<PAGE>

                                                                     EXHIBIT 4.3
 
                       LOUIS KRAVITZ & ASSOCIATES, INC.
                                        
                       Vitalink Pharmacy Services, Inc.

                    Retirement Savings and Investment Plan











            It is hereby certified that the following is a true and
             correct copy of the Louis Kravitz & Associates, Inc.
                      Master 401(k) Profit Sharing Plan,
             as adopted by the Company in the Adoption Agreement.



                       LOUIS KRAVITZ & ASSOCIATES, INC.


                       BY /s/ Louis Kravitz
                          -----------------------------


Copyright (c) 1994 Louis Kravitz & Associates, Inc.  All Rights Reserved.



     November 1, 1994


                                      20
<PAGE>
 
                               TABLE OF CONTENTS

<TABLE> 
<CAPTION> 
                                        
                                                                           PAGE
                                                                          NUMBER
                                                                          ------
<S>            <C>                                                        <C> 
Article I      General....................................................I-1

Article II     Definitions................................................II-1

Article III    Eligibility, Participation and Service.....................III-1

Article IV     Contributions and Forfeitures..............................IV-1

Article V      Allocations and Loans......................................V-1

Article VI     Deferrals and Hardship Withdrawals.........................VI-1

Article VII    Matching Contributions, Joining
               Bonuses and Coordination with Deferrals....................VII-1

Article VIII   Payments of Benefits.......................................VIII-1

Article IX     Age 70-1/2 Distribution Requirements.......................IX-1

Article X      Joint and Survivor Annuity Requirements....................X-1

Article XI     Top-Heavy Provisions.......................................XI-1

Article XII    The Trust..................................................XII-1

Article XIII   Administration.............................................XIII-1

Article XIV    Amendments, Action by Employer
               and Mergers................................................XIV-1

Article XV     Plan Termination...........................................XV-1

Article XVI    Adoption and Withdrawal by
               Other Organization.........................................XVI-1

Article XVII   Miscellaneous..............................................XVII-1
</TABLE> 
<PAGE>
 
                                   ARTICLE I
                                    GENERAL

     1.01  PURPOSE

     This new (or amended and restated) Plan is created for the purpose of
enabling eligible employees of the Employer to secure retirement, disability and
other benefits.  It is the Plan's objective to provide employees of the Employer
with a greater incentive to work efficiently, to stimulate such employees'
desire to remain with the Employer, and to develop in them a sense of
responsibility and sincere interest in the successful operation of the Employer.

     The Plan is designed to qualify as a profit sharing plan for purposes of
Sections 401(a), 402, 412 and 417 of the Internal Revenue Code of 1986 (the
"Code").  The Plan also provides for (1) a qualified cash or deferred
arrangement designed to meet the requirements of Section 401(k) of the Code, and
(2) matching contributions and after-tax voluntary employee contributions
designed to meet the requirements of Section 401(m) of the Code.  The Plan and
Trust are intended to meet the requirements of Sections 401(a) and 501(a) of the
Code, and applicable state law.

     Contributions made pursuant to the Plan shall be for the exclusive benefit
of participants and beneficiaries, and shall be held and invested pursuant to
the terms of the Trust Agreement, which is intended to form a part of the Plan.
The provisions of the Plan and Trust shall apply only to Employees who are
employed by the Employers on or after the Effective Date specified in the
Adoption Agreement.

                                       21
<PAGE>
 
     1.02  QUALIFIED CASH OR DEFERRED ARRANGEMENT AND MATCHING CONTRIBUTIONS

     This Plan provides for a qualified cash or deferred arrangement and
matching contributions, as defined by Sections 401(k) and 401(m), respectively,
of the Code.  Accordingly, the Plan provides for three types of Employer
                                                 -----                  
contributions:  Deferrals, Matching Contributions and Profit Sharing
Contributions (including Employer contributions to satisfy the "Top-Heavy"
requirements of Article XI).  These contributions are generally allocated to the
Deferred Income Account, the Matching Contribution Account (or Joining Bonus
Account) and the Employer Contribution Account, respectively.

     The Plan also permits the Company to apply different eligibility, vesting
and forfeiture rules to each type of Employer contribution.  Accordingly,
definitions and Plan provisions relating to eligibility, vesting and forfeitures
shall be applied according to the type of Employer contribution to which such
definition or Plan provision relates.


     1.03  EFFECTIVE DATES

     If this Plan is a new plan (that is, the Original Effective Date is in
calendar year 1989 or later), the provisions of this Plan shall be effective as
of the Original Effective Date.

     If this Plan is an amendment and restatement of an existing plan to comply
with current and prior tax laws, the provisions of this Plan shall generally be
effective as of the later of (i) the Original Effective Date or (ii) the first
day of the Plan Year beginning in 1987.  Notwithstanding the preceding, certain
provisions relating to changes to the following laws or subjects shall be
effective as follows:

                                       22
<PAGE>
 
              LAW OR SUBJECT                     EFFECTIVE DATE
              --------------                     --------------
 
 1.    Retirement Equity Act of 1984      Plan Years beginning in 1985
       (REA) (in general)

 2.    Loan requirements (REA-related)    Loans made after August 18, 1985

 3.    Section 417(a)(2)(A) of the Code   Plan Years beginning after
       (REA technical correction          October 22, 1986
       regarding spousal waiver)

 4.    Section 415 of the Code            Limitation Years beginning in 1987

 5.    Omnibus Budget Reconciliation      No provisions necessary; Plan
       Act of 1986                        already complied prior to Plan
                                          Years beginning in 1988.

 6.    Leased Employees                   Services performed after
                                          December 31, 1986

 7.    Section 401(a)(27) of the Code     Plan Years beginning in 1986
       (no profits required for profit
       sharing contribution)

 8.    Loan requirements (Department of   a.     Loans made after
       Labor regulations)                        October 18, 1989, and

                                          b.     Loans made on or after
                                                 the last day of the Plan
                                                 Year beginning in 1989.

 9.    Tax Reform Act of 1986 (most       Plan Years beginning in 1989
       provisions)

10.    Section 411(d)(6) of the Code      Plan Years beginning in 1989
       (for "existing" plans - see
       IRS regulations)

11.    Hardship withdrawals from          a.     Withdrawals made after
       Deferred Income Accounts                  March 31, 1989, and

                                          b.     Withdrawals made in Plan Years
                                                 beginning after 1988.


                                       23
<PAGE>
 
     1.04  ADDITIONAL REQUIREMENTS FOR PLANS BENEFITING OWNER-EMPLOYEES

     If this Plan provides contributions or benefits for one or more Owner-
Employees who control both the business for which this Plan is established and
one or more other trades or businesses, this Plan and the plan established for
other trades or businesses must, when looked at as a single plan, satisfy
Sections 401(a) and (d) of the Code for the Employees of this and all other
trades or businesses.

     If the Plan provides contributions or benefits for one or more Owner-
Employees who control one or more other trades or businesses, the employees of
the other trades or businesses must be included in a plan which satisfies
Sections 401(a) and (d) of the Code and which provides contributions and
benefits not less favorable than provided for Owner-Employees under this Plan.

     If an individual is covered as an Owner-Employee under the plans of two or
more trades or businesses which are not controlled and the individual controls a
trade or business, then the contributions or benefits of the employees under the
plan of the trades or businesses which are controlled must be as favorable as
those provided for him under the most favorable plan of the trade or business
which is not controlled.

     For purposes of the preceding paragraphs, an Owner-Employee, or two or more
Owner-Employees, will be considered to control a trade or business if the Owner-
Employee, or two or more Owner-Employees together:

          (a) own the entire interest in an unincorporated trade or business, or

          (b) in the case of a partnership, own more than 50% of either the
     capital interest or the profits interest in the partnership.

For purposes of the preceding sentence, an Owner-Employee, or two or more Owner-
Employees shall be treated as owning any interest in a partnership which is
owned, directly or indirectly, by a partnership which such Owner-Employee, or
such two or more Owner-Employees, are considered to control within the meaning
of the preceding sentence.

                                       24
<PAGE>
 
     1.05  NO LIFE INSURANCE

     This Plan does not provide for the purchase of individual life insurance
contracts on the life of any Participant, the premiums for which are charged to
the Account of such Participant.  If the Company wishes to provide such
insurance, it must amend the Plan to include all applicable provisions regarding
insurance (e.g. incidental death benefit rules).

     1.06  CHANGES TO PLAN PROVISIONS

     This Plan and Trust may be amended either by the adoption of an
individually drafted amendment or the execution of another Adoption Agreement.
The provisions of the amended Adoption Agreement shall apply only to Employees
who are employed by the Employer(s) on or after the Plan Amendment Effective
Date specified in the Adoption Agreement.

     Any amendment which affects the Vested Percentage of a Participant shall be
subject to the following conditions:

          (a) A Participant's Vested Percentage shall be no less than his Vested
     Percentage as of the later of the date such amendment is adopted or the
     date such amendment is effective.

          (b) A Participant who has at least 3 Years of Service (5 Years of
     Service for Plan Years beginning before January 1, 1989) shall be permitted
     to elect (in accordance with procedures prescribed by the Administrator) to
     have his Vested Percentage computed under the vesting schedule in effect
     prior to such amendment.

     If any provision of this Plan (including any applicable Plan rules and
procedures) results in any discrimination prohibited by Section 401(a)(4) of the
Code, such provision shall be rendered invalid (including any benefit accrued
under such provision).  Instead, the affected provision shall be operated in a
manner consistent with Section 401(a)(4) of the Code.

                                       25
<PAGE>
 
     1.07  PERMITTED DISPARITY

     If an Employer maintains another plan which (a) provides for permitted
disparity under Section 401(l) of the Code, and (b) covers a Participant of this
Plan, then the Integrated Allocation Method may not be selected in Section 5.06.
                                                ---                            
The intent of this Section 1.07 is to prevent an accidental violation of the
"overall permitted disparity" limits of regulation 1.401(l)-5.  (Note:  The
                                                                 ----      
Company may use permitted disparity in this Plan and in another plan of an
Employer by amending the Plan to include the requirements of regulation
1.401(l)-5(a)(2).  However, the Company shall then be considered to have adopted
an "individually-designed plan", rather than a "volume submitter plan".)

     1.08  COMPLIANCE WITH SECTIONS 410(B) AND 401(A)(26) OF THE CODE

     If the Plan (or a portion of the Plan) fails to satisfy Section 410(b) of
the Code for a Plan Year (1) even after all administrative methods have been
applied (e.g. designating two or more separate plans of the Employer as a single
plan), and (2) solely because Section 5.05 or 7.04(b) [whichever is applicable]
requires the completion of more than 500 Hours of Service and/or employment on
the last day of the Plan Year, then the following individuals (in the following
order and only to the extent necessary to satisfy Section 410(b) of the Code for
such Plan Year) shall also be eligible for an allocation of Profit Sharing
Contributions or Matching Contributions [whichever is applicable] for such Plan
Year:

          (a) Participants (but not Inactive Participants who become Inactive
     Participants during the Plan Year) who (i) are still employed by the
     Employer on the last day of the Plan Year, and (ii) complete at least 999
     Hours of Service during the Plan Year;

          (b) Step (a) shall be applied again, but substituting "998 Hours of
     Service" for "999 Hours of Service" in clause (ii) of step (a).  This step
     (b) shall be repeated as many times as necessary to satisfy Section 410(b)
     of the Code for the Plan Year, by successively reducing the Hours of
     Service requirement by one Hour each time;

          (c) Inactive Participants who (i) become Inactive Participants during
     the Plan Year, (ii) are still employed by the Employer on the last day of
     the Plan Year, and (iii) complete at least 999 Hours of Service during the
     Plan Year;

          (d) Step (c) shall be applied again, but substituting "998 Hours of
     Service" for "999 Hours of Service" in clause (iii) of step (c).  This step
     (d) shall be repeated as many times as necessary to satisfy Section 410(b)
     of the Code for the Plan Year, by successively reducing the Hours of
     Service requirement by one Hour each time;

                                       26
<PAGE>
 
          (e) Participants (but not Inactive Participants who become Inactive
     Participants during the Plan Year) who (i) are not employed by the Employer
                                                    ---                         
     on the last day of the Plan Year, and (ii) complete at least 999 Hours of
     Service during the Plan Year;

          (f) Step (e) shall be applied again, but substituting "998 Hours of
     Service" for "999 Hours of Service" in clause (ii) of step (e).  This step
     (f) shall be repeated as many times as necessary to satisfy Section 410(b)
     of the Code for the Plan Year, by successively reducing the Hours of
     Service requirement by one Hour each time (but not below 500 Hours of
     Service);

          (g) Inactive Participants who (i) become Inactive Participants during
     the Plan Year, (ii) are not employed by the Employer on the last day of the
                             ---                                                
     Plan Year, and (iii) complete at least 999 Hours of Service during the Plan
     Year;

          (h) Step (g) shall be applied again, but substituting "998 Hours of
     Service" for "999 Hours of Service" in clause (iii) of step (g).  This step
     (h) shall be repeated as many times as necessary to satisfy Section 410(b)
     of the Code for the Plan Year, by successively reducing the Hours of
     Service requirement by one Hour each time (but not below 500 Hours of
     Service).

     If the Plan fails to satisfy Section 401(a)(26) of the Code for a Plan
Year, then rules similar to the foregoing rules shall become applicable.

     1.09  REVISED $150,000 COMPENSATION LIMIT UNDER
           CODE SECTION 401(A)(17)

     In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan Years
beginning on or after January 1, 1994, the annual Compensation of each Employee
taken into account under the Plan shall not exceed the OBRA '93 annual
compensation limit.  The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Code.  The cost-of-living adjustment in effect
for a calendar year applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning in such calendar
year.  If a determination period consists of fewer than 12 months, the OBRA '93
annual compensation limit will be multiplied by a fraction, the numerator of
which is the number of months in the determination period, and the denominator
of which is 12.

     For Plan Years beginning on or after January 1, 1994, any reference in this
Plan to the limitation under Section 401(a)(17) of the Code shall mean the OBRA
'93 annual compensation limit set forth in this provision.

                                       27
<PAGE>
 
     If Compensation for any prior determination period is taken into account in
determining an Employee's benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period.  For
this purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.

                                       28
<PAGE>
 
                                  ARTICLE II
                                  DEFINITIONS

Where the following words and phrases appear in this Plan, they shall have the
respective meanings set forth below, unless the context clearly indicates to the
contrary:

        2.01 "ACCOUNT" OR "ACCOUNTS" shall mean the records relating to any (if
    one exists) of the following (depending upon its usage in the applicable
    Plan provision): (a) Deferred Income Account, (b) Employee Contribution
    Account, (c) Employer Contribution Account, (d) Forfeiture Account, (e)
    Joining Bonus Account, (f) Matching Contribution Account, (g) Prior Plan
    Account, (h) Qualified Matching Contribution Account, (i) Qualified
    Nonelective Contribution Account, (j) Rollover Contribution Account, and/or
    (k) such other individual account(s) created by the Administrator pursuant
    to the provisions of the Plan.

        2.02 "ADDITIONS" shall mean the total of the following amounts allocated
    to a Participant's Account with respect to each Limitation Year:

             (a) Employer contributions (as defined in Section 4.01(a)) and
        Forfeitures,

             (b)  Voluntary contributions, and

             (c) Any amounts attributable to Sections 401(h), 415(l) and 419A(d)
        [all relating to certain medical benefits] of the Code, but only to the
        extent provided by such sections of the Code.

    Notwithstanding the foregoing, Additions shall not include (i) Employer
    contributions (including Deferrals), Forfeitures and voluntary contributions
    which are either distributed to a Participant or held in a suspense account
    (both as described in the fourth paragraph of Section 5.09) and (ii) Excess
    Deferrals which are distributed in accordance with Sections 6.04(c) and (e).
    In addition, for Limitation Years beginning before January 1, 1987, not all
    voluntary contributions are Additions. Instead, only the lesser of (i) one-
    half of the Participant's voluntary contributions, or (ii) the amount of the
    Participant's voluntary contributions in excess of 6% of his Earnings for
    such Limitation Year, shall be considered Additions.

        2.03 "ADJUSTED GROSS EARNINGS" shall mean Gross Earnings, reduced by all
    of the following items (even if includible in gross income): reimbursements
    or other expense allowances, fringe benefits (cash and noncash), moving
    expenses, deferred compensation and welfare benefits. In the case of certain
    Self-Employed Individuals, Adjusted Gross Earnings shall mean a percentage
    of his Earned Income. The preceding percentage shall be determined in
    accordance with regulation 1.414(s)-1(f)(1), which takes into account what
    portion of the Gross Earnings of Non-Highly Compensated Employees (as a
    group) is included in the Adjusted Gross Earnings of Non-Highly Compensated
    Employees (as a group).

        2.04 "ADOPTION AGREEMENT" shall mean the Adoption Agreement executed by
    the Employer adopting this Plan. The Adoption Agreement shall be a part of
    this Plan.

        2.05 "ADMINISTRATOR" shall mean the Company, or the person or persons,
    or the committee named in the Adoption Agreement to administer the Plan in
    accordance with Article XIII.

                                       29
<PAGE>
 
        2.06 "AFFILIATED COMPANY(IES)" shall mean any corporation which is a
     member of a controlled group of corporations of which the Employer is a
     part, and any trade or business (whether or not incorporated) which is
     under common control with an Employer or an affiliated service group of
     which the Employer is a member, as determined under Sections 414(b), 414(c)
     and 414(m) of the Code, and for purposes of determining the "maximum
     benefit" under Section 5.09, under Section 415(h) of the Code. The term
     Affiliated Company shall also include any other entity required to be
     aggregated with the Employer pursuant to regulations under Section 414(o)
     of the Code.

        2.07 "AUTHORIZED LEAVE OF ABSENCE" shall mean an absence from employment
     by an Employee authorized by the Employer under the Employer's standard
     personnel practices. An absence due to service in the armed forces of the
     United States during a period of declared war or national emergency or
     through the operation of a compulsory military service law and/or during
     the period thereafter in which an Employee's reemployment rights are
     guaranteed by federal law shall be considered an Authorized Leave of
     Absence.

        2.08 "BALANCED FUND" shall mean that portion of the Trust which shall be
     invested and reinvested in types (and combinations) of investments
     authorized for the Equity Fund, Fixed Income Fund and the Short-Term Income
     Fund, as the Administrator, Trustee or Investment Manager shall deem
     suitable.

        2.09 "BENEFICIARY" shall mean the person or persons (natural or
     otherwise) designated by a Member in accordance with Section 8.04 of this
     Plan to receive any death benefit which shall be payable under this Plan.

        2.10 "BENEFIT" shall mean the value of a Member's nonforfeitable
     interest in his Account(s) which he or his Beneficiary is entitled to
     receive pursuant to Article VIII. Depending upon the context in which it is
     used, the term Benefit may mean a Member's Benefit attributable to a single
     Account.

        2.11  "Break-In-Service" shall mean either (a) or (b) below:

              (a) If the Elapsed Time method of computing Years of Service is
        chosen in the Adoption Agreement, any twelve consecutive month period of
        severance commencing on the date an Employee experiences a Termination
        of Employment or on the anniversary of such date, and during which time
        he is not an Employee. Notwithstanding the foregoing, a period of
        severance shall not include the period between the first and second
        anniversaries of the date the Employee is first absent from work for
        maternity or paternity reasons.

             (b) If the Hours of Service method of computing Years of Service is
        chosen in the Adoption Agreement, a Computation Period during which an
        Employee fails to complete more than 500 Hours of Service.

        2.12 "CODA" shall mean a cash or deferred arrangement, under which a
     covered employee may elect to have his employer either (i) contribute an
     amount on the employee's behalf to a trust which is a part of a tax-
     qualified plan, or (ii) provide such amount to the employee in cash (or
     other form of taxable benefit). A CODA shall also include a salary
     reduction arrangement. A qualified CODA is a CODA which (i) satisfies the
     requirements of Section 401(k) of the Code, and (ii) is part of a tax-
     qualified plan.

                                       30
<PAGE>
 
        2.13 "CODE" shall mean the Internal Revenue Code of 1986, as amended.

        2.14 "COMPANY" shall mean the corporation, partnership or sole
    proprietorship named in the Adoption Agreement, including any successor to
    the Company.

        2.15 "COMPENSATION" shall mean those amounts elected in the Adoption
    Agreement which are paid to a Participant during a Plan Year. The
    Administrator may establish rules to provide that certain Compensation
    earned, but not yet paid because of the timing of payroll periods/pay days,
    shall be treated as "paid" if the conditions described in regulation
    1.415-2(d)(5)(ii) are satisfied.

             (a) If not specifically stated otherwise, any amounts that are
        included or excluded from the definition of Compensation shall also
        include or exclude, respectively, elective Employer contributions
        attributable to such amounts made pursuant to a salary reduction
        agreement which are not includible in the gross income of the Employee
        under Sections 125, 402(a)(8),402(h) or 403(b) of the Code.

             (b) If not specifically stated otherwise, Compensation includes
        Earned Income as a Self-Employed Individual to the extent allowed under
        regulation 1.414(s)-1(f)(1), which takes into account what portion of
        the Gross Earnings of Non-Highly Compensated Employees (as a group) is
        included in the Compensations of Non-Highly Compensated Employees (as a
        group).

             (c) If not specifically stated otherwise, Compensation shall
        exclude all Compensation from entities other than an Employer.

             (d) Compensation shall exclude all Compensation paid to an Inactive
        Participant during the period he is an Inactive Participant.

    Notwithstanding the first sentence of this Section, in the case of a Plan
    which was originally adopted prior to May 14, 1990, and if elected in the
    Adoption Agreement, Compensation shall be determined on an "accrued" basis.
    However, the preceding election (if made) shall expire at the end of the
    Plan Year which begins in 1991.

    For Plan Years beginning in 1989 and later, Compensation shall not exceed
    $200,000 (or such higher amount in accordance with Sections 401(a)(17) and
    415(d) of the Code). If a Plan Year is less than 12 months, the $200,000 (or
    such higher amount) shall be prorated accordingly.

    If a Leased Employee becomes a Participant, his Compensation shall include
    similar Compensation from the leasing organization which is attributable to
    services performed for an Employer.

        2.16 "Computation Period" shall mean the 12-consecutive month period
    used in measuring an Employee's Year(s) of Service and Break(s)-In-Service.
    In general, for purposes of determining eligibility to participate in the
    Plan, the Computation Period shall be the 12-consecutive month period
    starting on the Employee's Employment Commencement Date and anniversaries
    thereof. However, see Section 3.01(a) regarding whether the eligibility
    Computation Period will shift to a Plan Year basis. The Computation Period
    used in determining Years of Service and Breaks-in-Service for purposes of
    vesting shall be the Plan Year if the Hours of Service method of computing
    Years of Service (as described in Section 3.05(a)) is selected in the
    Adoption Agreement.

                                       31
<PAGE>
 
        2.17 "DEFERRAL(S)" shall mean the amount of a Participant's Compensation
    withheld and contributed to the Plan in accordance with the salary reduction
    agreement described in Article VI. Deferrals constitute Employer
    contributions. For purposes of Sections 6.03(c) [regarding the limits of
    Section 402(g) of the Code], 6.05 [regarding the ADP Test] and 7.09(a)
    [regarding the ACP Test], Deferrals shall not include those Deferrals
    distributed pursuant to the fourth paragraph of Section 5.09 [regarding
    Section 415 of the Code].

        2.18 "DEFERRED INCOME ACCOUNT" shall mean the Account of a Participant
    to which Deferrals and any investment gains or losses thereon are credited.

        2.19 "DISABILITY" shall mean a physical or mental condition which
    permanently prevents an Employee from satisfactorily performing his usual
    duties for the Employer or the duties of such other position or job which
    the Employer makes available to him and for which such Employee is qualified
    by reason of his training, education or experience. The determination
    whether a Participant satisfies this definition of Disability shall be made
    by the Administrator in accordance with nondiscriminatory rules and
    procedures established by the Administrator (which may include a physical
    examination, medical reports and other evidence).

        2.20 "EARNED INCOME" shall mean "earned income" within the meaning of
    Section 401(c)(2) of the Code as an "employee" or "owner-employee" as
    defined in Sections 401(c)(l) and 401(c)(3) of the Code. That is, it shall
    mean the net earnings from self-employment in the trade or business with
    respect to which the Plan is established, for which personal services of the
    individual are a material income-producing factor. Net earnings will be
    determined without regard to items not included in gross income and the
    deductions allocable to such items. Net earnings are reduced by
    contributions by the Employer to this Plan or any other qualified Plan to
    the extent deductible under Code Section 404. Net earnings are further
    reduced by the deduction allowed to the Employer by Code Section 164(f) for
    taxable years beginning after December 31, 1989 (relating to FICA taxes on
    self-employment income).

        2.21 "EARNINGS" shall mean the amounts specified in the Adoption
    Agreement. Earnings for any applicable period (Plan Year, Limitation Year,
    etc.) is the Earnings paid (or treated as "paid" under rules described in
    the first paragraph of Section 2.15 [the definition of Compensation]) during
    such applicable period. However, Earnings may be determined on an "accrued"
    basis if the conditions of the second "flush left" paragraph of Section 2.15
    (modified by substituting the term "applicable period" for the term "Plan
    Year") are satisfied.

    Notwithstanding the preceding paragraph, Earnings for a Participant in a
    defined contribution plan who is permanently and totally disabled (as
    defined in Section 22(e)(3) of the

                                       32
<PAGE>
 
    Code) is the Earnings such Participant would have received for the
    Limitation Year if the Participant had been paid at the rate of Earnings
    paid immediately before becoming permanently and totally disabled; such
    imputed Earnings for the disabled Participant may be taken into account only
    if the Participant is not a Highly Compensated Employee and contributions
    made on behalf of such Participant are nonforfeitable when made.

        2.22 "EFFECTIVE DATE" shall mean the date specified in the Adoption 
    Agreement.

        2.23 "ELIGIBLE EMPLOYEE" shall mean an Employee other than an Excluded
    Employee who has satisfied the requirements for eligibility for
    participation as set forth in the Adoption Agreement.

        2.24 "EMPLOYEE" shall mean any person who is receiving remuneration for
    personal services rendered to an Employer (or would be receiving such
    remuneration except for an Authorized Leave of Absence) in the capacity of
    an "employee," as defined in Section 3121(d)(l) or (2) of the Code (as
    opposed to that of an independent contractor), but excluding nonresident
    aliens who receive no U.S. earned income from the Employer. The term
    Employee shall also include an individual who is (i) a Self-Employed
    Individual of an Employer, or (ii) a Leased Employee of an Employer, unless
    such Leased Employee is excluded pursuant to Section 2.58.

        2.25 "EMPLOYEE CONTRIBUTION ACCOUNT" shall mean the Account maintained
    to record a Participant's voluntary contributions and adjustments relating
    thereto as provided in Section 4.03.

        2.26 "EMPLOYER" or "EMPLOYERS" shall mean the Company, other adopting
    Employers, if any, listed in the Adoption Agreement, and any other
    Affiliated Company which may adopt this Plan in accordance with Article XVI
    (including any successor to the Employer).

        2.27 "EMPLOYER CONTRIBUTION ACCOUNT" shall mean the Account maintained
    to record a Participant's share of the contributions of the Employer and
    adjustments relating thereto.

        2.28 "EMPLOYMENT COMMENCEMENT DATE" shall mean the date an Employee
    first performed an Hour of Service with the Employer or any Prior Employer,
    if earlier.

        2.29 "ENTRY DATE" shall mean the date or dates Eligible Employees
    commence participation in the Plan as specified in the Adoption Agreement.
    In addition, the Effective Date and the first day of any Plan Year are Entry
    Dates.

        2.30 "EQUITY FUND" shall mean that portion of the Trust which shall be
    invested and reinvested in common stocks, preferred stocks, or in bonds,
    notes, or debentures which are convertible into common or preferred stocks,
    mutual or pooled equity investment funds and the type of investments
    authorized for the Short Term Income Fund as the Administrator, Trustee or
    Investment Manager shall deem suitable.

        2.31 "ERISA" shall mean Public Law No. 93-406, the Employee Retirement
    Income Security Act of 1974, as amended from time to time.

        2.32 "EXCESS COMPENSATION" shall mean a Participant's Compensation, if
    any, in excess of the Integration Level.

        2.33 "EXCLUDED EMPLOYEE" shall mean an Employee defined as such in the
    Adoption Agreement. In addition, an Excluded Employee shall include an
    Employee who is a member of a legally recognized collective bargaining unit,
    but only if (i) a

                                       33
<PAGE>
 
    collective bargaining agreement does not provide for participation by
    covered Employees in this Plan, and (ii) the representative of such
    collective bargaining unit has had an opportunity to bargain in good faith
    concerning retirement benefits.

        2.34 "FAMILY MEMBER" shall mean an Employee who is related to a Key
    Highly Compensated Employee because he is such Key Highly Compensated
    Employee's spouse or lineal ascendant or descendant, or is the spouse of
    such a lineal ascendant/descendant.

    For purposes of applying Section 401(a)(17) of the Code to a Key Highly
    Compensated Employee and his Family Members under Section 5.08 (regarding
    allocations of Employer contributions), the term "Family Member" shall
    include only the Key Highly Compensated Employee's spouse and lineal
    descendants who have not attained age 19 by the end of the Plan Year.

        2.35 "FIDUCIARIES" shall mean the Employers, the Administrator, Trustee,
    any Investment Manager, and such other persons or entities designated as
    Fiduciaries, but only with respect to the specific responsibilities of each
    for Plan and Trust administration, all as described herein.

        2.36 "FIXED INCOME FUND" shall mean that portion of the Trust which
    shall be invested and reinvested in investments providing a return which is
    fixed, limited or determinable in advance by the terms of the contract or
    the instrument creating or evidencing such investment, such as corporate
    bonds, corporate notes or corporate debentures, insurance company investment
    contracts, mortgages, real estate loans secured by trust deeds, Treasury
    Bonds, Treasury Bills, Treasury Notes or other such similar short-term
    obligations of the United States Government or any instrumentality thereof,
    in savings accounts, certificates of deposit or other interest bearing
    accounts which provide a reasonable rate of interest, in commercial paper or
    bankers' acceptances, in other similar securities or evidences of
    indebtedness, or mutual or pooled fixed income investment funds as the
    Trustee, Administrator or Investment Manager shall deem suitable.

        2.37 "FORFEITURE ACCOUNT" shall mean the Account(s) established pursuant
    to Section 4.02 or Section 7.07, depending upon the context in which such
    term is used.

        2.38 "FORFEITURE(S)" shall mean (i) the portion of a Member's Account(s)
    which is forfeited because of Termination of Employment before full vesting
    as determined under Section 8.01(d), or (ii) the portion of an Excess
    Aggregate Contribution which is forfeited in accordance with Sections
    7.13(a) or 7.14(c)(iii).

        2.39 "FORM W-2 EARNINGS" shall mean amounts from an Employer ,
    Affiliated Company, or any entity predecessor to the Employer that are
    required to be reported as wages on Form W-2 [box 10 on the 1991 Form W-2]
    for income tax purposes pursuant to Sections 6041(d) and 6051(a)(3) of the
    Code. However, Form W-2 Earnings shall exclude moving expense
    payments/reimbursements to the extent such amounts are reasonably believed
    to be deductible under Section 217 of the Code. In the case of a Self-
    Employed Individual, Form W-2 Earnings shall mean his Earned Income.

        2.40 "FORMER PARTICIPANT" shall mean a Participant or Inactive
    Participant who experienced a Termination of Employment, who has a balance
    in his Account which has not been paid in full and who has not again become
    a Participant pursuant to Article III.

                                       34
<PAGE>
 
       2.41 "GENERAL FUND" shall mean a special Investment Fund, established to
    hold and invest assets of the Trust not invested in the other Investment
    Funds.

       2.42  "GOVERNING BODY" shall mean:

          (a) in the case of a corporation, its board of directors.

          (b) in the case of a partnership, the partners designated to act on
       behalf of the partnership.

          (c) in the case of a sole proprietorship, the sole proprietor.

                                       35
<PAGE>
 
        2.43 "GROSS EARNINGS" shall mean Earnings, plus elective Employer
    contributions (attributable to Earnings) made pursuant to a salary reduction
    agreement which are not includible in the gross income of the Employee under
    Sections 125, 402(a)(8), 402(h) or 403(b) of the Code.

        2.44 "GUARANTEED FUND" shall mean that portion of the Trust which shall
    be invested and reinvested in securities backed by the United States
    Government, or its agencies or subsidiaries, and/or insurance contract or
    contracts which provide for a guaranteed rate of interest.

        2.45 "HIGHLY COMPENSATED EMPLOYEE" shall mean, for any Plan Year, an
    Employee who is considered "highly compensated" during the "Look-Back Year"
    or the "Determination Year."

             (a) An Employee shall be considered highly compensated during the
        Look-Back Year if the Employee, at any time during the Look-Back Year,
        is in one of the following categories:

                 (i) a greater than 5% owner of an Employer or an Affiliated 
             Company,

                 (ii) receives Gross Earnings in excess of $75,000,

                 (iii) an officer of an Employer or an Affiliated Company and
             receives Gross Earnings in excess of 50% of the amount in effect
             under Section 415(b)(1)(A) for the calendar year in which the Look-
             Back Year begins, or

                 (iv) receives Gross Earnings in excess of $50,000 and is in the
             "Top 20% Group."

             (b) An Employee shall be considered highly compensated during the
        Determination Year if the Employee, at any time during the Determination
        Year:

                 (i) is a greater than 5% owner of an Employer or an 
             Affiliated Company, or

                 (ii) (1) is described in subsections (a)(ii), (a)(iii) [where
             subsection (a)(iii) is modified by substituting Determination Year
             for Look-Back Year] or (a)(iv), and

                      (2) is one of the 100 Employees paid the highest Gross 
                 Earnings.

                                       36
<PAGE>
 
             (c) For purposes of this Section, the following definitions are 
        applicable:

                 (i) "Determination Year" shall mean the Plan Year.
                     --------------------

                 (ii) "Look-Back Year" shall mean the 12-month period
                      ----------------
             immediately preceding the Determination Year (see special exception
             in subsection (h) below).

                 (iii) "Top 20% Group" shall mean the group of Employees who are
                       ---------------
             paid the highest Gross Earnings during the applicable period. The
             size of the Top 20% Group is equal to 20% of the number of
             Employees (see subsection (g) below for exclusion and rounding
             rules).

             (d) For purposes of this Section, the term Employee shall include
        or exclude (as elected in the Adoption Agreement):

                 (i) Leased Employees who meet certain safe-harbor exceptions
             under IRS regulation 1.414(q)-1T,A-7(b)(2); and/or

                 (ii) Employees who are covered by a collective bargaining
             agreement, but only if (1) 90% or more of the Employees of the
             Employer and Affiliated Companies are covered under collective
             bargaining agreements, and (2) the Plan does not cover any Employee
             covered by a collective bargaining agreement.

             (e) The $75,000 and $50,000 in subsections (a)(ii) and (a)(iv),
        respectively, shall automatically increase (starting with the
        Determination/Look-Back Year beginning in 1988) to reflect cost-of-
        living increases described in Section 415(d) of the Code. The increased
        amount for any Determination/Look-Back Year shall be the dollar
        limitation in effect for the calendar year in which such
        Determination/Look-Back Year begins.

             (f) For purposes of subsection (a)(iii),

                 (i) The maximum number of officers who are considered Highly
             Compensated Employees shall be determined as follows:

                                                Maximum Number of Officers
                                                    Considered Highly
             Number of Employees                  Compensated Employees  
             -------------------                --------------------------
              30 or less                                     3        
              31 to 500                        10% of the number of Employees
              500 or more                                   50       

                 If the number of officers exceeds the maximum number of
            officers considered Highly Compensated Employees according to the
            above schedule, only those with the highest Gross Earnings during
            the applicable period shall be considered Highly Compensated
            Employees.

                 (ii) If no officer has Gross Earnings in excess of 50% of the
            amount in effect under Section 415(b)(1)(A) of the Code, then the
            officer with the highest Gross Earnings during the applicable period
            shall be deemed a Highly Compensated Employee.

                 (iii) For purposes of determining the number of Employees in
            the left-hand column of the schedule in paragraph (i) above, the
            following Employees shall be excluded (unless modified in the
            Adoption Agreement):

                     (1) Employees who have not completed 6 months of service 
                 by the end of the

                                       37
<PAGE>
 
                 applicable period

                     (2) Employees who normally work less than 17-1/2 hours 
                 per week

                     (3) Employees who normally work not more than 6 months a 
                 year

                     (4) Employees who have not attained age 21 by the end of
                 the applicable period

                 (iv) If "10% of the number of Employees" in the right-hand
             column of the schedule in paragraph (i) above is not an integer,
             the result shall be rounded in the manner specified in the Adoption
             Agreement.

             (g) For purposes of determining the size of the Top 20% Group in
        subsections (a)(iv) and (c)(iii):

                 (i) The number of Employees to which the 20% is multiplied
             shall take into account the exclusions described in subsection
             (f)(iii) above.

                 (ii) If "20% of the number of Employees" is not an integer, the
             result shall be rounded in the same manner as described in
             subsection (f)(iv) above.

             (h) Notwithstanding subsections (a), (b), and (c), if the Plan Year
        of this Plan (and all other plans of the Employer) is the calendar year,
        the Company may elect in the Adoption Agreement to define the Look-Back
        Year as the Plan Year (if the Plan Year is not a 12-month period, the
        Look-Back Year shall mean the 12-month period which ends on the last day
        of the Plan Year). If this election is made, no Determination Year
        calculations will be necessary, and the Look-Back Year rules will apply
        to the Plan Year (or applicable 12-month period). [See IRS regulation
        1.414(q)-1T,A-14(b)].

        2.46 "HIGHLY COMPENSATED PARTICIPANT" shall mean, for any Plan Year, a
    Highly Compensated Employee who is also an "eligible employee" for such Plan
    Year (as defined in regulation 1.401(k)-1(g)(4) or 1.401(m)-1(f)(4), for
    purposes of Article VI or VII, respectively). Accordingly, a Highly
    Compensated Employee is a Highly Compensated Participant if he is directly
    or indirectly eligible (1) to make a Deferral (in the case of Article VI),
    or (2) to have Aggregate Contributions [as defined in Section 7.02]
    allocated to his Account(s) (in the case of Article VII). While the
    preceding sentence generally covers all Highly Compensated Employees who are
    Participants, the term Highly Compensated Participant also includes a Highly
    Compensated Employee who is not a Participant solely because of any of the
    following reasons:

             (a) he has not contributed to another plan of the Employer,

             (b) he is "suspended" because of a distribution/withdrawal, a loan,
        or an election not to participate (unless the election not to
        participate is made pursuant to a "one-time election" as defined in
        regulation 1.401(k)-1(g)(4)(ii) or 1.401(m)-1(f)(4)(ii), for purposes of
        Article VI or VII, respectively), or

             (c) he may not receive an Addition on account of Section 415(c)(1)
        or 415(e) of the Code.

    By contrast, if the Plan provides for a "service" requirement to be eligible
    for Deferrals or Aggregate Contributions, a Highly Compensated Employee
    shall not be considered a Highly Compensated Participant unless the service
    is actually performed. For example, if Section 7.04(b) requires 1,000 Hours
    of Service or employment on the last day of the Plan Year, a Highly
    Compensated Employee who does not receive a Matching Contribution because of
    failure to satisfy such service requirement is not considered a Highly
                                                   ---
    Compensated Participant for such Plan Year.

                                       38
<PAGE>
 
        2.47  "HOUR OF SERVICE" shall mean:

             (a) Each hour for which an Employee is paid, or entitled to
        payment, for the performance of duties for the Employer. These hours
        will be credited to the Employee for the Computation Period in which the
        duties are performed; and

             (b) Each hour for which an Employee is paid, or entitled to
        payment, by the Employer on account of a period of time during which no
        duties are performed (irrespective of whether the employment
        relationship has terminated) due to vacation, holiday, illness,
        incapacity (including disability), layoff, jury duty, military duty, or
        leave of absence. No more than 501 Hours of Service will be credited
        under this paragraph for any single continuous period (whether or not
        such period occurs in a single Computation Period). Hours under this
        paragraph will be calculated and credited pursuant to Section 2530.200b-
        2 of the Department of Labor Regulations which are incorporated herein
        by this reference; and

             (c) Each hour for which back pay, irrespective of mitigation of
        damages, is either awarded or agreed to by the Employer. The same Hours
        of Service will not be credited both under paragraph (a) or paragraph
        (b), as the case may be, and under this paragraph (c). These hours will
        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.

    Hours of Service will be credited for employment with an Employer or with an
    Affiliated Company which is not an Employer, and with any other entity
    required to be aggregated with the Employer pursuant to Sections 414(n) and
    (o) of the Code.

    Effective for absences in Plan Years beginning with or in calendar year 1985
    and solely for purposes of determining whether a Break-In-Service for
    participation and vesting purposes has occurred in a Computation Period, an
    individual who is absent from work for maternity or paternity reasons shall
    receive credit for the Hours of Service which would otherwise have been
    credited to such individual but for such absence, or in any case in which
    such hours cannot be determined, 8 Hours of Service per day of such absence.
    For purposes of this paragraph, an absence from work for maternity or
    paternity reasons means an absence (1) by reason of the pregnancy of the
    individual, (2) by reason of a birth of a child of the individual, (3) by
    reason of the placement of a child with the individual in connection with
    the adoption of such child by such individual, or (4) for purposes of caring
    for such child for a period beginning immediately following such birth or
    placement. The Hours of Service credited under this paragraph shall be
    credited (1) only in the Computation Period in which the absence begins if
    the crediting is necessary to prevent a Break-In-Service in that period, or
    (2) in all other cases, in the following Computation Period. The
    Administrator may require the Participant to furnish such timely information
    as the Administrator may reasonably require to establish that the absence
    from work was for maternity or paternity reasons (as described in this
    paragraph) and the number of days for which there was such an absence.

    The Administrator shall determine Hours of Service on the basis of actual
    hours for which an Employee is paid or entitled to payment. However, if
    records of such hours are not available, the Administrator may determine
    Hours of Service based upon days of employment in a Computation Period by
    crediting an Employee with 10 Hours of Service for each day for which the
    Employee would be required

                                       39
<PAGE>
 
    to be credited with at least one Hour of Service under the preceding
    paragraphs. Alternatively, the Administrator may adopt such other
    equivalency rule as permitted under Department of Labor Regulations Section
    2530.200b-3 (as amended from time to time), which are incorporated herein by
    this reference.

    The Administrator shall determine the number of Hours of Service, if any, to
    be credited to an Employee under the foregoing rules in a uniform and
    nondiscriminatory manner and in accordance with Section 2530.200b-2 of the
    Department of Labor Regulations (as amended from time to time), which are
    incorporated herein by this reference.

        2.48 "Inactive Participant" shall mean an Employee who has become a
    Participant in the Plan pursuant to Article III, but whose participation in
    the Plan is suspended because of his becoming included in one of the
    following categories:

             (a) A Participant who becomes an Excluded Employee (see Section 
        3.03(b)).

             (b) A Participant who has been transferred from employment with an
        Employer to either employment with a unit of an Employer or an
        Affiliated Company not participating in this Plan (see Section 3.06).

             (c) A Participant who has waived further participation in this Plan
        (see Section 3.08).

             (d) A Participant whose participation in the Plan has otherwise
        ceased but whose employment has not terminated.

        2.49 "INTEGRATION LEVEL" shall mean the amount specified in the Adoption
    Agreement.

        2.50 "INTEGRATION PERCENTAGE" shall mean:
        
             (a) In the case of a Plan Year beginning prior to 1989, the rate of
        tax under Section 3111(a) of the Code (relating to the Employer's OASDI
        tax) at the beginning of the Plan Year, or

                                       40
<PAGE>
 
             (b) In the case of a Plan Year beginning in 1989 and later, the
        product of (i) the "Fraction" in the schedule below and (ii) the greater
        of (1) 5.7%, or (2) the rate of tax under Section 3111(a) of the Code at
        the beginning of the Plan Year attributable to the old-age insurance
        portion of OASDI.

             IF THE INTEGRATION LEVEL                                 
                                                                      THE    
                                    BUT IS LESS THAN               "FRACTION"
           EXCEEDS                    OR EQUAL TO                     IS     
           -------                  ----------------               ---------  
                                                                             
        1.  $  0                    the greater of (a) $10,000               
                                    or (b) 20% of SSTWB in effect            
                                    on the first day of the                  
                                    Plan Year                         1.0    
                                                                             
        2. the greater of (a)       80% of SSTWB in effect on                
           $10,000, or (b) 20%      the first day of the                     
           of SSTWB in effect       Plan Year.                        4.3    
           on the first day of                                     ---------  
           the Plan Year.                                             5.7
                                                                             
        3. 80% of SSTWB in           less than 100% of SSTWB in              
           effect on the first       effect on the first day of              
           day of the Plan           the Plan Year.                   5.4    
           Year.                                                   ---------
                                                                      5.7
                                                                             
        4. If the Integration Level equals the SSTWB in effect on the first day
           of the Plan Year, the "Fraction" is 1.0.

        2.51 "INTERIM VALUATION DATES(S)" shall mean the date or dates during
    the Plan Year on which an interim valuation is made in accordance with
    Section 5.04(b).

        2.52 "INVESTMENT FUND(S)" shall mean the investment funds established by
    the Trustee on the direction of the Administrator. Such funds may include
    (but are not limited to) a Balanced Fund, Equity Fund, Fixed Income Fund,
    Guaranteed Fund, Participant Directed Fund and Short-Term Income Fund. If
    separate Investment Funds are not established, Investment Fund shall mean
    the assets of the Trust.

        2.53 "INVESTMENT INCOME" shall mean the net gain or loss of the Trust
    from investments, as reflected by interest payments, dividends, realized and
    unrealized gains and losses on securities, other investment transactions and
    expenses paid from the Trust. In determining the Investment Income of the
    Trust for any period, assets shall be valued on the basis of their fair
    market value as determined in accordance with Section 5.02. The Investment
    Income, if any, of assets held under each Investment Fund(s) or segregated
    accounts maintained by the Trustee on the direction of the Administrator
    shall be determined separately. Expenses shall be allocated by the
    Administrator to each separate

                                       41
<PAGE>
 
    fund, if any, on a reasonable and equitable basis as it may in its sole
    discretion decide.

        2.54 "INVESTMENT MANAGER" shall mean any Fiduciary (other than a trustee
    or named fiduciary, as defined in Section 402(a)(2) of ERISA):

             (a) who has the power to manage, acquire, or dispose of any assets
        of the plan;

             (b) who is (1) registered as an investment advisor under the
        Investment Advisors Act of 1940; (2) is a bank as defined in ERISA; or
        (3) is an insurance company qualified to perform services described in
        paragraph (a) under the laws of more than one State; and

             (c) who has acknowledged in writing that he is a Fiduciary with
        respect to the Plan.

        2.55 "JOINING BONUS" shall mean an Employer contribution made pursuant
    to Article VII to newly eligible Participants to encourage such Participants
    to make Deferrals to the Plan.

        2.56 "JOINING BONUS ACCOUNT" shall mean the Account of a Participant to
    which a Joining Bonus and any investment gains or losses thereon are
    credited. The Administrator may choose not to establish a separate Joining
    Bonus Account, in which case a Joining Bonus shall be credited to the
    Matching Contribution Account. The preceding sentence shall not be
    applicable if different vesting schedules apply to the Joining Bonus Account
    and to the Matching Contribution Account.

        2.57 "KEY HIGHLY COMPENSATED EMPLOYEE" shall mean a Highly Compensated
    Employee who is either:

             (a) a greater than 5% owner of an Employer or Affiliated Company,
        or

             (b) one of the 10 Highly Compensated Employees paid the greatest
        Gross Earnings during the Plan Year.

        2.58 "LEASED EMPLOYEE" shall mean an individual who is treated as an
    Employee of an Employer (if he is not already an Employee of an Employer)
    because such individual, pursuant to an agreement between an Employer and
    any other person ("leasing organization"), has performed services for an
    Employer (or for an Employer and related persons determined in accordance
    with Section 414(n)(6) of the Code) on a substantially full time basis for a
    period of at least one year, and such services are of a type historically
    performed by employees in the business field of the Employer. Contributions
    or benefits provided a Leased Employee by the leasing organization which are
    attributable to services performed for the Employer shall be treated as
    provided by the Employer.

        A Leased Employee shall not be considered an Employee of an Employer if:

             (a) such individual is covered by a money purchase pension plan 
        providing:

                (i)   a nonintegrated employer contribution rate of at least 10%
             of Gross Earnings (Gross Earnings from the leasing organization
             which is attributable to services performed for an Employer shall
             be treated as Gross Earnings from an Employer),

                (ii)  immediate participation, and

                (iii) full and immediate vesting; and

             (b) Leased Employees constitute 20% or less of the Employer's Non-
        Highly Compensated Employees.

                                       42
<PAGE>
 
        2.59 "LIMITATION YEAR" shall mean the 12-consecutive month period ending
    on the date specified in the Adoption Agreement, including periods before
    the Effective Date. If the Limitation Year has been amended since the
    Original Effective Date, the provisions of the related amendment shall be
    incorporated into this Plan by reference.

        2.60 "MATCHING CONTRIBUTION ACCOUNT" shall mean the Account of a
    Participant to which Matching Contributions and any investment gains or
    losses thereon are credited. The Administrator may choose not to establish a
    separate Matching Contribution Account, in which case Matching Contributions
    shall be credited to the Employer Contribution Account. The preceding
    sentence shall not be applicable if different vesting schedules apply to the
    Employer Contribution Account and to the Matching Contribution Account.

        2.61 "MATCHING CONTRIBUTIONS" shall mean Employer contributions made
    pursuant to Article VII to match Deferrals contributed to the Plan.

        2.62 "MAXIMUM ADDITION" shall mean, with respect to any Limitation Year,
    the greater of (i) $30,000, or (ii) one-fourth of the defined benefit dollar
    limitation in effect under Section 415(b)(1)(A) of the Code for such
    Limitation Year. With respect to a Limitation Year of less than 12 months
    because of an amendment changing the Limitation Year to a different 12-
    consecutive month period, Maximum Addition shall mean the amount described
    in the preceding sentence, multiplied by a fraction: the numerator of which
    is the number of months in such short Limitation Year, and the denominator
    of which is 12.

        2.63 "MEMBER(S)" shall mean Participants, Former Participants and
    Inactive Participants.

        2.64 "NON-HIGHLY COMPENSATED EMPLOYEE" shall mean, for any Plan Year, an
    Employee of the Employer who is neither a Highly Compensated Employee nor a
    Family Member.

        2.65 "NON-HIGHLY COMPENSATED PARTICIPANT" shall mean, for any Plan Year,
    a Non-Highly Compensated Employee who is also an "eligible employee" for
    such Plan Year (as defined in regulation 1.401(k)-1(g)(4) or 1.401(m)-
    1(f)(4), for purposes of Article VI or VII, respectively). In addition, the
    rules in the definition of "Highly Compensated Participant" shall similarly
    apply here. This may be accomplished by substituting the word "Non-Highly"
    for the word "Highly" wherever it appears in the definition of "Highly
    Compensated Participant".

        2.66 "NORMAL RETIREMENT AGE" shall mean the age or date specified in the
    Adoption Agreement. Notwithstanding the foregoing, Normal Retirement Age
    shall not be later than the later of (i) age 65, or (ii) the 5th ("10th" for
    Plan Years beginning before January 1, 1988) anniversary of the
    Participant's Entry Date .

        2.67 "NORMAL RETIREMENT DATE" shall mean the first day of the month in
    which the Member attains his Normal Retirement Age.

        2.68 "ORIGINAL EFFECTIVE DATE" shall mean the date this Plan was first
    put into effect as specified in the Adoption Agreement.

        2.69 "OWNER-EMPLOYEE" shall mean an individual who is a sole proprietor,
    or who is a partner owning more than 10 percent of either the capital or
    profits interest of the partnership.

        2.70 "PARITY BREAK" shall mean, if elected in the Adoption Agreement, 
    either

                                       43
<PAGE>
 
    (a) or (b) below:

             (a) If the Elapsed Time method of computing Years of Service is
        chosen in the Adoption Agreement, a Break-In-Service which causes an
        Employee's Years of Service prior to such Break-In-Service to be
        cancelled. An Employee will incur a Parity Break if he has a Break-In-
        Service and his continuous period of severance (in determining an
        Employee's period of severance, the period between the first and second
        anniversaries of the date the Employee is first absent from work for
        maternity or paternity reasons shall not be considered a period of
        severance) equals or exceeds:

                 (i) For Plan Years commencing in or after calendar year 1985,
             the greater of five years or the period of Years of Service earned
             prior to such Break-In-Service; or

                 (ii) For Plan Years commencing prior to calendar year 1985, the
             period of Years of Service earned prior to such Break-In-Service.
             If an Employee completed a Parity Break before the beginning of the
             Plan Year commencing with or in 1985, his prior Years of Service
             shall be cancelled even if the Parity Break included less than five
             consecutive Breaks-In-Service.

             (b) If the Hours of Service method of computing Years of Service is
        chosen in the Adoption Agreement, a Break-In-Service which causes an
        Employee's Years of Service prior to such Break-In-Service to be
        cancelled. An Employee will incur a Parity Break if he has a Break-In-
        Service and the number of his consecutive one-year Breaks-In-Service
        equals or exceeds:

                 (i) For Plan Years commencing in or after calendar year 1985,
             the greater of five years or the aggregate number of Years of
             Service earned prior to such Break-In-Service; or

                 (ii) For Plan Years commencing prior to calendar year 1985, the
             aggregate number of Years of Service earned prior to such Break-In-
             Service. If an Employee completed a Parity Break before the
             beginning of the Plan Year commencing with or in 1985, his prior
             Years of Service shall be cancelled even if the Parity Break
             included less than five consecutive Breaks-In-Service.

    For purposes of determining whether or not a Parity Break has occurred,
    Years of Service (or the "aggregate number of Years of Service" if the
    Elapsed Time method is elected) shall not include any Years of Service
    previously cancelled by reason of any other prior Break-In-Service or Parity
    Break.

    Once an Employee becomes a Participant, a Deferred Income Account is
    established on his behalf. Because a Participant is always 100% vested in
    his Deferred Income Account, any Employee who has become a Participant shall
    not incur a Parity Break regardless of the number of his one-year Breaks-In-
    Service.

        2.71 "PARTICIPANT" shall mean an Employee of an Employer participating
    in the Plan in accordance with the provisions of Article III, and is not a
    Former Participant or an Inactive Participant.

        2.72 "PARTICIPANT DIRECTED FUND" shall mean that portion of a
    Participant's Accounts which are held in a segregated fund within the Trust
    and invested under the Participant's direction. A Participant shall be
    solely responsible for the portion of his Account(s) so invested. The
    Participant shall have the right and power to select any broker, salesman,
    or agent he desires to execute his investment orders. The Participant shall
    also have the right and power to

                                       44
<PAGE>
 
    designate an Investment Manager, who shall have control over the selection
    of the investments. This power of delegation must be exercised in writing
    delivered to the Trustee and Administrator and must be signed and dated by
    both the Participant and the Investment Manager. If a Participant dies
    before his Account(s) is totally distributed, his control over the selection
    of investments for the portion of his Account(s) in the Participant Directed
    Fund shall immediately vest in the person or organization he designated as
    Investment Manager. If no person or organization is so designated, then the
    control of investment shall immediately vest in the Beneficiaries of his
    Account(s) on a proportionate basis. If no Beneficiary is designated, the
    control shall immediately vest in the personal representative of his estate,
    or if none, then in the Trustee.

    Neither the Trustee nor the Administrator shall have any investment
    responsibility with respect to such Participant Directed Fund. All expenses
    resulting from investments made at the direction of a Participant and all
    Trustee expenses attributable to a Participant Directed Fund shall be borne
    solely by such Participant's Participant Directed Fund. The Administrator
    shall allocate other expenses attributable to administering Participant
    Directed Funds on a reasonable and equitable basis to each such Participant
    Directed Fund.

    The Administrator and the Trustee shall not be liable nor responsible for
    any loss resulting to any Participant or Beneficiary by reason of any sale
    or investment made or other action taken pursuant to and in accordance with
    the direction of the Participant, any Investment Manager or any other
    investment advisor selected by the Participant or Beneficiary.

        2.73 "PARTNER-EMPLOYEE" shall mean, in the case of a partnership, an
    individual who is a partner of the Employer.

        2.74 "PLAN" shall mean the plan as set forth herein and as amended from
    time to time. The name of the Plan shall be the name specified in the
    Adoption Agreement.

        2.75 "PLAN AMENDMENT EFFECTIVE DATE" shall mean the date, if applicable,
    specified in the Adoption Agreement.

        2.76 "PLAN YEAR" shall mean the 12-consecutive month period ending on
    the date specified in the Adoption Agreement, including periods before the
    Effective Date. If the Plan Year has been amended since the Original
    Effective Date, the provisions of the related amendment shall be
    incorporated into this Plan by reference.

        2.77 "PRIOR EMPLOYER(S)" shall mean those entities, if any, specified in
    the Adoption Agreement.

        2.78 "PRIOR PLAN" shall mean the plan, if any, specified in the Adoption
    Agreement, that existed immediately prior to its complete amendment and
    restatement into this Plan.

        2.79 "PRIOR PLAN ACCOUNT" shall mean the account(s) of Participants who
    were participants in the Prior Plan on the day before the Effective Date of
    this Plan and shall be maintained in accordance with the Adoption Agreement.

        2.80 "PROFIT SHARING CONTRIBUTIONS" shall mean discretionary Employer
    contributions which are allocated in accordance with Section 5.06 (including
    contributions to satisfy the requirements of Sections 5.06(c) and 11.05).

        2.81 "QUALIFIED DOMESTIC RELATIONS ORDER" shall mean a qualified
    domestic relations order as described in Section 414(p) of the Code.

                                       45
<PAGE>
 
        2.82 "QUALIFIED MATCHING CONTRIBUTION ACCOUNT" shall mean the Account of
    a Participant to which Qualified Matching Contributions and any investment
    gains or losses are credited. For Plan Years beginning before January 1,
    1989, the Administrator may choose not to establish a separate Qualified
    Matching Contribution Account, in which case Qualified Matching
    Contributions shall be credited to the Deferred Income Account, the Matching
    Contribution Account or the Employer Contribution Account (in accordance
    with rules established by the Administrator).

    If the Matching Contribution Account meets the requirements applicable to
    the Qualified Matching Contribution Account specified in Section 6.09
    (regarding full vesting and withdrawal/distribution restrictions), the
    Administrator may choose not to establish a separate Qualified Matching
    Contribution Account, in which case Qualified Matching Contributions shall
    be credited to the Matching Contribution Account.

        2.83 "QUALIFIED MATCHING CONTRIBUTIONS" shall mean Matching
    Contributions which are used by the Administrator for the purpose of either:

             (a) avoiding the nondiscrimination requirements of Section 7.08
        (the ACP Test), or

             (b) enabling the Plan to comply with the nondiscrimination
        requirements of Section 6.05 (the ADP Test).
        (See Sections 7.08 and 6.09 for details regarding such contributions.)

        2.84 "QUALIFIED NONELECTIVE CONTRIBUTION ACCOUNT" shall mean the Account
    of a Participant to which Qualified Nonelective Contributions made to this
    Plan (as opposed to such contributions under another plan of the Employer)
    and any investment gains or losses are credited. For Plan Years beginning
    before January 1, 1989, the Administrator may choose not to establish a
    separate Qualified Nonelective Contribution Account, in which case Qualified
    Nonelective Contributions shall be credited to the Deferred Income Account
    or the Employer Contribution Account (in accordance with rules established
    by the Administrator).

        2.85 "QUALIFIED NONELECTIVE CONTRIBUTIONS" shall mean amounts (including
    certain Forfeitures) contributed by the Employer for the purpose of enabling
    the Plan to comply with the nondiscrimination requirements of Sections 6.05
    (the ADP Test), 7.08 (the ACP Test) or 7.14 (the Multiple Use Test). (See
    Sections 6.08, 7.12 and 7.14 for details regarding such contributions.)

        2.86 "REA" shall mean Public Law No. 98-397, the Retirement Equity Act
    of 1984, as amended from time to time.

        2.87  "ROLLOVER CONTRIBUTION" shall mean the taxable portion of:

             (a) With respect to periods before January 1, 1993, a "qualified
        total distribution" within the meaning of Section 402(a)(5)(E)(i) of the
        Code, or a "rollover contribution" within the meaning of Section
        408(d)(3)(A)(ii) of the Code; or

             (b) With respect to periods after December 31, 1992, an "eligible
        rollover distribution" within the meaning of Section 402(c)(4) of the
        Code, or a "rollover contribution" within the meaning of Section
        408(d)(3)(A)(ii) of the Code.

    A Rollover Contribution shall also include a transfer by a trustee from
    another qualified retirement plan to the Trustee of this Plan of a
    Participant's interest in such other qualified retirement plan.

                                       46
<PAGE>
 
        2.88 "SAFE HARBOR EARNINGS #A" shall mean an Employee's Earned Income,
    wages, salaries and fees for professional services and other amounts
    received (without regard to whether or not an amount is paid in cash) for
    personal services actually rendered in the course of employment with the
    Employer, Affiliated Company, or any entity predecessor to the Employer to
    the extent that such amounts are includible in gross income (including, but
    not limited to, commissions paid salesmen, compensation for services on the
    basis of a percentage of profits, commissions on insurance premiums, tips,
    bonuses, fringe benefits, reimbursements and expense allowances).

    Safe Harbor Earnings #A shall include foreign earned income (as defined in
    Section 911(b) of the Code), whether or not excludable from gross income
    under Section 911 of the Code; and Safe Harbor Earnings #A shall exclude the
    following:

             (a) Employer contributions to a plan of deferred compensation which
        are not includible in the Employee's gross income for the taxable year
        in which contributed or Employer contributions under a simplified
        employee pension plan to the extent such contributions are deductible by
        the Employee, or any distributions from a plan of deferred compensation;

             (b) Amounts realized from the exercise of a non-qualified stock
        option, or when restricted stock (or property) held by the Employee
        either becomes freely transferrable or is no longer subject to a
        substantial risk of forfeiture;

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

             (d) Other amounts which received special tax benefits, or
        contributions made by the Employer or Affiliated Company (whether or not
        under a salary reduction agreement) towards the purchase of an annuity
        described in Section 403(b) of the Code (whether or not the amounts are
        actually excludable from the gross income of the Employee).

        2.89 "SAFE HARBOR EARNINGS #B" shall mean Safe Harbor Earnings #A, plus
    the following:

             (a) Amounts described in Sections 104(a)(3), 105(a) and 105(h) of
        the Code, but only to the extent that these amounts are includible in
        the gross income of the Employee;

             (b) Amounts paid or reimbursed by the Employer, Affiliated Company,
        or an entity predecessor to the Employer, for moving expenses incurred
        by an Employee, but only to the extent that these amounts are not
        deductible by the Employee under Section 217 of the Code;

             (c) The value of a non-qualified stock option granted to an
        Employee by the Employer, Affiliated Company, or an entity predecessor
        to the Employer, but only to the extent that the value of the option is
        includible in the gross income of the Employee for the taxable year in
        which granted; and

             (d) The amount includible in the gross income of an Employee upon
        making the election described in Section 83(b) of the Code.

        2.90 "SELF-EMPLOYED INDIVIDUAL" shall mean an individual who has Earned
    Income for the taxable year from the trade or business for which the Plan is
    established (including an individual who would have had Earned Income but
    for the fact that the trade or business had no net profits for the taxable
    year), or a Partner-Employee or an Owner-Employee.

                                       47
<PAGE>
 
        2.91 "SHORT-TERM INCOME FUND" shall mean that portion of the Trust which
    shall be invested and reinvested in short-term investments providing a known
    return such as Treasury Bills, Treasury Notes or other such similar short-
    term obligations of the United States Government or any instrumentality
    thereof, in savings accounts, certificates of deposit, repurchase
    agreements, or other interest bearing accounts which provide a reasonable
    rate of interest, in commercial paper or bankers' acceptances, or in other
    similar investments, or in mutual or pooled investment funds as the
    Administrator, Trustee or Investment Manager shall deem suitable and in
    loans to Participants.

        2.92 "SOCIAL SECURITY TAXABLE WAGE BASE (SSTWB)" shall mean the maximum
    amount of earnings which may be considered wages in a given calendar year
    under Sections 3121(a)(l) and 3121(x)(1) of the Code for purposes of
    computing Social Security (OASDI) taxes.

        2.93 "TERMINATION OF EMPLOYMENT" shall mean separation from active
    employment with an Employer resulting from retirement, death, Disability,
    voluntary or involuntary severance of employment, or failure to return to
    active employment with an Employer by the date on which an Authorized Leave
    of Absence expired.

        2.94 "TEFRA" shall mean Public Law No. 97-248, the Tax Equity and Fiscal
    Responsibility Act of 1982, as amended from time to time.

        2.95 "TOP HEAVY VESTING SCHEDULE" shall mean the schedule specified in
    the Adoption Agreement.

        2.96 "TRA86" shall mean Public Law No. 99-514, the Tax Reform Act of
    1986, as amended from time to time.

        2.97 "TRUST" or "TRUST FUND" shall mean the employee benefit trust fund
    maintained in accordance with a Trust Agreement which the Employer(s) has
    adopted, or in lieu thereof, or in addition thereto, the fund or funds held
    and invested in accordance with the terms of a group deposit administration
    or similar insurance contract or contracts.

        2.98 "TRUST AGREEMENT" shall mean that certain agreement or agreements
    between the Company and the Trustee establishing the Trust or Trusts, or in
    lieu thereof, or in addition thereto, the group deposit administration or
    similar insurance contract or contracts, which shall be a part of this Plan.

        2.99 "TRUSTEE" shall mean the corporation or corporations (including
    without limitation any legal reserve life insurance company or companies) or
    individual or individuals named in the Trust Agreement and appointed to
    hold, invest, reinvest, and disburse the Trust Fund.

        2.100 "VALUATION DATE(S)" shall mean the last day of each Plan Year.
    However, the Administrator may direct that valuations occur more frequently
    on a one-time or on a regular basis.

        2.101 "VESTED PERCENTAGE" shall mean the percentage (which may differ
    depending upon the Account to which such percentage relates) of a
    Participant's nonforfeitable interest in his Employer Contribution Account,
    Joining Bonus Account or Matching Contribution Account (depending upon the
    applicable Plan provision), determined in accordance with the schedule(s)
    specified in the Adoption Agreement.

             (a) If applicable, the Vested Percentage of an Employee who was a
        Participant in the Plan on the day before the first day of the Plan Year

                                       48
<PAGE>
 
        beginning in 1989 shall be determined in accordance with the alternative
        schedule specified in the Adoption Agreement.

             (b) In determining a Participant's Vested Percentage, all his Years
        of Service shall be included, unless otherwise specified in the Adoption
        Agreement. Such exclusion of certain Years of Service shall only be
        permitted if (i) the Original Effective Date of this Plan is in calendar
        year 1989 or later; or (ii) the Plan or Prior Plan previously excluded
        such Years of Service.

             (c) If Years of Service prior to the Original Effective Date are
        excluded, the Original Effective Date is modified (extended to an
        earlier date) to include service under a "predecessor plan," as defined
        in IRS Regulation 1.411(a)-5(b)(3).

             (d) Notwithstanding the foregoing, a Participant's Vested
        Percentage shall be 100% upon the attainment of his Normal Retirement
        Age (but only if he is employed on such date).

        2.102 "WAGES" shall mean regular (base) salary or wages from an Employer
    for personal services rendered, including elective Employer contributions
    (attributable to Wages) made pursuant to a salary reduction agreement which
    are not includible in the gross income of the Employee under Sections 125,
    402(a)(8), 402(h) or 403(b) of the Code. In the case of certain Self-
    Employed Individuals, Wages shall mean a percentage of his Earned Income.
    The preceding percentage shall be determined in accordance with regulation
    1.414(s)-1(f)(1), which takes into account what portion of the Gross
    Earnings of Non-Highly Compensated Employees (as a group) is included in the
    Wages of Non-Highly Compensated Employees (as a group).

        2.103 "YEARS OF SERVICE" shall mean an Employee's period of employment
    as determined in accordance with Article III.

                                       49
<PAGE>
 
                                  ARTICLE III
                    ELIGIBILITY, PARTICIPATION AND SERVICE

     3.01  ELIGIBILITY

             (a) Eligible Employee: An Employee other than an Excluded Employee
        shall become an Eligible Employee upon attainment of the minimum age and
        completion of the minimum service specified in the Adoption Agreement
        (and taking into account how service is computed for purposes of
        eligibility to participate: the Hours of Service method [Section
        3.05(a)] or the Elapsed Time method [Section 3.05(b)]). If the minimum
        service requirement specified in the Adoption Agreement is one Year of
        Service (using the Hours of Service method), the second and subsequent
        eligibility Computation Periods shall be measured in terms of Plan
        Years, commencing with the Plan Year in which occurs the first
        anniversary of the Employee's Employment Commencement Date, but
        excluding Years of Service cancelled because of a Parity Break.

             (b) Special Rule For Two or Three Years of Service: This subsection
        shall apply if the Adoption Agreement provides that an Employee must
        complete two or three Years of Service to become an Eligible Employee.
        If an Employee has a Break-In-Service prior to completing one Year of
        Service in each of two or three (whichever is applicable) Computation
        Periods, his Hours of Service prior to such Break-In-Service shall be
        cancelled and he shall be treated as a new Employee for purposes of
        meeting the requirements for becoming an Eligible Employee in this
        Section.

             (c) Special Rule for Hours of Service Method: This subsection shall
        apply if the Adoption Agreement provides that the Hours of Service
        method under Section 3.05(a) is used for purposes of eligibility to
        participate. An Employee shall not be credited with a Year of Service
        until the end of the Computation Period in which he is credited with at
        least 1,000 Hours of Service.

             (d) Compliance with TRA86 One-Year Eligibility Requirement: If the
        minimum service requirement used in subsection (a) above is greater than
        one Year of Service (or equivalent, e.g. 12 or less months of
        employment, depending upon the number of Hours of Service completed),
        such minimum service requirement shall no longer be permitted for Plan
        Years beginning after December 31, 1988. Accordingly, a separate minimum
        service requirement (no greater than one Year of Service or equivalent)
        for Plan Years beginning after December 31, 1988 must be specified in
        the Adoption Agreement.

        Note: Had this Plan not had a qualified CODA, the Plan would have been
        permitted to have a minimum service requirement greater than one Year of
        Service. This "plan design" can still be accomplished by selecting the
        appropriate requirements in Sections 5.05 or 7.04(b) to be eligible for
        an allocation of Profit Sharing Contributions or Matching Contributions,
        respectively.

             (e) Loss of Service: The provisions of Section 3.05(c) regarding
        cancellation of certain Years of Service shall also apply for purposes
        of eligibility to participate.

     3.02  DATE OF PARTICIPATION

             (a) Prior Plan Participants: An Employee participating under the
        provisions of the Prior Plan, if any, on the day preceding the Effective
        Date,

                                       50
<PAGE>
 
   shall continue to participate in accordance with the provisions of this Plan
   as of the Effective Date.

       (b)  Effective Date Employees:  An Employee who is an Eligible Employee
            ------------------------
   on the Effective Date shall become a Participant in the Plan on the Effective
   Date, provided he is employed by an Employer on the Effective Date.

       (c)  Other Employees:  Each Employee who does not become a Participant in
            ---------------
   this Plan pursuant to subsections (a) and (b) above, shall become a
   Participant in the Plan on the Entry Date coinciding with or immediately
   succeeding the date such Employee becomes an Eligible Employee, provided he
   is employed by an Employer on such Entry Date.

       (d)  Termination of Employment:  A Participant who experiences a
            -------------------------
   Termination of Employment shall cease to participate in the Plan as of his
   date of Termination of Employment.

     3.03  EXCLUDED EMPLOYEES

       (a)  Participation in Plan:  An Employee who ceases to be an Excluded
            ---------------------
   Employee shall become a Participant in this Plan on the later of (i) the date
   he ceases to be an Excluded Employee, or (ii) the Entry Date on which he
   would have otherwise become a Participant had he not been an Excluded
   Employee.

       (b)  Cessation of Participation:  Notwithstanding any other provision of
            --------------------------
   this Plan, if any Participant becomes an Excluded Employee, such Participant
   shall cease further participation under this Plan and shall become an
   Inactive Participant, and shall continue in such status thereafter. Such
   Inactive Participant may again become a Participant in this Plan in
   accordance with subsection (a) above.

     3.04  PARTICIPATION UPON REEMPLOYMENT

Upon the reemployment of an Employee who experienced a Termination of
Employment, the following rules shall apply in determining his participation in
the Plan.

       (a)  Former Participants:  If an Employee who was a Participant is
            -------------------
   reemployed, he shall become a Participant on his date of reemployment unless
   such Employee is an Excluded Employee.

       (b)  Other Former Employees:  If a former Employee who was not a
            ----------------------
   Participant is reemployed, he shall be eligible to participate in the Plan in
   accordance with Section 3.01, taking account of his prior Years of Service
   unless cancelled by reason of a Parity Break or Section 3.01(b). However, if
   such Employee on his Termination of Employment date was an Eligible Employee
   but had not become a Participant in the Plan, then such Employee shall
   participate in the Plan on the later of his date of reemployment or the Entry
   Date on which he would have otherwise become a Participant had he not had a
   Termination of Employment unless such Employee's prior Years of Service are
   cancelled by reason of a Parity Break or Section 3.01(b).

     3.05  YEARS OF SERVICE

This Section 3.05 shall apply for purposes other than eligibility to participate
in the Plan, which is covered by Section 3.01.

       (a)  Hours of Service Method for Crediting Years of Service:  This
            ------------------------------------------------------
   subsection shall apply if the Hours of Service method is selected in the
   Adoption Agreement. Subject to the loss of service provisions of Section
   3.05(c), an Employee shall be credited with a Year of Service for each
   Computation Period during which he is credited with 1,000 or more Hours of
   Service. Years of Service shall include the following:

                                       51
<PAGE>
 
           (i)   Periods of employment with an Employer, an Affiliated Company
       and a Prior Employer, if one is specified in the Adoption Agreement;

           (ii)  Periods of employment with a corporation, trade or business
       predecessor to an Employer;

           (iii) Periods of employment as an "employee" or "owner-employee" (as
       defined in Sections 401(c)(l) and 401(c)(3) of the Code) of any sole
       proprietorship or partnership which was predecessor to an Employer; and

           (iv)  Periods of employment as a Leased Employee.

       (b)  Elapsed Time Method For Crediting Years of Service:  This subsection
            --------------------------------------------------
   shall apply if the Elapsed Time method is selected in the Adoption Agreement.
   Years of Service shall be measured in whole years and fractions of a year
   with fractions of a Year of Service determined on the basis of 365 days
   equaling one year. Subject to the loss of service provisions of Section
   3.05(c), an Employee's Years of Service shall be determined from his
   Employment Commencement Date and anniversaries thereof, and shall include the
   following:

           (i)   The total period or periods of employment with an Employer, an
       Affiliated Company and a Prior Employer, if one is specified in the
       Adoption Agreement;

           (ii)  Any period of severance of employment following a Termination
       of Employment, if the Employee returns to employment with the Employer or
       an Affiliated Company within 12 months of such severance;

           (iii) The first 12 months of any Authorized Leave of Absence,
       including an absence for maternity or paternity reasons;

           (iv)  If the Employee quits, is discharged, or retires at any time
       during the first 12 months of an Authorized Leave of Absence, the period
       of severance after the date he so quits, is discharged, or retires, if he
       returns to employment with the Employer or an Affiliated Company within
       12 months of the date when his Authorized Leave of Absence began;

           (v)   Periods of employment with a corporation, trade or business
       predecessor to an Employer;

           (vi)  Periods of employment as an "employee" or "owner-employee" (as
       defined in Sections 401(c)(l) and 401(c)(3) of the Code) of any sole
       proprietorship or partnership which was predecessor to an Employer; and

           (vii) Periods of employment as a Leased Employee.

       (c)  Loss of Service:  An Employee's Years of Service for purposes of
            ---------------
   eligibility to participate in this Plan and/or vesting may be cancelled if
   such Employee incurs a Break-In-Service in accordance with the following
   rules:

           (i)   Participants:  Because a Participant shall not incur a Parity
       Break (see the last paragraph of the definition of Parity Break in
       Article II), a Participant's Years of Service earned prior to his Break-
       In-Service shall be aggregated with his Years of Service earned after
       such Break-In-Service.

           (ii)  Other Employees:  If an Employee not included in subparagraph
       (i) incurs a Break-In-Service, his Years of Service prior to such Break-
       In-Service shall be cancelled if he incurs a Parity Break.

     This subsection (c) shall not apply if the Adoption Agreement provides that
Employees must complete more than one Year of Service to become an Eligible
Employee.

                                       52
<PAGE>
 
     3.06  TRANSFER OF EMPLOYMENT

If a Participant transfers employment between Employers, he shall maintain all
his rights and obligations under the Plan so long as he remains a Participant in
the Plan.  In such a case, his employment shall be considered to be
uninterrupted as if no transfer had been made.  However, if a Participant's
employment is transferred to an Affiliated Company or a unit of an Employer not
participating in the Plan, such Participant shall become an Inactive Participant
on the date of such transfer.  Such an Inactive Participant may again become a
Participant upon his transfer to an Employer or unit of an Employer
participating in the Plan or by the adoption of the Plan by the Affiliated
Company.

                                       53

<PAGE>
 
     3.07  INACTIVE PARTICIPANTS

Compensation received by an Employee during the period he is an Inactive
Participant is not taken into account under this Plan.  Accordingly, an Inactive
Participant shall not be entitled to (1) share in Profit Sharing Contributions
and Forfeitures allocated pursuant to Article V, (2) make Deferrals pursuant to
Article VI, or (3) share in Matching Contributions allocated pursuant to 
Article VII, on account of such Compensation. Upon Termination of Employment, an
Inactive Participant shall have the value of his Accounts determined and
distributed in accordance with Article VIII.

     3.08  IRREVOCABLE WAIVER OF PARTICIPATION

If permitted in the Adoption Agreement, an Employee who would otherwise be
eligible to participate in the Plan may irrevocably waive his right to
participate in the Plan.  The Employee shall complete such form or forms as may
be required by the Administrator and the Employer, which may include a statement
which releases and holds harmless the Administrator and the Employer from any
and all liability and responsibility associated with the Employee's election to
irrevocably waive his right to participate in the Plan.

                                       54

<PAGE>
 
                                  ARTICLE IV
                         CONTRIBUTIONS AND FORFEITURES

     4.01  EMPLOYER CONTRIBUTIONS

       (a)  Amount of Contribution:  Each Employer agrees to contribute for each
            ----------------------
   Plan Year an amount, if any, to be determined in its sole discretion by the
   Governing Body of the Employer. However, such amount shall not be less than
   the sum of (1) total Deferrals for such Plan Year, (2) total Matching
   Contributions and Joining Bonuses required, if any, under Article VII, and
   (3) total "Top-Heavy" minimum contributions required, if any, under 
   Section 11.05.

       Each Employer shall designate what portion of the contributions under
   this Section 4.01(a) is attributable to (1) Deferrals, (2) Matching
   Contributions and/or Joining Bonuses, and (3) Profit Sharing Contributions.

       (b)  Time of Payment:  All contributions of the Employer shall be paid to
            ---------------
   the Trustee, and payment shall normally be made not later than the time
   prescribed by law for filing the federal income tax return of the Employer,
   including any extensions which may be granted for the filing of such tax
   return.

       (c)  Corrections:  In the event the Administrator determines that a
            -----------
   Participant was excluded from participation in error, or was mistakenly
   omitted and was not credited with allocations pursuant to Articles V, VI,
   and/or VII, or an error caused a Participant to be credited with less than
   his full allocations pursuant to Articles V, VI, and/or VII, the
   Administrator shall determine the amounts (or additional amounts) which
   should have been credited to such Participant's Account. To correct any such
   error or omission, the corrected amount may be deducted from Forfeitures
   and/or Investment Income prior to allocating such amounts to other
   Participants in lieu of adjusting Accounts of other Participants. In addition
   to (or instead of) the preceding adjustment, the Employer may make a special
   contribution (in addition to the contribution described in Section 4.01(a))
   to correct any such error or omission.

     4.02  DISPOSITION OF FORFEITURES ATTRIBUTABLE TO EMPLOYER CONTRIBUTION
           ACCOUNTS

This Section 4.02 discusses the treatment of Forfeitures attributable only to
Employer Contribution Accounts.  For a discussion of Forfeitures attributable to
the Matching Contribution Accounts and the Joining Bonus Accounts, see Sections
7.07 and 7.13.

For Plan Years beginning prior to January 1, 1989, the treatment of Forfeitures
and Forfeiture Accounts attributable to Employer Contribution Accounts shall be
determined under the terms of the Prior Plan.  For Plan Years beginning after
December 31, 1988, the provisions of this Section 4.02 shall be applicable.
Forfeitures shall occur as of the date a Forfeiture Account is established in
accordance with subsection (a) below.

       (a)  Establishment of Forfeiture Accounts:  The Administrator shall
            ------------------------------------
   establish a Forfeiture Account to record a Former Participant's Forfeiture,
   if any. A Former Participant's Forfeiture Account shall be established as of
   the earlier of the date the Former Participant receives a distribution of his
   Benefit, or the end of the Plan Year in which the Former Participant incurs
   five consecutive Breaks-In-Service. The value of the preceding Forfeiture
   Account shall be equal to the value of the non-vested portion of such Former

                                       55
<PAGE>
 
   Participant's Employer Contribution Account on the date the Forfeiture
   Account is established. Forfeiture Accounts shall become available for
   allocation as of the end of the Plan Year described in the Adoption
   Agreement, or, if earlier, as of the end of the Plan Year in which the Former
   Participant incurs five consecutive Breaks-In-Service. Such Forfeiture
   Accounts shall first be used as Qualified Nonelective Contributions pursuant
   to Sections 6.07, 7.11 or 7.14 (Note: Sections 6.07, 7.11 and 7.14 are
                                   ----
   effective for Plan Years beginning after December 31, 1990). Any Forfeiture
   Accounts not used as Qualified Nonelective Contributions shall be allocated
   to the Employer Contribution Accounts of eligible Participants in accordance
   with Section 5.07.

       If elected in the Adoption Agreement, then notwithstanding the preceding
   paragraph, in the case of a Plan subject to subsection (b)(i) below
   (repayment of a prior distribution is required in order to restore a Former
   Participant's Forfeiture Account), the Forfeiture Accounts of certain Former
   Participants shall only become available for allocation under the "Delayed
   Forfeiture Allocation Method." Under the Delayed Forfeiture Allocation
   Method, if (i) the Forfeiture Account of a Former Participant has not yet
   become available for allocation in accordance with the preceding paragraph,
   (ii) such Former Participant returns to employment with the Employer, and
   (iii) such Former Participant is eligible for a restoration of his Forfeiture
   Account pursuant to subsection (b)(i) below, then his Forfeiture Account
   shall not become available for allocation in accordance with the preceding
         ---
   paragraph until the end of the Plan Year in which occurs the end of the
   repayment period described in subsection (b)(i) below.

       (b)  Restoration of Forfeiture Accounts:  If a Former Participant
            ----------------------------------
   receives a distribution of less than his entire Employer Contribution Account
   and subsequently returns to employment with the Employer before having five
   consecutive Breaks-In-Service, his right to the restoration of his prior
   Forfeiture Account shall be governed by paragraph (i) or (ii) below,
   whichever is selected in the Adoption Agreement:

           (i)  Repayment of Prior Distribution:  If such Former Participant
                -------------------------------
       repays the amount of such distribution, the repaid amount and his
       Forfeiture Account shall be added to his new Employer Contribution
       Account as of the end of the Plan Year in which such amount is repaid.
       Such repayment must be made on or before the earlier of (1) the
       Participant incurring five consecutive one-year Breaks-In-Service
       following the date of distribution, or (2) the date five years after the
       date of resumption of employment. If such Former Participant does not
       make repayment within the prescribed period, his right to the restoration
       of his prior Forfeiture Account shall lapse.

           (ii)  No Repayment Required:  The Administrator shall add back to the
                 ---------------------
       (Former) Participant's Employer Contribution Account the Forfeiture
       Account as of the Valuation Date immediately preceding the date of
       reemployment. To determine such Participant's vested interest in his
       Employer Contribution Account upon any subsequent Termination of
       Employment, the following formula shall be applicable: 
       X = P (AB + D) - D, where

           "X" equals the vested interest
           "P" equals the Vested Percentage
           "AB" equals the value of the Employer Contribution Account
           "D" equals the amount of the prior distribution(s).

                                       56
<PAGE>
 
       (c)  Forfeiture Accounts at Plan Termination:  Notwithstanding Section
            ---------------------------------------
   4.02(b), an individual's rights to Forfeiture restoration shall lapse when
   this Plan is terminated and such individual has either (i) failed to repay
   his prior distribution in accordance with Section 4.02(b)(i) prior to the
   date the Plan is terminated or (ii) not resumed employment prior to the date
   the Plan is terminated. Any Forfeiture Accounts remaining on the date the
   Plan is terminated shall be disposed of in accordance with Section 15.03.

       (d)  Source of Funds for Restored Forfeitures:  If a Forfeiture Account
            ----------------------------------------
   has already been allocated pursuant to Sections 4.02(a), 5.07, 6.07, 7.11 or
   7.14, but such Forfeiture Account must be restored in accordance with
   Sections 4.02(a) or (b), such restoration shall be made from: (i) other
   Forfeitures which become available, (ii) Employer contributions under Section
   4.01(a), or (iii) Investment Income. Alternatively, the Employer may make a
   special contribution to restore such Forfeiture Account.

       (e)  Non-Vested Former Participants:  For purposes of this Section 4.02
            ------------------------------
   and Article VIII, if the value of a Former Participant's (or Inactive
   Participant's) Benefit is zero at his date of Termination of Employment, the
   Former Participant (or Inactive Participant) shall be deemed to have received
   a distribution of his Benefit on his date of Termination of Employment.

     4.03  VOLUNTARY AND ROLLOVER CONTRIBUTIONS BY PARTICIPANTS

       (a)  Company Discretion:  If provided in the Adoption Agreement,
            ------------------
   Participants may be permitted to elect to make voluntary contributions to the
   Trust, and/or Participants may be permitted to contribute Rollover
   Contributions. The Administrator shall give Participants adequate advance
   notice prior to the beginning of a Plan Year for which voluntary
   contributions will, or will not, be permitted. If voluntary contributions are
   permitted under this Plan, Section 6.11 may provide that Discriminatory
   Deferrals can be recharacterized as voluntary contributions.

       (b)  Amount of Voluntary Contributions:  With respect to a Plan Year when
            ---------------------------------
   voluntary contributions are permitted, the amount of voluntary contributions
   (including Discriminatory Deferrals recharacterized as voluntary
   contributions in accordance with Section 6.11) made by any Participant shall
   be subject to the limitations set forth in the Adoption Agreement and Article
   V. Voluntary contributions may be made by payroll deductions or by other
   methods and at other intervals in accordance with rules established by the
   Administrator. Voluntary contributions received by the Employer shall be
   transmitted to the Trustee within 30 days after they have been collected.

                                       57
<PAGE>
 
       (c)  Rollover Contributions:  With the approval of the Administrator, a
            ----------------------
   Participant may contribute a Rollover Contribution into the Trust. The
   Administrator, in its sole discretion, shall determine whether or not a
   Participant shall be permitted to make a Rollover Contribution. The
   Administrator shall develop like and non-discriminatory rules and procedures.
   The Administrator may require the Participant to supply all the information
   it deems necessary, including but not limited to the amount and nature of the
   property to be contributed, and a statement that such contribution
   constitutes a Rollover Contribution.

       (d)  Separate Fund:  The voluntary contributions and Rollover
            ------------- 
   Contributions of Participants shall be accounted for separately from that
   portion of the Trust attributable to Employer contributions. Such
   contributions may, but need not, be held and invested in a segregated
   separate fund within the Trust established and maintained for this purpose.

       (e)  Individual Accounts:  The Administrator shall create and maintain
            -------------------
   adequate records to record the interest in the Trust of voluntary
   contributions and Rollover Contributions. Such records shall be in the form
   of individual Accounts in accordance with Section 5.01. Each Participant
   electing to make voluntary contributions shall have an Employee Contribution
   Account, and each Participant contributing a Rollover Contribution shall have
   a Rollover Contribution Account.

       (f)  Valuation and Allocations:  If Employee Contribution Accounts and/or
            -------------------------
   Rollover Contribution Accounts are held and invested in a separate fund, the
   Administrator or Trustee shall determine the net worth of the assets of the
   separate fund or funds as of each Valuation Date or Interim Valuation Date in
   accordance with Section 5.02. Investment Income shall be allocated to the
   Employee Contribution Accounts and/or Rollover Contribution Accounts as of
   each Valuation Date or Interim Valuation Date as provided in Section 5.04.

       (g)  Vesting:  A Participant's Employee Contribution Account and/or
            -------
   Rollover Contribution Account shall at all times be fully vested and shall
   not be forfeitable for any cause.

                                       58
<PAGE>
 
       (h)  Withdrawals from Employee Contribution Accounts:  The Administrator
            -----------------------------------------------
   shall adopt uniform rules and procedures pertaining to the withdrawal from
   Employee Contribution Accounts. A Participant may elect to make a withdrawal
   from his Employee Contribution Account by filing an adequate advance written
   notice with the Administrator. Such withdrawal may be up to an amount equal
   to the balance then credited to said Account, determined as of the last
   preceding Valuation Date (or Interim Valuation Date), including any
   contributions made after such Valuation Date (or Interim Valuation Date) up
   to the date of withdrawal. Withdrawals from Rollover Contribution Accounts
   shall not be permitted. A withdrawal under this subsection (h) shall not have
   any effect on either his other Accounts in the Plan or his Vested Percentage
   in such other Accounts.

       (i)  Distribution:  Upon Termination of Employment, a Participant's
            ------------
   Employee Contribution Account and/or Rollover Contribution Account shall be
   distributed in accordance with Article VIII in the same manner and conditions
   as other Accounts.

       (j)  Forms:  Elections to make contributions, withdraw contributions,
            -----
   discontinue contributions or resume contributions shall be in writing, signed
   by the Participant and on such form or forms as the Administrator shall
   require.

       (k)  Consent and Annuity Requirements:  Notwithstanding Sections 4.03(h)
            --------------------------------
   and (i), any withdrawal or distribution of an Account described in this
   Section 4.03 shall:

            (i)  require the consent of the Participant if the value of all of
       the Participant's Accounts in this Plan exceeds $3,500; and

            (ii) be subject to the requirements of Article X (but only to the
       extent Article X is otherwise applicable).

                                       59
<PAGE>
 
                                   ARTICLE V
                             ALLOCATIONS AND LOANS

       5.01    INDIVIDUAL ACCOUNTS

The Administrator shall create and maintain adequate records to disclose the
interest in the Trust of each Member and Beneficiary.  Such records shall be in
the form of individual Accounts, and credits and charges shall be made to such
Accounts in the manner herein described.  The maintenance of individual Accounts
is only for accounting purposes, and a segregation of the assets of the Trust to
each Account shall not be required.

       5.02    VALUATION OF THE TRUST

The Administrator, or if it so directs, the Trustee, shall determine the net
worth of the assets of the Trust and of any separate fund therein as of each
Valuation Date and Interim Valuation Date.  In determining such net worth, the
Administrator or Trustee shall evaluate the assets at their "fair market value"
as of such Valuation Date or Interim Valuation Date as described herein.

The "fair market value" of the Trust Fund assets shall be determined in
compliance with this Section and the principles of Section 3(26) of ERISA and
regulations issued pursuant thereto.  Valuation shall be based upon information
reasonably available to the Administrator, including data from, but not limited
to, newspapers and financial publications of general circulation, statistical
and valuation services, records of securities exchanges, appraisals by qualified
persons, transactions and bona fide offers in assets of the type in question and
other information customarily used in the valuation of property for purposes of
Internal Revenue Code.  The Administrator may elect to value any bank deposit,
certificate of deposit, bond, interest-bearing insurance contract, promissory
note or other evidence of indebtedness at its unpaid face value, with interest
accrued to the Valuation Date or Interim Valuation Date, if the obligation is
not in default.  The value of any real property held in the Trust Fund,
determined as of the end of any Plan Year, shall be considered to remain
unchanged until the end of the following Plan Year.  In determining the value of
the Plan's investment in a collective investment fund, separate account,
partnership or similar entity, the Administrator may (but need not) rely upon
the most recent prior valuation of units or interests in the fund, separate
account, partnership or entity made on or on behalf of the fund, separate
account, partnership or entity.  With respect to securities for which there is a
generally recognized market, the published selling prices on or nearest to such
Valuation Date or Interim Valuation Date shall establish the fair market value
of such security.  The fair market value so determined shall be conclusive for
all purposes of the Plan and Trust.

       5.03    INVESTMENT OF ACCOUNTS

If elected in the Adoption Agreement, separate Investment Funds shall be
established.  In addition, such election may limit the type(s) of Account (and
contributions attributable to such Account) which may be invested in such
Investment Funds.

       (a) "Eligible Accounts":  If permitted above, a Participant's Account(s)
            -----------------
   (and related contributions) shall be invested in the Investment Fund or Funds
   in accordance with the Participant's investment election as made on the form
   or forms provided by the Administrator.

                                       60
<PAGE>
 
       (b) "Non-Eligible Accounts":  If separate Investment Funds are 
            ---------------------
   established, but an Account is not invested in any Investment Fund (because
   either (i) a Participant does not wish to invest such Account in any
   Investment Fund, or (ii) Investment Funds are limited to certain type(s) of
   Account), the "non-eligible" Account (and related contributions) shall be
   invested in the General Fund.

       (c) Change of Investment Election: A Participant may change his
           -----------------------------
   investment election with respect to future contributions under subsection (a)
   as of the first day of the Plan Year and/or at such other times as the
   Administrator shall provide under uniform rules and procedures.

       The Administrator, in its sole discretion, may also permit Participants
   to change the investment of their entire Account(s). If the Administrator
   permits such a change, it shall establish such rules and procedures as it
   deems appropriate. For example, the Administrator could require that the
   Participant's Account be invested (i) in the same Investment Fund or Funds
   and in the same proportions as the future contributions made on such
   Participant's behalf, or (ii) in any or all of the Investment Funds in even
   percentages of 10%, 20% or 25%. The effective date of such a change with
   respect to a Participant's entire Account shall be as of such date as
   determined by the Administrator.

       The Administrator may require Participants to provide written
   notification of a change of investment up to 60 days in advance on such form
   or forms and in accordance with such procedures as the Administrator shall
   determine.

                                       61
<PAGE>
 
       (d) Temporary Investments:  Pending the investment election of monies in
           ---------------------
   one of the Investment Funds, the Trustee or Investment Manager may invest
   such monies in the Short-Term Income Fund, if any, or a separate fund with
   similar type short-term investments.

       5.04    ALLOCATION OF INVESTMENT INCOME

       (a) Allocation on Valuation Date:  As of each Valuation Date, the
           ----------------------------
   Investment Income of each Investment Fund (or if none, of the Trust) and each
   separate fund in the Trust, if any, since the preceding Valuation Date, shall
   be determined by the Administrator and allocated to the Account or Accounts
   of Members and Beneficiaries who had balances in their Accounts on the
   Valuation Date.

       Investment Income of each of the Investment Funds (or if none, of the
   Trust) shall be allocated to each Account in the Investment Fund on the
   Valuation Date according to the ratio that a person's "Adjusted Account
   Balance" (as defined herein) bears to the total of the "Adjusted Account
   Balances" of all persons as of such Valuation Date in such Investment Fund.

       For purposes of this Section, a person's "Adjusted Account Balance" as of
   any Valuation Date shall be:

            (i) The balance in the person's Account in the Investment Fund (or
       if none, in the Trust) as of the immediately preceding Valuation Date;
       plus

            (ii) A portion of Deferrals, Matching Contributions, voluntary
       contributions and Rollover Contributions made on the person's behalf and
       not withdrawn since the immediately preceding Valuation Date; plus

            (iii) A portion of transfers from another Investment Fund to the
       person's Account since the immediately preceding Valuation Date; less

            (iv) Distributions, withdrawals, and transfers to another Investment
       Fund, from the person's Account since the immediately preceding Valuation
       Date. For purposes of this paragraph (iv), the Deferrals, Matching
       Contributions, voluntary contributions and Rollover Contributions made on
       the person's behalf and withdrawn since the preceding Valuation Date
       shall not be treated as withdrawals.

       The Investment Income of any special separate fund or funds in the
Trust shall be allocated among the Accounts in such separate fund or funds in
the same manner as for the Investment Funds.

       The Administrator may adopt any other non-discriminatory method or
methods, in addition to or in lieu of the foregoing, to equitably allocate
Investment Income to Accounts and/or to determine Adjusted Account Balances for
purposes of such allocations.

       No Investment Income shall be allocated to Forfeiture Accounts.
Investment Income on funds held in Forfeiture Accounts shall be allocated to
Participants in a nondiscriminatory manner as determined by the Administrator.

       (b) Interim Valuation Date:  The Administrator may, but shall not be
           ----------------------
   required to provide for an interim valuation of the Accounts in the Trust (or
   any separate fund therein) for the purpose of making distributions to Members
   or providing for the transfer between Investment Funds since the preceding

                                       62
<PAGE>
 
   Valuation Date or Interim Valuation Date. The Administrator shall determine
   the percentage increase or decrease in the net worth of the assets in the
   Trust (and/or separate fund in the Trust) or in each Investment Fund from the
   preceding Valuation Date to the Interim Valuation Date after excluding all
   distributions made since the preceding Valuation Date or Interim Valuation
   Date. In determining such percentage increase or decrease in the net worth of
   such assets, all Investment Income of the Trust (and/or separate fund
   therein) or of each Investment Fund during the period between the preceding
   Valuation Date and Interim Valuation Date shall be included and determined in
   the same manner as provided for in subsection (a). The revalued Accounts from
   which a distribution or transfer shall be made shall be multiplied by the
   appropriate percentages so determined in order to reflect such increase or
   decrease.

       The percentages once so determined shall be applied to all Accounts from
   which distributions or transfers are made until the next Valuation Date or
   Interim Valuation Date, whichever is earlier. Any increase or decrease in the
   net worth of the assets so distributed to or retained from such Accounts
   shall increase or decrease the total Investment Income which is to be
   allocated on the next following Valuation Date or Interim Valuation Date.

       5.05    ELIGIBILITY FOR ALLOCATION OF PROFIT SHARING CONTRIBUTION

As of the end of each Plan Year, the Profit Sharing Contributions for the Plan
Year made pursuant to Section 4.01 shall be allocated among those Participants
and those Inactive Participants who became Inactive Participants during such
Plan Year and who meet the requirements specified in the Adoption Agreement.
Such allocation shall be made in accordance with Section 5.06.

       5.06    ALLOCATION OF PROFIT SHARING CONTRIBUTION

The Profit Sharing Contributions shall be allocated to eligible Participants and
Inactive Participants in accordance with either subsection (a) or (b) below,
whichever is elected in the Adoption Agreement.

       (a)  Integrated Allocation Method
            ----------------------------

            (i)  Excess Allocation:  The Profit Sharing Contribution shall first
                 -----------------
       be allocated to the Employer Contribution Accounts of eligible
       Participants and Inactive Participants who earned Excess Compensation
       during such Plan Year in accordance with either paragraph (1) or (2)
       below. Paragraph (1) shall be applicable for Plan Years beginning prior
       to 1989, and paragraph (2) shall be applicable for Plan Years beginning
       in 1989 and later.

                 (1) For Plan Years which begin prior to 1989, the Employer
            Contribution Account of each eligible Participant and Inactive
            Participant shall receive an allocation equal to the Integration
            Percentage multiplied by the individual's Excess Compensation,
            unless some other smaller percentage is chosen by the Company with
            respect to such Plan Year (this includes the situation where the
            amount of the Employers' contribution is less than the Integration
            Percentage multiplied by the total Excess Compensation of all
            eligible individuals).

                 (2) For Plan Years beginning in and after 1989, the Employer
            Contribution Account of each eligible Participant and Inactive
            Participant shall receive an allocation equal to a percentage
            multiplied by the individual's Excess Compensation. The percentage
            referred to in the preceding sentence is that percentage which is
            equivalent

                                       63

<PAGE>
 
       to the ratio determined by dividing the Employers' contribution by the
       sum of (I) the total Compensation of all such eligible individuals and
       (II) the total Excess Compensation of all such eligible individuals
       (unless the Company chooses a smaller percentage for such Plan Year).
       However, the percentage may not exceed the Integration Percentage for the
       Plan Year.

           (ii) Remaining Allocation:  The remaining portion, if any, of the
                --------------------
       Profit Sharing Contribution for the Plan Year which is in excess of the
       amounts allocated under paragraph (i) above shall be allocated to the
       Employer Contribution Accounts of all eligible Participants and Inactive
       Participants according to the ratio that each Participant's or Inactive
       Participant's Compensation for the Plan Year bears to the total
       Compensation of all eligible Participants and Inactive Participants for
       the Plan Year.

       (b) Non-Integrated Allocation Method:  The Profit Sharing Contribution
           --------------------------------
   shall be allocated to the Employer Contribution Accounts of all eligible
   Participants and Inactive Participants according to the ratio that each
   Participant's or Inactive Participant's Compensation for the Plan Year bears
   to the total Compensation of all eligible Participants and Inactive
   Participants for the Plan Year.

       (c) Top-Heavy Allocation: Notwithstanding subsections (a) or (b) above,
           --------------------
   if this Plan is "Top-Heavy" (as defined in Article XI) for the Plan Year, the
   Profit Sharing Contribution shall first be allocated to satisfy the minimum
   allocation required under Section 11.05(b) (unless such requirement is
   satisfied by another defined contribution plan). The remaining Profit Sharing
   Contribution, if any, shall be allocated in accordance with the terms of
   subsections (a) or (b) (and treating the "Top-Heavy" allocation under this
   subsection (c) as an allocation under subsections (a) or (b)).

       5.07    ALLOCATION OF FORFEITURES ATTRIBUTABLE TO EMPLOYER CONTRIBUTION
               ACCOUNTS

This Section 5.07 discusses the allocation of Forfeitures attributable only to
Employer Contribution Accounts. For a discussion of Forfeitures attributable to
the Matching Contribution Accounts and the Joining Bonus Accounts, see Sections
7.07 and 7.13.

For Plan Years beginning prior to January 1, 1989, the allocation of Forfeitures
attributable to Employer Contribution Accounts shall be determined under the
terms of the Prior Plan. For Plan Years beginning after December 31, 1988,
Forfeitures which have become available for allocation during a Plan Year in
accordance with Section 4.02 (other than Forfeitures which have been deemed
Qualified Nonelective Contributions pursuant to Sections 6.07, 7.11 or 7.14)
shall be added to Profit Sharing Contributions for such Plan Year, and allocated
in accordance with Section 5.06.

       5.08    POSSIBLE REDUCTION OF ALLOCATION TO KEY HIGHLY COMPENSATED
               EMPLOYEES AND FAMILY MEMBERS

Notwithstanding Sections 5.06 and 5.07, the allocations of Profit Sharing
Contributions and Forfeitures to the Employer Contribution Accounts of a Key
Highly Compensated Employee and his Family Members shall be reduced to comply
with Sections 401(a)(17) and 414(q)(6) of the Code, but only to the extent
required by applicable regulations.  Any "excess" resulting from such reduction
shall be reallocated to all Participants and Inactive Participants (including
Key Highly Compensated Employees and Family Members) under Sections 5.06 and
5.07.  If after such reallocation there still remains an "excess" on account of

                                       64
<PAGE>
 
this Section 5.08, the additional "excess" shall again be reallocated.  This
process may be repeated as many times as necessary until such "excess" is
exhausted.

       5.09    MAXIMUM ALLOCATION

The contribution on behalf of or by Participants shall be limited in accordance
with Code Section 415 and regulations thereunder, which are incorporated by
reference. This Section explains the application of Code Section415 and in the
event of any omission or conflicting statements, Code Section 415 and
regulations thereunder shall govern. 

Notwithstanding anything contained in this Plan to the contrary, the total
Additions made to the Account of a Participant for any Limitation Year shall not
exceed the lesser of (a) the Maximum Addition or (b) 25% of the Participant's
Earnings for the Limitation Year. (Certain Additions attributable to Code
Sections 401(h), 415(l) and 419A(d) (relating to certain medical benefits) are
not subject to the 25% limit in the preceding sentence.)

To comply with Section 415(f)(1)(B) of the Code (which provides that all defined
contribution plans [including voluntary employee contribution accounts in a
defined benefit plan] of the Employer, whether or not terminated, shall be
considered as one defined contribution plan), Additions shall be limited as
described in the Adoption Agreement.

If Additions shall exceed the above limitation because of circumstances
described in regulation 1.415-6(b)(6), any Deferrals and/or voluntary
contributions (under this Plan or any other qualified plan of the Employer) made
by the Participant for the Limitation Year which caused the excess shall be paid
to the Participant.  If excess Additions still exist, the method described in
regulation 1.415-6(b)(6)(ii) shall be used; that is, such excess Additions shall
generally be held in a suspense account (to which no Investment Income shall be
credited) and be used to reduce future Employer contributions for the affected
Participant.

Notwithstanding the foregoing, the otherwise permissible Additions for any
Participant under this Plan may be reduced to the extent necessary to prevent
disqualification of the Plan under Code Section 415(e), which imposes additional
limitations on the benefits for Participants who also participate in one or more
tax-qualified defined benefit pension plan of the Employer. The Administrator
shall advise affected Participants of any additional limitation of their
Additions required by the preceding sentence. 

The Administrator shall comply with the provisions of the preceding paragraph as
specified in the Adoption Agreement and to the extent necessary so that the sum
of the Defined Contribution Fraction and the Defined Benefit Fraction (both
defined below) shall not exceed one (1.0):

       (a)  Defined Contribution Fraction
            -----------------------------

            (i)  Numerator:  The numerator of the Defined Contribution Fraction
                 ---------
       is the sum of the Annual Additions for all Limitation Years, where
       "Annual Addition" is defined as the total of the following amounts
       allocated to a Participant's accounts under all defined contribution
       plans maintained by the Employer (except as otherwise provided under
       Section 415(c)(6) of the Code) with respect to each Limitation Year:

                 (1)  Employer contributions (including "salary deferrals" and
            forfeitures, if any),

                 (2)  voluntary contributions, and

                 (3)  any amounts attributable to Sections 401(h), 415(l) and
            419A(d)

                                       65
<PAGE>
 
            (relating to certain medical benefits) of the Code, but only to the
            extent provided by such sections of the Code.

            Notwithstanding the foregoing, Annual Additions shall not include
       amounts which are deemed not to be Annual Additions pursuant to
       regulations 1.415-6(b)(l)(i) and 1.415-6(b)(6). In addition, for
       Limitation Years beginning before January 1, 1987, not all voluntary
       contributions are Annual Additions. Instead, only the lesser of (i) one-
       half of the Participant's voluntary contributions, or (ii) the amount of
       the Participant's voluntary contributions in excess of 6% of his Earnings
       for such Limitation Year, shall be considered Annual Additions.

            In addition, the numerator shall take into account any reductions
       allowed as a result of changes caused by TEFRA (the pre-TEFRA "1.4 rule")
       and Top-Heavy restrictions (the pre-Top-Heavy TEFRA "1.0 rule"). [See
       paragraph (iii) below for an additional numerator reduction.]

       (ii)  Denominator: The denominator of the Defined Contribution Fraction
             -----------
   is either (1) or (2) as follows:

             (1)  The sum of the "Adjusted Maximum Annual Addition" for each
       Limitation Year.

             (2)  The sum of (A) and (B) as follows:

                  (A)  The sum of the "Maximum Annual Addition" for each
             Limitation Year ending before January 1, 1983, multiplied by the
             "Transition Fraction."

                  (B)  The sum of the "Adjusted Maximum Annual Addition" for
             each Limitation Year ending after December 31, 1982.

                  The Plan Administrator shall select only one of the above
            denominators to be used under this Section 5.09, and such
            denominator shall be applied to each Participant. However, the
            denominator described in clause (ii)(2) may only be elected if the
            affected Plan was in existence on July 1, 1982.

       (iii) Numerator Reduction: If this Plan and all other plans required to
             -------------------
   be aggregated under Section 415(f) of the Code satisfied Section 415 of the
   Code as of the end of the Limitation Year beginning before January 1, 1987
   (that is, the pre-TRA86 "1.0 rule"), the numerator of the Defined
   Contribution Fraction shall be reduced (but not below "zero") to the extent
   necessary so that the sum of the Defined Contribution Fraction and the
   Defined Benefit Fraction (both computed in accordance with Sections 415 and
   416(h) of the Code, as amended by TRA86) does not exceed 1.0 for the
   Limitation Year beginning before January 1, 1987. In determining the amount
   of the reduction, the denominator of the Defined Contribution Fraction shall
   take into account the Transition Fraction method (as modified, if applicable,
   by Section 416(h) of the Code), if elected, under Section 415(e)(6) of the
   Code.

                                       66
<PAGE>
 
            (iv) Certain Terms:  For purposes of this subsection (a):
                 -------------

                 (1) "Maximum Annual Addition" shall mean the lesser of the
                      -----------------------
            dollar amount described in Section 415(c)(l)(A) of the Code for the
            applicable Limitation Year, or 25% of the Participant's Earnings for
            the applicable Limitation Year.

                 (2) "Adjusted Maximum Annual Addition" shall mean the lesser of
                      --------------------------------
            1.25 times the dollar amount described in Section 415(c)(l)(A) of
            the Code for the applicable Limitation Year, or 1.4 times 25% of the
            Participant's Earnings for the applicable Limitation Year.

                 (3) "Transition Fraction" shall mean the fraction,
                      -------------------

                     (A) the numerator of which is the lesser of

                         (I)  $51,875, or

                         (II) 1.4 times 25% of the Participant's Earnings for
                     the Limitation Year ending in 1981, and

                     (B) the denominator of which is the lesser of

                         (I)  $41,500, or

                         (II) 25% of the Participant's Earnings for the
                     Limitation Year ending in 1981.

                 (4) With respect to a Limitation Year of less than 12 months
            because of an amendment changing the Limitation Year to a different
            12-consecutive month period, the "dollar amount described in Section
            415(c)(1)(A) of the Code" used in subparagraphs (1) and (2) above
            shall be prorated to reflect the number of months in such short
            Limitation Year.

       (b)  Defined Benefit Fraction:  The numerator of the Defined Benefit
            ------------------------
   Fraction is the "projected annual benefit" (as defined below) of the
   Participant under all defined benefit plans required to be aggregated under
   Section 415 of the Code, determined as of the

                                       67
<PAGE>
 
   close of the Limitation Year. The denominator of the Defined Benefit Fraction
   is the lesser of 1.25 times 12 times the Maximum Monthly Pension or 1.4 times
   12 times the Participant's monthly average Earnings paid by the Employers and
   each Affiliated Company during the three consecutive Limitation Years when
   such Earnings were the highest.

       A Participant's "projected annual benefit" is equal to the projected
   benefit under the applicable Plan (taking into account the Participant's
   accrued pensions determined as of (1) the end of the Limitation Year which
   began prior to 1983 [the pre-TEFRA grandfather accrued pension] and (2) the
   end of the Limitation Year which began prior to 1987 [the pre-TRA86
   grandfather accrued pension]), based upon the following assumptions:

            (i)   The Participant will continue in employment until reaching
       normal retirement age.

            (ii)  The Participant's compensation for the Limitation Year under
       consideration will remain the same until reaching normal retirement age.

            (iii) All other relevant factors will remain constant for all future
       Limitation Years.

       For purposes of this subsection (b),

            (i)  "Maximum Monthly Pension" shall mean one-twelfth of the greater
                  -----------------------
   of (1) the dollar amount described in Section 415(b)(l)(A) of the Code for
   the applicable Limitation Year, and (2) the Participant's pre-TRA86
   grandfather accrued pension (after taking into account his pre-TEFRA
   grandfather accrued pension).

            (ii) The denominator of the Defined Benefit Fraction shall be
   further adjusted as required under Section 415(b) of the Code to reflect the
   form of the benefit, the Participant's social security retirement age, the
   date the benefit commences and length of service of less than 10 years.

                                       68

<PAGE>
 
       5.10    LOANS TO PARTICIPANTS WHO ARE PARTIES-IN-INTEREST

If permitted in the Adoption Agreement, the Administrator may, in its sole
discretion, authorize the Trustee to loan money to a Participant or an Inactive
Participant who is a "party-in-interest" (as defined by Section 3(14) of ERISA)
from the Trust.  The general terms and conditions of loans (which are intended
to comply with Section 2550.408b-1 of the Department of Labor Regulations) shall
be determined pursuant to the provisions of this Section 5.10.  Loans under this
Section 5.10 shall (i) be made available to all eligible individuals on a
reasonably equivalent basis, and (ii) not be made available to Highly
Compensated Employees in an amount greater than the amount made available to
other Employees.  The Administrator shall adopt additional rules and regulations
necessary to carry out the provisions of this Section 5.10.  Such rules shall be
uniformly applicable to all eligible individuals, and the determination of
whether to approve an application for a loan shall be on a like and
nondiscriminatory basis.

       (a) Administration of Loan Program: The Administrator shall administer
           ------------------------------
   the provisions of this Section 5.10, unless the Administrator delegates such
   responsibility to another person pursuant to Section 13.04.

       (b) Purpose of Loan:  The Administrator may choose to limit loans to a
           ---------------
   specific purpose(s).

       (c) Application: An application for a loan by a Participant shall be
           -----------
   made in writing to the Administrator on such form or forms as the
   Administrator may require. The Administrator may also require (if applicable)
   the Participant to produce such documents and other evidence of a financial
   need and the amount of the financial need. If the loan is secured by any part
   of the Participant's Account, the loan application must also include the
   Participant's consent to a possible reduction of his Benefit to satisfy the
   repayment of such loan. If the Participant is married at the time of the
   loan, the application must also include the spouse's consent to and
   acknowledgement of the effect of such possible reduction. The consents
   required under this paragraph shall be obtained no earlier than 90 days
   before the date such loan is made, and the spouse's consent shall be
   witnessed by a notary public (or, if permitted by the Administrator, by a
   representative of the Administrator). If the Participant is unmarried at the
   time of the loan or if the Participant later remarries, the consent of the
   new spouse shall not be required.

                                       69

<PAGE>
 
       (d) Amount of Loan: The Administrator shall require that the total
           -------------- 
   balance of all loans outstanding for a Participant shall not exceed the
   limits described in Section 2550.408b-1 of the Department of Labor
   Regulations. In addition, the Administrator may refuse to grant any loan to
   the extent such loan is treated as a taxable distribution under Section 72(p)
   of the Code.

       (e) Interest:  Each loan shall bear a reasonable rate of interest to be
           --------
   fixed by the Administrator and/or the Trustee. The Administrator and Trustee
   shall not discriminate among Participants in the matter of interest rates;
   but loans granted at different times or for different durations may bear
   different interest rates if the difference in rates is justified by different
   general economic conditions.

       (f) Repayment of Loan: Repayment shall normally be by payroll deduction
           -----------------
   on an installment basis (but not less frequently than quarterly), with the
   amortization of the principal and interest over the period of the loan. A
   different arrangement for repayment may be made by mutual agreement between
   the Administrator and the Participant, provided that such arrangement is
   consistent with bank practices for similar type loans. The period of
   repayment for any loan shall be arrived at by mutual agreement between the
   Administrator and the Participant, but shall normally not extend beyond five
   years for loans other than for the purchase of the principal residence of the
   Participant. Refinancing of the loan shall not be made available by the
   Administrator. That is, in the event interest rates have dropped due to a
   change in economic conditions, a new loan at the current interest rate may
   not be negotiated to replace the prior loan(s). If a Participant's employment
   terminates or the Plan terminates, the loan shall become immediately due. No
   distribution of Benefits shall be made to any Participant, Inactive
   Participant or to a Beneficiary of any such Participant or Inactive
   Participant unless and until all unpaid loans, including interest thereon,
   have been liquidated.

       (g)  Fees/Expenses:  The Administrator may charge reasonable set-up and
            -------------
   periodic service fees and other related expenses directly to the Participant.

       (h)  Security:  Loans shall be evidenced by the Participant's promissory
            --------
   note and shall be secured by the Participant's Account or any other form of
   security acceptable to the Administrator. If on any date the value of such
   security is less than the unpaid principal amount of any loan to the
   Participant outstanding on such date, the Administrator shall require such
   Participant to either tender additional security

                                       70
<PAGE>
 
   acceptable to the Administrator equal in value to the difference between the
   value of such Participant's security and the unpaid principal then
   outstanding, or accelerate principal repayment to the extent necessary to
   make the unpaid principal amount of such loan equal to the value of the
   Participant's security.

       (i)  Loan Default: Foreclosure on any loan and attachment of the security
            ------------
   shall generally not occur until the Participant's Benefit becomes payable in
   accordance with Article VIII.

       (j)  Hardship Withdrawals of Deferrals:  The Administrator may establish
            ---------------------------------
   special rules and limits for loans in situations involving a concurrent
   hardship withdrawal under Section 6.12(d).

       (k)  Additional Limits:  The Administrator may further limit the amount
            -----------------
   loaned to any Participant in order to maintain a reserve chargeable against
   the Participant's Benefit for income taxes which would have to be withheld by
   the Trustee if the loan becomes a deemed distribution to the Participant. Any
   such taxes required to be withheld by the Trustee (whether or not such a
   reserve has been created) shall be charged to and reduce the Participant's
   Benefit to the extent possible and any excess shall be treated as an
   administrative expense of the Plan which shall be reimbursed by the
   Participant in question.

                                       71

<PAGE>
 
                                  ARTICLE VI
                      DEFERRALS AND HARDSHIP WITHDRAWALS

       6.01  GENERAL

This Article VI is intended to provide guidelines regarding special
qualification, nondiscrimination and distribution rules under Section 401(k) and
other related Sections of the Code.  The Administrator shall adopt additional
rules necessary (1) to carry out this Article VI (including, if applicable,
special rules unique to Partner-Employees),  and (2) to implement special,
transitional and operational rules permitted under IRS regulations (for example,
the "restructuring" rules of regulation 1.401(k)-1(h)(3)(iii)).

Regulations under Sections 401(a)(4) and 410(b) consider the portion of this
Plan attributable to Deferrals to be a separate plan apart from the portions of
the Plan attributable to Profit Sharing Contributions or Matching Contributions.
Accordingly, if the provisions of this Article conflict with any other
provisions of this Plan, the provision that shall govern depends upon whether
such provision applies to Deferrals, Profit Sharing Contributions or Matching
Contributions.

       6.02  DEFINITIONS

For purposes of this Article VI, the following words or phrases shall have the
following meanings:

       (a)  "Actual Deferral Percentage (ADP)" shall mean the percentage
             --------------------------------
   obtained by dividing the Participant's Deferrals for the Plan Year by the
   Participant's ADP Compensation for the Plan Year. However, see Sections
   6.06(a), (b) and (c) and 7.09(a) regarding whether (i) additional amounts are
   added to Deferrals to increase the ADP, or (ii) certain Deferrals are
   excluded to lower the ADP. In addition, see subsection (b) below and Sections
   6.06(d) and (e) regarding situations where the ADP of a Highly Compensated
   Participant is decreased to satisfy the ADP Test in Section 6.05. If a
   Participant's ADP Compensation for the Plan Year is "zero", no ADP shall be
   computed for such Participant (see Section 6.05(b)(iv)).

                                       72

<PAGE>
 
       (b)  "Adjusted ADP" shall mean, in the case of a Plan which fails to
             ------------
   satisfy the ADP Test in Section 6.05, the eventual ADP calculated under the
   following leveling method, under which the ADP of the Highly Compensated
   Participant with the highest ADP is reduced to the extent required to:

            (i)  enable the Plan to satisfy the ADP Test, or

            (ii) cause such Highly Compensated Participant's ADP to equal the
       ADP of the Highly Compensated Participant with the next highest ADP.

            This process must be repeated until the Plan satisfies the ADP Test.
       In addition, the term Adjusted ADP shall be substituted for the term ADP
       wherever such term is used in the Plan.

       (c)  "ADP Compensation" shall mean the Participant's Compensation for the
             ----------------
   Plan Year, unless the definition of Compensation fails to satisfy the
   requirements of Section 414(s) of the Code ["Condition A"].

            (i) If Condition A exists, then ADP Compensation shall instead mean
       the Participant's Compensation for the Plan Year, but excluding Deferrals
       made for the Plan Year.

            (ii) If Condition A continues to exist after the definition of ADP
       Compensation has been revised in accordance with paragraph (i) above,
       then ADP Compensation shall instead mean the Participant's Compensation
       for the entire Plan Year, including Compensation earned prior to his
       Entry Date.

            (iii) If Condition A continues to exist after the definition of ADP
       Compensation has been revised in accordance with paragraph (ii) above,
       then ADP Compensation shall instead mean the Participant's Compensation
       for the entire Plan Year, including Compensation earned prior to his
       Entry Date, but excluding Deferrals made for the Plan Year.

            (iv) If Condition A continues to exist after the definition of ADP
       Compensation has been revised in accordance with paragraph (iii) above,
       then the Plan must be amended to provide for a definition of ADP
       Compensation that satisfies the requirements of Section 414(s) of the
       Code.

                                       73

<PAGE>
 
       For Plan Years beginning in 1989 and later, ADP Compensation shall not
   exceed $200,000 (or such higher amount in accordance with Sections 401(a)(17)
   and 415(d) of the Code).  If a Plan Year is less than 12 months, the $200,000
   (or such higher amount) shall be prorated accordingly.

       (d) "Discriminatory Deferrals" shall mean those Deferrals, Qualified
            ------------------------
   Nonelective Contributions and Qualified Matching Contributions which caused
   the ADP Test in Section 6.05 to be exceeded. The amount of Discriminatory
   Deferrals attributable to any Highly Compensated Participant is equal to such
   Participant's Deferrals (or other amounts treated as Deferrals) minus the
   product of (i) such Participant's Adjusted ADP, times (ii) such Participant's
   ADP Compensation.

       (e) "Excess Deferrals" shall mean, for any calendar year, Deferrals made
            ----------------
   by a Participant in excess of the greater of (i) $7,000 or (ii) the dollar
   limitation in effect under Section 402(g)(1) of the Code for such calendar
   year (see Section 6.03(c)).

       6.03  ELECTION TO MAKE DEFERRALS

       (a) Election Forms: The Administrator shall provide each Participant with
           --------------
   an election form authorizing the deferral of his Compensation. Compensation
   which is "currently available" (as described in regulation 1.401(k)-
   1(a)(3)(iii)) may not be deferred. The timing/frequency, amount and any other
   limitations regarding the Deferrals shall be governed by the terms specified
   in the Adoption Agreement.

       If elected in the Adoption Agreement, the Administrator shall define the
   term "Make-Up" Deferrals and establish rules and procedures regarding how
   such Deferrals may be made. The general intent is to allow Participants to
   make Deferrals in excess of "current" limits, as long as the "cumulative"
   limits for the Plan Year are not exceeded. An example of the preceding is a
   plan which has a maximum individual deferral rate of 10% of compensation, but
   which allows a participant who defers nothing in the first half of the plan
   year to defer 20% of compensation for the remainder of the plan year.

       In addition to (or in lieu of) the terms specified in the Adoption
   Agreement, the Administrator may establish such rules and procedures as are
   necessary to implement this subsection (a).  The election made under this
   subsection (a) will remain in effect until modified in accordance with
   subsection (b) below.

                                       74
<PAGE>
 
       (b)  Modification of Deferral Election: The Administrator shall establish
            ---------------------------------
   rules and procedures regarding when (at least once each Plan Year) and how a
   Participant may increase, decrease, suspend or resume Deferrals (or begin
   Deferrals, in the case of a Participant who does not elect to make Deferrals
   when first eligible).

       (c)  Maximum Amount of Deferrals:  Notwithstanding subsection (a) above,
            ---------------------------
   no Participant shall be permitted to make Deferrals under this Plan
   (including similar amounts under other plan(s) maintained by the Employer),
   for any calendar year, in excess of the greater of $7,000 or the dollar
           --------
   limitation in effect under Section 402(g)(1) of the Code for such calendar
   year. The foregoing limit shall not apply to certain "transitional" Deferrals
   (i) of certain Partner-Employees (see Section 1105(c)(4) of TRA86) or (ii)
   attributable to services performed during 1986 (see Section 1105(c)(5) of
   TRA86).

       In addition, no Participant shall be permitted to make Deferrals to the
   extent total Additions allocated to the Participant would exceed the limits
   of Section 5.09 (regarding Section 415 of the Code). However, those Deferrals
   distributed pursuant to the fourth paragraph of Section 5.09 are not treated
   as Additions.

       (d)  Automatic Cessation of Deferrals:  Notwithstanding subsections (a)
            --------------------------------
   and (b) above, the Administrator may suspend the Deferrals of a Highly
   Compensated Participant in order to meet the ADP Test in Section 6.05. This
   suspension can be based upon the results of the ADP Test on an "actual" or
   "projected" basis, in accordance with rules and procedures established by the
   Administrator.

       In addition, the Administrator may suspend the Deferrals of any
   Participant to comply with subsection (c) above.

       (e)  Allocation of Deferrals:  Deferrals shall be credited to the
            -----------------------  
   Participant's Deferred Income Account, which shall be 100% vested at all
   times, and shall normally be paid by the Employer to the Trustee within 30
   days following the month for which the amount was withheld (but no later than
   the end of the 12-month period following the Plan Year to which such
   Deferrals relate).

                                       75

<PAGE>
 
       6.04  DISTRIBUTION OF EXCESS DEFERRALS

       (a)  General:  If a Participant has made Excess Deferrals for the
            -------
   calendar year, whether because of oversight, because the Participant is
   covered by more than one qualified CODA of the Employer or because the
   Participant is covered by a qualified CODA of another unrelated employer,
   such Excess Deferrals (including gains/losses) shall be returned to the
   Participant.

       (b)  Gains and Losses:  The gains and losses (collectively referred to as
            ----------------
   "income") to be distributed under subsection (a) above shall be the
   Investment Income for the calendar year attributable to Excess Deferrals, as
   determined in accordance with methods described in Section 5.04. The
   Administrator may also elect to distribute income for the period between the
   end of the applicable calendar year and the date of distribution (the "gap
   period"). Such election shall be applied consistently to all Excess Deferrals
   attributable to a particular calendar year. However, the Administrator may
   change such election from year to year.

       Notwithstanding the foregoing, for periods before the issuance of final
   regulations under Section 402(g) of the Code on August 15, 1991, the
   determination of distributable income may be determined under proposed
   regulation 1.402(g)-1(d)(5), which generally provided for specific methods of
   determining income for both the calendar year and the gap period.

       (c)  Timing:  A distribution under this Section 6.04 shall generally be
            ------
   made by the April 15th of the following calendar year, subject to the
   following rules:

            (i)  If a Participant's Deferrals under this Plan for a calendar
       year exceeds the $7,000 (or higher) limitation described in Section
       6.03(c), the Administrator shall distribute such Excess Deferrals (and
       allocable income) without any special instructions from the Participant
       [i.e., the Participant shall be deemed to have notified the Administrator
       that he has made Excess Deferrals under the Plan].

            (ii)  If any of a Participant's Deferrals under this Plan is an
       Excess Deferral solely because the Participant is covered under more than
       one qualified CODA (whether of this Employer or another unrelated
       employer), it shall be the responsibility of the Participant to inform
       the Administrator in writing by the March 1st preceding the above April
       15th date, of the amount of Excess Deferrals made to this Plan. The
       Administrator shall not be required to investigate the accuracy of the

                                       76
<PAGE>
 
       information provided by the Participant; and if such information is
       provided after March 1st, the Administrator shall not guarantee that
       distribution of the Excess Deferrals (including allocable income) will
       occur by April 15th.

            (iii)  If Excess Deferrals are distributed to the Participant in the
       same calendar year as the calendar year in which such Excess Deferrals
       arose, the allocable income from the beginning of the calendar year to
       the date of distribution shall be determined in a manner similar to the
       method described in subsection (b)(ii) above.

       (d)  Consent Not Needed:  Distributions of Excess Deferrals shall not be
            ------------------
   subject to the requirements of Section 8.02(b)(iv) and Article X (regarding
   the notice and consent rules of Sections 411(a)(11) and 417 of the Code).

       (e)  Treatment Under Code Section 415:  Deferrals which become Excess
            --------------------------------
   Deferrals shall continue to be considered Additions,  unless such Excess
   Deferrals are distributed by April 15th of the following calendar year in
   accordance with subsection (c) above.

       6.05  SPECIAL NONDISCRIMINATION TESTS

Deferrals of Highly Compensated Participants shall be limited in accordance with
this Section 6.05, which is intended to comply with the nondiscrimination tests
described in Section 401(k)(3) of the Code and related regulations.

       (a)  Average Deferral Percentage Test:  For any Plan Year, the Average
            --------------------------------
   ADP for the group of Highly Compensated Participants shall not exceed the
   Average ADP for the group of Non-Highly Compensated Participants as follows:

         IF THE AVERAGE ADP FOR THE           THEN THE AVERAGE ADP FOR THE 
     GROUP OF NON-HIGHLY COMPENSATED           GROUP OF HIGHLY COMPENSATED 
          PARTICIPANTS FOR THE                    PARTICIPANTS FOR THE     
        PLAN YEAR (DENOTED "R") IS:            PLAN YEAR SHALL NOT EXCEED: 
     -------------------------------          ---------------------------- 
               2% or less                              2.0 times "R"       
               2% to 8%                                2.0% plus "R"       
               8% or more                             1.25 times "R"        

       The nondiscrimination limits of this Section 6.05(a) shall be referred to
   as the "ADP Test."

                                       77
<PAGE>
 
       (b)  Special Rules:  For purposes of applying the ADP Test of subsection
            -------------
   (a) above, the following rules are applicable:

            (i)  Excess Deferrals:  Excess Deferrals shall count as Deferrals
                 ----------------
       for purposes of determining the ADP of a Highly Compensated Participant.
       However, Excess Deferrals shall not count as Deferrals for purposes of
                                       ---
       determining the ADP of a Non-Highly Compensated Participant.

            (ii) Required Aggregation:  If this Plan satisfies the requirements
                 --------------------
       of Sections 401(k), 401(a)(4), or 410(b) of the Code only if aggregated
       with one or more other plans, or if one or more other plans satisfy the
       requirements of such Sections of the Code only if aggregated with this
       Plan, then all the cash or deferred arrangements included in such other
       plans shall be aggregated with the cash or deferred arrangement included
       in this Plan.

            Notwithstanding the preceding paragraph,

                 (1) for Plan Years beginning after December 31, 1988, an "ESOP"
            plan may not be aggregated with this Plan.

                 (2) for Plan Years beginning after December 31, 1989, a plan
            whose plan year differs from the Plan Year of this Plan may not be
            aggregated with this Plan.

            (iii)  Aggregation of Deferrals of Highly Compensated Employees:  If
                   --------------------------------------------------------
       a Highly Compensated Employee is also a participant under another plan of
       the Employer which includes a cash or deferred arrangement, the ADP of
       such Highly Compensated Employee under this Plan shall take into account
       such other cash or deferred arrangement. For Plan Years beginning after
       December 31, 1988, if the plan year of such other plan differs from the
       Plan Year of this Plan, the ADP of such Highly Compensated Employee for
       such Plan Year under this Plan shall be determined by including only
       amounts attributable to plan years which end in the same calendar year as
       this Plan Year.

            This paragraph (iii) shall not be effective if the affected plans
       are mandatorily disaggregated under regulation 1.401(k)-1(g)(11)(iii).

            (iv)  Deferrals Refunded Under Code Section 415:  Deferrals which
                  -----------------------------------------
       are distributed pursuant to the fourth paragraph of Section 5.09 shall be
       disregarded for purposes of the ADP Test.

            (v)  Participants Taken Into Account:  Any Employee who was a
                 -------------------------------
       Participant at any time during the Plan Year shall be taken into account,
       even if such Participant has experienced a Termination of Employment
       prior to the last day of such Plan Year. However, a Participant whose ADP
       Compensation for the Plan Year is "zero" shall not be taken into account.
                                                      ---

            (vi) Rounding of Percentages:  For Plan Years beginning after
                 -----------------------
       December 31, 1988, the ADP and the Average ADP shall be rounded to the
       nearest one-hundredth of 1%.

            (vii) Family Members:  The ADP of a Family Member shall not be
                  --------------
       separately calculated. Instead, the ADP of the Key Highly Compensated
       Employee shall be computed by combining his Deferrals and ADP
       Compensation with those of his Family Member(s). Notwithstanding the
       $200,000 limit on ADP Compensation in Section 6.02, for Plan Years
       beginning after December 31, 1988, the ADP Compensation of such
       "aggregated" Key Highly Compensated Employee shall be the sum of (1) plus
       (2), as follows:

                                       78
<PAGE>
 
                 (1) the sum of the ADP Compensation of each of the Key Highly
            Compensated Employee, his spouse, and lineal descendants who have
            not attained age 19 before the close of such Plan Year; and such sum
            shall be limited to $200,000 (or such larger amount described in
            Section 6.02), plus

                 (2) the sum of the ADP Compensation of each other Family Member
            not described in (1), where each individual ADP Compensation shall
            be limited to $200,000 (or such larger amount described in Section
            6.02).

       6.06  FAILURE TO PASS THE ADP TEST

     If the ADP Test is not satisfied, the Employer and/or Administrator may
take one or more of the following steps:

       (a) treat Forfeitures attributable to Employer Contribution Accounts as
   Qualified Nonelective Contributions for Plan Years beginning after December
   31, 1990 (see Section 6.07)

       (b) include Qualified Nonelective Contributions in the ADP (see Section
   6.08)

                                       79

<PAGE>
 
       (c) include Qualified Matching Contributions in the ADP (see Section
   6.09)

       (d) refund Deferrals which exceeded the limits (see Section 6.10)
  
       (e) recharacterize certain Deferrals as voluntary contributions (see
   Section 6.11).

       6.07  FORFEITURES ATTRIBUTABLE TO EMPLOYER CONTRIBUTION ACCOUNTS

For Plan Years beginning on or after January 1, 1991, if the ADP Test is not
satisfied, Forfeiture Accounts which have become available for allocation
pursuant to Section 4.02 shall not be allocated in accordance with Section 5.07.
Instead, enough Forfeitures as necessary shall be treated as Qualified
Nonelective Contributions pursuant to Section 6.08 to satisfy the ADP Test.
That is, for purposes of the Plan, such Forfeitures shall not be subject to the
provisions of Section 5.07, but will be subject to the provisions of Section
6.08.

Any Forfeitures not deemed to be Qualified Nonelective Contributions pursuant to
the preceding paragraph shall be allocated in accordance with Section 5.07,
unless such Forfeitures are deemed to be Qualified Nonelective Contributions
pursuant to Sections 7.11 or 7.14, to satisfy the ACP Test or the Multiple Use
Test, respectively.

       6.08  QUALIFIED NONELECTIVE CONTRIBUTIONS

If the ADP Test is not satisfied, the Employer may elect to make Qualified
Nonelective Contributions for the Plan Year.  Such contributions shall be
allocated to Non-Highly Compensated Participants (including Non-Highly
Compensated Participants who have a Termination of Employment prior to the end
of the Plan Year) in the following manner:

       (a) The initial allocation shall be made to the Non-Highly Compensated
   Participant with the lowest ADP Compensation for the Plan Year. The amount of
   such allocation shall be the lesser of (i) total Qualified Nonelective
   Contributions made for the Plan Year under this Section 6.08, or (ii) the
   maximum amount permitted under Section 5.09 (regarding Section 415 of the
   Code). [Note: Instead of the term "Compensation," this Section 6.08 uses the
           ----
   term "ADP Compensation" and Section 5.09 uses the term "Earnings." Since
   these three terms generally have different meanings, care should be exercised
   when carrying out this Section 6.08.]

                                       80
<PAGE>
 
       (b) If there still remain Qualified Nonelective Contributions after step
   (a) above, the second allocation shall be made to the Non-Highly Compensated
   Participant with the next lowest ADP Compensation for the Plan Year.
   Similarly, the amount of such allocation shall be the lesser of (i) remaining
   Qualified Nonelective Contributions, or (ii) the maximum amount permitted
   under Section 5.09.

       (c) If there still remain Qualified Nonelective Contributions after step
   (b) above, step (b) shall then be applied to the Non-Highly Compensated
   Participant with the next lowest ADP Compensation for the Plan Year. In
   addition, step (b) shall be repeated as many times as necessary until
   Qualified Nonelective Contributions are exhausted.

Qualified Nonelective Contributions under this Section 6.08 shall

       (a) be allocated to the Qualified Nonelective Contribution Account (or a
   "substitute" Account described in Section 2.84),

       (b) be made within 12 months after the end of the applicable Plan Year,
   and

       (c) be treated as Deferrals for purposes of Sections 6.02(a) and 6.05.

The Qualified Nonelective Contribution Account (or other Account to which
Qualified Nonelective Contributions are allocated) shall

       (a)  be fully vested at all times, and

       (b) be subject to the withdrawal and distribution restrictions in
   Section 6.12.

Even if the Employer does not make Qualified Nonelective Contributions to this
Plan, the Administrator may nevertheless elect to treat other Employer
contributions to this Plan or any other defined contribution plan of the
Employer as Qualified Nonelective Contributions for this Plan.  The preceding
sentence shall only apply to Employer contributions if the "account" to which
such contributions are allocated

       (a) meets the requirements of the preceding paragraph applicable to the
   Qualified Nonelective Contribution Account, and

       (b) meets other nondiscrimination requirements described in regulations
   under Section 401(k) of the Code.

       6.09  QUALIFIED MATCHING CONTRIBUTIONS

If the ADP Test is not satisfied (or if the Administrator wishes to avoid
[completely or partially] the nondiscrimination requirements of Section 7.08
[the ACP Test]), the Administrator may elect to treat Qualified Matching
Contributions as Deferrals for purposes of Sections 6.02(a) and 6.05.

Qualified Matching Contributions shall be allocated to the Qualified Matching
Contribution Account (or a "substitute" Account described in Section 2.82), and
such Account shall

       (a)  be fully vested at all times, and

       (b) be subject to the withdrawal and distribution restrictions in Section
   6.12.

Even if the Employer does not make Qualified Matching Contributions to this
Plan, the Administrator may nevertheless elect to treat Employer matching
contributions to any other defined contribution plan of the Employer as
Qualified Matching Contributions for this Plan.  The preceding sentence shall
only apply to Employer matching contributions if the "account" to which such
contributions are allocated

       (a) meets the requirements of the preceding paragraph applicable to the
   Qualified Matching Contribution Account, and

                                       81

<PAGE>
 
       (b) meets other nondiscrimination requirements described in regulations
   under Sections 401(k) and (m) of the Code.

   This Section 6.09 is effective only if the Qualified Matching Contributions
   to be treated as Deferrals for a Plan Year are made within 12 months after
   the end of such Plan Year.

       6.10  REFUND OF DISCRIMINATORY DEFERRALS

       (a)  General:  If the ADP Test is not satisfied and Qualified Nonelective
            -------
   Contributions and/or Qualified Matching Contributions (if any) are still
   insufficient to satisfy the ADP Test, the Discriminatory Deferrals (including
   gains/losses) attributable to a Highly Compensated Participant shall be
   distributed to the Participant.

                                       82
<PAGE>
 
       (b)  Family Members:  A distribution of Discriminatory Deferrals under
            --------------
   this Section 6.10 to a Key Highly Compensated Employee and his Family Members
   shall be accomplished by allocating the Discriminatory Deferrals among such
   Employees in proportion to the Deferrals (including Qualified Nonelective
   Contributions and Qualified Matching Contributions treated as Deferrals) of
   each such Employee for the applicable Plan Year.

       (c)  Gains and Losses:  The gains and losses (collectively referred to as
            ----------------
   "income") to be distributed under subsection (a) above shall be the
   Investment Income for the Plan Year attributable to Discriminatory Deferrals,
   as determined in accordance with methods described in Section 5.04. The
   Administrator may also elect to distribute income for the period between the
   end of the applicable Plan Year and the date of distribution (the "gap
   period"). Such election shall be applied consistently to all Discriminatory
   Deferrals attributable to a particular Plan Year. However, the Administrator
   may change such election from year to year.

            Notwithstanding the foregoing, for periods before the issuance of
   final regulations under Section 401(k) of the Code on August 15, 1991, the
   determination of distributable income may be determined under proposed
   regulation 1.401(k)-1(f)(4)(ii), which generally provided for specific
   methods of determining income for both the Plan Year and the gap period.

       (d)  Timing:  A distribution under this Section 6.10 must be made by the
            ------
   end of the following Plan Year. (Note: The Employer is subject to a 10%
                                    ----
   excise tax if Discriminatory Deferrals are distributed more than 2-1/2 months
   after the end of the applicable Plan Year.)

       (e)  Consent Not Needed:  Distributions of Discriminatory Deferrals shall
            ------------------
   not be subject to the requirements of Section 8.02(b)(iv) and Article X
   (regarding the notice and consent rules of Sections 411(a)(11) and 417 of the
   Code).

       6.11  RECHARACTERIZATION OF DISCRIMINATORY DEFERRALS

       (a)  General:  If permitted in the Adoption Agreement, a Highly
            -------
   Compensated Participant who would otherwise receive a refund of his
   Discriminatory Deferrals in accordance with Section 6.10 may instead elect to
   have such Discriminatory Deferrals recharacterized as voluntary contributions
   to the Plan.

                                       83
<PAGE>
 
       (b)  Limitations:
            -----------

            (i)   This Section 6.11 shall become effective only if voluntary
       contributions are permitted under Section 4.03.

            (ii)  Qualified Nonelective Contributions and Qualified Matching
       Contributions may not be recharacterized.

            (iii) Discriminatory Deferrals of a Participant may not be
       recharacterized to the extent such Deferrals, when added to other
       voluntary contributions of such Participant, exceed the limits (if any)
       permitted under Section 4.03.

            (iv)  Discriminatory Deferrals which have been recharacterized shall
       continue to be treated as Deferrals for purposes of Sections 404, 409,
       411, 412, 415, 416 and 417 of the Code. Discriminatory Deferrals
       attributable to Plan Years beginning after December 31, 1988 shall be
       subject to Section 6.12 (regarding withdrawal/distribution restrictions).

            (v)   Discriminatory Deferrals which have been recharacterized shall
       not be treated as "compensation" for purposes of Sections 404 and 415 of
       the Code.

       (c)  Taxability:  The Deferrals which are to be recharacterized shall be
            ----------
   the earliest Deferrals made for the Plan Year ("first-in, first-out"). (Note:
                                                                           ----
   Such recharacterized Deferrals shall be includible in the Highly Compensated
   Participant's gross income in the calendar year for which such Deferrals were
   made.)

       (d)  Timing and Methodology:  Recharacterization of Discriminatory
            ----------------------
   Deferrals may not be made later than the later of (1) 2-1/2 months following
   the end of the applicable Plan Year, or (2) October 24, 1988. For purposes of
   this Section 6.11, recharacterization will be deemed to have occurred on the
   date the last affected Highly Compensated Participant is given written
   notification of the amount recharacterized and the consequences thereof.
   (Note: See regulation 1.401(k)-1(f)(3)(ii) and (iii). The preceding
    ----
   regulation also requires the reporting of recharacterization to the Employer
   and the IRS.)

                                       84
<PAGE>
 
       6.12  WITHDRAWALS AND DISTRIBUTIONS FROM THE DEFERRED INCOME, QUALIFIED
             NONELECTIVE CONTRIBUTION AND QUALIFIED MATCHING CONTRIBUTION
             ACCOUNTS

       (a)  General:  Notwithstanding any provision of the Plan to the contrary,
            -------
   distributions or withdrawals from the Deferred Income Account, the Qualified
   Nonelective Contribution Account or the Qualified Matching Contribution
   Account shall not be made except in one of the following circumstances:

            (i)    An event described in Sections 8.01(b), (c) or (d) [regarding
       disability, death or Termination of Employment].

            (ii)   An event described in Section 8.01(a) [regarding Normal
       Retirement Date], but only if the Benefit is payable on account of either
       Termination of Employment or attainment of at least age 59-1/2. That is,
       if Normal Retirement Age were age 55, a Participant who reaches age 55,
       but has not had a Termination of Employment, may not receive a
       distribution of his Deferred Income Account.

            (iii)  Attainment of age 59-1/2.

            (iv)   Termination of this Plan without establishment or maintenance
       of another defined contribution plan (see Section 15.04 for specific
       details).

            (v)    In the case of a corporation, the sale (or other disposition)
       by the corporation of either (I) "substantially all" of its assets or
       (II) its interest in a subsidiary. The preceding sentence shall apply
       only to Employees who continue employment with the (I) buyer or (II)
       subsidiary, respectively. After March 31, 1988, a distribution may not be
       made under this paragraph (v) unless it is a "lump sum distribution" (as
       defined in Section 401(k)(10)(B) of the Code).

            (vi)   Occurrence of a hardship (see subsection (b) below).

            (vii)  Distribution of Excess Deferrals for any calendar year (see
       Section 6.04).

            (viii) Failure to satisfy the ADP, ACP or Multiple Use Tests of
       Sections 6.05, 7.08 and 7.14, respectively.

                                       85
<PAGE>
 
       (b)  Hardship Withdrawals
            --------------------

            (i)   For Plan Years beginning before January 1, 1989, hardship
       withdrawals shall be governed by the terms of the Prior Plan (if one
       existed), if such terms were a reasonable interpretation of Section
       401(k) of the Code [in the absence of IRS final and proposed regulations
       issued August 5, 1988]. Operation in accordance with IRS proposed
       regulations issued November 10, 1981 shall be deemed a reasonable
       interpretation.

            (ii)  Hardship withdrawals made on or before March 31, 1989 shall
       also be governed by the standards described in paragraph (i) above.

            (iii) Hardship withdrawals not described in either paragraph (i) or
       (ii) above shall be governed by the "immediate and heavy financial need
       test" described in subsection (c) below and the "other resources test"
       described in subsection (d) below.

       (c)  Immediate and Heavy Financial Need:  A hardship withdrawal shall
            ----------------------------------
   only be made if the Participant has an "immediate and heavy financial need".
   A Participant shall be deemed to have an immediate and heavy financial need
   if the hardship withdrawal is for any of the following:

            (i)   Expenses incurred for (or necessary to obtain) the medical
       care of the Participant, his spouse and his dependents. Such medical care
       must normally be tax-deductible within the meaning of Section 213(d) of
       the Code.

            (ii)  Costs directly related to the purchase of the principal
       residence of the Participant (excluding mortgage payments).

            (iii) Tuition and related educational fees for the next 12 months of
       post-secondary education for the Participant and his spouse, children
       (whether or not still a dependent) and dependents.

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

            The amount of the immediate and heavy financial need shall include
       amounts necessary to pay anticipated federal, state or local income taxes
       or penalties attributable to a hardship withdrawal.

       (d)  Other Resources:  A hardship withdrawal shall only be made if it is
            ---------------
   necessary to satisfy the financial need described in subsection (c) above.
   The determination of whether the hardship withdrawal is necessary shall be
   determined on the basis of the Safe Harbor Rule or the Facts and
   Circumstances Rule (both described below), as elected in the Adoption
   Agreement.

            (i)  Safe Harbor Rule:  A hardship withdrawal shall be deemed to be
                 ----------------
       necessary if all of the following are satisfied:
                    ---

                 (1) The withdrawal does not exceed the amount of the immediate
            and heavy financial need.

                 (2) The Participant has obtained all distributions other than
            hardship withdrawals (such as withdrawal of after-tax voluntary
            contributions) and all non-taxable loans currently available under
                           ---
            all plans maintained by the Employer.
            ---

                 (3) All qualified and non-qualified plans (but not health or
            welfare plans) of the Employer provide that the Participant will not
            be allowed to make Deferrals and other employee contributions for a
            period of at least 12 months after the date of the hardship
            withdrawal. However, the preceding rule shall not require the
            suspension of mandatory employee contributions under a defined
            benefit plan.

                                       86

<PAGE>
 
                 (4) All "401(k)" plans of the Employer limit the amount of
            Deferrals that the Participant may make in the calendar year
            following the calendar year of the hardship withdrawal to the
            difference between the maximum allowed for such later calendar year
            (see Section 6.03(c)) and the amount of the Participant's Deferrals
            for the calendar year of the hardship withdrawal.

            (ii)  Facts and Circumstances Rule:  A hardship withdrawal shall
                  ----------------------------
       generally be treated as necessary if the Employer relies upon the
       Participant's written representation (unless the Employer has actual
       knowledge to the contrary) that the need cannot reasonably be relieved by
       one or more of the following methods:

                  (1) Through reimbursement or compensation by insurance or
            otherwise.

                  (2) By the reasonable liquidation of the Participant's assets,
            or the assets of his spouse and minor children that are reasonably
            available to the Participant.

                  (3) By borrowing from commercial sources at reasonable terms.

                  (4) By discontinuing Deferrals or after-tax employee
            contributions to the Plan.

                  (5) By other distributions or non-taxable loans from plans
            maintained by the Employer or by any other unrelated employer.

            A Participant shall not be required to avail himself of any of the
       above resources if the effect would be to increase his hardship or need.
       For example, if a plan loan would disqualify a Participant from obtaining
       necessary financing to purchase a principal residence, a plan loan will
       not be a required method of relieving such Participant's hardship need.

       (e)  Amount Available for Hardship Withdrawals:  For Plan Years beginning
            -----------------------------------------
   before January 1, 1989, the amount available for hardship withdrawals under
   this Section 6.12 shall be the sum of the values of the Deferred Income
   Account, the Qualified Nonelective Contribution Account and the Qualified
   Matching Contribution Account, reduced by any amounts which are "offsetted"
   against the foregoing Accounts. Such "offsetting" amounts would include (but
   are not limited to) outstanding Plan loan(s) (including loans made to satisfy
   the requirements of subsection (d) above).

       For Plan Years beginning after December 31, 1988, the amount available
   for hardship withdrawals under this Section 6.12 shall be (i) plus (ii) plus
   (iii) plus (iv) less (v) less (vi) as follows:

            (i)   the value of the Deferred Income Account as of the
       Transitional Valuation Date (as defined herein), plus

            (ii)  Deferrals made after the Transitional Valuation Date, plus

            (iii) the value as of the Transitional Valuation Date of that
       portion of the Qualified Nonelective Contribution Account attributable to
       amounts which enable the Plan to comply with the ADP Test in Section 6.05
       (Note: The Qualified Nonelective Contribution Account also contains
        ----
       amounts which enable the Plan to comply with the ACP Test and the
       Multiple Use Test), plus

            (iv)  the value of the Qualified Matching Contribution Account as of
       the Transitional Valuation Date, less

            (v)   any hardship withdrawals since the Transitional Valuation
       Date, less

            (vi)  any other amounts which (1) are "offsetted" against the
       foregoing Accounts, and (2) are attributable to either (A) the value of
       the foregoing

                                       87
<PAGE>
 
       Accounts as of the Transitional Valuation Date, or (B) Deferrals made
       after the Transitional Valuation Date. Such "offsetting" amounts would
       include (but are not limited to) distributions and outstanding Plan
       loan(s) (including loans made to satisfy the requirements of subsection
       (d) above). In determining whether the preceding amounts are attributable
       to any portion of the foregoing Accounts, the Administrator shall apply
       the same rules established elsewhere in the Plan regarding "timing"; e.g.
       "last-in; first-out," etc.

       For purposes of this subsection (e), the term Transitional Valuation Date
   shall mean the later of (1) the last day of the last Plan Year ending before
   July 1, 1989, or (2) December 31, 1988. If the Transitional Valuation Date is
   not a Valuation Date or Interim Valuation Date, this subsection (e) shall be
   applied by substituting the phrase "Valuation (or Interim Valuation) Date
   immediately preceding the Transitional Valuation Date" for "Transitional
   Valuation Date" in paragraphs (i) through (vi) above.

       (f)  Maximum Number of Hardship Withdrawals:  During any 12-month period,
            --------------------------------------
   the maximum number of hardship withdrawals shall be limited as provided in
   the Adoption Agreement.

       (g)  Consent Requirements:  Unless specifically provided otherwise in the
            --------------------
   Plan, distributions and withdrawals under this Section 6.12 shall be subject
   to the requirements of Section 8.02(b)(iv) and Article X (regarding the
   notice and consent rules of Sections 411(a)(11) and 417 of the Code).

       (h)  Forms and Procedures:  The Administrator shall establish forms and
            --------------------
   procedures necessary to carry out this Section 6.12.

                                       88
<PAGE>
 
                                  ARTICLE VII
                    MATCHING CONTRIBUTIONS, JOINING BONUSES
                    ---------------------------------------
                        AND COORDINATION WITH DEFERRALS
                        -------------------------------

       7.01  GENERAL

This Article VII is intended to provide guidelines regarding special
qualification, nondiscrimination and distribution rules under Section 401(m) and
other related Sections of the Code.  The Administrator shall adopt additional
rules necessary (1) to carry out this Article VII (including, if applicable,
special rules unique to Partner-Employees), and (2) to implement special,
transitional and operational rules permitted under IRS regulations (for example,
the "restructuring" rules of regulation 1.401(m)-1(g)(5)(ii)).

Regulations under Sections 401(a)(4) and 410(b) consider the portion of this
Plan attributable to Matching Contributions to be a separate plan apart from the
portions of the Plan attributable to Profit Sharing Contributions or Deferrals.
Accordingly, if the provisions of this Article conflict with any other
provisions of this Plan, the provision that shall govern depends upon whether
such provision applies to Matching Contributions, Profit Sharing Contributions
or Deferrals.

If contributions under this Article VII are discretionary, the Employer shall
designate what portion, if any, of the Employer contributions under Section 4.01
shall be used to fund Matching Contributions and/or Joining Bonuses.

       7.02  DEFINITIONS

For purposes of this Article VII, the following words or phrases shall have the
following meanings:

       (a)  "Actual Contribution Percentage (ACP)" shall mean the percentage
             ------------------------------------
   obtained by dividing the Participant's Aggregate Contributions for the Plan
   Year by the Participant's ADP Compensation for the Plan Year. However, see
   Sections 6.06(c) and (e), and 7.09(a), (b) and (c) regarding whether 
   (i) additional amounts are added to Aggregate Contributions to increase the
   ACP, or (ii) certain Matching Contributions are excluded

                                       89
<PAGE>
 
   to lower the ACP.  In addition, see subsection (c) below and Section 7.13
   regarding situations where the ACP of a Highly Compensated Participant is
   decreased to satisfy the ACP Test in Section 7.08.  If a Participant's ADP
   Compensation for the Plan Year is "zero", no ACP shall be computed for such
   Participant (see Section 7.08(b)(iv)).

       (b)  "ADP Compensation" shall have the same meaning as such term is used
             ----------------
   in Section 6.02. Because the ACP Test is independent of the ADP Test, the
   definition of ADP Compensation for purposes of this Article VII may differ
   from the definition of ADP Compensation for purposes of Article VI.

       (c)  "Adjusted ACP" shall mean, in the case of a Plan which fails to
             ------------
   satisfy the ACP Test in Section 7.08, the eventual ACP calculated under the
   following leveling method, under which the ACP of the Highly Compensated
   Participant with the highest ACP is reduced to the extent required to:

            (i)  enable the Plan to satisfy the ACP Test, or

            (ii) cause such Highly Compensated Participant's ACP to equal the
       ACP of the Highly Compensated Participant with the next highest ACP.

       This process must be repeated until the Plan satisfies the ACP Test. In
   addition, the term Adjusted ACP shall be substituted for the term ACP
   wherever such term is used in the Plan.

       (d)  "Aggregate Contributions" shall mean, with respect to any Plan Year
             -----------------------
   and any Participant, the total of (i) his voluntary contributions made for
   such year, and (ii) Matching Contributions allocated to his Matching
   Contribution Account (and, if applicable, his Qualified Matching Contribution
   Account) during such year. Voluntary contributions include Discriminatory
   Deferrals which have been recharacterized as voluntary contributions for the
   Plan Year in accordance with Section 6.11. However, voluntary contributions
   that are distributed pursuant to the fourth paragraph of Section 5.09 shall
   not be considered Aggregate Contributions.

       (e)  "Average ACP" shall mean, for a group of Participants, the average
             -----------
   of the ACP's for each Participant in such group.

       (f)  "Average ADP" shall mean, for a group of Participants, the average
             -----------
   of the ADP's for each Participant in such group.

      (g)  "Combined ADP/ACP Limit" shall mean, in the case of a Plan Year
            ----------------------
   beginning after December 31, 1988, the greater of (i) the Primary Combined
   ADP/ACP Limit, or (ii) the Secondary Combined ADP/ACP Limit.

      (h)  "Excess Aggregate Contributions" shall mean those Aggregate
            ------------------------------
   Contributions and Qualified Nonelective Contributions which caused the ACP
   Test to be exceeded. The amount of Excess Aggregate Contributions
   attributable to any Highly Compensated Participant is equal to such
   Participant's Aggregate Contributions (or other amounts treated as Aggregate
   Contributions) minus the product of (i) such Participant's Adjusted ADP,
   times (ii) such Participant's ADP Compensation.

       (i)  "Primary Combined ADP/ACP Limit" shall mean the sum of
             ------------------------------

            (i) 1.25 times the greater of (1) the Average ADP for the group of
       Non-Highly Compensated Participants, or (2) the Average ACP for the group
       of Non-Highly Compensated Participants for the plan year beginning with
       or within the plan year of the plan containing the cash or deferred
       arrangement; plus

            (ii) the lesser of

                                       90
<PAGE>
 
                 (1) 2.0 times the lesser of the Average ADP or Average ACP
            described in paragraph (i) above, or

                 (2) 2% plus the lesser of the Average ADP or Average ACP
            described in paragraph (i) above.

       (j)  "Secondary Combined ADP/ACP Limit" shall mean the sum of
             --------------------------------

            (i) 1.25 times the lesser of (1) the Average ADP for the group of
       Non-Highly Compensated Participants, or (2) the Average ACP for the group
       of Non-Highly Compensated Participants for the plan year beginning with
       or within the plan year of the plan containing the cash or deferred
       arrangement; plus

            (ii) the lesser of

                 (1) 2.0 times the greater of the Average ADP or Average ACP
            described in paragraph (i) above, or

                 (2) 2% plus the greater of the Average ADP or Average ACP
            described in paragraph (i) above.

       7.03  JOINING BONUS

If elected in the Adoption Agreement, eligible Participants (and Inactive
Participants) shall receive an allocation of a Joining Bonus.

       (a)  Funding:  The funding of the Joining Bonus by the Employer shall be
            -------
   discretionary or required, as elected in the Adoption Agreement.

       (b)  Eligibility:  A Participant (and Inactive Participant who became an
            -----------
   Inactive Participant during the Plan Year) shall be eligible for a Joining
   Bonus for a Plan Year if he meets all of the following requirements:

            (i)   he meets the requirements specified in the Adoption Agreement,

            (ii)  his Entry Date occurs in such Plan Year (that is, such Plan
       Year is his first Plan Year of participation, even if his Deferrals for
       such Plan Year is $0).

            (iii) he has made Deferrals (greater than $0) for each payroll
       period (from his Entry Date to the last day of the Plan Year) during
       which he received Compensation and was eligible to make Deferrals, and

            (iv)  he has never received a Joining Bonus during any prior period
       of Plan participation.

       (c)  Allocation:
            ----------

            (i) If the funding of the Joining Bonus is required to be made by
       the Employer, the Joining Bonus Account of each eligible individual shall
       receive an allocation of the amount specified in the Adoption Agreement.

            (ii) If the funding of the Joining Bonus is discretionary on the
       part of the Employer, the total Employer contribution attributable to
       Joining Bonuses shall be allocated to the Joining Bonus Account of each
       eligible individual so that each eligible Account shall be allocated the
       same amount.

       (d)  Vesting of Joining Bonus Account:  A Participant's Vested Percentage
            --------------------------------
   in his Joining Bonus Account shall be either (i) 100%, or (ii) determined in
   accordance with the vesting schedule applicable to such Participant's
   Matching Contribution Account, whichever is elected in the Adoption
   Agreement. (Note: If the same vesting schedule applies to both the Joining
               ----
   Bonus Account and the Matching Contribution Account, the Administrator may
   choose not to establish a separate Joining Bonus Account, in which case a
   Joining Bonus shall be allocated to the Matching Contribution Account.)

                                       91
<PAGE>
 
       (e)  Treatment as Matching Contributions:  Unless specifically provided
            -----------------------------------
   otherwise in this Section 7.03, Plan provisions applicable to Matching
   Contributions shall similarly apply to Joining Bonuses.

       7.04  MATCHING CONTRIBUTIONS

If elected in the Adoption Agreement, eligible Participants (and Inactive
Participants) shall receive an allocation of a Matching Contribution.

       (a)  Funding:  The funding of Matching Contributions by the Employer
            -------
   shall be discretionary or required, as elected in the Adoption Agreement. If
   the funding is required, the Employer shall contribute such amount as
   necessary to satisfy Section 7.05(b), taking into account Forfeitures under
   Sections 7.07(a) and 7.13(i)(i).

       (b)  Eligibility:  A Participant (and Inactive Participant who became an
            -----------
   Inactive Participant during the applicable Plan Year) shall be eligible for a
   Matching Contribution if he meets the requirement(s) specified in the
   Adoption Agreement.

       (c)  Loss of Matching Contribution:  Notwithstanding any provision in
            -----------------------------
   this Plan to the contrary, a Matching Contribution (or a portion thereof)
   shall not be allocated to the extent such allocation results in any
   discrimination prohibited by Section 401(a)(4) of the Code because such
   Matching Contribution relates to an Excess Deferral, a Discriminatory
   Deferral [both as defined in Section 6.02], or an Excess Aggregate
   Contribution. In addition, such "forfeited" Matching Contribution shall not
   be taken into account under any provision of this Plan. For example, the
   forfeited Matching Contribution shall not be treated as an Aggregation
   Contribution for purposes of the ACP Test in Section 7.08.

       7.05  ALLOCATION OF MATCHING CONTRIBUTION

Matching Contributions shall be allocated as of the last day of the Plan Year in
accordance with either subsection (a) or (b) below, whichever is applicable.

       (a)  Discretionary Funding:  If the funding of the Matching Contribution
            ---------------------
   is discretionary on the part of the Employer, the total Employer contribution
   attributable to Matching Contributions shall be allocated to the Matching
   Contribution Accounts of all eligible individuals according to the ratio that
   each individual's Deferrals for the Plan Year bears to the total Deferrals of
   all eligible individuals. For purposes of this subsection (a), Deferrals in
   excess of the amount specified in the Adoption Agreement shall not be taken
   into account in determining the ratio described in the preceding sentence. In
   addition, an individual's allocation of Matching Contributions shall be
   limited to the amount described in the Adoption Agreement.

       (b)  Required Funding:  If the funding of the Matching Contribution is
            ----------------
   required to be made by the Employer, the Matching Contribution Account of
   each eligible individual shall receive an allocation of a percentage of his
   Deferrals for the Plan Year, as specified in the Adoption Agreement, and
   subject to the limitations specified in the Adoption Agreement.

       7.06  VESTING OF MATCHING CONTRIBUTION ACCOUNT

This Plan may provide that a Participant's (or Inactive Participant's) Vested
Percentage in his Matching Contribution Account will differ from his Vested
Percentage in his Employer Contribution Account, according to the elections made
in the Adoption Agreement.

                                       92

<PAGE>
 
       7.07  FORFEITURES ATTRIBUTABLE TO THE MATCHING CONTRIBUTION ACCOUNT

For Plan Years beginning prior to January 1, 1989, the treatment of Forfeitures
and Forfeiture Accounts attributable to Matching Contribution Accounts on
account of a Participant's Termination of Employment with less than 100% vesting
shall be determined under the terms of the Prior Plan.  For Plan Years beginning
after December 31, 1988, the provisions of this Section 7.07 shall be
applicable.

In general, the treatment of Forfeitures and Forfeiture Accounts attributable to
Matching Contribution Accounts under this Section 7.07 shall be exactly the same
treatment applied to Forfeitures and Forfeiture Accounts attributable to
Employer Contribution Accounts, as described in Section 4.02.  In other words,
in applying the provisions of Section 4.02 to this Section 7.07, Section 4.02
shall be read by substituting the term "Matching Contribution Account(s)" for
the term "Employer Contribution Account(s)" wherever it appears.

For example, a Former Participant's Forfeiture Account attributable to Matching
Contribution Accounts shall be established as of the earlier of the date the
Former Participant receives a distribution of his Benefit, or the end of the
Plan Year in which the Former

                                       93

<PAGE>
 
Participant incurs five consecutive Breaks-In-Service.  Similarly, Forfeiture
Accounts attributable to Matching Contribution Accounts shall become available
for allocation at the same time as Forfeiture Accounts attributable to Employer
Contribution Accounts (i.e., as of the end of the Plan Year described in the
Adoption Agreement, or, if earlier, as of the end of the Plan Year in which the
Former Participant incurs five consecutive Breaks-In-Service).  However, where
Section 4.02(a) provides for the allocation of Forfeiture Accounts in accordance
with Section 5.07, the allocation of Forfeiture Accounts attributable to
Matching Contribution Accounts shall instead be governed by the applicable
method below:

       (a) If the funding of Matching Contributions is required (see Section
   7.04(a)), Forfeitures under this Section 7.07 shall be applied to reduce the
   amount of the contribution required to be made by the Employer of the Former
   Participant or Inactive Participant pursuant to Sections 7.04(a) and 7.05. If
   Forfeitures available for the Plan Year exceed the required Employer
   contribution for the Plan Year, such excess Forfeitures shall be held in a
   suspense account (to which no Investment Income shall be credited) and be
   used to reduce future contributions required to be made by such Employer.

       (b) If the funding of Matching Contributions is discretionary (see
   Section 7.04(a)), Forfeitures under this Section 7.07 shall be added to the
   Employer contribution for the Plan Year, and allocated in accordance with
   Section 7.05(a).

       7.08  SPECIAL NONDISCRIMINATION TESTS

Aggregate Contributions of Highly Compensated Participants shall be limited in
accordance with this Section 7.08, which is intended to comply with the
nondiscrimination tests described in Section 401(m)(2) of the Code and related
regulations.

       (a)  Average Contribution Percentage Test:  For any Plan Year, the
            ------------------------------------
   Average ACP for the group of Highly Compensated Participants shall not exceed
   the Average ACP for the group of Non-Highly Compensated Participants as
   follows:

            IF THE AVERAGE ACP FOR             THEN THE AVERAGE ACP FOR      
      THE GROUP OF NON-HIGHLY COMPENSATED  THE GROUP OF HIGHLY COMPENSATED  
             PARTICIPANTS FOR THE               PARTICIPANTS FOR THE          
          PLAN YEAR (DENOTED "R") IS:        PLAN YEAR SHALL NOT EXCEED:   
      -----------------------------------  -------------------------------
               2% or less                            2.0 times "R"          
               2% to 8%                              2.0% plus "R"          
               8% or more                            1.25 times "R"

       The nondiscrimination limits of this Section 7.08(a) shall be referred to
   as the "ACP Test."

       (b)  Special Rules:  For purposes of applying the ACP Test of subsection
            -------------
   (a) above, the following rules are applicable:

            (i)  Qualified Matching Contributions:  Qualified Matching
                 --------------------------------
       Contributions which have been taken into account under the ADP Test (see
       Section 6.09) shall be disregarded for purposes of the ACP Test.

            (ii) Required Aggregation:  If this Plan satisfies the requirements
                 --------------------
       of

                                       94
<PAGE>
 
       Sections 401(m), 401(a)(4), or 410(b) of the Code only if aggregated with
       one or more other plans, or if one or more other plans satisfy the
       requirements of such Sections of the Code only if aggregated with this
       Plan, then all the Aggregate Contributions included in such other plans
       shall be aggregated with the Aggregate Contributions included in this
       Plan.

            Notwithstanding the preceding paragraph,

                 (1) for Plan Years beginning after December 31, 1988, an "ESOP"
            plan may not be aggregated with this Plan.

                 (2) for Plan Years beginning after December 31, 1989, a plan
            whose plan year differs from the Plan Year of this Plan may not be
            aggregated with this Plan.

            (iii)  Aggregation of Aggregate Contributions of Highly Compensated
                   ------------------------------------------------------------
       Employees:  If a Highly Compensated Employee is also a participant under
       ---------
       another plan of the Employer which includes Aggregate Contributions, the
       ACP of such Highly Compensated Employee under this Plan shall take into
       account such other Aggregate Contributions. For Plan Years beginning
       after December 31, 1988, if the plan year of such other plan differs from
       the Plan Year of this Plan, the ACP of such Highly Compensated Employee
       for such Plan Year under this Plan shall be determined by including only
       amounts attributable to plan years which end in the same calendar year as
       this Plan Year.

            This paragraph (iii) shall not be effective if the affected plans
       are mandatorily disaggregated under regulation 1.401(m)-1(f)(14), which
       references regulation 1.401(k)-1(g)(11)(iii).

            (iv)  Voluntary Contributions Refunded Under Code Section 415:  
                  -------------------------------------------------------
       Voluntary contributions which are distributed pursuant to the fourth
       paragraph of Section 5.09 shall be disregarded for purposes of the ACP
       Test.

            (v)  Participants With No Compensation:  A Participant whose ADP
                 ---------------------------------
       Compensation for the Plan Year is "zero" shall not be taken into account.
                                                      ---

            (vi)  Rounding of Percentages:  For Plan Years beginning after
                  -----------------------
       December 31, 1988, the ACP and the Average ACP shall be rounded to the
       nearest one-hundredth of 1%.

            (vii) Family Members:  The ACP of a Family Member shall not be
                  --------------
       separately calculated. Instead, the ACP of the Key Highly Compensated
       Employee shall be computed by combining his Aggregate Contributions and
       ADP Compensation with those of his Family Member(s). Notwithstanding the
       $200,000 limit on ADP Compensation in Section 6.02, for Plan Years
       beginning after December 31, 1988, the ADP Compensation of such
       "aggregated" Key Highly Compensated Employee shall be the sum of (1) plus
       (2), as follows:

                 (1) the sum of the ADP Compensation of each of the Key Highly
            Compensated Employee, his spouse, and lineal descendants who have
            not attained age 19 before the close of such Plan Year; and such sum
            shall be limited to $200,000 (or such larger amount described in
            Section 6.02), plus

                 (2) the sum of the ADP Compensation of each other Family Member
            not described in (1), where each individual ADP Compensation shall
            be limited to $200,000 (or such larger amount described in Section
            6.02).


                                       95
<PAGE>
 
       7.09  FAILURE TO PASS THE ACP TEST

If the ACP Test is not satisfied, the Employer and/or Administrator may take one
or more of the following steps:

       (a) include certain Deferrals in the ACP (see Section 7.10)

       (b) treat Forfeitures attributable to Employer Contribution Accounts as
   Qualified Nonelective Contributions for Plan Years beginning after 
   December 31, 1990 (see Section 7.11)

                                       96

<PAGE>
 
       (c) include Qualified Nonelective Contributions in the ACP (see Section
   7.12)

       (d) distribute or forfeit Aggregate Contributions which exceeded the
   limits (see Section 7.13)

       7.10  DEFERRALS

If the ACP Test is exceeded, the Administrator may elect to treat certain
Deferrals (but not Deferrals which are distributed pursuant to the fourth
paragraph of Section 5.09) of Non-Highly Compensated Participants as Aggregate
Contributions for purposes of the ACP Test.  This Section 7.10 is effective only
if the ADP Test in Section 6.05 is satisfied both with and without taking such
Deferrals into account.

       7.11  FORFEITURES ATTRIBUTABLE TO EMPLOYER CONTRIBUTION ACCOUNTS

For Plan Years beginning on or after January 1, 1991, if the ACP Test is not
satisfied, Forfeiture Accounts which have become available for allocation
pursuant to Section 4.02 shall not be allocated in accordance with Section 5.07.
Instead, if any Forfeitures remain after the application of Section 6.07
(regarding the use of Forfeitures to satisfy the ADP Test), enough Forfeitures
as necessary shall be treated as Qualified Nonelective Contributions pursuant to
Section 7.12 to satisfy the ACP Test.  That is, for purposes of the Plan, such
Forfeitures shall not be subject to the provisions of Section 5.07, but will be
subject to the provision of Section 7.12.

Any Forfeitures not deemed to be Qualified Nonelective Contributions pursuant to
the preceding paragraph shall be allocated in accordance with Section 5.07,
unless such Forfeitures are deemed to be Qualified Nonelective Contributions
pursuant Section 7.14 to satisfy the Multiple Use Test.

       7.12  QUALIFIED NONELECTIVE CONTRIBUTIONS

If the ACP Test is exceeded, the Employer may elect to make Qualified
Nonelective Contributions for the Plan Year.  Such contributions shall be
allocated to Non-Highly Compensated Participants (including Non-Highly
Compensated Participants who have a Termination of Employment prior to the end
of the Plan Year) in the following manner:

       (a) The initial allocation shall be made to the Non-Highly Compensated
   Participant with the lowest ADP Compensation for the Plan Year. The amount of
   such allocation shall be the lesser of (i) total Qualified Nonelective
   Contributions made for the Plan Year under this Section 7.12, or (ii) the
   maximum amount permitted under Section 5.09 (regarding Section 415 of the
   Code). [Note: Instead of the term "Compensation," this Section 7.12 uses the
           ----
   term "ADP Compensation" and Section 5.09 uses the term "Earnings." Since
   these three terms generally have different meanings, care should be exercised
   when carrying out this Section 7.12.]

       (b) If there still remain Qualified Nonelective Contributions after step
   (a) above, the second allocation shall be made to the Non-Highly Compensated
   Participant with the next lowest ADP Compensation for the Plan Year.
   Similarly, the amount of such allocation shall be the lesser of (i) remaining
   Qualified Nonelective Contributions, or (ii) the maximum amount permitted
   under Section 5.09.

       (c) If there still remain Qualified Nonelective Contributions after step
   (b) above, step (b) shall then be applied to the Non-Highly Compensated
   Participant with the next lowest ADP Compensation for the Plan Year.  In

                                       97
<PAGE>
 
   addition, step (b) shall be repeated as many times as necessary until
   Qualified Nonelective Contributions are exhausted.

Qualified Nonelective Contributions under this Section 7.12 shall

       (a) be allocated to the Qualified Nonelective Contribution Account (or a
   "substitute" Account described in Section 2.84),

       (b) be treated as Aggregate Contributions for purposes of Sections
   7.02(a) and 7.08,

       (c) not include Qualified Nonelective Contributions which have been
   treated as Deferrals in accordance with Section 6.08, and

       (d) be made within 12 months after the end of the applicable Plan Year.

The Qualified Nonelective Contribution Account (or other Account to which
Qualified Nonelective Contributions are allocated) shall

       (a) be fully vested at all times, and

       (b) be subject to the withdrawal and distribution restrictions in
   Section 6.12.

Even if the Employer does not make Qualified Nonelective Contributions to this
Plan, the Administrator may nevertheless elect to treat other Employer
contributions to this Plan or any other defined contribution plan of the
Employer as Qualified Nonelective Contributions for

                                       98
<PAGE>
 
this Plan.  The preceding sentence shall only apply to Employer contributions if
the "account" to which such contributions are allocated

       (a) meets the requirements of the preceding paragraph applicable to the
   Qualified Nonelective Contribution Account, and

       (b) meets other nondiscrimination requirements described in regulations
   under Section 401(k) of the Code.

       7.13  DISTRIBUTION OR FORFEITURE OF EXCESS AGGREGATE CONTRIBUTIONS

       (a)  General:  If the ACP Test is not satisfied and Qualified Nonelective
            -------
   Contributions and/or Deferrals (if any) are still insufficient to satisfy the
   ACP Test, the Excess Aggregate Contribution (including gains/losses)
   attributable to a Highly Compensated Participant shall be disposed of as
   follows:

            (i)   In the case of a Participant whose Vested Percentage in his
       Matching Contribution Account as of the end of the applicable Plan Year
       is 0%, the Excess Aggregate Contribution (including gains/losses) shall
       become a Forfeiture as of the end of the applicable Plan Year.

            (ii)  In the case of a Participant whose Vested Percentage in his
       Matching Contribution Account as of the end of the applicable Plan Year
       is 100%, the Excess Aggregate Contribution (including gains/losses) shall
       be distributed to the Participant.

            (iii) In the case of a Participant whose Vested Percentage in his
       Matching Contribution Account as of the end of the applicable Plan Year
       is greater than 0%, but less than 100%, the Excess Aggregate Contribution
       (including gains/losses) shall become a Forfeiture under paragraph (i) to
       the extent non-vested and be distributed under paragraph (ii) to the
       extent vested.

       (b)  Deferrals:  Notwithstanding anything to the contrary in this
            ---------
   Section 7.13, Deferrals shall not be forfeited or distributed under this
   Section 7.13.

       (c)  Accounting for Excess Aggregate Contributions:  The Administrator
            ---------------------------------------------
   shall establish rules regarding what portions, if any, of the following
   amounts for the Plan Year constitute Excess Aggregate Contributions:
   voluntary Employee contributions, Matching Contributions and Qualified
   Nonelective Contributions.

                                       99
<PAGE>
 
       (d)  Voluntary Employee Contributions:  Notwithstanding subsections(a)(i)
            --------------------------------
   and (a)(iii) above, voluntary Employee contributions shall not become
   Forfeitures. Instead, voluntary Employee contributions which are Excess
   Aggregate Contributions shall be distributed to the Participant.

       (e)  Family Members:  Excess Aggregate Contributions attributable to a
            --------------
   Key Highly Compensated Employee and his Family Members shall be allocated
   among such Employees in proportion to the Aggregate Contributions (including
   Qualified Nonelective Contributions treated as Aggregate Contributions) of
   each such Employee for the applicable Plan Year. Excess Aggregate
   Contributions allocated in accordance with the preceding sentence shall then
   be distributed and/or forfeited in accordance with subsections (a)(i),
   (a)(ii) or (a)(iii) above, whichever is applicable.

       (f)  Gains and Losses:  The gains and losses (collectively referred to as
            ----------------
   "income") to be distributed under subsection (a) above shall be the
   Investment Income for the Plan Year attributable to Excess Aggregate
   Contributions, as determined in accordance with methods described in Section
   5.04. The Administrator may also elect to distribute income for the period
   between the end of the applicable Plan Year and the date of distribution (the
   "gap period"). Such election shall be applied consistently to all Excess
   Aggregate Contributions attributable to a particular Plan Year. However, the
   Administrator may change such election from year to year.

       Notwithstanding the foregoing, for periods before the issuance of final
   regulations under Section 401(m) of the Code on August 15, 1991, the
   determination of distributable income may be determined under proposed
   regulation 1.401(m)-1(e)(3)(ii), which generally provided for specific
   methods of determining income for both the Plan Year and the gap period.

       (g)  Timing:  A distribution under this Section 7.13 must be made by the
            ------
   end of the following Plan Year. (Note: The Employer is subject to a 10%
   excise tax if Excess Aggregate Contributions are distributed more than 2-1/2
   months after the end of the applicable Plan Year.)

       (h)  Consent Not Needed:  Distributions of Excess Aggregate Contributions
            ------------------
   shall not be subject to the requirements of Section 8.02(b)(iv) and Article X
   (regarding the notice and consent rules of Sections 411(a)(11) and 417 of the
   Code).

                                      100
<PAGE>
 
       (i) Forfeitures: Any amounts forfeited pursuant to subsections
           -----------
   (a)(i) and (a)(iii) above shall be treated as follows: 

           (i) If the funding of the Matching Contribution is required to be
       made by the Employer (see Section 7.04(a)), Forfeitures under subsections
       (a)(i) and (a)(iii) above shall be applied to reduce the amount of the
       contribution required to be made by the Employer pursuant to Sections
       7.04(a) and 7.05 for the Plan Year for which Excess Aggregate
       Contributions arose, or for the next Plan Year (if not possible or
       practical for the current Plan Year).

           (ii) If the funding of the Matching Contributions is discretionary
       (see Section 7.04(a)), Forfeitures under subsections (a)(i) and (a)(iii)
       above shall be allocated to the Matching Contribution Accounts of
       eligible Non-Highly Compensated Participants for the Plan Year for which
       Excess Aggregate Contributions arose in the following manner:

               (1) the eligible Non-Highly Compensated Participants are those
           who meet the requirements for eligibility for a Matching Contribution
           under Section 7.04(b).

               (2) the allocation shall be pro rata according to the ratio that
           each eligible individual's Matching Contribution for the Plan Year
           bears to the total Matching Contributions of all eligible individuals
           for the Plan Year.

               (3) if it is not possible or practical to make the allocation as
           of the end of the current Plan Year, the above Forfeitures shall be
           added to the discretionary Employer contribution for the next Plan
           Year.

       (j) Treatment of Excess Aggregate Contributions: Aggregate Contributions
           -------------------------------------------
    (and amounts treated as Aggregate Contributions) which are considered
    Employer contributions for purposes of Sections 404 and 415 of the Code
    shall continue to be considered Employer contributions when such Aggregate
    Contributions become Excess Aggregate Contributions (even if such Excess
    Aggregate Contributions are forfeited or distributed in accordance with this
    Section 7.13).

                                      101
<PAGE>
 
     7.14  MULTIPLE USE LIMITATION

       (a) General: This Section 7.14 describes the rules to implement Section
           -------
    401(m)(9)(A) of the Code and regulation 1.401(m)-2, which generally provide
    that the Employer cannot use the "2 times/2% plus" discrimination test under
    more than one plan or cash or deferred arrangement of the Employer.

           This Section 7.14 shall take effect only if one or more Highly
                                               ----
       Compensated Employee is eligible under both a plan of the Employer which
       contains a cash or deferred arrangement (e.g. Deferrals) and a plan of
       the Employer which provides for voluntary Employee contributions or
       Matching Contributions. (Note: These plans could be one single plan or
                                ----
       separate plans of the Employer.) If the Employer has more than one plan
       which contains a cash or deferred arrangement and/or more than one plan
       which provides for voluntary Employee contributions or Matching
       Contributions, this Section 7.14 shall be applied separately with respect
       to each combination of plans of different types.

           This Section 7.14 shall not take effect if
                                   ---

              (i) the Plan Year begins before January 1, 1989, or

              (ii) during the Plan Year, either the Average ADP or the Average
           ACP of Highly Compensated Participants (under this Plan and any other
           affected plan of the Employer) does not exceed 1.25 times the Average
           ADP or the Average ACP, respectively, of Non-Highly Compensated
           Participants.

       (b) Multiple Use Test: Deferrals, voluntary contributions and Matching
           -----------------
    Contributions (including amounts treated as such) shall be limited in
    accordance with this subsection (b) to comply with Section 401(m)(9)(A) of
    the Code. The nondiscrimination limits of this subsection (b) shall be
    referred to as the "Multiple Use Test," which provides that the sum of the
    Average ADP and Average ACP of Highly Compensated Participants (under this
    Plan and any other affected plan of the Employer) shall not exceed the
    Combined ADP/ACP Limit (which is calculated taking into account the Average
    ADP and Average ACP of Non-Highly Compensated Participants).

                                      102
<PAGE>
 
       For purposes of determining the Average ADP and Average ACP of Highly
   Compensated Participants, the following rules are applicable:

           (i) Qualified Nonelective Contributions, Qualified Matching
       Contributions and Deferrals (whichever is applicable) shall be taken into
       account to the extent necessary to satisfy the ADP Test and the ACP Test.

           (ii) Deferrals may be treated as Matching Contributions only to the
       extent necessary to satisfy the ACP Test. That is, Deferrals which are
       not necessary to satisfy the ACP Test may not be treated as Matching
       Contributions.

           (iii) Excess Deferrals, Discriminatory Deferrals and Excess Aggregate
       Contributions shall be disregarded. That is, the preceding amounts must
       be first corrected, and such corrected amounts will not be used to
       determine the Average ADP and Average ACP.

       (c) Failure to Pass the Multiple Use Test. If the Multiple Use Test in
           -------------------------------------
    subsection (b) above is not satisfied, the Administrator shall take one of
    the following steps (or combinations of steps) in accordance with rules and
    procedures it has established, to the extent necessary to satisfy the
    Multiple Use Test:

           (i) Treat Forfeitures attributable to Employer Contribution Accounts
       as Qualified Nonelective Contributions for Plan Years beginning after
       December 31, 1990, similar to the treatment of Forfeitures used to
       satisfy the ADP Test (see Section 6.07). However, Forfeitures used to
       satisfy the ADP Test (see Section 6.07) or the ACP Test (see Section
       7.11) may not be used to satisfy the Multiple Use Test.

           (ii) Refund Deferrals in a manner similar to rules for Discriminatory
       Deferrals;

           (iii) Distribute or forfeit Aggregate Contributions in a manner
       similar to rules for Excess Aggregate Contributions.

       The Highly Compensated Participants who shall be affected by this
    subsection (c) shall be those who meet one of the following requirements (or
    any combinations) in accordance with rules and procedures established by the
    Administrator:

           (i) only those Highly Compensated Participants who have made 
       Deferrals;

           (ii) only those Highly Compensated Participants who have had
       Aggregate Contributions made on their behalf;

           (iii) only those Highly Compensated Participants who have made
       Deferrals and have had Aggregate Contributions made on their behalf;

           (iv) only those Highly Compensated Participants who are eligible to
       make Deferrals and eligible to have Aggregate Contributions made on their
       behalf (whether or not Deferrals or Aggregate Contributions have actually
       been made).

       Distributions of any amounts under this subsection (c) shall not be
    subject to the requirements of Section 8.02(b)(iv) and Article X (regarding
    the notice and consent rules of Sections 411(a)(11) and 417 of the Code).

     7.15  COORDINATION OF EXCESS DEFERRALS, DISCRIMINATORY DEFERRALS AND EXCESS
           AGGREGATE CONTRIBUTIONS

The Administrator shall establish rules to coordinate the distribution and/or
forfeiture of the following amounts which may occur in the same Plan Year (or
calendar year, if applicable):

       (a) Excess Deferrals under Section 6.04,

                                      103
<PAGE>
 
       (b) Discriminatory Deferrals as a result of the failure of the Plan to
    satisfy the ADP Test in Section 6.05, and

       (c) Excess Aggregate Contributions as a result of the failure of the Plan
    to satisfy the ACP Test in Section 7.08. 

    Such coordination shall take into account (1) the gains/losses applicable to
such amounts, (2) the ADP, ACP and Multiple Use Tests under Sections 6.05, 7.08
and 7.14, respectively, and (3) IRS regulations regarding such matters.

                                      104
<PAGE>
 
                                 ARTICLE VIII
                              PAYMENT OF BENEFITS

     8.01  TYPES OF BENEFITS

       (a)  Normal Retirement Benefit: A Participant or an Inactive
            -------------------------
    Participant who has attained his Normal Retirement Date shall be entitled to
    receive a normal retirement Benefit as follows:

           (i) in the case of a Participant (or Inactive Participant) who has
       experienced a Termination of Employment, the entire value of his Accounts
       payable in accordance with Section 8.02.

           (ii) in the case of a Participant (or Inactive Participant) who is
       still employed by an Employer, either paragraph (1) or (2) below as
       elected in the Adoption Agreement:

                (1) No amount is payable until there is a Termination of
           Employment.

                (2) An amount equal to the entire value of his Accounts as of
           his "Deemed Retirement Date," but subject to the limitations of
           Section 6.12(a)(ii) regarding a distribution from the Deferral Income
           Account. For purposes of this paragraph (2), a Participant's (or
           Inactive Participant's) Deemed Retirement Date is the date (if any)
           selected by such Participant (or Inactive Participant). Such Benefit
           shall be payable in accordance with Section 8.02 in the same manner
           as if the Participant (or Inactive Participant) had actually
           experienced a Termination of Employment on his Deemed Retirement
           Date.

     A Participant (or Inactive Participant) may exercise the option under this
paragraph (2) only once.  That is, a Participant (or Inactive Participant) who
has received a distribution of his Benefit while still employed by an Employer
shall not be entitled to another "in-service" distribution (unless required by
Article IX).

                                      105
<PAGE>
 
     Notwithstanding any provision of the Plan to the contrary, a Participant
(or Inactive Participant) who has received a distribution of his Benefit under
this paragraph (2) shall continue to be eligible (if otherwise eligible) for an
allocation under Articles V, VI, VII and XI.

        (b) Disability Benefit:  If a Participant's or Inactive Participant's
            ------------------
    Termination of Employment with the Employer is on account of Disability, he
    shall be entitled to receive a disability Benefit equal to the entire value
    of his Accounts payable in accordance with Sections 8.02 and 8.03.

       (c) Death Benefit:  In the event that the Termination of Employment of a
           -------------
    Participant or Inactive Participant is caused by his death, his Beneficiary
    shall be entitled to a death Benefit equal to the entire value of his
    Accounts payable in accordance with Sections 8.02 and 8.03 after receipt by
    the Administrator of acceptable proof of death.

       (d) Other Termination Benefits: In the event of the Termination of
           --------------------------
    Employment of a Participant or Inactive Participant before becoming eligible
    for a Benefit under subsections (a), (b) or (c), the Participant or Inactive
    Participant shall be entitled to receive a Benefit equal to his Vested
    Percentage (which may differ depending upon the Account to which such Vested
    Percentage relates) in the value of his Accounts payable in accordance with
    Section 8.02.

        8.02  PAYMENT OF BENEFITS

Except as may be required by the provisions of Section 8.03 or Article X,
payment of Benefits shall be made in accordance with this Section.

        (a) Application for Payment: Upon a Member's or Beneficiary's
            -----------------------
    entitlement to payment of Benefits under Section 8.01, he shall file with
    the Administrator his written application on such form or forms, and subject
    to any other uniform and nondiscriminatory conditions, as the Administrator
    may require. The Administrator may withhold payment of a Benefit until
    proper application is made.

                                      106
<PAGE>
 
        (b) Time of Payment: Payment of Benefits shall be made according to
            ---------------
    this subsection (b), unless the Company elects another method regarding the
    timing of payment in the Adoption Agreement.

           (i) Upon entitlement to a Benefit under Section 8.01(c) (on account
       of death), full payment or commencement of payment shall be made within
       the 90-day period following the date of death (or receipt by the
       Administrator of acceptable proof of death) if the Beneficiary is the
       Member's spouse. If the Beneficiary is not the Member's spouse, rules
       similar to those described in paragraph (ii) below shall apply.

           (ii) Upon entitlement to a Benefit under Sections 8.01(a) or (b) (for
       reasons of retirement or Disability), full payment or commencement of
       payment shall be made as soon as practical following the last day of the
       Plan Year in which the retirement or Disability occurs or receipt by the
       Administrator of acceptable proof of Disability, if later. However, the
       Administrator may establish rules for earlier payment where practical.

           (iii) Upon entitlement to a Benefit under Section 8.01(d), full
       payment or commencement is as follows:

               (1) With respect to a Member whose Vested Percentage in all his
           Accounts is 100%, payment shall generally be made as soon as
           practical following the last day of the Plan Year in which his
           Termination of Employment occurs. However, the Administrator may
           establish rules for earlier payment where practical.

               (2) With respect to a Member whose Vested Percentage in any
           Account is less than 100%, payment shall generally be made as soon as
           practical following the last day of the Plan Year in which his
           Termination of Employment occurs. However, the Administrator may
           establish rules for earlier payment where practical.

               (3) With respect to a Member whose Benefit (determined separately
           with respect to each Account) is zero (because either his Vested
           Percentage is 0% or the value of his Account is zero), the Member
           shall be deemed to have received a distribution of such Benefit on
           his date of Termination of Employment for purposes of this Article
           VIII and Sections 4.02 and 7.07.

                                      107
<PAGE>
 
           (iv) If a Member's Benefit under Sections 8.01(a), (b) or (d) exceeds
       $3,500, payment of his Benefit may not be made without his consent. If a
       Member does not consent to immediate payment, his Benefit shall remain in
       the Trust and be paid upon the earliest of (1) his death, (2) attainment
       of the later of age 62 or his Normal Retirement Date, or (3) his
       subsequent consent to payment on an earlier date. The Administrator shall
       also require consent of the Member's spouse if such consent is required
       pursuant to Article X.

           (v) Unless a Member elects otherwise, payment of a Member's Benefit
       must commence not later than 60 days after the close of the Plan Year
       following the latest of (1) his Termination of Employment, (2) attainment
       of age 65 or his Normal Retirement Date, if earlier, or (3) the 10th
       anniversary of the date on which the Member commenced participation in
       the Plan. For purposes of this paragraph, the failure of a Member to
       consent to a distribution payable in accordance with this paragraph shall
       be deemed to be an election by such Member to defer commencement of his
       Benefit.

           (vi) Payment of Benefits under Section 8.01(c) to a Member's
       Beneficiary on account of the Member's death shall not require the
       consent of the Beneficiary, even if the Death Benefit exceeds $3,500.

               (c) Determination of Benefit: A Member's Benefit shall be based
           upon the value of his Account determined as of the Valuation Date
           coinciding with or immediately preceding the date of distribution,
           plus (i) Deferrals, Matching Contributions, voluntary contributions
           and Rollover Contributions made during the period since such
           Valuation Date, and less (ii) any distributions or withdrawals from
           the Account(s) since such Valuation Date. The value of the Account
           may be further adjusted to reflect Interim Valuations made pursuant
           to Section 5.04(b). If a Member's Benefit exceeds $3,500 at the time
           of any distribution, then such Member's Benefit at any subsequent
           time shall be deemed to exceed $3,500. Accordingly, any reference in
           this Plan to "exceeds $3,500" shall take into account the preceding
           "deemed to exceed $3,500" rule. [An illustration of how this
           paragraph is intended to operate is as follows: Suppose the Plan
           allows periodic installment payments, and Member X elects to receive
           his $5,000 Benefit over 60 monthly installments of approximately $100
           each. After 24 monthly installments, X's remaining Benefit is $3,200.
           The Member may not be "cashed-out" with a single sum distribution of
                          ---
           $3,200 without his consent because although his current Benefit does
                  -------
           not exceed $3,500, his initial Benefit exceeded $3,500.]
                                  -------

               (d) Method of Payment: Payment of Benefits shall be in a single
           sum unless (i) a different form is otherwise required by Article X,
           (ii) periodic installment payments are permitted in the Adoption
           Agreement, or (iii) the Prior Plan provided forms of payment which
           may not be eliminated pursuant to Section 411(d)(6) of the Code, in
           which case the Plan must be amended to include such forms of payment.
           If periodic installment payments are permitted, they shall be in
           substantially equal amounts (but not less than $100 per month) for a
           specified number of years, but not to exceed the Member's actuarially
           determined life expectancy at the date payments are to commence. Such
           periodic payments shall be made not less frequently than annually.
           The Administrator may direct the Trustee to segregate and deposit a
           cash sum equal to the Member's Benefit in one or more bank savings
           accounts, savings certificates or other separate fund as the
           Administrator may from time to time have established and maintained

                                      108
<PAGE>
 
   by the Trustee for this purpose, and to pay such Investment Income as may
   accrue on the sum so deposited. Periodic installment payments shall also
   be subject to the rules contained in Article IX.

       The amount which a Member or Beneficiary is entitled to receive at any
   time, and from time to time, may be paid in cash or in securities, or in any
   combination thereof.

       8.03  PAYMENT OF DISABILITY AND DEATH BENEFITS

       (a) Disability Benefit: Payment of a Disability Benefit to a 
           ------------------
   Member shall be in a single sum unless the provisions of Article X apply.

       (b) Death Benefit:  Payment of a Death Benefit to the Beneficiary(ies) 
           -------------
   of a deceased Member shall be in a single sum unless the provisions of
   Article X apply.

       8.04  DESIGNATION OF BENEFICIARY

Subject to the applicable state laws governing a Member's right to retirement
plan benefits, any Qualified Domestic Relations Order and the restrictions
contained herein, a Member may designate a Beneficiary to receive the Benefit
payable upon his death, or may change any such designation (without consent of
any previously designated Beneficiary) on any form acceptable to the
Administrator and received by the Administrator at any time prior to the
Member's death.

                                      109
<PAGE>
 
A Member's surviving spouse shall automatically be his Beneficiary unless:

       (a) The spouse has consented in writing to the designation of a
    Beneficiary other than the spouse, the spouse's consent acknowledges the
    effect of such designation and the spouse's consent has been witnessed by a
    notary public, or if permitted by the Administrator, by a representative of
    the Administrator, or

       (b) It is established to the satisfaction of the Administrator or his
    representative that the consent of the Member's spouse may not be obtained
    because there is no spouse, because the spouse cannot be located or because
    of such other circumstances as may be permitted under Internal Revenue
    Service regulations pertaining to Section 417(a)(2) of the Code, or

       (c) The Member and the Member's spouse (if entitled to a Pre-Retirement
    Spouse's Annuity) have elected to waive the Pre-Retirement Spouse's Annuity
    as provided in Section 10.06.

The consent or waiver described in paragraphs (a) and (c) above shall be valid
only if such consent or waiver specifically acknowledges the chosen Beneficiary.
That is, the Member may not designate another Beneficiary without the consent of
the Member's spouse.

A designation of Beneficiary other than the spouse shall be automatically
revoked on the marriage or remarriage (other than a common law marriage) of a
Member, and any designation of the spouse as Beneficiary shall be automatically
revoked upon any finalized divorce of a Member subsequent to the date of filing
of his designation of Beneficiary.

If there is no designated Beneficiary alive when a death Benefit becomes
payable, the Beneficiary shall be deemed to be (1) the Member's surviving
spouse, or, if none, (2) the Member's surviving children (including any adopted
children) in equal shares, or, if none, (3) the Member's heirs-at-law as
determined in the reasonable judgement of the Administrator, or if none exist,
(4) the Plan.

Payments made pursuant to the foregoing shall be a complete discharge of the
liabilities under the Plan for such payments and the Administrator may require
the Beneficiary to execute such application forms and releases as the
Administrator deems necessary and appropriate.

                                      110
<PAGE>
 
        8.05  UNCLAIMED BENEFITS

The Administrator, the Trustee and the Employers shall not be required to
determine, or to make investigation to determine, the identity or mailing
address of any Member or Beneficiary, and they shall have discharged their
obligation when they shall have sent checks and other papers by registered or
certified mail to such Member or Beneficiary at the address designated to it by
such Member or Beneficiary, or if the Member or Beneficiary makes no such
designation, at his last address in the records of the Employers.

In the event a Member or a Beneficiary cannot be located, the Administrator may
direct the Trustee to segregate and deposit a cash sum equal to such Member's or
Beneficiary's Benefit in a separate fund within the Trust to be invested in one
or more savings accounts, savings certificates or such other investment vehicle
as the Administrator shall determine.  Any Investment Income as may accrue in
such separate fund shall be added to the Member's or Beneficiary's Benefit.

If a Benefit remains unclaimed for a period of three years following the date
the Benefit first becomes payable to a Member or Beneficiary under the terms of
this Article, the Administrator may consider that such Benefit is forfeited.
Such Forfeiture shall be allocated on the next succeeding Valuation Date with
other Forfeitures; provided, however, if such Member or Beneficiary is located
after such allocation and makes a claim for his Benefit, such Member or
Beneficiary shall be paid an amount equal to the Benefit which was forfeited in
accordance with this Section 8.05.  Payment of such Benefit shall be from the
current Forfeitures, or the Employer, in its sole discretion, may make a special
contribution.

        8.06  QUALIFIED DOMESTIC RELATIONS ORDERS

This Plan specifically permits the payment of Benefits to an "alternate payee"
(as defined in Section 414(p)(8) of the Code) pursuant to the terms of a
Qualified Domestic Relations Order.  In addition, payment of Benefits to a
Member (or his Beneficiary) may not be made to the extent such payment conflicts
with the terms of a Qualified Domestic Relations Order.

The Administrator shall adopt rules and procedures to implement this
Section 8.06, including procedures to determine whether a "domestic relations
order" (as defined in Section 414(p)(1)(B) of the Code) qualifies as a Qualified
Domestic Relations Order.

        8.07  CODE SECTION 401(A)(31) REQUIREMENTS

This Section applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a distributee's election under this Section, a distributee may elect, at
the time and in the manner prescribed by the Administrator, to have any portion
of an eligible rollover distribution paid directly to an eligible retirement
plan specified by the distributee in a direct rollover.

For purposes of this Section, the following words or phrases shall have the
following meanings:

        (a) Eligible Rollover Distribution: An eligible rollover distribution is
            ------------------------------
    any distribution of all or any portion of the balance to the credit of the
    distributee, except that an eligible rollover distribution does not include:
    any distribution that is one of a series of substantially equal periodic
    payments (not less frequently than annually) made for the life (or life
    expectancy) of the distributee or the joint lives (or joint life
    expectancies)


                                      111
<PAGE>
 
    of the distributee and the distributee's designated beneficiary, or for a
    specified period of ten years or more; any distribution to the extent such
    distribution is required under Section 401(a)(9) of the Code; and the
    portion of any distribution that is not includible in gross income
    (determined without regard to the exclusion for net unrealized appreciation
    with respect to employer securities).

        (b) Eligible Retirement Plan: An eligible retirement plan is an
    individual retirement account described in Section 408(a) of the Code, an
    individual retirement annuity described in Section 408(b) of the Code, an
    annuity plan described in Section 403(a) of the Code, or a qualified trust
    described in Section 401(a) of the Code, that accepts the distributee's
    eligible rollover distribution. However, in the case of an eligible rollover
    distribution to the surviving spouse, an eligible retirement plan is an
    individual retirement account or individual retirement annuity.

        (c) Distributee:  A distributee includes an Employee or former Employee.
    In addition, the Employee's or former Employee's surviving spouse and the
    Employee's or former Employee's spouse or former spouse who is the alternate
    payee under a Qualified Domestic Relations Order are distributees with
    regard to the interest of the spouse or former spouse.

        (d) Direct Rollover:  A direct rollover is a payment by the Plan to the
    eligible retirement plan specified by the distributee.

        8.08  WAIVER OF THE 30-DAY NOTICE PERIOD

Notwithstanding any provision of the Plan to the contrary, if a distribution is
one to which Sections 401(a)(11) and 417 of the Code do not apply, such
distribution may commence less than 30 days after the notice required under
Section 1.411(a)-11(c) of the Income Tax Regulations is given, provided that:

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

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

     This Section shall generally apply to distributions made on or after
January 1, 1994. However, this Section may be applied to earlier distributions
in accordance with Section IV of IRS Notice 93-26.

                                      112

<PAGE>
 
                                  ARTICLE IX
                     AGE 70-1/2 DISTRIBUTION REQUIREMENTS

     9.01    GENERAL RULES

       (a)  Except as otherwise provided in Article X, Joint and
   Survivor Annuity Requirements, the requirements of this Article shall apply
   to any distribution of a Member's Benefit and will take precedence over any
   inconsistent provisions of this Plan. Unless otherwise specified, the
   provisions of this Article apply to calendar years beginning after December
   31, 1984.

       (b) All distributions required under this Article shall be determined and
   made in accordance with the Income Tax Regulations under Section 401(a)(9) of
   the Code, including the minimum distribution incidental benefit requirement
   of Section 1.401(a)(9)-2 of the regulations.

     9.02    REQUIRED BEGINNING DATE

The entire interest of a Member must be distributed or begin to be distributed
no later than the Member's Required Beginning Date.

     9.03    LIMITS ON DISTRIBUTION PERIODS

As of the first Distribution Calendar Year, distributions, if not made in a
single sum, may only be made over one of the following periods (or a combination
thereof):

       (a)  The life of the Member;

       (b)  The life of the Member and a Designated Beneficiary;

       (c)  A period certain not extending beyond the Life Expectancy
    of the Member; or

       (d)  A period certain not extending beyond the joint and last
    survivor expectancy of the Member and a Designated Beneficiary.

                                      113
<PAGE>
 
     9.04    DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH YEAR

If the Member's Benefit is to be distributed in other than a single sum, the
following minimum distribution rules shall apply on or after the Required
Beginning Date:

       (a)  Individual Account                                           
            ------------------                                                  
                                                                                
            (i)  If a Member's Benefit is to be distributed over (1) a          
       period not extending beyond the Life Expectancy of the Member or         
       the joint life and last survivor expectancy of the Member and            
       the Member's Designated Beneficiary, or (2) a period not                 
       extending beyond the Life Expectancy of the Designated                   
       Beneficiary, the amount required to be distributed for each              
       calendar year, beginning with distributions for the first                
       Distribution Calendar Year, must at least equal the quotient             
       obtained by dividing the Member's Benefit by the Applicable Life         
       Expectancy.                                                              
                                                                                
            (ii)  For calendar years beginning before January 1, 1989,          
       if the Member's spouse is not the Designated Beneficiary, the            
       method of distribution selected must assure that at least 50% of         
       the present value of the amount available for distribution is            
       paid within the Life Expectancy of the Member.                           
                                                                                
            (iii)  For calendar years beginning after December 31,              
       1988, the amount to be distributed each year, beginning with             
       distributions for the first Distribution Calendar Year, shall            
       not be less than the quotient obtained by dividing the Member's          
       Benefit by the lesser of (1) the Applicable Life Expectancy, or          
       (2) if the Member's spouse is not the Designated Beneficiary,            
       the applicable divisor determined from the table set forth in            
       Q&A-4 of Section 1.401(a)(9)-2 of the Income Tax Regulations.            
       Distributions after the death of the Member shall be distributed         
       using the Applicable Life Expectancy in Section 9.04(a)(i) as            
       the relevant divisor without regard to regulations                       
       Section 1.401(a)(9)-2.                                                   
                                                                                
            (iv)  The minimum distribution required for the Member's            
       first Distribution Calendar Year must be made on or before the           
       Member's Required Beginning Date. The minimum distribution for           
       other calendar years, including the minimum distribution for the         
       Distribution Calendar Year in which the Member's Required                
       Beginning Date occurs, must be made on or before December 31 of          
       that Distribution Calendar Year.                                       

                                      114
<PAGE>
 
       (b) Other Forms: If the Member's Benefit is distributed in the form of an
           ------------
    annuity purchased from an insurance company, distributions thereunder shall
    be made in accordance with the requirements of Section 401(a)(9) of the Code
    and the regulations thereunder.

     9.05    DEATH DISTRIBUTION PROVISIONS                                 
                                                                                
       (a)  Distribution Beginning Before Death:  If the Member dies after 
            ------------------------------------
   distribution of his or her Benefit has begun, the remaining portion of
   such Benefit will continue to be distributed at least as rapidly as under the
   method of distribution being used prior to the Member's death.
   
       (b)  Distribution Beginning After Death:  If the Member dies before the
            ----------------------------------                              
   the distribution of his or her Benefit begins, distribution of the Member's
   entire Benefit shall be completed by December 31 of the calendar year
   containing the fifth anniversary of the Member's death except to the extent
   that an election is made to receive distributions in accordance with (i) or
   (ii) below:

            (i)  If any portion of the Member's Benefit is payable to a     
       Designated Beneficiary, distributions may be made over the life or over a
       period certain not greater than the Life Expectancy of the Designated
       Beneficiary commencing on or before December 31 of the calendar year
       immediately following the calendar year in which the Member died;
       
            (ii) If the Designated Beneficiary is the Member's surviving spouse,
       the date distributions are required to begin in accordance with (i) above
       shall not be earlier than the later of (1) December 31 of the calendar
       year immediately following the calendar year in which the Member died, or
                                                                              --
       (2) December 31 of the calendar year in which the Member would have
       attained age 70-1/2.

            If the Member has not made an election pursuant to this Section
       9.05(b) by the time of his or her death, the Member's Designated
       Beneficiary must elect the method of distribution no later than the
       earlier of (1) December 31 of the calendar year in which distributions
       would be required to begin under this Section 9.05, or (2) December 31 of
                                                           --
       the calendar year which contains the fifth anniversary of the date of
       death of the Member. If the Member has no Designated Beneficiary, or if
       the Designated Beneficiary does not elect a method of distribution,
       distribution of the Member's entire Benefit must be completed by December
       31 of the calendar year containing the fifth anniversary of the Member's
       death.
       
       (c) For purposes of Section 9.05(b), if the surviving spouse dies after
   the Member, but before payments to such spouse begin, the provisions of
   Section 9.05(b), with the exception of paragraph (ii) therein, shall be
   applied as if the surviving spouse were the Member.

       (d) For purposes of this Section 9.05, any amount paid to a child of the
   Member will be treated as if it has been paid to the surviving spouse if the
   amount becomes payable to the surviving spouse when the child reaches the age
   of majority.

       (e) For the purposes of this Section 9.05, distribution of a Member's
   Benefit is considered to begin on the Member's Required Beginning Date (or,
   if Section 9.05(c) is applicable, the date distribution is required to begin
   to the surviving spouse pursuant to Section 9.05(b)). If distribution in the
   form of an annuity described in Section 9.04(b) irrevocably commences to the
   Member before the Required Beginning Date, the

                                      115
<PAGE>
 
     date distribution is considered to begin is the date distribution actually
     commences.

        9.06    DEFINITIONS

            (a)  Applicable Life Expectancy:  The Life Expectancy (or joint
                 --------------------------
     and last survivor expectancy) calculated using the attained age of the
     Member (or Designated Beneficiary) as of the Member's (or Designated
     Beneficiary's) birthday in the applicable calendar year reduced by one for
     each calendar year which has elapsed since the date Life Expectancy was
     first calculated. If Life Expectancy is being recalculated, the Applicable
     Life Expectancy shall be the Life Expectancy as so recalculated. The
     applicable calendar year shall be the first Distribution Calendar Year, and
     if Life Expectancy is being recalculated such succeeding calendar year. If
     annuity payments commence in accordance with Section 9.04(b) before the
     Required Beginning Date, the applicable calendar year is the year such
     payments commence. If distribution is in the form of an immediate annuity
     purchased after the Member's death with the Member's remaining Benefit, the
     applicable calendar year is the year of purchase.

            (b)  Designated Beneficiary:  The individual who is designated
                 ----------------------
     as the Beneficiary under the Plan in accordance with Section 401(a)(9) of
     the Code and the regulations thereunder.

                                      116
<PAGE>
 
           (c)  Distribution Calendar Year:  A calendar year for which a
                --------------------------
     minimum distribution is required. For distributions beginning before the
     Member's death, the first Distribution Calendar Year is the calendar year
     immediately preceding the calendar year which contains the Member's
     Required Beginning Date. For distributions beginning after the Member's
     death, the first Distribution Calendar Year is the calendar year in which
     distributions are required to begin pursuant to Section 9.05.

           (d)  Life Expectancy:  Life Expectancy and joint and last
                ---------------
     survivor expectancy are computed by use of the expected return multiples in
     Tables V and VI of Section 1.72-9 of the Income Tax Regulations.

           Unless otherwise elected by the Member (or spouse, in the
     case of distributions described in Section 9.05(b)(ii)), by the time
     distributions are required to begin, Life Expectancies shall be
     recalculated annually. Such election shall be irrevocable as to the Member
     (or spouse) and shall apply to all subsequent years. The Life Expectancy of
     a nonspouse Beneficiary may not be recalculated.

           (e)  Member's Benefit
                ----------------

                (i)  The Account as of the last Valuation Date in the
           calendar year immediately preceding the Distribution Calendar Year
           (Valuation Calendar Year) increased by the amount of any
           contributions or Forfeitures allocated to the Account as of dates in
           the Valuation Calendar Year after the Valuation Date and decreased by
           distributions made in the Valuation Calendar Year after the Valuation
           Date.

                (ii) Exception for Second Distribution Calendar Year: For
           purposes of paragraph (i) above, if any portion of the minimum
           distribution for the first Distribution Calendar Year is made in the
           second Distribution Calendar Year on or before the Required Beginning
           Date, the amount of the minimum distribution made in the second
           Distribution Calendar Year shall be treated as if it had been made in
           the immediately preceding Distribution Calendar Year.

           (f)  Required Beginning Date
                -----------------------

                (i)  General Rule:  The Required Beginning Date of a Member
                     ------------
           is the first day of April of the calendar year following the
           calendar year in which the Member attains age 70-1/2.

                                      117
<PAGE>
 
                (ii) Transitional Rules
                     ------------------
                     (1) The Required Beginning Date of a Member who attains age
                70-1/2 before January 1, 1988, shall be determined in accordance
                with (A) or (B) below:

                         (A)  Non-5-percent owners:  The Required
                              --------------------
                     Beginning Date of a Member who is not a 5-percent owner is
                     the first day of April of the calendar year following the
                     calendar year in which the later of retirement or
                     attainment of age 70-1/2 occurs.

                         (B)  5-percent owners:  The Required Beginning
                              ----------------
                     Date of a Member who is a 5-percent owner during any year
                     beginning after December 31, 1979, is the first day of
                     April following the later of:

                              (I) the calendar year in which the Member
                         attains age 70-1/2, or

                              (II) the earlier of the calendar year with
                         or within which ends the Plan Year in which the Member
                         becomes a 5-percent owner, or the calendar year in
                         which the Member retires.

                     (2)  The Required Beginning Date of a Member who is
                not a 5-percent owner who attains age 70-1/2 during 1988
                who has not retired as of January 1, 1989, is April 1,
                1990.

                (iii)  5-percent owner:  A Member is treated as a 5-percent
                       ---------------
            owner for purposes of this Section if such Member is a 5-percent
            owner as defined in Section 416(i) of the Code (determined in
            accordance with Section 416 of the Code but without regard to
            whether the Plan is top-heavy) at any time during the Plan Year
            ending with or within the calendar year in which such owner attains
            age 66-1/2 or any subsequent Plan Year.

                 (iv)  Once distributions have begun to a 5-percent owner
            under this Section, they must continue to be distributed, even if
            the Member ceases to be a 5-percent owner in a subsequent year.

     9.07   TRANSITIONAL RULE
            -----------------

           (a)  Notwithstanding the other requirements of this Article and
     subject to the requirements of Article X, distribution on behalf of any
     Member, including a 5-percent owner, may be made in accordance with all of
     the following requirements (regardless of when such distribution
     commences):

                (i) The distribution by the Trust is one which would not have
           disqualified such Trust under Section 401(a)(9) of the Code as in
           effect prior to amendment by the Deficit Reduction Act of 1984.

                (ii)  The distribution is in accordance with a method of
           distribution designated by the Member whose Benefit in the Trust is
           being distributed or, if the Member is deceased, by a Beneficiary of
           such Member.

                (iii) Such designation was in writing, was signed by the
           Member or Beneficiary, and was made before January 1, 1984.

                (iv)  The Member had accrued a Benefit under the Plan as of
           December 31, 1983.

                (v) The method of distribution designated by the Member or the
           Beneficiary specifies the time at which distribution will commence,
           the period over which distributions will be made, and in the case of
           any distribution upon the Member's death, the Beneficiaries of the
           Member listed in order of priority.

           (b) A distribution upon death will not be covered by this
     transitional rule unless the information in the designation contains the
     required information described above with respect to the distributions to
     be made upon the death of the Member.

                                      118
<PAGE>
 
                (c)  For any distribution which commences before January 1,
     1984, but continues after December 31, 1983, the Member or the Beneficiary,
     to whom such distribution is being made, will be presumed to have
     designated the method of distribution under which the distribution is being
     made if the method of distribution was specified in writing and the
     distribution satisfies the requirements in Sections 9.07(a)(i) and (v).

                (d)  If a designation is revoked, any subsequent distribution
     must satisfy the requirements of Section 401(a)(9) of the Code and the
     regulations thereunder. If a designation is revoked subsequent to the date
     distributions are required to begin, the Trust must distribute by the end
     of the calendar year following the calendar year in which the revocation
     occurs the total amount not yet distributed which would have been required
     to have been distributed to satisfy Section 401(a)(9) of the Code and the
     regulations thereunder, but for the TEFRA Section 242(b)(2) election. For
     calendar years beginning after December 31, 1988, such distributions must
     meet the minimum distribution incidental benefit requirements in
     Section 1.401(a)(9)-2 of the Income Tax Regulations. Any changes in the
     designation will be considered to be a revocation of the designation.
     However, the mere substitution or addition of another Beneficiary (one not
     named in the designation) under the designation will not be considered to
     be a revocation of the designation, so long as such substitution or
     addition does not alter the period over which distributions are to be made
     under the designation, directly or indirectly (for example, by altering the
     relevant measuring life). In the case in which an amount is transferred or
     rolled over from one plan to another plan, the rules in Q&A J-2 and Q&A J-3
     of regulation Section 1.401(a)(9)-1 shall apply.

                                      119
<PAGE>
 
                                   ARTICLE X
                    JOINT AND SURVIVOR ANNUITY REQUIREMENTS

        10.01   COVERAGE

        (a) General:  The provisions of this Article will apply to this Plan
            -------
   unless:

           (i) Members cannot or do not elect payment of their Benefits in the
           form of a life annuity, and

           (ii) On the death of a Member, his Benefit (reduced by the amount of
           such Member's loan(s) pursuant to Section 5.10(c)) will be paid to
           the Member's surviving spouse, or if there is no surviving spouse, or
           if the surviving spouse has already consented in a manner conforming
           to the waiver requirements set forth in this Article, then to the
           Member's designated Beneficiary.

        (b) Certain Participants Covered:  The provisions of this Article shall
            ----------------------------
   apply to a Member even if the Plan is otherwise not covered, if this Plan
   (with respect to such Member) is a direct or indirect transferee on or after
   January 1, 1985 of one of the following plans:

          (i)  a defined benefit plan,

          (ii) a defined contribution plan which is subject to the funding
          standards of Section 412 of the Code,

          (iii)  any other plan which does not meet the exceptions described in
          subsection (a) above, or

          (iv) a plan which received amounts from another transferee plan.

         However, the provisions of this Article shall apply only to the amount
   transferred to this Plan on or after January 1, 1985 and not to the Member's
   entire Benefit.

                                      120
<PAGE>
 
      (c) Precedence:  If this Article applies to this Plan or a Member, the
          ----------
   provisions of this Article shall take precedence over any conflicting
   provision in this Plan.

      (d) Exception:  The provisions of this Article shall not apply to a Member
          ---------
   (or Beneficiary) whose Benefit is $3,500 or less. Such Member (or
   Beneficiary) shall receive payment of his Benefit in accordance with the
   otherwise applicable provisions of this Plan.

        10.02   JOINT AND SURVIVOR ANNUITY

A Member's Benefit shall be paid in the form of a joint and survivor annuity.
In the case of a Member who is not married, the term "joint and survivor
annuity" shall mean an annuity for the life of such Member.  However, the Member
and spouse or former spouse may elect not to receive a joint and survivor
annuity, as provided in this Article, in which case the Member's Benefit will be
paid in accordance with the otherwise applicable provisions of this Plan.  More
than one spouse may be entitled to survivor annuity benefits.  For example, two
former spouses may have been awarded survivor benefits and there may also be a
current spouse.  In such case, this Section shall be applied by dividing the
Member's Benefit in proportion to the spousal entitlements and then applying
this Section to each portion as if each portion were a separate Benefit
belonging to the Member and the spouse or former spouse in question.  The rules
in this Section apply to all former Members with vested Benefits, the
distribution of which had not commenced prior to January 1, 1985.

        10.03   PURCHASE OF ANNUITY

The joint and survivor annuity payable under this Article shall be provided by
purchasing a nontransferable annuity contract from an insurance company with the
Member's Benefit (subject to the apportionment rules in Section 10.02 relating
to multiple spouses).  The annuity contract shall provide for monthly payments
to the Member for life, beginning on the date selected by the Member (but no
later than the latest of the Member's (1) Normal Retirement Date, (2) 62nd
birthday, or (3) date of Termination of Employment).  These payments shall end
with the payment for the calendar month in which the Member's death occurs, with
the provision that if the Member dies after his Benefit commences and is
survived by a spouse or former spouse entitled to survivor benefits, such spouse
or former spouse shall receive monthly payments of between 50 and 100 percent of
the Member's Benefit (as elected by the Member), beginning with the payment for
the calendar month following the month in which the Member died and ending with
the payment for the calendar month in which the spouse or former spouse dies.

In addition, the annuity contract must contain provisions which meet all
requirements of this Article (e.g. consent, waiver, etc.).

        10.04   WAIVER

A Member and his spouse or former spouse may elect, in the manner prescribed by
the Administrator, not to receive a joint and survivor annuity (in which case
the Member shall receive his or her Benefit as otherwise provided in the Plan).
Such an election may be made or revoked at any time, but it shall become
irrevocable when payment of the Member's Benefit commences, or an annuity
contract is purchased, if earlier.  Spousal consents to elections waiving the

                                      121
<PAGE>
 
joint and survivor annuity are required and must be given in writing witnessed
by a notary public, or, if permitted, by the Administrator, or by a
representative of the Administrator.  The preceding consent or waiver shall not
be valid unless such consent or waiver specifically acknowledges the chosen
Beneficiary.  Accordingly, the Member may not designate another Beneficiary
without the consent of the Member's spouse.  Spousal consent may be waived by
the Administrator if a Member has no spouse or the spouse cannot be located, or
for such other reasons authorized in applicable Treasury Regulations.

        10.05   NOTICE REQUIREMENTS

The Administrator shall provide each Member within the Election Period a written
explanation of:  (i) the terms and conditions of a joint and survivor annuity;
(ii) the Member's right to make and the effect of an election to waive the joint
and survivor annuity form of payment; (iii) the rights of a Member's spouse; and
(iv) the right to make and the effect of a revocation of a previous election to
waive the joint and survivor annuity.

   For purposes of this Section:

      (a) "Election Period" shall mean the period no earlier than 30 days and no
             ---------------
   later than 90 days before the Member's Annuity Starting Date.

      (b) "Annuity Starting Date" shall mean the first day of the first period
          ---------------------
   for which the amount is payable as an annuity, or if a benefit is not payable
   in the form of an annuity, the first day on which all events have occurred
   which entitle the Member to such benefit.

                                      122
<PAGE>
 
        10.06   PAYMENT OF DEATH BENEFIT

The payment of Benefits due upon the death of a Member pursuant to
Section 8.01(c) shall be governed by this Section 10.06.

        (a) Married Members:  The Benefit payable upon the death of a married
            ---------------
   Member shall be in the form of a "Pre-retirement Spouse's Annuity" (as
   defined herein) unless one of the following applies:

           (i) The single sum value of the Benefit payable to the spouse is
           $3,500 or less.

           (ii) The Member and his spouse have elected to waive the Pre-
           retirement Spouse's Annuity.

           (iii) The Member's spouse, after the death of the Member, elects to
           receive the Benefit in a form other than the Pre-retirement Spouse's
           Annuity.

        For purposes of this Plan, "Pre-retirement Spouse's Annuity" shall mean
   an annuity payable for the life of the surviving spouse, which can be
   purchased by the Member's Benefit payable upon the death of the Member (but
   reduced by the amount of such Member's loan(s) pursuant to Section 5.10(c)).
   Such Pre-retirement Spouse's Annuity shall be provided by purchasing a
   nontransferable annuity contract from an insurance company chosen by the
   Administrator.

        The Pre-retirement Spouse's Annuity shall commence within a reasonable
   time after the death of the Member. The spouse may elect to defer payment of
   the annuity to a later date, but not beyond the April 1 following the date
   the Member would have attained age 70-1/2.

        The Member's spouse may elect in writing and in the manner prescribed by
   the Administrator, not to receive payment of the Benefit in the form of the
   Pre-retirement Spouse's Annuity. The spouse may elect to receive payment of
   the Benefit as provided in Section 8.02(d).

                                      123
<PAGE>
 
       Under rules established by the Administrator, the Administrator shall
    notify Members of their right to make a "Qualified Election" and to revoke
    any such election within the "Election Period." The Administrator shall
    comply with the foregoing sentence by providing each Member, during the
    "Disclosure Period," a written explanation of the Pre-retirement Spouse's
    Annuity in such terms and in such manner as would be comparable to the
    explanation described in Section 10.05.

       For purposes of this Section 10.06,

           (i) "Qualified Election" shall mean a waiver of a Pre-retirement
                ------------------
       Spouse's Annuity. The waiver must be in writing and must be consented to
       by the Member's spouse. The spouse's consent to a waiver must be
       witnessed by a representative of the Administrator or notary public.
       Notwithstanding this consent requirement, if the Member establishes to
       the satisfaction of the Administrator that such written consent may not
       be obtained because there is no spouse or the spouse cannot be located, a
       waiver will be deemed a Qualified Election. Any consent necessary under
       this provision will be valid only with respect to the spouse who signs
       the consent, or in the event of a deemed Qualified Election, the
       designated spouse. Additionally, a revocation of a prior waiver may be
       made by a Member without the consent of the spouse at any time before the
       commencement of benefits. The number of revocations shall not be limited.

       If the Qualified Election is made prior to the first day of the Plan Year
    in which the Member attains age 35, such Qualified Election shall become
    invalid as of such date. To extend the waiver of the Pre-retirement Spouse's
    Annuity beyond such date, another Qualified Election must be made.

           (ii) "Election Period" shall mean the period which begins on the
                 ---------------
       Member's Entry Date and ends on the date of the Member's death.

           (iii) "Disclosure Period" shall mean (and subject to regulations
                  -----------------
       under Section 417 of the Code) the latest of the following:

                (1) the period beginning on the Member's Entry Date and ending
           with the close of the Plan Year preceding the Plan Year in which the
           Member attains age 35, or

                                      124
<PAGE>
 
                (2) the two-year period beginning one year preceding the date
            the Member becomes a Participant and ending one year following such
            date, or
            
                (3) the two-year period beginning one year preceding the date
            Section 10.01(b) becomes applicable to a Member and ending one year
            following such date.

        If a Member experiences a Termination of Employment before age 35, such
    Member's Disclosure Period shall be the two-year period beginning one year
    preceding such Member's date of Termination of Employment and ending one
    year following such date. If such Member resumes employment with an
    Employer, his Disclosure Period shall be redetermined.

        If a former spouse of a Member is entitled to receive a portion of the
    Member's Benefit under a Qualified Domestic Relations Order, the requirement
    to pay the Member's death Benefit in the form of a Pre-retirement Spouse's
    Annuity shall not apply unless it is consistent with such Qualified Domestic
    Relations Order.

        More than one spouse may be entitled to a Pre-retirement Spouse's
    Annuity. For example, two former spouses may have been awarded survivor
    benefits and there may also be a current spouse. In such case, this Section
    shall be applied by dividing the Member's Benefit in proportion to the
    spousal entitlements and then applying this Section to each portion as if
    each portion were a separate Benefit belonging to the Member and the spouse
    or former spouse in question.

        (b) Other Members: The benefit payable to a Beneficiary upon the death
            -------------
    of either:

            (i)  A Member who is not married on his date of death, or

            (ii) A Member whose spouse will not receive a Pre-retirement
        Spouse's Annuity in accordance with subsection (a) hereof shall be in a
        single sum unless the Plan permits some other form of payment.

                                      125
<PAGE>
 
        10.07   TRANSITIONAL RULES

       (a) Any living Member not receiving payment of Benefits on August 23,
    1984, who would otherwise not receive payment of his Benefit prescribed by
    the previous sections of this Article must be given the opportunity to elect
    to have the prior sections of this Article apply if such Member is credited
    with at least one Hour of Service under the Plan or a predecessor Plan in a
    Plan Year beginning on or after January 1, 1976, and such Member had at
    least 10 Years of Service when he separated from service.

       (b) Any living Member not receiving payment of Benefits on August 23,
    1984, who was credited with at least one Hour of Service under this Plan or
    a predecessor Plan on or after September 2, 1974, and who is not otherwise
    credited with any service in a Plan Year beginning on or after January 1,
    1976, must be given the opportunity to have his Benefit paid in accordance
    with subsection (d) of this Section.

       (c) The respective opportunities to elect (as described in subsections
    (a) and (b) above) must be afforded to the appropriate Members during the
    period commencing on August 23, 1984, and ending on the date Benefit payment
    would otherwise commence to said Members.

       (d) Any Member who has elected pursuant to subsection (b) of this Section
    and any Member who does not elect under subsection (a) or who meets the
    requirements of subsection (a) except that such Member does not have at
    least 10 Years of Service when he or she separates from service, shall have
    his Benefit distributed in accordance with all of the following requirements
    if Benefits would have been payable in the form of a life annuity:

           (i) Automatic Joint and Survivor Annuity. If Benefits in the form of
               ------------------------------------
       a life annuity become payable to a married Member who:

               (1) begins to receive payments under the Plan on or after Normal
           Retirement Date; or

               (2) dies on or after Normal Retirement Date while still working
           for the Employer; or

                                      126
<PAGE>
 
               (3) begins to receive payments on or after the qualified early
           retirement age; or

               (4) separates from service on or after attaining Normal
           Retirement Date (or the qualified early retirement age) and after
           satisfying the eligibility requirements for the payment of Benefits
           under the Plan and thereafter dies before beginning to receive such
           Benefits;

       then such Benefits will be received under this Plan in the form of a
       qualified joint and survivor annuity, unless the Member has elected
       otherwise during the election period. The election period must begin at
       least 6 months before the Member attains qualified early retirement age
       and end not more than 90 days before the commencement of Benefit payment.
       Any election hereunder will be in writing and may be changed by the
       Member at any time.

           (ii) Election of Early Survivor Annuity. A Member who is employed
                ----------------------------------
       after attaining the qualified early retirement age will be given the
       opportunity to elect, during the election period, to have a survivor
       annuity payable on death. If the Member elects the survivor annuity,
       payments under such annuity must not be less than the payments which
       would have been made to the spouse under the qualified joint and survivor
       annuity if the Member had retired on the day before his or her death. Any
       election under this provision will be in writing and may be changed by
       the Member at any time. The election period begins on the later of (1)
       the 90th day before the Member attains the qualified early retirement
       age, or (2) the date on which participation begins, and ends on the date
       the Member terminates employment.

           (iii) For purposes of this subsection (d):

               (1) Qualified early retirement age is the latest of:

                   (A) the earliest date, under the Plan, on which the Member
               may elect to receive retirement Benefits,

                   (B) the first day of the 120th month beginning before the
               Member reaches his Normal Retirement Date, or

                   (C) the date the Member begins participation.

               (2) Qualified joint and survivor annuity is an annuity for the
           life of the Member with a survivor annuity for the life of the spouse
           which is not less than 50 percent and not more than 100 percent of
           the amount of the annuity which is payable during the joint lives of
           the Member and the spouse and which is the amount of annuity which
           can be purchased with the Member's Benefit.

        10.08   WAIVER OF ANNUITY PAYMENTS

The waivers described in Sections 10.04 and 10.06 must specify a particular form
of benefit to be provided.  Such particular form of benefit may be changed only
if the spouse executes another waiver.

                                      127
<PAGE>
 
                                  ARTICLE XI
                             TOP-HEAVY PROVISIONS

     11.01  GENERAL

For any Plan Year during which the Plan is a member of a "Top-Heavy Group," the
provisions of this Article shall become applicable, to the extent such
provisions are more liberal than the remaining provisions of this Plan.
Notwithstanding the foregoing, the Plan is not a member of a "Top-Heavy Group"
if it is also a member of an Aggregation Group which is not a "Top-Heavy Group."

The term "Top-Heavy Group" shall mean an Aggregation Group in which more than
60% of all Benefits (as of the Determination Date) provided under the plans in
such Aggregation Group are attributable to Key Employees.  The terms "Top-Heavy"
and "Top-Heavy Plan" shall have similar meanings.

     11.02  DEFINITIONS

       (a) "Actuarial Equivalent" or "Actuarially Equivalent" shall mean, for
            --------------------      ----------------------
   purposes of this Article, equality in value of the aggregate amounts expected
   to be received under different forms of payment, based upon an interest rate
   of 8% per annum and the 1983 Individual Annuity Mortality Table (these
   actuarial assumptions are derived from regulation 1.401(a)(4)-
   3(d)(5)(iv)(B)). If the actuarial assumptions contained in the top heavy
   provisions of the applicable defined benefit plan conflict with the preceding
   sentence, the top heavy provisions of the applicable defined benefit plan
   shall take precedence.

       (b) "Aggregation Group" shall mean the group of plans which includes
            -----------------

           (i) each plan (whether or not terminated) of the Employer in which a
       Key Employee is a Participant at any time during the applicable Plan Year
       or any of the 4 preceding Plan Years;

           (ii) each other plan of the Employer which enables any plan described
       in (i) above to meet the requirements of Code Sections 401(a)(4) or 410;
       and

                                      128
<PAGE>
 
           (iii) any other plan of the Employer which the Employer may designate
       as part of the Aggregation Group, but only if the resulting Aggregation
       Group continues to meet the requirements of Code Sections 40l(a)(4) and
       410.

       (c) "Benefits" shall mean, for purposes of this Article, the following:
           ----------

           (i) In the case of a defined benefit plan, the single sum Actuarial
       Equivalent present value of the accrued pension of each Participant. The
       value of such Benefits as of any Determination Date shall be the value as
       of the most recent Valuation Date which is within a 12-month period
       ending on the Determination Date.

       For purposes of this Article, the accrued pension of an Employee other
    than a Key Employee shall be determined under (a) the method, if any, that
    uniformly applies for accrual purposes under all plans maintained by the
    Employers, or (b) if there is no such method, as if such benefit accrued not
    more rapidly than the slowest accrual rate permitted under the fractional
    accrual rate of Section 411(b)(1)(C) of the Code.

           (ii) In the case of a defined contribution plan, the value of the
       Accounts of each Participant. The value of such Accounts as of any
       Determination Date shall be the value as of the most recent Valuation
       Date which is within a 12-month period ending on the Determination Date.
       If this Plan is not subject to the minimum funding requirements of
       Section 412 of the Code, the value of an Account shall not include
       Employer contributions made after the Determination Date, except for the
       first Plan Year.

           (iii) In the case of all plans, the accrued benefit attributable to
       nondeductible Employee contributions.

           (iv) Benefits shall include all distributions made (under a plan
       described in subsection (b) above) during the 5-year period ending on the
       Determination Date. Such distributions include those under a terminated
       and liquidated plan which, if it had not been liquidated, would have been
       required to be included in the Aggregation Group.

                                      129
<PAGE>
 
          (v)  Benefits shall not include:
                              ---

               (1) Benefits of a Former Key Employee.

               (2) any rollover (or similar transfers) initiated by the
           Participant and made after December 31, 1983. This sentence shall
           only be applicable to the transferee plan and only to the extent
           provided in government regulations.

               (3) amounts which are deductible Employee contributions (IRA-
           type).

               (4) Benefits of any Former Participant who has not performed
           services for the Employer at any time during the 5-year period ending
           on the Determination Date.

     (d) "Determination Date" shall mean, with respect to any Plan Year,
          ------------------

          (i)  the last day of the preceding Plan Year, or
 
          (ii) in the case of the first Plan Year of any plan, the last day of
     such Plan Year.

     (e) "Employer" shall mean, for purposes of this Article, the Employer and
          --------
the Affiliated Companies.

       (f) "Former Key Employee" shall mean, for any Plan Year, an Employee (or
            -------------------
his Beneficiary) who is a Non-Key Employee for such Plan Year, but was a Key
Employee in a prior Plan Year.

     (g) "Key Employee" shall mean, for any Plan Year, an Employee or former
          ------------
Employee (or their Beneficiaries) who, at any time during the Plan Year
containing the Determination Date for the Plan Year in question or any of the 4
preceding Plan Years, is or was

          (i)  an officer of an Employer having annual Earnings (Gross Earnings
     for Plan Years beginning after December 31, 1988) greater than 50 percent
     of the amount in effect under Section 415(b)(1)(A) of the Code for the
     applicable Plan Year. For purposes of the preceding sentence, the maximum
     number of officers who may be deemed Key Employees shall be determined as
     follows:

                                      130
<PAGE>
 
                                       MAXIMUM NUMBER OF OFFICERS
           NUMBER OF EMPLOYEES*           DEEMED KEY EMPLOYEES
           --------------------        -------------------------
               30 or less                         3
               31 to 500             10% of the number of Employees**
               500 or more                       50
           __________
                *For purposes of determining the number of Employees, see
           Section 2.45 (regarding Highly Compensated Employees) regarding which
           Employees may be excluded.

                ** If the result is not an integer, the result shall be
           increased to the next integer. Notwithstanding the preceding
           sentence, if IRS regulations applicable to Top-Heavy plans are
           amended (either formally or informally) to conform to similar
           regulations applicable to Highly Compensated Employees, then the
           rounding rules under Section 2.45 shall be applicable to this Section
           11.02(g)(i).

                In addition, if the number of officers exceeds the maximum
           number of officers deemed Key Employees according to the above
           schedule, only those with the highest one-year Earnings (Gross
           Earnings for Plan Years beginning after December 31, 1988) during the
           applicable period shall be deemed Key Employees.

           (ii) One of the 10 Employees

                (1) owning (or considered as owning within the meaning of
           Section 318 of the Code) both more than a 1/2% interest and the
           largest interests in an Employer (if two Employees have the same
           interest in an Employer, the Employee having the greater annual
           Earnings (Gross Earnings for Plan Years beginning after December 31,
           1988) shall be treated as owning a larger interest), and

                (2) having an annual Earnings (Gross Earnings for Plan Years
           beginning after December 31, 1988) greater than the amount in effect
           under Code Section 415(c)(l)(A).

                                      131
<PAGE>
 
          (iii) a greater than 5% owner of an Employer, or

          (iv) a greater than 1% owner of an Employer having an annual Earnings
     (Gross Earnings for Plan Years beginning after December 31, 1988) greater
     than $150,000.

     For purposes of determining ownership in paragraphs (ii), (iii) and (iv)
above, the rules of subsections (b), (c) and (m) of Section 414 of the Code
shall not apply.

     (h) "Non-Key Employee" shall mean an Employee who is not a Key Employee.
          ----------------

     (i) "Participant" shall mean, for purposes of this Article, Participants
          -----------
(as defined in Article II) and in the case of a Code Section 401(k) plan, an
Employee who has met the eligibility requirements of such plan, but who has
declined to reduce his salary according to the terms of the plan. Participants
shall not include, for purposes of this Article, Employees who have waived their
right to participate in this Plan in accordance with Section 3.08. Participants
shall include an Employee excluded from Plan participation merely because his
Compensation is below a stated amount.

     (j) "Valuation Date" shall mean
          --------------

          (i) in the case of a defined benefit plan, the date used for computing
     annual plan costs for minimum funding under Section 412 of the Code,
     regardless of whether a valuation is performed for the applicable year.

          (ii) in the case of a defined contribution plan, the date used for
     allocating trust earnings, contributions or forfeitures.

     11.03  VESTING

The Vested Percentage of each Participant who has at least one Hour of Service
while the Plan was Top-Heavy shall be not less than the percentage determined
under the Top Heavy Vesting Schedule. For purposes of determining a
Participant's nonforfeitable percentage under the Top Heavy Vesting Schedule,
his Years of Service prior to the Original Effective Date shall be excluded.
However, the Original Effective Date shall be modified to include service under
a "predecessor plan," as defined in IRS regulation 1.411(a)-5(b)(3).

                                      132
<PAGE>
 
In the event the Plan ceases to be Top-Heavy, a Participant's Vested Percentage
shall thereafter be determined by the schedule in effect prior to the Plan being
Top-Heavy.  Notwithstanding the foregoing,

       (a) A Participant's Vested Percentage shall be no less than his Vested
   Percentage as of the end of the last year during which the Plan was Top-
   Heavy.

       (b) A Participant who has at least 5 Years of Service (3 Years of Service
   for Plan Years beginning after December 31, 1988) shall be permitted to elect
   (in accordance with procedures prescribed by the Administrator) to have his
   Vested Percentage computed under the Top Heavy Vesting Schedule, in lieu of
   the schedule in effect prior to the Plan being Top-Heavy.

     11.04  COMPENSATION

Notwithstanding the definition of Compensation in Article II, Compensation shall
not exceed $200,000 or such higher amount for the Plan Year as permitted under
Section 416(d) of the Code.  This Section 11.04 shall expire at the end of the
Plan Year which begins in 1988.

     11.05  MINIMUM BENEFITS
       
       (a) In the case of a defined benefit plan,

           (i) The Accrued Pension of a Participant who is Non-Key Employee
       shall not be less than the product of (1), (2) and (3) as follows:

               (1) 2%

               (2) Years of Top-Heavy Service (maximum of 10)

               (3) Average Top-Heavy Gross Earnings

           (ii) For purposes of this Section, Years of Top-Heavy Service shall
       mean an Employee's Years of Service, but excluding

               (1) Years of Service during a Plan Year which begins before
           January 1, 1984;

               (2) Years of Service in which the Plan is not Top-Heavy; and

                                      133
<PAGE>
 
               (3) Years of Service prior to the Participant's date of
           participation in the defined benefit plan.

           (iii) For purposes of this Section, Average Top-Heavy Gross Earnings
       shall mean an Employee's average monthly Gross Earnings during the five
       consecutive Plan Years which produces the highest average, but excluding
       Gross Earnings during Plan Years beginning after the last Plan Year in
       which the Plan is Top-Heavy.

           (iv) The minimum accrued pension described in this Section shall be
       payable in the form of a "single life pension." If the accrued pension is
       actually paid in any other form, it shall be adjusted so that it is
       actuarially equivalent (as determined under the defined benefit plan) to
       the "single life pension" form.

           (v) In the event the Plan ceases to be Top-Heavy, a Participant's
       accrued pension shall not be less than the accrued pension computed under
       this Section 11.05.

       (b) In the case of a defined contribution plan, the Employer Contribution
   Account for the Plan Year of a Participant who is a Non-Key Employee and who
   is employed on the last day of the Plan Year (regardless of whether such
   Participant completed 1,000 Hours of Service in such Plan Year) shall be
   allocated an amount at least equal to the product of (i) and (ii) as follows:

           (i) the Participant's Gross Earnings (while a Participant) for the
       Plan Year;

           (ii) the lesser of (1) 3% and (2) the allocation of Employer
       contributions and forfeitures (under all defined contribution plans in
       the Aggregation Group) for such Plan Year on behalf of the most highly
       benefited Key Employee, expressed as a percentage of such Employee's
       Earnings (not in excess of $200,000 or such higher amount as permitted
       under Code Section 416(d)[Code Section 401(a)(17) for Plan Years
       beginning after December 31, 1988]). Item (2) shall not be applicable if
       any of the defined contribution plans required to be included in the
       Aggregation Group enables a defined benefit plan required to be included
       in the Aggregation Group to meet the requirements of Sections 401(a)(4)
       or 410 of the Code.

       To the extent it does not conflict with the "allocation" formula under
   the defined contribution plan, the minimum allocation required under this
   subsection (b) shall be satisfied by first allocating the Employer
   contribution for the Plan Year towards the minimum allocation. This would
   generally be true in the case of a defined contribution plan which is not
   subject to Section 412 of the Code (relating to minimum funding rules).

       For example, an integrated profit sharing plan would apply the Employer
   contribution first to the minimum allocation under this subsection (b), and
   then to the "integrated" portion of the plan.

       If the Employer contribution is entirely allocated under the terms of the
   allocation formula under the defined contribution plan, any additional amount
   necessary to satisfy the minimum allocation required under this subsection
   (b) shall be contributed by the Employer.

       For purposes of this subsection (b), Employer contributions attributable
   to a salary reduction or similar arrangement shall not be taken into account
   for Plan Years beginning before 1985. For Plan Years beginning after 1984 and
   before 1989, such contributions shall offset the minimum Benefits required
   pursuant to this Article. For Plan Years beginning after 1988, such
   contributions may not be used to offset the minimum Benefits required
   pursuant to this Article.

                                      134
<PAGE>
 
       For purposes of this subsection (b), "matching contributions" (as defined
   in Section 401(m)(4)(A) of the Code) used to satisfy the requirements of
   Sections 401(k) and (m) of the Code may not be used to offset the minimum
   Benefits required pursuant to this Article for Plan Years beginning after
   1988.

        (c) The defined benefit plan minimum described in subsection (a) may be
   satisfied by one or a combination of defined benefit plans. In addition,
   Participants covered only under a defined benefit plan shall receive the
   defined benefit minimum.

        (d) The defined contribution plan minimum described in subsection (b)
   may be satisfied by one or a combination of defined contribution plans. In
   addition, Participants covered only under a defined contribution plan shall
   receive the defined contribution minimum.

        (e) If a Participant is covered under both a defined benefit plan and a
   defined contribution plan, the minimum benefit requirements of this Section
   11.05 may be satisfied by one of the following methods (in lieu of
   subsections (a), (b), (c) or (d)), as elected in the Adoption Agreement:

            (i) The Participant receives only the minimum described in
       subsection (a).

            (ii) The Participant receives the minimum described in subsection
       (a) and the vested Benefit under the defined benefit plan is offset by
       the annuitized value of the vested Benefit under the defined contribution
       plan (i.e. "floor offset").

            (iii) No special minimums are required, provided that a
       comparability analysis (using rules and regulations prescribed by the
       Internal Revenue Service) proves that total benefits (on an aggregated
       basis for all Participants) under both the defined benefit and defined
       contribution plans are at least equal to the defined benefit minimum (on
       an aggregated basis for all Participants).

            (iv) The Participant receives contributions and forfeitures under
       the defined contribution plan equal to 5% of his Gross Earnings (while a
       Participant) for the Plan Year.

       11.06  CODE SECTION 415 LIMITATIONS

If the Plan is Top-Heavy, the provisions of the Plan containing maximum benefits
under Section 415 of the Code shall be amended by substituting "1.0" for "1.25"
wherever it appears and substituting "$41,500" for "$51,875" wherever it
appears.

This Section 11.06 shall not be effective if the exceptions of Sections
416(h)(2) and (3) of the Code are met.

       11.07  TERMINATED (OR PARTIALLY TERMINATED) DEFINED BENEFIT PLANS

Notwithstanding anything in this Plan to the contrary, in the case of a defined
benefit plan which has been terminated (or partially terminated with respect to
a group of Participants) and is in the process of distributing all affected plan
assets (or transferring such assets to another plan) as soon as administratively
feasible,

       (a) minimum benefits under Section 11.05(a) shall cease to accrue as of
   the date of plan termination, and

       (b) for purposes of Section 11.05(e), such terminated defined benefit
   plan shall be deemed to have ceased to exist as of the date of plan
   termination, so that the Participant will not be considered to be covered
   under both a defined benefit plan and a defined contribution plan.

                                      135
<PAGE>
 
This Section 11.07 shall not be effective if the Employer maintains another
defined benefit plan which is a member of the Top-Heavy Group.

                                      136
<PAGE>
 
                                  ARTICLE XII
                                   THE TRUST

For the purpose of providing for the payment of Benefits under the Plan and to
hold, invest and administer the assets of the Plan, the Company shall enter into
one or more Trust Agreements with one or more Trustees, or in lieu thereof, or
in addition thereto, one or more contracts with a legal reserve life insurance
company.

The Company shall have the responsibility of selecting the Trustee, monitoring
the Trustee's performance, removing the Trustee, selecting successors, and
determining the form and the terms of the agreement to be entered into with the
Trustee.

All contributions under this Plan shall be paid to the Trustee and deposited in
the Trust.  All contributions made by an Employer are expressly conditioned upon
the continued qualification of the Plan under the Code, including any amendments
to the Plan, and upon the deductibility (unless the Employer is a "tax-exempt"
organization) under Section 404 of the Code of such contributions made to
provide Plan benefits.  All assets of the Trust, including Investment Income,
shall be retained for the exclusive benefit of Members and Beneficiaries and
shall be used to pay benefits to such persons or to pay administrative expenses
of the Plan and Trust to the extent not paid by an Employer and shall not revert
to or inure to the benefit of any Employer.

Notwithstanding anything herein to the contrary, if permitted under the Code or
regulations thereunder, upon an Employer's request, any contribution which was
made by a mistake of fact, or was conditioned upon initial qualification of the
Plan (but only if the application for qualification was made by the time
prescribed by law for filing the Employer's return for the taxable year in which
the Plan is adopted, or such later date as the Secretary of the Treasury may
prescribe), or upon the deductibility of the contribution under Section 404 of
the Code, shall be returned to the Employer within one year after the payment of
the contribution, the denial of the initial qualification, or the disallowance
of the deduction (to the extent disallowed), whichever is applicable.

                                      137
<PAGE>
 
The assets of the Trust may be invested in any investment permitted by law for
the investment of the assets of an employee benefit trust in accordance with the
terms of the Trust Agreement.  In particular, up to 100% of Plan assets may be
invested and reinvested in qualifying common stock, preferred stock, bonds,
notes, other securities and/or real property of the Employer to the extent
permitted under ERISA.

                                      138
<PAGE>
 
                                 ARTICLE XIII
                                ADMINISTRATION

        13.01   FIDUCIARY RESPONSIBILITY

The Fiduciaries shall have only those specific powers, duties, responsibilities
and obligations as are specifically granted or delegated to them under the Plan
and the Trust.  It is intended under the Plan and the Trust that each Fiduciary
shall be responsible for the proper exercise of its own powers, duties,
responsibilities, and obligations as provided for under this Plan and the Trust,
and shall not be responsible for any act or failure to act of another Fiduciary.

A Fiduciary from time to time may allocate or delegate to any other persons or
organizations any of its rights, powers, duties and responsibilities, except
Trustee duties.  Any such allocation or delegation shall be made in writing.

Wherever in the Plan or the Trust Agreement it is provided that a person or
entity has the power to appoint another person or entity with discretionary
authority or control respecting the operation or administration of the Plan or
the Trust, the responsibility of the appointing party with respect to that
appointment is limited to the selection of the appointee and the periodic review
of the performance of the appointee.  Any violation of the responsibilities by
the appointee will not be considered a breach by the appointing party.

        13.02   RESPONSIBILITY OF TRUSTEE

The Trustee shall be the named Fiduciary for asset management, and shall have
exclusive authority and discretion to manage and control the assets of the Plan,
except to the extent that such authority and discretion for all or a specified
portion of the Plan's asset is delegated and allocated by the Administrator to
one or more Investment Managers or assumed by the Administrator.  The Trustee
and Investment Manager shall not be liable for the acts or omissions of the
Administrator or the Employers, nor shall they be liable or responsible for the
portion or portions of the Trust managed by persons other than themselves.

In the event all or a portion of the Trust is invested in the general account of
an insurance company pursuant to a deposit administration contract (or contract
of like purpose), the Administrator shall be the named Fiduciary with respect to
the portion of the Trust so invested; provided, however, the insurance company
shall be the Investment Manager with respect to any portion of the Trust
invested in one or more separate accounts (as distinguished from the general
account) of the insurance company pursuant to such contract.  The insurance
company will hold such portion or portions of the Trust in accordance with the
contract and will keep records of all investments, receipts, disbursements,
transfers, and other transactions, and will make available such information as
is required to be made available by ERISA and by regulations thereunder to the
Administrator in order to allow it to make such reports as are required by
ERISA.  The insurance company will provide such valuations of the Plan's assets
as may be made in accordance with the terms of the contract in order to enable
the Administrator to comply with ERISA.

                                      139
<PAGE>
 
        13.03   APPOINTMENT OF ADMINISTRATOR

The Plan shall be administered by the Administrator who shall be appointed by
and serve at the pleasure of the Company.  The Administrator may resign by
giving notice in writing to the Company and the Trustee.

All usual and reasonable expenses of the Administrator may be paid in whole or
in part by the Employers, and any expenses not paid by the Employers shall be
paid by the Trustee out of the principal or income of the Trust.  If an Employee
serves as the Administrator, either individually or jointly with others, he
shall not receive compensation with respect to his services as such.

        13.04   AUTHORITY OF ADMINISTRATOR

The Administrator is the named Fiduciary to administer the Plan.  The
Administrator shall have authority to control and manage the operation and
administration of the Plan and shall discharge its duties with respect to the
Plan solely in the interest of the Members and Beneficiaries.  The Administrator
shall have all powers necessary to exercise its authority and discharge its
responsibilities, including, but not by way of limitation, the following:

        (a)  To decide all questions relating to eligibility and to
   determine the amount, manner and time of payment of any Benefits hereunder;

                                      140
<PAGE>
 
        (b)  To maintain in conjunction with the Employers all 
   necessary records for the administration of the Plan and Trust other than
   those maintained by the Trustee or other Fiduciaries;

        (c)  To certify to the Trustee the amount and kind of Benefits
   payable under the Plan and authorize all Benefit disbursements by the
   Trustee from the Trust;

        (d)  To appoint and remove any Investment Manager and to
   periodically review their performance;

        (e)  To construe and interpret the Plan and Trust Agreement and
   to make and publish such rules for the regulation of the Plan and the Trust
   as are not inconsistent with their terms;

        (f)  To employ one or more persons to render advice with regard
   to any responsibility any Fiduciary has under the Plan;

        (g)  To receive from the Employers, Members and Beneficiaries
   such information and prescribe the use of such forms as shall be necessary
   for the proper administration of the Plan and the Trust, including
   procedures to be followed by distributees in obtaining Benefits;

        (h)  To prepare and distribute, in such manner as it determines
   to be appropriate, information explaining the Plan;

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

        (j)  To delegate, if the Administrator is a committee, to one or
   more of its members the rights to act in its behalf in all matters
   connected with the administration of the Plan;

        (k)  To receive and review reports of the financial condition
   and of the receipts and disbursements of the Trust from the Trustee;

        (l)  To appoint and contract with such independent public
   accountant or accountants as shall be necessary to comply with the
   reporting and disclosure requirements of any applicable federal or state
   law, or such legal counsel, actuarial counsel or other counsel as it deems
   necessary or advisable in discharging its duties hereunder.

                                      141
<PAGE>
 
The Administrator may from time to time allocate or delegate to any member(s),
person(s) or organization(s) any of its rights, powers, duties, and
responsibilities, provided that such allocation or delegation is made to and
accepted in writing by such member(s), person(s), or organization(s).  Any such
allocation or delegation shall be reviewed periodically by the Administrator and
shall be terminable upon such notice as the Administrator in its discretion
deems reasonable and proper under the circumstances.

        13.05   RULES AND DECISIONS

The Administrator may adopt such rules as it deems necessary, desirable, or
appropriate.  When making a determination or calculation, the Administrator
shall be entitled to rely upon information furnished by a Member, Beneficiary,
Employer, the legal counsel of an Employer, the Trustee or Investment Manager.

The Administrator and any representative whom it chooses to assist it to carry
out its responsibilities under the Plan shall have the maximum discretionary
authority permitted by law to interpret, construe, and administer the Plan, to
make determinations regarding Plan participation, enrollment and eligibility for
benefits, to evaluate and determine the validity of benefit claims, and to
resolve any and all claims and disputes regarding the rights and entitlements of
individuals to participate in the Plan and to receive benefits and payments
pursuant to the Plan.  The decisions of the Administrator and its
representatives shall be given the maximum deference permitted by law.

        13.06   PROCEDURES

The Administrator, if more than one person, may act at a meeting or in writing
without a meeting.  Such Administrator shall elect one of its members as
chairman, appoint a secretary, who may or may not be a member, and advise the
Trustee of such actions in writing.  The secretary shall keep a record of all
meetings and forward all necessary communications to the Employers and the
Trustee.  The Administrator may adopt such bylaws and regulations as it deems
desirable for the conduct of its affairs.  All decisions of the Administrator
shall be taken by action of a majority of its members including actions at a
meeting or in writing without a meeting.  A quorum of the Administrator shall
consist of a majority of members present.  A member who is a Participant shall
not vote on any question relating specifically to himself.

        13.07   INFORMATION

To enable the Administrator to perform its functions, the Employers shall supply
full and timely information to the Administrator on all matters relating to
Members, including their Compensation, retirement, death, Termination of
Employment, and the cause thereof, and such other pertinent facts as the
Administrator may require; and the Administrator shall advise the Trustee of
such of the foregoing facts as may be pertinent to the Trustee's administration
of the Trust.

        13.08   FUNDING POLICY AND METHOD

The Administrator from time to time shall establish a funding policy and method
for carrying out the objectives of the Plan which is consistent with the
requirements of ERISA.  In this connection, the Administrator shall consider the
Plan's short and long run financial needs and communicate those requirements to
the Trustee and any Investment Manager.

                                      142
<PAGE>
 
     13.09   APPLICATION FOR BENEFIT AND OTHER FORMS

The Administrator may require a Member or Beneficiary to complete and file an
application for Benefit payments and all such other forms approved by the
Administrator and to furnish all pertinent information requested by the
Administrator.  The Administrator may rely upon all such information so
furnished it, including such person's current mailing address.

     13.10   CLAIMS PROCEDURE

The Administrator shall make all determinations as to the right of any person to
a Benefit.

Claims shall be made and processed according to the following procedures:

       (a)  Claims must be in writing and must be delivered to the 
   Administrator.

       (b)  The Administrator will act on a claim within a reasonable
   period of time after its receipt. Claims shall be acted upon within 90 days
   after receipt of the claim by the Administrator, unless special circumstances
   require an extension of time. If such an extension of time is required,
   written notice of the extension and the special

                                      143
<PAGE>
 
   circumstances shall be given to the claimant prior to the termination of the
   initial 90-day period. In no event shall such extension exceed a period of 90
   days from the end of such initial period. Claims not acted upon within the
   time prescribed herein shall be deemed denied for purposes of proceeding to
   the review stage.

       (c) The Administrator shall provide to every claimant whose claim is
   denied written notice setting forth in a manner calculated to be understood
   by the claimant:

           (i)   The specific reason or reasons for the denial;

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

           (iii) 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;

           (iv)  An explanation of the Plan's claim review procedure.

       (d) The claimant shall be afforded a reasonable opportunity to appeal a
   denial of the claim to the Administrator for a full and fair review. Such
   appeal must be made in writing upon application to the Administrator and may
   not be made more than 60 days following receipt by the claimant of written
   notification of denial of his claim. The claimant or his duly authorized
   representative shall be permitted to review pertinent documents and submit
   issues and comments in writing.

       The decision upon review shall be made promptly, and not later than 60
   days after receipt of a request for a review, unless special circumstances
   require an extension of time for processing, in which case a decision shall
   be rendered as soon as possible but not later than 120 days after receipt of
   a request for review. If requested, a hearing shall be granted by the
   Administrator.

       The decision on review shall be in writing and shall include specific
   references to the pertinent Plan provisions on which the decision is based.

The Administrator may designate a representative to receive, review and decide
claims in accordance with subparagraphs (a), (b), and (c) of this Section.
However, the Administrator will receive, review and decide all appeals in
accordance with subparagraph (d) of this Section.

                                      144
<PAGE>
 
      13.11   FACILITY OF PAYMENT

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

      13.12   RECORDS AND REPORTS

The Administrator shall exercise such authority and responsibility as it deems
appropriate in order to comply with ERISA and governmental regulations issued
thereunder relating to maintenance of plan records and filing of such reports as
may be required by federal or state agencies.

      13.13   SERVICE OF PROCESS

The Administrator shall be the agent of the Plan for the service of legal
process.

                                      145
<PAGE>
 
                                  ARTICLE XIV
                 AMENDMENTS, ACTION BY EMPLOYER AND MERGERS
                 ------------------------------------------

     14.01  AMENDMENTS

The Company may, by action described in Section 14.02, make from time to time
any amendment (including the termination or partial termination of this Plan in
accordance with Article XV) or amendments to this Plan which do not cause any
part of the Trust to be used for, or diverted to, any purpose other than the
exclusive benefit of Members and their Beneficiaries; provided, however, that
the Company may make any amendment it determines necessary or desirable, with or
without retroactive effect, to comply with the Code and regulations thereunder.

Except to the extent allowed under regulations, no amendment may be made which
has the effect of:

       (a) decreasing the Account of a Member,

       (b) eliminating or reducing an early retirement benefit or a retirement-
   type subsidy, or

       (c) eliminating an optional form of benefit,

with respect to benefits attributable to service before such amendment.  In the
case of a retirement-type subsidy, the preceding sentence shall apply only with
respect to a Participant who satisfies (either before or after the amendment)
the pre-amendment conditions for the subsidy.

     14.02  ACTION BY EMPLOYER

Any action by the Company, or by any Employer other than the Company, may be by
resolution of its Governing Body, or may be taken by any person or persons duly
authorized by resolution of the Governing Body of such Employer to take such
action.  Any Employer may delegate to the Company the authority to act on its
behalf with respect to the administration of the Plan or the adoption of such
additional amendments to the Plan as may be required by the Internal Revenue
Service.

     14.03  SUCCESSOR EMPLOYER

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

     14.04  PLAN ASSETS

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

       (a) Each Member would (if either this Plan or the other Plan then
   terminated) receive a Benefit immediately after the merger, consolidation or
   transfer which is equal to or greater than the Benefit he would have been
   entitled to receive immediately before the merger, consolidation or transfer
   (if this Plan had then terminated);

       (b) Resolutions of the Governing Body of an Employer under this Plan, and
   of any new or successor employer of the affected Members, shall authorize
   such transfer of assets; and, in the case of the new or successor employer of
   the affected Members, its resolutions shall include an assumption of
   liabilities with respect to such Member's inclusion in the new employer's
   plan; and

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

                                      146
<PAGE>
 
                                  ARTICLE XV
                               PLAN TERMINATION
                               ----------------

        15.01   RIGHT TO TERMINATE

The Employers hope and expect to continue the Plan indefinitely.  Nevertheless,
the Employers maintain the right to terminate or partially terminate the Plan
with respect to any of its Employees at any time.  The Employers also reserve
the right to suspend or to discontinue, partially or completely, its
contributions under the Plan with respect to any of its Employees at any time.
In the event of any dissolution, merger, consolidation, or reorganization of the
Company, the Plan shall terminate and the Trust shall be liquidated, unless the
Plan is continued by a successor to the Company in accordance with 
Section 14.03.

        15.02   PARTIAL TERMINATION

Upon termination of the Plan with respect to a group of Participants and
Inactive Participants which constitutes a partial termination of the Plan, the
Trustee shall, in accordance with the directions of the Administrator, allocate
and segregate for the benefit of the Participants and Inactive Participants then
or theretofore employed by the Employer with respect to whom the Plan is being
terminated the proportionate interest of such Participants and Inactive
Participants in the Trust as reflected by their Accounts, which shall become
fully vested.  In addition, the Trustee shall similarly allocate and segregate
the proportionate interest of affected Former Participants and Beneficiaries in
the Trust as reflected by their vested Accounts.  The assets so allocated and
segregated under this Section 15.02 shall be used by the Trustee to pay Benefits
to or on behalf of the preceding individuals in accordance with Section 15.04.

        15.03   FORFEITURES UPON PLAN TERMINATION

If any unallocated Forfeiture Accounts exist on the date the Plan is terminated
(because such Forfeiture Accounts have not yet become available for allocation
under Section 5.07, a (Former) Participant's rights to Forfeiture restoration
have lapsed in accordance with Section 4.02(c), or Forfeitures have not yet been
allocated under Section 7.13(i)), such Forfeiture

                                      147
<PAGE>
 
Accounts shall be disposed of in accordance with Plan provisions established by
the Company.  Such Plan provisions may include (but are not limited to)
provisions that cause Forfeiture Accounts to be (1) allocated to some or all
Participants in a nondiscriminatory manner, (2) used to reduce Employer
contributions required, if any, under the Plan, (3) used to pay administrative
expenses of the Plan and Trust, and/or (4) reverted to an Employer
(notwithstanding any Plan provision to the contrary).  In addition, such Plan
provisions (1) may be established at the time the Plan is initially adopted (or
amended and restated) or at the time the Plan is terminated, and (2) shall form
a part of this Plan.

        15.04   LIQUIDATION OF THE TRUST FUND

Upon termination of the Plan, the Accounts of all Participants and Inactive
Participants affected thereby shall become fully vested, and the Administrator
shall direct the Trustee to distribute the assets remaining in the Trust,
subject to the restrictions below, after payment of any expenses properly
chargeable thereto, to Participants, Inactive Participants, Former Participants,
and Beneficiaries affected by the termination in proportion to their respective
vested Account balances.

In the case of assets attributable to the Deferred Income Account, the Qualified
Nonelective Contribution Account and the Qualified Matching Contribution
Account, such assets may not be distributed unless (1) the Employer or an
Affiliated Company does not establish or maintain another defined contribution
plan [other than (i) an "ESOP" (as defined in Section 4975(e) or 409 of the
Code), (ii) a "SEP" (as defined in Section 408(k) of the Code), or (iii) a plan
in which fewer than 2% of the Participants of this Plan are eligible to
participate at any time 12 months before or 12 months after the termination of
this Plan] at any time during the 12-month period following the date of final
distribution of all such assets, and (2) with respect to distributions after
March 31, 1988, the distribution is a "lump sum distribution" (as defined in
Section 401(k)(10)(B) of the Code).

If the assets attributable to the Deferred Income Account, the Qualified
Nonelective Contribution Account and the Qualified Matching Contribution Account
cannot be distributed because the above requirements are not satisfied, such
assets shall first be transferred (if possible) to such other defined
contribution plan.  Then the assets attributable to the remaining Accounts shall
be distributed in accordance with the first paragraph of this Section.  This
sequence of events shall be followed to preserve any favorable tax and rollover
rules under Section 402 of the Code.

                                      148
<PAGE>
 
        15.05   MANNER OF DISTRIBUTION

Any distribution may be made, in whole or in part, in cash, securities or other
assets in kind as the Administrator in its sole discretion shall determine.  All
non-cash distributions shall be valued at fair market value at date of
distribution.  In addition, notwithstanding Section 8.02(b)(iv), distributions
with a value in excess of $3,500 may:

        (a)  in the case where the Employer or an Affiliated Company
   maintains no other defined contribution plan (other than an "ESOP"), be
   distributed to the Participant without his/her consent; or

        (b)  in the case where the Employer or an Affiliated Company
   maintains another defined contribution plan (other than an "ESOP"), be
   transferred to such other plan if the Participant does not consent to an
   immediate distribution.

        15.06   DISCONTINUANCE OF EMPLOYER CONTRIBUTIONS

In the event of the complete discontinuance of contributions to the Plan by an
Employer, the Accounts of all Participants and Inactive Participants employed by
such Employer shall as of the date of such discontinuance become nonforfeitable.

                                      149
<PAGE>
 
                                  ARTICLE XVI
                ADOPTION AND WITHDRAWAL BY OTHER ORGANIZATIONS
                ----------------------------------------------

     16.01   PROCEDURE FOR ADOPTION

          (a)  Affiliated Company:  Subject to the provisions of Section
               ------------------
     16.03, an Affiliated Company now in existence or hereafter formed or
     acquired, which is not already an Employer under this Plan, and which is
     otherwise legally eligible may, with the consent and approval of the
     Company, adopt the Plan and Trust, for all or any classification of persons
     in its employment, and thereby from and after the specified effective date
     become an Employer under this Plan. Such adoption shall be effectuated and
     evidenced by a formal resolution of the Governing Body of such Affiliated
     Company. The adopting resolution may contain such specific changes and
     variations in the Plan or the Trust as may be acceptable to the Company and
     the Trustee. The adopting resolution of an Affiliated Company shall become,
     as to such Affiliated Company and its Employees, a part of this Plan as
     then in effect. It shall not be necessary for such adopting Affiliated
     Company to execute the Plan or Trust as then in effect. The effective date
     of the Plan for any such adopting Affiliated Company shall be that stated
     in the adopting resolution and from and after such effective date such
     adopting Affiliated Company shall assume all the rights, obligations and
     liabilities of an Employer under the Plan and Trust.

          (b)  Acquisition of Entity Which Becomes Part of Employer: In
               ----------------------------------------------------
     the event the Employer acquires an entity which becomes part of the
     Employer (as opposed to the situation where the acquired entity becomes a
     separate Affiliated Company as described in subsection (a) above), service
     performed for such prior entity shall not constitute service performed for
     the Employer unless the Company amends the Plan to provide otherwise. Such
     amendment may also contain other changes and variations in the Plan or the
     Trust as are necessary to carry out the Company's intent.

     16.02   WITHDRAWAL

Any participating Employer, by action of its Governing Body and notice to the
Company and Trustee, may withdraw from the Plan and Trust at any time without
affecting other Employers not withdrawing by complying with the provisions of
the Plan and Trust.  A withdrawing Employer may arrange for the continuation by
itself or its successor of this Plan and Trust in separate forms for its own
Employees, with such amendments if any, as it may deem proper, and may arrange
for continuation of the Plan and Trust by merger with an existing plan and fund
and transfer of Trust assets.

     16.03   ADOPTION CONTINGENT UPON AND CONTINUED QUALIFICATION

The adoption of this Plan and its related Trust by an Affiliated Company as
provided in Section 16.01(a) is hereby made contingent and subject to the
condition precedent that the Plan after its adoption by the Affiliated Company
continues to meet all the statutory requirements for qualified plans, including
but not limited to Sections 401(a) and 501(a) of the Code, as amended.  The
Company may request a determination from the appropriate District Director of
Internal Revenue to the effect that the Plan and Trust herein set forth, or as
amended before the receipt of such letter, continues to meet the requirements of

                                      150
<PAGE>
 
the applicable federal statutes for tax qualification purposes after the
adoption of the Plan by the Affiliated Company.  If such an approval letter is
denied, such adoption shall become void and inoperative and any contributions
made by or for such organization shall be promptly refunded by the Trustee.
Furthermore, if the Plan or the Trust in its operation becomes disqualified or
would become disqualified under the Code for any reason because of the Plan's
adoption by any Employer, the portion of the Trust allocable to the Employees of
such Employer shall be segregated as soon as is administratively feasible,
pending either the prompt

       (a) correction of the conditions which would cause the disqualification
   to the satisfaction of the Internal Revenue Service, so as not to affect the
   continued qualified status of the Plan;

       (b) requalification of the Plan and Trust;

       (c) withdrawal of such Employer from this Plan and Trust and a
   continuation by itself or its successor, of a plan and trust separately from
   this Plan and Trust, or by merger with another existing plan and fund, with a
   transfer of said segregated portion of Trust assets, as provided by Section
   16.02; or

       (d) termination of the Plan and Trust as to such Employer and its
   Employees.

                                      151

<PAGE>
 
                                 ARTICLE XVII
                                 MISCELLANEOUS
                                 -------------

       17.01  NONGUARANTEE OF EMPLOYMENT

Nothing contained in this Plan shall be construed as a contract of employment
between an Employer and any Employee, or as a right of any Employee to be
continued in the employment of an Employer, or as a limitation of the right of
an Employer to discharge any of its Employees, with or without cause.

       17.02  RIGHT TO TRUST ASSETS

No Employee shall have any right to, or interest in, any assets of the Trust
upon termination of his employment or otherwise, except as provided from time to
time under this Plan, and then only to the extent of the Benefits payable under
the Plan to such Employee out of the assets of the Trust.

       17.03  NONALIENATION OF BENEFITS

Except as otherwise provided in the Plan, Benefits payable under this Plan shall
not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any
kind, either voluntary or involuntary, including any such liability which is for
alimony or other payments for the support of a spouse or former spouse, or for
any other relative of the Employee, prior to actually being received by the
person entitled to the Benefit under the terms of the Plan; and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, charge, or
otherwise dispose of any right to Benefits payable hereunder shall be void.  The
Trust shall not in any manner be liable for, or subject to, the debts,
contracts, liabilities, engagements, or torts of any person entitled to Benefits
hereunder.  The provisions of this Section shall not apply in the case of a
Qualified Domestic Relations Order.

       17.04  GOVERNING LAW

Except as otherwise specifically provided under any federal law applicable to
this Plan, this Plan shall be construed and applied according to the laws of the
State specified in the Adoption Agreement.

       17.05  BONDING, INSURANCE AND INDEMNITY

       (a)  Bonding:  To the extent required under ERISA or any other federal
            -------
   law of similar import, the Company shall obtain, pay for, and keep current a
   bond or bonds with respect to the Administrator and each Employee who
   receives, handles, disburses, or otherwise exercises custody or control of
   any of the assets of the Plan.

       (b)  Insurance:  The Company may, in its discretion obtain, pay for, and
            ---------
   keep current a policy or policies of insurance, insuring the Administrator,
   the members of its Governing Body, or each other Employer and Employees to
   whom any fiduciary responsibility with respect to the administration of the
   Plan has been delegated, against any and all liabilities, costs and expenses
   incurred by such persons, including attorney's fees, as a result of any act,
   or omission to act, in connection with the performance of their duties,
   responsibilities and obligations under the Plan and any applicable federal or
   state law.

       (c)  Indemnity:  If the Company does not obtain, pay for and keep current
            ---------
   any type of insurance policy or policies referred to in subsection (b), or if
   such insurance is provided but any of the parties referred to in subsection
   (b)

                                      152
<PAGE>
 
   above incur any liabilities, costs or expenses which are not covered or
   exceed the limits under such policies, then, in either event, the Employers
   shall, to the extent permitted by law, indemnify and hold harmless such
   parties against any and all liabilities, costs and expenses incurred by such
   parties in performing their duties and responsibilities under this Plan,
   including attorney's fees, provided such party or parties were acting in good
   faith within what was reasonably believed to have been in the best interests
   of the Plan and its Participants.

                                      153

<PAGE>
 
        17.06  ADOPTION CONTINGENT UPON INITIAL AND CONTINUED QUALIFICATION

The adoption of this Plan and its related Trust by the Employers is hereby made
contingent and subject to the condition precedent that the Plan and Trust meet
all the statutory requirements for qualified plans, including but not limited to
Sections 401(a) and 501(a) of the Code.  The Employers may request an initial
letter of determination from the appropriate District Director of Internal
Revenue to the effect that the Plan and Trust, as herein set forth or as amended
before the receipt of such letter, meets the requirements of the applicable
federal statutes for tax qualification purposes for the Employers and its
covered Employees.  If the request for initial qualification is denied, the
adoption shall become void and inoperative and any contributions made by the
Employers shall be returned to the Employers within one year after the date of
the denial, but only if the request for initial qualification was made by the
time prescribed by law for filing the Employer's return for the taxable year in
which the Plan is adopted, or such later date as the Secretary of the Treasury
may prescribe.

        17.07  TRANSFER OF ASSETS

This Plan specifically permits a transfer from the Trust of a Member's Account
to another qualified retirement plan.

        17.08  SEVERABILITY CLAUSE

If any portion of this Plan shall be rendered invalid by a court of competent
jurisdiction, such rendering shall not impair the validity of the remaining
portions of the Plan.

        17.09  GENDER, TENSE AND HEADINGS

Whenever any words are used in the masculine gender, they shall be construed as
though they were also used in the feminine gender in all cases where they would
so apply.  Whenever any words used herein are in the singular form, they shall
be construed as though they were also used in the plural form in all cases where
they would so apply.

Headings of Articles, Sections and subsections as used herein are inserted
solely for convenience and reference and constitute no part of the Plan.

                                      154
<PAGE>
 
               MODIFICATION TO LOUIS KRAVITZ & ASSOCIATES, INC.

                       MASTER 401(K) PROFIT SHARING PLAN

                             AND ADOPTION AGREEMENT


Notwithstanding anything contained within or to the contrary in the Louis
Kravitz & Associates, Inc. Master 401(k) Profit Sharing Plan and Adoption
Agreement, the following shall apply to the Vitalink Pharmacy Services, Inc.
Retirement Savings Plan effective October 1, 1997.

PLAN DOCUMENT
-------------

1.   Section 2.101 is hereby amended in its entirety by adding the following
     items after 2.101(d):

     "(e)  Notwithstanding the above, the following vesting schedules shall
     apply:

     For prior Grancare Inc. employees 100% immediate vesting.

     For employees hired before October 1, 1997 who were not prior Grancare
     employees and who were not prior Manor Care, Inc. employees, 100% immediate
     vesting.

     For prior Manor Care, Inc. employees and for matching accounts transferred
     from   the manor care, inc. retirement savings and investment plan and for
     matching contributions and profit sharing contributions made on or after
     october   1, 1997 for such employees:

     YEARS OF SERVICE      PERCENTAGE
     ----------------      ----------

     Less than three years      0%
     3 years                   20%
     4 years                   40%
     5 years or more          100%

     For employees hired on or after October 1, 1997:

     YEARS OF SERVICE      PERCENTAGE
     ----------------      ----------

     Less than five             0%
     Five or more             100%"

                                       5
<PAGE>
 
2.   Section 2.53 is hereby amended in its entirety to read as follows:

     "2.53   "Investment Income" shall mean the net gain or loss of the Trust
     from investments, as reflected by interest payments, dividends, realized
     and unrealized gains and losses on securities, and other similar
     transactions.  In determining the Investment Income of the Trust for any
     period, assets shall be valued on the basis of their fair market value as
     determined in accordance with Section 5.02.  The Investment Income, if any,
     of assets held under each Investment Fund(s) or segregated accounts
     maintained by the Trustee on the direction of the Administrator shall be
     determined separately."

3.   Article V is hereby amended by inserting a new Section 5.04A after Section
     5.04, to read as follows:

     "5.04A     Allocation of Expenses

     Section 5.04 discusses the allocation of Investment Income.  This Section
     5.04A discusses the allocation of expenses.  In general, Article XII
     provides that expenses of the Plan and Trust shall be paid from the assets
     of the Trust to the extent such expenses are not paid by an Employer.  In
     addition, if Section 5.07 so provides, Forfeitures attributable to Employer
     Contribution Accounts shall be used to pay expenses of the Plan and Trust.

     If expenses of the Plan and Trust are paid either (1) by an Employer, or
     (2) through the use of Forfeitures, there is no need to allocate such
     expenses to the Accounts of Members and Beneficiaries.  However, where
     expenses are paid from the assets of the Trust, such expenses shall be
     allocated to Accounts in accordance with uniform, consistent and
     nondiscriminatory rules established by the Administrator.  [For example,
     expenses may be allocated to only certain Accounts or all Accounts.  In
     addition, each affected Account may be allocated a prorata share of an
     expense, or each affected account may be allocated an equal share of an
     expense.]"

4.   Section 7.07(a) is hereby amended by deleting the phrase "(to which no
     Investment Income shall be credited)".

5.   Section 2.100 is hereby amended in its entirety to read as follows:

     "2.100   "Valuation Date(s)" shall generally mean the end of each
     "business" day unless the Investment Fund or the per share value of the
     Investment Fund is not normally valued daily.  For example, the Investment
     Fund may be valued weekly, monthly, quarterly, annually or at other time
     intervals.

     In the case of an Investment Fund which meets the foregoing exception, the
     term Valuation Date shall mean the date(s) such Investment Fund is actually
     valued.  However, in no event shall a valuation occur less frequently than
     annually, with the last day of each Plan Year serving as a Valuation Date
     (or one of the Valuation Dates)."

                                       6
<PAGE>
 
6.   Section 2.01 is hereby amended by adding the following paragraph at the end
     thereof:

     "Notwithstanding anything in the Plan to the contrary, the value of an
     Account as of any time shall be determined on a "cash" basis.  that is,
     contributions or Investment Income which have accrued to an Account shall
     not be recognized for purposes of determining the value of such Account
     until such amount is actually credited (or deposited) to such Account."

7.   A new Section 2.104 is hereby added at the end of Article II to read as
     follows:

     "2.104   "Matching Allocation Period" shall mean [X] the Plan Year." [  ] a
     calendar month."  [  ] a calendar quarter."  [  ] a "payroll period" (may
     vary for different groups of Employees)."

8.   The first sentence of Section 2.15 is hereby amended by deleting the phrase
     "during a Plan Year." and inserting in lieu thereof "during a Matching
     Allocation Period.".

9.   Sections 7.04(b) and 7.05 are each hereby amended by deleting the words
     "Plan Year" wherever they appear, and inserting in lieu thereof "Matching
     Allocation Period".

10.  The next-to-last paragraph of Section 2.15 is hereby amended in its
     entirety to read as follows:

     "For plan years beginning in 1989 and later, Compensation taken into
     account under the Plan for any Plan Year shall not exceed the "401(a)(17)
     Limit" (as defined herein) for such Plan Year.  That is, the sum of
     Compensations for all Matching Allocation Periods within any Plan Year
     shall not exceed the 401(a)(17) Limit for such Plan Year.  Accordingly, the
     Administrator shall establish uniform and nondiscriminatory rules to
     provide for those situations in which the preceding sum of Compensations
     will exceed the 401(a)(17) Limit.

                                       7
<PAGE>
 
     For purposes of this Section, the term "401(a)(17) Limit" shall mean the
     amount determined under section 401(a)(17) of the code for the applicable
     Plan Year.

     (a)  The 401(a)(17) Limit shall be adjusted in accordance with (i) Section
          415(d) of the Code [for Plan Years beginning before 1994] or (ii)
          Section 401(a)(17)(b) of the Code [for Plan Years beginning after
          1993].

     (b)  The 401(a)(17) Limit may take into account the "reasonable, good-faith
          standards during the transition years", as elaborated in an Internal
          Revenue Service field directive dated June 12, 1992 regarding such
          subject.  That is, although regulations under Section 401(a)(17) of
          the Code require that the 401(a)(17) Limit for any calendar year
          applies to Plan Years beginning in such calendar year, such
          regulations are not effective until the Plan Year beginning in 1994.
          During the "transition years", the IRS field directive shall be
          operative.  Accordingly, if a Plan Year ends in 1989 or earlier, the
                                                  ----                        
          401(a)(17) Limit is $200,000; $209,200 if the Plan Year ends in 1990;
                                                                  ----         
          ....; $150,000 if the Plan Year begins in 1994, etc.
                                          ------              

     (c)  If a Plan Year is less than 12 months, the 401(a)(17) Limit for such
          short Plan Year shall be prorated."

11.  The second "flush left" paragraph of Section 4.02 is hereby amended in its
     entirety to read as follows:

     "This Section 4.02 is effective for Plan Years beginning on or after the
     date specified in the Adoption Agreement.  (For Plan Years beginning prior
     to the preceding Plan Years, the treatment of Forfeitures and allocation of
     Forfeiture Accounts attributable to Employer Contribution Accounts shall be
     determined under the terms of the Prior Plan.)  Forfeitures shall occur as
     of the date a Forfeiture Account is established in accordance with
     subsection (a) below."

12.  The first paragraph of Section 4.02(a) is hereby amended by deleting the
     last two sentences and inserting in lieu thereof the following:

     "Such Forfeiture Accounts shall be allocated in accordance with Section
     5.07."

13.  The second paragraph of Section 4.02(a) is hereby deleted in its entirety.

                                       8
<PAGE>
 
14.  The second paragraph of Section 5.07 is hereby amended in its entirety to
     read as follows:

     "For Plan Years beginning prior to the effective date specified for Section
     4.02, the allocation of Forfeitures attributable to Employer Contribution
     Accounts shall be determined under the terms of the Prior Plan.  For Plan
     Years beginning on or after the effective date specified for Section 4.02,
     Forfeitures which have become available for allocation during a Plan Year
     in accordance with Section 4.02 shall be added to Profit Sharing
     Contributions.

     If any Forfeitures still remain, such excess shall be held in a suspense
     account and be applied as previously described in future Plan Years."

15.  The following Sections are hereby deleted in their entirety:  6.06(a);
     6.07; 7.09(b); 7.11; and 7.14(c)(i).

16.  The first paragraph of Section 7.07 is hereby amended in its entirety to
     read as follows:

     "This Section 7.07 is effective for Plan Years beginning on or after the
     effective date specified for Section 4.02.  For Plan Years beginning prior
     to the preceding Plan Years, the treatment of Forfeitures and allocation of
     Forfeiture Accounts attributable to Matching Contribution Accounts on
     account of a Participant's Termination of Employment with less than 100%
     vesting shall be determined under the terms of the Prior Plan."

17.  Section 7.13(i)(ii)(1) is hereby amended in its entirety to read as
     follows:

     "(1)  the eligible Non-Highly Compensated Participants are those (A) who
     made Deferrals during the Plan Year, and (B) whose Matching Contribution
     Accounts are greater than zero dollars as of the end of the Plan Year."

18.  Section 5.03(c) is hereby amended in its entirety to read as follows:

     "(c)  Change of Investment Election:  The Administrator shall establish
           -----------------------------                                    
     rules and procedures under which Participants may:

          (i)  change their investment election with respect to future
               contributions under subsection (a), and

          (ii) transfer their Account(s) (all or a portion) from one Investment
               Fund to another."

                                       9
<PAGE>
 
19.  Section 5.10(c) is hereby amended in its entirety to read as follows:

     "(c)  Application:  an application for a loan by a Participant shall be
           -----------                                                      
     made in writing to the Administrator on such form or forms as the
     Administrator may require.  The Administrator may also require (if
     applicable) the Participant to produce such documents and other evidence of
     a financial need and the amount of the financial need.  If the loan is
     secured by any part of the Participant's Account, the loan application must
     also include the Participant's consent to a possible reduction of his
     Benefit to satisfy the repayment of such loan.  The preceding consent shall
     be obtained no earlier than 90 days before the date such loan is made.

     If (1) the Plan is subject to the provisions of Article X, (2) a loan is
     secured by any part of a Participant's Account, and (3) such Participant is
     married at the time of the loan, the loan application must also include the
     spouse's consent to and acknowledgment of the effect of the possible
     reduction described in the preceding paragraph.  The spouse's consent shall
     (1) be obtained no earlier than 90 days before the date such loan is made,
     and (2) be witnessed by a notary public (or if permitted by the
     Administrator, by a representative of the Administrator).  If the
     Participant is unmarried at the time of the loan or if the Participant
     later remarries, the consent of the new spouse shall not be required."

20.  Section 6.11(b)(iv) is hereby amended by deleting the last sentence
     thereof.

21.  Section 6.02(c) is hereby amended in its entirety to read as follows:

     "(c)  'ADP Compensation' shall mean the Participant's Compensation for the
            ----------------                                                   
     Plan Year, unless either (1) the definition of Compensation fails to
     satisfy the requirements of Section 414(s) of the Code ['Condition A'], or
     (2) the applicable nondiscrimination test (either the ADP test in Section
     6.05 or the ACP test in Section 7.08) is not satisfied ['Condition B'].

         (i) If either Condition A or Condition B exists, then ADP Compensation
                                   --                                          
         shall instead mean the Participant's Compensation for the Plan Year,
         but excluding Deferrals made for the Plan Year.

         (ii) If either Condition A or Condition B continues to exist after the
                                    --                                         
         definition of ADP Compensation has been revised in accordance with
         paragraph (i) above, then ADP Compensation shall instead mean the
         Participant's Compensation for the entire Plan Year, including
         Compensation earned prior to his Entry Date.
 
         (iii) If either Condition A or Condition B continues to exist after the
                                     --                                         
         definition of ADP Compensation has been revised in accordance with
         paragraph (ii) above, then ADP Compensation shall instead mean the
         Participant's Compensation for the entire Plan Year, including
         Compensation earned prior to his Entry Date, but excluding Deferrals
         made for the Plan Year.

                                       10

<PAGE>
 
          (iv) If, after the definition of ADP Compensation has been revised in
          accordance with paragraph (iii) above, Condition A no longer exists,
          but Condition B continues to exist, then ADP Compensation shall have
          the same meaning as defined in the first sentence of Section 6.02(c)
          or paragraph (i), (ii) or (iii) above, whichever is the first
                                                                  -----
          definition that satisfies the requirements of Section 414(s) of the
          Code.

          (v)  If, after the definition of ADP Compensation has been revised in
          accordance with paragraph (iii) above, Condition A continues to exist
          (and whether or not Condition B continues to exist), then the Plan
          must be amended to provide for a definition of ADP Compensation that
          satisfies the requirements of Section 414(s) of the Code.

22.  Section 13.09 is hereby amended in its entirety to read as follows:

     "13.09  FORMS

     Where necessary, the Administrator shall develop written election forms,
     applications, etc. that a Member or Beneficiary must complete and submit
     (including any additional pertinent information).  The Administrator may
     rely upon all such information so furnished it, including such person's
     current mailing address.  The Administrator may accept forms sent by
     facsimile.

     Notwithstanding the foregoing, the Administrator may establish rules,
     procedures and circumstances under which an individual may make elections,
     applications, etc. in a form other than a written form (e.g., telephonic
     voice response system), unless such non-written form is prohibited by law."

                                       11
<PAGE>
 
23.  Section 8.02(b)(iii)(1) is hereby amended in its entirety to read as
     follows:

     "With respect to a Member whose Vested Percentage in all his Accounts is
                                                          ---                
     100%, payment shall generally be made as soon as practical following the
     Member's date of termination."

24.  Section 8.02(b)(iii)(2) is hereby amended in its entirety to read as
     follows:
 
     "With respect to a Member whose Vested Percentage in any Account is less
                                                          ---
     than 100%, payment shall generally be made as soon as practical following
     the Member's date of termination."

25.  Section 8.02(b)(ii) is hereby amended in its entirety to read as follows:
 
     "Upon entitlement to a Benefit under Section 8.01(a) or (b) (for reasons of
     retirement or Disability), full payment or commencement of payment shall be
     made as soon as practical following the date such retirement occurs or the
     date such Disability occurs or the date of receipt by the Administrator of
     acceptable proof of such Disability, if later."
 
26.  Section 9.05(b) is hereby amended in its entirety to read as follows:
 
     "(b) Distribution Beginning After Death: If the Member dies before the
          ----------------------------------
     distribution of his or her Benefit begins, distribution of the Member's
     entire Benefit shall be completed as soon as practical following the
     Member's death except to the extent that an election is made to receive
     distributions in accordance with (i) or (ii) below:

          (i) if any portion of the Member's Benefit is payable to a Designated
          Beneficiary, distributions may be made over the life or over a period
          certain not greater than the Life Expectancy of the Designated
          Beneficiary commencing as soon as practical following the death of the
          Member.

          (ii) if the Designated Beneficiary is the Member's surviving spouse,
          the date distributions are required to begin in accordance with (i)
          above shall be made as soon as practical following the Member's death.


     If the Member has not made an election pursuant to this Section 9.05(b) by
     the time of his or her death, the Member's Designated Beneficiary must
     elect the method of distribution as soon as practical following the
     Member's death. If the Member has no Designated Beneficiary, or if the
     Designated Beneficiary does not elect a method of distribution,
     distribution of the Member's entire Benefit must be completed as soon as
     practical following the Member's death."

                                       12
<PAGE>
 
ADOPTION AGREEMENT
------------------

Item M.3.b is hereby modified in its entirety to read as follows:

          "b.  Matching Contributions on behalf of any Participant shall be
               limited to the following amount:  Check applicable item(s):

               [ ]  no limit is applicable

               [X]  Participants with 1-5 years of service 25% of his/her
                    deferrals

                    Participants with 6-9 years of service 75% of his/her
                    deferrals

                    Participants with 10 or more years of service 100% of
                    his/her deferrals

               [ ]      % of his Compensation
                    ----

               [ ]  Total Matching Contributions on behalf of any Participant
                    for the Plan Year shall not exceed $       .
                            ---------                   -------


Item H.1 is hereby modified in its entirety to read as follows:

          "1. Employee voluntary contributions are not permitted. However,
              employee voluntary contribution accounts will be maintained for
              voluntary balances transferred from a prior plan."

Item K.4 is hereby modified in its entirety to read as follows:

          "Top Heavy Vesting Schedule (Section 2.95) shall mean:

              The same vesting schedule as described in Section 2.101 except
              that for employees hired after October 1, 1997 the following
              schedule shall apply:

              Years of Service               Percentage
              ----------------               ----------
              Less than three years               0%
              3 years                            20%
              4 years                            40%
              5 years or more                   100%"


          IN WITNESS WHEREOF, the Company has adopted this Modification as of
the 18th day of September, 1997.
    ----        ---------------- 


                              By /s/ Stephen A. Thompson
                                ------------------------ 

                                       13
<PAGE>
 
 
                        LOUIS KRAVITZ & ASSOCIATES, INC.
                                        
                       MASTER 401(K) PROFIT SHARING PLAN






















            It is hereby certified that the following is a true and
              correct copy of the Louis Kravitz & Associates, Inc.
                       Master 401(k) Profit Sharing Plan,
              as adopted by the Company in the Adoption Agreement.



                        LOUIS KRAVITZ & ASSOCIATES, INC.


                        BY /s/ Louis Kravitz
                           ----------------------------


   Copyright (c) 1994 Louis Kravitz & Associates, Inc.  All Rights Reserved.



     November 1, 1994


                                      20
<PAGE>
 
               MODIFICATION TO LOUIS KRAVITZ & ASSOCIATES, INC.
                     MASTER 401(k) PROFIT SHARING PLAN AND
                               ADOPTION AGREEMENT
                                        
     Notwithstanding anything contained within or to the contrary in the Louis
Kravitz & Associates, Inc. Master 401(k) Profit Sharing Plan and Adoption
Agreement, the following shall apply to the Vitalink Pharmacy Services, Inc.
401(k) Profit Sharing Plan, effective February 15, 1997.

     1.  Item G.4 of the Adoption Agreement is hereby amended in its entirety to
read as follows:

     "4.  Compensation in First Year of Participation:  For purposes of
          -------------------------------------------                  
     allocating the Employer's Profit Sharing Contribution and Forfeitures for
     the Plan Year in which a Participant begins or resumes participation in the
     Plan, Compensation paid before a Participant's participation began or
     resumed shall be excluded.

     For purposes of this Item G.4, participation in the Plan is determined in
     accordance with Section 3.02(c) and as if the minimum service eligibility
     requirement in Section 3.01(a) were two Years of Service."

     2.  Section 5.05 is hereby modified in its entirety to read as follows:

     "At of the end of each Plan Year, the Profit Sharing Contributions for the
     Plan Year made pursuant to Section 4.01 shall be allocated among those
     participants and those Inactive Participants who became Inactive
     Participants during such Plan Year and who meet the following requirements:

          (i)  Participants who complete at least 1,000 Hours of Service
               during the Plan Year, and

<PAGE>
 
          (ii)  Participants who are still employed by the Employer on the
     last day of the Plan Year, and

          (iii) Participants who would have also been Participants if the
     minimum service eligibility requirement in Section 3.01(a)
     were two Years of Service.

     Notwithstanding any of the above requirements, a Participant who has
     experienced a Termination of Employment during the Plan Year on account of
     death, Disability or retirement on or after his Normal Retirement Date
     shall be eligible for an Employer contribution.  Such allocation shall be
     made in accordance with Section 5.06."

     3. Article II is hereby amended by adding the following section after
     Section 2.103:

          "2.104 `Deferral Period' shall mean each calendar quarter (January 1
          to March 31, April 1 to June 30, July 1 to September 30, and October 1
          to December 31).

     4. Section 7.04(b) is hereby amended in its entirety to read as follows:

          "(b)  Eligibility:  A Participant (and Inactive Participant who 
                -----------
          became an Inactive Participant during the applicable Deferral Period)
          shall be eligible for a Matching Contribution for any Deferral Period
          if he is employed by the Employer on the valuation date in such
          Deferral Period."

                                       2

<PAGE>
 
     5. Section 7.05 is hereby amended in its entirety to read as follows:

          "Matching Contributions for any Deferral Period shall be allocated as
          of the Valuation Date in such Deferral Period. The amount of Matching
          Contributions to be allocated to the Matching Contribution Account of
          any eligible individual shall be 25% of such individual's Deferrals
          made for such Deferral Period, but not to exceed 1% of such
          individual's Deferrable Compensation."

     6.  Section 16.01 of the Plan Document is hereby modified by adding a new
Section 16.01(c) at the end thereof to read as follows:

         "(c)  Loans Acquired Due to Merger of Plans:  Notwithstanding any
               -------------------------------------
          provisions of the Plan to the contrary, and pursuant to Subsection (b)
          above, the following shall apply in the event the Employer acquires an
          entity and merges the Plan of the acquired entity into this Plan.

         (i)   Resolutions of the Governing Body of the Employer authorizing the
               transfer of assets due to a merger of plan, shall include
               participant loans and such participant loans shall become part of
               this Plan.

         (ii)  The general terms and conditions of loans shall be determined
               pursuant to the provisions of the prior plan from which the loans
               were originated."
 
     7.  Item R of the Adoption Agreement is hereby modified in its entirety to
read as follows:

     "R.  LOANS (Section 5.10)  Loans are not permitted except in the event of a
          -----
          merger as provided for in Section 16.01(c)."

                                       3

<PAGE>
 
     8.  Section 4.03(h) is hereby modified by deleting the fourth sentence and
inserting in lieu thereof the following:

     "Withdrawals from Rollover Contribution Accounts shall be permitted."

     9.  Section F.3 of the Adoption Agreement is hereby amended in its entirety
to read as follows:

               "YEARS OF SERVICE WITH ANY PRIOR EMPLOYER, HAVING A 401(k) PLAN
               AT THE TIME OF ACQUISITION, acquired by Vitalink Pharmacy
               Services, Inc. after January 1, 1995 shall count for purposes of
               determining eligibility in the Vitalink Pharmacy Services, Inc.
               401(k) Profit Sharing Plan. Except as otherwise stated, the
               eligibility requirement for the Vitalink Pharmacy Services, Inc.
               401(k) Profit Sharing Plan is one year of service."

     10.  Items M.2, M.3 and M.4 of the Adoption Agreement are hereby deleted in
their entirety.

     IN WITNESS WHEREOF, the Company has adopted this Modification as of the
30th day of March, 1997.


                                     VITALINK PHARMACY SERVICES, INC.


                                     By: /s/ Stephen A. Thompson
                                        ---------------------------------
                                                Vice President

                                       4