<PAGE>   1
                                                                    EXHIBIT 10.2


EXHIBIT A


                            THE BON-TON STORES, INC.
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN


Article 1.        Establishment and Purpose

         1.1      Establishment. The Bon-Ton Stores, Inc. (the "Company") hereby
establishes a defined benefit pension plan known as The Bon-Ton Stores, Inc.
Supplemental Executive Retirement Plan (the "Plan") effective as of February 3,
2001 (the "Effective Date").

         1.2      Purpose. The principal purposes of the Plan are to provide
certain executives, as defined in Article 3, with competitive retirement
benefits, protect against reductions in retirement benefits due to tax law
limitations on qualified plans, and encourage the continued employment of such
employees with the Company.


Article 2.        Definitions

         2.1      Actuarially Equivalent. "Actuarially Equivalent" or "Actuarial
Equivalent" means the equivalence in present value between two or more forms
and/or times of payment based upon a determination by an actuary chosen by the
Board, using reasonable actuarial assumptions as of the date of any such
determination.

         2.2      Affiliate. "Affiliate" means a corporation or other entity
controlled by the Company and designated by the Board from time to time as such.

         2.3      Board. "Board" means the Board of Directors of the Company.

         2.4      Cause. "Cause" means conduct by the Participant consisting of
gross negligence, wanton or willful disregard of duties, conviction of a crime
involving moral turpitude or any other act or omission determined by the Board
to be inimical to the best interests of the Company. The determination of cause
shall be made by the Board, solely in its discretion, and its determination
shall be final and binding.

         2.5      Change of Control. "Change of Control" shall be deemed to
occur if:

                  a)       any "person", as such term is defined under Sections
3(a)(9) and 13(d) of the Exchange Act, who is not an Affiliate of the Company on
the date hereof, becomes a "beneficial owner", as such term is used in Rule
13d-3 under the Exchange Act, of a majority of the Company's voting stock;

                  b)       the Company adopts any plan of liquidation providing
for the distribution of all or substantially all of its assets; or
<PAGE>   2
                  c)       the Company is party to a merger, consolidation,
other form of business combination or a sale of all or substantially all of its
assets, unless the business of the Company is continued following any such
transaction by a resulting entity (which may be, but need not be, the Company)
and the shareholders of the Company immediately prior to such transaction hold,
directly or indirectly, a majority of the voting power of the resulting entity.

         2.6      Employment. "Employment" means the period or periods during
which a Participant is an employee of the Company.

         2.7      ERISA. "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended, and any successor act thereto.

         2.8      Participant. "Participant" means an eligible employee of the
Company selected to receive benefits under the Plan as provided in Article 3 of
this Plan.

         2.9      Top Hat Plan. "Top Hat Plan" means a nonqualified, unfunded
plan maintained primarily to provide deferred compensation benefits to a
Participant who falls within a select group of "management or highly compensated
employees" within the meaning of Section 201, 301 and 401 of ERISA.


Article 3.        Retirement

         3.1      Eligibility. Only those employees who comprise a select group
of management or highly compensated employees will be eligible to be selected to
participate in the Plan, as provided below.

         3.2      Participation. The Board, or such person or entity designated
by the Board, acting in its discretion, may designate any eligible employee as a
Participant under this Plan, and may designate any conditions applicable to any
such Participant. Such designation shall be in writing and shall be effective as
of the date contained therein. Participation in the Plan is terminable by the
Board, in its discretion, upon written notice to the Participant, and
termination shall be effective as of the date contained therein, but in no event
earlier than the date of such notice, provided that no such termination shall in
any material manner reduce or adversely affect any Participant's rights to
vested benefits hereunder without the consent of the Participant.

         3.3      Noncompetition. Notwithstanding any other provisions hereof,
neither a Participant nor a Participant's spouse nor any other beneficiary of a
Participant shall receive any further benefits hereunder if the Participant,
without prior written consent of the Board, prior to attaining age 65, engages
in (as a principal, partner, director, officer, agent, employee, consultant,
owner, independent contractor of otherwise), or becomes financially interested
in, any retail department store business: (a) that is a direct competitor of the
Company (i.e. competitive lines generate at least 30% of the Company's revenues
and at least 30% of the



                                       2
<PAGE>   3
competitor's revenues); (b) with at least $250 million in gross annual sales;
and (c) operating a store or stores within a 15 mile radius of any Company store
which is in existence or which is under contract to be acquired or constructed
by the Company at such time, and which competing store or stores have total
gross annual sales in excess of 15% of the Company's gross annual sales for the
prior year, including owned and leased businesses.


Article 4.        Amount, Form, and Payment of Supplemental Benefit

         4.1      Normal Retirement Benefit. Subject to the terms of this Plan,
a Participant who retires from Employment shall be entitled to receive a monthly
benefit payable for such Participant's lifetime, commencing on the first day of
the month coinciding with or next following the date of such retirement (the
"Normal Retirement Benefit"). A Participant's Normal Retirement Benefit is
calculated according to the benefit formula determined by the Board with respect
to the Participant, and set forth in the appendix hereto which applies to the
Participant (the "Applicable Appendix").

         4.2      Form of Benefit. Unless the Board determines otherwise, or as
otherwise specified herein, a Participant who is not married as of the date on
which benefit payments commence shall receive his benefit hereunder in the form
of a Normal Retirement Benefit. A Participant who is married as of the date on
which benefit payments commence shall receive his benefits in the same form as
an unmarried Participant; provided however, that if such Participant dies prior
to the tenth anniversary of the date as of which his benefits commenced, and if
such Participant is survived by his spouse, such surviving spouse shall receive
monthly benefit payments in the same amount as previously paid to the
Participant until such tenth anniversary or until her death, whichever is
earlier. No actuarial adjustment shall be made to the monthly benefit payable to
a married participant by reason of his marital status. However, the Board
reserves the right to authorize lump sum benefit distributions that are the
Actuarial Equivalent of the forms of benefit otherwise provided for in this
Paragraph 4.2, in lieu thereof.

         4.3      Death Benefit. If a Participant dies before such Participant
retires and is survived by a spouse, then such spouse shall be entitled to
receive from the Company a death benefit in the form of a lump sum payable in
cash within 60 days after such Participant's death equal to the Actuarial
Equivalent of the Normal Retirement Benefit that would have been payable to such
Participant had he retired on his date of death (without taking into account the
value of the additional benefits payable to a surviving spouse as provided in
Paragraph 4.2).


Article 5.        Administration

         5.1      Authority of the Board. This Plan shall be administered by the
Board or any committee designated by the Board to administer the Plan. Subject
to the provisions of the Plan, the Board or applicable committee shall have the
authority to make, amend, interpret, and enforce all appropriate rules and
regulations for the administration of this Plan and to decide or


                                       3
<PAGE>   4
resolve any and all questions, including interpretations of this Plan, as may
arise in connection with this Plan. Notwithstanding the foregoing, the Company
shall act as the plan administrator for purposes of any filings with any
governmental entity or in the event claims for benefits are made by any
Participant.

         5.2      Agents. In the administration of this Plan, the Board may,
from time to time, employ agents and delegate to such agents such administrative
duties as it deems advisable and allowable under the terms of the Plan.

         5.3      Decisions Binding. The decision or action of the Board with
respect to any question arising out of or in connection with the administration,
interpretation, and application of this Plan and any rules or guidelines made in
connection with this Plan shall be final and conclusive, and shall be binding
upon all persons and entities having any interest in this Plan.

         5.4      Indemnity of Board. The Company shall indemnify and hold
harmless the Board and its individual members along with any other committee
that may be established to administer the Plan pursuant to Paragraph 5.1 and any
members thereof, against any and all claims, loss, damage, expense, or liability
arising from any action or failure to act with respect to this Plan.

         5.5      Cost of Administration. The Company shall bear all expenses of
administration of this Plan.

         5.6      Claims.

         A Participant or a Participant's beneficiary for benefits under the
Plan may file a written claim for benefits under the Plan with the Plan
Administrator, if he believes that he is entitled to receive benefits under the
Plan but is not receiving benefits under the Plan or if he is receiving benefits
under the Plan, but disputes the amount and/or form of benefits received. Such
written claim for benefits shall set forth the nature of the claim and/or
dispute, and set forth all facts and circumstances which are relevant to the
claim.

         If, pursuant to the provisions of the Plan, the Company denies the
claim of the Participant or the Participant's beneficiary for benefits under the
Plan, the Company shall provide written notice, within ninety (90) days after
receipt of the claim, setting forth in a manner calculated to be understood by
the claimant:

                  a)       the specific reasons for such denial;

                  b)       the specific reference to the Plan provisions on
which the denial is based;

                  c)       a description of any additional material or
information necessary to perfect the claim and an explanation of why such
material or information is needed; and



                                       4
<PAGE>   5
                  d)       an explanation of the Plan's claim review procedure
and the time limitations of this subsection applicable thereto.

The Participant or the Participant's beneficiary whose claim for benefit has
been denied may request review by the Company of the denied claim by notifying
the Company in writing within sixty (60) days after receipt of the notification
of claim denial. As part of said review procedure, the claimant or the
claimant's authorized representative may review pertinent documents and submit
issues and comments to the Company in writing. The Company shall render its
decision to the claimant in writing in a manner calculated to be understood by
the claimant not later than sixty (60) days after receipt of the request for
review, unless special circumstances require an extension of time, in which case
decision shall be rendered as soon after the sixty-day period as possible, but
not later than one hundred and twenty (120) days after receipt of the request
for review. The decision on review shall state the specific reasons therefor and
the specific Plan reference on which it is based.


Article 6.        Amendment and Termination

         The Company hereby reserves the right to amend, modify, or terminate
the Plan at any time by action of a majority of the members of the Board. Except
as described below in this Article 6, no such amendment or termination shall in
any material manner reduce or adversely affect any Participant's rights to
benefits hereunder without the consent of the Participant.

         The Board may terminate the Plan and commence termination payout for
all Participants, or remove certain employees as Participants, if it is
determined by the United States Department of Labor or a court of competent
jurisdiction that the Plan constitutes an employee pension benefit plan within
the meaning of Section 3(2) of ERISA which is not exempt from the provisions of
Parts 2, 3 and 4 of Title I of ERISA; provided, however, that if the Plan is
terminated pursuant to this sentence, then all Participants shall be deemed to
be fully vested in the benefits described in Article 4 as of the date
immediately preceding such termination. If payout is commenced pursuant to the
operation of this Article 6, the payment of such amounts shall be made in the
manner and at the times selected by the Board; provided, however, that such
payment shall not be extended for a longer period of time than would have been
the case had the payment of benefits occurred as scheduled immediately prior to
such accelerated payout.


Article 7.        Miscellaneous

         7.1      Unfunded Plan. This Plan is intended to be a Top Hat Plan and
therefore exempt from the provisions of Parts 2, 3, and 4 of Title I of ERISA.
Such status shall not be adversely affected by the establishment of any trust
pursuant to Paragraph 7.4 below.

         7.2      Unsecured General Creditor. Each Participant and his or her
beneficiaries, heirs, successors, and assigns shall have no secured legal or
equitable rights, interests, or claims in any


                                       5
<PAGE>   6
property or assets of the Company, nor shall any such persons have any rights,
interests or claims in any life insurance policies, annuity contracts, or the
proceeds therefrom owned or which may be acquired by the Company. Except as
provided in Paragraph 7.4, such policies, annuity contracts, or other assets of
the Company shall not be held under any trust for the benefit of a Participant,
his or her beneficiaries, heirs, successors or assigns, or held, in any way, as
collateral security for the fulfilling of any obligations of the Company under
this Plan. Any and all of the Company's assets and policies shall be, and shall
remain for purposes of this Plan, the general, unpledged, unrestricted assets of
the Company. The Company's obligation under this Plan shall be that of an
unfunded and unsecured promise to pay money in the future.

         7.3      Exclusive Supplemental Retirement Benefit.

         As of the Effective Date, the Plan is the intended to be the sole
source of Company paid supplemental retirement benefits for Participants. In the
event a Participant is entitled to any other supplemental retirement benefit
payable by the Company, the benefit payable hereunder shall be reduced by an
amount that is the Actuarial Equivalent of such other supplemental retirement
benefits, except where such other supplemental retirement benefits are paid
under an arrangement that explicitly negates the operation of this Paragraph.

         7.4      Trust Fund.

                  a)       At its discretion, the Company may establish one or
more grantor trusts, with such trustees as the Board may approve, for the
purpose of providing for the payment of benefits under this Plan. Such trust or
trusts may be irrevocable, but the assets thereof shall be subject to the claims
of the Company's general creditors. To the extent any benefits provided under
this Plan are actually paid from any such trust, the Company shall have no
further obligation with respect thereto, but to the extent not so paid, such
benefits shall remain the obligation of, and shall be paid by, the Company.

                  b)       At its discretion, the Company may, in addition to or
in lieu of establishing one or more grantor trusts as described in clause (a)
above, take other actions to fund the benefits provided for under this Plan, but
in no event shall the Company establish any funding mechanism which would result
in the Plan failing to qualify as a Top Hat Plan exempt from the provisions of
Parts 2, 3, and 4 of Title I of ERISA.

         7.5      Nonassignability. Neither a Participant nor any other person
shall have any right to sell, assign, transfer, pledge, anticipate, mortgage, or
otherwise encumber, hypothecate or convey in advance of actual receipt the
amounts, if any, payable hereunder, or any part thereof, which are, and all
rights to which are, expressly declared to be nonassignable and nontransferable,
provided that a Participant may assign the right to receive such amounts to
trusts or limited partnerships established for the benefit of the Participant's
spouse or children. No part of the amount payable shall, prior to actual
payment, be subject to seizure or sequestration for the payment of any debts,
judgments, alimony or separate maintenance owed by a Participant or any


                                       6
<PAGE>   7
other person, nor shall such amounts or rights to such amounts be transferable
by operation of law in the event of a Participant's or any other person's
bankruptcy or insolvency.

         7.6      Not a Contract of Employment. The terms and conditions of this
Plan shall not be deemed to constitute a contract of employment between the
Company and any Participant, and Participants (and Participants' beneficiaries)
shall have no rights against the Company except as may otherwise be specifically
provided herein. Moreover, nothing in this Plan shall be deemed to give a
Participant the right to be retained in the service of the Company or to
interfere with the right of the Company to discipline or discharge any
Participant at any time.

         7.7      Validity. If any provision of this Plan shall be held illegal
or invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if such
illegal and invalid provision had never been inserted herein.

         7.8      Successors. The provisions of this Plan shall bind and inure
to the benefit of the Company and its successors and assigns, and the Company
shall require all its successors and assigns to expressly assume its obligations
hereunder. The term "successors," as used herein, shall include any corporate or
other business entity which shall, whether by merger, consolidation, purchase or
otherwise, acquire all or substantially all of the business and assets of the
Company.

         7.9      Tax Withholding. The Company shall have the right to require
Participants to remit to the Company an amount sufficient to satisfy federal,
state, and local tax withholding requirements, or to deduct from payments made
pursuant to the Plan amounts sufficient to satisfy such tax withholding
requirements.

         7.10     Governing Law. The provisions of this agreement shall be
construed and interpreted according to the laws of the State of Pennsylvania
except as preempted by Federal law.

         7.11     Change of Control.

                  a)       If a Change of Control of the Company occurs, all
benefits shall be fully accelerated and be payable to the extent and in the
manner provided for in the Applicable Appendix.

                  b)       Notwithstanding the foregoing, in the event any
benefits payable hereunder are treated as "excess parachute payments" (as that
term is defined in Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"), or any successor statute), the benefits payable hereunder shall be
reduced, if possible, to the extent necessary so that no portion of such
benefits shall be subject to the excise tax imposed on excess parachute payments
pursuant to Code Section 4999 (or any successor statute).



                                       7
<PAGE>   8
         7.12     Acceleration. The Board, in its sole and absolute discretion,
may waive all vesting requirements and/or permit accelerated vesting
arrangements.

         7.13     Forfeiture. All benefits hereunder shall be subject to
forfeiture in their entirety in the event that Participant is terminated for
Cause.












                                       8
<PAGE>   9
APPENDIX A

Amount of Supplemental Benefit for Jim Baireuther

         If Jim Baireuther ("Baireuther") remains continuously employed with the
Company through the date that he attains sixty (60) years of age, he will become
eligible for and vest in a benefit in the amount of $30,000 a year. Baireuther's
entitlement to this benefit shall terminate and the benefit will be forfeited if
he is terminated for Cause.

Vesting upon Change of Control

         If a Change of Control (as defined in Paragraph 2.5) occurs and
Baireuther is "Terminated in Connection with the Change of Control" (as this
term is defined below), he will immediately become eligible for and vest in a
benefit in an amount equal to a percentage of the benefit amount indicated above
($30,000), such percentage to be determined in accordance with the following
chart.

<TABLE>
<CAPTION>
         Years of Continuous Employment with the Company
           Upon the Occurrence of a Change of Control             Percentage
<S>                                                               <C>
                            1                                          20
                            2                                          40
                            3                                          60
                            4                                          80
                            5                                         100
</TABLE>

         If a Change of Control occurs and Baireuther is not "Terminated in
Connection with the Change of Control," he shall be entitled to receive a Normal
Retirement Benefit pursuant to Paragraph 4.1, without regard to the Change of
Control.

         "Terminated in Connection with the Change of Control" means: (1) the
termination of Baireuther's employment with the Company by the Company, for any
reason other than for Cause (as defined in Paragraph 2.4) within three (3) years
of the date on which a Change of Control occurs, or (2) the termination of
Baireuther's employment with the Company by Baireuther, in connection with a
demotion (i.e., the Company offers Baireuther a lower position or a comparable
position with lower compensation), within three (3) years of the date on which
the Change of Control occurs.



                                       9
<PAGE>   10
APPENDIX B

Amount of Supplemental Benefit for Michael Gleim

         If Michael Gleim ("Gleim") remains continuously employed with the
Company through January 31, 2002, he will become eligible for and vest in a
benefit in the amount of $50,000 a year. Gleim's entitlement to this benefit
shall terminate and the benefit will be forfeited if he is terminated for Cause.

Vesting upon Change of Control

         If a Change of Control (as defined in Paragraph 2.5) occurs and Gleim
is "Terminated in Connection with the Change of Control" (as this term is
defined below), he will immediately become eligible for and vest in a benefit in
an amount equal to a percentage of the benefit amount indicated above ($50,000),
such percentage to be determined in accordance with the following chart.

<TABLE>
<CAPTION>
         Years of Continuous Employment with the Company
            Upon the Occurrence of a Change of Control            Percentage
<S>                                                               <C>
                             1                                         20
                             2                                         40
                             3                                         60
                             4                                         80
                             5                                        100
</TABLE>

         If a Change of Control occurs and Gleim is not "Terminated in
Connection with the Change of Control," he shall be entitled to receive a Normal
Retirement Benefit pursuant to Paragraph 4.1, without regard to the Change of
Control.

         "Terminated in Connection with the Change of Control" means: (1) the
termination of Gleim's employment with the Company by the Company, for any
reason other than for Cause (as defined in Paragraph 2.4) within three (3) years
of the date on which a Change of Control occurs, or (2) the termination of
Gleim's employment with the Company by Gleim, in connection with a demotion
(i.e., the Company offers Gleim a lower position or a comparable position with
lower compensation), within three (3) years of the date on which the Change of
Control occurs.



                                       10
<PAGE>   11
APPENDIX C

Amount of Supplemental Benefit for Ryan Sattler

         If Ryan Sattler ("Sattler") remains continuously employed with the
Company through the date that he attains sixty (60) years of age, he will become
eligible for and vest in a benefit in the amount of $10,000 a year. Sattler's
entitlement to this benefit shall terminate and the benefit will be forfeited if
he is terminated for Cause.

Vesting upon Change of Control

         If a Change of Control (as defined in Paragraph 2.5) occurs and Sattler
is "Terminated in Connection with the Change of Control" (as this term is
defined below), he will immediately become eligible for and vest in a benefit in
an amount equal to a percentage of the benefit amount indicated above ($10,000),
such percentage to be determined in accordance with the following chart.

<TABLE>
<CAPTION>
         Years of Continuous Employment with the Company
            Upon the Occurrence of a Change of Control            Percentage
<S>                                                               <C>
                             1                                         20
                             2                                         40
                             3                                         60
                             4                                         80
                             5                                        100
</TABLE>

         If a Change of Control occurs and Sattler is not "Terminated in
Connection with the Change of Control," he shall be entitled to receive a Normal
Retirement Benefit pursuant to Paragraph 4.1, without regard to the Change of
Control.

         "Terminated in Connection with the Change of Control" means: (1) the
termination of Sattler's employment with the Company by the Company, for any
reason other than for Cause (as defined in Paragraph 2.4) within three (3) years
of the date on which a Change of Control occurs, or (2) the termination of
Sattler's employment with the Company by Sattler, in connection with a demotion
(i.e., the Company offers Sattler a lower position or a comparable position with
lower compensation), within three (3) years of the date on which the Change of
Control occurs.


                                       11
<PAGE>   12
APPENDIX D

Amount of Supplemental Benefit for Steve Evans

         If Steve Evans ("Evans") remains continuously employed with the Company
through the date that he attains sixty (60) years of age, he will become
eligible for and vest in a benefit in the amount of $10,000 a year. Evans's
entitlement to this benefit shall terminate and the benefit will be forfeited if
he is terminated for Cause.

Vesting upon Change of Control

         If a Change of Control (as defined in Paragraph 2.5) occurs and Evans
is "Terminated in Connection with the Change of Control" (as this term is
defined below), he will immediately become eligible for and vest in a benefit in
an amount equal to a percentage of the benefit amount indicated above ($10,000),
such percentage to be determined in accordance with the following chart.

<TABLE>
<CAPTION>
         Years of Continuous Employment with the Company
            Upon the Occurrence of a Change of Control            Percentage
<S>                                                               <C>
                             1                                         20
                             2                                         40
                             3                                         60
                             4                                         80
                             5                                        100
</TABLE>

         If a Change of Control occurs and Evans is not "Terminated in
Connection with the Change of Control," he shall be entitled to receive a Normal
Retirement Benefit pursuant to Paragraph 4.1, without regard to the Change of
Control.

         "Terminated in Connection with the Change of Control" means: (1) the
termination of Evans' employment with the Company by the Company, for any reason
other than for Cause (as defined in Paragraph 2.4) within three (3) years of the
date on which a Change of Control occurs, or (2) the termination of Evans'
employment with the Company by Evans, in connection with a demotion (i.e., the
Company offers Evans a lower position or a comparable position with lower
compensation), within three (3) years of the date on which the Change of Control
occurs.



                                       12
<PAGE>   13
APPENDIX E

Amount of Supplemental Benefit for John Farrel

         If John Farrel ("Farrel") remains continuously employed with the
Company through the date that he attains sixty (60) years of age, he will become
eligible for and vest in a benefit in the amount of $10,000 a year. Farrel's
entitlement to this benefit shall terminate and the benefit will be forfeited if
he is terminated for Cause.

Vesting upon Change of Control

         If a Change of Control (as defined in Paragraph 2.5) occurs and Farrel
is "Terminated in Connection with the Change of Control" (as this term is
defined below), he will immediately become eligible for and vest in a benefit in
an amount equal to a percentage of the benefit amount indicated above ($10,000),
such percentage to be determined in accordance with the following chart.

<TABLE>
<CAPTION>
         Years of Continuous Employment with the Company
            Upon the Occurrence of a Change of Control            Percentage
<S>                                                               <C>
                             1                                         20
                             2                                         40
                             3                                         60
                             4                                         80
                             5                                        100
</TABLE>

         If a Change of Control occurs and Farrel is not "Terminated in
Connection with the Change of Control," he shall be entitled to receive a Normal
Retirement Benefit pursuant to Paragraph 4.1, without regard to the Change of
Control.

         "Terminated in Connection with the Change of Control" means: (1) the
termination of Farrel's employment with the Company by the Company, for any
reason other than for Cause (as defined in Paragraph 2.4) within three (3) years
of the date on which a Change of Control occurs, or (2) the termination of
Farrel's employment with the Company by Farrel, in connection with a demotion
(i.e., the Company offers Farrel a lower position or a comparable position with
lower compensation), within three (3) years of the date on which the Change of
Control occurs.



                                       13
<PAGE>   14
APPENDIX F

Amount of Supplemental Benefit for Frank Tworecke

          If Frank Tworecke ("Tworecke") completes five (5) consecutive years of
employment with the Company, he will become eligible for and vest in a
supplemental retirement benefit in the amount of $50,000 a year. For each full
year that Tworecke remains in the Company's employ after the completion of the
first five (5) years, the amount of the annual supplemental retirement benefit
which Tworecke shall receive shall increase by $15,000 per year. The maximum
supplemental retirement benefit Tworecke can receive is $125,000 per year. The
supplemental retirement benefit shall be payable in equal monthly installments
commencing with the month Tworecke's employment with the Company ceases (after
the benefit vests) through the month of the date of Tworecke's death at age
sixty-five (65) or greater. If Tworecke dies after the supplemental benefit
described in this Appendix F becomes vested but before he reaches age sixty-five
(65), whether he is still employed with the Company, the Company will pay
Tworecke's estate the amount of the vested benefit, until the date of his 65th
birthday. Tworecke's entitlement to this supplemental retirement benefit shall
terminate and the benefit will be forfeited if (a) Tworecke ceases employment
with the Company at any time prior to vesting for any reason; (b) Tworecke
violates any portion of the November 1999 Employment Agreement between Tworecke
and the Company (the "Employment Agreement") or any subsequent agreement between
him and the Company (even after vesting); or (c) the Board determines at any
time before or after termination of employment that Tworecke is guilty of
dishonesty or other unlawful acts causing injury or damage to the Company, its
employees or customers (even after vesting).

         In all respects, Tworecke's benefit under the Plan shall be subject to
and limited by the provisions of the Employment Agreement which govern his right
to receive a supplemental retirement benefit from the Company, including, but
not limited to, Paragraph 9 of the Employment Agreement. To the extent that the
terms of the Plan provide for a benefit which is inconsistent in amount or form
with the applicable provisions of the Employment Agreement (including, but not
limited to, the form of benefit provided under Paragraph 4.2 of the Plan, the
death benefit provided under Paragraph 4.3 of the Plan, and accelerated vesting
upon a Change of Control as provided under Paragraph 7.11 of the Plan), the
terms of the Employment Agreement shall govern.





                                       14