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                                                                   EXHIBIT 10.39

                         TANDY BRANDS ACCESSORIES, INC.

                            EMPLOYEES INVESTMENT PLAN

                 As amended and restated effective July 1, 2000


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                                TABLE OF CONTENTS

<TABLE>
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<S>                                                                         <C>
ARTICLE I - PURPOSE ........................................................   2

ARTICLE II - DEFINITIONS AND CONSTRUCTION ..................................   2
   2.1    DEFINITIONS ......................................................   2
   2.2    CONSTRUCTION .....................................................  15

ARTICLE III - ELIGIBILITY AND PARTICIPATION ................................  16
   3.1    ELIGIBILITY REQUIREMENTS .........................................  16
   3.2    NOTIFICATION OF ELIGIBILITY ......................................  16
   3.3    RE-ENTRY OF PRIOR PARTICIPANTS ...................................  17

ARTICLE IV - CONTRIBUTIONS .................................................  17
  4.1     SALARY REDUCTION CONTRIBUTIONS ...................................  17
  4.2     COMPANY MATCHING CONTRIBUTIONS ...................................  18
  4.3     QUALIFIED NONELECTIVE CONTRIBUTIONS ..............................  19
  4.4     SEVEN THOUSAND DOLLAR ($7,000.00) TEST ...........................  19
  4.5     DEFERRAL PERCENTAGE TEST .........................................  20
  4.6     CONTRIBUTION PERCENTAGE TEST .....................................  22
  4.7     ROLLOVER CONTRIBUTIONS ...........................................  25
  4.8     PRIOR PLAN EMPLOYEE CONTRIBUTIONS ................................  27
  4.9     PRIOR PLAN EMPLOYER CONTRIBUTIONS ................................  27

ARTICLE V - ADJUSTMENT OF INDIVIDUAL ACCOUNTS ..............................  28
  5.1     INDIVIDUAL ACCOUNTS ..............................................  28
  5.2     METHOD OF ADJUSTMENT .............................................  28
  5.3     PAYROLL WITHHOLDING AGREEMENTS ...................................  29

ARTICLE VI - ALLOCATIONS ...................................................  31
  6.1      SALARY REDUCTION AND ROLLOVER CONTRIBUTIONS .....................  31
  6.2      COMPANY MATCHING CONTRIBUTIONS ..................................  31
  6.3      QUALIFIED NONELECTIVE CONTRIBUTIONS .............................  32
  6.4      ALLOCATION OF FORFEITURES .......................................  32
  6.5      NOTIFICATION TO PARTICIPANTS ....................................  33
  6.6      MAXIMUM ANNUAL ADDITION TO ACCOUNT OR BENEFIT ...................  33
</TABLE>


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ARTICLE VII - RETIREMENT ..................................................   36
   7.1    NORMAL OR LATE RETIREMENT .......................................   36
   7.2    BENEFIT .........................................................   36

ARTICLE VIII - DEATH ......................................................   37
   8.1    DESIGNATION OF BENEFICIARY ......................................   37
   8.2    BENEFIT .........................................................   37
   8.3    NO BENEFICIARY ..................................................   38

ARTICLE IX - DISABILITY ...................................................   38
   9.1    BENEFIT .........................................................   38

ARTICLE X - TERMINATION OF EMPLOYMENT AND FORFEITURES .....................   39
  10.1    ELIGIBILITY AND BENEFITS ........................................   39
  10.2    TIME OF PAYMENT .................................................   40
  10.3    FORFEITURES .....................................................   40

ARTICLE XI - ADMINISTRATION ...............................................   41
  11.1    APPOINTMENT OF COMMITTEE ........................................   41
  11.2    COMMITTEE POWERS AND DUTIES .....................................   41
  11.3    DUTIES AND POWERS OF THE PLAN ADMINISTRATOR .....................   43
  11.4    RULES AND DECISION ..............................................   44
  11.5    COMMITTEE PROCEDURES ............................................   44
  11.6    AUTHORIZATION OF BENEFIT PAYMENTS ...............................   45
  11.7    PAYMENT OF EXPENSES .............................................   45
  11.8    INDEMNIFICATION OF MEMBERS OF THE COMMITTEE .....................   45

ARTICLE XII - NOTICES .....................................................   45
  12.1    NOTICE TO TRUSTEE ...............................................   45
  12.2    SUBSEQUENT NOTICES ..............................................   46
  12.3    RELIANCE UPON NOTICE ............................................   46

ARTICLE XIII - DISTRIBUTIONS, WITHDRAWALS AND LOANS .......................   47
  13.1    METHOD OF PAYMENT ...............................................   47
  13.2    TIME OF PAYMENT .................................................   48
  13.3    CASH OUT DISTRIBUTION ...........................................   54
  13.4    MINORITY OR DISABILITY PAYMENTS .................................   55
  13.5    DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS ...................   55
  13.6    DIRECT ROLLOVER OF ELIGIBLE ROLLOVER DISTRIBUTIONS ..............   57
</TABLE>


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<TABLE>
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  13.7    FINANCIAL HARDSHIP WITHDRAWALS ..................................   58
  13.8    LOANS TO PARTICIPANTS ...........................................   60
  13.9    WITHDRAWALS UPON ATTAINMENT OF AGE 59 1/2 .......................   63
  13.10   WITHDRAWALS FOR DISABILITY ......................................   63
  13.11   WITHDRAWAL OF PRE-1986 CONTRIBUTIONS: ...........................   64
  13.12   SUSPENSION OF CONTRIBUTIONS .....................................   65

ARTICLE XIV - TRUSTEE, INVESTMENT MANAGERS AND DIRECTED INVESTMENTS .......   65
  14.1    APPOINTMENT OF TRUSTEE ..........................................   65
  14.2    APPOINTMENT OF INVESTMENT MANAGER ...............................   66
  14.3    RESPONSIBILITY OF TRUSTEE AND INVESTMENT MANAGER ................   66
  14.4    BONDING OF TRUSTEE AND INVESTMENT MANAGER .......................   67
  14.5    PARTICIPANT DIRECTION OF INVESTMENT .............................   67

ARTICLE XV - AMENDMENT AND TERMINATION OF PLAN ............................   71
  15.1    AMENDMENT OF PLAN ...............................................   71
  15.2    RIGHT TO TERMINATE AND WITHDRAW .................................   72
  15.3    SUSPENSION AND DISCONTINUANCE OF CONTRIBUTIONS ..................   72
  15.4    LIQUIDATION OF TRUST FUND .......................................   73
  15.5    CONSOLIDATION OR MERGER .........................................   74

ARTICLE XVI - GENERAL PROVISIONS ..........................................   74
  16.1    NO EMPLOYMENT CONTRACT ..........................................   74
  16.2    MANNER OF PAYMENT ...............................................   74
  16.3    NONALIENATION OF BENEFITS .......................................   75
  16.4    TITLES FOR CONVENIENCE ONLY .....................................   75
  16.5    VALIDITY OF PLAN ................................................   75
  16.6    PLAN BINDING ....................................................   76
  16.7    RETURN OF CONTRIBUTIONS .........................................   76
  16.8    MISSING PARTICIPANTS OR BENEFICIARIES ...........................   76
  16.9    QUALIFIED MILITARY SERVICE ......................................   77

ARTICLE XVII - TOP-HEAVY RULES ............................................   77
  17.1    DEFINITIONS .....................................................   77
  17.2    DETERMINATION OF-TOP HEAVY STATUS ...............................   79
  17.3    MINIMUM EMPLOYER CONTRIBUTION ...................................   81
  17.4    MINIMUM VESTING .................................................   81
</TABLE>


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ARTICLE XVIII - ADOPTION AND WITHDRAWAL BY OTHER ORGANIZATIONS .............  82
  18.1    PROCEDURE FOR ADOPTION ...........................................  82
  18.2    WITHDRAWAL .......................................................  83
  18.3    ADOPTION CONTINGENT UPON INITIAL AND CONTINUED QUALIFICATION .....  83

ARTICLE XIX - FIDUCIARY PROVISIONS .........................................  84
  19.1    GENERAL ALLOCATION OF DUTIES .....................................  84
  19.2    FIDUCIARY DUTY ...................................................  85
  19.3    FIDUCIARY LIABILITY ..............................................  85
  19.4    CO-FIDUCIARY LIABILITY ...........................................  85
  19.5    DELEGATION AND ALLOCATION ........................................  86
</TABLE>

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                         TANDY BRANDS ACCESSORIES, INC.

                            EMPLOYEES INVESTMENT PLAN

                                    PREAMBLE

         WHEREAS, TANDY BRANDS ACCESSORIES, INC., a corporation formed under the
laws of the State of Delaware (the "Company") previously adopted a stock bonus
plan, effective as of January 1, 1991, which was spun off from the Tandy Brands
Employees Investment Plan maintained by The Bombay Company, Inc. (formerly Tandy
Brands, Inc.) when the Company became an independent, publicly traded
corporation (the "Prior Plan"); and

         WHEREAS, the Company amended and restated the Prior Plan, effective
April 1, 1999, to incorporate amendments which had previously been made, and to
modify provisions of the plan to the extent necessary to comply with recent
legislation, including the Small Business Job Protection Act of 1996 and the
Taxpayer Relief Act of 1997; and

         WHEREAS, the Company now desires to amend and restate the Prior Plan to
add a cash or deferred feature and to implement other design changes;

         NOW, THEREFORE, in consideration of the premises and to carry out the
purposes and intent as set forth above, said Prior Plan is hereby restated,
retitled, and amended in its entirety, superseded and replaced by this separate,
restated Tandy Brands Accessories, Inc. Employees Investment Plan, effective
July 1, 2000. There will be no gap or lapse in time or effect between such Plans
and the existence of a qualified Plan shall be continuous and uninterrupted.

         The terms and conditions of this restated Tandy Brands Accessories,
Inc. Employees Investment Plan are as follows:


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                                    ARTICLE I

                                     PURPOSE

         The purpose of this Plan is to reward Employees of the Employer, as
hereinafter defined, for their loyal and faithful service, to share with the
Employees a portion of the profits, to help the Employees accumulate funds for
their later years, and to provide funds for their beneficiaries in the event of
death or disability. The benefits provided by this Plan will be paid from a
Trust Fund established by the Employer and will be in addition to the benefits
Employees are entitled to receive under any other programs of the Employer and
from the Social Security Act.

          This Plan and the separate related Trust forming a part hereof are
established and shall be maintained for the exclusive benefit of the
Participants hereunder and their beneficiaries. No part of the Trust Fund can
ever revert to the Employer, except as hereinafter provided, or be used for or
diverted to purposes other than the exclusive benefit of the Participants of
this Plan and their beneficiaries.

                                   ARTICLE II

                          DEFINITIONS AND CONSTRUCTION

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

                  (a) Affiliate: A member of a controlled group of corporations
         (as defined in Section 414(b) of the Code), a group of trades or
         businesses (whether or not incorporated) which are under common control
         (as defined in Section 414(c) of the Code), or an affiliated service
         group (as defined in Section 414(m) of the Code) of which


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         an Employer is a member, or any entity otherwise required to be
         aggregated with an Employer pursuant to Section 414(o) of the Code and
         the regulations issued thereunder.

                  (b) Allocation Date: The last day of the Plan Year.

                  (c) Annual Compensation: The total amounts paid by an Employer
         to an Employee as remuneration for personal services rendered during
         each Plan Year, as reported on the Employee's federal income tax
         withholding statement or statements (Form W-2 or its subsequent
         equivalent), together with any amounts not includable in the gross
         income of the Employee pursuant to Sections 125 or 402(e)(3) of the
         Code, but Annual Compensation shall not include (i) any Company
         contributions made under the Tandy Brands Accessories Stock Purchase
         Program which are used to purchase stock for a participating Employee
         and are included in such Form W-2 as referred to above and (ii) any
         amounts realized from the exercise of a non-qualified stock option or
         from a disqualifying disposition of a stock option qualified under
         Section 423 of the Code, if any. Effective for Plan Years beginning on
         or after January 1, 1989 and before January 1, 1994, Annual
         Compensation shall not exceed $200,000, as adjusted by the Secretary of
         the Treasury for increases in the cost of living at the time and in the
         manner set forth in section 415(d) of the Code. Effective for Plan
         Years beginning on or after January 1, 1994, Annual Compensation shall
         not exceed $150,000, as adjusted by the Secretary of the Treasury for
         increases in the cost of living at the time and in the manner set forth
         in section 401(a)(17)(B) of the Code. On or before June 30, 1997, in
         determining the Annual Compensation of a Participant for purposes of
         this limitation, the rules of section 414(q)(6) of the Code shall
         apply, except in applying such rules, the term "family" shall include
         only the spouse of the Participant and any lineal descendants of the
         Participant


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         who have not attained age 19 before the close of the year. If, as a
         result of the application of such rules, the adjusted limitation is
         exceeded, then the limitation shall be prorated among the affected
         individuals in proportion to each such individual's Annual Compensation
         as determined under this paragraph prior to the application of this
         limitation. On or after July 1, 1997, the family aggregation rules
         required by section 414(q)(6) of the Code shall not apply.

                  (d) Beneficiary: A person designated by a Participant or
         former Participant to receive benefits hereunder upon the death of such
         Participant or former Participant.

                  (e) Break in Service: An Employee shall have a Break in
         Service for each Computation Period applicable to him in which he
         completes less than 501 Hours of Service with an Employer unless he is
         on a Leave of Absence authorized by an Employer in accordance with its
         uniform leave policy.

                  (f) Code: The Internal Revenue Code of 1986, as amended.

                  (g) Committee: The persons appointed to administer the Plan in
         accordance with Article XI.

                  (h) Company: Tandy Brands Accessories, Inc., or its successor
         or successors.

                  (i) Company Stock: Common stock of the Company which
         constitutes "qualifying employer securities" under section 4975(e)(8)
         of the Code. In the event Company Stock or other qualifying employer
         securities are not or become not readily tradeable on an established
         securities market, the fair market value thereof shall be as determined
         by an independent appraiser meeting requirements similar to those
         contained in Treasury Regulations promulgated under section 170(a)(1)
         of the Code.


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                  (j) Company Matching Contributions: Contributions which may be
         made by an Employer for any Plan Year on behalf of a Participant who
         has elected to receive Salary Reduction Contributions for such Plan
         Year, as provided in Section 4.2 hereof. Company Matching Contributions
         shall be determined in the sole and absolute discretion of the board of
         directors of the Company.

                  (k) Company Matching Contribution Account: A separate
         subaccount to which is credited a Participant's Company Matching
         Contributions, if any, and any earnings attributable thereto, adjusted
         to reflect any withdrawals, distributions or investment losses
         attributable thereto.

                  (l) Computation Period: For purposes of determining
         eligibility to participate in the Plan, the Computation Period shall be
         the twelve (12) consecutive month period beginning on the date an
         Employee completes an Hour of Service, or any anniversary thereof,
         whichever is applicable. For purposes of determining a Participant's
         Years of Service, the Computation Period shall be the Plan Year.

                  (m) Disability: A medically determinable physical or mental
         impairment that, as determined by the Committee, is of such permanence
         and degree that the Participant is, and for the indefinite future will
         be, unable to perform substantial gainful activity commensurate with
         his professional or other training, education, and experience, and
         comparable to his then or prior services for the Company.

                  (n) Effective Date: July 1, 2000.

                  (o) Employee: Any person who is receiving remuneration for
         personal services rendered to an Employer, or who would be receiving
         such remuneration except for an authorized leave of absence. The term
         "Employee" shall also include any "leased


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         employee", as such term is defined below, deemed to be an employee of
         an Employer or any Affiliate, as provided in Sections 414(n) or (o) of
         the Code. The term "leased employee" means any person (other than an
         employee of the recipient) who pursuant to an agreement between the
         recipient and any other person ("leasing organization") has performed
         services for the recipient (or for the recipient 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 performed under primary direction or control by the
         recipient. Contributions or benefits provided a leased employee by the
         leasing organization which are attributable to services performed for
         the recipient shall be treated as provided by the recipient.

                  A leased employee shall not be considered an employee of the
         recipient if: (i) such employee is covered by a money purchase pension
         plan providing: (1) a nonintegrated employer contribution rate of at
         least ten percent (10%) of compensation, as defined in section
         415(c)(3) of the Code, but including amounts contributed pursuant to a
         salary reduction agreement which are excludable from the employee's
         gross income under Section 125, Section 402(e)(3), Section 402(h)(1)(B)
         or Section 403(b) of the Code, (2) immediate participation, and (3)
         full and immediate vesting; and (ii) leased employees do not constitute
         more than twenty percent (20%) of the recipient's nonhighly compensated
         work force.

                  (p) Employee Contributions or Prior Plan Employee
         Contributions: Voluntary, after tax contributions which, prior to July
         1, 2000, could be made to the Prior Plan by a Participant, at his or
         her election. Prior Plan Employee Contributions shall include after tax
         contributions made on or before December 31, 1985 to the Tandy


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         Brands Employees Investment Plan maintained by the Bombay Company, Inc.
         (formerly Tandy Brands, Inc.) and subsequently spun off into the Prior
         Plan as of January 1, 1991 ("Pre-1986 Contributions") and after tax
         contributions made after December 31, 1985 ("Post-1986 Contributions").
         When the term Prior Plan Employee Contributions is used, it shall mean
         both Pre-1986 Contributions and Post-1986 Contributions.

                  (q) Employee Contribution Account or Prior Plan Employee
         Contribution Account: A separate subaccount to which is credited a
         Participant's Prior Plan Employee Contributions, if any, and any
         earnings attributable thereto, adjusted to reflect any withdrawals,
         distributions or investment losses attributable thereto. The Prior Plan
         Employee Contribution Account shall indicate which part is attributable
         to Pre-1986 Contributions (the "Pre-1986 Contribution Account") and
         which part is attributable to Post-1986 Contributions (the "Post-1986
         Contribution Account"). Such accounts are primarily for accounting
         purposes and do not require a segregation of the Trust Fund, except as
         otherwise provided herein.

                  (r) Employer: Tandy Brands Accessories, Inc. and such other
         organizations as may adopt the Plan in accordance with Article XVIII,
         and their successor or successors.

                  (s) Entry Date: The first day of each calendar month.

                  (t) ERISA: The Employee Retirement Income Security Act of
         1974, as amended.

                  (u) Fund or Trust Fund: All assets of whatsoever kind or
         nature held from time to time by the Trustee in the Trust forming a
         part of this Plan, without distinction as to income and principal and
         without regard to source, i.e., allocations, employer or employee
         contributions, earnings, forfeitures or gifts.


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<PAGE>   13


                  (v) Highly Compensated Employee: The term Highly Compensated
         Employee includes highly compensated active employees and highly
         compensated former employees. A highly compensated active employee
         includes any employee who performs Service for the Employer during the
         determination year and who, during the look-back year, received
         compensation from the Employer in excess of $80,000 (as adjusted
         pursuant to Section 415(d) of the Code). The term Highly Compensated
         Employee also includes Employees who are Five Percent (5%) Owners (as
         defined in Section 17.1(g) hereof) at any time during the look-back
         year or determination year. For purposes of this Section 2.1(v), the
         determination year shall be the Plan Year. The look-back year shall be
         the twelve-month period immediately preceding the determination year.
         For purposes of this Section 2.1(v), the term "compensation" shall have
         the same meaning as the term "Annual Compensation," as defined in
         Section 2.1(c) hereof; provided, however, that any Company
         contributions made under the Tandy Brands Accessories Stock Purchase
         Program which are used to purchase stock for a participating Employee
         and are included in Form W-2 and any amounts realized from the exercise
         of a nonqualified stock option or from a disqualifying disposition of a
         stock option qualified under Section 423 of the Code, if any, shall be
         included in "compensation" for the purposes of this Section 2.1(v).

                  A highly compensated former employee includes any Employee who
         separated from service (or was deemed to have separated from service)
         prior to the determination year, performs no Service for the Employer
         during the determination year, and was a highly compensated active
         employee for either the separation year or any determination year
         ending on or after the Employee's 55th birthday. The determination of
         the identity


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         of Highly Compensated Employees will be made in accordance with Section
         414(q) of the Code and the regulations thereunder.

                  (w) Hour of Service: Each hour connected with an Employee's
         Service, either before or after the Effective Date, for an Employer and
         described in one or more of the paragraphs (i) through (iii) below:

                           (i) Each hour for which an Employee is paid, or
                  entitled to be paid, for the performance of duties during the
                  applicable period, shall be an Hour of Service.

                           (ii) Each hour for which an Employee is paid, or
                  entitled to be paid, by an Employer on account of a period of
                  time during which such person performs no duties, even if the
                  employment relationship has terminated, due to vacation,
                  holiday, illness, incapacity, disability, layoff, jury duty,
                  military duty, or leave of absence, shall be an Hour of
                  Service. Notwithstanding the foregoing sentence,

                                    (1) Not more than 501 hours shall be
                           credited under this paragraph (ii) to the Employee on
                           account of any single continuous period during which
                           he performs no duties;

                                    (2) No hours shall be credited under this
                           paragraph (ii) on account of hours for which the
                           Employee is paid or entitled to be paid under a plan
                           maintained solely for the purpose of complying with
                           applicable workmen's compensation, unemployment
                           compensation, or disability insurance laws; and


                                       9
<PAGE>   15


                                    (3) No hours shall be credited on account of
                           a payment to the Employee solely as reimbursement for
                           medical or related expenses incurred by such person.

                           Only for purposes of this paragraph (ii), a payment
                  shall be deemed to be made by or due from the Employer
                  directly, or indirectly through a trust, fund, insurer, or
                  other entity, to which the Employer contributes or pays
                  premiums, and regardless of whether such contributions are for
                  the benefit of particular employees or a group of employees in
                  the aggregate.

                           (iii) With respect to periods either before or after
                  the Effective Date during which no duties were performed, each
                  hour for which back pay is awarded or agreed to by an Employer
                  shall be an Hour of Service, regardless of any mitigation of
                  damages. However, any such hours with respect to periods
                  described in paragraph (ii) shall be subject to all of the
                  limitations set forth in paragraph (ii).

                  If an Employer maintains records of Hours of Service for
         Employees, such hours shall be used. For Employees, such as exempt
         salaried workers, for whom such records are not available, credit for
         Hours of Service will be at the rate of 45 hours for each week of
         employment.

                  In determining the number of Hours of Service to be credited
         to an Employee in the case of a payment which is made or due to an
         Employee under the provisions of the paragraphs above, the Committee of
         the Plan shall apply the rules set forth in Department of Labor
         Regulations Section 2530.200b-2(b) and (c), which rules are
         incorporated into and made a part of this Plan by reference.


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<PAGE>   16



                  For purposes of determining whether an Employee has incurred a
         Break in Service as defined in Section 2.1(e), the Committee shall
         credit an Employee with Hours of Service during absence from work for
         maternity or paternity reasons which would otherwise have been credited
         to such Employee but for such absence. In the case of such absence, if
         the actual number of hours cannot be determined, the Employee shall be
         credited with eight (8) Hours of Service per day of such absence. For
         purposes of this Plan, an Employee shall be deemed to be on maternity
         or paternity leave if the Employee's absence from work is by reason of
         the pregnancy of the Employee, by reason of the birth of a child of the
         Employee, by reason of the placement of a child with the Employee in
         connection with the adoption of such child by the Employee, or 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 limited to the lesser of the number necessary
         to prevent the Employee from incurring a Break in Service or 501 Hours
         of Service. Hours of Service credited under this paragraph shall be
         credited in the Plan Year in which the absence begins, but if the
         Employee does not need those Hours of Service to prevent a Break in
         Service in the Plan Year in which the absence began, then they shall be
         credited in the immediately following Plan Year. This paragraph shall
         apply for absence periods which begin in Plan Years commencing after
         1984.

                  (x) Individual Account: The account or record maintained by
         the Committee showing the monetary value of the individual interest in
         the Trust Fund of each Participant, former Participant and Beneficiary.



                                       11

<PAGE>   17










                  (y) Investment Managers: The qualified and acting Investment
         Managers, as defined in ERISA, who under this Plan may be appointed by
         the Committee to invest and manage Plan assets as fiduciaries.

                  (z) Leave of Absence: Any period during which an Employee is
         not receiving a salary from his Employer for a reason which the
         Employer shall consider not to constitute a termination of employment.
         A Leave of Absence shall be granted in accordance with an Employer's
         rules or practices uniformly applied to the granting of Leaves of
         Absence. Any period required by law to be counted as service (e.g.,
         certain military service) shall be deemed to be a Leave of Absence in
         accordance with such rules as may be adopted by the Committee.

                  (aa) Named Fiduciary: The Committee shall be the Named
         Fiduciary designated to manage the operation and administration of the
         Plan.

                  (bb) Normal Retirement Date: The 65th birthday of a
         Participant.

                  (cc) Participant: An Employee who has met the eligibility
         requirements for participation in this Plan, as set forth in Article
         III hereof

                  (dd) Plan: Tandy Brands Accessories, Inc. Employees Investment
         Plan, as amended from time to time.

                  (ee) Plan Administrator: Such person or persons as designated
         by the Committee, which shall be the Committee unless and until it
         designates such other person or persons.

                  (ff) Plan Year: The twelve (12) month period beginning July
         1st and ending June 30th, both dates inclusive of each year.



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<PAGE>   18










                  (gg) Prior Plan: The Tandy Brands Accessories, Inc. Employees
         Investment Plan, effective January 1, 1991, as amended and restated
         effective April 1, 1999.

                  (hh) Prior Plan Employer Contributions: Contributions made by
         the Company to the Prior Plan under the terms of the Prior Plan,
         attributable to any period ending prior to July 1, 2000.

                  (ii) Prior Plan Employer Contribution Account: A separate
         subaccount to which is credited a Participant's Prior Plan Employer
         Contributions and any other employer contributions made under the Prior
         Plan, if any, and any earnings attributable thereto, adjusted to
         reflect any withdrawals, distributions or investment losses
         attributable thereto.

                  (jj) qualified Nonelective Contributions: Contributions which
         may, at the election of the Company, be made to the Plan in an amount
         necessary to assure the Plan's compliance with the deferral percentage
         test described in Section 4.5 hereof or the contribution percentage
         test described in Section 4.6 hereof or other nondiscrimination
         requirements as permitted under the Code.

                  (kk) Qualified Nonelective Contribution Account: A separate
         subaccount to which is credited a Participant's Qualified Nonelective
         Contributions, if any, and any earnings attributable thereto, adjusted
         to reflect any withdrawals, distributions or investment losses
         attributable thereto.

                  (11) Retirement: Termination of employment after a Participant
         has reached his Normal Retirement Date. Retirement shall be considered
         as commencing on the day immediately following a Participant's last day
         of employment.




                                       13


<PAGE>   19










                  (mm) Rollover Contributions: Contributions which may be made
         to the Plan by a Participant or Employee, as provided in Section 4.7
         hereof.

                  (nn) Rollover Contribution Account: A separate subaccount to
         which is credited a Participant's or Employee's Rollover Contributions,
         if any, and any earnings attributable thereto, adjusted to reflect any
         withdrawals, distributions or investment losses attributable thereto.

                  (oo) Salary Reduction Contributions: Contributions made to the
         Plan by the Company, at the election of a Participant, in lieu of cash
         compensation, pursuant to a payroll withholding agreement, as provided
         in Section 4.1 hereof.

                  (pp) Salary Reduction Contribution Account: A separate
         subaccount to which is credited a Participant's Salary Reduction
         Contributions, if any, and any earnings attributable thereto, adjusted
         to reflect any withdrawals, distributions or investment losses
         attributable thereto.

                  (qq) Service: A period or periods of employment by an Employee
         used in determining eligibility for Plan participation or in
         determining the amount of benefits. Service shall include any
         employment with any Affiliate of an Employer.

                  (rr) Trust: The Tandy Brands Accessories, Inc. Employees
         Investment Plan Trust, as amended from time to time, the trust or
         trusts established to hold and invest contributions made under the Plan
         for the exclusive benefit of the Participants included in the Plan from
         which the benefits will be distributed.

                  (ss) Trustee: The qualified and acting trustee or trustees
         under the Trust.

                  (tt) Valuation Date: Each day on which the financial markets
         are open for trading activity; provided, however, on a day on which the
         financial markets are not


                                       14

<PAGE>   20










         open, the Valuation Date shall be the next preceding day on which the
         financial markets were open for trading activity.

                  (uu) Year of Service: A Computation Period applicable to an
         Employee in which he completes at least 1,000 Hours of Service. All of
         an Employee's Years of Service shall be counted, subject to the
         following exceptions:

                           (i) Prior to the Effective Date, Years of Service
                  shall be computed and counted pursuant to the provisions of
                  the Prior Plan in effect on the day before the Effective Date.

                           (ii) Any Employee shall receive credit for Years of
                  Service incurred while employed with a predecessor of an
                  Employer hereunder, whether such predecessor was a
                  corporation, partnership, sole proprietorship or other
                  business entity. A predecessor shall include any business
                  entity whose capital stock or assets were acquired by any
                  Employer participating in this Plan.

                           (iii) If an Employee who does not have any
                  nonforfeitable right to his Individual Account incurs a period
                  of consecutive Breaks in Service that equals or exceeds the
                  greater of (1) five or (2) the aggregate number of Years of
                  Service incurred before such period, then all of his prior
                  Years of Service before such period shall no longer be
                  credited to him.

          2.2 Construction: The masculine gender, where appearing in the Plan,
shall be deemed to include the feminine gender, unless the context clearly
indicates to the contrary. The words "hereof," "herein," "hereunder," and other
similar compounds of the word "here" shall mean and refer to the entire Plan,
not to any particular provision or section. The Plan and Trust shall each form a
part of the other by reference and terms shall be used therein interchangeably.




                                       15
<PAGE>   21






                                   ARTICLE III

                          ELIGIBILITY AND PARTICIPATION

         3.1 Eligibility Requirements: Every Employee on the Effective Date,
who was A Participant in the Prior Plan on the day before the Effective Date,
shall continue to be a Participant in the Plan. Every other Employee shall
become a Participant in the Plan as of the first Entry Date concurrent with or
next following the last day of such Employee's Computation Period during which
he first completes a Year of Service. Notwithstanding the foregoing, (a)
Employees included in a unit of Employees covered by a collective bargaining
agreement between employee representatives and an Employer, if retirement
benefits were the subject of good faith bargaining between such employee
representatives and the Employer, shall not be eligible to participate in the
Plan unless such collective bargaining agreement expressly provides for the
inclusion of such Employees under the Plan; (b) Non-resident aliens who receive
no earned income from an Employer which constitutes income from sources within
the United States shall not be eligible to participate in the Plan; (c)
Individuals classified as independent contractors or Leased Employees under the
Employer's customary worker classification procedures shall not be eligible to
participate in the Plan, regardless of whether or not such individual is
actually an employee. An Employee's allocation of contributions under the Plan
shall take into account his Annual Compensation for only that portion of the
Plan Year during which he is eligible to participate in the Plan.

         3.2 Notification of Eligibility: The Committee shall promptly notify in
writing each Employee of his qualification as a Participant and shall furnish
each new Participant a copy of such explanation of the Plan as the Committee
shall provide for that purpose.






                                       16
<PAGE>   22










         3.3 Re-entry of Prior Participants:

                 (a) An Employee who terminates employment after becoming a
         Participant hereunder shall be eligible to participate immediately upon
         his completion of one Hour of Service following his re-employment by an
         Employer; provided, however, if the Participant did not have a
         nonforfeitable right to any portion of his Individual Account at the
         time of his termination of employment and he is re-employed after
         incurring a period of consecutive Breaks in Service that equals or
         exceeds the greater of (i) five or (ii) the aggregate number of Years
         of Service incurred before his termination of employment, then he must
         satisfy the requirements of Section 3.1 after his re-employment.

                 (b) In the event a Participant becomes ineligible to
         participate because he is no longer a member of an eligible class of
         Employees, but he has not incurred a Break in Service, such Employee
         shall participate immediately upon his return to an eligible class of
         Employees. If such Participant incurs a Break in Service his
         eligibility to participate shall be determined pursuant to Section
         3.3(a) above. In the event an Employee who is not a member of the
         eligible class of Employees becomes a member of the eligible class,
         such Employee shall participate immediately if he has satisfied the
         requirements of Section 3.1 and would have previously become a
         Participant had he been in the eligible class.


                                   ARTICLE IV

                                  CONTRIBUTIONS

         4.1 Salary Reduction Contributions: Each Participant may elect to have
contributed on his behalf to the Trust Fund, on a pre-tax basis, any whole
percentage of his Annual Compensation which is not less than one percent (1%)
and which does not exceed ten percent



                                       17
<PAGE>   23











(10%); provided, however, that such amount may not exceed Seven Thousand Dollars
($7,000.00), indexed for increases in the cost of living, as provided in Section
402(g)(5) of the Code, in any taxable year of such Participant. Salary Reduction
Contributions shall be elected pursuant to a payroll withholding agreement, in
accordance with Section 5.3 hereof. In the event that a payroll withholding
agreement is not received for a Participant, a payroll withholding agreement is
deemed to have been made and such Participant will be treated as if he elected
one percent (1%) of his Annual Compensation to be contributed to the Trust Fund
on his behalf as Salary Reduction Contributions. Salary Reduction Contributions
are at all times one hundred percent (100%) vested and nonforfeitable. Salary
Reduction Contributions made on behalf of a Participant shall be added to the
Trust Fund as soon as practicable after deduction from a Participant's paycheck,
and shall be credited to the Salary Reduction Contribution Account of the
Participant in accordance with Section 6.1.

         4.2 Company Matching Contributions: The Employer shall contribute to
the Trust Fund Company Matching Contributions in the amount of one hundred
percent (100%) of each Participant's Salary Reduction Contributions, not to
exceed five percent (5%) of Annual Compensation. Company Matching Contributions
shall be paid to the Trust Fund as soon as practicable following the end of each
calendar month with respect to which the applicable Salary Reduction
Contributions are made, and shall be credited to the Company Matching
Contribution Account of each eligible Participant who has Salary Reduction
Contributions made to the Trust Fund on his behalf during the applicable period
as provided in Section 6.2. The board of directors of the Company, in its sole
discretion, may change the Company Matching Contribution percentage at any time.






                                       18
<PAGE>   24










         4.3 Qualified Nonelective Contributions: Each Employer shall, for each
Plan Year, contribute to the Trust Fund such Qualified Nonelective
Contributions, if any, as the board of directors of the Company shall determine.
The amount of Qualified Nonelective Contributions, if. any, shall be determined
in the sole and absolute discretion of the board of directors of the Company.
Qualified Nonelective Contributions are at all times one hundred percent (100%)
vested and nonforfeitable. Qualified Nonelective Contributions shall be added to
and become a part of the Trust Fund, and, as of each Allocation Date, shall be
credited to the Individual Accounts of the eligible Participants, as provided in
Section 6.3.

         4.4 Seven Thousand Dollar ($7.000.00) Test: If a Participant's Salary
Reduction Contributions hereunder should exceed Seven Thousand Dollars
($7,000.00), indexed for increases in the cost of living, as set forth in
Section 402(g)(5) of the Code, in any taxable year of the Participant, the
excess (with earnings thereon) shall be distributed to the Participant. If the
Participant also participates in another elective deferral program (within the
meaning of Section 402(g)(3) of the Code) and if, when aggregating his elective
deferrals under all such programs, an excess of deferral contributions arises
under the dollar limitation in Section 402(g) of the Code with respect to such
Participant, the Participant shall, no later than March 1st following the close
of the Participant's taxable year, notify the Committee as to the portion of
such excess deferrals to be allocated to this Plan and such excess so allocated
to this Plan (with earnings thereon) shall be distributed to the Participant. In
the event there is a loss allocable to an excess deferral, any distribution to a
Participant as required by this Section 4.4 shall be no greater than the lesser
of: (a) the value of the Participant's Salary Reduction Contribution Account or
(b) the Participant's excess deferrals for the Plan Year. Any distribution under
this





                                       19
<PAGE>   25











Section shall be made to the Participant no later than the April 15th
immediately following the close of the Participant's taxable year for which such
excess deferrals were made.

         4.5 Deferral Percentage Test: Each Plan Year, the Committee shall
         determine:

                  (a) The "deferral percentage" for each Employee who is then
         eligible for Salary Reduction Contributions, which, in the case of a
         Highly Compensated Employee, shall be the ratio of the amount of such
         Highly Compensated Employee's Salary Reduction Contributions for such
         Plan Year to the Highly Compensated Employee's compensation (as defined
         in Section 2.1(v) hereof) for such Plan Year, and, which in the case of
         an Employee who is not a Highly Compensated Employee, shall be the
         ratio of the amount of such Employee's Salary Reduction Contributions
         for such Plan Year to such Employee's compensation (as defined in
         Section 2.1(v) hereof) for such Plan Year;

                  (b) The "highly compensated deferral percentage," which shall
         be the average of the "deferral percentages" for all Highly Compensated
         Employees then eligible for Salary Reduction Contributions; and

                  (c) The "nonhighly compensated deferral percentage," which
         shall be the average of the "deferral percentages" for all Employees
         then eligible for Salary Reduction Contributions who were not included
         in the "highly compensated deferral percentage," in (b) above.

In no event shall the "highly compensated deferral percentage" exceed the
greater of: (i) a deferral percentage equal to one and one-fourth (1 1/4) times
the "nonhighly compensated deferral percentage" or (ii) a deferral percentage
equal to two (2) times the "nonhighly compensated deferral percentage," but not
more than two (2) percentage points greater than the "nonhighly compensated
deferral percentage," or such lesser amount as the Secretary of Treasury may



                                       20
<PAGE>   26











prescribe to prevent the multiple use of this alternative limitation, as set
forth in Section 1.401(m)-2(b) of the Treasury Regulations. In the event that
multiple use of the alternative limitation occurs with respect to any Plan Year,
then either the "highly compensated contribution percentage," as defined in
Section 4.6 hereof, or the "highly compensated deferral percentage," as defined
above, shall be reduced, such reduction and the Highly Compensated Employees to
whom such reduction shall apply to be determined by the Committee in accordance
with Section 1.401(m)-2(c) of the Treasury Regulations. If the above deferral
percentage test would otherwise be violated as of the end of the Plan Year,
then, subject to satisfaction of the conditions described in Section
1.401(k)-1(b)(5) of the Treasury Regulations, the "deferral percentage," as
defined in (a) above, shall instead be the ratio of the sum of the Employee's
Salary Reduction Contributions, Qualified Nonelective Contributions, if any,
and, to the extent necessary to satisfy the deferral percentage test, Company
Matching Contributions for the applicable Plan Year to the Employee's
compensation (as defined in Section 2.1(v) hereof) for the applicable Plan Year.
Any Company Matching Contributions so utilized to satisfy the deferral
percentage test shall at all times be one hundred percent (100%) vested and
nonforfeitable and shall be excluded from consideration for purposes of the
contribution percentage test described in Section 4.6. If, after consideration
of Qualified Nonelective Contributions, if any, and applicable Company Matching
Contributions, as described above, the deferral percentage test would still be
violated as of the end of the Plan Year, then notwithstanding any other
provision hereof, every Salary Reduction Contribution included in the "highly
compensated deferral percentage" for a Participant whose deferral percentage is
greater than the permitted maximum shall be revoked to the extent necessary to
comply with such deferral percentage test and the amount of such Salary
Reduction Contribution, to the extent



                                       21


<PAGE>   27










revoked, shall constitute an "excess contribution" to be distributed to such
Participant (with earnings thereon) no later than the last day of the Plan Year
following the Plan Year for which such contribution was made. Excess
contributions are allocated to the Highly Compensated Employees with the largest
amounts of Employer contributions which are taken into account in calculating
the deferral percentage test for the Plan Year in which the excess arose,
beginning with the Highly Compensated Employee with the largest amount of such
Employer contributions and continuing in descending order until all excess
contributions have been allocated. For purposes of the preceding sentence, the
"largest" amount is determined after distribution of any amounts distributed
hereunder pursuant to Section 4.4 hereof. In the event there is a loss allocable
to an excess contribution, any distribution to a Participant as required by this
Section shall be no greater than the lesser of: (1) the value of the
Participant's Salary Reduction Contribution Account or (2) the Participant's
excess contribution for the Plan Year during which such excess contribution was
made.

          If a Highly Compensated Employee participates in two (2) or more plans
maintained by an Employer or any Affiliate that are subject to the deferral
percentage test, then such Employee's deferral percentage shall be determined by
aggregating his participation in all such plans. In addition, if an Employer
maintains two (2) or more plans subject to the deferral percentage test and such
plans are treated as a single plan for purposes of the requirements for
qualified plans under either Section 410(b) or 401(a)(4) of the Code, then such
plans are treated as a single plan for purposes of the deferral percentage test.

         4.6 Contribution Percentage Test: Each Plan Year, the Committee shall
determine:

                  (a) The "contribution percentage," for each Employee who is
         then eligible to receive Company Matching Contributions, which, in the
         case of a Highly Compensated





                                       22
<PAGE>   28












         Employee, shall be the ratio of the sum of such Employee's Company
         Matching Contributions for such Plan Year to the Highly Compensated
         Employee's compensation (as defined in Section 2.1(v) hereof) for such
         Plan Year, and, which in the case of an Employee who is not a Highly
         Compensated Employee, shall be the ratio of the amount of such
         Employee's Company Matching Contributions for such Plan Year to such
         Employee's compensation (as defined in Section 2.1(v) hereof) for such
         Plan Year.

                  (b) The "highly compensated contribution percentage," which
         shall be the average of the "contribution percentages" for all eligible
         Highly Compensated Employees; and

                  (c) The "nonhighly compensated contribution percentage," which
         shall be the average of the "contribution percentages" for all
         Employees then eligible who were not included in the "highly
         compensated contribution percentage" in (b) above.

In no event shall the "highly compensated contribution percentage" exceed the
greater of: (i) a contribution percentage equal to one and one-fourth (1 1/4)
times the "nonhighly compensated contribution percentage" or (ii) a contribution
percentage equal to two (2) times the "nonhighly compensated contribution
percentage," but not more than two (2) percentage points greater than the
"nonhighly compensated contribution percentage," or such lesser amount as the
Secretary of Treasury may prescribe to prevent the multiple use of this
alternative limitation, as set forth in Section 1.401(m)-2(b) of the Treasury
Regulations. In the event that multiple use of the alternative limitation occurs
with respect to any Plan Year, then either the "highly compensated deferral
percentage," as defined in Section 4.5 hereof, or the "highly compensated
contribution percentage," as defined above, shall be reduced, such reduction and
the Highly Compensated Employees to whom such reduction shall apply to be
determined by the Committee in




                                       23
<PAGE>   29










accordance with Section l.401(m)-2(c) of the Treasury Regulations. If the above
contribution percentage test would otherwise be violated as of the end of the
Plan Year, then, subject to satisfaction of the conditions described in Section
1.401 (m)-l (b)(5) of the Treasury Regulations, the "contribution percentage,"
as defined in (a) above, shall instead be the ratio of the sum of the Employee's
Company Matching Contributions and, to the extent necessary to satisfy the
contribution percentage test, Salary Reduction Contributions and Qualified
Nonelective Contributions, if any, for the applicable Plan Year to the
Employee's compensation (as defined in Section 2.1(v) hereof) for the applicable
Plan Year. Any Salary Reduction Contributions or Qualified Nonelective
Contributions so utilized to satisfy the contribution percentage test shall be
excluded from consideration for purposes of the deferral percentage test
described in Section 4.5. If, after consideration of applicable Salary Reduction
Contributions and Qualified Nonelective Contributions, if any, as described
above, the contribution percentage test would still be violated as of the end of
the Plan Year, then notwithstanding any other provision hereof, every Company
Matching Contribution included in the "highly compensated contribution
percentage" for a Participant whose contribution percentage is greater than the
permitted maximum shall automatically be revoked to the extent necessary to
comply with such contribution percentage test and the amount of such
contribution, to the extent revoked, shall constitute an "excess aggregate
contribution" to be distributed to such Participant (with earnings thereon) or
forfeited, if applicable, no later than the last day of the Plan Year following
the Plan Year for which such contribution was made. Excess aggregate
contributions are allocated to the Highly Compensated Employees with the largest
amounts of Employer contributions taken into account in calculating the
contribution percentage test for the Plan Year in which the excess arose,
beginning with the Highly Compensated Employee with the largest amount of such




                                       24
<PAGE>   30







Employer contributions and continuing in descending order until all excess
aggregate contributions have been allocated. For purposes of the preceding
sentence, the "largest amount" is determined after first determining required
distributions under Section 4.4 hereof, and then determining excess
contributions under Section 4.5. In the event there is a loss allocable to an
excess aggregate contribution, any distribution to a Participant as required by
this Section shall be no greater than the lesser of: (1) the value of the
Participant's Company Matching Contribution Account or (2) the Participant's
excess aggregate contribution for the Plan Year.

         If a Highly Compensated Employee participates in two (2) or more plans
maintained by an Employer or any Affiliate that are subject to the contribution
percentage test, then such Employee's contribution percentage shall be
determined by aggregating his participation in all such plans. In addition, if
an Employer maintains two (2) or more plans subject to the contribution
percentage test and such plans are treated as a single plan for purposes of the
requirements for qualified plans under either Section 410(b) or 401(a)(4) of the
Code, then such plans are treated as a single plan for purposes of the
contribution percentage test.

         4.7 Rollover Contributions: Any Participant who is entitled to receive
an eligible rollover distribution, as defined in Section 401(a)(31)(C) of the
Code, may, in accordance with procedures approved by the Committee, elect to
transfer directly to the Trustee, as a trustee-to-trustee transfer, in cash
only, an amount equal to all or a portion of such distribution; provided that
the maximum amount of such transfer shall be the fair market value of that
portion of the distribution which would be includable in gross income if not so
transferred (determined without regard to Section 402(c) of the Code). Any
Participant who has had distributed to him an amount which qualifies as an
eligible rollover distribution, as defined in Section 402(c)(4) of the Code,
may, in accordance with procedures approved by the Committee, contribute cash
only to




                                       25

<PAGE>   31

the Trust Fund in an amount equal to all or any portion of such distribution,
provided the following conditions are met:

                  (a) The contribution occurs on or before the 60th day
         following his receipt of such distribution or, if such distribution has
         previously been deposited in an individual retirement account (as
         defined in Section 408 of the Code), the contribution occurs on or
         before the 60th day following his receipt of such distribution from the
         individual retirement account; and

                  (b) If the amount contributed has not previously been
         deposited in an individual retirement account, the maximum amount of
         such contribution shall be the fair market value of that portion of the
         distribution which would be includable in gross income if not so
         contributed.

         The Committee shall develop such procedures, and may require such
information from a Participant desiring to make such a contribution or direct
transfer, as it deems necessary or desirable to determine that the proposed
contribution or transfer will meet the requirements of this Section 4.7. Upon
approval by the Committee, the amount contributed or transferred shall be
deposited in the Trust and shall be credited, as of the Valuation Date next
following such contribution or transfer, to a Rollover Contribution Account for
the Participant.

         An Employee in an eligible class to participate in the Plan, whether or
not he has satisfied the eligibility conditions of the Plan, as set forth in
Section 3.1 hereof, may make a Rollover Contribution to the Trust Fund to the
same extent and in the same manner as a Participant. If such Employee makes a
Rollover Contribution to the Trust Fund prior to satisfying the Plan's
eligibility conditions, the Committee and Trustee shall treat the Employee as a
Participant for all purposes of the Plan except for purposes of sharing in
contributions until he actually becomes a



                                       26
<PAGE>   32
Participant. If the Employee terminates employment prior to becoming a
Participant, the Trustee will distribute his Rollover Contribution Account to
him in accordance with the provisions of Article XIII hereof, as if such
Employee were a Participant of the Plan.

         Each Participant's or Employee's Rollover Contribution Account shall be
100% vested and nonforfeitable at all times, and shall share in asset
adjustments pursuant to Section 5.2 herein, but shall not share in
contributions. Upon termination of employment, the total amount of a
Participant's Rollover Contribution Account shall be distributed in accordance
with Article XIII hereof.

         4.8 Prior Plan Employee Contributions: As of July 1, 2000, Prior Plan
Employee Contributions shall be neither required nor permitted under this Plan.
Prior Plan Employee Contributions which have previously been made shall at all
times be fully vested and nonforfeitable, shall be credited to the Participant's
Prior Plan Employee Contribution Account, shall in due course be included in the
adjustment of Individual Accounts, as provided in Section 5.2, and shall share
in the gains and losses of the Trust Fund. All Prior Plan Employee Contributions
shall be invested in the Frozen Company Stock Fund, as provided in Section
14.5(c).

         4.9 Prior Plan Employer Contributions: As of July 1, 2000, Prior Plan
Employer Contributions shall be neither required nor permitted under this Plan.
Prior Plan Employer Contributions which have previously been made shall at all
times be fully vested and nonforfeitable, shall be credited to the Participant's
Prior Plan Employer Contribution Account, shall in due course be included in the
adjustment of Individual Accounts, as provided in Section 5.2, and shall share
in the gains and losses of the Trust Fund. All Prior Plan Employer



                                       27
<PAGE>   33

Contributions shall be invested in the Frozen Company Stock Fund, as provided in
Section 14.5(c).


                                    ARTICLE V

                        Adjustment of Individual Accounts

         5.1 Individual Accounts: The Committee shall establish an Individual
Account for each Participant showing the monetary value of the individual
interest in the Trust Fund of each Employee, former Employee and Beneficiary.
The Individual Account of each Participant shall be composed of a Company
Matching Contribution Account, to which Company Matching Contributions, if any,
shall be credited and a Salary Reduction Contribution Account, to which Salary
Reduction Contributions, if any, shall be credited, together with Company
Matching Contributions, if any, utilized to satisfy the deferral percentage test
or the contribution percentage test, as set forth in Sections 4.5 and 4.6
hereof. Qualified Nonelective Contributions, if any, contributed to satisfy the
deferral percentage test or the contribution percentage test as set forth in
Section 4.5 and 4.6 hereof, shall be credited to a Participant's Qualified
Nonelective Contribution Account. If an individual has made either Prior Plan
Employee Contributions or Rollover Contributions, or received Prior Plan
Employer Contributions, then his Individual Account shall include a Prior Plan
Employee Contribution Account, a Rollover Contribution Account and a Prior Plan
Employer Contribution Account, as applicable.

         5.2 Method of Adjustment: The Committee, or the Trustee or Investment
Manager, as directed by the Committee, shall value the assets of the Trust Fund
on each Valuation Date. In making such valuation, the Committee, or the Trustee,
as the case might be, shall arrive at the fair market value of each investment
fund in the Trust Fund. As of each Valuation Date, before any restoration of
accounts as required pursuant to Section 13.3 hereof and before taking into



                                       28
<PAGE>   34

account the contributions of the Employer and forfeitures for the period since
the last preceding Valuation Date, the Committee shall adjust all Individual
Accounts as follows:

                  (a) The Committee shall determine the market value of each
         investment fund in the Trust Fund, including the effect of expenses of
         administration and other charges against such fund since the last
         Valuation Date.

                  (b) The Committee shall determine the total aggregate value of
         all Individual Accounts participating in the investment fund as shown
         in its records as of the prior Valuation Date. The Individual Account
         balances of Employees, former Employees and Beneficiaries shall be
         reduced by any amounts paid to them from the investment fund since the
         last Valuation Date.

                  (c) The Committee shall then adjust the value of each
         Individual Account participating in the investment fund by crediting
         each Individual Account with its proportion of the difference between
         (a) and (b) if (a) is the larger or charging it with its proportion of
         the difference between (a) and (b) if (b) is larger; the proportion to
         be so credited or charged to each Individual Account shall be
         calculated by multiplying the difference between (a) and (b) by a
         fraction, the numerator of which is the value of said Individual
         Account and the denominator of which is the aggregate value of all
         Individual Accounts.

         5.3 Payroll Withholding Agreements: Each Participant who elects to make
Salary Reduction Contributions shall enter into a payroll withholding agreement
between the Participant and the Employer, to be effective as of the first day of
the first payroll period for which he elects Salary Reduction Contributions.
Such agreement must be made prior to the first day of such



                                       29
<PAGE>   35

payroll period, and shall be effective for each payroll period thereafter until
modified or amended, as provided below.

         The terms of such agreement shall provide that the Participant agrees
to have the Employer withhold from his compensation each payroll period an
amount, expressed as any whole percentage of his Annual Compensation which does
not exceed the limitations of Article IV. In consideration of such agreement,
the Employer will make a contribution to the Trust Fund on behalf of the
Participant for each payroll period in an amount equal to the total amount by
which the Participant's Annual Compensation from the Employer was reduced during
such payroll period pursuant to the payroll withholding agreement. In the event
that a payroll withholding agreement for a Participant is not received, the
Participant is deemed to have completed a payroll withholding agreement in
accordance with Section 4.1.

         Notwithstanding the above, payroll withholding agreements shall be
governed by the following general guidelines:

                  (a) A payroll withholding agreement shall apply to each
         payroll period during which an effective agreement is in place. Upon
         termination of employment, such agreement will become void.

                  (b) A Participant may revoke his payroll withholding agreement
         at any time upon reasonable advance notice to the Committee, and thus
         discontinue all future withholding thereafter. A resumption of
         withholding following the revocation of a payroll withholding agreement
         may be made only upon advance notice to the Committee, within the time
         period established and in the manner prescribed by the Committee, such
         notice to be in the form of a new payroll withholding agreement, and
         shall be effective as of the first day of the first full payroll period
         beginning thereafter. A Participant may



                                       30
<PAGE>   36

         increase the percentage to be withheld from his Annual Compensation or
         decrease the percentage to be withheld from his Annual Compensation
         upon reasonable advance notice to the Committee, such increase or
         decrease to be effective as of the first full payroll period beginning
         thereafter. Any revocation of or change in the terms of a payroll
         withholding agreement shall be made in the manner prescribed by the
         Committee.

                  (c) An Employer may unilaterally amend or revoke a payroll
         withholding agreement with any Participant at any time, if the Employer
         determines that such revocation or amendment is necessary to insure
         that a Participant's Annual Additions, as defined in Section 6.6(b)
         hereof, for any Plan Year will not exceed the limitations of Article VI
         or to insure that the requirements of Section 401(k) of the Code have
         been satisfied with respect to the amount which may be withheld and
         contributed on behalf of a Highly Compensated Employee.


                                   ARTICLE VI

                                   ALLOCATIONS

         6.1 Salary Reduction and Rollover Contributions: Salary Reduction
Contributions shall be credited to the Salary Reduction Contribution Accounts of
Participants and former Participants, as of the Valuation Date coinciding with
the date on which Salary Reduction Contributions are received by the Trust Fund,
or as soon thereafter as administratively feasible, in accordance with each
Participant's or former Participant's payroll withholding agreement. Rollover
Contributions shall be credited to the Individual Accounts of Participants and
Employees as provided in Section 4.7 hereof.

         6.2 Company Matching Contributions: Company Matching Contributions for
the period ending on the last day of each month shall be credited to the Company
Matching



                                       31
<PAGE>   37

Contribution Accounts of all eligible Participants as of the Valuation Date
coinciding with the date on which Company Matching Contributions are received by
the Trust Fund or as soon thereafter as administratively feasible. The amount of
the Company Matching Contribution, if any, allocated to the Company Matching
Contribution Account of each eligible Participant shall be that percentage of
such eligible Participant's Salary Reduction Contributions specified by the
board of directors of the Company in accordance with Section 4.2.

         6.3 Qualified Nonelective Contributions: As of each Allocation Date,
but after any adjustment of Individual Accounts, as provided in Section 5.2, and
other applicable provisions herein, the Committee shall allocate Qualified
Nonelective Contributions, if any, for the Plan Year ending with said Allocation
Date to the Qualified Nonelective Contribution Accounts of all Participants who
are not Highly Compensated Employees for the Plan Year, except those
Participants who terminated employment prior to the Allocation Date. The amount
of the contribution allocated under this Section 6.3 to the Qualified
Nonelective Contribution Account of each such Participant shall be in the
proportion that his Annual Compensation bears to the total Annual Compensation
of all such Participants.

         6.4 Allocation of Forfeitures: If a Participant forfeits a portion of
his Individual Account as provided in Section 10.3 hereof, then said forfeited
amount shall be used first to restore the Individual Accounts of rehired
Participants, as required under Section 13.3 hereof. Any remaining forfeitures
shall be utilized to reduce the Employer's obligation, if any, to make Company
Matching Contributions pursuant to the terms of the Plan. If a Participant who
does not have any nonforfeitable right to his Individual Account terminates his
employment and thereby forfeits his Individual Account, then in the event such
Participant is re-employed before he has incurred five (5) or more consecutive
Breaks in Service, his Individual Account which



                                       32
<PAGE>   38

was forfeited shall again be credited to his account by his Employer at the time
of his re-employment.

         6.5 Notification to Participants: At least annually, the Committee
shall advise each Participant, former Participant and Beneficiary for whom an
Individual Account is held hereunder of the then balance in such account.

         6.6 Maximum Annual Addition to Account or Benefit:

                  (a) Where Employer Maintains Another Qualified Defined
         Contribution Plan: If an Employer maintains, or has ever maintained,
         this Plan and one or more other qualified defined contribution plans,
         the Annual Additions allocated under this Plan to any Participant's
         Individual Account shall be limited in accordance with the allocation
         provisions of this Section 6.6(a).

                  The amount of the Annual Additions which may be allocated
         under this Plan to any Participant's Individual Account as of any
         Allocation Date shall not exceed the Maximum Permissible DC Amount
         (based upon compensation up to such Allocation Date) reduced by the sum
         of any allocations of Annual Additions made to the Participant's
         Individual Account under this Plan and any other such plans maintained
         by the Employer as of any preceding allocation date within the
         Limitation Year.

                  If an Allocation Date of this Plan coincides with an
         allocation date of any other plan described in the above paragraph,
         the amount of Annual Additions to be allocated on behalf of a
         Participant under this Plan as of such date shall be an amount equal to
         the product of the amount described in the next preceding paragraph
         multiplied by a fraction (not to exceed 1.0), the numerator of which is
         the amount to be allocated under this Plan without regard to this
         Article during the Limitation Year and the denominator of which is



                                       33
<PAGE>   39

         the amount that would otherwise be allocated on this Allocation Date
         under all plans without regard to this Section 6.6.

                  If the Annual Addition allocated on behalf of a Participant
         under this Plan is to be reduced as of any Allocation Date as a result
         of exceeding the limitations described in the next preceding two
         paragraphs, such reduction shall be, to the extent required, effected
         by first reducing Salary Reduction Contributions, and earnings
         attributable thereto, and then by reducing any Company Matching
         Contributions to be allocated under this Plan on behalf of such
         Participant as of such Allocation Date.

                  If as a result of the first four paragraphs of this Section
         6.6(a) the allocation of Annual Additions is reduced, such reduction
         shall be made as follows:

                           (i) To the extent permitted under applicable Treasury
                  Regulations, the amount of such reduction consisting of Salary
                  Reduction Contributions, and earnings attributable thereto,
                  shall be paid to the Participant as soon as administratively
                  feasible.

                           (ii) The amount of such reduction consisting of
                  Company Matching Contributions shall be allocated and
                  reallocated to the Individual Accounts of the other
                  Participants in the proportion that each Participant's
                  compensation bears to the total compensation of all such
                  Participants' compensation for such Plan Year to the extent
                  that such allocations do not cause the Annual Additions to any
                  such other Participant's Individual Account to exceed the
                  lesser of the Maximum Permissible DC Amount or any other
                  limitation provided in the Plan.



                                       34
<PAGE>   40

                  (b) Definitions Applicable to Section 6.6.

                           (i) Annual Additions: Annual Additions are the sum of
                  the following amounts allocated on behalf of a Participant for
                  a Limitation Year:

                                    (1) all Company Matching Contributions;

                                    (2) all forfeitures, if applicable;

                                    (3) all Salary Reduction Contributions; and

                                    (4) amounts allocated after March 31, 1984,
                           to an individual medical account, as defined in
                           Section 415(l)(2) of the Code which is part of a
                           pension or annuity plan maintained by the Employer,
                           and amounts derived from contributions paid or
                           accrued after December 31, 1985, in taxable years
                           ending after such date, which are attributable to
                           post-retirement medical benefits allocated to the
                           separate account of a key employee (as defined in
                           Section 419(d)(3) of the Code) under a welfare
                           benefit plan (as defined in Section 419(e) of the
                           Code) maintained by the Employer.

                           The Annual Additions for any Limitation Year
                  beginning before January 1, 1987, shall not be recomputed to
                  treat all Prior Plan Employee Contributions as Annual
                  Additions.

                           (ii) Employer: Employer shall mean, in addition to an
                  Employer (as defined in Section 2.1(r) hereof), any and all
                  Affiliates of an Employer.

                           (iii) Limitation Year: The Limitation Year shall be
                  the twelve (12) consecutive month period ending on the last
                  day of June or any other twelve (12)



                                       35
<PAGE>   41

                  consecutive month period for all qualified plans of an
                  Employer pursuant to a written resolution the Employer adopts.

                  (c) Maximum Permissible DC Amount: The Maximum Permissible DC
         Amount for a given Limitation Year is equal to the lesser of (i) 25% of
         compensation for the Limitation Year (as defined in Section 2.1(v)
         hereof, but, for Limitation Years ending prior to July 1, 1998,
         excluding contributions made by the Employer pursuant to a salary
         reduction agreement under a plan subject to Section 401(k) or 125 of
         the Code) applicable to such Limitation Year or (ii) $30,000, as
         adjusted. If a short Limitation Year is created because of an amendment
         changing the Limitation Year to a different twelve (12) consecutive
         month period, the $30,000 referred to in the previous sentence is
         multiplied by a fraction, the numerator of which is equal to the number
         of months in the short Limitation Year and the denominator of which is
         12.


                                   ARTICLE VII

                                   RETIREMENT

         7.1 Normal or Late Retirement: A Participant, upon reaching his Normal
Retirement Date for the purposes of this Plan, shall be entirely vested in his
Individual Account and such amount contained therein shall be nonforfeitable. If
a Participant continues in the employment of an Employer beyond his Normal
Retirement Date, he shall continue to participate in the Plan.

         7.2 Benefit: Upon Retirement (whether normal or late Retirement in
accordance with Section 7.1), a Participant shall be entitled to the entire
amount to the credit of his Individual Account as of the Valuation Date
concurrent with or next preceding his date of Retirement, together with his
portion, if any, of Salary Reduction Contributions and Company Matching
Contributions allocated after his date of Retirement, adjusted for earnings and
losses, if any,



                                       36
<PAGE>   42

which accrue to the Valuation Date immediately preceding the date of
distribution, if later. Upon his Retirement under this Article VII, a
Participant shall receive the benefits to which he is entitled at the time and
in the manner provided in Article XIII hereof.


                                  ARTICLE VIII

                                      DEATH

         8.1 Designation of Beneficiary: Each Participant and former Participant
may, from time to time, designate one or more Beneficiaries and alternate
Beneficiaries to receive benefits pursuant to this Article in the event of the
death of such Participant or former Participant. Such designation shall be made
in writing upon a form provided by the Committee and shall only be effective
when filed with the Committee. The last such designation filed with the
Committee shall control. If a Participant is married, his spouse shall
automatically be his Beneficiary; provided, however, a Beneficiary other than
his spouse may be designated if (a) his spouse consents in writing to such
designation, the consent acknowledges the effect of such designation and the
designation is witnessed by a member of the Committee or a notary public, or (b)
it is established to the satisfaction of the Committee that there is sufficient
reason why the consent may not be obtained.

         8.2 Benefit: Upon the death of a Participant or former Participant, his
designated Beneficiary or Beneficiaries shall be entitled to the entire vested
amount to the credit of his Individual Account as of the Valuation Date
concurrent with or next preceding his date of death, together with his portion,
if any, of Salary Reduction Contributions and Company Matching Contributions
allocated after his date of death, adjusted for earnings and losses, if any,
which accrue to the Valuation Date immediately preceding the date of
distribution, if later. Payment shall be made at the time and in the manner
provided in Article XIII hereof.



                                       37
<PAGE>   43

         8.3 No Beneficiary: If a Participant or former Participant dies without
a designated Beneficiary surviving him, or if all his Beneficiaries die before
receiving the payment to which they are entitled, then the Committee is hereby
empowered to designate a Beneficiary or Beneficiaries on his behalf, but only
from among the following with priority in the order named by number which shall
include persons legally adopted:

                  (a) his spouse;

                  (b) his children and children of deceased children, per
         stirpes (by right of representation);

                  (c) his parents;

                  (d) his brothers and sisters, and nephews and nieces who are
         children of deceased brothers and sisters, per stirpes (by right of
         representation); and

                  (e) his legal representative properly appointed by the
         appropriate court upon his death.

Neither the Employer nor the Trustee shall be named as Beneficiary.

         For the purpose of this Plan, the production of a certified copy of the
death certificate of any Employee or other person shall be sufficient evidence
of death, and the Committee shall be fully protected in relying thereon. In the
absence of such proof, the Committee may rely upon such other evidence of death
as it deems necessary or advisable.


                                   ARTICLE IX

                                   DISABILITY

         9.1 Benefit: In the event of the Disability of a Participant, he shall
be entitled to the entire vested amount to the credit of his Individual Account
as of the Valuation Date concurrent with or next preceding the date on which his
employment terminates as a result of his Disability,



                                       38
<PAGE>   44

together with his portion, if any, of Salary Reduction Contributions and Company
Matching Contributions allocated after the date of his termination of
employment, adjusted for earnings and losses, if any, which accrue to the
Valuation Date immediately preceding the date of distribution, if later.
Payments shall be made at the time and in the manner provided in Article XIII
hereof. A Participant who suffers a Disability who has not terminated employment
may request an in-service withdrawal in accordance with Section 13.10 hereof.


                                    ARTICLE X

                    TERMINATION OF EMPLOYMENT AND FORFEITURES

         10.1 Eligibility and Benefits: If a Participant's employment with his
Employer and all Affiliates shall terminate for any reason other than his
Retirement under Article VII, death under Article VIII, or Disability under
Article IX, such Participant shall be entitled to the entire amount to the
credit of his Salary Reduction Contribution Account, Prior Plan Employee
Contribution Account, Prior Plan Employer Contribution Account, Rollover
Contribution Account and Qualified Nonelective Contribution Account and to a
percentage of the amount in his Company Matching Contribution Account as of the
Valuation Date coincident with or next preceding the date of such termination,
together with his portion, if any, of Salary Reduction Contributions and Company
Matching Contributions allocated after the date of his termination of
employment, adjusted for earnings and losses, if any, which accrue to the
Valuation Date immediately preceding the date of distribution, if later. The
percentage of such amount in his Company Matching Contribution Account to which
he is entitled shall be determined in accordance with the following schedule:



                                       39
<PAGE>   45

<TABLE>
<CAPTION>
                                                               Percentage
                   Completed Years of Service                   Payable
                   --------------------------                  ----------
<S>                                                            <C>
                   1 year but less than 2 years                    33%
                   2 years but less than 3 years                   67%
                   3 years or more                                100%
</TABLE>

         The provisions of this Section 10.1 shall be subject to the provisions
of Section 15.3 hereof, which shall be given full effect. Notwithstanding the
foregoing, each Participant in the Plan who was a Participant in the Prior Plan
on or before June 30, 2000 shall be 100% vested in his Company Matching
Contribution Account under the Plan.

         10.2 Time of Payment: The amount to which a Participant shall be
entitled under Section 10.1 shall be paid to him at the time and in the manner
provided in Article XIII hereof.

         10.3 Forfeitures: A Participant to whom Section 10.1 is applicable
shall forfeit that portion of the amount in his Individual Account to which he
is not entitled under Section 10.1 and the amount thus forfeited shall remain in
the Trust Fund and shall be allocated pursuant to the provisions of Section 6.4.
A Participant who does not have any nonforfeitable right to his Individual
Account shall be deemed to have received a cashout distribution pursuant to
Section 13.3 hereof, and shall forfeit the amount in such Individual Account in
the Plan Year in which his termination of employment occurs. A Participant who
receives a cashout distribution in accordance with the provisions of Section
13.3 hereunder shall forfeit that portion of his Individual Account to which he
is not entitled under Section 10.1 in the Plan Year in which the cashout
distribution occurs. A Participant who is entitled to a portion of his
Individual Account but who is not one hundred percent (100%) vested in such
Individual Account, and who does not receive a cashout distribution under
Section 13.3, shall forfeit that portion of his Individual Account to which he
is not entitled under Section 10.1 in the Plan Year in which he incurs five (5)
consecutive Breaks in Service.



                                       40
<PAGE>   46

                                   ARTICLE XI

                                 ADMINISTRATION

         11.1 Appointment of Committee: The Plan shall be administered by a
committee known as the "Administrative Committee," hereinafter referred to as
the "Committee" consisting of at least one or more persons who shall be
appointed by and serve at the pleasure of the board of directors of the
Company. At least one of the members of the Committee shall be an outside
director on the board of directors of the Company. All usual and reasonable
expenses of the Committee may be paid in whole or in part by the Employer, and
any expenses not paid by the Employer shall be paid by the Trustee out of the
principal or income of the Trust. The members of the Committee shall not
receive compensation with respect to their services for the Committee;
provided, however, that any member of the Committee who is an outside director
on the board of directors of the Company shall be paid usual and reasonable
director's committee fees by the Company. The members of the Committee shall
serve without bond or security for the performance of their duties hereunder
unless the applicable law makes the furnishing of such bond or security
mandatory or unless required by the Company. Each member of the Committee shall
hold office until his death, disability, resignation or removal from office.
Any member of the Committee may be removed by the Company at its pleasure. Any
member may resign by delivering his written resignation to the Company and to
the other members of the Committee.

         11.2 Committee Powers and Duties: The Committee shall have such powers
as may be necessary to discharge its duties hereunder, including, but not by
way of limitation, the following powers and duties:


                                      41

<PAGE>   47


                  (a) to construe and interpret the Plan, decide all questions
         of eligibility and determine the amount, manner and time of payment of
         any benefits hereunder;

                  (b) to prescribe procedures to be followed by distributees in
         obtaining benefits;

                  (c) to make a determination as to the right of any person to
         a benefit and to afford any person dissatisfied with such
         determination the right to a hearing thereon;

                  (d) to receive from the Employer and from Participants such
         information as shall be necessary for the proper administration of the
         Plan;

                  (e) to delegate to one or more of the members of the
         Committee or the Plan Administrator the right to act in its behalf in
         all matters connected with the administration of the Plan and Trust;

                  (f) to receive and review reports of the financial condition
         and of the receipts and disbursements of the Trust Fund from the
         Trustee;

                  (g) to appoint or employ for the Plan any agents it deems
         advisable, including, but not limited to, legal counsel; and

                  (h) to take any and all further actions from time to time as
         the Committee, in its sole and absolute discretion, shall deem
         necessary for the proper administration of the Plan.

                  The Committee shall have no power to add to, subtract from or
         modify any of the terms of the Plan, nor to change or add to any
         benefits provided by the Plan, nor to waive or fail to apply any
         requirements of eligibility for benefits under the Plan. The Committee
         shall have full and absolute discretion in the exercise of each and
         every aspect of its

                                      42

<PAGE>   48


         authority under this Plan, including without limitation, all of the
         rights, powers and authorities specified in this Section 11.2 and, if
         applicable, in Section 11.3 hereof.

                  A majority of the members of the Committee shall constitute a
         quorum for the transaction of business. No action shall be taken
         except upon a majority vote of the Committee members. Except when
         there is only one member of the Committee, an individual shall not
         vote or decide upon any matter relating solely to himself or vote in
         any case in which his individual right or claim to any benefit under
         the Plan is particularly involved. If, in any case in which a
         Committee member is so disqualified to act, and the remaining members
         cannot agree, the board of directors of the Company will appoint a
         temporary substitute member to exercise all the powers of the
         disqualified member concerning the matter in which he is disqualified.

         11.3 Duties and Powers of the Plan Administrator: The Plan
Administrator shall have such powers as may be necessary to discharge his
duties hereunder, including, but not by way of limitation, the following powers
and duties:

                  (a) to file with the Secretary of Labor the annual report,
         plan description, summary plan description, and other pertinent
         documents which may be requested by the Secretary;

                  (b) to file with the Secretary of Labor such terminal and
         supplementary reports as may be necessary in the event of the
         termination of the Plan;

                  (c) to furnish each Participant and each Beneficiary
         receiving benefits hereunder a summary plan description explaining the
         Plan;


                                       43


<PAGE>   49



                  (d) to furnish any Participant or Beneficiary, who requests
         in writing, statements indicating such Participant's or Beneficiary's
         total accrued benefits and nonforfeitable benefits, if any;

                  (e) to furnish to a Participant a statement containing
         information contained in a registration statement required by Section
         6057(a)(2) of the Code;

                  (f) to maintain all records necessary for verification of
         information required to be filed with the Secretary;

                  (g) to allocate the assets of the Plan available to provide
         benefits to Participants in the event the Plan should terminate; and

                  (h) to report to the Trustee all available information
         regarding the amount of benefits payable to each Participant, the
         amount of benefits guaranteed, the computations with respect to the
         allocation of assets, and any other information which the Trustee may
         require in order to terminate the Plan.

         11.4 Rules and Decision: The Committee may adopt such rules as it deems
necessary or desirable. All rules and decisions of the Committee shall be
uniformly and consistently applied to all Employees in similar circumstances.
The Committee is required to provide a notice in writing to any person whose
claim for benefits under the Plan has been denied, setting forth the specific
reasons for such denial. The Committee shall adopt rules or procedures to carry
out the intent of this Section and to provide a basis for a full and fair
review by the Committee of the decision denying the claim and provide such
person with an opportunity to supply any evidence he has to sustain the claim.

         11.5 Committee Procedures: The Committee shall adopt such bylaws as it
deems desirable. The Committee shall elect one of its members as chairman and
shall elect a secretary


                                      44

<PAGE>   50


who may, but need not, be a member of the Committee. The Committee shall advise
the Trustee of such elections in writing. The Secretary of the Committee shall
keep a record of all meetings and forward all necessary communications to the
Trustee.

         11.6 Authorization of Benefit Payments: The Committee shall issue
directions to the Trustee concerning all benefits which are to be paid from the
Trust Fund pursuant to the provisions of the Plan. The Committee shall keep on
file, in such manner as it may deem convenient or proper, all reports from the
Trustee.

         11.7 Payment of Expenses: All expenses incident to the administration
or protection of the Plan and Trust, including but not limited to, actuarial,
legal, accounting, and Trustee's fees, shall be paid by the Employer, or if not
paid by the Employer, shall be paid by the Trustee from the Trust Fund and,
until paid, shall constitute a first and prior claim and lien against the Trust
Fund.

         11.8 Indemnification of Members of the Committee: The Company shall
indemnify the members of the Committee against any liability or loss sustained
by them by any act or failure to act in their capacity as members of the
Committee, unless the same is judicially determined to be due to the gross
negligence, willful misconduct or willful failure to act of such member. Such
indemnification shall include attorney's fees reasonably incurred by such
members of the Committee in defense of any action brought against them by
reason of any such act or failure to act.


                                  ARTICLE XII

                                    NOTICES

         12.1 Notice to Trustee: As soon as practicable after a Participant
ceases to be in the employ of an Employer for any of the reasons set forth in
Articles VII through X, inclusive, the


                                       45


<PAGE>   51


Committee shall give notice to the Trustee, which notice shall include such of
the following information and directions as are necessary or advisable under
the circumstances:

                  (a) name and address of the Participant;

                  (b) reason Participant ceased to be in the Employer's employ;

                  (c) name and address of the Beneficiary or Beneficiaries in
         case of a Participant's death;

                  (d) percentage or amount to which Participant is entitled in
         case of termination of employment pursuant to Article X;

                  (e) time, manner and amount of payments to be made pursuant
         to Article XIII.

         If a former Participant dies, the Committee shall give a like notice to
the Trustee, but only if the Committee learns of his death.

         12.2 Subsequent Notices: At any time and from time to time after
giving the notice as provided for in Section 12.1, the Committee may modify
such original notice or any subsequent notice by means of a further notice or
notices to the Trustee; but, any action taken or payments made by the Trustee
pursuant to a prior notice shall not be affected by a subsequent notice.

         12.3 Reliance upon Notice: Upon receipt of any notice as provided in
this Article, the Trustee shall promptly take whatever action and make whatever
payments are called for therein, it being intended that the Trustee may rely
upon the information and directions in such notice absolutely and without
question. However, the Trustee may call to the attention of the Committee any
error or oversight which the Trustee believes to exist in any notice.


                                      46

<PAGE>   52

                                  ARTICLE XIII

                      DISTRIBUTIONS, WITHDRAWALS AND LOANS

         13.1 Method of Payment: As soon as practicable after a Participant,
former Participant or Beneficiary is entitled to receive benefits hereunder, as
provided in Articles VII, VIII, IX, X or this Article XIII, the Committee
shall give notice to the Trustee. Subject to Section 13.5 hereof, the Committee
shall direct that such benefits shall be paid to the Participant or his
Beneficiary in one of the following ways, or in any combination thereof, as
such Participant or Beneficiary shall direct:

                  (a) lump sum, payable in cash or in Company Stock, or partly
         in cash and partly in Company Stock, where applicable;

                  (b) payment in monthly installments over any designated
         period of years, not to exceed ten (10) years, or, if shorter, the
         life expectancy of the Participant, or the joint life expectancy of
         the Participant and his designated beneficiary, with any unpaid
         balance at the date of the Participant's death to be payable to the
         surviving beneficiary designated by such Participant.

         If a Participant's interest is to be distributed in other than a lump
sum, then the amount to be distributed each year must be at least an amount
equal to the quotient obtained by dividing the Participant's entire interest by
the life expectancy of the Participant or the joint life expectancy of the
Participant and his designated Beneficiary. The minimum distribution shall be
computed by reference to the expected return multiples in Tables V and VI of
Treasury Regulation Section 1.72--9. For purposes of this computation, a
Participant's life expectancy, and that of his spouse, may be redetermined, no
more frequently than annually, as provided below; however, the life expectancy
of a nonspouse Beneficiary may not be recalculated. Unless otherwise elected

                                      47

<PAGE>   53

by the Participant or, if applicable, his spouse, by the time distributions are
required to begin, life expectancies shall not be recalculated. If such an
election is timely made, then applicable life expectancies shall be
recalculated annually. Such election shall be irrevocable as to the Participant
and, if applicable, his spouse, and shall apply to all subsequent years. Life
expectancy or, if applicable, joint and last survivor expectancy shall be
calculated using the attained age of the Participant and, if applicable, that
of his designated Beneficiary as of the Participant's and, if applicable, the
designated Beneficiary's birthday in the first calendar year for which a
distribution is required, reduced by one for each calendar year which has
elapsed since the date life expectancy was first calculated; provided that if
life expectancy is being recalculated, as described above, the applicable life
expectancy shall be life expectancy as so recalculated.

         For calendar years beginning before January 1, 1989, if the
Participant's spouse is not the designated Beneficiary, the method of
distribution selected must assure that at least 50% of the present value of the
total amount available for distribution is paid within the life expectancy of
the Participant. For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with distributions for the first
calendar year for which a minimum distribution is required, shall not be less
than the quotient obtained by dividing the Participant's benefit by the
applicable life expectancy or, if the Participant's spouse is not the designated
Beneficiary, by the lesser of the applicable life expectancy or the applicable
divisor determined from the table set forth in Q&A-4 of Section 1.401 (a)(9)-2
of the Treasury Regulations; provided that distributions after the death of the
Participant shall be distributed using the applicable life expectancy as the
relevant divisor.

         13.2 Time of Payment: After a Participant, former Participant, former
Participant or Beneficiary is entitled to receive benefits hereunder, as
provided in Articles VII, VIII, IX or X,


                                      48

<PAGE>   54


benefits shall commence for such Participant or Beneficiary, subject to the
requirements herein, as soon as practicable following receipt by the Committee
of the Participant's or Beneficiary's request for distribution. In the event
that the vested portion of a Participant's Individual Account does not exceed
Five Thousand and No/l00 Dollars ($5,000.00), distribution of such
Participant's benefits shall be made in a lump sum as soon as reasonably
practicable following the Participant's termination of employment. In the event
that the vested portion of a Participant's Individual Account exceeds (or at
the time of any prior distribution exceeded) Five Thousand and No/100 Dollars
($5,000.00), no distributions may commence without the Participant's written
consent, as described below, until the Participant attains his Normal
Retirement Age. Such consent must be obtained in writing within the ninety (90)
day period ending on the date of distribution. The Committee shall notify the
Participant of the right to defer any distribution until he attains Normal
Retirement Age. Such notification shall include a general description of the
material features, and an explanation of the relative values of, the optional
forms of benefit available under the Plan in a manner that would satisfy the
notice requirements of Section 417(a)(3) of the Code, and shall be provided no
less than thirty (30) days and no more than ninety (90) days prior to the date
of distribution. Notwithstanding the foregoing, the consent of the Participant
shall not be required to the extent that a distribution is required to satisfy
Section 415 or Sections 401(k)(8) or 401(m)(6) of the Code. In addition, upon
termination of this Plan if the Plan does not then offer an annuity option, the
Participant's Individual Account may, without the consent of the Participant,
be distributed to the Participant or transferred to another defined
contribution plan within the same controlled group, as defined in Section 4
14(b) or (c) of the Code. Furthermore, if a distribution is one to which
Sections 401(a)(l1) and 417 of the Code do not apply, such distribution may
commence less than thirty (30) days after the notice required

                                      49

<PAGE>   55
under Section 1.411(a)-11(c) of the Treasury Regulations is given, provided
that: (a) the Committee clearly informs the Participant that he has a right to a
period of at least thirty (30) days after receiving the notice to consider the
decision of whether or not to elect a distribution (and, if applicable, a
particular distribution option), and (b) the Participant, after receiving the
notice, affirmatively elects a distribution.

         Distributions shall commence no later than the required beginning date,
which, effective January 1, 1997, is April 1st of the calendar year following
the later of: (i) the calendar year in which the Participant attains age 70 1/2,
or (ii) the calendar year in which the participant retires; provided that if a
Participant is a Five Percent (5%) Owner (as defined in Section 17.1(g) hereof),
then the required beginning date is April 1st of the calendar year following the
calendar year in which such Participant attains age 70 1/2. The minimum
distribution required for the calendar year immediately preceding the
Participant's required beginning date must be made on or before the
Participant's required beginning date. The minimum distribution for other
calendar years, including the minimum distribution for the calendar year in
which the Participant's required beginning date occurs, must be made on or
before December 31 of such calendar year. All minimum distributions required
under this Article XIII shall be determined and made in accordance with the
applicable Treasury Regulations under Section 401(a)(9) of the Code, including
the minimum distribution incidental benefit requirement of Section l.401(a)(9)-2
of the Treasury Regulations.

         Notwithstanding any provision herein to the contrary, any Participant
who attains age 70 1/2 in a calendar year after 1995 and prior to 1999, may
irrevocably elect, in the manner established by the Committee, by April 1 of
the calendar year following the year in which the Participant attains age
70 1/2 (or by December 31, 1997 in the case of a Participant who attains age


                                      50

<PAGE>   56


70 1/2 in 1996) to defer distributions until April 1 of the calendar year
following the calendar year in which the Participant retires. If no such
election is made, the Participant will begin receiving distributions by the
April 1 of the calendar year following the year in which the Participant
attains age 70 1/2 (or by December 31, 1997 in the case of a Participant who
attains age 70 1/2 in 1996). Furthermore, any Participant who attains age
70 1/2 in a calendar year prior to 1996, may irrevocably elect, in the manner
established by the Committee, to stop distributions and recommence distributions
as of the April 1 of the calendar year following the calendar year in which such
Participant retires. In such event, there shall be no new annuity starting date
upon such recommencement. Finally, any Participant who attains age 70 1/2 in a
calendar year after 1998 shall have an affirmative election to irrevocably
commence distributions hereunder at any time thereafter, in the manner
established by the Committee, and in a method of payment set forth in Section
13.1.

         If distributions have commenced so that payments are being made over
the life of the Participant, and the Participant dies before his entire
interest has been distributed, then the remaining portion of such interest
shall be distributed at least as rapidly as under the method of distribution
being used as of the date of his death. On the other hand, if the Participant
dies before the distribution of any of his benefits has begun, then the entire
interest of the Participant must be distributed no later than December 31 of
the calendar year containing the fifth anniversary of his death; except that if
any portion of the Participant's interest is payable to a designated
Beneficiary, such portion may be distributed over the life of such designated
Beneficiary (or over a period not extending beyond the life expectancy of such
Beneficiary); provided that such distribution must begin not later than
December 31 of the calendar year immediately following the calendar year of the
Participant's death. If the designated Beneficiary

                                      51

<PAGE>   57


is the Participant's surviving spouse and such surviving spouse dies after the
Participant, but before payments to such surviving spouse begin, then the
provisions of the preceding sentence shall be applied as if the surviving
spouse were the Participant. Furthermore, if the designated Beneficiary is the
surviving spouse of the Participant, then distribution to such surviving spouse
will not be required to begin earlier than the later of: (1) December 31 of the
calendar year immediately following the calendar year of the Participant's
death and (2) December 31 of the calendar year in which the Participant would
have attained age 70 1/2. If the Participant has not elected, prior to his
death, which method of distribution will apply to determine the commencement
and period of payment, as described above, then the designated Beneficiary must
elect such method no later than the earlier of (A) December 31 of the calendar
year in which distributions would be required to begin under the preceding
provisions of this paragraph, or (B) December 31 of the calendar year which
contains the fifth anniversary of the Participant's date of death. If the
Participant has no designated Beneficiary, or if the designated Beneficiary
does not elect such method, distribution of the Participant's entire interest
must be completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death. Distribution of a Participant's
benefits is considered to have begun, for purposes of this paragraph, on the
Participant's required beginning date; provided that if the Participant's
designated Beneficiary is his surviving spouse, and such surviving spouse dies
after the Participant but before payments to such surviving spouse have begun,
then distribution of benefits is considered to have begun on the date
distribution to the surviving spouse is required to begin pursuant to the
provisions of this paragraph. For purposes of applying these rules in the event
of the Participant's death, the expected return multiples in Tables V and VI of
Treasury Regulation Section 1.72-9 shall be utilized. The life expectancy of a
surviving spouse may be

                                      52

<PAGE>   58

recalculated annually as provided in Section 13.1 hereof; however, in the case
of any other designated Beneficiary, such life expectancy may not be
recalculated. Any amount paid to the child of the Participant will be treated
as if it had been paid to the surviving spouse if the amount becomes payable
when the child reaches the age of majority. Unless the Participant elects
otherwise, in writing, no distribution hereunder shall start later than 60 days
after the close of the Plan Year in which the last to occur of the following
occurs:

                  (a) the Participant attains the age of 65 years,

                  (b) the 10th anniversary of the year in which the Participant
         commenced participation in the Plan, or

                  (c) the Participant terminates service with the Employer and
         all Affiliates.

         Notwithstanding the preceding paragraph, a distribution on behalf of
any Participant or Beneficiary may be made in accordance with a designated
distribution designation executed prior to January 1, 1984. The Trustee shall
not distribute pursuant to a pre-1984 distribution designation if any of the
following apply: (i) the distribution is one which would have disqualified the
Plan and Trust under Section 401(a)(9) of the Code as in effect on December 31,
1983; (ii) the Participant did not have a balance in his Individual Account as
of December 31, 1983; (iii) the pre-1984 distribution designation did not
specify the time at which distribution will commence, the period over which
distribution shall be made, and the death Beneficiaries in order of priority;
(iv) the substitution of a Beneficiary alters the distribution period; or (v)
the Participant or Beneficiary modifies or revokes the pre-1984 distribution
designation. If a designation is revoked, any subsequent distribution must
satisfy the requirements of Section 401 (a)(9) of the Code and the Treasury
Regulations thereunder. If a designation is revoked subsequent to a
Participant's required beginning date, as defined above, the Plan must


                                      53


<PAGE>   59


distribute by the end of the calendar year following the calendar year in which
the revocation occurs, the total amount which would have been required to have
been distributed to satisfy Section 401(a)(9) of the Code and Treasury
Regulations thereunder, but for the pre-1984 election. For calendar years
beginning after December 31, 1988, such distribution must meet the minimum
distribution incidental benefit requirements in Section 1.401(a)(9)-2 of the
Treasury Regulations.

         13.3 Cash Out Distribution. If a Participant or former Participant who
has received a distribution of his benefits hereunder on or before the last day
of the second Plan Year following the year in which his termination of
employment occurs has forfeited a portion of his Individual Account, then in
the event such Participant or former Participant is subsequently rehired by the
Employer prior to the date on which he incurs five (5) consecutive Breaks in
Service, he shall be entitled to repay, at any time prior to the earlier of:
(a) the date which is five (5) years after the first date on which he is
subsequently re-employed by the Employer and (b) the date on which he incurs
five (5) consecutive Breaks in Service, the amount of the distribution to him
from his Individual Account. Upon such repayment, the rehired Participant's
Individual Account shall be credited with the exact amount which was nonvested
at the time of termination. In the event a rehired Participant who has received
a distribution hereunder does not timely repay such distribution from his
Individual Account, as provided above, then the amount he forfeited at the time
of his termination of employment pursuant to the terms of Section 10.3 herein
shall remain forfeited. His prior Years of Service shall be taken into account,
however, for purposes of determining his vested interest in contributions
following re-employment. If a Participant who does not have any nonforfeitable
right to his Individual Account and thus is deemed to have received a cashout
distribution, pursuant to the provisions of Section 10.3 hereof, is
subsequently

                                      54

<PAGE>   60

re-employed by the Employer and five (5) consecutive Breaks in Service have not
occurred, then upon such re-employment, the rehired Participant's Individual
Account shall be credited with the exact amount which was nonvested at the time
of termination.

         13.4 Minority or Disability Payments: During the minority or
Disability of any person entitled to receive benefits hereunder, the Committee
may direct the Trustee to make payments due such person directly to him or to
his spouse or a relative or to any individual or institution having custody of
such person. Neither the Committee nor the Trustee shall be required to see to
the application of payments so made, and the receipt of the payee (including
the endorsement of a check or checks) shall be conclusive as to all interested
parties.

         13.5 Distributions Under Domestic Relations Orders: Nothing contained
in this Plan shall prevent the Trustee, in accordance with the direction of the
Committee, from complying with the provisions of a qualified domestic relations
order (as defined in Section 414(p) of the Code). The Plan specifically permits
distribution to an alternate payee under a qualified domestic relations order at
any time, irrespective of whether the Participant has attained his earliest
retirement age under the Plan, as defined in Section 414(p) of the Code. A
distribution to an alternate payee prior to the Participant's attainment of
earliest retirement age is available only if: (a) the order specifies
distribution at that time or permits an agreement between the Plan and the
alternate payee to authorize an earlier distribution; (b) the order specifies
such distribution to be in the form of a single, lump sum payment; and (c) if
the amount to which the alternate payee is entitled under the Plan exceeds
$5,000, and the order so requires, the alternate payee consents to any
distribution occurring prior to the Participant's attainment of earliest
retirement age. Nothing in this Section 13.5 gives a Participant a right to
receive distribution at a time otherwise not


                                      55


<PAGE>   61
permitted under the Plan nor does it permit the alternate payee to receive a
form of payment not otherwise permitted under the Plan.

          The Plan Administrator shall establish reasonable procedures to
determine the qualified status of a domestic relations order. Upon receiving a
domestic relations order, the Plan Administrator shall promptly notify the
Participant and any alternate payee named in the order, in writing, of the
receipt of the order and the Plan's procedures for determining the qualified
status of the order. Within a reasonable period of time after receiving the
domestic relations order, the Plan Administrator shall determine the qualified
status of the order and shall notify the Participant and each alternate payee,
in writing, of its determination. The Plan Administrator shall provide notice
under this paragraph by mailing to the individual's address specified in the
domestic relations order, or in a manner consistent with Department of Labor
regulations. The Plan Administrator may treat as qualified any domestic
relations order entered prior to January 1, 1985, irrespective of whether it
satisfies all the requirements described in Section 414(p) of the Code.

          If any portion of the Participant's Individual Account is payable
during the period the Plan Administrator is making its determination of the
qualified status of the domestic relations order, the Committee shall direct the
Trustee to segregate the amounts that are payable into a separate account and to
invest the segregated account solely in fixed income investments. If the Plan
Administrator determines the order is a qualified domestic relations order
within eighteen (18) months of receiving the order, the Committee shall direct
the Trustee to distribute the segregated account in accordance with the order.
If the Plan Administrator does not make its determination of the qualified
status of the order within eighteen (18) months after receiving the order, the
Committee shall direct the Trustee to distribute the segregated account in the
manner


                                       56
<PAGE>   62

the Plan would distribute it if the order did not exist and shall apply the
order prospectively if the Plan Administrator later determines the order is a
qualified domestic relations order.

          To the extent it is not inconsistent with the provisions of the
qualified domestic relations order, the Committee may direct the Trustee to
invest any amount that is subject to being paid to an alternate payee pursuant
to said order into a segregated subaccount or separate account and to invest the
account in federally insured, interest-bearing savings account(s) or time
deposit(s) (or a combination of both), or in other fixed income investments. A
segregated subaccount shall remain a part of the Trust, but it alone shall share
in any income it earns, and it alone shall bear any expense or loss it incurs.

          The Trustee shall make any payments or distributions required under
this Section 13.5 by separate benefit checks or other separate distribution to
the alternate payee(s).

          13.6 Direct Rollover of Eligible Rollover Distributions: An individual
who is entitled to a benefit hereunder, the distribution of which would qualify
as an eligible rollover distribution (as defined in Section 401(a)(31)(C) of the
Code) may, in lieu of receiving any payment or payments from the Plan, direct
the Trustee to transfer all of such payment or payments directly to the trustee
of an eligible retirement plan (as defined in Section 401 (a)(31)(D) of the
Code). Such election must be made on a form provided by the Committee for that
purpose and received by the Committee no later than the date established by the
Committee preceding the date on which the distribution is to occur. An election
which is made hereunder with respect to one payment in a series of periodic
payments shall apply to all subsequent payments in that series, unless the
distributee revokes such election. Any election made pursuant to this Section
13.6 may be revoked at any time prior to the date established by the Committee
preceding the date on which the distribution is to occur. If an individual who
is so entitled has not elected a direct rollover


                                       57
<PAGE>   63

within the time and in the maimer set forth above, such distributee shall be
deemed to have affirmatively waived a direct rollover. A distributee who wishes
to elect a direct rollover shall provide to the Committee, within the time and
in the manner prescribed by the Committee, such information as the Committee
shall reasonably request regarding the eligible retirement plan to which the
payment or payments are to be transferred. The Committee shall be entitled to
rely on the information so provided, and shall not be required to independently
verify such information. The Committee shall be entitled to delay the transfer
of any payment or payments pursuant to this Section 13.6 until it has received
all of the information which it has requested in accordance with this Section
13.6. The provisions of this Section 13.6 shall not apply to any distribution in
an amount which the Committee reasonably anticipates to total less than $200
during a calendar year.

          13.7 Financial Hardship Withdrawals: A Participant may, upon the
approval of the Committee, withdraw any portion of his Individual Account, other
than amounts attributable to income on such Participant's Salary Reduction
Contributions, on account of financial hardship. A Participant who wishes to
request a hardship withdrawal shall file with the Committee a written request
for withdrawal, on a form provided by the Committee. The Committee shall adopt
uniform and nondiscriminatory rules regarding the granting of such requests and
shall evaluate hardship requests made under this Section 13.7. Financial
hardship means an immediate and heavy financial need of the Participant for
which funds are not reasonably available from other resources of the
Participant. If approved by the Committee, any withdrawal for financial hardship
may not exceed the amount required to meet the immediate financial need created
by the hardship. Furthermore, the Committee shall not approve the request of any
Participant for a hardship withdrawal, unless the Participant has theretofore
made all


                                       58
<PAGE>   64

withdrawals, other than hardship withdrawals, and has theretofore obtained all
loans permitted under all plans maintained by the Employer. The determination of
whether a Participant suffers sufficient hardship to justify the granting of his
written request and of the amount permitted to be withdrawn under this Section
13.7 shall be made in the sole and absolute discretion of the Committee after a
full review of the Participant's written request and evidence presented by the
Participant showing financial hardship.

          A distribution will be treated as necessary to satisfy a financial
hardship if the Committee relies upon the Participant's written representation,
unless the Committee has actual knowledge to the contrary, that the hardship
cannot reasonably be relieved:

                  (a) through reimbursement or compensation by insurance or
         otherwise;

                  (b) by liquidation of the Participant's assets;

                  (c) by cessation of Salary Reduction Contributions under the
         Plan; or

                  (d) by other distributions or nontaxable (determined at the
         time of the loan) loans from plans maintained by the Employer, or any
         other employer of such Participant, or by borrowing from commercial
         sources on reasonable commercial terms in an amount sufficient to
         satisfy the financial hardship.

                  Upon a Participant's receipt of a withdrawal for financial
         hardship, such Participant shall be prohibited from making Salary
         Reduction Contributions for a period of twelve (12) months, beginning
         on the date on which the hardship withdrawal is made. A Participant may
         elect to resume Salary Reduction Contributions as of the first payroll
         period commencing on or after the Entry Date next following the last
         day of such twelve (12) month period by executing a new payroll
         withholding agreement within the time period prior to such date
         established by the Committee. Upon a Participant's resumption


                                       59
<PAGE>   65

          of Salary Reduction Contributions, the maximum amount of such
          contributions which may be made on such Participant's behalf for his
          taxable year following the taxable year in which the hardship
          withdrawal is made, is the applicable dollar limit for such following
          taxable year under Section 4.4 hereof, reduced by the amount of Salary
          Reduction Contributions made on his behalf for his taxable year in
          which the hardship withdrawal is made.

          Expenses which may warrant approval of a Participant's request for a
hardship withdrawal include:

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

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

                           (iii) Payment of tuition and related educational fees
                  for the next twelve (12) months of post-secondary education
                  for the Participant, his or her spouse, children or
                  dependents, as defined above; or

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

          13.8 Loans to Participants: Subject to such rules and regulations as
may from time to time be promulgated by the Committee, the Committee, upon
application of a Participant, may, in its sole and absolute discretion, direct
the Trustee to make a loan or loans to such Participant


                                       60
<PAGE>   66

from his Rollover Contribution Account, and upon depletion of the funds in his
Rollover Contribution Account, from his Salary Reduction Contribution Account,
and upon depletion of the funds in his Salary Reduction Contribution Account,
from his Company Matching Contribution Account, and upon depletion of the funds
in his Company Matching Contribution Account, from his Prior Plan Employer
Contribution Account, and upon depletion of the funds in his Prior Plan Employer
Contribution Account, from his Prior Plan Employee Contribution Account, upon
such terms as the Committee deems appropriate, and subject to the following
requirements.

          A loan will be made to a Participant solely to relieve a financial
hardship as described in Section 13.7, subject to the discretion of the
Committee. The maximum amount which may be loaned is the lesser of: (a)
$50,000.00, reduced as provided below, or (b) one-half of the value of the
vested portion of the Participant's Individual Account as of the Valuation Date
next preceding the date on which the Committee receives the Participant's loan
application. The $50,000.00 limitation shall be reduced by the excess (if any)
of:

                           (i) the highest outstanding balance of loans from the
                  Plan to the Participant during the one-year period ending on
                  the day before the date on which such loan was made, over

                           (ii) the outstanding balance of loans from the Plan
                  to the Participant on the date on which such loan was made.

In determining the maximum amount allowed hereunder as a loan, all loans to a
Participant from all plans of the Employer and any Affiliate are to be
aggregated.

          The minimum amount which may be loaned is One Thousand Dollars
($1,000.00), and no more than one loan may be outstanding at any time. Loans
shall be granted by the Committee


                                       61
<PAGE>   67

in a uniform and nondiscriminatory manner. Each loan shall bear a reasonable
rate of interest and be adequately secured, and shall by its terms require
repayment in no later than five years unless such loan is used to acquire any
dwelling unit which within a reasonable time is to be used (determined at the
time the loan is made) as a principal residence of the Participant.

          All loans shall be repaid pursuant to a payroll deduction procedure
established by the Employer unless the Participant is on an authorized leave of
absence, in which case payment shall be made to the principal office of the
Employer by check. All loans to Participants granted under this provision are to
be considered a directed investment of such Participant. The loan shall remain
an asset of the Trust, but to the extent of the outstanding balance of any such
loan at any time, the Individual Account of the Participant to whom such loan is
made alone shall share in any interest paid on such loan and alone shall bear
any expenses or loss incurred in connection with such loan. Loans shall be made
pro rata from each investment fund with respect to which a Participant's
Individual Account is invested at the time of the loan and shall be repaid pro
rata to each investment fund with respect to which the Participant's Individual
Account was invested at the time of the loan.

          Each loan applicant shall receive a clear statement of the charges
involved in each loan transaction. This statement shall include the dollar
amount and annual interest rate of the finance charge. No distribution shall be
made to any Participant or former Participant, or to a Beneficiary or
beneficiaries, or the estate of a Participant unless and until (1) the amount to
be distributed has been offset by all unpaid loans to the Participant from the
Plan, together with interest, or (2) all unpaid loans to the Participant from
the Plan, together with interest, have been paid in full. Notwithstanding the
foregoing, no portion of an unpaid loan balance may be treated as a reduction of
a Participant's Individual Account until such time as such reduction, if treated


                                       62
<PAGE>   68

as a distribution, will not breach the special distribution restrictions of
Section 401(k)(2)(B) of the Code.

          13.9 Withdrawals Upon Attainment of Age 59 1/2: Notwithstanding any
other provisions of the Plan, a Participant who is still employed and who has
attained the age of 59 1/2 may elect to withdraw all or any part of the vested
amount in his Individual Account. The amount available for withdrawal shall be
determined as of the Valuation Date concurrent with or preceding the date on
which the Committee receives the Participant's request for withdrawal, and the
withdrawal amount shall be distributed to the Participant as soon as practicable
thereafter. The Committee shall direct the Trustee to make the distribution to
the Participant in a lump sum in cash, unless in the Participant's written
request for the distribution, he requests that it be in a form otherwise
described in Section 13.1. A Participant who makes a withdrawal pursuant to this
Section 13.9 will be subject to the suspension of contribution periods described
under Section 13.12.

          13.10 Withdrawals for Disability: If a Participant suffers a
Disability, he may upon his written request or that of his legal guardian or
representative receive a distribution of all or any of part of the vested amount
in his Individual Account, other than amounts in his Salary Reduction
Contribution Account. The Committee shall direct the Trustee to make the
distribution to the Participant in a lump sum payment in cash, unless in the
written request for the distribution, the Participant, or his legal guardian or
representative, requests that it be in a form otherwise described in Section
13.1. The amount available for withdrawal shall be determined as of the
Valuation Date concurrent with or next preceding the date on which the Committee
receives the Participant's request for withdrawal, and the withdrawal amount
shall be distributed as soon as practicable thereafter. A Participant (or his
legal guardian or representative) who


                                       63
<PAGE>   69

makes a withdrawal pursuant to this Section 13.10 will be subject to the
suspension of contribution periods described under Section 13.12.

          13.11 Withdrawal of Pre-1986 Contributions: A Participant may withdraw
all of the value of his Pre-1986 Contribution Account by filing a written notice
with the Committee. The effective date of such written notice shall be the date
the notice is received by the Committee or a date subsequent thereto if the
Participant so states in his written notice. The amount available for withdrawal
shall be determined as of the Valuation Date concurrent with or next preceding
the date on which the Committee receives the Participant's request for
withdrawal, and the withdrawal amount shall be distributed as soon as
practicable thereafter. In the event of such a withdrawal, the Participant's
participation in the Plan shall not terminate, but his Salary Reduction
Contributions and the Company Matching Contributions which would otherwise be
made on his behalf shall automatically be suspended for a period of twelve (12)
months after such full withdrawal. Alternatively, a Participant may make a
partial withdrawal of twenty-five percent (25%) of the value of his Pre-1986
Contribution Account in the same maimer provided above for a full withdrawal;
provided, however, that the amount of such partial withdrawal shall be further
limited, if applicable, to the amount equal to a Participant's total
contributions as reflected on the Participant's December 31, 1985 statement
under "Employee Contribution." If a Participant makes a partial withdrawal of
his Pre-1986 Contribution Account, then the Participant's Salary Reduction
Contributions and Company Matching Contributions which would otherwise be made
on his behalf shall automatically be suspended for a period of six (6) months.


                                       64
<PAGE>   70
         The trustee shall distribute any proceeds due under this Section 13.11
in a lump sum payment in cash, unless in the Participant's written request for
the distribution, he requests that it be in a form otherwise described in
Section 13.1.

         13.12 Suspension of Contributions: In the event of a withdrawal under
Section 13.9 or 13.10 which is twenty-five percent (25%) or less of the vested
amount of the Participant's Individual Account, then the Participant's Salary
Reduction Contributions and Company Matching Contributions which would otherwise
be made on his behalf under the terms of the Plan shall automatically be
suspended for six (6) months. In the event of a withdrawal under Section 13.9 or
13.10 which is greater than twenty-five percent (25%) of the vested amount of
the Participant's Individual Account, up to and including a total withdrawal,
then the Participant's Salary Reduction Contributions and Company Matching
Contributions which would otherwise be made on his behalf under the terms of the
Plan shall automatically be suspended for twelve (12) months. Notwithstanding
the foregoing, in the event of an in-service withdrawal for Disability pursuant
to Section 13.10, for the purpose of calculating twenty-five percent (25%) of
the vested amount of the Participant's Individual Account under this Section
13.12, such amount shall exclude amounts in the Participant's Salary Reduction
Contribution Account.

                                   ARTICLE XIV

              TRUSTEE, INVESTMENT MANAGERS AND DIRECTED INVESTMENTS

         14.1 Appointment of Trustee: A Trustee (or Trustees) shall be appointed
by the board of directors of the Company to administer the Trust Fund. The
Trustee shall serve at the pleasure of the Company and shall have such rights,
powers and duties as are provided to a Trustee under


                                       65
<PAGE>   71

ERISA for the investment of assets and for the administration of the Trust Fund,
pursuant to the terms of the Trust.

         14.2 Appointment of Investment Manager: An Investment Manager (or
Investment Managers) may be appointed by the Committee to manage (including the
power to acquire and dispose of) any part or all of the assets of the Trust
Fund. The Investment Manager shall serve at the pleasure of the Committee, and
shall have the rights, powers and duties provided to a Named Fiduciary under
ERISA for the investment of the assets assigned to it. (The Investment Manager
may be referred to from time to time hereafter as "he," "they," or "it," or may
be referred to in the singular or plural, but all such references shall be to
the then acting Investment Manager or Investment Managers serving hereunder.)

         14.3 Responsibility of Trustee and Investment Manager: All
contributions under this Plan shall be paid to and held by the Trustee, except
when assets have been transferred to an insurance company. The Investment
Manager shall have exclusive management and control of the investments and/or
reinvestment of the assets of the Trust Fund assigned to it in writing by the
Committee. All property and funds of the Trust Fund, including income from
investments and from all other sources, shall be retained for the exclusive
benefit of Employees, as provided in the Plan, and shall be used to pay benefits
to Employees or their Beneficiaries, or to pay expenses of administration of the
Plan and Trust Fund to the extent not paid by the Employer.

         This Plan and the related Trust is intended to allocate to each
fiduciary the individual responsibilities of the prudent execution of the
functions assigned to each. None of the allocated responsibilities or any other
responsibility shall be shared by the fiduciaries or the Trustee unless such
sharing shall be provided for by a specific provision in this Plan or related
Trust.


                                       66
<PAGE>   72

         14.4 Bonding of Trustee and Investment Manager: Neither the Trustee nor
the Investment Manager shall be required to furnish any bond or security for the
performance of their powers and duties hereunder unless the applicable law makes
the furnishing of such bond or security mandatory.

         14.5 Participant Direction of Investment: Each Participant shall have
the right, within the guidelines established by the Committee, to direct the
Committee to instruct the Trustee to invest all or a portion, if any, of such
Participant's Individual Account in such investment funds as may be designated
by the Committee from time to time. The Committee shall direct the Trustee or,
if applicable, the Investment Manager as to the investment funds in which
Participants may invest. The Committee may determine to offer as investment
funds any investment fund, program or other vehicle which is suitable as a
proper and permissible investment of contributions made to a retirement plan
qualified pursuant to Section 401(a) of the Code, including Company Stock. Such
investment funds shall be made available in a manner sufficient to comply with
Section 404(c) of ERISA.

         The Committee shall be authorized at any time and from time to time,
without amending the Plan, to modify, alter, delete or add to the investment
funds available for investment at the direction of a Participant. In the event a
modification occurs, the Committee shall notify those Participants whom the
Committee, in its sole and absolute discretion, determines are affected by the
change, and shall give such Participants such additional time as is determined
reasonable by the Committee to designate the manner and percentage in which
amounts invested in those funds thereby affected shall be invested.

         The Committee shall not be obligated to substitute funds of similar
investment criteria for existing funds, nor shall it be obligated to continue
the types of investments presently available


                                       67
<PAGE>   73

to the Participants. Nothing contained herein shall constitute any action by the
Committee as a direction of investment of the assets or an attempt to control
such direction.

                  (a) Investment of Contributions: Any Participant, on or before
         entry into the Plan, within the time period established by the
         Committee, may designate the manner and the applicable percentage in
         which the Participant desires the Trustee to invest his current
         contributions, pursuant to the provisions set forth above, which
         designation shall continue in effect until revoked or modified by the
         Participant. If a Participant fails to designate the investment of his
         current contributions on or before his entry into the Plan, the
         Participant may make such designation, within the time period
         established by the Committee, to become effective as soon as
         practicable until revoked by the Participant.

                  In the event the nature of any fund shall, in the opinion of
         the Committee, change, then the Committee shall notify those
         Participants who the Committee, in its sole and absolute discretion,
         determines are affected by the change, who shall then have a reasonable
         period of time, as determined by the Committee, to designate the manner
         and the applicable percentages in which amounts invested in those funds
         affected by the change shall be invested.

                  Any amounts with respect to which the Trustee fails to receive
         a proper investment direction from any Participant shall be invested as
         provided in Section 14.3 above, or as otherwise directed by the
         Committee to the Trustee. All investment designations under this
         subparagraph (a) shall be made in the manner prescribed by the
         Committee.


                                       68
<PAGE>   74

                  The Committee shall maintain separate subaccounts in the name
         of each Participant within his Individual Account to reflect such
         Participant's accrued benefit attributable to his directed investment
         in each investment fund.

                  (b) Conversion of Investments: Subject to subparagraph (c)
         below, each Participant or former Participant shall have the right,
         within the time period or periods established by the Committee, and
         subject to any restrictions on transfer imposed under particular
         investment funds, to convert, within the guidelines established by the
         Committee, up to one hundred percent (100%) of the amount in his
         Individual Account which he has previously directed in any investment
         fund hereunder into one or more of the other investment funds
         designated by the Committee for investment pursuant to this Section
         14.5.

                  A direction to convert by any eligible Participant or former
         Participant shall be made in the manner prescribed by the Committee
         within the time period established by the Committee. Any conversion of
         investments pursuant to this subparagraph (b) shall not affect a
         Participant's direction of investments with respect to his future
         contributions pursuant to subparagraph (a) hereof.

                  If a Participant's spouse who is not a Participant in this
         Plan acquires an interest in a Participant's Individual Account
         pursuant to a qualified domestic relations order, then the
         Participant's spouse may direct the Committee to convert the investment
         of the interest to which such spouse is thus entitled in the same
         manner and at the same time as the Participant may direct a conversion
         of investments, as provided above.

                  (c) Prior Plan Employee Contribution Account and Prior Plan
         Employer Contribution Account: Prior to July 1, 2000, the Prior Plan
         Employee Contribution


                                       69
<PAGE>   75

         Accounts and Prior Plan Employer Contribution Accounts of Participants
         were invested solely in Company Stock. After July 1, 2000, all Prior
         Plan Employee Contribution Accounts and Prior Plan Employer
         Contribution Accounts will remain invested in Company Stock and
         Participants shall not be able to convert such accounts into any other
         investment option (such Company Stock fund hereinafter defined as the
         "Frozen Company Stock Fund"). Notwithstanding the foregoing, when a
         Participant has reached Normal Retirement Age, he may elect to direct
         the investment of all or a portion of his Prior Plan Employee
         Contribution Account and Prior Plan Employer Contribution Account from
         the Frozen Company Stock Fund into the other investment options
         designated by the Committee for investment in accordance with this
         Section 14.5.

                  (d) Miscellaneous: The provisions of this Section 14.5 shall
         be subject to such administrative rules as may be established by the
         Committee. The Committee is authorized to establish such additional
         rules and regulations, from time to time, as it determines are
         necessary to carry out the provisions of this Section 14.5. For
         purposes of this Section 14.5, each Participant or former Participant
         shall be deemed to be effecting a "directed investment" of his
         Individual Account by exercising control of the investments in such
         Participant's or former Participant's Individual Account, to the extent
         any investment fund is selected by the Participant or former
         Participant, as provided herein. To the extent that the Committee, the
         Trustee and any Investment Manager follow the directions of a
         Participant or former Participant with respect to any acts involving an
         investment fund, then neither the Committee, the Trustee, nor the
         Investment Manager shall be liable for any loss or damage, or by reason
         of any breach, which arises from the Participant's or former
         Participant's exercise or non-exercise of his


                                       70
<PAGE>   76

         rights under this Section 14.5 over the assets in his Individual
         Account, as provided in Section 404(c) of ERISA.


                                   ARTICLE XV

                        AMENDMENT AND TERMINATION OF PLAN

         15.1 Amendment of Plan: The Company may, without the assent of any
other party, make from time to time any amendment or amendments to this Plan
which do not cause any part of the Trust Fund to be used for, or diverted to,
any purpose other than the exclusive benefit of Employees included in the Plan.
To the extent that an amendment to the Plan affects the rights or duties of the
Trustee hereunder, the Company shall obtain the Trustee's written consent to
such amendment. Any amendment to the Plan shall be by a written instrument
executed by the Company, and shall become effective as of the date specified in
such instrument. Notwithstanding the foregoing, no amendment to the Plan shall
be effective to the extent that it has the effect of decreasing a Participant's
accrued benefit, except as provided in Section 412(c)(8) of the Code. For
purposes of the preceding sentence, an amendment which has the effect of
decreasing a Participant's Individual Account or eliminating an optional form of
benefit, with respect to benefits attributable to service prior to such
amendment shall be treated as reducing an accrued benefit. If any amendment
changes the vesting schedules set forth in Sections 10.1 or 17.4, then a
Participant's nonforfeitable percentage in his Individual Account because of a
change to the vesting schedule shall not be less than his nonforfeitable
percentage computed under the vesting schedule in effect prior to the amendment.
Furthermore, if any amendment changes the vesting schedules set forth in
Sections 10.1 or 17.4, then each Participant having at least three (3) Years of
Vesting Service may elect to have the nonforfeitable percentage of his
Individual Account computed under the Plan without regard to the amendment.


                                       71
<PAGE>   77

The Participant must file his written election with the Committee within sixty
(60) days after receipt of a copy of the amendment. The Committee shall furnish
the Participant with a copy of the amendment and with notice of the time within
which his election must be returned to the Committee.

         15.2 Right to Terminate and Withdraw: An Employer may at any time, by
adoption of a resolution of its Board of Directors, terminate the Plan with
respect to all or any part of the Employees employed by said Employer, and may
direct and require the Trustee to liquidate the share of the Trust Fund
allocable to such Employees or their Beneficiaries. If the Plan is not
terminated by each and every Employer, the Plan shall continue in effect for
Employees of each Employer which does not so terminate the Plan. However, the
Company may elect to terminate the Plan for all participating Employers. In the
event that an Employer shall cease to exist, the Plan shall be terminated with
respect to the Employees of such Employer, unless a successor organization
adopts and continues the Plan.

         A terminating or withdrawing Employer shall give ninety (90) days'
notice in writing of its intention to the Committee, the Trustee and the Company
unless a shorter notice is agreed to by the Committee and Trustee. If an
Employer withdraws from this Plan and provides for a successor plan for its
Employees, the Trust Fund assets of this Trust held on behalf of such Employer
shall be determined and transferred to a successor trust upon approval by the
District Director of Internal Revenue of the successor Plan and Trust.

         15.3 Suspension and Discontinuance of Contributions: In the event an
Employer decides it is impossible or inadvisable for it to continue to make its
contributions as provided in Article IV, it shall have the power by appropriate
resolution to either:

                  (a) suspend its contributions to the Plan;


                                       72
<PAGE>   78

                  (b) discontinue its contributions to the Plan; or

                  (c) terminate the Plan.

Suspension shall be a temporary cessation of contributions and shall not
constitute or require a termination of the Plan. Such a suspension which has not
ripened into a complete discontinuance shall not constitute or require a
termination of the Plan or Trust or any vesting of Individual Accounts, other
than as prescribed by the provisions of Section 10.1. A complete discontinuance
of contributions by an Employer shall not constitute a formal termination of the
Plan and shall not preclude later contributions, but all Individual Accounts of
Participants employed by such Employer not theretofore fully vested shall be and
become 100% vested and nonforfeitable in the respective Participants,
irrespective of the provisions of Section 10.1. In such event, Employees of such
Employer who become eligible to enter the Plan subsequent to the discontinuance
shall receive no benefit, and no additional benefits attributable to such
Employer's contributions shall accrue to any of such Participants unless such
contributions are resumed. After the date of a complete discontinuance of
contributions, the Trust shall remain in existence as provided in this Section
15.3, and the provisions of the Plan and Trust shall remain in force as may be
necessary in the sole opinion of the Committee.

         15.4 Liquidation of Trust Fund: Upon termination or partial termination
of the Plan by an Employer, the Individual Accounts of all Participants, former
Participants and Beneficiaries shall thereupon be and become fully vested and
nonforfeitable. Thereupon, the Trustee shall convert the Trust Fund to cash
after deducting all charges and expenses. The Committee shall then adjust the
balances of all Individual Accounts, as provided in Section 5.2. Thereafter, the
Trustee shall distribute the amount to the credit of each affected Participant,
former Participant


                                       73
<PAGE>   79

and Beneficiary, in accordance with the provisions of Article XIII hereof and
the terms of the Trust.

         15.5 Consolidation or Merger: This Plan shall not be merged or
consolidated with, nor shall any assets or liabilities be transferred to, any
other plan, unless the benefits payable to such Participant if the Plan was
terminated immediately after such action would be equal to or greater than the
benefits to which such Participant would have been entitled if this Plan had
been terminated immediately before such action. The Plan shall not accept a
direct transfer of assets from a plan subject to the requirements of Section 417
of the Code.

                                   ARTICLE XVI

                               GENERAL PROVISIONS

         16.1 No Employment Contract: Nothing contained in this Plan shall be
construed as giving any person whomsoever any legal or equitable right against
the Committee, the Employer, their stockholders, officers or directors or
against the Trustee, except as the same shall be specifically provided for in
this Plan or the Trust. Nor shall anything in this Plan give any Participant or
other Employee the right to be retained in the service of an Employer and the
employment of all persons by an Employer shall remain subject to termination by
such Employer to the same extent as if this Plan had never been executed.

         16.2 Manner of Payment: Wherever and whenever it is herein provided for
payments or distributions to be made, whether in money or otherwise, said
payments or distributions shall be made directly into the hands of the
Participant, his Beneficiary, his administrator, executor or guardian, or an
alternate payee pursuant to Section 13.5 herein, as the case may be. A deposit
to the credit of a person entitled to payment in any bank or trust company
selected by such person shall be deemed payment into his hands, and provided
further that in the event any person


                                       74

<PAGE>   80


otherwise entitled to receive any payment or distribution shall be a minor or an
incompetent, such payment or distribution may be made to his guardian or other
person as may be determined by the Committee.

         16.3 Nonalienation of Benefits: Subject to Section 414(p) of the Code
and Section 13.5 herein relating to qualified domestic relations orders, the
interest of any Participant or Beneficiary hereunder shall not be subject in any
manner to any indebtedness, judgment, process, creditors' bills, attachments,
garnishment, levy, execution, seizure or receivership, nor shall such interest
be in any manner reduced or affected by any transfer, assignment, conveyance,
sales, encumbrance, act, omission, or mishap, voluntary or incidental,
anticipatory or otherwise, of or to said Participant or Beneficiary, and they
and any of them shall have no right or power to transfer, convey, assign, sell
or encumber said benefits and their interest therein, legal or equitable, during
the existence of this Plan. Notwithstanding the foregoing, no provision of this
Plan shall preclude the enforcement of a Federal tax levy made pursuant to
Section 6331 of the Code or collection by the United States on a judgment
resulting from an unpaid tax assessment.

         16.4 Titles for Convenience Only: Titles of the Articles and Sections
hereof are for convenience only and shall not be considered in construing this
Plan. Also, words used in the singular or the plural may be construed as though
in the plural or singular where they would so apply.

         16.5 Validity of Plan: This Plan and each of its provisions shall be
construed and their validity determined by the laws of the State of Texas, and
all provisions hereof shall be administered in accordance with the laws of said
State, provided that in case of conflict, the provisions of ERISA shall control.


                                       75
<PAGE>   81


         16.6 Plan Binding: This Plan shall be binding upon the successors and
assigns of the Employer and the Trustee and upon the heirs and personal
representatives of those individuals who become Participants hereunder.

         16.7 Return of Contributions: This Plan and the related Trust are
designed to qualify under Sections 401(a) and 501(a) of the Code. Anything
contained herein to the contrary notwithstanding, if the initial determination
letter is issued by the District Director of Internal Revenue to the effect that
this Plan and related Trust hereby created, or as amended prior to the receipt
of such letter, do not meet the requirements of Section 401(a) and 501(a) of the
Code, each Employer shall be entitled at its option to withdraw all
contributions theretofore made, in which event the Plan and Trust shall then
terminate.

         Each Employer's contributions to the Plan are specifically conditioned
on their deductibility, and the Trustee, upon written request from an Employer,
shall return to such Employer the amount of the Employer's contribution made as
a result of a mistake of fact or the amount of such Employer's contribution
disallowed as a deduction under Section 404 of the Code. Such return of
contribution must be within one (1) year after (a) such Employer made the
contribution by mistake of fact or (b) the disallowance of the contribution as a
deduction. The amount of Employer contribution subject to being returned
hereunder shall not be increased by any earnings attributable to the
contribution, but such amount subject to being returned shall be decreased by
any losses attributable to it.

         16.8 Missing Participants or Beneficiaries: Each Participant shall file
with the Committee from time to time in writing a mailing address and any change
of mailing address for himself and his designated Beneficiary. Any
communication, statement or notice addressed to a Participant or Beneficiary at
the last mailing address filed with the Committee, or if no such


                                       76
<PAGE>   82


address is filed with the Committee, then at his last mailing address as shown
on his Employer's records, shall be binding on the Participant or his
Beneficiary for all purposes of the Plan. The Committee shall not be required to
search for or locate a Participant or Beneficiary. If the Committee notifies any
Participant or Beneficiary that he is entitled to a distribution and also
notifies him of the provisions of this Section 16.8 (or makes reasonable effort
to so notify such Participant or Beneficiary by certified letter, return receipt
requested, to the last known address, or such other further diligent effort,
including consultation with the Social Security Administration, to ascertain the
whereabouts of such Participant or Beneficiary as the Committee deems
appropriate) and the Participant or Beneficiary fails to claim his distributive
share or make his whereabouts known to the Committee within three years
thereafter, the distributive share of such Participant or Beneficiary will be
forfeited according to Section 6.4. However, if the Participant or his
Beneficiary should, thereafter, make a proper claim for such share, it shall be
distributed to him.

         16.9 Qualified Military Service: Notwithstanding any provision of
this Plan to the contrary, contributions, benefits and service credit with
respect to qualified military service will be provided in accordance with
Section 414(u) of the Code.

                                  ARTICLE XVII

                                 TOP-HEAVY RULES

         17.1 Definitions: For purposes of applying the provisions of this
Article XVII:

                  (a) "Key Employee" shall mean, as of any Determination Date,
         any Employee or former Employee who, at any time during the Plan Year
         (which includes the Determination Date) or during the preceding four
         Plan Years, is (i) an officer of an Employer having Compensation from
         the Employer and any Affiliate greater than fifty


                                       77
<PAGE>   83


         percent (50%) of the amount in effect under Section 415(b)(l)(A) of the
         Code for any such Plan Year, (ii) one of the ten Employees of an
         Employer having Compensation from the Employer and any Affiliate of
         more than the limitation in effect under Section 15(c)(l)(A) of the
         Code and owning the largest interests in such Employer, (iii) a Five
         Percent (5%) Owner of an Employer, or (iv) a One Percent (1%) Owner of
         an Employer who has Compensation of more than $150,000. The
         constructive ownership rules of Section 318 of the Code (or the
         principles of that section, in the case of an unincorporated Employer)
         will apply to determine ownership in an Employer. The Committee will
         make the determination of who is a Key Employee in accordance with
         Section 416(i)(1) of the Code and the regulations under that section of
         the Code. The Beneficiary of a Key Employee shall be treated as a Key
         Employee for purposes of determining whether this Plan is top-heavy.

                  (b) "Non Key Employee" is an Employee who does not meet the
         definition of Key Employee.

                  (c) "Compensation" shall mean compensation as defined in
         Section 2.1(v) hereof.

                  (d) "Required Aggregation Group" means:

                           (i) Each qualified plan of an Employer or an
                  Affiliated Entity in which at least one (1) Key Employee
                  participates or participated at any time during the Plan Year
                  which includes the Determination Date, or during the preceding
                  four Plan Years (regardless of whether the plan has
                  terminated); and


                                       78
<PAGE>   84


                           (ii) Any other qualified plan of an Employer which
                  enables a plan described in (i) to meet the requirements of
                  Section 401(a)(4) of the Code or Section 410 of the Code.

                  (e) "Permissive Aggregation Group" is the Required Aggregation
         Group plus any other qualified plans maintained by an Employer, but
         only if such group would satisfy in the aggregate the requirements of
         Section 401 (a)(4) of the Code and Section 410 of the Code. The
         Committee shall determine which plans to take into account in
         determining the Permissive Aggregation Group.

                  (f) "Determination Date" for any Plan Year is the Allocation
         Date of the preceding Plan Year.

                  (g) "Five Percent (5%) Owner" is any person who owns more than
         five percent (5%) of the outstanding stock of an Employer or stock
         possessing more than five percent (5%) of the total combined voting
         power of all stock of an Employer.

                  (h) "One Percent (1%) Owner" is any person who owns more than
         one percent (1%) of the outstanding stock of an Employer or stock
         possessing more than one percent (1%) of the total combined voting
         power of all stock of an Employer.

                  (i) "Affiliated Entity" shall mean any and all Affiliates of
         an Employer.

         17.2 Determination of-Top Heavy Status: The Plan is-Top Heavy for a
Plan Year with respect to a particular Employer if the Top-Heavy Ratio for that
Employer as of the Determination Date exceeds sixty percent (60%). The Plan is
Super Top-Heavy for a Plan Year if the Top-Heavy Ratio as of the Determination
Date exceeds ninety percent (90%). The Top-Heavy Ratio is a fraction, the
numerator of which is the sum of the present value of the Individual Accounts of
all Key Employees as of the Determination Date, the contributions for all


                                       79
<PAGE>   85


Key Employees of such Employer that are due as of Determination Date, and
distributions made to all Key Employees, of such Employer within the five (5)
year period immediately preceding the Determination Date, and the denominator of
which is a similar sum determined for all Employees of such Employer. If an
Employee has not performed any services for an Employer at any time during the
five (5) year period ending on the Determination Date, any amount in the
Individual Account of such Employee shall not be taken into account. The
Committee shall calculate the Top-Heavy Ratio without regard to any Non-Key
Employee who was formerly a Key Employee. The Committee shall calculate the Top-
Heavy Ratio, including the extent to which it must take into account
distributions, rollovers and transfers, in accordance with Section 416 of the
Code and the regulations under that section of the Code.

         If an Employer maintains other qualified plans (including a simplified
employee pension plan) this Plan is Top-Heavy only if it is part of the Required
Aggregation Group, and the Top-Heavy Ratio for both the Required Aggregation
Group and the Permissive Aggregation Group exceeds sixty percent (60%). If the
Employer maintains other qualified plans (including a simplified employee
pension plan) this Plan is Super Top-Heavy only if it is part of the Required
Aggregation Group, and the Top-Heavy Ratio for both the Required Aggregation
Group and the Permissive Aggregation Group exceeds ninety percent (90%). The
Committee will calculate the Top-Heavy Ratio in the same manner as required by
the first paragraph of this Section 17.2, taking into account all plans within
the aggregation group. The Committee shall calculate the present value of
accrued benefits and the other amounts the Committee must take into account,
under defined benefit plans or simplified employee pension plans included within
the group in accordance with the terms of those plans, Section 416 of the Code
and the regulations under that


                                       80
<PAGE>   86





section of the Code. The Committee shall calculate the Top Heavy Ratio with
reference to the Determination Dates that fall within the same calendar year.

         17.3 Minimum Employer Contribution: If this Plan is Top-Heavy with
respect to a particular Employer in any Plan Year beginning after December 31,
1983, such Employer shall make a minimum contribution for each Non-Key Employee
who is a Participant employed by the Employer on the Allocation Date of such
Plan Year equal to the lesser of: (a) three percent (3%) of such Non-Key
Employee's Compensation or (b) the highest contribution rate received by a Key
Employee. The contribution rate is the sum of employer contributions and
forfeitures allocated to the Participant's Individual Account for the Plan Year
divided by his Compensation for the Plan Year. To determine the contribution
rate, the Committee shall consider all qualified defined contribution plans
maintained by such Employer as a single Plan. If the contribution rate,
excluding Salary Reduction Contributions and Company Matching Contributions, for
the Plan Year with respect to a Non-Key Employee is less than the minimum
contribution, the Employer will increase its contribution for such Non-Key
Employee to the extent necessary so his contribution rate for the Plan Year will
equal the required minimum contribution. If the minimum contribution is made for
a Non-Key Employee pursuant to another qualified plan maintained by an
Employer, then the minimum contribution requirement will be considered satisfied
for purposes of this Plan.

         17.4 Minimum Vesting: For any Plan Year for which the Plan is Top-Heavy
with respect to a particular Employer beginning after December 31, 1983, the
Committee shall calculate the percentage of the amount in a Participant's
Company Matching Contribution Account which is vested and nonforfeitable
according to the vesting schedule applicable under Section 10.1. The Committee
shall apply the vesting schedule set forth above to a Participant


                                       81
<PAGE>   87


who earns at least one (1) Hour of Service after such schedule becomes
effective. If the Top-Heavy status of the Plan for such Employer changes so that
there is a shift between the vesting schedules set forth above and set forth in
Section 10.1, then a Plan amendment will be deemed to have occurred so that the
provisions of Section 15.1 of the Plan become applicable.

                                  ARTICLE XVIII

                 ADOPTION AND WITHDRAWAL BY OTHER ORGANIZATIONS

         18.1 Procedure for Adoption: Subject to the further provisions of
Section 18.1, any corporation or other organization with employees, now in
existence or hereafter formed or acquired, which is not already an Employer
under this Plan and which is otherwise legally eligible, may, in the future,
with the consent and approval of the Company, by formal resolution of its own
board of directors, adopt the Plan hereby created and the related Trust, and
thereby, from and after the specified effective date, become an Employer under
this Plan. Such adoption shall be effectuated by and evidenced by a formal
designation resolution of the Company, and by such formal resolution of the
adopting organization. It shall not be necessary for the adopting organization
to sign or execute the original or then amended Plan and Trust documents. The
effective date of the Plan for any such adopting organization shall be that
stated in the resolution or decision of adoption, and from and after such
effective date such adopting organization shall assume all the rights,
obligations and liabilities of an individual Employer entity hereunder and under
the Trust. The administrative powers and control of the Company, provided in the
Plan and Trust, including the sole right to amendment and of appointment and
removal of the Committee and the Trustee and their successors, shall not be
diminished by reason of the participation of any such adopting organization in
the Plan and Trust.


                                       82
<PAGE>   88


         18.2 Withdrawal: Any participating Employer, by action of its board of
directors and by giving notice to the Company and Trustee, may withdraw from the
Plan and Trust at any time without affecting any other Employer not withdrawing,
by complying with the provisions of the Plan and Trust. A withdrawing Employer
may arrange for the continuation 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 trust, and transfer of Trust assets. The Company may, in its absolute
discretion, terminate an adopting Employer's participation at any time when in
its judgment such adopting Employer fails or refuses to discharge its
obligations under the Plan.

         18.3 Adoption Contingent Upon Initial and Continued Qualification: The
adoption of this Plan and its related Trust by an organization as provided in
Section 18.1 is hereby made contingent on and subject to the condition precedent
that said adopting organization meets all the statutory requirements for
qualified plans, including but not limited to Section 401(a) and 501(a) of the
Code, for its Employees. The adopting organization shall, upon request of the
Committee, request an initial approval letter of 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,
meets the requirements of the applicable federal statutes for tax qualification
purposes for such adopting organization and its covered Employees. Unless such
an initial approval letter is issued, such adoption shall become void and
inoperative and any contributions made by or for such organization after such
adoption shall be promptly refunded by the Trustee. Furthermore, if the Plan or
the Trust in its operation becomes disqualified, as to such adopting
organization and its Employees, the portion of the Trust Fund allocable to them
shall be segregated as soon as is administratively feasible, pending either, the
prompt (a) re-qualification


                                       83
<PAGE>   89


of the Plan and Trust as to such organization and its Employees to the
satisfaction of the Internal Revenue Service, so as not to affect the continued
qualified status thereof as to any other Employer, or (b) withdrawal of such
organization from this Plan and Trust and a continuation of its own Plan and
Trust separately from this Plan and Trust, or by merger with another existing
plan and trust, with a transfer of said segregated portion of Trust assets, as
provided by Section 18.2, or (c) termination of the Plan and Trust as to itself
and its Employees.

                                   ARTICLE XIX

                              FIDUCIARY PROVISIONS

         19.1 General Allocation of Duties: Each fiduciary with respect to the
Plan shall have only those specific powers, duties, responsibilities and
obligations as are specifically given him under the Plan. The Trustee shall have
only those specific powers, duties, responsibilities and obligations as are
specifically given it in the Trust. The board of directors of each Employer
shall have the sole responsibility for authorizing its contributions under the
Plan and for terminating the Plan. The Company shall have the sole authority to
appoint and remove the Trustee or members of the Committee and to amend or
terminate this Plan, in whole or in part. The Committee shall have the sole
authority to appoint and remove the Investment Managers. The board of directors
of the Company and the Committee, respectively, shall make formal periodic
reviews of the Investment Managers' investments and performance in order to
determine if such investments and performance are in conflict with the
provisions of ERISA. However, said board and Committee, respectively, shall not
be liable for any acts or omissions of the Investment Manager or be under any
obligation to invest or otherwise manage any assets of the Trust Fund which are
subject to the management of the Investment Manager unless they know that said
Investment Manager has committed a breach of the obligations and duties set



                                       84
<PAGE>   90





forth in ERISA. Except as otherwise specifically provided, the Committee shall
have the sole responsibility for the administration of the Plan, which
responsibility is specifically described herein. It is intended under the Plan
that each fiduciary shall be responsible for the proper exercise of its own
powers, duties, responsibilities and obligations hereunder and shall not be
responsible for any act or failure to act of another fiduciary, except to the
extent provided by law or as specifically provided herein.

         19.2 Fiduciary Duty: Each fiduciary under the Plan shall discharge its
duties and responsibilities with respect to the Plan:

                  (a) solely in the interest of the Plan Participants, for the
         exclusive purpose of providing benefits to such Participants, and their
         Beneficiaries, and defraying reasonable expenses of administering the
         Plan;

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

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

                  (d) in accordance with the documents and instruments governing
         the Plan insofar as such documents and instruments are consistent with
         applicable law.

         19.3 Fiduciary Liability: A fiduciary shall not be liable in any way
for any acts or omissions constituting a breach of fiduciary responsibility
occurring prior to the date it becomes a fiduciary or after the date it ceases
to be a fiduciary.

         19.4 Co-Fiduciary Liability: A fiduciary shall not be liable for any
breach of fiduciary responsibility by another fiduciary unless:


                                       85
<PAGE>   91


         IN WITNESS WHEREOF, Tandy Brands Accessories, Inc. has caused its
corporate seal to be affixed hereto and these presents to be duly executed in
its name and behalf by its proper officers thereunto duly authorized this 1st
day of June, 2000.



ATTEST:                                   TANDY BRANDS ACCESSORIES, INC.

/s/ [ILLEGIBLE]
--------------------------                By:  /s/ J S B JENKIN
Assistant Secretary                            ---------------------------------
                                          Its: President
                                               ---------------------------------