Exhibit 10.4

                          EMPLOYEE STOCK OWNERSHIP PLAN

                                       OF

                                ASHE FEDERAL BANK

                          ADOPTED ON SEPTEMBER 10, 1996

                            EFFECTIVE ON JULY 1, 1996

                          INCORPORATING AMENDMENT NO. 3

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                                TABLE OF CONTENTS

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                                    ARTICLE I

                                   DEFINITIONS

SECTION 1.1    ACCOUNT.......................................................  1
SECTION 1.2    AFFILIATED EMPLOYER...........................................  1
SECTION 1.3    ALLOCATION COMPENSATION.......................................  1
SECTION 1.4    BOARD.........................................................  2
SECTION 1.5    BENEFICIARY...................................................  2
SECTION 1.6    BREAK IN SERVICE..............................................  2
SECTION 1.7    CHANGE IN CONTROL.............................................  2
SECTION 1.8    CODE..........................................................  2
SECTION 1.9    COMMITTEE.....................................................  2
SECTION 1.10   DISABILITY....................................................  2
SECTION 1.11   DOMESTIC RELATIONS ORDER......................................  2
SECTION 1.12   EFFECTIVE DATE................................................  3
SECTION 1.13   ELIGIBLE EMPLOYEE.............................................  3
SECTION 1.14   ELIGIBLE PARTICIPANT..........................................  3
SECTION 1.15   EMPLOYEE......................................................  3
SECTION 1.16   EMPLOYER......................................................  3
SECTION 1.17   EMPLOYMENT COMMENCEMENT DATE..................................  3
SECTION 1.18   ERISA.........................................................  3
SECTION 1.19   ESOP CONTRIBUTION.............................................  3
SECTION 1.20   FAIR MARKET VALUE.............................................  3
SECTION 1.21   FAMILY MEMBER.................................................  4
SECTION 1.22   FINANCED SHARE................................................  4
SECTION 1.23   FIVE PERCENT OWNER............................................  4
SECTION 1.24   FORFEITURES...................................................  4
SECTION 1.25   FORMER PARTICIPANT............................................  4
SECTION 1.26   GENERAL INVESTMENT ACCOUNT....................................  4
SECTION 1.27   HIGHLY COMPENSATED EMPLOYEE...................................  4
SECTION 1.28   HOUR OF SERVICE...............................................  5
SECTION 1.29   INVESTMENT ACCOUNT............................................  5
SECTION 1.30   INVESTMENT FUND...............................................  5
SECTION 1.31   LOAN REPAYMENT ACCOUNT........................................  6
SECTION 1.32   LOAN REPAYMENT CONTRIBUTION...................................  6
SECTION 1.33   MATERNITY OR PATERNITY LEAVE..................................  6
SECTION 1.34   MILITARY SERVICE..............................................  6
SECTION 1.35   NAMED FIDUCIARY...............................................  6
SECTION 1.36   OFFICER.......................................................  6
SECTION 1.37   PARTICIPANT...................................................  6
SECTION 1.38   PERIOD OF SERVICE.............................................  6

                                       (i)

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SECTION 1.39   PERIOD OF SEVERANCE...........................................  6
SECTION 1.40   PLAN..........................................................  7
SECTION 1.41   PLAN ADMINISTRATOR............................................  7
SECTION 1.42   PLAN YEAR.....................................................  7
SECTION 1.43   QUALIFIED DOMESTIC RELATIONS ORDER............................  7
SECTION 1.44   QUALIFIED PARTICIPANT.........................................  7
SECTION 1.45   RETIREMENT....................................................  7
SECTION 1.46   SHARE.........................................................  7
SECTION 1.47   SHARE ACQUISITION LOAN........................................  7
SECTION 1.48   SHARE INVESTMENT ACCOUNT......................................  7
SECTION 1.49   TENDER OFFER..................................................  8
SECTION 1.50   TOTAL COMPENSATION............................................  8
SECTION 1.51   TRUST.........................................................  8
SECTION 1.52   TRUST AGREEMENT...............................................  8
SECTION 1.53   TRUST FUND....................................................  8
SECTION 1.54   TRUSTEE.......................................................  8
SECTION 1.55   VALUATION DATE................................................  8


                                   ARTICLE II

                                  PARTICIPATION

SECTION 2.1    ELIGIBILITY FOR PARTICIPATION.................................  9
SECTION 2.2    COMMENCEMENT OF PARTICIPATION.................................  9
SECTION 2.3    TERMINATION OF PARTICIPATION..................................  9
SECTION 2.4    ADJUSTMENTS TO PERIOD OF SERVICE..............................  9


                                   ARTICLE III

                               SPECIAL PROVISIONS

SECTION 3.1    MILITARY SERVICE.............................................. 10
SECTION 3.2    MATERNITY OR PATERNITY LEAVE.................................. 10
SECTION 3.3    LEAVE OF ABSENCE.............................................. 11


                                   ARTICLE IV

                   CONTRIBUTIONS BY PARTICIPANTS NOT PERMITTED

SECTION 4.1    CONTRIBUTIONS BY PARTICIPANTS NOT PERMITTED................... 11

                                      (ii)

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                                    ARTICLE V

                          CONTRIBUTIONS BY THE EMPLOYER

SECTION 5.1    IN GENERAL.................................................... 12
SECTION 5.2    LOAN REPAYMENT CONTRIBUTIONS.................................. 12
SECTION 5.3    ESOP CONTRIBUTIONS............................................ 12
SECTION 5.4    TIME AND MANNER OF PAYMENT.................................... 13


                                   ARTICLE VI

                             SHARE ACQUISITION LOANS

SECTION 6.1    IN GENERAL.................................................... 13
SECTION 6.2    COLLATERAL; LIABILITY FOR REPAYMENT........................... 14
SECTION 6.3    LOAN REPAYMENT ACCOUNT........................................ 14
SECTION 6.4    RELEASE OF FINANCED SHARES.................................... 15
SECTION 6.5    RESTRICTIONS ON FINANCED SHARES............................... 16


                                   ARTICLE VII

                           ALLOCATION OF CONTRIBUTIONS

SECTION 7.1    ALLOCATION AMONG ELIGIBLE PARTICIPANTS........................ 16
SECTION 7.2    ALLOCATION OF RELEASED SHARES OR OTHER PROPERTY............... 16
SECTION 7.3    ALLOCATION OF ESOP CONTRIBUTIONS.............................. 16


                                  ARTICLE VIII

                           LIMITATIONS ON ALLOCATIONS

SECTION 8.1    OPTIONAL LIMITATIONS ON ALLOCATIONS OF ESOP CONTRIBUTIONS..... 17
SECTION 8.2    GENERAL LIMITATIONS ON CONTRIBUTIONS.......................... 17



                                      (iii)

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                                   ARTICLE IX

                                     VESTING

SECTION 9.1    VESTING....................................................... 21
SECTION 9.2    VESTING ON DEATH, DISABILITY, RETIREMENT OR CHANGE IN CONTROL. 21
SECTION 9.3    FORFEITURES ON TERMINATION OF EMPLOYMENT...................... 21
SECTION 9.4    AMOUNTS CREDITED UPON RE-EMPLOYMENT........................... 22
SECTION 9.5    ALLOCATION OF FORFEITURES..................................... 22


                                    ARTICLE X

                                 THE TRUST FUND

SECTION 10.1   THE TRUST FUND................................................ 22
SECTION 10.2   INVESTMENTS................................................... 23
SECTION 10.3   DISTRIBUTIONS FOR DIVERSIFICATION OF INVESTMENTS.............. 23
SECTION 10.4   USE OF COMMINGLED TRUST FUNDS................................. 24
SECTION 10.5   MANAGEMENT AND CONTROL OF ASSETS.............................. 24


                                   ARTICLE XI

                    VALUATION OF INTERESTS IN THE TRUST FUND

SECTION 11.1   ESTABLISHMENT OF INVESTMENT ACCOUNTS.......................... 25
SECTION 11.2   SHARE INVESTMENT ACCOUNTS..................................... 25
SECTION 11.3   GENERAL INVESTMENT ACCOUNTS................................... 25
SECTION 11.4   VALUATION OF INVESTMENT ACCOUNTS.............................. 26
SECTION 11.5   ANNUAL STATEMENTS............................................. 26


                                   ARTICLE XII

                                     SHARES

SECTION 12.1   SPECIFIC ALLOCATION OF SHARES................................. 26
SECTION 12.2   DIVIDENDS..................................................... 27
SECTION 12.3   VOTING RIGHTS................................................. 27
SECTION 12.4   TENDER OFFERS................................................. 29


                                      (iv)

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                                  ARTICLE XIII

                               PAYMENT OF BENEFITS

SECTION 13.1   IN GENERAL.................................................... 31
SECTION 13.2   DESIGNATION OF BENEFICIARIES.................................. 32
SECTION 13.3   DISTRIBUTIONS TO PARTICIPANTS AND FORMER PARTICIPANTS......... 33
SECTION 13.4   MANNER OF PAYMENT............................................. 35
SECTION 13.5   MINIMUM REQUIRED DISTRIBUTIONS................................ 36
SECTION 13.6   DIRECT ROLLOVER OF ELIGIBLE ROLLOVER DISTRIBUTIONS............ 37
SECTION 13.7   VALUATION OF SHARES UPON DISTRIBUTION TO A PARTICIPANT........ 39
SECTION 13.8   PUT OPTIONS
SECTION 13.9   RIGHT OF FIRST REFUSAL

                                   ARTICLE XIV

                                 ADMINISTRATION

SECTION 14.1   NAMED FIDUCIARIES............................................. 41
SECTION 14.2   PLAN ADMINISTRATOR............................................ 41
SECTION 14.3   COMMITTEE RESPONSIBILITIES.................................... 42
SECTION 14.4   CLAIMS PROCEDURE.............................................. 44
SECTION 14.5   CLAIMS REVIEW PROCEDURE....................................... 44
SECTION 14.8   ALLOCATION OF FIDUCIARY RESPONSIBILITIES AND EMPLOYMENT OF
               ADVISORS...................................................... 45
SECTION 14.9   OTHER ADMINISTRATIVE PROVISIONS............................... 45


                                   ARTICLE XV

                  AMENDMENT, TERMINATION AND TAX QUALIFICATION

SECTION 15.1   AMENDMENT AND TERMINATION BY ASHE FEDERAL BANK................ 46
SECTION 15.2   AMENDMENT OR TERMINATION OTHER THAN BY ASHE FEDERAL BANK...... 46
SECTION 15.3   CONFORMITY TO INTERNAL REVENUE CODE........................... 46
SECTION 15.4   CONTINGENT NATURE OF CONTRIBUTIONS............................ 47




                                       (v)

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                                   ARTICLE XVI

                     SPECIAL RULES FOR TOP HEAVY PLAN YEARS

SECTION 16.1   IN GENERAL.................................................... 47
SECTION 16.2   DEFINITION OF TOP HEAVY PLAN.................................. 48
SECTION 16.3   DETERMINATION DATE............................................ 48
SECTION 16.4   CUMULATIVE ACCRUED BENEFITS................................... 49
SECTION 16.5   KEY EMPLOYEES................................................. 49
SECTION 16.6   REQUIRED AGGREGATION GROUP.................................... 50
SECTION 16.7   PERMISSIBLE AGGREGATION GROUP................................. 50
SECTION 16.8   SPECIAL REQUIREMENTS DURING TOP HEAVY PLAN YEARS.............. 50


                                  ARTICLE XVII

                            MISCELLANEOUS PROVISIONS

SECTION 17.1   GOVERNING LAW................................................. 51
SECTION 17.2   NO RIGHT TO CONTINUED EMPLOYMENT.............................. 52
SECTION 17.3   CONSTRUCTION OF LANGUAGE...................................... 52
SECTION 17.4   HEADINGS...................................................... 52
SECTION 17.5   MERGER WITH OTHER PLANS....................................... 52
SECTION 17.6   NON-ALIENATION OF BENEFITS.................................... 52
SECTION 17.7   PROCEDURES INVOLVING DOMESTIC RELATIONS ORDERS................ 53
SECTION 17.8   LEASED EMPLOYEES.............................................. 53
SECTION 17.9   STATUS AS AN EMPLOYEE STOCK OWNERSHIP PLAN.................... 54


                                  ARTICLE XVIII

                                CHANGE IN CONTROL

SECTION 18.1   DEFINITION OF CHANGE IN CONTROL............................... 54
SECTION 18.2   VESTING ON CHANGE OF CONTROL.................................. 56
SECTION 18.3   REPAYMENT OF LOAN............................................. 56
SECTION 18.4   PLAN TERMINATION AFTER CHANGE IN CONTROL...................... 57
SECTION 18.5   AMENDMENT OF ARTICLE XVIII.................................... 57


                                      (vi)

<PAGE>

                          EMPLOYEE STOCK OWNERSHIP PLAN

                                       OF

                                ASHE FEDERAL BANK

                                    ARTICLE I

                                    ---------

                                   DEFINITIONS

                                   -----------


            The following  definitions shall apply for the purposes of the Plan,
unless a different meaning is clearly indicated by the context:

            SECTION  1.1  ACCOUNT   means  an  account   established   for  each
Participant  to which is  allocated  such  Participant's  share,  if any, of all
Financed  Shares and other  property that are re leased from the Loan  Repayment
Account in accordance with section 6.4,  together with his share, if any, of any
ESOP Contributions that may be made by the Employer.

            SECTION 1.2  AFFILIATED  EMPLOYER means any  corporation  which is a
member of a controlled  group of  corporations  (as defined in section 414(b) of
the Code) that  includes  the  Employer;  any trade or business  (whether or not
incorporated)  that is under common control (as defined in section 414(c) of the
Code) with the Employer;  any organization (whether or not incorporated) that is
a member of an  affiliated  service  group (as defined in section  414(m) of the
Code) that  includes  the  Employer;  any  leasing  organization  (as defined in
section 414(n) of the Code) to the extent that any of its employees are required
pursuant  to  section  414(n)  of the Code to be  treated  as  employees  of the
Employer;  and any other  entity  that is  required  to be  aggregated  with the
Employer pursuant to regulations under section 414(o) of the Code.

            SECTION  1.3  ALLOCATION  COMPENSATION  during any period  means the
compensation  taken into account in  determining  the allocation of benefits and
contributions  among  Participants  and consists of the  aggregate  compensation
received  by an  Employee  from the  Employer  with  respect  to such  period as
reported to the Internal  Revenue  Service as wages for such period  pursuant to
section  6041(a)  of  the  Code,  plus  the  amount  by  which  such  Employee's
compensation  with  respect  to such  period  has  been  reduced  pursuant  to a
compensation  reduction  agreement under the terms of any of the following plans
which may be maintained by the Employer:

            (a) a qualified cash or deferred arrangement described in
      section 401(k) of the Code;

            (b) a salary reduction simplified employee pension plan described in
      section 408(k) of the Code;

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                                       -2-

            (c) a tax deferred  annuity plan  described in section 403(b) of the
      Code; or

            (d) a cafeteria plan described in section 125 of the Code.

In no event, however,  shall an Employee's Allocation  Compensation for any Plan
Year include any compensation in excess of $150,000. The $150,000 limitation set
forth in the preceding  sentence shall be indexed in accordance with regulations
prescribed  under section  401(a)(17) of the Code. If there are less than twelve
(12) months in the Plan Year,  the $150,000  limitation  (as adjusted)  shall be
prorated by multiplying such limitation by a fraction, the numerator of which is
the  number of months  in the Plan Year and the  denominator  of which is twelve
(12). For purposes of applying the foregoing  limitations to any person who is a
Five Percent Owner or who is one of the ten Highly  Compensated  Employees  with
the highest Total  Compensation  (determined  prior to the  application  of this
sentence),  any Allocation  Compensation paid to the spouse of such person or to
any lineal  descendant  of such person who has not  attained age 19 on or before
the last day of such Plan Year shall be deemed to have been paid to such person.

            SECTION 1.4 BOARD means the Board of Directors of Ashe Federal Bank.

            SECTION 1.5 BENEFICIARY means the person or persons  designated by a
Participant or Former  Participant  or other person  entitled to a benefit under
the Plan, or otherwise determined to be entitled to a benefit under the Plan. If
more than one person is  designated,  each shall have an equal share  unless the
person making the designation directed otherwise.  The word "person" includes an
individual, a trust, an estate or any other person that is permitted to be named
as a Beneficiary.

            SECTION 1.6 BREAK IN SERVICE means a Period of Severance of at least
365 consecutive days.

            SECTION  1.7 CHANGE IN CONTROL  means an event as defined in section
18.1.

            SECTION 1.8 CODE means the Internal  Revenue Code of 1986 (including
the corresponding provisions of any succeeding law).

            SECTION 1.9 COMMITTEE means the Compensation  Committee described in
section 14.3.

            SECTION  1.10  DISABILITY  means a  condition  of total  incapacity,
mental or physical, for further performance of duty with the Employer, which the
Plan  Administrator  shall have deter mined,  on the basis of competent  medical
evidence, is likely to be permanent.

            SECTION 1.11 DOMESTIC  RELATIONS  ORDER means a judgment,  decree or
order (including the approval of a property settlement) that is made pursuant to
a  state  domestic  relations  or  community  property  law and  relates  to the
provision of child support, alimony payments, or

<PAGE>

                                       -3-

marital  property rights to a spouse,  child or other dependent of a Participant
or Former Participant.

            SECTION 1.12 EFFECTIVE DATE means July 1, 1996.

            SECTION 1.13 ELIGIBLE EMPLOYEE means an Employee who is eligible for
participation in the Plan in accordance with Article II.

            SECTION  1.14  ELIGIBLE  PARTICIPANT  means,  for any Plan Year,  an
Employee who is a Participant during all or any part of such Plan Year.

            SECTION 1.15 EMPLOYEE means any person, including an officer, who is
employed by the Employer.

            SECTION 1.16  EMPLOYER  means Ashe Federal  Bank,  and any successor
thereto and any Affiliated  Employer which,  with the prior written  approval of
the Board and  subject  to such  terms and  conditions  as may be imposed by the
Board, shall adopt this Plan.

            SECTION 1.17 EMPLOYMENT  COMMENCEMENT DATE means the date on which a
person first performs an Hour of Service,  except that if an Employee  separates
from  service  with the  Employer,  incurs a Break in Service  and  subsequently
returns to service with the Employer, his Employment  Commencement Date shall be
the date on which he first  performs an Hour of Service  following  the Break in
Service.

            SECTION 1.18 ERISA means the Employee Retirement Income Security Act
of 1974, as amended from time to time (including the corresponding provisions of
any succeeding law).

            SECTION  1.19 ESOP  CONTRIBUTION  means  Shares or  amounts of money
contributed to the Plan by the Employer in accordance with section 5.3.

            SECTION 1.20 FAIR MARKET VALUE on any date means:

            (a) with respect to a Share:

                  (i) the final  quoted sale price on the date in question  (or,
            if there is no  reported  sale on such date,  on the last  preceding
            date on  which  any  reported  sale  occurred)  as  reported  in the
            principal  consolidated  reporting system with respect to securities
            listed  or  admitted  to  trading  on the  principal  United  States
            securities  exchange  on which like Shares are listed or admitted to
            trading; or

                  (ii) if like  Shares are not listed or  admitted to trading on
            any such exchange, the closing bid quotation with respect to a Share
            on such  date on the  National  Association  of  Securities  Dealers
            Automated Quotation

<PAGE>

                                       -4-

            System, or, if no such quotation is provided, on another
            similar system, se lected by the Committee, then in use; or

                  (iii) if sections 1.20(a)(i) and (ii) are not applicable,  the
            fair  mar  ket  value  of a  Share  as  determined  by an  appraiser
            independent of the Em ployer and experienced and expert in the field
            of corporate appraisal.

            (b) with  respect to  property  other than  Shares,  the fair market
      value determined in the manner determined by the Trustee.

            SECTION 1.21 FAMILY MEMBER means,  with respect to any person,  such
person's  spouse and lineal  ascendants or  descendants  and the spouses of such
lineal ascendants or descendants.

            SECTION  1.22  FINANCED  SHARE  means:  (a) a Share  that  has  been
purchased with the proceeds of a Share Acquisition Loan, that has been allocated
to the Loan  Repayment  Account in accordance  with section 6.3 and that has not
been released in accordance with section 6.4; or (b) a Share that  constitutes a
dividend  paid with respect to a Share  described in section  1.22(a),  that has
been allocated to the Loan Repayment  Account in accordance with section 6.3 and
that has not been released in accordance with section 6.4.

            SECTION 1.23 FIVE PERCENT  OWNER means,  for any Plan Year, a person
who,  during such Plan Year,  owned (or was considered as owning for purposes of
section  318 of the  Code):  (a) more  than 5% of the  value of all  classes  of
outstanding  stock of the Employer;  or (b) stock possessing more than 5% of the
combined voting power of all classes of outstanding stock of the Employer.

            SECTION 1.24 FORFEITURES means the amounts forfeited by Participants
and Former  Participants  on  termination  of employment  prior to full vesting,
pursuant  to section  9.3,  less  amounts  credited  because  of  re-employment,
pursuant to section 9.4.

            SECTION  1.25  FORMER   PARTICIPANT   means  a   Participant   whose
participation in the Plan has terminated pursuant to section 2.3.

            SECTION 1.26 GENERAL  INVESTMENT ACCOUNT means an Investment Account
established and maintained in accordance with Article XI.

            SECTION 1.27 HIGHLY  COMPENSATED  EMPLOYEE means, for any Plan Year,
an Employee who:

            (a) at any time during such Plan Year or the  immediately  preceding
      Plan Year was a Five Percent Owner; or

<PAGE>

                                       -5-

            (b) is a member of the group  consisting  of the 100  Employees  and
      persons  employed by any  Affiliated  Employer  who  received the greatest
      Total Compensation for such Plan Year and during such Plan Year:

                  (i) received Total  Compensation  for such Plan Year in excess
            of $75,000 (or such higher amount as may be permitted  under section
            414(q) of the Code); or

                  (ii) received Total  Compensation  for such Plan Year that was
            in  excess  of both (A)  $50,000  (or such  higher  amount as may be
            permitted  under  section  414(q)  of the  Code)  and (B) the  Total
            Compensation for such Plan Year of at least 80% of the Employees and
            persons employed by any Affiliated Employer for such Plan Year; or

                  (iii)  was an  Officer  of  the  Employer  or  any  Affiliated
            Employer  and  received  Total  Compensation  for such  Plan Year in
            excess of 50% of the amount in effect under section  415(b)(1)(A) of
            the Code for such Plan Year; or

            (c) during the immediately preceding Plan Year:

                  (i) received Total  Compensation  for such Plan Year in excess
            of $75,000 (or such higher amount as may be permitted  under section
            414(q) of the Code); or

                  (ii) received Total  Compensation  for such Plan Year that was
            in  excess  of both (A)  $50,000  (or such  higher  amount as may be
            permitted  under  section  414(q)  of the  Code)  and (B) the  Total
            Compensation for such Plan Year of at least 80% of the Employees and
            persons employed by an Affiliated Employer for such Plan Year; or

                  (iii)  was an  Officer  of  the  Employer  or  any  Affiliated
            Employer  and  received  Total  Compensation  for such  Plan Year in
            excess of 50% of the amount in effect under section  415(b)(1)(A) of
            the Code for such Plan Year.

The  determination  of who is a  Highly  Compensated  Employee  will  be made in
accordance with section 414(q) of the Code and the regulations  thereunder.  For
purposes of applying any provisions of the Plan applicable to Highly Compensated
Employees,  any person who is a Family  Member of a Five Percent Owner or one of
the ten Highly  Compensated  Employees with the highest Total Compensation for a
Plan Year shall not be treated as a separate  person for such Plan Year, and any
Total Compensation or Allocation  Compensation paid to such person for such Plan
Year, as well as his share of allocations of  contributions or Shares under this
Plan,  shall be  attributed  to the Five  Percent  Owner or  Highly  Compensated
Employee.

<PAGE>

                                       -6-

            SECTION  1.28 HOUR OF SERVICE  means each hour for which a person is
paid, or entitled to payment,  for the performance of duties for the Employer or
any Affiliated Employer.

            SECTION 1.29  INVESTMENT  ACCOUNT means either a General  Investment
Account or a Share Investment Account.

            SECTION  1.30  INVESTMENT  FUND  means  any one of the three or more
funds as may be established from time to time by the Committee  which,  together
with any and all Shares and other  investments held under the Plan,  constitutes
the Trust Fund.

            SECTION 1.31 LOAN REPAYMENT ACCOUNT means an account established and
maintained in accordance with section 6.3.

            SECTION  1.32 LOAN  REPAYMENT  CONTRIBUTION  means  amounts of money
contributed to the Plan by the Employer in accordance with section 5.2.

            SECTION 1.33 MATERNITY OR PATERNITY  LEAVE means a person's  absence
from work for the Employer and all  Affiliated  Employers:  (a) by reason of the
pregnancy of such person;  (b) by reason of the birth of a child of such person;
(c) by reason of the placement of a child with the person in connection with the
adoption of such child by such person; or (d) for purposes of caring for a child
of such person immediately  following the birth of the child or the placement of
the child with such person.

            SECTION 1.34  MILITARY  SERVICE means service in the armed forces of
the United States.  It may also include,  if and to the extent that the Board so
provides and if all Participants and Former  Participants in like  circumstances
are similarly  treated,  special service for the government of the United States
and other public service.

            SECTION   1.35  NAMED   FIDUCIARY   means  any  person,   committee,
corporation or organization as described in section 14.1.

            SECTION  1.36  OFFICER  means an employee  who is an  administrative
executive in regular and continued  service with the Employer or any  Affiliated
Employer;  PROVIDED,  HOWEVER, that at no time shall more than the lesser of (a)
50 employees or (b) the greater of: (i) 3 employees or (ii) 10% of all employees
be treated as  Officers.  The  determination  of  whether an  employee  is to be
considered  an Officer shall be made in  accordance  with section  416(i) of the
Code.

            SECTION  1.37  PARTICIPANT  means any person who has  satisfied  the
eligibility  requirements set forth in section 2.1, who has become a Participant
in accordance with section 2.2, and whose participation has not terminated under
section 2.3.

            SECTION 1.38 PERIOD OF SERVICE  means a period of  consecutive  days
commencing on a person's  Employment  Commencement Date and ending on the date a
Period of Severance begins, with any adjustments required under section 2.4.

Whenever used in the Plan, a Period of

<PAGE>

                                       -7-

Service "of year(s)" means the quotient of the Period of Service divided by 365,
and any fractional part of a year shall for such purposes be disregarded.

            SECTION 1.39 PERIOD OF SEVERANCE means a period of consecutive  days
commencing with the earlier of:

            (a) the date on which a person terminates  service with the Employer
      and  all  Affiliated  Employers  by  reason  of  resignation,  retirement,
      discharge or death; or

            (b) the first  anniversary of the date on which a person  terminates
      service  with the  Employer  and all  Affiliated  Employers  for any other
      reason  including  layoff,  disability,  leave  of  absence  or any  other
      cessation of service not otherwise included as service under the Plan;

and ending on the first date  following  such  separation  from service on which
such person performs an Hour of Service.

            SECTION 1.40 PLAN means the Employee  Stock  Ownership  Plan of Ashe
Federal Bank and Certain  Affiliates as amended from time to time.  The Plan may
be referred to as the "Employee  Stock  Ownership  Plan of Ashe Federal Bank and
Certain Affiliates."

            SECTION  1.41  PLAN  ADMINISTRATOR  means  any  person,   committee,
corporation or organization designated in section 14.2, or appointed pursuant to
section 14.2, to perform the responsibilities of that office.

            SECTION 1.42 PLAN YEAR means the period  commencing on the Effective
Date and ending on June 30, 1997 and each 12-month period beginning on each July
1st thereafter.

            SECTION 1.43  QUALIFIED  DOMESTIC  RELATIONS  ORDER means a Domestic
Relations Order that: (a) clearly  specifies (i) the name and last known mailing
address of the Participant or Former Participant and of each person given rights
under such  Domestic  Relations  Order,  (ii) the amount or  percentages  of the
Participant's  or Former  Participant's  benefits  under this Plan to be paid to
each  person  covered  by such  Domestic  Relations  Order,  (iii) the number of
payments or the period to which such Domestic Relations Order applies,  and (iv)
the name of this Plan;  and (b) does not  require  the payment of a benefit in a
form or amount that is (i) not  otherwise  provided for under the Plan,  or (ii)
inconsistent with a previous Qualified Domestic Relations Order.

            SECTION  1.44  QUALIFIED  PARTICIPANT  means a  Participant  who has
attained  age 55 and who has  been a  Participant  in the  Plan  for at least 10
years.

            SECTION 1.45 RETIREMENT  means: (a) any termination of participation
in the Plan at or after  attainment of age 65; and (b) any  retirement  under an
applicable qualified defined benefit plan of the Employer as in effect from time
to time with entitlement to a normal or early retirement allowance.

<PAGE>

                                       -8-

            SECTION 1.46 SHARE means a share of any class of stock issued by the
Employer or any Affiliated  Employer;  provided that such share is a "qualifying
employer  security" within the meaning of section 409(l) of the Code and section
407(d)(5) of ERISA.

            SECTION  1.47 SHARE  ACQUISITION  LOAN means a loan  obtained by the
Trustee in accordance with Article VI.

            SECTION 1.48 SHARE  INVESTMENT  ACCOUNT means an Investment  Account
established and maintained in accordance with Article XI.

            SECTION  1.49 TENDER  OFFER means a tender  offer made to holders of
any one or more classes of Shares generally, or any other offer, made to holders
of any one or more classes of Shares generally, to purchase, exchange, redeem or
otherwise transfer Shares, whether for cash or other consideration.

            SECTION  1.50  TOTAL   COMPENSATION   during  any  period  means  an
employee's  aggregate total compensation paid by the Employer and any Affiliated
Employer with respect to such period as reported to the Internal Revenue Service
for such person pursuant to section 6041(a) of the Code. In addition, solely for
purposes of identifying  those employees who are Highly  Compensated  Employees,
each  employee's  Total  Compensation  shall  include  any  amounts by which the
employee's compensation paid by the Employer or any Affiliated Employer has been
reduced  pursuant to a compensation  reduction  agreement under the terms of any
qualified cash or deferred arrangement  described in section 401(k) of the Code,
any salary  reduction  simplified  employee  pension  plan  described in section
408(k) of the Code,  any tax deferred  annuity plan des cribed in section 403(b)
of the Code, or any cafeteria  plan  described in section 125 of the Code. In no
event, however,  shall an employee's Total Compensation include any compensation
in excess of $150,000 (or such higher  amount as may be permitted  under section
401(a)(17) of the Code).  For purposes of applying the foregoing  limitations to
any  person  who is a Five  Percent  Owner  or  who  is  one of the  ten  Highly
Compensated  Employees with the highest Total Compensation  (determined prior to
the application of this sentence),  any Total Compensation paid to the spouse of
such person or to any lineal  descendant of such person who has not attained age
19 on or before the last day of such Plan Year shall be deemed to have been paid
to such person.

            SECTION 1.51 TRUST means the legal relationship created by the Trust
Agreement pursuant to which the Trustee holds the Trust Fund in trust. The Trust
may be referred to as the "Employee  Stock  Ownership Plan Trust of Ashe Federal
Bank and Certain Affiliates."

            SECTION  1.52  TRUST  AGREEMENT  means the  agreement  between  Ashe
Federal Bank and the Trustee  therein named or its successors  pursuant to which
the Trust Fund shall be held in trust.

            SECTION   1.53  TRUST  FUND   means  the   corpus   (consisting   of
contributions  paid  over to the  Trustee,  and  investments  thereof),  and all
earnings,  appreciations or additions  thereof and thereto,  held by the Trustee
under the Trust  Agreement in accordance  with the Plan,  less any  depreciation
thereof and any payments made therefrom pursuant to the Plan.

<PAGE>

                                       -9-

            SECTION 1.54  TRUSTEE  means the Trustee of the Trust Fund from time
to time in office.  The Trustee  shall  serve as Trustee  until it is removed or
resigns  from  office  and is re  placed by a  successor  Trustee  appointed  in
accordance with the terms of the Trust Agreement.

            SECTION 1.55 VALUATION DATE means the last business day of June.

                                   ARTICLE II

                                   ----------

                                  PARTICIPATION

                                  -------------


            SECTION 2.1 ELIGIBILITY FOR PARTICIPATION.

            (a) Only  Eligible  Employees may be or become  Participants  in the
Plan. An Employee shall be an Eligible  Employee if he is a common-law  employee
of an Employer and is not excluded under section 2.1(b).

            (b) An Employee is not an Eligible Employee if he:

            (i) is an Employee who has waived any claim to participation
      in the Plan; or

            (ii)  is  an  Employee  or  in a  unit  of  Employees  covered  by a
      collective   bargaining  agreement  with  the  Employer  where  retirement
      benefits were the subject of good-faith bargaining,  unless such agreement
      expressly provides that Employees such as he be covered under the Plan; or

            (iii) is a "leased employee" as defined in section 17.8(a).

            SECTION 2.2 COMMENCEMENT OF PARTICIPATION.

            Every  Employee who is an Eligible  Employee on the  Effective  Date
shall automatically  become a Participant on the Effective Date. An Employee who
becomes an Eligible Employee after the Effective Date shall automatically become
a  Participant  on the first day of the  month  following  the month in which he
becomes an Eligible Employee.

            SECTION 2.3 TERMINATION OF PARTICIPATION.

            Participation  in the Plan  shall  cease,  and a  Participant  shall
become a Former  Participant,  upon termination of employment with the Employer,
death, Disability or Retirement,

<PAGE>

                                      -10-

failure to return to work upon the  expiration of a leave of absence  granted by
the  Employer  pursuant to section  3.3 or becoming an Employee  who is excluded
under section 2.1(b).

            SECTION 2.4 ADJUSTMENTS TO PERIOD OF SERVICE.

            (a) The Period of Service of an  Employee  shall  include any period
during which the Employee is separated  from the service of the Employer and all
Affiliated  Employers if such period is less than 365 consecutive  days measured
from the date on which such  Employee  terminates  service  and ending  with the
first date following such termination for which the Employer is credited with an
Hour of Service.

            (b) The Period of Service of an Employee  who returns to the service
of the Employer and all Affiliated Employers following a separation from service
shall commence with the first date following  such  separation  from service for
which the  Employer is credited  with an Hour of Service,  and he shall be given
credit for any Period of Service prior to such  separation,  except that if such
separation includes a Break in Service,  such credit shall not be given until he
completes a Period of Service of one year following such Break in Service.  If a
non-vested  Employee  returns to the service of the  Employer or any  Affiliated
Employer following a Period of Severance of greater than five consecutive years,
then such Employee shall forfeit any Period of Service prior to such separation.

            (c) The Period of Service of an Employee  who is absent on Maternity
or  Paternity  Leave shall  exclude any period of such absence that occurs after
the first anniversary of the commencement of such absence.

            (d) An  Employee's  Period of Service  shall also be adjusted to the
extent  required  by the  Family  and  Medical  Leave  Act  or  any  regulations
promulgated thereunder.

                                   ARTICLE III

                                   -----------

                               SPECIAL PROVISIONS

                               ------------------


            SECTION 3.1 MILITARY SERVICE.

            In the case of a termination  of employment of any Employee to enter
directly  into  Military  Service,  the entire  period of his  absence  shall be
treated,  for purposes of vesting and  eligibility for  participation  (but not,
except as required by law, for purposes of  eligibility  to share in allocations
of  contributions  in accordance  with Article VII), as if he had worked for the
Employer during the period of his absence.  In the event of the re-employment of
such person by the Employer within a period of not more than six months:

<PAGE>

                                      -11-

            (a) after he becomes entitled to release or discharge, if he
      has entered into the armed forces; or

            (b) after such  service  terminates,  if he has  entered  into other
      service defined as Military Service;

such period, also, shall be deemed to be Military Service.

            SECTION 3.2 MATERNITY OR PATERNITY LEAVE.

            (a) Subject to section 3.2(b), in the event of an Employee's absence
from work in the service of the  Employer  and all  Affiliated  Employers  for a
period:

            (i) that commences on or after October 1, 1985;

            (ii) for which the person is not paid or  entitled to payment by the
      Employer or any Affiliated Employer;

            (iii) that constitutes Maternity or Paternity Leave; and

            (iv) that exceeds one year;

then solely for purposes of determining  when a Break in Service has occurred or
when a Period of  Severance  of five years has  occurred,  the period of such an
absence  commencing on the first  anniversary  of such absence and ending on the
second  anniversary of the commencement of such absence (or, if earlier,  on the
last day of such absence) shall not be treated as a Period of Severance.

            (b)  Notwithstanding  anything  in the  Plan to the  contrary,  this
section  3.2  shall  not  apply   unless  the  person   furnishes  to  the  Plan
Administrator  such information as the Plan Administrator may reasonably require
in order to establish: (i) that the person's absence is one described in section
3.2(a); and (ii) the number of working days during such absence.

            SECTION 3.3 LEAVE OF ABSENCE.

            In the event of  temporary  absence  from work in the service of the
Employer and all  Affiliated  Employers  for any period of two years or less for
which a Participant  shall have been granted a leave of absence by the Employer,
the entire  period of his absence  shall be treated for  purposes of vesting and
eligibility for  participation  (but not for purposes of eligibility to share in
the allocation of  contributions  in accordance  with Article VII), as if he had
worked for the Employer during the period of his absence.  Absence from work for
a period  greater than, or failure to return to work upon the expiration of, the
period of leave of absence granted by the Employer shall terminate participation
in the Plan as of the date on which such period ended. In

<PAGE>

                                      -12-

granting  leaves of absence for  purposes  of the Plan,  all  Employees  in like
circumstances shall be similarly treated.

                                   ARTICLE IV

                                   ----------

                   CONTRIBUTIONS BY PARTICIPANTS NOT PERMITTED

                   -------------------------------------------


            SECTION 4.1 CONTRIBUTIONS BY PARTICIPANTS NOT PERMITTED.

            Participants shall not be required, nor shall they be permitted,  to
make contributions to the Plan.

                                    ARTICLE V

                                    ---------

                          CONTRIBUTIONS BY THE EMPLOYER

                          -----------------------------


            SECTION 5.1 IN GENERAL.

            Subject to the  limitations of Article VIII, for each Plan Year, the
Employer  shall  contribute  to the Plan the amount,  if any,  determined by the
Board,  but in no event less than the amount  described in section  5.2(a).  The
amount  contributed  for any Plan  Year  shall be  treated  as a Loan  Repayment
Contribution, an ESOP Contribution, or a combination thereof, in accordance with
the provisions of this Article V.

            SECTION 5.2 LOAN REPAYMENT CONTRIBUTIONS.

            For each Plan Year, a portion of the  Employer's  contributions,  if
any, to the Plan for such Plan Year equal to the sum of:

            (a) the minimum  amount  required to be added to the Loan  Repayment
      Account  in  order  to  provide  adequate  funds  for the  payment  of the
      principal  and interest  then required to be repaid under the terms of any
      outstanding Share Acquisition Loan obtained by the Trustee; plus

            (b) the additional amount, if any, designated by the Committee to be
      applied to the  prepayment of principal or interest under the terms of any
      outstand ing Share Acquisition Loan obtained by the Trustee;

<PAGE>

                                      -13-

shall be treated as a Loan  Repayment  Contribution  for such Plan Year.  A Loan
Repayment  Contribution for a Plan Year shall be allocated to the Loan Repayment
Account  and shall be applied by the  Trustee,  in the  manner  directed  by the
Committee,  to the  payment  of accrued  interest  and to the  reduction  of the
principal  balance of any Share Acquisition Loan obtained by the Trustee that is
outstanding on the date on which the Loan Repayment Contribution is made. To the
extent that a Loan Repayment  Contribution  for a Plan Year results in a release
of  Financed  Shares in  accordance  with  section  6.4,  such  Shares  shall be
allocated  among the  Accounts  of Eligible  Participants  for such Plan Year in
accordance with section 7.2.

            SECTION 5.3 ESOP CONTRIBUTIONS.

            In the event that the amount of the Employer's  contributions to the
Plan for a Plan Year exceeds the amount of the Loan Repayment  Contributions for
such Plan Year, such excess shall be treated as an ESOP  Contribution  and shall
be allocated among the Accounts of the Eligible  Participants for such Plan Year
in accordance with section 7.3.

            SECTION 5.4 TIME AND MANNER OF PAYMENT.

            (a) Payment of  contributions  made pursuant to this Article V shall
be made:

            (i) in cash, in the case of a Loan Repayment Contribution; and

            (ii) in cash, in Shares or in a combination  of cash and Shares,  in
      the case of an ESOP Contribution.

            (b)  Contributions  made  pursuant to this Article V for a Plan Year
shall  be paid to the  Trust  Fund on or  before  the due  date  (including  any
extensions  thereof) of the Employer's federal income tax return for its taxable
year during which such Plan Year ends. All such contributions shall be allocated
to  the  Accounts  of  the  Eligible  Participants,  in  the  case  of  an  ESOP
Contribution,  or to the Loan Repayment Account, in the case of a Loan Repayment
Contribution,  as soon as is  practicable  following the payment  thereof to the
Trust Fund.

            (a) to purchase Shares; or

            (b) to make payments of principal or interest,  or a combination  of
      principal and interest, with respect to such Share Acquisition Loan; or

            (c) to make payments of principal and interest,  or a combination of
      principal  and  interest,  with  respect to a  previously  obtained  Share
      Acquisition Loan that is then outstanding.

Any such Share  Acquisition  Loan shall be obtained on such terms and conditions
as the Committee may approve; PROVIDED,  HOWEVER, that such terms and conditions
shall provide for the payment of

<PAGE>

                                      -14-

interest  at no  more  than a  reasonable  rate  and  shall  permit  such  Share
Acquisition Loan to satisfy the  requirements of section  4975(d)(3) of the Code
and section 408(b)(3) of ERISA.

            SECTION 6.2 COLLATERAL; LIABILITY FOR REPAYMENT.

            (a) The  Committee  may direct the Trustee to pledge,  at the time a
Share  Acquisition  Loan  is  obtained,  the  following  assets  of the  Plan as
collateral for such Share Acquisition Loan:

            (i) any Shares purchased with the proceeds of such Share Acquisition
      Loan and any earnings attributable thereto;

            (ii) any  Financed  Shares then  pledged as  collateral  for a prior
      Share  Acquisition  Loan which is repaid  with the  proceeds of such Share
      Acquisition Loan and any earnings attributable thereto; and

            (iii) pending the application  thereof to purchase Shares or repay a
      prior Share  Acquisition Loan, the proceeds of such Share Acquisition Loan
      and any earn ings attributable thereto.

Except as specifically  provided in this section  6.2(a),  no assets of the Plan
shall be pledged as collateral for the repayment of any Share Acquisition Loan.

            (b) No person  entitled to payment  under a Share  Acquisition  Loan
shall have any right to the assets of the Plan except for:

            (i) Financed  Shares that have been pledged as  collateral  for such
      Share Acquisition Loan pursuant to section 6.2(a);

            (ii) Loan Repayment Contributions made pursuant to section 5.2; and

            (iii) earnings  attributable to Financed Shares described in section
      6.2(b)(i)  and  to  Loan  Repayment  Contributions  described  in  section
      6.2(b)(ii).

Except in the event of a default or a refinancing  pursuant to which an existing
Share  Acquisition  Loan is repaid,  the  aggregate  amount of all  payments  of
principal and interest made by the Trustee with respect to all Share Acquisition
Loans  obtained  on behalf of the Plan  shall at no time  exceed  the  aggregate
amount of all Loan Repayment  Contributions  theretofore made plus the aggregate
amount  of all  earnings  (other  than  dividends  paid in the  form of  Shares)
attributable to Financed Shares and to such Loan Repayment Contributions.

            (c) Any Share Acquisition Loan shall be without recourse against the
Plan and Trust.

<PAGE>

                                      -15-

            SECTION 6.3 LOAN REPAYMENT ACCOUNT.

            In the  event  that one or more  Share  Acquisition  Loans  shall be
obtained, a Loan Repayment Account shall be established under the Plan. The Loan
Repayment  Account shall be credited with all Shares  acquired with the proceeds
of a Share Acquisition  Loan, all Loan Repayment  Contributions and all earnings
(including dividends paid in the form of Shares) or appreciation attributable to
such Shares and Loan Repayment  Contributions.  The Loan Repayment Account shall
be charged with all payments of principal  and interest made by the Trustee with
respect to any Share  Acquisition  Loan, all Shares  released in accordance with
section 6.4 and all losses,  depreciation or expenses  attributable to Shares or
to other property credited thereto. The Financed Shares, as well as any earnings
thereon,  shall  be  allocated  to such  Loan  Repayment  Account  and  shall be
accounted for separately from all other amounts contributed under the Plan.

            SECTION 6.4 RELEASE OF FINANCED SHARES.

            As of  the  last  day  of  each  Plan  Year  during  which  a  Share
Acquisition Loan is outstanding, a portion of the Financed Shares purchased with
the proceeds of such Share  Acquisition Loan and allocated to the Loan Repayment
Account shall be released.  The number of Financed  Shares  released in any such
Plan  Year  shall be  equal to the  amount  determined  according  to one of the
following methods:

            (a) by computing  the product of: (i) the number of Financed  Shares
      purchased with the proceeds of such Share  Acquisition  Loan and allocated
      to the Loan Repayment Account  immediately before the release is effected;
      multiplied  by (ii) a fraction,  the  numerator of which is the  aggregate
      amount of the  principal and interest  payments  (other than payments made
      upon  the  refinancing  of a Share  Acquisition  Loan as  contemplated  by
      section  6.1(c)) made with respect to such Share  Acquisition  Loan during
      such Plan Year, and the  denominator  of which is the aggregate  amount of
      all principal and interest remaining to be paid with respect to such Share
      Acquisition Loan as of the first day of such Plan Year; or

            (b) by computing  the product of: (i) the number of Financed  Shares
      purchased with the proceeds of such Share  Acquisition  Loan and allocated
      to the Loan Repayment Account  immediately before the release is effected;
      multiplied  by (ii) a fraction,  the  numerator of which is the  aggregate
      amount  of the  principal  payments  (other  than  payments  made upon the
      refinancing of a Share Acquisition Loan as contemplated by section 6.1(c))
      made with  respect to such Share  Acquisition  Loan during such Plan Year,
      and the  denominator  of which is the  aggregate  amount of all  principal
      remaining to be paid with respect to such Share Acquisition Loan as of the
      first day of such Plan Year; PROVIDED,  HOWEVER, that the method described
      in this section 6.4(b) may be used only if the Share Acquisition Loan does
      not  extend  for a  period  in  excess  of 10  years  after  the  date  of
      origination  and only to the extent that principal  payments on such Share
      Acquisition Loan are

<PAGE>

                                      -16-

      made at least as rapidly as under a loan of like  principal  amount with a
      like interest rate and term requiring level  amortization of principal and
      interest.

The method to be used shall be specified in the  documents  governing  the Share
Acquisition Loan or, if not specified therein,  prescribed by the Committee,  in
its  discretion.  In the event that  property  other than,  or in  addition  to,
Financed  Shares  shall be held in the Loan  Repayment  Account  and  pledged as
collateral  for a Share  Acquisition  Loan,  then the  property  to be  released
pursuant  to this  section  6.4 shall be  property  having a Fair  Market  Value
determined  by applying  the method to be used to the Fair  Market  Value of all
property  pledged as  collateral  for such  Share  Acquisition  Loan;  PROVIDED,
HOWEVER,  that no property other than Financed Shares shall be released pursuant
to this section 6.4 unless all Financed Shares have previously been released.

            SECTION 6.5 RESTRICTIONS ON FINANCED SHARES.

            Except to the extent  required  under any  applicable  law,  rule or
regulation,  no Shares  purchased with the proceeds of a Share  Acquisition Loan
shall be subject to a put, call or other  option,  or to any buy-sell or similar
arrangement,  while held by the Trustee or when distri buted from the Plan.  The
provisions  of this  section 6.5 shall  continue to apply in the event that this
Plan shall cease to be an employee stock ownership  plan,  within the meaning of
section 4975(e)(7) of the Code.

                                   ARTICLE VII

                                   -----------

                           ALLOCATION OF CONTRIBUTIONS

                           ---------------------------


            SECTION 7.1 ALLOCATION AMONG ELIGIBLE PARTICIPANTS.

            Subject to the limitations of Article VIII, ESOP Contributions for a
Plan Year made in  accordance  with  section 5.3 and  Financed  Shares and other
property  that are released from the Loan  Repayment  Account for a Plan Year in
accordance with section 6.4 shall be allocated  among the Eligible  Participants
for such Plan Year, in the manner provided in this Article VII.

            SECTION 7.2 ALLOCATION OF RELEASED SHARES OR OTHER PROPERTY.

            Subject  to the  limitations  of  Article  VIII,  in the event  that
Financed  Shares or other property are released from the Loan Repayment  Account
for a Plan Year in accordance  with section 6.4,  such released  Shares or other
property shall be allocated among the Accounts of the Eligible  Participants for
the Plan Year in the proportion that each such Eligible Participant's Allocation
Compensation  for the portion of the Plan Year during which he was a Participant
bears

<PAGE>

                                      -17-

to the aggregate  Allocation  Compensation of all Eligible  Participants for the
portion of the Plan Year during which they were Participants.

            SECTION 7.3 ALLOCATION OF ESOP CONTRIBUTIONS.

            Subject to the  limitations  of Article  VIII, in the event that the
Employer  makes an ESOP  Contribution  for a Plan Year,  such ESOP  Contribution
shall be allocated among the Accounts of the Eligible Participants for such Plan
Year  in  the  proportion  that  each  such  Eligible  Participant's  Allocation
Compensation  for the portion of the Plan Year during which he was a Participant
bears to the aggregate Allocation  Compensation of all Eligible Participants for
the portion of such Plan Year during which they were Eligible Participants.

                                  ARTICLE VIII

                                  ------------

                           LIMITATIONS ON ALLOCATIONS

                           --------------------------


            SECTION 8.1 OPTIONAL LIMITATIONS ON ALLOCATIONS OF ESOP
                        CONTRIBUTIONS.

            If, for any Plan Year, the application of sections 7.2 and 7.3 would
result in more than  one-third of the number of Shares or of the amount of money
or  property to be  allocated  thereunder  being  allocated  to the  Accounts of
Eligible  Participants  for  such  Plan  Year who are  also  Highly  Compensated
Employees for such Plan Year,  then the Committee may, but shall not be required
to, direct that this section 8.1 shall apply in lieu of sections 7.2 and 7.3. If
the Committee gives such a direction,  then the Committee shall impose a maximum
dollar  limitation  on the amount of Allocation  Compensation  that may be taken
into account for each Eligible Participant. The dollar limitation which shall be
imposed  shall be the  limitation  which  produces the result that the aggregate
Allocation  Compensation  taken into account for Eligible  Participants  who are
Highly  Compensated  Employees  constitutes  exactly  one-third of the aggregate
Allocation  Compensation  taken into account for all Eligible  Participants.  In
determining whether more than one-third of the number of Shares or of the amount
of money or  property  to be  allocated  under the Plan for a Plan Year would be
allocated to the Highly Compensated Employees,  any allocation to be made to the
Account of a Family Member of a Highly Compensated Employee who is either a Five
Percent Owner or one of the ten Highly  Compensated  Employees  with the highest
Total  Compensation shall be treated as an allocation to such Highly Compensated
Employee.

            SECTION 8.2 GENERAL LIMITATIONS ON CONTRIBUTIONS.

            (a) No amount shall be allocated to a  Participant's  Account  under
this Plan for any Limitation  Year, to the extent that such an allocation  would
result in an Annual Addition of an amount greater than the lesser of (i) $30,000
(or such other amount as is permissible under

<PAGE>

                                      -18-

section  415(c)(1)(A)  of the  Code,  or  (ii)  25% of the  Participant's  Total
Compensation for such Limitation Year.

            (b) In the case of a  Participant  who may be  entitled  to benefits
under any  qualified  defined  benefit plan (whether or not  terminated)  now in
effect or ever maintained by the Employer,  such Participant's  Annual Additions
under this Plan shall,  in addition to the  limitations  provided  under section
8.2(a),  be  further  limited  so  that  the  sum of the  Participant's  Defined
Contribution  Plan  Fraction  plus his Defined  Benefit Plan  Fraction  does not
exceed 1.0 for any Limitation Year; PROVIDED,  HOWEVER,  that for any Limitation
Year ending prior to January 1, 1983, the sum of his Defined  Contribution  Plan
Fraction  plus his Defined  Benefit  Plan  Fraction  shall not exceed  1.4;  and
provided  further,  that this  limitation  shall only apply if and to the extent
that the benefits under the Employer's  Retirement  Plan are not limited so that
such sum is not exceeded.

            (c)  For  purposes  of  this  section  8.2,  the  following  special
definitions shall apply:

            (i) ANNUAL ADDITION means the sum of the following amounts allocated
      on behalf of a Participant for a Limitation Year:

                  (A) all contributions by the Employer (including contributions
            made under a salary reduction  agreement pursuant to section 401(k),
            408(k)  or  403(b)  of  the  Code)  under  any   qualified   defined
            contribution plan (other than this Plan) maintained by the Employer,
            as  well  as the  Participant's  allocable  share,  if  any,  of any
            forfeitures under such plans; plus

                  (B) (I) for  Limitation  Years that began  prior to January 1,
            1987,  the  lesser  of  (1)  50%  of  the  Participant's   voluntary
            nondeductible  contributions to all qualified  defined  contribution
            plans  maintained  by the  Employer,  or (2) the amount by which the
            Participant's  nondeductible  voluntary  contributions to such plans
            exceeds 6% of his Total Compensation;  and (II) for Limitation Years
            that  begin  after  December  31,  1986,  all of the Par  ticipant's
            voluntary nondeductible contributions to such plans; plus

                  (C) all ESOP Contributions under this Plan; plus

                  (D) except as hereinafter  provided in this section 8.2(c)(i),
            a portion of the Employer's Loan Repayment Contributions to the Plan
            for such  Limitation  Year which  bears the same  proportion  to the
            total amount of the Employer's Loan Repayment  Contributions for the
            Limitation  Year that the number of Shares (or the Fair Market Value
            of  property  other  than  Shares)  allocated  to the  Participant's
            Account  pursuant to section 7.2 or 8.1,  whichever  is  applicable,
            bears to the  aggregate  number of Shares (or Fair  Market  Value of
            property  other than Shares) so allocated  to all  Participants  for
            such Limitation Year.

<PAGE>

                                      -19-

      Notwithstanding  section  8.2(c)(i)(D),  if, for any Limitation  Year, the
      aggregate  amount of ESOP  Contributions  allocated to the Accounts of the
      individuals who are Highly Compensated Employees for such Limitation Year,
      when added to such Highly  Compensated  Employees'  allocable share of any
      Loan Repayment  Contributions  for such  Limitation  Year, does not exceed
      one-third  of the  total of all  ESOP  Contributions  and  Loan  Repayment
      Contributions for such Limitation Year, then that portion,  if any, of the
      Loan Repayment  Contributions  for such Limitation Year that is applied to
      the payment of interest on a Share  Acquisition Loan shall not be included
      as an Annual Addition.  In determining  whether more than one-third of the
      number of Shares or of the  amount of money or  property  to be  allocated
      under  the  Plan  for a  Plan  Year  would  be  allocated  to  the  Highly
      Compensated  Employees,  any  allocation  to be made to the  Account  of a
      Family  Member  of a  Highly  Compensated  Employee  who is  either a Five
      Percent  Owner or one of the ten  Highly  Compensated  Employees  with the
      highest  Total  Compensation  shall be  treated as an  allocation  to such
      Highly  Compensated  Employee.  In no event shall any Financed Shares, any
      dividends or other earnings  thereon,  any proceeds of the sale thereof or
      any  portion  of the  value of the  foregoing  be  included  as an  Annual
      Addition.

            (ii)  EMPLOYER  means Ashe  Federal  Bank,  and all members of a con
      trolled group of  corporations,  as defined in section 414(b) of the Code,
      as modified by section 415(h) of the Code, all commonly  controlled trades
      or  businesses,  as defined in section  414(c) of the Code, as modified by
      section 415(h) of the Code, all affiliated  service groups,  as defined in
      section  414(m) of the Code,  of which Ashe Federal  Bank is a member,  as
      well as any leasing organization, as defined in section 17.8, that employs
      any person who is considered an employee  under section 17.8 and any other
      entity that is required to be  aggregated  with the  Employer  pursuant to
      regulations under section 414(o) of the Code.

            (iii) DEFINED BENEFIT PLAN FRACTION  means,  for any Participant for
      any Limitation  Year, a fraction,  the numerator of which is the Projected
      Annual Benefit  (determined as of the end of such Limitation  Year) of the
      Participant  under any qualified  defined  benefit  plans  (whether or not
      terminated)  maintained  by the  Employer  for the  current  and all prior
      Limitation  Years,  and the  denominator  of which is as follows:  (A) for
      Limitation  Years ending  prior to January 1, 1983,  the lesser of (I) the
      dollar  limitation in effect under  section  415(b)(1) (A) of the Code for
      such  Limitation  Year, or (II) the amount which may be taken into account
      under section  415(b)(1)(B)  of the Code with respect to such  Participant
      for such Limita tion Year;  and (B) in all other cases,  the lesser of (I)
      (except  as  provided  in section  16.8(b)  for a Top Heavy Plan Year) the
      product  of 1.25  multiplied  by the  dollar  limitation  in effect  under
      section  415(b)(1)(A)  of the Code for such  Limitation  Year, or (II) the
      product of 1.4  multiplied  by the amount  which may be taken into account
      under section  415(b)(1)(B)  of the Code with respect to such  Participant
      for such Limitation Year.

<PAGE>

                                      -20-

            (iv) DEFINED  CONTRIBUTION  PLAN FRACTION means, for any Participant
      for any Limitation  Year, a fraction (A) the numerator of which is the sum
      of such Participant's  Annual Additions  (determined as of the end of such
      Limitation  Year)  under  this  Plan  and  any  other  qualified   defined
      contribution plans (whether or not terminated)  maintained by the Employer
      for the current and all prior Limitation Years, and (B) the denominator of
      which is as follows:  (I) for Limitation  Years ending prior to January 1,
      1983, the sum of the lesser of the following  amounts for such  Limitation
      Year and for each prior  Limitation Year during which such Participant was
      employed  by the  Employer:  (1) the Maximum  Permissible  Amount for such
      Limitation Year (without regard to section  415(c)(6) of the Code), or (2)
      the amount which may be taken into account under section  415(c)(1)(B)  of
      the Code with respect to such  Participant for such  Limitation  Year; and
      (II) in all other cases,  the sum of the lesser of the  following  amounts
      for such Limitation Year and for each prior  Limitation  during which such
      Participant  was  employed  by the  Employer:  (1)  (except as provided in
      section  16.8(b) for a Top Heavy Plan Year) the product of 1.25 multiplied
      by the Maximum  Permissible  Amount for such Limitation  Year  (determined
      without  regard to section  415(c)(6) of the Code),  or (2) the product of
      1.4 multiplied by the amount which may be taken into account under section
      415(c)(1)(B)  of the Code (or  section  415(c)(7)  of the Code,  if applic
      able) with respect to such Participant for such Limitation Year; PROVIDED,
      HOWEVER,  that the Plan  Administrator  may,  at his  election,  adopt the
      transition  rule set forth in section  415(e)(6) of the Code in making the
      computation  set  forth  in  this  section  8.2(c)(iv).  If  the  sum of a
      Participant's  Defined Benefit Plan Fraction and Defined Contribution Plan
      Fraction  exceeded 1.0 as of September 30, 1983,  then such  Participant's
      Defined  Contribution  Plan Fraction shall be determined under regulations
      to be  prescribed  by the Secretary of the Treasury so that the sum of the
      fractions does not exceed 1.0.

            (v) LIMITATION YEAR means the Plan Year; PROVIDED,  HOWEVER, that if
      the Employer  changes the Limitation  Year, the new Limitation  Year shall
      begin on a date within the Limitation Year in which the amendment is made.

            (vi)  MAXIMUM  PERMISSIBLE  AMOUNT means (A) $25,000 (or such higher
      amount as may be  permitted  under  section  415(d) of the Code because of
      cost of living  increases) for Limitation Years beginning prior to January
      1, 1983,  and (B) the  greater of (I)  $30,000,  or (II) 25% of the dollar
      limitation in effect under section 415(b)(1)(A) of the Code for Limitation
      Years beginning on or after January 1, 1983.

            (vii)  PROJECTED   ANNUAL  BENEFIT  means  a  Participant's   annual
      retirement  benefit  (adjusted to the  actuarial  equivalent of a straight
      life  annuity  if  expressed  in a form  other  than a  straight  life  or
      qualified joint and survivor  annuity) under any qualified defined benefit
      plan maintained by the Employer, whether or not ter minated, assuming that
      the Participant will continue employment until the later of current age or
      normal retirement age under such plan, and that the Participant's

<PAGE>

                                      -21-

      Total  Compensation for the Limitation Year and all other relevant factors
      used to determine  benefits  under such plan will remain  constant for all
      future Limitation Years.

            (d)  When a  Participant's  Annual  Addition  to this  Plan  must be
reduced to satisfy the  limitations  of section  8.2(a) or (b),  such  reduction
shall be effected  (i) by reducing the amount of future ESOP  Contributions  and
Loan Repayment Contributions,  in that order of priority, to be made to the Plan
and  attributable to the Participant for the Limitation Year, to the extent that
such reduction may be made without  violating the terms of the Plan; and (ii) to
the extent that actions taken under section 8.2(d)(i) do not produce  compliance
with the  limitations,  by reducing the  Participant's  Annual Additions to this
Plan  attributable to ESOP  Contributions and Loan Repayment  Contributions,  in
that order of priority,  and reallocating such amounts to other  Participants in
the current  Limitation  Year; and (iii) if an excess Annual Addition occurs due
to a reasonable error in estimating compensation pursuant to section 8.2(e), the
allocation of Forfeitures,  or other circumstances permitted by the Commissioner
of Internal  Revenue,  and the excess Annual  Addition is not  eliminated in the
current Limitation Year, then amount of the Participant's excess Annual Addition
to this Plan  shall be  allocated  in  accordance  with  Articles V and VII as a
contribution by the Employer in the next succeeding Limitation Year.

            (e) Prior to determining a Participant's  actual Total  Compensation
for a Limitation  Year,  the Employer may determine the  limitations  under this
section 8.2 for a  Participant  on the basis of a reasonable  estimation  of the
Participant's  Total  Compensation  for the  Limitation  Year that is  uniformly
determined for all  Participants  who are similarly  situated.  As soon as it is
administratively  feasible after the end of the Limitation Year, the limitations
of this section 8.2 shall be determined on the basis of the Participant's actual
Total Compensation for the Limitation Year.

                                   ARTICLE IX

                                   ----------

                                     VESTING

                                     -------


            SECTION 9.1 VESTING.

            Subject to the provisions of section 18.2,  the balance  credited to
each  Employee's  Account shall become  vested in accordance  with the following
schedule:

                 Period of Service            Vested
                      In Years              Percentage

                 -----------------          ----------

                 less than 3                     0%
                 3 or more                     100%




<PAGE>

                                      -22-

            SECTION 9.2 VESTING ON DEATH, DISABILITY, RETIREMENT OR CHANGE IN
                        CONTROL.

            Any  previously  unvested  portion of the  remainder  of the balance
credited  to the  Account  of a  Participant  or of a  person  who  is a  Former
Participant  solely  because he is excluded  from  participation  under  section
2.1(b) shall become fully vested in him  immediately  upon attainment of age 65,
or, if earlier,  upon the termination of his  participation  by reason of death,
Disability,  Retirement  or upon the  occurrence  of a Change in  Control of the
Employer.

            SECTION 9.3 FORFEITURES ON TERMINATION OF EMPLOYMENT.

            Upon the  termination  of  employment  of a  Participant  or  Former
Participant  for any  reason  other than  death,  Disability,  Retirement,  that
portion of the balance  credited to his Account  which is not vested at the date
of such  termination  shall be forfeited as of the last  Valuation  Date for the
Plan Year in which such termination of employment  occurs.  The proceeds of such
forfeitures,   less  amounts,  if  any,  required  to  be  credited  because  of
re-employment pursuant to section 9.4, shall be treated as Forfeitures and shall
be disposed of as provided in section 9.5.

            SECTION 9.4 AMOUNTS CREDITED UPON RE-EMPLOYMENT.

            If an Employee  forfeited any amount of the balance  credited to his
Account upon his termination of employment with the Employer, and is re-employed
prior to the occurrence of a Period of Severance of five years, then:

            (i) an  amount  equal  to  the  Fair  Market  Value  of  the  Shares
      forfeited, determined as of the date of forfeiture; and

            (ii) the amount credited to his General  Investment Account that was
      forfeited, determined as of the date of forfeiture;

shall be credited back to his Account from the proceeds of forfeitures which are
redeemed  pursuant  to  section  9.3  during  the  Plan  Year  in  which  he  is
re-employed,  unless such proceeds are insufficient,  in which case the Employer
shall make an additional contribution in the amount of such deficiency.

            SECTION 9.5 ALLOCATION OF FORFEITURES.

            Any  Forfeitures  that  occur  during a Plan  Year  shall be used to
reduce the  contributions  required of the Employer  under the Plan and shall be
treated  as  Loan  Repayment   Contributions  and  ESOP   Contributions  in  the
proportions designated by the Committee in accordance with Article V.

<PAGE>

                                      -23-

                                    ARTICLE X

                                    ---------

                                 THE TRUST FUND

                                 --------------


            SECTION 10.1 THE TRUST FUND.

            The Trust Fund shall be held and invested under the Trust  Agreement
with the Trustee.  The provisions of the Trust  Agreement shall vest such powers
in the Trustee as to invest ment,  control and  disbursement  of the Trust Fund,
and such other provisions not inconsistent  with the Plan,  including  provision
for the appointment of one or more  "investment  managers" within the meaning of
section 3(38) of ERISA to manage and control (including  acquiring and disposing
of) all or any of the  assets of the Trust  Fund,  as the Board may from time to
time authorize.  Except as required by ERISA, no bond or other security shall be
required of any Trustee at any time in office.

            SECTION 10.2 INVESTMENTS.

            (a) Except to the extent  provided to the contrary in section  10.3,
the Trust Fund shall be invested in:

            (i) Shares;

            (ii)  units  of  interest  in  such  Investment   Funds  as  may  be
      established from time to time by the Committee; and

            (iii) such other  investments  as may be  permitted  under the Trust
      Agreement;

in such  proportions  as shall be determined by the Committee or, if so provided
under the Trust Agreement,  as directed by one or more investment managers or by
the Trustee, in its discretion;  PROVIDED,  HOWEVER, that the investments of the
Trust Fund shall consist  primarily of Shares.  Notwithstanding  the immediately
preceding  sentence,  the  Trustee  may  temporarily  invest  the Trust  Fund in
short-term  obligations of, or guaranteed by, the United States Government or an
agency  thereof,  or may retain  uninvested,  or sell  investments  to  provide,
amounts of cash required for purposes of the Plan.

            (b) Initially,  the value of each unit in each Investment Fund shall
be $1,  and one unit in any such  Investment  Fund  shall  be  credited  to each
Participant or Former Participant,  or the Beneficiary of a deceased Participant
or Former  Participant,  for each $1 applicable to the purchase for him of units
in such Investment Fund. Thereafter, the Plan Administrator shall deter mine the
value  of  units  in each  such  Investment  Fund as of each  Valuation  Date by
dividing the fair market value of all property in each such  Investment  Fund as
of such Valuation Date (after

<PAGE>

                                      -24-

deducting  any expenses or other amounts then  properly  chargeable  against the
particular Investment Fund) by the number of units then outstanding in each such
Investment  Fund,  and making such other  adjustments  as shall be  necessary to
properly reflect transactions  occurring subsequent to the immediately preceding
Valuation  Date. For the purposes of this Article X, fractions of units computed
to three decimal places,  as well as whole units, in any of the Investment Funds
may be redeemed or purchased for the credit of Employees, Participants or Former
Participants or their Beneficiaries.

            SECTION 10.3 DISTRIBUTIONS FOR DIVERSIFICATION OF INVESTMENTS.

            (a) Notwithstanding section 10.2, each Qualified Participant may:

            (i) during the first 90 days of each of the first four Plan Years to
      begin  after  the  Plan  Year  in  which  he  first  becomes  a  Qualified
      Participant,  elect that such  percentage  of the balance  credited to his
      Account as he may  specify,  but in no event more than 25% of the  balance
      credited to his Account,  be  distributed to him pursuant to this section;
      and

            (ii)  during the first 90 days of the fifth Plan Year to begin after
      the Plan Year in which he first becomes a Qualified  Participant or of any
      Plan Year  thereafter,  elect that such percentage of the balance credited
      to his  Account  as he may  specify,  but in no event more than 50% of the
      balance  credited to his Account,  be  distributed to him pursuant to this
      section.

For purposes of an election under this section 10.3,  the balance  credited to a
Participant's Account shall be the balance credited to his Account determined as
of the last Valuation Date to occur in the Plan Year  immediately  preceding the
Plan Year in which such election is made.

            (b) An election made under section 10.3(a) shall be made in writing,
in the form and manner prescribed by the Plan Administrator,  and shall be filed
with the Plan  Administrator  during the  election  period  specified in section
10.3(a). As soon as is practicable, and in no case later than 90 days, following
the end of the  election  period  during which such  election is made,  the Plan
Administrator  shall take such actions as are  necessary to cause the  specified
percentage of the balance  credited to the Account of the Qualified  Participant
making the election to be distributed to such Qualified Participant.

            (c) An election made under section 10.3(a) may be changed or revoked
at any time during the election period described in section 10.3(a) during which
it is  initially  made.  In no event,  however,  shall any  election  under this
section  10.3  result  in  more  than  25%  of  the  balance   credited  to  the
Participant's Account being distributed to the Participant,  if such election is
made during a Plan Year to which section 10.3(a)(i)  applies,  or result in more
than 50% of the balance distributed to the Participant, if such election is made
during the Plan Year to which section 10.3(a)(ii) applies or thereafter.

<PAGE>

                                      -25-

            SECTION 10.4 USE OF COMMINGLED TRUST FUNDS.

            Subject to the  provisions of the Trust  Agreement,  amounts held in
the Trust Fund may be invested in:

            (a) any  commingled or group trust fund  described in section 401(a)
      of the Code and exempt under section 501(a) of the Code; or

            (b) any  common  trust fund  exempt  under  section  584 of the Code
      maintained  exclusively  for the  collective  investment  of the assets of
      trusts that are exempt under section 501(a) of the Code;

provided  that the trustee of such  commingled,  group or common trust fund is a
bank or trust company.

            SECTION 10.5 MANAGEMENT AND CONTROL OF ASSETS.

            All assets of the Plan shall be held by the Trustee in trust for the
exclusive benefit of Participants,  Former Participants and their Beneficiaries.
No part of the corpus or income of the Trust Fund shall be used for, or diverted
to,  purposes  other  than for the  exclusive  benefit of  Participants,  Former
Participants   and   their   Beneficiaries,   and   for   defraying   reasonable
administrative  expenses  of the Plan and Trust Fund.  No person  shall have any
interest  in or right to any part of the  earnings  of the  Trust  Fund,  or any
rights in, to or under the Trust Fund or any part of its  assets,  except to the
extent expressly provided in the Plan.

                                   ARTICLE XI

                                   ----------

                    VALUATION OF INTERESTS IN THE TRUST FUND

                    ----------------------------------------


            SECTION 11.1 ESTABLISHMENT OF INVESTMENT ACCOUNTS.

            The Plan Administrator shall establish,  or cause to be established,
for each person for whom an Account is maintained a Share Investment Account and
a General  Investment  Account.  Such  Share  Investment  Accounts  and  General
Investment Accounts shall be maintained in accordance with this Article XI.

            SECTION 11.2 SHARE INVESTMENT ACCOUNTS.

            The Share Investment Account  established for a person in accordance
with  section  11.1 shall be credited  with:  (a) all Shares  allocated  to such
person's Account; (b) all Shares pur-

<PAGE>

                                      -26-

chased with amounts of money or property allocated to such person's Account; (c)
all dividends paid in the form of Shares with respect to Shares  credited to his
Account;  and (d) all Shares  purchased  with amounts  credited to such person's
General Investment Account.  Such Share Investment Account shall be charged with
all Shares that are sold or exchanged to acquire other investments or to provide
cash and with all Shares that are distributed in kind.

            SECTION 11.3 GENERAL INVESTMENT ACCOUNTS.

            The General  Investment  Account that is established for a person in
accordance with section 11.1 shall be credited with: (a) all amounts, other than
Shares,  allocated to such person's  Account;  (b) all dividends  paid in a form
other  than  Shares  with  respect to Shares  credited  to such  person's  Share
Investment  Account;  (c) the  proceeds  of any sale of Shares  credited to such
person's Share Investment Account; and (d) any earnings  attributable to amounts
credited to such person's General  Investment  Account.  Such General Investment
Account shall be charged with all amounts  credited  thereto that are applied to
the  purchase  of Shares,  any losses or  depreciation  attributable  to amounts
credited  thereto,  any  expenses  allocable  thereto and any  distributions  of
amounts credited thereto.

            SECTION 11.4 VALUATION OF INVESTMENT ACCOUNTS.

            (a)  The  Plan  Administrator  shall  determine,   or  cause  to  be
determined,  the aggregate value of each person's Share Investment Account as of
each Valuation Date by multiplying  the number of Shares  credited to such Share
Investment Account on such Valuation Date by the Fair Market Value of a Share on
such Valuation Date.

            (b)  The  Plan  Administrator  shall  determine,   or  cause  to  be
determined,  the aggregate value of each person's General  Investment Account as
of each Valuation Date as follows:

            (i) To the  extent  that all or a portion of such  person's  General
      Investment Account is invested in one or more of the Investment Funds, the
      Plan  Administrator  shall multiply the number of units in each Investment
      Fund  credited to such person as of the  immediately  preceding  Valuation
      Date by the  value  of a unit in such  Investment  Fund as of the  current
      Valuation Date.

            (ii) To the extent  that all or a portion of such  person's  General
      Investment  Account is invested in  investments  other than the Investment
      Funds, the Plan  Administrator  shall adjust the balance in such manner as
      it shall deem appropriate to reflect earnings,  losses, expenses,  benefit
      payments and other transactions properly chargeable to such Account.

<PAGE>

                                      -27-

            SECTION 11.5 ANNUAL STATEMENTS.

            There shall be  furnished,  by mail or  otherwise,  at least once in
each Plan Year to each  person who would then be entitled to receive all or part
of the  balance  credited  to any  Account if the Plan were then  terminated,  a
statement  of his  interest  in the Plan as of such date as shall be selected by
the Plan Administrator, which statement shall be deemed to have been accepted as
correct and be binding on such  person  unless the Plan  Administrator  receives
written  notice to the contrary  within 30 days after the statement is mailed or
furnished to such person.

                                   ARTICLE XII

                                   -----------

                                     SHARES

                                     ------


            SECTION 12.1 SPECIFIC ALLOCATION OF SHARES.

            All Shares purchased under the Plan shall be specifically  allocated
to the Share Investment Accounts of Participants,  Former Participants and their
Beneficiaries  in accordance  with section 11.2,  with the exception of Financed
Shares, which shall be allocated to the Loan Repayment Account.

            SECTION 12.2 DIVIDENDS.

            (a) Dividends  paid with respect to Shares held under the Plan shall
be  credited to the Loan  Repayment  Account,  if paid with  respect to Financed
Shares.  Such  dividends  shall be: (i) applied to the payment of principal  and
accrued interest with respect to any Share Acquisition Loan, if paid in cash; or
(ii) held in the Loan  Repayment  Account  as  Financed  Shares  for  release in
accordance with section 6.4, if paid in the form of Shares.

            (b)  Dividends  paid with respect to Shares  allocated to a person's
Share  Investment  Account shall be credited to such person's  Share  Investment
Account.  Cash dividends  credited to a person's Share Investment  Account shall
be, at the  direction of the Board,  either:  (i) held in such Share  Investment
Account and invested in accordance with sections 10.2 and 11.2; (ii) distributed
immediately to such person;  (iii)  distributed to such person within 90 days of
the close of the Plan Year in which such  dividends  were paid;  or (iv) used to
make payments of principal or interest on a Share  Acquisition  Loan;  PROVIDED,
HOWEVER,  that the Fair Market Value of Financed  Shares  released from the Loan
Repayment Account equals or exceeds the amount of the dividend.

<PAGE>

                                      -28-

            SECTION 12.3 VOTING RIGHTS.

            (a) Each person shall  direct the manner in which all voting  rights
appurtenant  to  Shares  allocated  to his  Share  Investment  Account  will  be
exercised,  provided  that such Shares were  allocated  to his Share  Investment
Account as of the applicable  record date. Such person shall,  for such purpose,
be deemed a "named  fiduciary" within the meaning of section 402(a)(2) of ERISA.
Such a direction  shall be given by completing  and filing with the inspector of
elections,  the  Trustee or such other  person who shall be  independent  of the
Employer as the Committee shall designate, at least 10 days prior to the date of
the meeting of holders of Shares at which such voting  rights will be exercised,
a written  direction in the form and manner  prescribed  by the  Committee.  The
inspector  of  elections,  the Trustee or such other  person  designated  by the
Committee shall tabulate the directions given on a strictly  confidential basis,
and shall provide the Committee  with only the final results of the  tabulation.
The final  results of the  tabulation  shall be  followed  by the  Committee  in
directing  the  Trustee as to the manner in which such  voting  rights  shall be
exercised.  The Plan Administrator shall make a reasonable effort to furnish, or
cause to be  furnished,  to each person for whom a Share  Investment  Account is
maintained all annual reports,  proxy materials and other  information  known by
the Plan Administrator to have been furnished by the issuer of the Shares, or by
any solicitor of proxies, to the holders of Shares.

            (b) To the extent  that any person  shall fail to give  instructions
with respect to the exercise of voting rights appurtenant to Shares allocated to
his Share Investment Account:

            (i) the Trustee shall, with respect to each matter to be voted upon:
      (A) cast a number of  affirmative  votes  equal to the  product of (I) the
      number of  allocated  Shares for which no written  instructions  have been
      given, multiplied by (II) a fraction, the numerator of which is the number
      of allocated Shares for which affirmative votes will be cast in accordance
      with  written  instructions  given as provided in section  12.3(a) and the
      denominator of which is the aggregate  number of affirmative  and negative
      votes which will be cast in accordance with written  instructions given as
      aforesaid, and (B) cast a number of negative votes equal to the excess (if
      any)  of  (I)  the  number  of  allocated  Shares  for  which  no  written
      instructions  have been given over (II) the  number of  affirmative  votes
      being  cast with  respect to such  allocated  Shares  pursuant  to section
      12.3(b)(i)(A); or

            (ii) if the Trustee shall determine that it may not, consistent with
      its  fiduciary  duties,  vote the  allocated  Shares  for which no written
      instructions   have  been  given  in  the  manner   described  in  section
      12.3(b)(i),  it shall  vote  such  Shares  in such  manner  as it,  in its
      discretion,  may  determine to be in the best  interests of the persons to
      whose Share Investment Accounts such Shares have been allocated.

            (c) (i) The voting rights  appurtenant  to Financed  Shares shall be
exercised as follows  with respect to each matter as to which  holders of Shares
may vote:

            (A) a number of votes equal to the  product of (I) the total  number
      of votes  appurtenant to Financed  Shares  allocated to the Loan Repayment
      Account on

<PAGE>

                                   -29-

      the applicable record date;  multiplied by (II) a fraction,  the numerator
      of which is the total number of  affirmative  votes cast by  Participants,
      Former  Participants and the Beneficiaries of deceased Former Participants
      with  respect  to  such  matter   pursuant  to  section  12.3(a)  and  the
      denominator of which is the total number of affirmative and negative votes
      cast  by  Participants,  Former  Participants  and  the  Beneficiaries  of
      deceased Former Participants, shall be cast in the affirmative; and

            (B) a number of votes equal to the excess of (I) the total number of
      votes  appurtenant  to Financed  Shares  allocated  to the Loan  Repayment
      Account on the applicable record date, over (II) the number of affirmative
      votes  cast  pursuant  to  section  12.3(c)(i)(A)  shall  be  cast  in the
      negative.

To the extent that the Financed Shares consist of more than one class of Shares,
this section  12.3(c)(i) shall be applied  separately with respect to each class
of Shares.

            (ii) If voting  rights are to be exercised  with respect to Financed
Shares as provided in section  12.3(c)(i)(A) and (B) at a time when there are no
Shares  allocated  to the Share  Investment  Accounts  of  Participants,  Former
Participants  and the  Beneficiaries of deceased Former  Participants,  then the
voting rights  appurtenant to Financed Shares shall be exercised as follows with
respect to each matter as to which holders of Shares may vote:

            (A) Each person who is a Participant on the  applicable  record date
      and who was a  Participant  on the last day of the Plan Year  ending on or
      immediately  prior to such  record  date will be granted a number of votes
      equal to the quotient, rounded to the nearest integral number, of (I) such
      Participant's  Allocation  Com  pensation  for the Plan Year  ending on or
      immediately  prior to such  record  date (or for the  portion of such Plan
      Year during which he was a Participant); divided by (II) $1,000.00; and

            (B) a number of votes equal to the  product of (I) the total  number
      of  Financed  Shares  allocated  to  the  Loan  Repayment  Account  on the
      applicable  record date;  multiplied by (II) a fraction,  the numerator of
      which is the total number of votes that are cast in the  affirmative  with
      respect  to  such  matter  pursuant  to  section  12.3(c)(ii)(A)  and  the
      denominator  of which is the total number of votes that are cast either in
      the affirmative or in the negative with respect to such matter pursuant to
      section 12.3(c)(ii)(A), shall be cast in the affirmative; and

            (C) a number of votes equal to the excess of (I) the total number of
      Financed Shares allocated to the Loan Repayment  Account on the applicable
      record date,  over (II) the number of affirmative  votes cast with respect
      to such matter  pursuant to section  12.3(c)(ii)(B),  shall be cast in the
      negative.

To the extent that the Financed Shares consist of more than one class of Shares,
this section  12.3(c)(ii) shall be applied separately with respect to each class
of Shares.

<PAGE>

                                   -30-

            SECTION 12.4 TENDER OFFERS.

            (a) Each person shall direct whether  Shares  allocated to his Share
Investment  Account  will be  delivered  in response to any Tender  Offer.  Such
person shall, for such purpose, be deemed a "named fiduciary" within the meaning
of section  402(a)(2) of ERISA.  Such a direc tion shall be given by  completing
and filing with the Trustee or such other person who shall be independent of the
Employer as the Committee shall designate,  at least 10 days prior to the latest
date for exercising a right to deliver  Shares  pursuant to such Tender Offer, a
written  direction  in the form and  manner  prescribed  by the  Committee.  The
Trustee  or  other  person  designated  by  the  Committee  shall  tabulate  the
directions  given on a  strictly  confidential  basis,  and  shall  provide  the
Committee  with only the final results of the  tabulation.  The final results of
the  tabulation  shall be followed by the  Committee in directing  the number of
Shares to be delivered. The Plan Administrator shall make a reasonable effort to
furnish,  or cause to be furnished,  to each person for whom a Share  Investment
Account is maintained,  all information known by the Plan  Administrator to have
been furnished by the issuer or by or on behalf of any person making such Tender
Offer, to the holders of Shares in connection with such Tender Offer.

            (b) To the extent  that any person  shall fail to give  instructions
with respect to Shares allocated to his Share Investment Account:

            (i) the Trustee  shall (A) tender or otherwise  offer for  purchase,
      exchange or redemption a number of such Shares equal to the product of (I)
      the number of allocated Shares for which no written instructions have been
      given, multiplied by (II) a fraction, the numerator of which is the number
      of allocated Shares tendered or otherwise  offered for purchase,  exchange
      or redemption in accordance with written instructions given as provided in
      section  12.4(a) and the  denominator of which is the aggregate  number of
      allocated  Shares  for  which  written  instructions  have  been  given as
      aforesaid,  and (B)  withhold  a number of Shares  equal to the excess (if
      any)  of  (I)  the  number  of  allocated  Shares  for  which  no  written
      instructions have been given over (II) the number of Shares being tendered
      or otherwise offered pursuant to section 12.4(b)(i)(A); or

            (ii) if the Trustee shall determine that it may not, consistent with
      its fiduciary duties,  exercise the tender or other rights  appurtenant to
      allocated Shares for which no written  instructions have been given in the
      manner  described in section  12.4(b)(i),  it shall  tender,  or otherwise
      offer,  or withhold  such Shares in such manner as it, in its  discretion,
      may  determine  to be in the best  interests of the persons to whose Share
      Investment Accounts such Shares have been allocated.

            (c) In the case of any Tender Offer, any Financed Shares held in the
Loan Repayment Account shall be dealt with as follows:

            (i) If such Tender  Offer  occurs at a time when there are no Shares
      allocated  to  the  Share  Investment  Accounts  of  Participants,  Former
      Participants and

<PAGE>

                                      -31-

      the Beneficiaries of deceased Former Participants, then the disposition of
      the Finan ced Shares shall be determined as follows:

                  (A) each person who is a Participant on the applicable  record
            date and who was a  Participant  on the  last  day of the Plan  Year
            ending on or immediately prior to such record date will be granted a
            number  of  tender  rights  equal to the  quotient,  rounded  to the
            nearest  integral  number,  of  (I)  such  Participant's  Allocation
            Compensation  for the Plan Year  ending on or  immediately  prior to
            such record date (or for the portion of such Plan Year during  which
            he was a Participant), divided by (II) $1,000.00; and

                  (B) on  the  last  day  for  delivering  Shares  or  otherwise
            responding  to such Tender  Offer,  a number of Shares  equal to the
            product of (I) the total number of Financed Shares  allocated to the
            Loan  Repayment  Account on the last day of the effective  period of
            such Tender Offer;  multiplied by (II) a fraction,  the numerator of
            which is the total number of tender rights exercised in favor of the
            delivery  of Shares in  response  to the Tender  Offer  pursuant  to
            section  12.4(c)(i)(A)  and the  denominator  of which is the  total
            number of tender  rights  that are  exercisable  in  response to the
            Tender Offer pursuant to section  12.4(c)(i)(A),  shall be delivered
            in response to the Tender Offer; and

                  (C) a number  of Shares  equal to the  excess of (I) the total
            number of Financed Shares allocated to the Loan Repayment Account on
            the last day of the effective period of such Tender Offer; over (II)
            the number of Shares to be delivered in response to the Tender Offer
            pursuant to section 12.4(c)(i)(B), shall be withheld from delivery.

            (ii) If such Tender  Offer  occurs at a time when the voting  rights
      appurte nant to such  Financed  Shares are to be  exercised in  accordance
      with section 12.3(c)(i), then:

                  (A) on  the  last  day  for  delivering  Shares  or  otherwise
            responding to such Tender Offer,  a number of Financed  Shares equal
            to the product of (I) the total number of Financed Shares  allocated
            to the Loan  Repayment  Account  on the  last  day of the  effective
            period of such Tender  Offer;  multi  plied by (II) a fraction,  the
            numerator of which is the total number of Shares  delivered from the
            Share Investment  Accounts of Participants,  Former Participants and
            the  Beneficiaries  of deceased  Former  Participants in response to
            such Tender Offer pursuant to section 12.4(a),  and the deno minator
            of which is the  total  number  of  Shares  allocated  to the  Share
            Investment   Accounts  of  Participants,   Former  Participants  and
            Beneficiaries of deceased Former  Participants  immediately prior to
            the last day for delivering  Shares or otherwise  responding to such
            Tender Offer, shall be delivered; and

<PAGE>

                                   -32-

                  (B) a number of Financed Shares equal to the excess of (I) the
            total  number of Financed  Shares  allocated  to the Loan  Repayment
            Account  on  the  last  day  for  delivering   Shares  or  otherwise
            responding  to such Tender  Offer;  over (II) the number of Financed
            Shares to be delivered pursuant to section 12.4(c)(ii)(A),  shall be
            withheld from delivery.

To the extent that the Financed Shares consist of more than one class of Shares,
this section  12.4(c) shall be applied  separately with respect to each class of
Shares.

                               ARTICLE XIII

                               ------------

                               PAYMENT OF BENEFITS

                            -------------------


            SECTION 13.1 IN GENERAL.

            The balance  credited  to a  Participant's  or Former  Participant's
Account  under the Plan shall be paid only at the times,  to the extent,  in the
manner and to the persons provided in this Article XIII.

            SECTION 13.2 DESIGNATION OF BENEFICIARIES.

            (a)  Subject to section  13.2(b),  any person  entitled to a benefit
under the Plan may designate a Beneficiary  to receive any amount to which he is
entitled that remains  undistributed on the date of his death. Such person shall
designate his  Beneficiary  (and may change or revoke any such  designation)  in
writing  in the form and  manner  prescribed  by the  Plan  Administrator.  Such
designation,  and any change or revocation  thereof,  shall be effective only if
received by the Plan Administrator prior to such person's death and shall become
irrevocable upon such person's death.

            (b) A  Participant  or  Former  Participant  who  is  married  shall
automatically  be  deemed to have  designated  his  spouse  as his  Beneficiary,
unless, prior to the time such designation would, under section 13.2(a),  become
irrevocable:

            (i) the Participant or Former  Participant  designates an additional
      or a different Beneficiary in accordance with this section 13.2; and

            (ii)  (A) the  spouse  of such  Participant  or  Former  Participant
      consents to such designation in a writing that  acknowledges the effect of
      such consent and is witnessed by a Plan representative or a notary public;
      or (B) the spouse of such Participant or Former Participant has previously
      consented to such  designation by signing a written waiver of any right to
      consent to any designation made by the

<PAGE>

                                   -33-

      Participant or Former Participant, and such waiver acknowledged the effect
      of the  waiver  and was  witnessed  by a Plan  representative  or a notary
      public;   or  (C)  it  is  established  to  the  satisfaction  of  a  Plan
      representative that the consent required under section  13.2(b)(ii)(A) may
      not be obtained  because such spouse cannot be located or because of other
      circumstances  permitted under regulations  issued by the Secretary of the
      Treasury.

            (c) In the event that a Beneficiary  entitled to payments  hereunder
shall  die  after  the  death of the  person  who  designated  him but  prior to
receiving  payment  of his  entire  interest  in the  Account  of the person who
designated him, then such Beneficiary's  interest in the Account of such person,
or any unpaid balance thereof,  shall be paid as provided in section 13.3 to the
Beneficiary who has been designated by the deceased Beneficiary,  or if there is
none,  to  the  executor  or  administrator  of  the  estate  of  such  deceased
Beneficiary,  or if no such executor or  administrator  is appointed within such
time as the Plan Administrator,  in his sole discretion,  shall deem reasonable,
to such one or more of the spouse and  descendants  and blood  relatives of such
deceased  Beneficiary as the Plan Administrator may select. If a person entitled
to a benefit under the Plan and any of the Beneficiaries designated by him shall
die in such  circumstances  that there shall be substantial doubt as to which of
them shall have been the first to die, for all purposes of the Plan,  the person
who made the  Beneficiary  designation  shall be  deemed to have  survived  such
Beneficiary.

            (d) If no  Beneficiary  survives the person  entitled to the benefit
under the Plan or if no  Beneficiary  has been  designated by such person,  such
benefit  shall be paid to the  executor or  administrator  of the estate of such
person, or if no such executor or administrator is appointed within such time as
the Plan Administrator,  in his sole discretion,  shall deem reasonable, to such
one or more of the spouse and  descendants  and blood relatives of such deceased
person as the Plan Administrator may select.

            SECTION 13.3 DISTRIBUTIONS TO PARTICIPANTS AND FORMER PARTICIPANTS.

            (a)(i)  Subject to the  provisions  of section  13.5 with respect to
required minimum distributions,  the vested portion of the balance credited to a
Participant's  or a Former  Participant's  Account shall be  distributed  to him
commencing as of the last  Valuation Date to occur in the Plan Year in which the
Participant or Former  Participant  terminates  employment  with the Employer or
attains age 65, whichever is later; unless the Participant or Former Participant
elects otherwise pursuant to section 13.3(a)(ii), and the payment, or first in a
series of  payments,  is  actually  made  within  three  months  following  such
Valuation Date.

            (ii) A Participant or Former Participant may, upon request on a form
provided by the Plan  Administrator  and filed with the Plan  Administrator  not
later than 15 days prior to the date on which his  employment  with the Employer
terminates,  elect that his vested interest in his Account be paid commencing as
of any earlier or later Valuation Date after his termination of employment,  but
in no event later than the last Valuation Date to occur in the calendar year in

<PAGE>

                                      -34-

which the  Participant or Former  Participant  attains age 70 1/2, in which case
the payment, or first in a series of payments, shall be made within three months
following such Valuation Date.

            (b)(i)  Subject to section  13.3(b)(ii),  the vested  portion of the
balance  credited to the Account of a Participant or Former  Participant will be
paid to him,  commencing  as of the  Valuation  Date  determined  under  section
13.3(a), in substantially equal annual installments over a fixed period equal to
the greater of:

            (A) five years; or

            (B) if the vested portion of the balance  credited to the Account of
      the Participant or Former Participant, determined as of the Valuation Date
      determined under section 13.3(a), is greater than $500,000 (or such larger
      amount as may be prescribed  by the Secretary of the Treasury  pursuant to
      section 409(o) of the Code),  the sum of five years plus the lesser of (I)
      five  additional  years, or (II) one additional year for each $100,000 (or
      fraction  thereof) by which the vested portion of the balance  credited to
      the  Participant's  or Former  Participant's  Account exceeds $500,000 (or
      such larger  amount as may be  prescribed by the Secretary of the Treasury
      pursuant to section 409(o) of the Code).

            (ii) A Participant or Former Participant may, upon request on a form
provided by the Plan  Administrator  and filed with the Plan  Administrator  not
later than 15 days prior to the date on which his employment  terminates,  elect
that  the  vested  portion  of the  balance  credited  to his  Account  be paid,
commencing as of the Valuation Date determined under section 13.3(a):

            (A) in substantially  equal annual  installments over a fixed period
      not to exceed the lesser of (I) 10 years,  or (II) the life  expectancy of
      the Participant or Former Participant, or, if his Beneficiary is a natural
      person, the joint life and last survivor  expectancy of the Participant or
      Former Participant and his Beneficiary; or

            (B) subject to section 13.4, in a lump sum payment.

            (c) If any person  entitled to a benefit  under the Plan dies before
his entire  benefit has been  distributed  to him,  then the  remainder  of such
benefit  shall be paid to the  Beneficiary  designated by him under section 13.2
either:

            (i)  in a  lump  sum  distribution  as of the  Valuation  Date  next
      following  the date of his death,  and the amount  thereof  shall be based
      upon the vested portion of the balance  credited to his Account as of such
      Valuation Date; or

            (ii) if, prior to the death of the Participant or Former Participant
      whose vested Account is being distributed, an election pursuant to section
      13.3(b)(ii)(B)  is in effect for him, in a lump sum distribution as of the
      Valuation  Date  specified  in such  election,  or, if earlier,  as of the
      latest Valuation Date that would permit

<PAGE>

                                   -35-

      payment to be made  within five years  after the  Participant's  or Former
      Participant's death, and the amount thereof shall be based upon the vested
      portion of the balance  credited to his Account as of such Valuation Date;
      or

            (iii)  if,  prior  to  the  death  of  the   Participant  or  Former
      Participant  whose  vested  Account  is  being  distributed,  an  election
      pursuant to section 13.3(b)(ii)(A) is in effect for him:

                  (A)  over  the  period  and at the  times  set  forth  in such
            election,  if distribution  has begun prior to the  Participant's or
            Former Participant's death; or

                  (B) commencing at the time set forth in such election and over
            the period set forth in such  election  (or, if less,  over a period
            equal to the life  expectancy  of the  Beneficiary  of the  deceased
            Participant or Former Participant), if the deceased Participant's or
            Former  Participant's spouse is his Beneficiary and distribution has
            not   begun   prior  to  the   deceased   Participant's   or  Former
            Participant's death; or

                  (C)  commencing on the date specified in such election (or, if
            earlier,  the last  Valuation Date that will permit payment to begin
            within  one  year  after  the  deceased   Participant's   or  Former
            Participant's  death) and over the period set forth in such election
            (or,  if less,  over a period  equal to the life  expectancy  of the
            Beneficiary of the deceased Participant or Former  Participant),  if
            the deceased Participant's or Former Participant's  Beneficiary is a
            natural person other than his spouse and  distribution has not begun
            prior to the deceased Participant's or Former Participant's death;

      and the  amount  thereof  shall be based  upon the  vested  portion of the
      balance  credited  to his  Account as of the  Valuation  Dates as of which
      payments are determined; or

            (iv) upon written  application of the Beneficiary  made in such form
      and manner as the Plan Administrator may prescribe,  at another time or in
      another  manner  permitted  under section  13.3(a) or (b),  subject to the
      following limitations:

                  (A)(I) If such  Beneficiary is a natural person other than the
            spouse  of the  deceased  Participant  or Former  Participant  whose
            vested Account is being  distributed,  a distribution that commences
            within  one  year  after  such  deceased   Participant's  or  Former
            Participant's  death shall be made over a fixed period that does not
            exceed the life  expectancy of such  Beneficiary  when  distribution
            commences.

                  (II)  If  such  Beneficiary  is the  spouse  of  the  deceased
            Participant  or Former  Participant  whose  vested  Account is being
            distributed, a

<PAGE>

                                   -36-

            distribution that commences no later than the later of: (1) the date
            on which the deceased  Participant or Former  Participant would have
            attained age 70 1/2 had he lived;  or (2) the first  anniversary  of
            the death of such deceased Participant or Former Participant,  shall
            be made over a fixed period that does not exceed the life expectancy
            of such Beneficiary when distribution commences.

                  (III) In all  other  cases  where the  spouse of the  deceased
            Partici pant or Former  Participant  whose  vested  Account is being
            distributed is not the Beneficiary, payment must be completed within
            five years after the death of such  deceased  Participant  or Former
            Participant.

                  (B) In cases where  distribution  has  commenced  prior to the
            death of the deceased Participant or Former Participant whose vested
            Account is being  distributed,  distribution  must be  completed  at
            least as  rapidly  as  under  the  method  in  effect  prior to such
            deceased Participant's or Former Participant's death.

            SECTION 13.4 MANNER OF PAYMENT.

            (a)  Subject to section  13.4(b),  payments  of  distributions  made
pursuant to section 13.3 or section 13.5 shall be paid, in  accordance  with the
written  direction of the person  requesting  the payment,  in whole Shares,  in
cash, or in a combination of cash and whole Shares. Such written direction shall
be given in such form and manner as the Plan Administrator may prescribe.  If no
such  direction is given,  then payment  shall be made in the maximum  number of
whole  Shares  that may be acquired  with the amount of the  payment,  plus,  if
necessary,  an amount of money equal to any remaining amount of the payment that
is less than the Fair Market Value of a whole Share.

            (b) No  distribution  of a lump sum payment shall be made in cash to
the extent that the making of such  distribution,  when  combined with all other
distributions  to be made in cash as of the same Valuation  Date,  would require
the sale of Shares constituting 1% or more of all outstanding Shares;  PROVIDED,
HOWEVER,  that  this  section  13.4(b)  shall not  apply to or in  respect  of a
Participant or Former Participant:

            (i) following such Participant's or Former Participant's termination
      of  employment   with  the  Employer  on  account  of  his  Retirement  or
      Disability; or

            (ii)  following  such  Participant's  or Former  Participant's  65th
      birthday; or

            (iii) following the death of such Participant or Former Participant.

<PAGE>

                                   -37-

            SECTION 13.5 MINIMUM REQUIRED DISTRIBUTIONS.

            (a) Required  minimum  distributions  of a  Participant's  or Former
Participant's Account shall commence no later than:

            (i) if the  Participant  or Former  Participant  attained age 70 1/2
      prior to  January  1,  1988 and was not a Five  Percent  Owner at any time
      during the Plan Year ending in the calendar  year in which he attained age
      70 1/2,  during  any of the  four  preceding  Plan  Years  or  during  any
      subsequent  years,  the later of (A) the calendar year in which he attains
      or attained  age 70 1/2 or (B) the  calendar  year in which he  terminates
      employment with the Employer; or

            (ii) if the  Participant or Former  Participant  attained age 70 1/2
      prior to  January 1, 1988 and is or was a Five  Percent  Owner at any time
      during the Plan Year ending in the calendar  year in which he attained age
      70 1/2,  or during  any of the four  preceding  Plan  Years or during  any
      subsequent  years,  the later of (A) the calendar year in which he attains
      age 70 1/2 or (B) the  calendar  year in  which he  first  becomes  a Five
      Percent Owner; or

            (iii) in all other cases, the calendar year in which the Participant
      or Former Participant attains age 70 1/2.

            (b) The  required  minimum  distributions  contemplated  by  section
13.5(a) shall be made as follows:

            (i) The minimum  required  distribution  to be made for the calendar
      year for which the first  minimum  distribution  is  required  shall be no
      later than April 1st of the immediately  following calendar year and shall
      be equal to the  quotient  obtained  by  dividing  (A) the vested  balance
      credited to the  Participant's or Former  Participant's  Account as of the
      last  Valuation Date to occur in the calendar year  immediately  preceding
      the  calendar  year in which the first  minimum  distribution  is required
      (adjusted to account for any additions  thereto or subtractions  therefrom
      after such Valuation Date but on or before  December 31st of such calendar
      year); by (B) the  Participant's or Former  Participant's  life expectancy
      (or,  if his  Beneficiary  is a natural  person,  the joint  life and last
      survivor expectancy of him and his Beneficiary); and

            (ii) the minimum required  distribution to be made for each calendar
      year following the calendar year for which the first minimum  distribution
      is required shall be made no later than December 31st of the calendar year
      for which the  distribution is required and shall be equal to the quotient
      obtained by dividing (A) the vested balance credited to the  Participant's
      or Former Participant's  Account as of the last Valuation Date to occur in
      the calendar year prior to the calendar year for which the distribution is
      required  (adjusted to account for any additions  thereto or  subtractions
      therefrom after such Valuation Date but on or before December

<PAGE>

                                   -38-

      31st of such  calendar year and, in the case of the  distribution  for the
      calendar year immediately  following the calendar year for which the first
      minimum  distribution  is required,  reduced by any  distribution  for the
      prior calendar year that is made in the current calendar year); by (B) the
      Participant's  or  Former   Participant's  life  expectancy  (or,  if  his
      Beneficiary  is a  natural  person,  the  joint  life  and  last  survivor
      expectancy of him and his Beneficiary).

For purposes of this section  13.5,  the life  expectancy  of a  Participant  or
Former  Participant  (or the  joint  life  and  last  survivor  expectancy  of a
Participant  or  Former  Participant  and his  designated  Beneficiary)  for the
calendar year in which the Participant or Former Participant  attains age 70 1/2
shall be determined on the basis of Tables V and VI, as  applicable,  of section
1.72-9  of  the  Income  Tax  Regulations  as of  the  Participant's  or  Former
Participant's and  Beneficiary's  birthday in such year. Such life expectancy or
joint life and last survivor  expectancy for any subsequent  year shall be equal
to the  excess  of (1) the  life  expectancy  or joint  life  and last  survivor
expectancy for the year in which the Participant or Former  Participant  attains
age 70 1/2,  over (2) the  number of whole  years  that have  elapsed  since the
Participant or Former Participant attained age 70 1/2.

            (c)  Payment  of  the  distributions   required  to  be  made  to  a
Participant  or Former  Participant  under  this  section  13.5 shall be made in
accordance with section 13.4.

            SECTION 13.6 DIRECT ROLLOVER OF ELIGIBLE ROLLOVER DISTRIBUTIONS.

            (a) A  Distributee  may  elect,  at  the  time  and  in  the  manner
prescribed  by the  Plan  Administrator,  to have  any  portion  of an  Eligible
Rollover  Distribution paid directly to an Eligible Retirement Plan specified by
the Distributee in a Direct Rollover.

            (b) The following rules shall apply with respect to Direct Rollovers
made pursuant to this section 13.6:

            (i) A  Participant  may only elect to make a Direct  Rollover  of an
      Eligible  Rollover  Distribution  if such Eligible  Rollover  Distribution
      (when combined with other Eligible  Rollover  Distributions  made or to be
      made in the same calendar year) is

      reasonably expected to be at least $200;

            (ii) If a  Participant  elects a Direct  Rollover of a portion of an
      Eligible  Rollover  Distribution,  that  portion must be equal to at least
      $500; and

            (iii) A  Participant  may not  divide his or her  Eligible  Rollover
      Distribution into separate  distributions to be transferred to two or more
      Eligible Retirement Plans.

            (c) For  purposes  of this  section  13.6 and any  other  applicable
section  of the  Plan,  the  following  definitions  shall  have  the  following
meanings:

<PAGE>

                                      -39-

            (i) "Direct  Rollover"  means a payment by the Plan to the  Eligible
      Retirement Plan specified by the Distributee.

            (ii)  "Distributee"  means  an  Employee  or  former  Employee.   In
      addition,  the Employee's or former  Employee's  surviving  spouse and the
      Employee's  spouse or former  spouse who is the  alternate  payee  under a
      Qualified Domestic Relations Order are considered Distributees with regard
      to the interest of the spouse or former spouse.

            (iii)  "Eligible  Retirement  Plan" means an  individual  retirement
      account described in section 408(a) of the Code, an individual  retirement
      annuity described in section 408(b) of the Code, an annuity plan described
      in section 403(a) of the Code, or a qualified  trust  described in section
      401(a)  of the Code  that  accepts  the  Distributee's  Eligible  Rollover
      Distribution. However, in the case of an Eligible Rollover Distribution to
      the  current  or  former  spouse  who is the  alternative  payee  under  a
      Qualified  Domestic  Relations Order or to a surviving spouse, an Eligible
      Retirement  Plan  is  an  individual   retirement  account  or  individual
      retirement annuity.

            (iv) "Eligible Rollover  Distribution" means any distribution of all
      or any  portion of the  balance to the credit of the  Distributee,  except
      that an Eligible Rollover  Distribution does not include: any distribution
      that is one of a series of substantially equal periodic payments (not less
      frequently  than annually)  made for the life (or life  expectancy) of the
      Distributee  or the  joint  lives  (or  joint  life  expectancies)  of the
      Distributee's  designated  Beneficiary,  or for a specified  period of ten
      (10) years or more; any  distribution  to the extent such  distribution is
      required  under  section  401(a)(9)  of the Code;  and the  portion of any
      distribution  that is not includible in gross income  (determined  without
      regard to the exclusion for net  unrealized  appreciation  with respect to
      employer securities).

            SECTION 13.7 VALUATION OF SHARES UPON DISTRIBUTION TO A PARTICIPANT.

            Notwithstanding  any contrary provision in this Article XIII, in the
event that all or a portion of a payment of a  distribution  to a Participant is
to be made in cash,  such  Participant  shall only be  entitled  to receive  the
proceeds of the Shares allocated to his Account that are sold in connection with
such distribution and which are valued as of the date of such sale.

            SECTION 13.8 PUT OPTIONS.

            (a) Subject to section  13.8(c) and except as provided  otherwise in
section  13.8(b),  each  Participant  or Former  Participant  to whom Shares are
distributed under the Plan, each Beneficiary of a deceased Participant or Former
Participant,   including  the  estate  of  a  deceased   Participant  or  Former
Participant,  to whom Shares are distributed  under the Plan, and each person to
whom such a Participant,  Former  Participant  or Beneficiary  gives Shares that
have been

<PAGE>

                                      -40-

distributed  under the Plan  shall  have the right to require  the  Employer  to
purchase  from him all or any portion of such Shares.  A person  shall  exercise
such right by  delivering  to the  Employer a written  notice,  in such form and
manner as the Employer may by written notice to such person  prescribe,  setting
forth the number of Shares to be  purchased by the  Employer,  the number of the
stock  certificate  evidencing such person's  ownership of such Shares,  and the
effective  date of the purchase.  Such notice shall be given at least 30 days in
advance of the effective  date of purchase,  and the effective  date of purchase
specified  therein  shall be, either within the 60-day period that begins on the
date on which the Shares to be purchased by the Employer were  distributed  from
the Plan or within the 60-day  period  that  begins on the first day of the Plan
Year immediately  following the Plan Year in which the Shares to be purchased by
the Employer are distributed from the Plan. As soon as practicable following its
receipt of such a notice,  the Employer shall take such actions as are necessary
to purchase  the Shares  specified  in such notice at a price per Share equal to
the Fair Market Value of a Share  determined as of the Valuation Date coincident
with or immediately preceding the effective date of the purchase.

            (b) The Employer  shall have no obligation to purchase any Share (i)
pursuant  to a notice  that is not  timely  given,  or on an  effective  date of
purchase that is not within the periods  prescribed in section 13.8(a),  or (ii)
following  the  earliest  date  on  which  Shares  are  publicly  traded  on  an
established market.

            (c) This  section  13.8 shall not apply so long as the  Employer  is
prohibited by law from redeeming or purchasing its own securities.

            SECTION 13.9 RIGHT OF FIRST REFUSAL.

            (a) Subject to section  13.9(d),  for any period during which Shares
are not pub licly traded in any  established  market,  no person who owns Shares
that were  distributed  from the Plan,  other than a person to whom such  Shares
were sold in compliance  with this section  13.9,  shall sell such Shares to any
person other than the Employer without first offering to sell such Shares to the
Employer in accordance with this section 13.9.

            (b) In the event  that a person to whom this  section  13.9  applies
shall  receive  and desire to accept  from a person  other than the  Employer an
offer to purchase Shares to which this section 13.9 applies, he shall furnish to
the Employer a written notice which shall:

                  (i) include a copy of such offer to purchase;

                  (ii) offer to sell to the Employer the Shares  subject to such
            offer to  purchase at a price per Share that is equal to the greater
            of:

                        (A) the price per Share specified in such offer to
                  purchase; or

<PAGE>

                                   -41-

                        (B) the Fair Market Value of a Share as of the Valuation
                  Date coincident with or immediately preceding the date of such
                  notice;

            and otherwise upon the same terms and conditions as those
            specified in such offer to purchase; and

                  (iii)  include an  indication  of his intention to accept such
            offer to purchase if the Employer does not accept his offer to sell.

Such person shall refrain from  accepting such offer to purchase for a period of
fourteen days following the date on which such notice is given.

            (c) Subject to section 13.9(d), the Employer shall have the right to
purchase  the Shares  covered by the offer to sell  contained  in a notice given
pursuant  to section  13.9(b),  on the terms and  conditions  specified  in such
notice,  by written notice given to the party making the offer to sell not later
than the fourteenth day after the notice  described in section 13.9(b) is given.
If the Employer does not give such a notice during the  prescribed  fourteen-day
period,  then the person  owning  such  Shares may accept the offer to  purchase
described in the notice.

            (d) This  section  13.9 shall not apply so long as the  Employer  is
prohibited by law from redeeming or purchasing its own securities

                                   ARTICLE XIV

                                   -----------

                                 ADMINISTRATION

                                 --------------


            SECTION 14.1 NAMED FIDUCIARIES.

            The term "Named Fiduciary" shall mean (but only to the extent of the
responsi bilities of each of them) the Plan  Administrator,  the Committee,  the
Board and the  Trustee.  This  Article XIV is intended to allocate to each Named
Fiduciary the responsibility for the prudent execution of the functions assigned
to him or it,  and none of such  responsibilities  or any  other  responsibility
shall be shared by two or more of such  Named  Fiduciaries.  Whenever  one Named
Fiduciary is required by the Plan or Trust Agreement to follow the directions of
another Named Fiduciary,  the two Named  Fiduciaries shall not be deemed to have
been  assigned  a shared  responsibility,  but the  responsibility  of the Named
Fiduciary giving the directions shall be deemed his sole responsibility, and the
responsibility  of the Named Fiduciary  receiving those  directions  shall be to
follow  them  insofar  as such  instructions  are on  their  face  proper  under
applicable law.

<PAGE>

                                      -42-

            SECTION 14.2 PLAN ADMINISTRATOR.

            There shall be a Plan  Administrator,  who shall be the Senior Human
Resources  Officer  of the  Employer,  or such  Employee  or  officer  as may be
designated by the Committee,  as hereinafter provided, and who shall, subject to
the responsibilities of the Committee and the Board, have the responsibility for
the day-to-day  control,  management,  operation and administra tion of the Plan
(except  trust  duties).   The  Plan  Administrator  shall  have  the  following
responsibilities:

            (a) To maintain records necessary or appropriate for the
      administration of the Plan;

            (b) To give and receive  such  instructions,  notices,  information,
      materials,  reports and  certifications to the Trustee as may be necessary
      or appro priate in the administration of the Plan;

            (c) To  prescribe  forms and make rules and  regulations  consistent
      with the terms of the Plan and with the  interpretations and other actions
      of the Commit tee;

            (d) To require  such proof of age or  evidence  of good health of an
      Employee, Participant or Former Participant or the spouse of either, or of
      a Beneficiary as may be necessary or appropriate in the  administration of
      the Plan;

            (e) To prepare and file,  distribute  or furnish all  reports,  plan
      descrip  tions,  and other  information  concerning  the Plan,  including,
      without limitation, filings with the Secretary of Labor and communications
      with  Participants,  Former  Participants  and other persons,  as shall be
      required of the Plan Administrator under ERISA;

            (f) To determine any question  arising in connection  with the Plan,
      and the Plan  Administrator's  decision or action in respect thereof shall
      be final and  conclusive  and  binding  upon the  Employer,  the  Trustee,
      Participants,  Former  Participants,  Beneficiaries  and any other  person
      having an interest under the Plan;  PROVIDED,  HOWEVER,  that any question
      relating to  inconsistency or omission in the Plan, or  interpretation  of
      the provisions of the Plan, shall be referred to the Committee by the Plan
      Administrator  and the decision of the Committee in respect  thereof shall
      be final;

            (g) Subject to the provisions of section 14.5, to review and dispose
      of claims under the Plan filed pursuant to section 14.4;

            (h) If the Plan  Administrator  shall  determine  that by  reason of
      illness, senility, insanity, or for any other reason, it is undesirable to
      make any payment to a Participant, Former Participant,  Beneficiary or any
      other person entitled

<PAGE>

                                   -43-

      thereto,  to direct the application of any amount so payable to the use or
      benefit of such  person in any  manner  that he may deem  advisable  or to
      direct in his discretion the withholding of any payment under the Plan due
      to any person under legal disability  until a representative  competent to
      receive such payment in his behalf shall be appointed pursuant to law;

            (i)  To  discharge  such  other   responsibilities  or  follow  such
      directions as may be assigned or given by the Committee or the Board; and

            (j) To perform any duty or take any action which is allocated to the
      Plan Administrator under the Plan.

The  Plan  Administrator  shall  have  the  power  and  authority  necessary  or
appropriate to carry out his responsibilities. The Plan Administrator may resign
only by giving at least 30 days'  prior  written  notice of  resignation  to the
Committee, and such resignation shall be effective on the date specified in such
notice.

            SECTION 14.3 COMMITTEE RESPONSIBILITIES.

            The Committee shall,  subject to the  responsibilities of the Board,
have the following responsibilities:

            (a) To review the performance of the Plan Administrator;

            (b) To hear and decide  appeals,  pursuant  to the claims  procedure
      contained  in section  14.5 of the Plan,  taken from the  decisions of the
      Plan Administrator;

            (c) To hear and decide  questions,  including  interpretation of the
      Plan, as may be referred to the Committee by the Plan Administrator;

            (d) To review the  performance  of the Trustee  and such  investment
      managers as may be  appointed  in or pursuant  to the Trust  Agreement  in
      investing, managing and controlling the assets of the Plan;

            (e) To the extent  required by ERISA,  to establish a funding policy
      and method consistent with the objectives of the Plan and the requirements
      of ERISA, and to review such policy and method at least annually;

            (f) To  report  and  make  recommendations  to the  Board  regarding
      changes in the Plan,  including changes in the operation and management of
      the Plan and removal and  replacement  of the Trustee and such  investment
      managers as may be appointed in or pursuant to the Trust Agreement;

<PAGE>

                                   -44-

            (g) To  designate an Alternate  Plan  Administrator  to serve in the
      event  that the Plan  Administrator  is  absent  or  otherwise  unable  to
      discharge his responsi bilities;

            (h) To remove and replace the Plan  Administrator  or Alternate,  or
      both of them, and to fill a vacancy in either office;

            (i) To the extent  provided  under and subject to the  provisions of
      the Trust  Agreement,  to  appoint  "investment  managers"  as  defined in
      section  3(38) of ERISA to manage and  control  (including  acquiring  and
      disposing of) all or any of the assets of the Plan;

            (j) With the prior  approval of the Board,  to direct the Trustee to
      obtain one or more Share Acquisition Loans;

            (k) To develop and provide  procedures and forms necessary to enable
      Participants  to give voting and tendering  directions  on a  confidential
      basis;

            (l)  To  discharge  such  other   responsibilities  or  follow  such
      directions as may be assigned or given by the Board; and

            (m) To perform any duty or take any action which is allocated to the
      Committee under the Plan.

The Committee  shall have the power and authority  necessary or  appropriate  to
carry out its responsibilities.

            SECTION 14.4 CLAIMS PROCEDURE.

            Any claim  relating to  benefits  under the Plan shall be filed with
the Plan  Administrator  on a form  prescribed  by him.  If a claim is denied in
whole or in part, the Plan Administrator  shall give the claimant written notice
of such denial, which notice shall specifically set forth:

            (a) The reasons for the denial;

            (b) The pertinent Plan provisions on which the denial was based;

            (c)  Any  additional  material  or  information  necessary  for  the
      claimant to perfect his claim and an  explanation  of why such material or
      information is needed; and

            (d) An explanation of the Plan's  procedure for review of the denial
      of the claim.

<PAGE>

                                   -45-

In the event  that the claim is not  granted  and notice of denial of a claim is
not  furnished  by the 30th day after such claim was filed,  the claim  shall be
deemed  to have  been  denied  on that day for the  purpose  of  permitting  the
claimant to request review of the claim.

            SECTION 14.5 CLAIMS REVIEW PROCEDURE.

            Any person  whose  claim  filed  pursuant  to section  14.5 has been
denied in whole or in part by the Plan  Administrator  may request review of the
claim by the Committee,  upon a form prescribed by the Plan  Administrator.  The
claimant  shall file such form  (including a statement of his position) with the
Committee  no later than 60 days after the  mailing or  delivery  of the written
notice of denial  provided for in this section  14.5,  or, if such notice is not
provided,  within 60 days  after such claim is deemed  denied  pursuant  to this
section 14.5. The claimant shall be permitted to review pertinent  documents.  A
decision shall be rendered by the Committee and communicated to the claimant not
later than 30 days after receipt of the claimant's  written  request for review.
However, if the Committee finds it necessary,  due to special circumstances (for
example, the need to hold a hearing),  to extend this period and so notifies the
claimant in writing, the decision shall be rendered as soon as practicable,  but
in no event later than 120 days after the  claimant's  request  for review.  The
Committee's decision shall be in writing and shall specifically set forth:

            (a) The reasons for the decision; and

            (b) The pertinent Plan provisions on which the decision is based.

Any such  decision of the  Committee  shall be binding upon the claimant and the
Employer,  and the Plan Administrator shall take appropriate action to carry out
such decision.

            SECTION 14.8 ALLOCATION OF FIDUCIARY RESPONSIBILITIES AND
                         EMPLOYMENT OF ADVISORS.

            Any Named Fiduciary may:

            (a) Allocate any of his or its responsibilities  (other than trustee
      responsibilities)  under the Plan to such other person or persons as he or
      it may designate,  provided that such allocation and designation  shall be
      in writing and filed with the Plan Administrator;

            (b)  Employ one or more  persons to render  advice to him or it with
      regard to any of his or its responsibilities under the Plan; and

            (c) Consult with counsel, who may be counsel to the Employer.

<PAGE>

                                   -46-

            SECTION 14.9 OTHER ADMINISTRATIVE PROVISIONS.

            (a) Any person  whose claim has been denied in whole or in part must
exhaust the administrative  review procedures  provided in section 14.5 prior to
initiating any claim for judicial review.

            (b) No bond or other  security  shall be required of a member of the
Committee, the Plan Administrator, or any officer or Employee of the Employer to
whom fiduciary respon  sibilities are allocated by a Named Fiduciary,  except as
may be required by ERISA.

            (c) Subject to any  limitation  on the  application  of this section
14.9(c) pursuant to ERISA,  neither the Plan Administrator,  nor a member of the
Committee,  nor any  officer  or  Employee  of the  Employer  to whom  fiduciary
responsibilities are allocated by a Named Fiduciary, shall be liable for any act
of omission or  commission by himself or by another  person,  except for his own
individual willful and intentional malfeasance.

            (d) The Plan Administrator or the Committee may, except with respect
to actions under section 14.5, shorten, extend or waive the time (but not beyond
60 days)  required by the Plan for filing any notice or other form with the Plan
Administrator or the Committee, or taking any other action under the Plan.

            (e) The Plan  Administrator  or the  Committee  may direct  that the
costs of services  provided  pursuant to section 14.6, and such other reasonable
expenses as may be incurred in the administration of the Plan, shall be paid out
of the funds of the Plan unless the Employer shall pay them.

            (f)  Any  person,  group  of  persons,  committee,   corporation  or
organization  may serve in more than one fiduciary  capacity with respect to the
Plan.

            (g) Any action taken or omitted by any fiduciary with respect to the
Plan, including any decision, interpretation,  claim denial or review on appeal,
shall be conclusive and binding on all  interested  parties and shall be subject
to judicial  modification  or reversal  only to the extent it is determined by a
court of competent  jurisdiction  that such action or omission was arbitrary and
capricious and contrary to the terms of the Plan.

                                   ARTICLE XV

                                   ----------

                  AMENDMENT, TERMINATION AND TAX QUALIFICATION

                  --------------------------------------------



<PAGE>

                                      -47-

            SECTION 15.1 AMENDMENT AND TERMINATION BY ASHE FEDERAL BANK.

            The  Employer  expects  to  continue  the  Plan  indefinitely,   but
specifically  reserves  the  right,  in its sole  discretion,  at any  time,  by
appropriate  action of the Board,  to amend,  in whole or in part, any or all of
the provisions of the Plan and to terminate the Plan at any time. Subject to the
provisions of section 15.2, no such  amendment or  termination  shall permit any
part of the Trust Fund to be used for or diverted to purposes other than for the
exclusive benefit of Participants,  Former Participants,  Beneficiaries or other
persons entitled to benefits,  and no such amendment or termination shall reduce
the accrued benefit of any Participant, Former Participant, Beneficiary or other
person who may be entitled to benefits,  without his consent.  In the event of a
termination  or partial  termination  of the Plan, or in the event of a complete
discontinuance of the Employer's contributions to the Plan, the Accounts of each
affected person shall forthwith  become  nonforfeitable  and shall be payable in
accordance with the provisions of Article XIII.

            SECTION 15.2 AMENDMENT OR TERMINATION OTHER THAN BY ASHE FEDERAL
                         BANK.

            In the event that a corporation or trade or business other than Ashe
Federal Bank shall adopt this Plan, such corporation or trade or business shall,
by adopting the Plan,  empower Ashe Federal Bank to amend or terminate the Plan,
insofar as it shall cover  employees of such  corporation  or trade or business,
upon the terms and conditions set forth in section 15.1; PROVIDED, HOWEVER, that
any such  corporation  or trade or  business  may,  by  action  of its  board of
directors or other  governing body,  amend or terminate the Plan,  insofar as it
shall cover  employees of such  corporation  or trade or business,  at different
times  and  in a  different  manner.  In the  event  of any  such  amendment  or
termination by action of the board of directors or other  governing body of such
a corporation or trade or business, a separate plan shall be deemed to have been
established for the employees of such corporation or trade or business,  and the
assets  of such plan  shall be  segregated  from the  assets of this Plan at the
earliest  practicable  date  and  shall  be dealt  with in  accordance  with the
documents governing such separate plan.

            SECTION 15.3 CONFORMITY TO INTERNAL REVENUE CODE.

            The Employer has  established the Plan with the intent that the Plan
and Trust will at all times be qualified  under section  401(a) and exempt under
section 501(a) of the Code and with the intent that contributions under the Plan
will be allowed as  deductions  in computing  the net income of the Employer for
federal income tax purposes,  and the provisions of the Plan and Trust Agreement
shall be construed to effectuate such intentions.  Accordingly,  notwithstanding
anything to the contrary hereinbefore provided, the Plan and the Trust Agreement
may be  amended  at any  time  without  prior  notice  to  Participants,  Former
Participants,  Beneficiaries or any other persons entitled to benefits,  if such
amendment is deemed by the Board to be necessary or  appropriate  to  effectuate
such intent.

<PAGE>

                                      -48-

            SECTION 15.4 CONTINGENT NATURE OF CONTRIBUTIONS.

            (a) All ESOP  Contributions  to the Plan  are  conditioned  upon the
issuance by the Internal  Revenue Service of a  determination  that the Plan and
Trust are qualified  under  section  401(a) of the Code and exempt under section
501(a) of the Code. If the Employer  applies to the Internal Revenue Service for
such a determination within 90 days after the date on which it files its federal
income tax return for its taxable  year that  includes  the last day of the Plan
Year in which the Plan is adopted,  and if the Internal Revenue Service issues a
determination  that the Plan and Trust are not so qualified or exempt,  all ESOP
Contributions  made by the  Employer  prior  to the  date of  receipt  of such a
determination may, at the election of the Employer,  be returned to the Employer
within one year after the date of such determination.

            (b) All ESOP  Contributions and Loan Repayment  Contributions to the
Plan are made upon the condition that such ESOP Contributions and Loan Repayment
Contributions  will be allowed as a deduction in computing the net income of the
Employer for federal income tax purposes.  To the extent that any such deduction
is disallowed,  the amount  disallowed may, at the election of the Employer,  be
returned to the Employer within one year after the deduction is disallowed.

            (c) Any contribution to the Plan made by the Employer as a result of
a mistake of fact may,  at the  election  of the  Employer,  be  returned to the
Employer within one year after such contribution is made.

                                   ARTICLE XVI

                                   -----------

                     SPECIAL RULES FOR TOP HEAVY PLAN YEARS

                     --------------------------------------


            SECTION 16.1 IN GENERAL.

            As  of  the  Determination   Date  for  each  Plan  Year,  the  Plan
Administrator shall determine whether the Plan is a Top Heavy Plan in accordance
with the provisions of this Article XVI. If, as of such Determination  Date, the
Plan is a Top  Heavy  Plan,  then  the  Plan  Year  immediately  following  such
Determination  Date shall be a Top Heavy Plan Year and the special provisions of
this  Article  XVI shall be in  effect;  PROVIDED,  HOWEVER,  that if, as of the
Determination  Date for the Plan Year in which the  Effective  Date occurs,  the
Plan is a Top Heavy Plan, such Plan Year shall be a Top Heavy Plan Year, and the
provisions of this Article XVI shall be given  retroactive  effect for such Plan
Year.

<PAGE>

                                      -49-

            SECTION 16.2 DEFINITION OF TOP HEAVY PLAN.

            (a) Subject to section 16.2(c),  the Plan is a Top Heavy Plan if, as
of a Deter  mination  Date:  (i) it is not a member  of a  Required  Aggregation
Group,  and  (ii)(A)  the  sum of the  Cumulative  Accrued  Benefits  of all Key
Employees  exceeds 60% of (B) the sum of the Cumulative  Accrued Benefits of all
Employees  (excluding former Key Employees),  former Employees (excluding former
Key Employees and other former Employees who have not performed any services for
the Employer or any Affiliated  Employer during the  immediately  preceding five
Plan Years), and their Beneficiaries.

            (b) Subject to section 16.2(c),  the Plan is a Top Heavy Plan if, as
of a Deter  mination  Date:  (i) the Plan is a member of a Required  Aggregation
Group,  and  (ii)(A)  the  sum of the  Cumulative  Accrued  Benefits  of all Key
Employees  under all plans that are members of the  Required  Aggregation  Group
exceeds 60% of (B) the sum of the Cumulative  Accrued  Benefits of all Employees
(excluding  former  Key  Employees),  former  Employees  (excluding  former  Key
Employees and other former Employees who have not performed any services for the
Employer or any Affiliated  Employer during the immediately  preceding five Plan
Years),  and  their  Benefic  iaries  under all plans  that are  members  of the
Required Aggregation Group.

            (c) Notwithstanding  sections 16.2(a) and 16.2(b), the Plan is not a
Top Heavy  Plan if, as of a  Determination  Date:  (i) the Plan is a member of a
Permissible  Aggregation  Group,  and (ii)(A) the sum of the Cumulative  Accrued
Benefits  of  all  Key  Employees  under  all  plans  that  are  members  of the
Permissible  Aggregation  Group  does  not  exceed  60%  of (B)  the  sum of the
Cumulative  Accrued Benefits of all Employees  (excluding former Key Employees),
former Employees  (excluding former Key Employees and other former Employees who
have not  performed  any services for the  Employer or any  Affiliated  Employer
during the immediately preceding five Plan Years), and their Beneficiaries under
all plans that are members of the Permissible Aggregation Group.

            SECTION 16.3 DETERMINATION DATE.

            The Determination Date for the Plan Year in which the Effective Date
occurs shall be the last day of such Plan Year, and the  Determination  Date for
each Plan Year beginning  after the Plan Year in which the Effective Date occurs
shall be the last day of the preceding Plan Year. The Determination Date for any
other  qualified  plan  maintained  by the Employer for a plan year shall be the
last day of the preceding  plan year of each such plan,  except that in the case
of the first plan year of such plan, it shall be the last day of such first plan
year.

            SECTION 16.4 CUMULATIVE ACCRUED BENEFITS.

            (a) An individual's  Cumulative  Accrued Benefits under this Plan as
of a Determination Date are equal to the sum of:

<PAGE>

                                      -50-

            (i) the balance  credited to such  individual's  Account  under this
      Plan as of the most recent  Valuation  Date  preceding  the  Determination
      Date;

            (ii)  the  amount  of  any  ESOP  Contributions  or  Loan  Repayment
      Contributions  made  after  such  Valuation  Date  but  on or  before  the
      Determination Date; and

            (iii)  the  amount  of  any   distributions  of  such   individual's
      Cumulative  Accrued  Benefits  under the Plan during the five  year-period
      ending on the Deter mination Date.

For  purposes  of this  section  16.4(a),  the  computation  of an  individual's
Cumulative Accrued Benefits,  and the extent to which  distributions,  rollovers
and transfers are taken into  account,  will be made in accordance  with section
416 of the Code and the regulations thereunder.

            (b)  For  purposes  of  this  Plan,  the  term  "Cumulative  Accrued
Benefits"  with respect to any other  qualified  plan shall mean the  cumulative
accrued  benefits  determined  for purposes of section 416 of the Code under the
provisions of such plans.

            (c) For purposes of  determining  the top heavy status of a Required
Aggregation  Group or a Permissible  Aggregation  Group, the Cumulative  Accrued
Benefits  under this Plan and the  Cumulative  Accrued  Benefits under any other
plan shall be determined as of the Determination Date that falls within the same
calendar year as the Determination  Dates for all other members of such Required
Aggregation Group or Permissible Aggregation Group.

            SECTION 16.5 KEY EMPLOYEES.

            (a) For  purposes  of the  Plan,  the term Key  Employee  means  any
employee or former employee of the Employer or any Affiliated Employer who is at
any time during the current Plan Year or was at any time during the  immediately
preceding four Plan Years:

            (i) a Five Percent Owner;

            (ii) a person who would be  described  in section 1.23 if the number
      "1%" were  substituted  for the number "5%" in section 1.23 and who has an
      annual Total Compensation from the Employer and any Affiliated Employer of
      more than $150,000;

            (iii) an Officer of the Employer or any Affiliated  Employer who has
      an annual  Total  Compensation  greater  than 50% of the  amount in effect
      under section 415(b)(1)(A) of the Code for any such Plan Year; or

            (iv) one of the ten  persons  owning the  largest  interests  in the
      Employer and having an annual Total  Compensation from the Employer or any
      Affiliated

<PAGE>

                                   -51-

      Employer  in excess of the  dollar  limitation  in  effect  under  section
      415(c)(1)(A) of the Code for such Plan Year.

            (b) For purposes of section 16.5(a):

            (i) for purposes of section 16.5(a)(iii),  in the event the Employer
      or any Affiliated Employer has more officers than are considered Officers,
      the term Key Employee shall mean those officers, up to the maximum number,
      with the highest annual  compensation  in any one of the five  consecutive
      Plan Years ending on the Determination Date; and

            (ii) for  purposes of section  16.5(a)(iv),  if two or more  persons
      have equal ownership interests in the Employer,  each such person shall be
      considered as having a larger ownership interest than any such person with
      a lower annual compensation from the Employer or any Affiliated Employer.

            (c) For  purposes of section  16.5(a):  (i) a person's  compensation
from Affiliated  Employers shall be aggregated,  but his ownership  interests in
Affiliated  Employers  shall not be  aggregated;  (ii) an employee shall only be
deemed to be an officer if he has the power and  responsibility  of a person who
is an officer  within the meaning of section 416 of the Code; and (iii) the term
Key Employee shall also include the Beneficiary of a deceased Key Employee.

            SECTION 16.6 REQUIRED AGGREGATION GROUP.

            For purposes of this Article XVI, a Required Aggregation Group shall
consist  of (a) this  Plan;  (b) any other  qualified  plans  maintained  by the
Employer and any  Affiliated  Employers  that cover Key  Employees;  and (c) any
other  qualified  plans that are  required  to be  aggregated  for  purposes  of
satisfying the requirements of sections 401(a)(4) and 410(b) of the Code.

            SECTION 16.7 PERMISSIBLE AGGREGATION GROUP.

            For purposes of this Article XVI, a  Permissible  Aggregation  Group
shall consist of (a) the Required  Aggregation Group and (b) any other qualified
plans  maintained  by the  Employer  and  any  Affiliated  Employers;  PROVIDED,
HOWEVER, that the Permissible Aggregation Group must satisfy the requirements of
sections 401(a)(4) and 410(b) of the Code.

            SECTION 16.8 SPECIAL REQUIREMENTS DURING TOP HEAVY PLAN YEARS.

            (a) Notwithstanding any other provision of the Plan to the contrary,
for each Top Heavy Plan Year,  in the case of a  Participant  (other  than a Key
Employee)  on the  last  day of such  Top  Heavy  Plan  Year  who is not  also a
participant in another qualified plan which satisfies

<PAGE>

                                      -52-

the minimum  contribution  and benefit  requirements  of section 416 of the Code
with respect to such  Participant,  the sum of the ESOP  Contributions  and Loan
Repayment Contributions made with respect to such Participant, when expressed as
a percentage of his Total  Compensation  for such Top Heavy Plan Year, shall not
be less than 3% of such Participant's Total Compensation for such Top Heavy Plan
Year or, if less, the highest combined rate,  expressed as a percentage of Total
Compensation at which ESOP  Contributions and Loan Repayment  Contributions were
made on behalf of a Key  Employee  for such Top Heavy  Plan Year.  The  Employer
shall make an additional  contribution to the Account of each Participant to the
extent necessary to satisfy the foregoing requirement.

            (b)  For any  Top  Heavy  Plan  Year,  the  number  "1.0"  shall  be
substituted for the number "1.25" in sections 8.2(c)(iii) and 8.2(c)(iv), except
that:

            (i) this section 16.8(b) shall not apply to any individual for a Top
      Heavy  Plan  Year  that  is  not a  Super  Top  Heavy  Plan  Year  if  the
      requirements  of section  16.8(a)  would be  satisfied  for such Super Top
      Heavy Plan Year if the number "4%" were substituted for the number "3%" in
      section 16.8(a); and

            (ii) this section 16.8(b) shall not apply to an individual for a Top
      Heavy Plan Year if,  during  such Top Heavy  Plan Year,  there are no ESOP
      Contributions or Loan Repayment Contributions allocated to such individual
      under  this Plan,  there are no  contributions  under any other  qualified
      defined  contribution  plan main tained by the Employer,  and there are no
      accruals for such  individual  under any  qualified  defined  benefit plan
      maintained by the Employer.

For purposes of this section 16.8(b), the term Super Top Heavy Plan Year means a
Top Heavy Plan Year in which the Plan would meet the  definitional  requirements
of section  16.2(a) or 16.2(b) if the term "90%" were  substituted  for the term
"60%" in sections 16.2(a), 16.2(b) and 16.2(c).

                               ARTICLE XVII

                               ------------

                         MISCELLANEOUS PROVISIONS

                         ------------------------


            SECTION 17.1 GOVERNING LAW.

            The Plan shall be construed,  administered and enforced according to
the laws of the State of North Carolina without giving effect to the conflict of
laws  principles  thereof,  except to the extent that such laws are preempted by
federal law.

<PAGE>

                                      -53-

            SECTION 17.2 NO RIGHT TO CONTINUED EMPLOYMENT.

            Neither the establishment of the Plan nor any provisions of the Plan
or of the Trust  Agreement  establishing  the Trust Fund,  nor any action of the
Plan Administrator,  the Committee or the Trustee, shall be held or construed to
confer  upon any  Employee  any right to a  continuation  of  employment  by the
Employer.  The Employer  reserves the right to dismiss any Employee or otherwise
deal  with any  Employee  to the same  extent  as  though  the Plan had not been
adopted.

            SECTION 17.3 CONSTRUCTION OF LANGUAGE.

            Wherever  appropriate in the Plan, words used in the singular may be
read in the plural,  words used in the plural may be read in the  singular,  and
words  importing  the masculine  gender may be read as referring  equally to the
feminine and the neuter.  Any  reference  to an Article or section  number shall
refer to an Article or section of the Plan, unless otherwise indicated.

            SECTION 17.4 HEADINGS.

            The  headings of  Articles  and  sections  are  included  solely for
convenience of reference. If there is any conflict between such headings and the
text of the Plan, the text shall control.

            SECTION 17.5 MERGER WITH OTHER PLANS.

            The Plan shall not be merged or consolidated  with, nor transfer its
assets or  liabilities  to,  any other  plan  unless  each  Participant,  Former
Participant,  Beneficiary and other person entitled to benefits,  would (if that
plan  then  terminated)   receive  a  benefit   immediately  after  the  merger,
consolidation or transfer which is equal to or greater than the benefit he would
have been entitled to receive if the Plan had terminated  immediately before the
merger, consolidation or transfer.

            SECTION 17.6 NON-ALIENATION OF BENEFITS.

            (a) Except as  provided in section  17.6(b),  the right to receive a
benefit  under the Plan  shall not be  subject  in any  manner to  anticipation,
alienation  or  assignment,  nor shall  such  right be liable  for or subject to
debts,  contracts,   liabilities  or  torts.  Should  any  Participant,   Former
Participant  or other  person  attempt  to  anticipate,  alienate  or assign his
interest  in or right to a benefit,  or should any person  claiming  against him
seek to subject such  interest or right to legal or equitable  process,  all the
interest or right of such  Participant  or Former  Participant  or other  person
entitled to benefits in the Plan shall cease, and in that event such interest or
right shall be held or applied, at the direction of the Plan Administrator,  for
or to the benefit of such

<PAGE>

                                      -54-

Participant or Former  Participant,  or other person or his spouse,  children or
other   dependents  in  such  manner  and  in  such   proportions  as  the  Plan
Administrator may deem proper.

            (b) This section 17.6 shall not prohibit the Plan Administrator from
recognizing  a Domestic  Relations  Order that is  determined  to be a Qualified
Domestic Relations Order in accordance with section 17.7.

            SECTION 17.7 PROCEDURES INVOLVING DOMESTIC RELATIONS ORDERS.

            Upon receiving a Domestic  Relations Order,  the Plan  Administrator
shall  segregate  in a separate  account or in an escrow  account or  separately
account  for the  amounts  payable  to any  person  pursuant  to  such  Domestic
Relations Order,  pending a determination  whether such Domestic Relations Order
constitutes a Qualified  Domestic  Relations Order, and shall give notice of the
receipt of the Domestic Relations Order to the Participant or Former Participant
and each other person  affected  thereby.  If, within 18 months after receipt of
such Domestic  Relations  Order,  the Plan  Administrator,  a court of competent
jurisdiction  or another  appropriate  authority  determines  that such Domestic
Relations  Order  constitutes a Qualified  Domestic  Relations  Order,  the Plan
Administrator  shall direct the Trustee to pay the segregated  amounts (plus any
interest  thereon) to the person or persons entitled thereto under the Qualified
Domestic  Relations Order. If it is determined that the Domestic Relations Order
is not a  Qualified  Domestic  Relations  Order or if no  determination  is made
within  the  prescribed   18-month  period,  the  segregated  amounts  shall  be
distributed as though the Domestic  Relations  Order had not been received,  and
any later  determination  that  such  Domestic  Relations  Order  constitutes  a
Qualified  Domestic  Relations  Order  shall be  applied  only with  respect  to
benefits that remain  undistributed on the date of such determination.  The Plan
Administrator  shall be authorized to establish such  reasonable  administrative
procedures as he deems necessary or appropriate to administer this section 17.7.
This section 17.7 shall be construed and  administered  so as to comply with the
requirements of section 401(a)(13) of the Code.

            SECTION 17.8 LEASED EMPLOYEES.

            (a) Subject to section  17.8(b),  a leased employee shall be treated
as an Employee for purposes of the Plan.  For purposes of this section 17.8, the
term  "leased  employee"  means  any  person  (i)  who  would  not,  but for the
application  of this  section  17.8,  be an Employee and (ii) who pursuant to an
agreement between the Employer and any other person ("leasing organization") has
performed for the Employer (or for the Employer and related  persons  determined
in accordance with section 414(n)(6) of the Code), on a substantially  full-time
basis  for a period  of at  least  one  year,  services  of a type  historically
performed by employees in the business field of the Employer.

            (b) For purposes of the Plan:

<PAGE>

                                      -55-

            (i) contributions or benefits provided to the leased employee by the
      leasing  organization which are attributable to services performed for the
      Employer shall be treated as provided by the Employer; and

            (ii) section 17.8(a) shall not apply to a leased employee if:

                  (A) the number of leased employees performing services for the
            Employer  does not  exceed 20% of the  number of the  Employer's  Em
            ployees who are not Highly Compensated Employees; and

                  (B)  such  leased  employee  is  covered  by a money  purchase
            pension plan providing (I) a nonintegrated  contribution  rate of at
            least 10% of the  leased  employee's  compensation;  (II)  immediate
            participation;  (III) full and immediate vesting;  and (IV) coverage
            for all of the  employees  of the leasing  organization  (other than
            employees who perform  substantially  all of their  services for the
            leasing organization).

            SECTION 17.9 STATUS AS AN EMPLOYEE STOCK OWNERSHIP PLAN.

            It is intended that the Plan constitute an "employee stock ownership
plan," as defined in section  4975(e)(7)  of the Code and section  407(d)(6)  of
ERISA.  The Plan shall be  construed  and  administered  to give  effect to such
intent.

                                  ARTICLE XVIII

                                  -------------

                                CHANGE IN CONTROL

                                -----------------


            SECTION 18.1 DEFINITION OF CHANGE IN CONTROL

            A Change in Control of the Employer shall be deemed to have occurred
upon the happening of any of the following events:

            (a) the  occurrence  of any event upon which any  "person"  (as such
      term is used in sections 13(d) and 14(d) of the Securities Exchange Act of
      1934,  as  amended  ("Exchange  Act")),  other than (A) a trustee or other
      fiduciary holding securities under an employee benefit plan maintained for
      the benefit of employees of Ashe Bancorp,  Inc.; (B) a corporation  owned,
      directly or  indirectly,  by the  stockholders  of Ashe  Bancorp,  Inc. in
      substantially  the same  proportions  as their  ownership of stock of Ashe
      Bancorp,  Inc.; or (C) any group  constituting a person in which employees
      of Ashe Bancorp,  Inc. are  substantial  members,  becomes the "beneficial
      owner" (as defined in Rule 13d-3 promulgated under the Exchange

<PAGE>

                                   -56-

      Act), directly or indirectly,  of securities issued by Ashe Bancorp,  Inc.
      representing  25% or  more of the  combined  voting  power  of all of Ashe
      Bancorp, Inc.'s then outstanding securities; or

            (b) the  occurrence of any event upon which the  individuals  who on
      the date the Plan is  adopted  are  members of the  Board,  together  with
      individuals whose election by the Board or nomination for election by Ashe
      Bancorp,  Inc.'s  stockholders  was approved by the affirmative vote of at
      least  two-thirds  of the  members  of the Board  then in office  who were
      either  members  of the Board on the date this  Plan is  adopted  or whose
      nomination or election was previously so approved, cease for any reason to
      constitute a majority of the members of the Board, but excluding, for this
      purpose,  any such  individual  whose  initial  assumption of office is in
      connection with an actual or threatened  election  contest relating to the
      election of directors of Ashe Federal Bank (as such terms are used in Rule
      14a-11 of Regulation 14A promulgated under the Exchange Act); or

            (c) the shareholders of Ashe Federal Bank approve either:

                  (i) a merger or  consolidation  of Ashe  Federal Bank with any
            other  corporation,  other than a merger or consolidation  following
            which both of the following conditions are satisfied:

                        (A)  either  (1) the  members  of the Board  immediately
                  prior to such merger or  consolidation  constitute  at least a
                  majority  of  the  members  of  the  governing   body  of  the
                  institution  resulting from such merger or  consolidation;  or
                  (2) the  shareholders  of Ashe Federal Bank own  securities of
                  the  institution  resulting from such merger or  consolidation
                  representing  80% or more of the combined  voting power of all
                  such securities  then  outstanding in  substantially  the same
                  proportions  as their  ownership of voting  securities of Ashe
                  Federal Bank before such merger or consolidation; and

                        (B)  the  entity  which  results  from  such  merger  or
                  consolidation  expressly  agrees  in  writing  to  assume  and
                  perform Ashe Federal Bank's obligations under the Plan; or

                  (ii) a plan of complete liquidation of Ashe Federal Bank or an
            agreement for the sale or disposition by Ashe Federal Bank of all or
            substantially all of its assets; and

            (d) any event that would be described in section 18.1(b)(i), (ii) or
      (iii) if "Ashe  Bancorp,  Inc." were  substituted  for "Ashe Federal Bank"
      therein; and

In no event,  however,  shall a transaction  by which Ashe Federal Bank converts
from a mutual savings bank to a stock savings bank, or any  transaction by which
a company wholly owned by

<PAGE>

                                   -57-

Ashe Federal  Bank  becomes the parent  company of Ashe Federal Bank be deemed a
Change in Control.

            SECTION 18.2 VESTING ON CHANGE OF CONTROL.

            Upon the effective date of a Change in Control,  the Account of each
person who would then,  upon  termination of the Plan, be entitled to a benefit,
shall be fully vested and nonforfeitable.

            SECTION 18.3 REPAYMENT OF LOAN.

            (a) Upon a Change in Control  described in section 18.1(c) (or which
would be described in section 18.1(c) if "Ashe Bancorp,  Inc." were  substituted
for "Ashe Federal Bank"  thereunder),  the Committee shall direct the Trustee to
sell a sufficient  number of Shares to repay any outstanding  Share  Acquisition
Loan in full.  The  proceeds  of such  sale  shall be used to repay  such  Share
Acquisition  Loan. After repayment of the Share  Acquisition Loan, all remaining
Shares which had been unallocated (or the proceeds thereof, if applicable) shall
be allocated  among the  accounts of all  Participants  who were  employed by an
Employer on the  effective  date of such Change in Control.  Such  allocation of
Shares or  proceeds  shall be  credited  as of the date on which  the  Change in
Control occurs to the Accounts of each Participant who has not had a termination
of  participation  under  section  2.3  as of  such  date  (each,  an  "Affected
Participant"),  in proportion to their Allocation Compensation,  for the period,
beginning on the January 1 immediately preceding the date on which the Change in
Control occurs and ending on the date on which the Change in Control occurs.  If
any amount  cannot be allocated to an Affected  Participant  in the year of such
Change in Control as a result of the limitations of section 415 of the Code, the
amounts will be allocated in subsequent years to those persons who were Affected
Participants  and who  continue  to be  Participants  in the Plan until  finally
distributed to Affected Participants.

            (b) In the event that the  application  of  section  415 of the Code
prevents the  allocation of all of the Shares or other assets  released from the
Loan Repayment  Account as provided in section  18.3(a) as of the effective date
of the Change in Control, each Affected Participant shall be entitled to receive
a supplemental  benefit  payment  directly from the Employer.  The  supplemental
benefit  payment to each  Affected  Participant  shall be an amount equal to the
excess of:

            (i) the  total  amount of Shares  or other  property  that  would be
      allocated to such Affected  Participant's Account under section 18.3(a) if
      section 415 of the Code did not apply; over

            (ii) the total of Shares or other  property  actually  allocated  to
      such Affected Participant's Account under section 18.3(a).

<PAGE>

                                   -58-

Such payment (without offset for any allocations which may occur under this Plan
subsequent to the Change in Control) shall be made as soon as  practicable,  but
in any event within ten (10)  business  days,  after the  effective  date of the
Change  in  Control.  This  section  18.3(b)  shall be  treated  as a  separate,
non-qualified "excess benefit plan" within the meaning of section 3(34) of ERISA
and shall be interpreted,  administered and enforced in a manner consistent with
this intention.  To the extent that any Affected  Participant is entitled to the
same or a similar  payment  under  any  other  non-qualified  plan,  program  or
arrangement  of the Employer,  any payment  under this section  18.3(b) shall be
coordinated with the payments under such other non-qualified  programs,  plan or
arrangements  in such  manner  as shall be  determined  by the  Committee  to be
necessary to prevent the duplication of benefits.

            SECTION 18.4 PLAN TERMINATION AFTER CHANGE IN CONTROL.

            After  repayment of the loan and allocation of shares or proceeds as
provided in section 18.2,  the Plan shall be terminated and all amounts shall be
distributed as soon as practicable.

            SECTION 18.5 AMENDMENT OF ARTICLE XVIII.

            Article  XVIII  of the  Plan may not be  amended  after a Change  in
Control of the Employer  unless  required by the Internal  Revenue  Service as a
condition to the continued  treatment of the Plan as a tax-qualified  plan under
section 401(a) of the Code.