SEAGULL THRIFT PLAN

















                             As Amended and Restated
                           Effective September 1, 1996


<PAGE>



                               SEAGULL THRIFT PLAN



          THIS  AGREEMENT  AND  DECLARATION  OF TRUST is by and between  SEAGULL
ENERGY  CORPORATION,  a  Texas  corporation,  hereinafter  referred  to  as  the
"Company,"  and TEXAS  COMMERCE BANK NATIONAL  ASSOCIATION,  Houston,  Texas,  a
national banking association, hereinafter referred to as "Trustee."


                              W I T N E S S E T H :


          WHEREAS,  the Company has heretofore  adopted the SEAGULL THRIFT PLAN,
hereinafter referred to as the "Plan," for the benefit of its employees; and

          WHEREAS,  the Company has  heretofore  entered into a trust  agreement
with the  Trustee  establishing  a trust to hold and invest  contributions  made
under the Plan and from which benefits have been distributed under the Plan;

          WHEREAS, the Company desires to restate the Plan and to amend the Plan
in  several  respects,   intending  thereby  to  provide  an  uninterrupted  and
continuing program of benefits;

          NOW THEREFORE, the Plan and the trust agreement are hereby restated in
their  entirety  as  follows  with no  interruption  in  time,  effective  as of
September 1, 1996, except as otherwise indicated herein:


                                       (i)

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                                TABLE OF CONTENTS
                                                                                
Article I              Definitions and Construction ................         I-1
---------              ----------------------------
Article II             Participation................................        II-1
----------             -------------
Article III            Contributions................................       III-1
-----------            -------------
Article IV             Allocations..................................        IV-1
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Article V              Investment Funds.............................         V-1
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Article VI             Retirement Benefits..........................        VI-1
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Article VII            Disability Benefits..........................       VII-1
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Article VIII           Severance Benefits and Determination
------------           ------------------------------------
                       of Vested Interest...........................      VIII-1
Article IX             Death Benefits...............................        IX-1
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Article X              Time and Form of Payment of Benefits.........         X-1
---------              ------------------------------------
Article XI             In-Service Withdrawals.......................        XI-1
----------             ----------------------
Article XII            Loans........................................       XII-1
-----------            -----
Article XIII           Administration of the Plan...................      XIII-1
------------           --------------------------
Article XIV            Trustee and Administration of Trust Fund.....       XIV-1
-----------            ----------------------------------------
Article XV             Fiduciary Provisions.........................        XV-1
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Article XVI            Amendments...................................       XVI-1
-----------            ----------
Article XVII           Discontinuance of Contributions,
                       Termination, Partial Termination,
                       and Merger or Consolidation..................      XVII-1
Article XVIII          Participating Employers......................     XVIII-1
-------------          -----------------------
Article XIX            Miscellaneous Provisions ....................       XIX-1
-----------            ------------------------
Article XX             Top-Heavy Status.............................        XX-1
----------             ----------------


                                      (ii)

<PAGE>



                         I. Definitions and Construction


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

(1)      Account(s): A Member's Cash or Deferred Account,  Employer Contribution
         Contribution  Account,  Member  Contribution  Account,  and/or Rollover
         Contribution Account, including the amounts credited thereto.

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

(3)      Benefit Commencement Date:  With respect to each Member or beneficiary,
         the date such Member's or beneficiary's benefit is paid to him from the
         Trust Fund.

(4)      Cash or Deferred Account: An individual account for each Member,  which
         is  credited  with  the  Cash  or  Deferred  Contributions  made by the
         Employer  on  such  Member's   behalf  and  the  Employer  Safe  Harbor
         Contributions, if any, made on such Member's behalf pursuant to Section
         3.4 to satisfy the  restrictions  set forth in Section 3.1(e) and which
         is credited  with (or debited  for) such  account's  allocation  of net
         income (or net loss) and changes in value of the Trust Fund.

(5)      Cash or Deferred  Contributions:  Contributions made to the Plan by the
         Employer on a Member's behalf in accordance with the Member's elections
         to defer  Compensation  under the  Plan's  qualified  cash or  deferred
         arrangement as described in Section 3.1.

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

(7)      Committee:  The administrative committee  appointed by the Directors to
         administer the Plan.

(8)      Company:  Seagull Energy Corporation.

(9)      Company Stock:  The common stock of Seagull Energy Corporation.

(10)     Compensation:  The total of all wages, salaries,  fees for professional
         service and other  amounts  received in cash or in kind by a Member for
         services  actually rendered or labor performed for the Employer while a
         Member to the extent  such  amounts  are  includable  in gross  income,
         subject to the following adjustments and limitations:

         (A)      The following shall be excluded:

                  (i)         bonuses and incentive or other supplemental pay;


                                       I-1

<PAGE>



                  (ii)        reimbursements and other expense allowances;

                  (iii)       cash and noncash fringe benefits;

                  (iv)        moving expenses;

                  (v)         Employer contributions to or payments from this or
                              any other deferred compensation  program,  whether
                              such program is qualified  under section 401(a) of
                              the Code or nonqualified;

                  (vi)        welfare benefits;

                  (vii)       amounts realized from the receipt or exercise of a
                              stock option that is not an incentive stock option
                              within the meaning of section 422 of the Code;

                  (viii)      amounts realized at the time property described in
                              section  83  of  the Code  is freely  transferable
                              or no longer subject   to  a  substantial  risk of
                              forfeiture;

                  (ix)        amounts  realized  as  a  result  of  an  election
                              described in section 83(b) of the Code;

                  (x)         any amount realized as a result of a disqualifying
                              disposition  within  the meaning of section 421(a)
                              of the Code; and

                  (xi)        any  other  amounts   that  receive   special  tax
                              benefits  under the  Code  but are not hereinafter
                              included.

         (B)      The following shall be included:

                  (i)         elective  contributions  made on a Member's behalf
                              by the Employer that are not  includable in income
                              under  section  125,  section  402(e)(3),  section
                              402(h), or section 403(b) of the Code;

                  (ii)        compensation  deferred under  an eligible deferred
                              compensation plan  within  the meaning  of section
                              457(b) of the Code; and

                  (iii)       employee contributions described in section 414(h)
                              of the Code that are  picked  up by the  employing
                              unit and are treated as employer contributions.

         (C)      The Compensation of any Member taken into account for purposes
                  of the Plan  shall be limited  to  $150,000  for any Plan Year
                  with such limitation to be:


                                       I-2

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                  (i)         adjusted automatically  to reflect any  amendments
                              to section 401(a)(17) of the Code and any cost-of-
                              living  increases authorized by section 401(a)(17)
                              of the Code;

                  (ii)        prorated  for  a  Plan  Year of  less  than twelve
                              months  and to  the  extent otherwise  required by
                              applicable law; and

                  (iii)       in  the  case  of  a Member  who is either a five-
                              percent owner  of the Employer (within the meaning
                              of section  416(i)(1)(A)(iii)  of the  Code) or is
                              one  of the ten most  Highly Compensated Employees
                              for  the Plan Year  and  who has  a spouse  and/or
                              lineal  descendants  who  are  under  the  age  of
                              nineteen as of the end of a Plan Year who  receive
                              Compensation  during such  Plan Year, prorated and
                              allocated among  such  Member, his  spouse, and/or
                              lineal descendants under the age of nineteen based
                              on  the Compensation  for such  Plan Year  of each
                              such individual.

(11)     Controlled  Entity:  Each  corporation that is a member of a controlled
         group  of   corporations,   within  the  meaning  of  section   1563(a)
         (determined without regard to sections 1563(a)(4) and 1563(e)(3)(C)) of
         the Code,  of which the  Employer  is a member,  each trade or business
         (whether or not  incorporated)  with which the Employer is under common
         control,  and each member of an affiliated  service  group,  within the
         meaning  of  section  414(m) of the Code,  of which the  Employer  is a
         member.

(12)     Direct Rollover:  A payment by the Plan to an  Eligible Retirement Plan
         designated by a Distributee.

(13)     Directors:  The Board of Directors of the Company.

(14)     Distributee:   Each  (A)  Member  entitled  to  an  Eligible   Rollover
         Distribution,  (B)  Member's  surviving  spouse  with  respect  to  the
         interest of such surviving spouse in an Eligible Rollover Distribution,
         and (C) former  spouse of a Member who is an  alternate  payee  under a
         qualified domestic relations order, as defined in section 414(p) of the
         Code,  with regard to the interest of such former spouse in an Eligible
         Rollover Distribution.

(15)     Effective Date:  September 1, 1996, as to this restatement of the Plan,
         except (A) as otherwise  indicated in specific  provisions  of the Plan
         and (B) that  provisions  hereof  affecting  the duties of the  Trustee
         shall be effective as of the date of execution of this  restatement  of
         the Plan by the Trustee.  The original  effective  date of the Plan was
         January 1, 1973.

(16)     Eligible Employee: Each Employee other than (A) an Employee whose terms
         and  conditions of employment  are governed by a collective  bargaining
         agreement,  unless such  agreement  provides for his coverage under the
         Plan,  (B) a  nonresident  alien who receives no earned income from the
         Employer that constitutes income from sources within the United States,
         (C) an  Employee  who is a  Leased  Employee,  (D) an  Employee  who is
         employed at the ENSTAR Natural Gas Company  division of the Company and
         (E) an Employee who is

                                       I-3

<PAGE>



         employed by the Alaska Pipeline Company.  Notwithstanding any provision
         of  the  Plan  to  the  contrary,  no  individual  who  is  designated,
         compensated,  or otherwise  classified or treated by the Employer as an
         independent  contractor  shall be  eligible  to  become a Member of the
         Plan.

(17)     Eligible  Retirement Plan: (A) With respect to a Distributee other than
         a surviving  spouse,  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  plan described in section 401(a) of
         the  Code,  which  under  its  provisions  accepts  such  Distributee's
         Eligible  Rollover  Distribution  and (B) with respect to a Distributee
         who is a surviving spouse, an individual  retirement  account described
         in  section  408(a)  of the Code or an  individual  retirement  annuity
         described in section 408(b) of the Code.

(18)     Eligible Rollover Distribution:  Any distribution of all or any portion
         of the Accounts of a Distributee  other than (A) a 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  and  the  Distributee's  designated  beneficiary  or for a
         specified period of ten years or more, (B) a distribution to the extent
         such  distribution is required under section 401(a)(9) of the Code, (C)
         the portion of a  distribution  that is not  includable in gross income
         (determined   without  regard  to  the  exclusion  for  net  unrealized
         appreciation with respect to employer  securities),  (D) a loan treated
         as a  distribution  under section 72(p) of the Code and not excepted by
         section 72(p)(2),  (E) a loan in default that is a deemed distribution,
         (F) any  corrective  distribution  provided in Sections 3.7 and 4.5(b),
         and (G) any other  distribution  so designated by the Internal  Revenue
         Service in revenue  rulings,  notices,  and other  guidance  of general
         applicability.

(19)     Employee:  Each (A) individual employed by  the Employer and (B) Leased
         Employee.

(20)     Employer:  The  Company and  each entity  that  has  adopted  the  Plan
         pursuant to the provisions of Article XVIII.

(21)     Employer  Contribution  Account: An individual account for each Member,
         which  is  credited   with  the  sum  of  (A)  the  Employer   Matching
         Contributions   made  on  such  Member's   behalf,   (B)  the  Employer
         Discretionary  Contributions,  if any,  made on  such  Member's  behalf
         pursuant   to  Section   3.3,   and  (C)  the   Employer   Safe  Harbor
         Contributions, if any, made on such Member's behalf pursuant to Section
         3.4 to satisfy the  restrictions  set forth in Section 3.5 and which is
         credited with (or debited for) such account's  allocation of net income
         (or net loss) and changes in value of the Trust Fund.

(22)     Employer Contributions:  The total of Employer  Matching Contributions,
         Employer   Discretionary  Contributions,   and   Employer  Safe  Harbor
         Contributions.


                                       I-4

<PAGE>



(23)     Employer Discretionary Contributions:  Contributions  made  to the Plan
         by the Employer pursuant to Section 3.3.

(24)     Employer Matching Contributions:  Contributions made to the Plan by the
         Employer pursuant to Section 3.2.

(25)     Employer Safe Harbor Contributions:  Contributions  made to the Plan by
         the Employer pursuant to Section 3.4.

(26)     Employment Commencement Date:  The  date on which  an individual  first
         performs an Hour of Service.

(27)     Highly  Compensated  Employee:  Each  Employee  who  performs  services
         during the Plan  Year  for which  the  determination  of  who is highly
         compensated is being made (the "Determination Year") and who:

         (A)      is a five-percent owner of the Employer (within the meaning of
                  section  416(i)(1)(A)(iii) of the Code) at any time during the
                  Determination  Year  or the  twelve-month  period  immediately
                  preceding the Determination Year (the "LookBack Year"); or

         (B)      receives compensation (within the meaning of section 415(c)(3)
                  of  the  Code,   including   elective   or  salary   reduction
                  contributions   to  a   cafeteria   plan,   cash  or  deferred
                  arrangement,  or  tax-sheltered  annuity;  "compensation"  for
                  purposes of this  Paragraph)  in excess of $75,000  (with such
                  amount  to  be   adjusted   automatically   to   reflect   any
                  cost-of-living  adjustments authorized by section 414(q)(1) of
                  the Code) during the Look-Back Year; or

         (C)      receives  compensation  in excess of $50,000 (with such amount
                  to be adjusted  automatically  to reflect  any  cost-of-living
                  adjustments  authorized  by  section  414(q)(1)  of the  Code)
                  during  the  Look-Back  Year and is a member of the top 20% of
                  Employees  for  the  Look-Back   Year  (other  than  Employees
                  described  in  section  414(q)(8)  of the Code)  ranked on the
                  basis of compensation received during the year; or

         (D)      is an officer  (within  the  meaning of section  416(i) of the
                  Code) during the Look-Back Year and receives  compensation  in
                  the  Look-Back  Year  greater than 50% of the amount in effect
                  under section  415(b)(1)(A)  of the Code for the calendar year
                  in which the Look-Back Year begins; or

         (E)      is  described  in  clauses  (B),  (C),  or  (D)  above  (after
                  modifying  such clauses to substitute the  Determination  Year
                  for the  Look-Back  Year) and is one of the 100  Employees who
                  receives  the  most   compensation  from  the  Employer  or  a
                  Controlled Entity during the Determination Year.


                                       I-5

<PAGE>



         For purposes of the preceding  sentence,  (i) no more than 50 Employees
         (or, if lesser, the greater of three Employees or 10% of the Employees)
         shall be treated as officers,  (ii) if no officer has  compensation  in
         excess of 50% of the amount in effect under section 415(b)(1)(A) of the
         Code,  then the  highest-paid  officer  shall be  deemed to be a Highly
         Compensated Employee,  (iii) all employers aggregated with the Employer
         under section 414(b),  (c), (m), or (o) of the Code shall be treated as
         a single  employer,  (iv) a former  Employee who had a separation  year
         (generally,   the  Determination  Year  such  Employee  separates  from
         service) prior to the  Determination  Year and who was an active Highly
         Compensated   Employee   for  either  such   separation   year  or  any
         Determination  Year  ending  on or after  such  Employee's  fifty-fifth
         birthday shall be deemed to be a Highly Compensated  Employee,  and (v)
         the  Committee  may  elect,   in  accordance  with  the  provisions  of
         applicable  Treasury  regulations,  rulings  and  notices,  to make the
         Look-Back Year calculation for a Determination Year on the basis of the
         calendar year ending with or within the applicable  Determination  Year
         (or, in the case of a  Determination  Year that is shorter  than twelve
         months, the calendar year ending with or within the twelve-month period
         ending with the end of the applicable  Determination Year). Further, if
         any individual is a member of the family of a five-percent  owner or of
         a Highly Compensated Employee in the group consisting of the ten Highly
         Compensated  Employees paid the greatest  compensation during the year,
         then such  individual  shall not be considered a separate  employee and
         any   compensation   paid  to  such   individual  (and  any  applicable
         contribution or benefit on behalf of such individual)  shall be treated
         as if it were  paid to (or on  behalf  of) the  five-percent  owner  or
         Highly Compensated  Employee.  For purposes of the preceding  sentence,
         the term "family" means, with respect to any active or former Employee,
         such  Employee's  spouse and lineal  ascendants and descendants and the
         spouses of such lineal  ascendants and descendants.  To the extent that
         the provisions of this Paragraph are  inconsistent or conflict with the
         definition  of a "highly  compensated  employee"  set forth in  section
         414(q)  of the  Code  and  the  Treasury  regulations  thereunder,  the
         relevant  terms and  provisions  of section  414(q) of the Code and the
         Treasury regulations thereunder shall govern and control.

(28)     Hour of  Service:  Each hour for which an  individual  is  directly  or
         indirectly  paid,  or  entitled  to  payment,  by  the  Employer  or  a
         Controlled  Entity for the  performance  of duties or for reasons other
         than the performance of duties;  provided,  however,  that no more than
         501 Hours of Service  shall be credited to an  individual on account of
         any continuous period during which he performs no duties. Such Hours of
         Service shall be credited to the individual for the computation  period
         in which such duties were  performed  or in which  occurred  the period
         during which no duties were performed. An Hour of Service also includes
         each hour,  not credited  above,  for which back pay,  irrespective  of
         mitigation  of  damages,  has been  either  awarded or agreed to by the
         Employer  or a  Controlled  Entity.  These  Hours of  Service  shall be
         credited  to the  individual  for the  computation  period to which the
         award or agreement pertains rather than the computation period in which
         the  award,  agreement,  or payment is made.  Solely  for  purposes  of
         determining whether a OneYear Break-in-Service has occurred, an Hour of
         Service is also each normal work hour,  not otherwise  credited  above,
         during  which an  individual  is  absent  from  work by  reason  of the
         individual's  pregnancy,  the birth of a child of the  individual,  the
         placement  of a child  with  the  individual  in  connection  with  the
         adoption of such child by the individual, or for

                                       I-6

<PAGE>



         purposes of caring for such child for the period immediately  following
         such birth or placement.  The Committee may in its discretion  require,
         as a  condition  to the  crediting  of  Hours  of  Service  under  this
         provision,   that  the  individual   furnish   appropriate  and  timely
         information  to the  Committee  establishing  the  reason  for any such
         absence.  Such Hours of Service shall be credited to the individual for
         the  computation  period in which the absence  from work begins if such
         crediting  is  necessary  to  prevent  the  occurrence  of  a  One-Year
         Break-in-Service  in such computation  period;  otherwise such Hours of
         Service  shall be  credited  to the  individual  in the next  following
         computation period. The number of Hours of Service to be credited to an
         individual  for any  computation  period  shall be  governed  by 29 CFR
         ss.ss.  2530.200b-2(b) and (c). Hours of Service shall also include any
         hours  required to be credited by federal law other than the Act or the
         Code,  but only under the  conditions  and to the extent so required by
         such federal law.

(29)     Investment Fund:  A portion  of  the Trust  Fund that  is invested in a
         specified manner as described in Section 5.1.

(30)     Leased Employee:  Each person who is not an employee of the Employer or
         a Controlled  Entity  but who  performs services  for the Employer or a
         Controlled Entity pursuant to an  agreement  (oral or written)  between
         the  Employer  or a  Controlled  Entity and  any leasing  organization,
         provided that such person has performed such services for the  Employer
         or a  Controlled  Entity or for  related persons (within the meaning of
         section 144(a)(3) of the Code) on a substantially full-time basis for a
         period  of  at  least  one  year  and  such  services  are  of  a  type
         historically  performed   by  the  Employer's  or  Controlled  Entity's
         employees in the Employer's or Controlled Entity's field of business.

(31)     Member:  Each individual who (A) has met the  eligibility  requirements
         for  participation in the Plan pursuant to Article II or (B) has made a
         Rollover  Contribution  in accordance with Section 3.8, but only to the
         extent provided in Section 3.8.

(32)     Member  Contribution  Account:  An  individual  account for each Member
         which is credited with his Member  contributions  made prior to January
         1, 1987 and which is  credited  with (or  debited  for) such  account's
         allocation  of net  income  (or net loss) and  changes  in value of the
         Trust Fund.

(33)     Normal Retirement Date: The  date  a  Member  attains the age of sixty-
         five.

(34)     One-Year Break-in-Service: Any Plan Year during which an individual has
         no more than 500 Hours of Service.

(35)     Plan:  The Seagull Thrift Plan, as amended from time to time.

(36)     Plan Year:  The twelve-consecutive month period commencing January 1 of
         each year.


                                       I-7

<PAGE>



(37)     Rollover Contribution Account:  An  individual  account for an Eligible
         Employee, which  is  credited with  the  Rollover Contributions of such
         Employee  and  which is  credited  with (or debited for) such account's
         allocation  of  net income  (or net loss) and  changes in  value of the
         Trust Fund.

(38)     Rollover Contributions:  Contributions  made  by  an  Eligible Employee
         pursuant to Section 3.8.

(39)     Trust: The trust  established  herein to hold and invest  contributions
         made  under the  Plan,  and  income  thereon,  and from  which the Plan
         benefits are distributed.

(40)     Trust Fund:  The funds and  properties held pursuant to the  provisions
         hereof for  the use and  benefit  of the  Members,  together  with  all
         income, profits, and increments thereto.

(41)     Trustee:  The trustee or trustees qualified and acting hereunder at any
         time.

(42)     Valuation Dates:  Each and every business day of the Plan Year.

(43)     Vested Interest:  The portion of a Member's Accounts which, pursuant to
         the Plan, is nonforfeitable.

(44)     Vesting Service:  The measure of service used in determining a Member's
         Vested Interest as determined pursuant to Section 8.4.

(45)     Voting Fiduciary:  The independent fiduciary,  if any, appointed by the
         Committee  pursuant to the provisions of Section 13.7 to receive voting
         directions  from the Members and vote Company Stock in accordance  with
         the provisions of Section 5.3.

          1.2 Number and Gender.  Wherever appropriate herein, words used in the
singular  shall be considered to include the plural and words used in the plural
shall be  considered  to include  the  singular.  The  masculine  gender,  where
appearing in the Plan, shall be deemed to include the feminine gender.

          1.3  Headings.  The  headings  of  Articles  and  Sections  herein are
included  solely for  convenience,  and if there is any  conflict  between  such
headings and the text of the Plan, the text shall control.

          1.4 Construction. It is intended that the Plan be qualified within the
meaning  of section  401(a) of the Code and that the Trust be tax  exempt  under
section  501(a) of the Code,  and all  provisions  herein  shall be construed in
accordance with such intent.



                                       I-8

<PAGE>



                                II. Participation

                                  

          2.1 Eligibility. Each Eligible Employee shall become a Member upon the
first day of the month  coincident with or next following the date on which such
Eligible Employee completes an Hour of Service. Notwithstanding the foregoing:

                  (a) An Eligible Employee  who  was a Member of the Plan on the
         day  prior  to  the  Effective  Date  shall  remain  a  Member  of this
         restatement thereof as of the Effective Date;

                  (b) An Eligible  Employee who was a Member of the Plan, or who
         was eligible to become a Member of the Plan,  prior to a termination of
         employment  shall become a Member  immediately upon his reemployment as
         an Eligible Employee;

                  (c) An Employee  who has  completed an Hour of Service but who
         has not  become a Member  of the Plan  because  he was not an  Eligible
         Employee shall become a Member of the Plan immediately upon becoming an
         Eligible Employee as a result of a change in his employment status;

                  (d) An Eligible  Employee who had met the requirements of this
         Section  to become a Member of the Plan but who  terminated  employment
         prior to the date upon which he would have become a Member shall become
         a Member immediately upon his reemployment; and

                  (e) A Member who ceases to be an Eligible Employee but remains
         an Employee shall continue to be a Member but, on and after the date he
         ceases to be an  Eligible  Employee,  he shall no longer be entitled to
         defer  Compensation  hereunder  or share  in  allocations  of  Employer
         Contributions  unless  and  until he shall  again  become  an  Eligible
         Employee.


                                      II-1

<PAGE>



                               III. Contributions

                                  

          3.1 Cash or Deferred Contributions.

          (a) A Member may elect to defer an integral  percentage  of from 1% to
14% (or,  with respect to a Member who is a Highly  Compensated  Employee,  such
lesser  percentage as may be prescribed  from time to time by the  Committee) of
his Compensation for a Plan Year by having the Employer contribute the amount so
deferred  to the  Plan.  Compensation  for a Plan Year not so  deferred  by such
election shall be received by such Member in cash. A Member's  election to defer
an  amount  of his  Compensation  pursuant  to  this  Section  shall  be made by
executing  a  Compensation  reduction  agreement  pursuant  to which the  Member
authorizes the Employer to reduce his Compensation in the elected amount and the
Employer, in consideration thereof,  agrees to contribute an equal amount to the
Plan. The reduction in a Member's  Compensation  for a Plan Year pursuant to his
election  under  a  Compensation   reduction  agreement  shall  be  effected  by
Compensation  reductions  as of  each  payroll  period  within  such  Plan  Year
following  the  effective  date of such  agreement.  The amount of  Compensation
elected to be  deferred  by a Member for a Plan Year  pursuant  to this  Section
shall become a part of the Employer's  Cash or Deferred  Contributions  for such
Plan Year.

          (b) A Member's Compensation  reduction agreement shall remain in force
and effect for all periods following the date of its execution until modified or
terminated  or until such Member  terminates  his  employment.  A Member who has
elected to defer a portion of his Compensation may change his deferral  election
percentage  (within the  percentage  limits set forth in  Paragraph  (a) above),
effective  as of the first day of any month in  accordance  with the  procedures
prescribed by the Committee.

          (c)  A  Member  may  cancel  his  Compensation   reduction  agreement,
effective  as of the first day of any month in  accordance  with the  procedures
prescribed by the Committee.  A Member who so cancels his Compensation reduction
agreement may resume  Compensation  deferrals,  effective as of the first day of
any month that is at least six months after such cancellation in accordance with
the procedures prescribed by the Committee.

          (d) In  restriction of the Members'  elections  provided in Paragraphs
(a),  (b), and (c) above,  the Cash or Deferred  Contributions  and the elective
deferrals  (within the meaning of section 402(g)(3) of the Code) under all other
plans,  contracts,  and arrangements of the Employer on behalf of any Member for
any  calendar  year shall not exceed  $7,000  (with such  amount to be  adjusted
automatically to reflect any  cost-of-living  adjustments  authorized by section
402(g)(5) of the Code).

          (e) In further  restriction  of the  Members'  elections  provided  in
Paragraphs (a), (b), and (c) above, it is specifically  provided that one of the
"actual deferral  percentage"  tests set forth in section  401(k)(3) of the Code
and the  Treasury  regulations  thereunder  must be met in each  Plan  Year.  If
multiple  use of the  alternative  limitation  (within  the  meaning  of section
401(m)(9) of  the Code and Treasury  regulation ss. 1.401(m)-2(b)) occurs during

                                      III-1

<PAGE>



a Plan Year, such  multiple  use  shall  be  corrected  in  accordance  with the
provisions of Treasury  regulation ss.  1.401(m)-2(c);  provided,  however, that
if such  multiple  use  is  not  eliminated  by  making   Employer  Safe  Harbor
Contributions,  then  the  "actual  contribution   percentages"  of  all  Highly
Compensated Employees  participating  in the  Plan  shall  be  reduced,  and the
excess  contributions   distributed,  in  accordance  with   the  provisions  of
Section  3.8(c)  and  applicable  Treasury regulations, so that there is no such
multiple use.

          (f) If the  restrictions set forth in Paragraph (d) or (e) above would
not otherwise be met for any Plan Year, the Compensation deferral elections made
pursuant  to  Paragraphs  (a),  (b),  and (c) above of  Members  who are  Highly
Compensated  Employees  may be  reduced  by the  Committee  on a  temporary  and
prospective basis in such manner as the Committee shall determine.

          (g) As soon as  administratively  feasible  following  the end of each
month,  the  Employer  shall  contribute  to the  Trust,  as  Cash  or  Deferred
Contributions  with  respect to each  Member,  an amount  equal to the amount of
Compensation  elected to be deferred,  pursuant to Paragraphs  (a) and (b) above
(as adjusted pursuant to Paragraph (f) above), by such Member during such month.
Such contributions,  as well as the contributions made pursuant to Sections 3.2,
3.3, and 3.4, shall be made without regard to current or accumulated  profits of
the Employer.  Notwithstanding the foregoing, the Plan is intended to qualify as
a profit sharing plan for purposes of sections 401(a),  402, 412, and 417 of the
Code.

          3.2 Employer  Matching  Contributions.  For each calendar  month,  the
Employer shall  contribute to the Trust, as Employer  Matching  Contributions on
behalf of each Member who has completed one Year of Service,  as defined  below,
as of the first day of such  month,  an amount  that  equals 100% of the Cash or
Deferred  Contributions that were made pursuant to Section 3.1 on behalf of each
of the Members  during such month and that were not in excess of 6% of each such
Member's  Compensation for such month. For purposes of this Section, an Employee
shall be credited  with one Year of Service  upon the  completion  of any twelve
month period  commencing with his Commencement  Date or any anniversary  thereof
during which twelve month period such  Employee is credited  with 1,000 Hours of
Service. An Employee who completed one Year of Service prior to a termination of
his  employment  (regardless  of  whether  such  Employee  had  elected to defer
compensation  pursuant to Section  3.1) shall  continue to be credited  with one
Year of Service upon his reemployment with the Employer.

          3.3  Employer  Discretionary  Contributions.  For each Plan Year,  the
Employer may contribute to the Trust, as an Employer Discretionary Contribution,
an additional amount as determined in its discretion.

          3.4 Employer  Safe Harbor  Contributions.  In addition to the Employer
Matching   Contributions   made   pursuant  to  Section  3.2  and  the  Employer
Discretionary Contribution made pursuant to Section 3.3, for each Plan Year, the
Employer,  in its  discretion,  may  contribute  to the Trust as a "safe  harbor
contribution"  for such Plan  Year the  amounts  necessary  to cause the Plan to
satisfy the  restrictions  set forth in Section  3.1(e) (with respect to certain
restrictions on Cash or Deferred Contributions) and Section 3.5 (with respect to
certain restrictions on Employer Matching Contributions). Amounts contributed in
order to satisfy the restrictions set forth in Section 3.1(e)

                                      III-2

<PAGE>



shall be considered  "qualified matching  contributions"  (within the meaning of
Treasury  regulation ss.  1.401(k)-1(g)(13))  for purposes of such Section,  and
amounts  contributed in order to satisfy the  restrictions  set forth in Section
3.5 shall be considered  Employer  Matching  Contributions  for purposes of such
Section.  Any amounts contributed  pursuant to this Paragraph shall be allocated
in accordance with the provisions of Sections 4.2(d) and (e).

          3.5  Restrictions  on Employer  Contributions.  In  restriction of the
Employer Contribu tions hereunder,  it is specifically  provided that one of the
"actual  contribution  percentage" tests set forth in section 401(m) of the Code
and the  Treasury  regulations  thereunder  must be met in each Plan  Year.  The
Committee may elect,  in accordance  with applicable  Treasury  regulations,  to
treat  Cash  or  Deferred   Contributions  to  the  Plan  as  Employer  Matching
Contributions for purposes of meeting this requirement.

          3.6  Return  of   Contributions.   Anything  to  the  contrary  herein
notwithstanding,  the Employer's  contributions  to the Plan are contingent upon
the  deductibility of such  contributions  under section 404 of the Code. To the
extent that a deduction for  contributions  is  disallowed,  such  contributions
shall,  upon the written demand of the Employer,  be returned to the Employer by
the Trustee within one year after the date of  disallowance,  reduced by any net
losses of the Trust  Fund  attributable  thereto  but not  increased  by any net
earnings  of  the  Trust  Fund  attributable  thereto.   Moreover,  if  Employer
contributions are made under a mistake of fact, such  contributions  shall, upon
the written  demand of the Employer,  be returned to the Employer by the Trustee
within  one year  after the  payment  thereof,  reduced by any net losses of the
Trust Fund  attributable  thereto but not  increased  by any net earnings of the
Trust Fund attributable thereto.

          3.7 Disposition of Excess Deferrals and Excess Contributions.

          (a)  Anything  to the  contrary  herein  notwithstanding,  any Cash or
Deferred  Contributions to the Plan for a calendar year on behalf of a Member in
excess of the limitations set forth in Section 3.1(d) and any "excess deferrals"
from other plans  allocated  to the Plan by such Member no later than March 1 of
the next  following  calendar  year within the  meaning of, and  pursuant to the
provisions  of,  section  402(g)(2) of the Code,  shall be  distributed  to such
Member not later than April 15 of the next following calendar year.

          (b) Anything to the contrary herein notwithstanding,  if, for any Plan
Year,  the  aggregate  Cash or Deferred  Contributions  made by the  Employer on
behalf of Highly  Compensated  Employees  exceeds the maximum  amount of Cash or
Deferred Contributions  permitted on behalf of such Highly Compensated Employees
pursuant  to  Section   3.1(e)   (determined   by  reducing   Cash  or  Deferred
Contributions on behalf of Highly Compensated  Employees in order of the "actual
deferral  percentages"  (as that term is defined in section  401(k)(3)(B) of the
Code and the Treasury regulations thereunder) beginning with the highest of such
percentages),  such  excess  shall  be  distributed  to the  Highly  Compensated
Employees on whose behalf such excess was contributed before the end of the next
following  Plan Year.  For purposes of this  Paragraph,  the  determination  and
correction  of excess Cash or Deferred  Contributions  of a Member  whose actual
deferral percentage is determined under the family aggregation rules of sections
401(k) and 414(q) of the Code shall be made in  accordance  with the  provisions
of such sections and the Treasury regulations thereunder.

                                      III-3

<PAGE>





          (c) Anything to the contrary herein notwithstanding,  if, for any Plan
Year, the aggregate Employer  Contributions  allocated to the Accounts of Highly
Compensated Employees exceeds the maximum amount of such Employer  Contributions
permitted on behalf of such Highly Compensated Employees pursuant to Section 3.5
(determined  by  reducing  Employer  Contributions  made  on  behalf  of  Highly
Compensated  Employees in order of the "contribution  percentages" (as that term
is defined in section 401(m)(3) of the Code and Treasury regulations thereunder)
beginning  with  the  highest  of  such  percentages),   such  excess  shall  be
distributed  to the Highly  Compensated  Employees  on whose  behalf such excess
contributions were made (or, if such excess contributions are forfeitable,  they
shall be forfeited) before the end of the next following Plan Year. For purposes
of  this  Paragraph,   the  determination  and  correction  of  excess  Employer
Contributions allocated to the Account of a Member whose contribution percentage
is determined under the family  aggregation  rules of sections 401(m) and 414(q)
of the Code shall be made in accordance with the provisions of such sections and
the Treasury regulations  thereunder.  Employer Contributions shall be forfeited
pursuant  to  this  Paragraph  only  if  distribution  of  all  vested  Employer
Contributions  is  insufficient to meet the  requirements of this Paragraph.  If
vested Employer Contributions are distributed to a Member and nonvested Employer
Contributions remain credited to such Member's Accounts, such nonvested Employer
Contributions  shall vest at the same rate as if such  distribution had not been
made.

          (d) In  coordinating  the  disposition of excess  deferrals and excess
contributions  pursuant  to this  Section,  such  excess  deferrals  and  excess
contributions shall be disposed of in the following order:

                           (1)  First,  Cash  or  Deferred  Contributions  which
         constitute  excess deferrals  described in Paragraph (a) above that are
         not  considered  in  determining   the  amount  of  Employer   Matching
         Contributions pursuant to Section 3.2 shall be distributed;

                           (2) Next, excess Cash or Deferred Contributions which
         constitute  excess deferrals  described in Paragraph (a) above that are
         considered in determining the amount of Employer Matching Contributions
         pursuant to Section 3.2 shall be distributed, and the Employer Matching
         Contributions with respect to such Cash or Deferred Contributions shall
         be forfeited;

                           (3)  Next,  excess  Cash  or  Deferred  Contributions
         described in Paragraph (b) above that are not considered in determining
         the amount of Employer Matching  Contributions  pursuant to Section 3.2
         shall be distributed;

                           (4)  Next,  excess  Cash  or  Deferred  Contributions
         described in Paragraph (b) above that are considered in determining the
         amount of Employer Matching Contributions pursuant to Section 3.2 shall
         be distributed, and the Employer Matching Contributions with respect to
         such Cash or Deferred Contributions shall be forfeited; and


                                      III-4

<PAGE>



                           (5) Finally,  excess Employer Contributions described
         in  Paragraph  (c) above  shall be  distributed  (or,  if  forfeitable,
         forfeited).

          (e) Any  distribution  or  forfeiture  of excess  deferrals  or excess
contributions  pursuant to the  provisions of this Section shall be adjusted for
income or loss  allocated  thereto in the manner  determined by the Committee in
accordance with any method  permissible under applicable  Treasury  regulations.
Any forfeiture pursuant to the provisions of this Section shall be considered to
have occurred on the date which is 2 1/2 months after the end of the Plan Year.

          3.8 Rollover Contributions.

          (a) Qualified  Rollover  Contributions  may be made to the Plan by any
Eligible  Employee  of  amounts  received  by  such  Eligible  Employee  from an
individual  retirement  account or annuity or from an employees' trust described
in section 401(a) of the Code,  which is exempt from tax under section 501(a) of
the Code, but only if any such Rollover  Contribution is made pursuant to and in
accordance  with  applicable  provisions  of the Code and  Treasury  regulations
promulgated  thereunder.  A Rollover  Contribution of amounts that are "eligible
rollover  distributions"  within the meaning of section 402(f)(2)(A) of the Code
may be  made  to  the  Plan  irrespective  of  whether  such  eligible  rollover
distribution was paid to the Eligible Employee or paid to the Plan as a "direct"
Rollover  Contribution.  A  direct  Rollover  Contribution  to the  Plan  may be
effectuated  only by wire  transfer  directed to the Trustee or by issuance of a
check made payable to the Trustee,  which is negotiable  only by the Trustee and
which   identifies  the  Eligible   Employee  for  whose  benefit  the  Rollover
Contribution is being made. Any Eligible  Employee desiring to effect a Rollover
Contribution  to the Plan  must  execute  and file with the  Committee  the form
prescribed by the  Committee  for such  purpose.  The Committee may require as a
condition to accepting any Rollover  Contribution  that such  Eligible  Employee
furnish any evidence that the Committee in its discretion deems  satisfactory to
establish  that the  proposed  Rollover  Contribution  is in fact  eligible  for
rollover to the Plan and is made pursuant to and in accordance  with  applicable
provisions of the Code and Treasury regulations.  All Rollover  Contributions to
the Plan must be made in cash. A Rollover  Contribution shall be credited to the
Rollover  Contribution  Account of the Eligible  Employee for whose benefit such
Rollover Contribution is being made when received by the Trustee.

          (b) An  Eligible  Employee  who has made a  Rollover  Contribution  in
accordance with this Section,  but who has not otherwise  become a Member of the
Plan in accordance  with Article II, shall become a Member  coincident with such
Rollover  Contribution;  provided,  however,  that such Member  shall not have a
right to defer  Compensation or have Employer  Contributions  made on his behalf
until he has otherwise satisfied the requirements imposed by Article II.


                                      III-5

<PAGE>



                                 IV. Allocations

                                   

          4.1 Suspended  Amounts.  All contributions,  forfeitures,  and the net
income (or net loss) of the Trust Fund shall be held in suspense until allocated
to the Accounts of the Members as provided herein.

          4.2 Allocation of Contributions.

          (a) Cash or Deferred  Contributions made by the Employer on a Member's
behalf  for each  month  pursuant  to  Section  3.1 shall be  allocated  to such
Member's  Cash or Deferred  Account as of the last day of such month;  provided,
however, that for purposes of Section 4.4, such contributions shall be allocated
to the Cash or Deferred Account of such Member when received by the Trustee.

          (b) The 100% Employer  Matching  Contributions for each month pursuant
to Section  3.2(a)  shall be  allocated  as of the last day of such month to the
Employer  Contribution  Accounts of the Members for whom such contributions were
made;  provided,  however,  that for purposes of Section 4.4, such contributions
shall be allocated to the  Employer  Contribution  Accounts of such Members when
received by the Trustee.

          (c) The Employer Discretionary Contribution,  if any, made pursuant to
Section 3.3 for a Plan Year shall be  allocated  as of the last day of such Plan
Year to the Employer Contribution Accounts of the Members (regardless of whether
such Member elected to have Cash or Deferred  Contributions  made to the Plan on
his behalf  during  such Plan Year) who had  completed  one Year of Service  (as
defined  in  Section  3.2) as of the last day of such Plan Year and who (1) were
Eligible  Employees  on such  last  day of  such  Plan  Year  or (2)  terminated
employment during such Plan Year on or after Normal Retirement Date or by reason
of total  and  permanent  disability  (as  defined  in  Section  7.2) or  death;
provided, however, that for purposes of Section 4.4, such contributions shall be
allocated to the Employer Contribution Accounts of such Members when received by
the Trustee. The allocation to each such eligible Member's Employer Contribution
Account shall be that portion of such Employer Discretionary  Contribution which
is in the same  proportion  that such Member's  Compensation  for such Plan Year
bears to the total of all such Members' Compensation for such Plan Year.

          (d) The Employer  Safe Harbor  Contribution,  if any, made pursuant to
Section  3.4 for a Plan Year in order to satisfy the  restrictions  set forth in
Section  3.1(e)  shall be  allocated as of the last day of such Plan Year to the
Cash or Deferred  Accounts of Members who (1) received an  allocation of Cash or
Deferred  Contributions  for such Plan Year and (2) were not Highly  Compensated
Employees  for such Plan Year (each such Member  individually  referred to as an
"Eligible Member" for purposes of this Paragraph);  provided,  however, that for
purposes of Section 4.4,  such  contributions  shall be allocated to the Cash or
Deferred  Accounts of such Eligible  Members when received by the Trustee.  Such
allocation shall be made, first, to the Cash or Deferred Account of the Eligible
Member who received the  least amount of  Compensation for  such Plan Year until

                                      IV-1

<PAGE>



the limitation  set forth in  Section 4.5 has  been reached as to such  Eligible
Member,  then  to  the  Cash or  Deferred  Account  of  the  Eligible Member who
received the next smallest amount of Compensation  for such Plan Year until  the
limitation  set  forth in  Section  4.5  has  been  reached  as to such Eligible
Member,   and   continuing  in  such  manner  until  the  Employer  Safe  Harbor
Contribution for such Plan Year has been completely  allocated or the limitation
set forth in  Section  4.5 has been  reached  as to all  Eligible  Members.  Any
remaining  Employer  Safe  Harbor  Contribution  for  such  Plan  Year  shall be
allocated  among the Cash or Deferred  Accounts of all Members who were Eligible
Employees  during such Plan Year, with the allocation to each such Member's Cash
or Deferred  Account  being the portion of such  remaining  Employer Safe Harbor
Contribution which is in the same proportion that such Member's Compensation for
such Plan Year  bears to the total of all such  Members'  Compensation  for such
Plan Year.

          (e) The Employer  Safe Harbor  Contribution,  if any, made pursuant to
Section  3.4 for a Plan Year in order to satisfy the  restrictions  set forth in
Section  3.5  shall be  allocated  as of the last day of such  Plan  Year to the
Employer  Contribution  Accounts of Members who (1)  received an  allocation  of
Employer  Matching  Contributions  for such  Plan  Year and (2) were not  Highly
Compensated Employees for such Plan Year (each such Member individually referred
to as an "Eligible Member" for purposes of this Paragraph);  provided,  however,
that for purposes of Section 4.4, such  contributions  shall be allocated to the
Employer  Contribution  Accounts of such  Eligible  Members when received by the
Trustee.  Such allocation  shall be made,  first,  to the Employer  Contribution
Account of the Eligible Member who received the least amount of Compensation for
such Plan Year until the limitation set forth in Section 4.5 has been reached as
to such  Eligible  Member,  then to the  Employer  Contribution  Account  of the
Eligible Member who received the next smallest  amount of Compensation  for such
Plan Year until the  limitation  set forth in Section 4.5 has been reached as to
such  Eligible  Member,  and  continuing  in such manner until the Employer Safe
Harbor  Contribution  for such Plan Year has been  completely  allocated  or the
limitation set forth in Section 4.5 has been reached as to all Eligible Members.
Any  remaining  Employer  Safe Harbor  Contribution  for such Plan Year shall be
allocated  among the  Employer  Contribution  Accounts  of all  Members who were
Eligible  Employees  during  such Plan Year,  with the  allocation  to each such
Member's  Employer  Contribution  Account  being the  portion of such  remaining
Employer  Safe Harbor  Contribution  which is in the same  proportion  that such
Member's Compensation for such Plan Year bears to the total of all such Members'
Compensation for such Plan Year.

          (f) If an  Employer  Safe  Harbor  Contribution  is made in  order  to
satisfy the  restrictions  set forth in both Section  3.1(e) and Section 3.4 for
the same Plan Year,  the  Employer  Safe  Harbor  Contribution  made in order to
satisfy the restrictions set forth in Section 3.1(e) shall be allocated pursuant
to Paragraph (d) above prior to allocating the Employer Safe Harbor Contribution
made in  order  to  satisfy  the  restrictions  set  forth in  Section  3.4.  In
determining  the  application of the limitations set forth in Section 4.5 to the
allocations of Employer Safe Harbor Contributions, all Annual Additions (as such
term is defined in Section 4.5) to a Member's  Accounts other than Employer Safe
Harbor Contributions shall be considered allocated prior to Employer Safe Harbor
Contributions.


                                      IV-2

<PAGE>



          4.3 Application of  Forfeitures.  Any amounts that are forfeited under
any  provision  hereof  during a Plan Year shall be  applied to reduce  Employer
Matching Contributions next coming due.

          4.4 Valuation of Accounts.  All amounts  contributed to the Trust Fund
shall be invested at the time of their  receipt by the Trustee,  and the balance
of each Account shall reflect the result of daily pricing of the assets in which
such Account is invested  from the time of receipt by the Trustee until the time
of distribution.

          4.5 Limitations and Corrections.

          (a) For  purposes of this  Section,  the  following  terms and phrases
shall have these respective meanings:

                           (1) "Annual Additions" of a Member for any Limitation
         Year shall mean the total of (A) the  Employer  Contributions,  Cash or
         Deferred  Contributions,  and  forfeitures,  if any,  allocated to such
         Member's  Accounts for such year, (B) Member's  contributions,  if any,
         (excluding any Rollover  Contributions)  for such year, and (C) amounts
         referred to in sections 415(l)(1) and 419A(d)(2) of the Code.

                           (2) "Limitation Year" shall mean the Plan Year.

                           (3) "Maximum  Annual  Additions"  of a Member for any
         Limitation  Year shall mean the lesser of (A) $30,000  (or, if greater,
         one-fourth  of the defined  benefit  dollar  limitation in effect under
         section  415(b)(1)(A) of the Code for such Limitation  Year) or (B) 25%
         of such Member's compensation,  within the meaning of section 415(c)(3)
         of the Code and applicable Treasury regulations thereunder, during such
         year except that the  limitation  in this Clause (B) shall not apply to
         any  contribution  for medical  benefits (within the meaning of section
         419A(f)(2) of the Code) after separation from service with the Employer
         or a Controlled Entity which is otherwise treated as an Annual Addition
         or to any amount otherwise  treated as an Annual Addition under section
         415(l)(1) of the Code.

          (b) Contrary Plan  provisions  notwithstanding,  in no event shall the
Annual Additions  credited to a Member's Accounts for any Limitation Year exceed
the Maximum Annual  Additions for such Member for such year. If as a result of a
reasonable  error in estimating a Member's  compensation,  a reasonable error in
determining  the amount of  elective  deferrals  (within  the meaning of section
402(g)(3) of the Code) that may be made with respect to any individual under the
limits of  section  415 of the  Code,  or  because  of other  limited  facts and
circumstances,  the  Annual  Additions  that  would be  credited  to a  Member's
Accounts  for a  Limitation  Year would  nonetheless  exceed the Maximum  Annual
Additions for such Member for such year, the excess Annual  Additions which, but
for this Section,  would have been allocated to such Member's  Accounts shall be
disposed of as follows:

                           (1) First,  any such excess  Annual  Additions in the
         form of Cash or  Deferred  Contributions  on behalf of such Member that
         would not have been  considered in determining  the amount of  Employer

                                      IV-3

<PAGE>



         Contributions  allocated  to such Member's Accounts pursuant to Section
         4.2  shall be  distributed to  such Member, adjusted for income or loss
         allocated thereto;

                           (2) Next,  any such excess  Annual  Additions  in the
         form of Cash or  Deferred  Contributions  on behalf of such Member that
         would  have been  considered  in  determining  the  amount of  Employer
         Contributions  allocated to such Member's  Accounts pursuant to Section
         4.2 shall be  distributed  to such Member,  adjusted for income or loss
         allocated thereto, and the Employer  Contributions that would have been
         allocated to such Member's Accounts based upon such distributed Cash or
         Deferred  Contributions  shall,  to the extent such amounts  would have
         otherwise been allocated to such Member's  Accounts,  be allocated to a
         suspense  account and shall be held there  until used to reduce  future
         Employer Matching Contributions in the same manner as a forfeiture;

                           (3) Finally,  any such excess Annual Additions in the
         form of Employer Discretionary  Contributions shall, to the extent such
         amounts would otherwise have been allocated to such Member's  Accounts,
         be allocated to a suspense account and shall be held therein until used
         to reduce future Employer Matching  Contributions in the same manner as
         a forfeiture.

          (c) Pending  their  application  to reduce  future  Employer  Matching
Contributions,  excess amounts  described in Paragraphs  (b)(2) and (b)(3) above
shall be invested in a principal-safe asset.

          (d) For purposes of  determining  whether the Annual  Additions  under
this Plan exceed the limitations herein provided, all defined contribution plans
of the Employer are to be treated as one defined contribution plan. In addition,
all defined  contribution  plans of Controlled  Entities shall be aggregated for
this purpose.  For purposes of this Section only, a "Controlled  Entity"  (other
than an affiliated  service group member within the meaning of section 414(m) of
the Code) shall be determined by application of a more than 50% control standard
in lieu of an 80%  control  standard.  If the  Annual  Additions  credited  to a
Member's  Accounts for any  Limitation  Year under this Plan plus the  additions
credited on his behalf under other  defined  contribution  plans  required to be
aggregated  pursuant to this Paragraph would exceed the Maximum Annual Additions
for such Member for such Limitation  Year, the Annual  Additions under this Plan
shall be reduced to the extent  possible  prior to any  reductions  of additions
under such other plan or plans.

          (e) In the case of a Member who also participated in a defined benefit
plan of the Employer or a Controlled Entity (as defined in Paragraph (d) above),
the Employer shall reduce the Annual Additions  credited to the Accounts of such
Member under this Plan pursuant to the provisions of Paragraph (b) to the extent
necessary to prevent the limitation set forth in section 415(e) of the Code from
being exceeded.  Notwithstanding the foregoing, the provisions of this Paragraph
shall apply only if such  defined  benefit plan does not provide for a reduction
of benefits thereunder to ensure that the limitation set forth in section 415(e)
of the Code is not exceeded.


                                      IV-4

<PAGE>



          (f) If the  limitations  set forth in this Section would not otherwise
be met for any Limitation Year, the Compensation  deferral elections pursuant to
Section 3.1 of affected  Members may be reduced by the  Committee on a temporary
and prospective basis in such manner as the Committee shall determine.


                                      IV-5

<PAGE>



                               V. Investment Funds


                                
          5.1 Investment of Accounts.

                  (a)  Each  Member  shall  designate,  in  accordance  with the
procedures  established from time to time by the Committee,  the manner in which
the amounts  allocated to each of his Accounts  shall be invested from among the
Investment Funds made available from time to time by the Committee. With respect
to each of a Member's Accounts, such Member may designate one of such Investment
Funds  for  all the  amounts  allocated  to such  Account  or he may  split  the
investment  of the amounts  allocated  to such Account  between such  Investment
Funds in such  increments as the Committee may  prescribe.  If a Member fails to
make a designation,  then his Accounts shall be invested in the Investment  Fund
or  Funds  designated  by the  Committee  from  time to time  in a  uniform  and
nondiscriminatory manner.

                  (b) A Member may change his investment  designation for future
contributions to be allocated to any one or all of his Accounts. Any such change
shall be made in accordance  with the  procedures  established by the Committee,
and the frequency of such changes may be limited by the Committee.

                  (c) A Member may elect to convert his  investment  designation
with respect to the amounts  already  allocated to one or more of his  Accounts.
Any such conversion shall be made in accordance with the procedures  established
by the Committee,  and the frequency of such  conversions  may be limited by the
Committee.

          5.2 Restriction of Acquisition of Company Stock.  Notwithstanding  any
other provision hereof,  it is specifically  provided that the Trustee shall not
purchase  Company Stock or other Company  securities  during any period in which
such  purchase  is, in the opinion of counsel for the Company or the  Committee,
restricted  by any law or  regulation  applicable  thereto.  During such period,
amounts  that would  otherwise  be  invested in Company  Stock or other  Company
securities pursuant to an investment designation shall be invested in such other
assets as the Trustee may in its discretion  determine,  or the Trustee may hold
such amounts  uninvested  for a reasonable  period  pending the purchase of such
stock or securities.

          5.3 Voting of Company Stock and Other Rights.

                  (a) To the extent  permitted by section  404(a) of the Act, at
each annual meeting and special meeting of the  shareholders  of the Company,  a
Member or  beneficiary  may direct  the voting of the number of whole  shares of
Company Stock attributable to his pro rata interest in the Company Stock fund as
of the Valuation  Date  coinciding  with or, if none,  next preceding the record
date for such meeting.  The Committee  shall forward or cause to be forwarded to
each such Member or beneficiary copies of pertinent proxy solicitation  material
provided  by  the  Company   together  with  a  request  for  such  Member's  or
beneficiary's  confidential  instructions  as to the manner in which such shares
are to be voted. The Committee or the Voting Fiduciary if one has been appointed
shall  direct  the   Trustee  to  vote  such  shares  in  accordance  with  such

                                       V-1

<PAGE>



instructions  and, to the extent  permitted  by section 404(a) of the Act, shall
also direct the Trustee as  to the manner in which to vote any shares of Company
Stock at any such  meeting for  which the Committee has not received,  or is not
subject to receiving,  such voting instructions.

                  (b) To the extent permitted by section 404(a) of the Act, if a
"cash tender offer" or "exchange offer" for shares of Company Stock is made, the
shares of Company Stock attributable to a Member's Accounts shall be tendered or
exchanged  by the Trustee  pursuant  to such "cash  tender  offer" or  "exchange
offer" only in accordance with the written  instructions  and directions of such
Member to the  Trustee  to so tender or  exchange.  If written  instructions  or
directions are not timely  received from a Member whose Accounts are invested in
Company  Stock,  such  Member's pro rata interest in the shares of Company Stock
held in the Company  Stock fund shall not be tendered or  exchanged  pursuant to
such "cash  tender  offer" or  "exchange  offer"  except as  required by section
404(c) of the Act. For purposes of this Paragraph,  the term "cash tender offer"
shall  include a tender  offer for,  or request or  invitation  for  tenders of,
shares of Company  Stock in exchange for cash, as made to the Plan or to holders
of shares of Company Stock generally;  the term "exchange offer" shall include a
tender offer for, or request or invitation for tenders of, any shares of Company
Stock in exchange for any consideration  other than for all cash, as made to the
Plan or to holders  of shares of  Company  Stock  generally.  If a "cash  tender
offer" or  "exchange  offer" for shares of Company  Stock is made,  the  Trustee
shall use its best efforts to take those steps  reasonably  necessary to furnish
information  to, and allow  decision by, each Member whose Accounts are invested
in Company Stock with respect to such "cash tender offer" or "exchange offer" in
substantially  the same manner as would be available to holders of Company Stock
generally, and, in that connection, the Trustee shall:

                  (1) inform  each such Member as to the existence of such "cash
         tender offer" or "exchange offer;"

                  (2) transmit to each such Member as soon as  practicable  such
         written  information,  explanation and other materials relative to such
         "cash tender  offer" or "exchange  offer" as are made  available by the
         Company or by the persons or entities  making such "cash tender  offer"
         or  "exchange  offer"  to  the  holders  of  shares  of  Company  Stock
         generally;

                  (3) request detailed written  instructions and directions from
         each such Member as to whether to tender or exchange each such Member's
         pro rata  interest  in the shares of Company  Stock held in the Company
         Stock  fund and,  if so  instructed  and  directed,  as to the time and
         manner of such tender or exchange, and such instructions and directions
         of the  individual  Members shall be given to the election judge or the
         Trustee and shall be kept confidential from the Company; and

                  (4) use its best  efforts  to  effect  on a  confidential  and
         nondiscriminatory  basis the tender or exchange  of Company  Stock held
         under the Plan with  respect to such "cash  tender  offer" or "exchange
         offer" solely in accordance  with written  instructions  and directions
         received from such Members.


                                       V-2

<PAGE>



         5.4 Stock Rights, Stock Splits, and Stock Dividends. Except as provided
in  Section  5.3,  no Member or  beneficiary  shall  have any right to  request,
direct,  or demand  that the  Committee  or the  Trustee  exercise in his behalf
rights or privileges  to acquire,  convert,  or exchange  Company Stock or other
securities. The Trustee, in its discretion, may exercise or sell any such rights
or privileges. Company Stock received by the Trustee by reason of a stock split,
stock dividend,  or  recapitalization  shall be  appropriately  allocated to the
Accounts of each affected Member or beneficiary in accordance with Section 4.4.


                                       V-3

<PAGE>



                             VI. Retirement Benefits


                               
          6.1 Retirement  Benefits. A Member who terminates his employment on or
after his Normal  Retirement  Date shall be  entitled to a  retirement  benefit,
payable at the time and in the form provided in Article X, equal in value to the
sum of:

                  (a) The amount  in his Accounts  as of the Valuation Date next
         preceding his Benefit Commencement Date; and

                  (b) If the Valuation Date next preceding such Member's Benefit
         Commencement  Date  occurs  prior to the close of the Plan Year  during
         which  his  termination  of  employment  occurred,  the  amount of such
         Member's  allocation  of  Cash  or  Deferred  Contributions,   Employer
         Contributions,  and Employer  Safe Harbor  Contributions  for such Plan
         Year.



                                      VI-1

<PAGE>



                            VII. Disability Benefits

                               

          7.1  Disability  Benefits.  In the  event  a  Member's  employment  is
terminated  due to total and permanent  disability,  as  determined  pursuant to
Section 7.2, such Member shall be entitled to a disability  benefit,  payable at
the time and in the form provided in Article X, equal in value to the sum of:

                  (a) The amount in  his Accounts as  of the Valuation Date next
          preceding his Benefit Commencement Date; and

                  (b) If the Valuation Date next preceding such Member's Benefit
         Commencement  Date  occurs  prior to the close of the Plan Year  during
         which such  disability  was  determined,  the  amount of such  Member's
         allocation of Cash or Deferred  Contributions,  Employer Contributions,
         and Employer Safe Harbor Contributions for such Plan Year.

          7.2 Total and Permanent Disability  Determined.  A Member's employment
shall be  considered  terminated  due to total and  permanent  disability if the
Committee  determines,  based on a written medical opinion (unless waived by the
Committee  as  unnecessary),  that  such  Member  is  permanently  incapable  of
performing his job for physical or mental reasons.


                                      VII-1

<PAGE>



         VIII. Severance Benefits and Determination of Vested Interest

             

          8.1 No Benefits  Unless Herein Set Forth.  Except as set forth in this
Article,  upon  termination  of  employment  of a  Member  prior  to his  Normal
Retirement  Date for any reason  other than total and  permanent  disability  or
death,  such Member  shall  acquire no right to any benefit from the Plan or the
Trust Fund.

          8.2  Severance  Benefit.  Each Member whose  employment  is terminated
prior to his  Normal  Retirement  Date  for any  reason  other  than  total  and
permanent disability or death shall be entitled to a severance benefit,  payable
at the time and in the form provided in Article X, equal in value to the sum of:

                  (a) His Vested  Interest in  the amount  in his Accounts as of
         the Valuation Date next preceding his Benefit Commencement Date; and

                  (b) If the Valuation Date next preceding such Member's Benefit
         Commencement  Date  occurs  prior to the close of the Plan Year  during
         which  his  termination  of  employment  occurred,  the  amount of such
         Member's  Vested  Interest  in  his  allocation  of  Cash  or  Deferred
         Contributions,  Employer  Matching  Contributions,  and  Employer  Safe
         Harbor Contributions for such Plan Year.

          8.3 Determination of Vested Interest.

                  (a) A Member shall have a 100% Vested  Interest in his Cash or
Deferred Account, Member Contribution Account, and Rollover Contribution Account
at all times.

                  (b) A Member's  Vested  Interest in his Employer  Contribution
Account  shall be  determined  by such  Member's  years of  Vesting  Service  in
accordance with the following schedule:

                                  Years of Vesting Service       Vested Interest

                 Less than       2   years                               0%
                                 2   years                              25%
                                 3   years                              40%
                                 4   years                              55%
                                 5   years                              70%
                                 6   years                              85%
                                 7   years or more                     100%


                  (c) Paragraph (b) above notwithstanding, a Member shall have a
100% Vested Interest in his Employer Contribution Account upon attainment of his
Normal Retirement Date while employed by the Employer or a Controlled Entity.

                                     VIII-1

<PAGE>



                  (d)  Paragraph  (b) above  notwithstanding,  if a Member shall
cease  to be  employed  by  reason  of a  reduction  in  force,  as  hereinafter
described,  such Member  shall then have a 100% Vested  Interest in his Employer
Contribution  Account.  The employment of a Member shall be considered as having
been  terminated  because of a "reduction in force" if such  termination  is the
result  of  a  work  force  reduction,   geographic  consolidation,  or  segment
disposition.

          8.4 Vesting Service.

                  (a) For the period  preceding the Effective  Date,  subject to
the provisions of Paragraphs (c) and (d) below, an individual  shall be credited
with  Vesting  Service in an amount  equal to all  service  credited  to him for
vesting  purposes under the Plan as it existed on the day prior to the Effective
Date.

                  (b) For the Plan Year  beginning  with the Effective  Date and
all Plan Years  thereafter,  subject to the provisions of Paragraphs (c) and (d)
below,  1,000 or more Hours of Service during any Plan Year shall constitute one
year of Vesting Service.

                  (c) In the case of an individual who terminates  employment at
a time when he does not have any Vested  Interest in his  Employer  Contribution
Account and who then incurs a number of consecutive  One-Year  Breaks-in-Service
that  equals or exceeds  the  greater of five years or his  aggregate  number of
years of Vesting Service completed before such One-Year Breaks-in- Service, such
individual's   years  of  Vesting   Service   completed   before  such  One-Year
Breaks-inService  shall be  disregarded  in  determining  his  years of  Vesting
Service.

                  (d) In the  case  of a  Member  who  incurs  five  consecutive
One-Year  Breaks-inService,  such Member's  years of Vesting  Service  completed
after such One-Year  Breaks-in-Service  shall be disregarded in determining such
Member's   Vested   Interest  in  any  Plan   benefits   derived  from  Employer
Contributions on his behalf prior to such One-Year Breaks-in-Service.

          8.5 Forfeitures.

                  (a) With respect to a Member who  terminates  employment  with
the Employer with a Vested Interest in his Employer Contribution Account that is
less than 100% and either is not  entitled  to a  distribution  from the Plan or
receives a distribution  from the Plan of the balance of his Vested  Interest in
his Accounts in the form of a lump sum  distribution  by the close of the second
Plan Year  following the Plan Year in which his  employment is  terminated,  the
forfeitable  amount credited to the terminated  Member's  Employer  Contribution
Account as of the Valuation  Date next preceding his Benefit  Commencement  Date
shall become a forfeiture as of his Benefit Commencement Date (or as of his date
of  termination  of  employment  if no amount is payable  from the Trust Fund on
behalf of such Member  with such  Member  being  considered  to have  received a
distribution of zero dollars on his date of termination of employment).

                  (b) In the  event  that an  amount  credited  to a  terminated
Member's  Employer   Contribution  Account  becomes  a  forfeiture  pursuant  to
Paragraph (a) above, the terminated Member shall,  upon subsequent  reemployment
with the Employer prior to incurring five consecutive OneYear Breaks-in-Service,
have the  forfeited  amount  restored  to such  Member's  Employer  Contribution
Account,  unadjusted  by any  subsequent  gains or  losses  of the  Trust  Fund;
provided,  however,  that such  restoration  shall be made  only if such  Member
repays in cash an amount equal to the amount so  distributed  to him pursuant to
Paragraph  (a) above  within five years from the date the Member is  reemployed;
provided,  further,  that such Member's repayment of amounts  distributed to him
from his Cash or Deferred  Account shall be limited to the portion  thereof that
was  attributable  to  contributions  with  respect to which the  Employer  made
Employer Matching  Contributions.  A reemployed Member who was not entitled to a
distribution  from the Plan on his date of  termination  of employment  shall be
considered  to have  repaid a  distribution  of zero  dollars on the date of his
reemployment.  Any  such  restoration  shall  be made as of the  Valuation  Date
coincident  with or next  succeeding  the  date  of  repayment.  Notwithstanding
anything to the  contrary in the Plan,  forfeited  amounts to be restored by the
Employer  pursuant to this Paragraph  shall be charged against and deducted from
forfeitures  for the Plan Year in which such  amounts  are  restored  that would
otherwise  be  available  to reduce  Employer  Matching  Contributions.  If such
forfeitures  otherwise available are not sufficient to provide such restoration,
the portion of such  restoration  not provided by  forfeitures  shall be charged
against  and  deducted  from  Employer  Contributions  otherwise  available  for
allocation  to  other  Members  in  accordance  with  Section  4.2(c),  and  any
additional  amount needed to restore such  forfeited  amounts shall be a minimum
required  Employer  Contribution  (without  regard  to  current  or  accumulated
earnings and profits).

                  (c) With  respect to a Member  whose  Vested  Interest  in his
Employer  Contribution  Account is less than 100% and who receives a termination
distribution  from  his  Employer  Contribution  Account  other  than a lump sum
distribution  by the close of the second  Plan Year  following  the Plan Year in
which his  employment  is  terminated,  any  amount  remaining  in his  Employer
Contribution  Account shall continue to be maintained as a separate account.  At
any relevant time, such Member's  nonforfeitable portion of his separate account
shall be determined in accordance with the following formula:

                                 X=P(AB + D) - D

For purposes of applying the formula:  X is the  nonforfeitable  portion of such
separate  account at the relevant time; P is the Member's Vested Interest in his
Employer  Contribution  Account at the relevant  time; AB is the balance of such
separate account at the relevant time; and D is the amount of the  distribution.
For all other purposes of the Plan, a Member's separate account shall be treated
as an  Employer  Contribution  Account.  Upon  his  incurring  five  consecutive
One-Year  Breaks-inService,  the  forfeitable  portion of a terminated  Member's
separate account and Employer  Contribution Account shall be forfeited as of the
end of the Plan Year during which the terminated  Member incurred his fifth such
consecutive One-Year Break-in-Service.

                  (d) With respect to a Member who  terminates  employment  with
the Employer with a Vested Interest in his Employer Contribution Account greater
than 0% but less than 100% and who is not  otherwise  subject to the  forfeiture
provisions of Paragraph (a) or Paragraph (c) above,  the forfeitable  portion of
his Employer  Contribution  Account shall be forfeited as of the end of the Plan
Year during which the terminated  Member incurs his fifth  consecutive  One-Year
Break-inService or, if earlier, the date of the terminated Member's death.

                                     VIII-2

<PAGE>



                  (e) Any forfeitures occurring pursuant to Paragraphs (a), (c),
or (d) above shall be applied to reduce  Employer  Matching  Contributions  next
coming due. Prior to such application,  forfeited amounts shall be invested in a
principal-safe asset.

                  (f) Distributions of  benefits described in this Section shall
be subject to the time of payment requirements of Section 10.1.



                                     VIII-3

<PAGE>



                               IX. Death Benefits

                                 

          9.1 Death Benefits.  Upon the death of a Member while an Employee, the
Member's designated  beneficiary shall be entitled to a death benefit payable at
the time and in the form provided in Article X, equal in value to the sum of:

                  (a) The amount in  his Accounts  as of the Valuation Date next
preceding his Benefit Commencement Date; and

                  (b) If the Valuation Date next preceding such Member's Benefit
         Commencement  Date  occurs  prior to the close of the Plan Year  during
         which his death  occurred,  the amount of such  Member's  allocation of
         Cash or Deferred Contributions,  Employer  Contributions,  and Employer
         Safe Harbor Contributions for such Plan Year.

          9.2 Designation of Beneficiaries.

                  (a)  Each  Member  shall  have  the  right  to  designate  the
beneficiary or  beneficiaries  to receive payment of his benefit in the event of
his death.  Each such  designation  shall be made by executing  the  beneficiary
designation  form  prescribed  by the  Committee  and filing  such form with the
Committee.  Any such  designation  may be changed at any time by such  Member by
execution of a new designation in accordance with this Section.  Notwithstanding
the foregoing, if a Member who is married on the date of his death designates an
individual or entity other than his surviving  spouse as his  beneficiary,  such
designation  shall not be effective unless (1) such spouse has consented thereto
in  writing  and such  consent  (A)  acknowledges  the  effect of such  specific
designation,  (B) either consents to the specific designated  beneficiary (which
designation  may not  subsequently  be  changed by the  Member  without  spousal
consent)  or  expressly  permits  such  designation  by the Member  without  the
requirement  of further  consent by the spouse,  and (C) is  witnessed by a Plan
representative  (other than the Member) or a notary public or (2) the consent of
such spouse cannot be obtained  because such spouse cannot be located or because
of other circumstances  described by applicable Treasury  regulations.  Any such
consent by such surviving spouse shall be irrevocable.

                  (b)  If  no  beneficiary  designation  is  on  file  with  the
Committee at the time of the death of the Member or if such  designation  is not
effective  for  any  reason  as  determined  by the  Committee,  the  designated
beneficiary or beneficiaries to receive such death benefit shall be as follows:

                           (1) If a Member leaves a  surviving spouse, his death
benefit shall be paid to such surviving spouse;

                           (2) If a Member leaves no surviving spouse, his death
         benefit shall be paid to such Member's  executor or administrator or to
         his heirs at law if there is no administration of such Member's estate.

                                      IX-1

<PAGE>



                     X. Time and Form of Payment of Benefits

                      

          10.1 Time of Payment.

                  (a) Subject to the  provisions of the remaining  Paragraphs of
this  Section,  a  Member's  Benefit  Commencement  Date  shall  be as  soon  as
administratively  feasible  after the  Valuation  Date  coincident  with or next
succeeding the date the Member or his beneficiary  becomes entitled to a benefit
pursuant to Article VI, VII, VIII, or IX.

                  (b) Unless (1) the Member has attained age sixty-five or died,
(2) the Member  consents to a distribution  pursuant to Paragraph (a) within the
ninety-day  period  ending on the date  payment of his benefit  hereunder  is to
commence  pursuant to Paragraph (a), or (3) the Member's  Vested Interest in his
Accounts is not in excess of $3,500,  the  Member's  Benefit  Commencement  Date
shall be  deferred  to the date  which is as soon as  administratively  feasible
after the Valuation Date  coincident  with or next succeeding the earlier of the
date the Member  attains age  sixty-five or the Member's date of death,  or such
earlier  Valuation  Date as the  Member  may  elect  by  written  notice  to the
Committee  prior to such  Valuation  Date. No less than thirty days (unless such
thirty-day  period is waived  by an  affirmative  election  in  accordance  with
applicable Treasury regulations) and no more than ninety days before his Benefit
Commencement  Date, the Committee  shall inform the Member of his right to defer
his Benefit  Commencement  Date and shall describe the Member's  Direct Rollover
election rights pursuant to Section 10.5 below.

                  (c) A Member's Benefit  Commencement Date shall in no event be
later than the  sixtieth day  following  the close of the Plan Year during which
such Member attains,  or would have attained,  his Normal Retirement Date or, if
later, terminates his employment with the Employer or a Controlled Entity.

                  (d)  A  Member's  Benefit   Commencement   Date  shall  be  in
compliance  with the provisions of section  401(a)(9) of the Code and applicable
Treasury regulations thereunder and shall in no event be later than:

                           (1) April  1  of  the  calendar  year  following  the
         calendar year in which such  Member attains the age of seventy and one-
         half; and

                           (2) In the  case of a  benefit  payable  pursuant  to
         Article IX, the last day of the five-year period following the death of
         such Member.

The preceding provisions of this Section notwithstanding, a Member may not elect
to defer the receipt of his benefit  hereunder to the extent that such  deferral
creates a death  benefit  that is more than  incidental  within  the  meaning of
section 401(a)(9)(G) of the Code and applicable Treasury regulations thereunder.


                                       X-1

<PAGE>



                  (e) Subject to the provisions of Paragraphs (c) and (d) above,
a Member's  Benefit  Commencement  Date shall not occur before the expiration of
the latest to end of the following periods:

                           (1) A  period during  which the Member is employed by
the Employer or any Controlled Entity; or

                           (2) A period during which the Member is employed by a
         purchaser of assets from the  Employer or a  Controlled  Entity if such
         Member  transfers to employment  with such purchaser in connection with
         such purchase. Notwithstanding the foregoing, in the event of a segment
         disposition by the Employer,  the  limitation of this Paragraph  (e)(2)
         shall not apply to a Member  who  transfers  to the  employment  of the
         purchaser  of such segment if such segment  disposition  satisfies  the
         requirements of section 401(k)(10) of the Code.

                  (f)  Paragraphs  (a),  (b), and (c) above  notwithstanding,  a
Member  whose  Vested  Interest  in his  Accounts is $3,500 or more may elect to
defer  his  Benefit   Commencement  Date  beyond  the  date  specified  in  such
Paragraphs,  subject to the  provisions  of Paragraph  (d), by submitting to the
Committee a written statement, signed by the Member, which describes the benefit
and designates the date on which the payment of such benefit shall commence.

          10.2 Form of Payment.

                  (a)  Subject to the  provisions  of  Paragraph  (b)  below,  a
Member's  benefit shall be provided  from the balance of such Member's  Accounts
under  the Plan  and  shall  be paid in one  lump  sum on the  Member's  Benefit
Commencement  Date. The Member's  benefit shall be paid to the Member unless the
Member  has died  prior to his  Benefit  Commencement  Date,  in which  case the
Member's benefit shall be paid to his beneficiary  designated in accordance with
the provisions of Section 9.2.

                  (b) Benefits shall be paid (or transferred pursuant to Section
10.3) in cash  except  that a Member  (or his  designated  beneficiary  or legal
representative  in the case of a deceased  Member) may elect to have the portion
of his Accounts invested in Company Stock  distributed (or transferred  pursuant
to Section  10.3) in full shares of Company Stock to the extent of such Member's
pro rata portion of the shares of Company  Stock held in the Company Stock fund,
with any balance of the Member's  interest in the Company Stock fund  (including
fractional shares) to be paid or transferred in cash.

          10.3 Direct Rollover  Election.  Notwithstanding  any provision of the
Plan to the contrary that would otherwise  limit a Distributee's  election under
this Section,  a Distributee may elect, at the time and in the manner prescribed
by  the  Committee,  to  have  all  or  any  portion  of  an  Eligible  Rollover
Distribution  (other  than  any  portion   attributable  to  the  offset  of  an
outstanding  loan balance of such Member  pursuant to the Plan's loan procedure)
paid directly to an Eligible  Retirement  Plan specified by the Distributee in a
Direct Rollover. The preceding sentence notwithstanding, a Distributee may elect
a Direct  Rollover pursuant  to this Section only if such Distributee's Eligible

                                       X-2

<PAGE>



Rollover  Distributions  during the Plan Year are  reasonably  expected to total
$200 or more.  Furthermore,  if less than 100% of the Member's Eligible Rollover
Distribution is to be a Direct Rollover,  the amount of the Direct Rollover must
be $500 or more.  Prior to any Direct  Rollover  pursuant to this  Section,  the
Committee may require the  Distributee to furnish the Committee with a statement
from the plan,  account,  or annuity to which the  benefit is to be  transferred
verifying  that such plan,  account,  or annuity  is, or is  intended  to be, an
Eligible Retirement Plan.

          10.4 Unclaimed Benefits. In the case of a benefit payable on behalf of
a Member, if the Committee is unable to locate the Member or beneficiary to whom
such  benefit is  payable,  upon the  Committee's  determination  thereof,  such
benefit shall be forfeited,  held in a suspense  account,  and applied to reduce
Employer  Matching  Contributions  next coming due.  Prior to such  application,
forfeited amounts shall be invested in a principal-safe  asset.  Notwithstanding
the foregoing, if subsequent to any such forfeiture the Member or beneficiary to
whom  such  benefit  is  payable  makes a valid  claim  for such  benefit,  such
forfeited  benefit  shall be  restored  to the Plan in the  manner  provided  in
Section 8.5(b).

          10.5 Claims Review.  In any case in which a claim for Plan benefits of
a Member or  beneficiary  is denied or modified,  the  Committee  shall  furnish
written  notice  to the  claimant  within  ninety  days (or  within  180 days if
additional  information requested by the Committee  necessitates an extension of
the ninety-day period), which notice shall:

                  (a)    State the specific  reason or reasons for the denial or
         modification;

                  (b)    Provide specific reference to pertinent Plan provisions
         on which the denial or modification is based;

                  (c)    Provide  a description  of  any additional  material or
         information   necessary   for   the   Member,   his   beneficiary,   or
         representative  to  perfect  the  claim and  an explanation of why such
         material or information is necessary; and

                  (d)    Explain  the Plan's claim review procedure as contained
         herein.

In the event a claim for Plan benefits is denied or modified, if the Member, his
beneficiary,  or a representative of such Member or beneficiary  desires to have
such denial or  modification  reviewed,  he must,  within  sixty days  following
receipt of the notice of such denial or  modification,  submit a written request
for review by the Committee of its initial  decision.  In  connection  with such
request,  the Member,  his beneficiary,  or the representative of such Member or
beneficiary  may  review any  pertinent  documents  upon  which  such  denial or
modification  was based and may submit  issues and  comments in writing.  Within
sixty  days  following  such  request  for  review the  Committee  shall,  after
providing a full and fair  review,  render its final  decision in writing to the
Member,  his  beneficiary  or the  representative  of such Member or beneficiary
stating  specific  reasons for such decision and making  specific  references to
pertinent  Plan  provisions  upon  which  the  decision  is  based.  If  special
circumstances  require an extension of such sixty-day  period,  the  Committee's
decision  shall be  rendered  as soon as  possible,  but not later than 120 days
after  receipt of the request for review.  If an extension of time for review is
required,  written  notice  of  the  extension shall be furnished to the Member,

                                       X-3

<PAGE>



beneficiary,  or the representative of  such Member or beneficiary  prior to the
commencement of the extension period.


                                       X-4

<PAGE>



                           XI. In-Service Withdrawals

                             

          11.1 In-Service Withdrawals.

                  (a) A Member may  withdraw an amount that is not less than 25%
nor more than 100% of the then value of his Member Contribution Account.

                  (b) A Member who has attained age  fifty-nine and one-half may
withdraw from his Cash or Deferred  Account an amount not less than 25% nor more
than 100% of the then value of such  Account.  Only one such  withdrawal  may be
made in any twenty-four month period.

                  (c) A Member who has a financial  hardship,  as  determined by
the  Committee,  and who has  made all  available  withdrawals  pursuant  to the
Paragraphs  above and  pursuant  to the  provisions  of any  other  plans of the
Employer  and any  Controlled  Entities  of  which  he is a  member  and who has
obtained  all  available  loans  pursuant  to Article  XII and  pursuant  to the
provisions  of any other plans of the  Employer and any  Controlled  Entities of
which he is a member may withdraw from his Rollover Contribution Account and his
Cash or Deferred  Account  amounts not to exceed the lesser of (1) such Member's
Vested  Interest in such Accounts or (2) the amount  determined by the Committee
as being available for withdrawal  pursuant to this  Paragraph.  Such withdrawal
shall come, first, from the Member's Rollover Contribution Account and then from
his Cash or Deferred Account. For purposes of this Paragraph, financial hardship
shall mean the immediate and heavy financial  needs of the Member.  A withdrawal
based upon financial  hardship  pursuant to this Paragraph  shall not exceed the
amount required to meet the immediate financial need created by the hardship and
not reasonably available from other resources of the Member. The amount required
to meet the immediate  financial  need may include any amounts  necessary to pay
any federal, state, or local income taxes or penalties reasonably anticipated to
result from the  distribution.  The determination of the existence of a Member's
financial  hardship and the amount  required to be  distributed to meet the need
created by the  hardship  shall be made by the  Committee.  The  decision of the
Committee  shall be final  and  binding,  provided  that all  Members  similarly
situated  shall  be  treated  in  a  uniform  and  nondiscriminatory  manner.  A
withdrawal  shall be  deemed to be made on  account  of an  immediate  and heavy
financial need of a Member if the withdrawal is for:

                           (1) Expenses  for medical  care  described in section
         213(d) of the Code  previously  incurred  by the Member,  the  Member's
         spouse,  or any  dependents of the Member (as defined in section 152 of
         the  Code) or  necessary  for those  persons  to  obtain  medical  care
         described  in  section  213(d)  of  the  Code  and  not  reimbursed  or
         reimbursable by insurance;

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

                           (3) Payment of tuition and related  educational fees,
         and  room  and  board   expenses,   for  the  next  twelve   months  of
         post-secondary  education  for  the  Member  or  the  Member's  spouse,
         children, or dependents (as defined in section 152 of the Code);

                                      XI-1

<PAGE>



                           (4) Payments necessary to prevent the eviction of the
         Member from his  principal residence or foreclosure  on the mortgage of
         the Member's principal residence; or

                           (5) Such other financial needs that the  Commissioner
         of Internal  Revenue may deem to be immediate and heavy financial needs
         through  the  publication  of  revenue  rulings,   notices,  and  other
         documents of general applicability.

The above notwithstanding,  (1) withdrawals under this Paragraph from a Member's
Cash or Deferred  Account  shall be limited to the sum of the  Member's  Cash or
Deferred  Contributions to the Plan, plus income allocable  thereto and credited
to the Member's  Cash or Deferred  Account as of the Valuation  Date  coincident
with or next preceding December 31, 1988, less any previous  withdrawals of such
amounts,  and (2)  amounts  allocated  to a Member's  Cash or  Deferred  Account
pursuant to the provisions of Section 4.2(d) and Employer Matching Contributions
used to  satisfy  the  restrictions  set forth in  Section  3.1(e)  shall not be
subject to withdrawal. A Member who makes a withdrawal from his Cash or Deferred
Account under this  Paragraph may not make  elective  contributions  or employee
contributions  to the Plan or any other  qualified or  nonqualified  plan of the
Employer or any  Controlled  Entity for a period of twelve months  following the
date  of  such   withdrawal.   Further,   such  Member  may  not  make  elective
contributions under the Plan or any other plan maintained by the Employer or any
Controlled  Entity for such  Member's  taxable year  immediately  following  the
taxable year of the  withdrawal in excess of the  applicable  limit set forth in
Section  3.1(d)  for such next  taxable  year less the  amount of such  Member's
elective contributions for the taxable year of the withdrawal.

          11.2 Restriction on In-Service Withdrawals.

                  (a) All  withdrawals  pursuant to this  Article  shall be made
only as of the first day of any month by executing and filing with the Committee
the form  prescribed  by the  Committee  at least ten days prior to the proposed
date of withdrawal.

                  (b)   Notwithstanding  the  provisions  of  this  Article,  no
withdrawal  shall be made from an Account to the extent  such  Account  has been
pledged to secure a loan under Article XII.

                  (c) If a Member's  Account from which a withdrawal  is made is
invested in more than one Investment Fund, the withdrawal shall be made pro rata
from each Investment Fund in which such Account is invested.

                  (d) All withdrawals under this Article shall be paid in cash.

                  (e) Any  withdrawal hereunder shall be subject to the Director
Rollover election described in Section 10.3.

                  (f) This Article shall not be applicable to a Member following
termination  of employment  and the amounts in such Member's  Accounts  shall be
distributable in accordance with the provisions of Article X.

                                      XI-2

<PAGE>



                                   XII. Loans

                                      

          12.1  Eligibility for Loan. Upon  application by (1) any Member who is
an Employee or (2) any Member no longer employed by the Employer,  a beneficiary
of a deceased Member or an alternate payee under a qualified  domestic relations
order,  as defined  in section  414(p)(8)  of the Code,  who  retains an Account
balance under the Plan and who is a  party-in-interest,  as that term is defined
in section  3(14) of the Act, as to the Plan (an  individual  who is eligible to
apply for a loan under this Article being hereinafter  referred to as a "Member"
for purposes of this Article),  the Committee may in its  discretion  direct the
Trustee  to make a loan or  loans  to such  Member.  Such  loans  shall  be made
pursuant to the  provisions of the  Committee's  written loan  procedure,  which
procedure is hereby incorporated by reference as a part of the Plan.

          12.2 Maximum Loan.

                  (a) A loan to a Member may not exceed 50% of the then value of
such Member's Vested Interest in his Accounts.

                  (b) Paragraph (a) above to the contrary  notwithstanding,  the
amount of a loan made to a Member under this Article  shall not exceed an amount
equal to the difference between:

                           (1) The lesser of $50,000 (reduced by the excess,  if
         any,  of (A) the  highest  outstanding  balance  of loans from the Plan
         during the one-year  period  ending on the day before the date on which
         the loan is made over (B) the  outstanding  balance  of loans  from the
         Plan on the date on which the loan is made) or  one-half of the present
         value of the Member's total  nonforfeitable  accrued  benefit under all
         qualified plans of the Employer or a Controlled Entity; minus

                           (2) The total  outstanding loan balance of the Member
         under all other  loans from all  qualified  plans of the  Employer or a
         Controlled Entity.


                                      XII-1

<PAGE>



                        XIII. Administration of the Plan

                           

          13.1 Appointment of Committee.  The general administration of the Plan
shall be vested in the  Committee  which shall be appointed by the Directors and
shall  consist  of  one or  more  persons.  Any  individual,  whether  or not an
Employee,  is eligible to become a member of the  Committee.  Each member of the
Committee shall, before entering upon the performance of his duties,  qualify by
signing a consent to serve as a member of the  Committee  under and  pursuant to
the Plan and by filing  such  consent  with the  records of the  Committee.  For
purposes of the Act, the Committee shall be the Plan  "administrator"  and shall
be the "named fiduciary" with respect to the general  administration of the Plan
(except as to the investment of the assets of the Trust Fund).

          13.2 Term,  Vacancies,  Resignation,  and Removal.  Each member of the
Committee shall serve until he resigns, dies, or is removed by the Directors. At
any time  during his term of  office,  a member of the  Committee  may resign by
giving written notice to the Directors and the  Committee,  such  resignation to
become effective upon the appointment of a substitute member or, if earlier, the
lapse of thirty days after such notice is given as herein provided.  At any time
during his term of office,  and for any reason, a member of the Committee may be
removed by the Directors with or without  cause,  and the Directors may in their
discretion  fill any  vacancy  that may  result  therefrom.  Any  member  of the
Committee  who is an Employee  shall  automatically  cease to be a member of the
Committee  as of  the  date  he  ceases  to be  employed  by the  Employer  or a
Controlled Entity.

          13.3  Officers,  Records,  and  Procedures.  The  Committee may select
officers and may appoint a secretary who need not be a member of the  Committee.
The  Committee  shall  keep  appropriate  records  of its  proceedings  and  the
administration  of the Plan and shall  make  available  for  examination  during
business  hours to any  Member or  beneficiary  such  records as pertain to that
individual's  interest in the Plan. The Committee  shall designate the person or
persons  who  shall be  authorized  to sign for the  Committee  and,  upon  such
designation, the signature of such person or persons shall bind the Committee.

          13.4 Meetings.  The Committee shall hold meetings upon such notice and
at such time and place as it may from time to time determine. Notice to a member
shall not be  required  if waived in writing by that  member.  A majority of the
members  of the  Committee  duly  appointed  shall  constitute  a quorum for the
transaction of business. All resolutions or other actions taken by the Committee
at any meeting where a quorum is present shall be by vote of a majority of those
present at such  meeting  and  entitled to vote.  Resolutions  may be adopted or
other action taken without a meeting upon written  consent  signed by all of the
members of the Committee.

          13.5  Self-Interest of Members.  No member of the Committee shall have
any right to vote or decide upon any matter relating solely to himself under the
Plan or to vote in any case in which his  individual  right to claim any benefit
under the Plan is particularly involved. In any case in which a Committee member
is so disqualified to act and the remaining  members cannot agree, the Directors
shall  appoint a temporary  substitute  member to exercise all the powers of the
disqualified member concerning the matter in which he is disqualified.

                                     XIII-1

<PAGE>



          13.6 Compensation and Bonding.  The members of the Committee shall not
receive  compensation  with respect to their services for the Committee.  To the
extent required by the Act or other  applicable law, or required by the Company,
members of the Committee  shall furnish bond or security for the  performance of
their duties hereunder.

          13.7 Committee  Powers and Duties.  The Committee  shall supervise the
administration and enforcement of the Plan according to the terms and provisions
hereof  and shall  have all  powers  necessary  to  accomplish  these  purposes,
including, but not by way of limitation, the right, power, authority, and duty:

                  (a) To  make   rules,   regulations,   and   bylaws   for  the
         administration of the Plan that are not inconsistent with the terms and
         provisions  hereof,  provided  such rules,  regulation,  and bylaws are
         evidenced  in writing and copies  thereof are  delivered to the Trustee
         and to the Company,  and to enforce the terms of the Plan and the rules
         and regulations promulgated thereunder by the Committee;

                  (b) To  construe  in  its  discretion  all  terms, provisions,
         conditions, and limitations of the Plan. In all cases, the construction
         necessary for  the Plan to  qualify under the  applicable provisions of
         the Code shall control;

                  (c) To  correct  any defect or to supply  any  omission  or to
         reconcile any inconsistency  that may appear in the Plan in such manner
         and to such  extent as it shall  deem in its  discretion  expedient  to
         effectuate the purposes of the Plan;

                  (d) To employ  and  compensate  such  accountants,  attorneys,
         investment  advisors,  and other  agents,  employees,  and  independent
         contractors  as the Committee  may deem  necessary or advisable for the
         proper and efficient administration of the Plan;

                  (e) To  determine in  its discretion all questions relating to
         eligibility;

                  (f) To  make a determination in its discretion as to the right
         of any person to a  benefit under the Plan and  to prescribe procedures
         to be followed by distributees in obtaining benefits hereunder;

                  (g) To prepare,  file, and  distribute,  in such manner as the
         Committee  determines to be appropriate,  such information and material
         as is required by the reporting and disclosure requirements of the Act;

                  (h) To furnish the Employer any information  necessary for the
         preparation of such Employer's tax return or other information that the
         Committee  determines  in its  discretion is necessary for a legitimate
         purpose;

                  (i) To require  and obtain from  the Employer  and the Members
         any information or data  that the Committee determines is necessary for
         the proper administration of the Plan;


                                     XIII-2

<PAGE>



                  (j)      To instruct the  Trustee as to  the loans to  Members
         pursuant to the provisions of Article XII;

                  (k)      To  instruct  the  Trustee   as  to  the  management,
         investment, and reinvestment of the Trust Fund;

                  (l)      To  appoint investment managers  pursuant to Section 
         15.5;

                  (m)      To receive  and review reports from  the Trustee  and
         the investment  managers  as to  the financial  condition of  the Trust
         Fund, including its receipts and disbursements;

                  (n)      To  review  periodically  the  Plan's  short-term and
         long-term investment needs and goals and to communicate  such needs and
         goals to the Trustee and  any  investment  manager as frequently as the
         Committee,  in  its  discretion,  deems   necessary   for   the  proper
         administration of the Plan and Trust; and

                  (o)      To  establish   or  designate   Investment  Funds  as
         investment options as provided in Article V.

                  (p)      To vote any shares of Company  Stock or mutual  funds
         held in  the Trust  Fund, provided,  however,  that the Committee shall
         follow the  directions  of the Members  pursuant  to Section  5.3(a) in
         voting  Company  Stock, and further  provided,  that  the Committee may
         appoint a  Voting   Fiduciary  to  vote  Company  Stock  in  accordance
         with  the directions from the Members.

          13.8 Employer to Supply  Information.  The Employer  shall supply full
and  timely  information  to the  Committee,  including,  but  not  limited  to,
information relating to each Member's Compensation,  age, retirement,  death, or
other cause of termination of employment and such other  pertinent  facts as the
Committee  may  require.  The  Employer  shall advise the Trustee of such of the
foregoing  facts as are  deemed  necessary  for the  Trustee  to  carry  out the
Trustee's  duties under the Plan. When making a determination in connection with
the Plan, the Committee shall be entitled to rely upon the aforesaid information
furnished by the Employer.

          13.9  Indemnification.  The Company shall  indemnify and hold harmless
each  member of the  Committee  against  any and all  expenses  and  liabilities
arising  out of his  administrative  functions  or  fiduciary  responsibilities,
including any expenses and liabilities  that are caused by or result from an act
or omission  constituting  the  negligence of such member in the  performance of
such functions or responsibilities,  but excluding expenses and liabilities that
are  caused by or result  from such  member's  own gross  negligence  or willful
misconduct.  Expenses  against which such member shall be indemnified  hereunder
shall include,  without  limitation,  the amounts of any settlement or judgment,
costs,  counsel fees, and related charges reasonably incurred in connection with
a claim asserted or a proceeding brought or settlement thereof.


                                     XIII-3

<PAGE>



                  XIV. Trustee and Administration of Trust Fund

                    

          14.1 Appointment, Resignation, Removal, and Replacement of Trustee.

                  (a) The Trustee shall be appointed,  removed,  and replaced by
and in the sole  discretion  of the  Directors.  The Trustee shall be the "named
fiduciary" with respect to investment of the Trust Fund's assets.

                  (b) Any  Trustee  may  resign  at any time by  giving at least
thirty days' written notice of such  resignation  to the Directors.  Any Trustee
may be removed,  with or without  cause,  by the Directors on written  notice of
such removal to such Trustee.  The Directors may appoint a successor  Trustee by
written designation, a copy of which shall be delivered to the Committee and the
former  Trustee.  If there would be no other  Trustee  then  acting,  the actual
appointment and  qualification of a successor Trustee to whom the Trust Fund may
be transferred are conditions  which must be fulfilled before the resignation or
removal of a Trustee  shall become  effective.  The  Directors may by resolution
increase or decrease the number of Trustees at any time acting hereunder.

          14.2  Acceptance of Fund. The Trustee accepts the Trust Fund hereunder
and agrees to accept and retain,  manage,  administer and hold the Trust Fund in
accordance with the terms and provisions of this Plan. The Trustee shall receive
any securities or other  properties that are tendered to the Trustee pursuant to
the Plan that are acceptable to the Trustee.

          14.3  Committee  Discharging  Duty.  The  Trustee  may assume that the
Committee is discharging  its duties under the Plan until and unless the Trustee
is notified to the contrary in writing by any person known to be a member of the
Committee or by the Employer.  Upon receipt of such notice,  the Trustee may, if
the Trustee so desires,  apply to a court of competent jurisdiction for guidance
with respect to the disposition of the Trust Fund.

          14.4 Taxes. If, pursuant to the provisions of any law now or hereafter
enacted, any tax shall be imposed upon the Trustee with respect to the assets or
income of the Trust Fund, the Trustee (without the necessity of any direction or
approval by the Committee)  may pay such tax from the Trust Fund,  provided such
payment is not otherwise prohibited by law. The Trustee,  however,  shall not be
obligated  to pay any such tax as long as the  validity  thereof is contested in
good faith.  In determining  whether or not to pay any such tax, the Trustee may
obtain the advice of counsel  (including,  but not limited  to,  counsel for the
Employer or the Committee).

          14.5 Powers of the Trustee.  The Committee shall direct the Trustee in
the management,  investment,  and reinvestment of the Trust Fund. Subject to the
limitation of the preceding  sentence and to any  limitations  stated  elsewhere
herein, in addition to the authority,  rights,  privileges,  powers,  and duties
elsewhere  herein vested in the Trustee and those now or hereafter  conferred by
law, the Trustee shall also have the following  authority,  rights,  privileges,
powers, and duties:


                                      XIV-1

<PAGE>



                  (a) To hold,  manage, control, collect, and use the Trust Fund
         in accordance with the terms of this instrument;

                  (b) To sell (for cash or on  credit,  or both),  exchange,  or
         otherwise  dispose  of,  the  whole or any part of the Trust  Fund,  at
         public or private sale; to lease  (including,  but not limited to, oil,
         gas, or mineral  leases),  rent,  mortgage  (including  purchase  money
         mortgages),  pledge, or otherwise encumber the whole or any part of the
         Trust Fund;  and to loan or borrow  money in any manner,  including  by
         joint and several obligations,  all upon such terms,  regardless of the
         duration of the Trust, as the Trustee may deem advisable (provided that
         neither  the  Employer  nor any Member  may borrow  from the Trust Fund
         except as otherwise permitted herein);

                  (c) To invest or  reinvest  the Trust Fund in  property of any
         description  whatsoever  (including,  but not limited to, any common or
         preferred stocks, open-end or closed-end mutual funds (including mutual
         funds  established  and maintained as collective  investment  funds for
         trust accounts by the Trustee or its  affiliate),  put and call options
         traded on a national  exchange,  United States  retirement  plan bonds,
         corporate bonds, debentures,  convertible debentures, commercial paper,
         U.S.  Treasury Bills,  U.S. Treasury notes and other direct or indirect
         obligations of the United States  Government or its agencies,  improved
         or  unimproved  real  estate  situated  in the United  States,  limited
         partnerships,  insurance  contracts  of  any  type,  mortgages,  notes,
         including  or not  limited to master  notes,  or other  property of any
         kind,  real,  or personal or mixed,  whether  tangible or intangible or
         productive  of  income,  to buy or sell  options  on common  stock on a
         nationally  recognized  exchange with or without holding the underlying
         common  stock,  to buy and  sell  commodities,  commodity  options  and
         contracts for the future delivery of commodities, commodity options and
         contracts for the future delivery of commodities, and to make any other
         investments deemed appropriate);

                  (d) To make or hold  investments of any part of the Trust Fund
         in common  or  undivided  interest  with  other  persons  or  entities,
         including an  undivided  interest in any property in which any Trustee,
         individually or otherwise,  may hold an undivided interest; to buy from
         or sell to any person or entity to the extent not otherwise  prohibited
         herein;

                  (e) To make commingled,  collective, or common investments and
         to  invest  and   reinvest  all  or  any  portion  of  the  Trust  Fund
         collectively  with funds of other  pension  and profit  sharing  trusts
         exempt  from  tax  under  section  501(a)  of the  Code  by  reason  of
         qualifying  under  section  401(a)  of said  Code,  including,  without
         limitation,  power to invest collectively with such other funds through
         the  medium of one or more of the  common,  collective,  or  commingled
         trust  funds,  which  has  been or may  hereafter  be  established  and
         maintained  by the  Trustee  or its  affiliates.  To the  extent of the
         interest of the Trust Fund in any such collective  trust, the agreement
         or declaration of trust  establishing  such  collective  trust shall be
         deemed  to be  adopted  and made a part of the Plan and Trust as if set
         forth in full herein.

                  (f) To  deposit  or invest  all or a part of the Trust Fund in
         savings  accounts,  certificates  of  deposit, or  other  deposits that
         bear  a  reasonable  rate  of  interest in  a bank or similar financial
         institution,  including  the  commercial  department  of  the  Trustee,


                                      XIV-2

<PAGE>



         if such  bank or other  institution  is  supervised  by any agency of a
         state or the federal government.

                  (g) To employ and compensate such attorneys, counsel, brokers,
         banks, investment advisors, or other agents,  employees, or independent
         contractors  and to delegate to them such of the  duties,  rights,  and
         powers  of the  Trustee  as may be deemed  advisable  in  handling  and
         administering the Plan;

                  (h) To partition  any  property or interest  held as a part of
         the Trust Fund and, in any and all such  partitions,  to pay or receive
         such money or property as may be  necessary  or  advisable  to equalize
         differences and to evaluate any property belonging to the Trust Fund;

                  (i) To  institute,  join  in,  maintain,  defend,  compromise,
         submit to arbitration, or settle any litigation,  claim, obligation, or
         controversy  with  respect  to any  matter  affecting  the Trust  Fund,
         regardless  of the manner in which such matter may have arisen,  all in
         the name of the Trustee and without the joinder of any Member; and

                  (j) To hold  uninvested  for a  reasonable  period of time any
         moneys  received by it until the same shall be  invested  or  disbursed
         pursuant to the provisions of the Plan.

                  (k) To invest  any of the funds of the Trust  into the  AVESTA
         Trust,  or  any  other  open-end,  diversified,  management  investment
         company  and that offers  collective  investment  funds for  retirement
         accounts as to which Texas  Commerce Bank National  Association  or any
         affiliated bank serves as a trustee.

The Trustee is also authorized to exercise all the rights, powers,  options, and
privileges  now or  hereafter  granted to,  provided  for, or vested in trustees
under the Texas Trust Code,  except as such may conflict  with the terms of this
instrument or applicable law. As far as possible,  no subsequent  legislation or
regulation shall be in limitation of the rights,  powers, or privileges  granted
the Trustee  hereunder  or set forth in the Texas Trust Code as it exists at the
time of the execution hereof.  Generally,  the Trustee shall have, hold, manage,
control, use, invest and reinvest, disburse, and dispose of the Trust Fund under
all circumstances to the same extent as if the Trustee were the owner thereof in
fee simple,  subject only to such  limitations as are contained  herein and such
applicable laws as cannot be waived.  This instrument  shall always be construed
in  favor  of  the  validity  of  any  act or  omission  by or of  the  Trustee.
Notwithstanding the foregoing,  the Trustee may not invest the Trust Fund assets
in any Company  security that is not a "qualifying  Company  security" or in any
Company  real  property  that is not  "qualifying  Company real  property."  The
Trustee may, however,  acquire  "qualifying  Company  securities" or "qualifying
Company real property" as an investment,  provided that any such  acquisition or
investment  will not result in the Trust  Fund's  holding  more than 100% of the
then fair market  value of the assets of the Trust Fund in  "qualifying  Company
securities" and "qualifying Company real property." The term "qualifying Company
securities"  means  stock  or  marketable  obligations  of  the  Company  or  an
affiliate.  The term  "qualifying  Company real property"  means parcels of real
property  leased to the  Company or an affiliate  if a substantial number of the

                                      XIV-3

<PAGE>



parcels are dispersed  geographically  and if each such  parcel is suitable for,
or adaptable to, more than one use.

          14.6 Compensation, Expenses, and Bond of Trustee. Unless prohibited by
Section  14.10,  the Trustee  shall  receive such  compensation  for services as
Trustee hereunder as may be agreed upon from time to time by the Company and the
Trustee.  The Trustee shall be reimbursed for all reasonable  expenses  incurred
while acting as Trustee as provided in Section 14.10.  No bond or other security
shall be  required  of the Trustee  unless  otherwise  required by law or by the
Company.

          14.7 Reliance.  The Trustee shall be fully protected in relying upon a
resolution  of the  Directors as to the  membership  of the Committee as it then
exists  and in  continuing  to rely  upon  such  resolution  until a  subsequent
resolution is filed with the Trustee by the Directors. The Trustee may accept as
true all papers, certificates,  statements, and representations of fact that are
presented to the Trustee by the Committee without investigation, questioning, or
verification  if the Trustee  believes  same to be true and  authentic,  and the
Trustee may rely solely on the written  advice of the Committee  with respect to
any question of fact.

          14.8  Accounting.  As soon as  practicable  after the end of each Plan
Year, the Trustee shall render a written accounting of the administration of the
Trust Fund showing all receipts and  disbursements  during the year and the then
value of the assets of the Trust Fund. This  accounting  shall be transmitted to
the Committee and to the Company.

          14.9 Judicial Protection.  The Trustee may seek judicial protection by
any action or proceeding  deemed necessary to settle the accounts of the Trustee
or may  obtain  a  judicial  determination  or a  declaratory  judgment  as to a
question of construction of the Plan. The Trustee must join as parties defendant
in any such action only the Committee and the Company,  although the Trustee may
join other parties if the Trustee deems it advisable to do so.

          14.10 Payment of Expenses. All expenses incident to the administration
of the Plan and Trust, including but not limited to, legal, accounting,  Trustee
fees, expenses of the Committee, and the cost of furnishing any bond or security
required of the Committee shall be paid by the Trustee from the Trust Fund, and,
until paid,  shall  constitute a claim against the Trust Fund which is paramount
to the claims of Members  and  beneficiaries;  provided,  however,  that (a) the
obligation  of the Trustee to pay such  expenses from the Trust Fund shall cease
to exist to the extent such  expenses  are paid by the  Employer  and (b) in the
event the Trustee's  compensation is to be paid, pursuant to this Section,  from
the Trust Fund, any individual serving as Trustee who already receives full-time
pay  from an  employer  or an  association  of  employers  whose  employees  are
participants  in the Plan,  or from an employee  organization  whose members are
participants  in the Plan,  shall not receive any  additional  compensation  for
serving as Trustee. This Section shall be deemed to be a part of any contract to
provide  for  expenses  of Plan and  Trust  administration,  whether  or not the
signatory to such contract is, as a matter of convenience, the Employer.

          14.11  Trust  Fund   Property.   All  income,   profits,   recoveries,
contributions,  forfeitures,  and any and all moneys, securities, and properties
of any kind at  any time received or held by the Trustee hereunder shall be held

                                      XIV-4

<PAGE>



for  investment  purposes  as  a commingled  Trust  Fund.  The  Committee  shall
maintain  Accounts  in  the  name  of  each  Member,  but  the maintenance of an
Account  designated as the  Account of a Member  shall not mean that such Member
shall have a greater or lesser  interest  than that due him by  operation of the
Plan and shall not be  considered as segregating  any funds or property from any
other funds or property  contained in the commingled  fund. No Member shall have
any title to any specific asset in the Trust Fund.

          14.12  Distributions  from  Members'  Accounts.  Distributions  from a
Member's  Accounts shall be made by the Trustee only if, when, and in the amount
and manner directed by the Committee.  Any distribution  made to a Member or for
his  benefit  shall  be  debited  to such  Member's  Account  or  Accounts.  All
distributions  hereunder shall be made in cash except as otherwise  specifically
provided herein.

          14.13 Payments Solely from Trust Fund. All benefits  payable under the
Plan shall be paid or provided  for solely from the Trust Fund,  and neither the
Employer  nor the  Trustee  assumes  any  liability  or  responsibility  for the
adequacy  thereof.  The  Committee  or the  Trustee may  require  execution  and
delivery of such instruments as are deemed necessary to assure proper payment of
any benefits.

          14.14 No Benefits to the Employer.  No part of the corpus or income of
the Trust Fund shall be used for any purpose other than the exclusive purpose of
providing  benefits  for the Members and their  beneficiaries  and of  defraying
reasonable  expenses of administering the Plan.  Anything to the contrary herein
notwithstanding,  the Plan  shall  not be  construed  to vest any  rights in the
Employer other than those specifically given hereunder.



                                      XIV-5

<PAGE>



                            XV. Fiduciary Provisions

                              

          15.1 Article  Controls.  This Article shall control over any contrary,
inconsistent or ambiguous provisions contained in the Plan.

          15.2 General  Allocation  of Fiduciary  Duties.  Each  fiduciary  with
respect  to  the  Plan  shall  have  only   those   specific   powers,   duties,
responsibilities  and obligations as are specifically  given him under the Plan.
The  Directors  shall have the sole  authority to appoint and remove the Trustee
and members of the Committee.  Except as otherwise specifically provided herein,
the Committee shall have the sole  responsibility  for the administration of the
Plan, which responsibility is specifically described herein. Except as otherwise
specifically provided herein, the Trustee shall have the sole responsibility for
the  administration,  investment,  and  management  of the assets held under the
Plan. However, because the Committee, as a co-fiduciary,  has chosen to exercise
its power given hereunder to direct the Trustee in the  management,  investment,
and  reinvestment  of the Trust Fund, the Trustee shall be subject to all proper
directions  of the Committee  that are made in accordance  with the terms of the
Plan and the Act. It is  intended  under the Plan that each  fiduciary  shall be
responsible for the proper exercise of his own powers, duties, responsibilities,
and obligations hereunder and shall not be responsible for any act or failure to
act of another fiduciary except to the extent provided by law or as specifically
provided herein.

          15.3 Fiduciary Duty. Each fiduciary under the Plan, including, but not
limited  to,  the  Committee  and the  Trustee  as  "named  fiduciaries,"  shall
discharge his duties and responsibilities with respect to the Plan:

                  (a) Solely in  the interest of the  Members, for the exclusive
         purpose of providing benefits to Members and their beneficiaries and of
         defraying reasonable expenses of administering the Plan;

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

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

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

No  fiduciary  shall  cause the Plan or Trust Fund to enter  into a  "prohibited
transaction" as provided in section 4975 of the Code or section 406 of the Act.

          15.4 Delegation and Allocation of Fiduciary Duties.  The Committee may
appoint subcommittees, individuals or any other agents as it deems advisable and
may delegate to any  of such appointees  any or all of the powers and  duties of

                                      XV-1

<PAGE>



the Committee.  Such appointment and delegation  must be in writing,  specifying
the powers or duties  being  delegated,  and  must be accepted in writing by the
delegatee.  Upon such  appointment,  delegation  and acceptance,  the delegating
Committee members shall have no liability  for the acts or omissions of any such
delegatee,  as long  as  the  delegating Committee  members do  not violate  any
fiduciary  responsibility in making or continuing such delegation.

          15.5 Investment  Manager.  The Committee may, in its sole  discretion,
appoint an "investment manager," with power to manage, acquire or dispose of any
asset of the Plan and to direct the Trustee in this regard, so long as:

                  (a) The investment  manager is (1) registered as an investment
         adviser  under the  Investment  Advisers  Act of 1940,  (2) a bank,  as
         defined in the  Investment  Advisers  Act of 1940,  or (3) an insurance
         company qualified to do business under the laws of more than one state;
         and

                  (b) Such investment manager acknowledges in writing that he is
a fiduciary with respect to the Plan.

Upon such  appointment,  the  Committee  shall not be liable for the acts of the
investment  manager,  as  long  as the  Committee  members  do not  violate  any
fiduciary  responsibility in making or continuing such appointment.  The Trustee
shall follow the directions of such  investment  manager and shall not be liable
for the acts or omissions of such investment manager. The investment manager may
be removed by the Committee at any time and within its sole discretion.



                                      XV-2

<PAGE>



                                 XVI. Amendments

                                   

          16.1 Right to Amend. Subject to Section 16.2 and any other limitations
contained in the Act or the Code, the Directors may from time to time amend,  in
whole or in part,  any or all of the  provisions  of the Plan on  behalf  of the
Company  and all  Employers.  Specifically,  but not by way of  limitation,  the
Directors may make any  amendment  necessary to acquire and maintain a qualified
status for the Plan under the Code, whether or not retroactive.

          16.2 Limitation on Amendments.  No amendment of the Plan shall be made
that would vest in the  Employer,  directly or  indirectly,  any  interest in or
control of the Trust Fund. No amendment shall be made that would vary the Plan's
exclusive purpose of providing  benefits to Members and their  beneficiaries and
of defraying  reasonable expenses of administering the Plan or that would permit
the  diversion  of any part of the Trust Fund from that  exclusive  purpose.  No
amendment shall be made that would reduce any then nonforfeitable  interest of a
Member.  No  amendment  shall  increase  the duties or  responsibilities  of the
Trustee unless the Trustee consents thereto in writing.



                                      XVI-1

<PAGE>



               XVII. Discontinuance of Contributions, Termination,
                Partial Termination, and Merger or Consolidation


                  
          17.1  Right to  Discontinue  Contributions,  Terminate,  or  Partially
Terminate.  The Employer has  established  the Plan with the bona fide intention
and  expectation  that  from  year to year it will be able to,  and will deem it
advisable to, make its contributions as herein provided.  However, the Directors
realize  that  circumstances  not now  foreseen,  or  circumstances  beyond  its
control,  may make it either  impossible  or  inadvisable  for the  Employer  to
continue to make its contributions to the Plan.  Therefore,  the Directors shall
have the power to discontinue  contributions to the Plan, terminate the Plan, or
partially terminate the Plan at any time hereafter. Each member of the Committee
and the  Trustee  shall be  notified  of such  discontinuance,  termination,  or
partial termination.

          17.2  Procedure  in  the  Event  of  Discontinuance  of  Contribution,
Termination, or Partial Termination.

                  (a) If the Plan is  amended so as to  permanently  discontinue
Employer  contributions,  or if Employer  contributions  are in fact permanently
discontinued,  the  Vested  Interest  of each  affected  Member  shall  be 100%,
effective as of the date of discontinuance. In case of such discontinuance,  the
Committee  shall remain in existence  and all other  provisions of the Plan that
are necessary,  in the opinion of the Committee,  for equitable operation of the
Plan shall remain in force.

                  (b) If the Plan is  terminated  or partially  terminated,  the
Vested  Interest of each  affected  Member  shall be 100%,  effective  as of the
termination date or partial termination date, as applicable.  Unless the Plan is
otherwise amended prior to dissolution of the Company,  the Plan shall terminate
as of the date of dissolution of the Company.

                  (c) Upon discontinuance,  termination, or partial termination,
any previously unallocated  contributions,  forfeitures,  and net income (or net
loss)  shall be  allocated  among the  Accounts  of the  Members on such date of
discontinuance,  termination, or partial termination according to the provisions
of  Article  IV,  as if such date of  discontinuance,  termination,  or  partial
termination  were a  Valuation  Date.  Thereafter,  the net income (or net loss)
shall continue to be allocated to the Accounts of the Members until the balances
of the Accounts are  distributed.  In the event of termination,  the date of the
final distribution shall be treated as a Valuation Date.

                  (d) In the case of a termination or partial termination of the
Plan, and in the absence of a Plan amendment to the contrary,  the Trustee shall
pay the balance of the Accounts of a Member for whom the Plan is so  terminated,
or who is affected by such partial termination,  to such Member,  subject to the
time of payment, form of payment, and consent provisions of Article X.

          17.3 Merger, Consolidation,  or Transfer. This Plan and Trust Fund may
not merge or  consolidate  with, or transfer its assets or  liabilities  to, any
other plan, unless immediately thereafter each Member  would,  in the event such

                                     XVII-1

<PAGE>



other plan  terminated,  be entitled to  a benefit which is equal to or  greater
than the  benefit  to  which  he  would  have  been  entitled  if the Plan  were
terminated  immediately  before  the  merger, consolidation, or transfer.



                                     XVII-2

<PAGE>



                         XVIII. Participating Employers

                             

          18.1  Adoption  by Other  Employers.  It is  contemplated  that  other
corporations, associations, partnerships, or proprietorships may adopt this Plan
and thereby become Employers. By appropriate action of its Board of Directors or
noncorporate  counterpart,  any such entity,  whether or not presently existing,
may become,  upon approval of the Directors,  a party hereto.  The provisions of
the Plan shall apply  separately  and equally to each Employer and its Employees
in the same manner as is expressly  provided for the Company and its  Employees,
except  that the power to  appoint or  otherwise  affect  the  Committee  or the
Trustee and the power to amend or  terminate  the Plan shall be exercised by the
Directors  alone.  Nevertheless,  any  Employer  may,  with the  consent  of the
Directors,  incorporate  in its adoption  agreement or in an amendment  document
specific  provisions  relating to the operation of the Plan, and such provisions
shall become a part of the Plan as to such Employer only. Transfer of employment
among Employers  shall not be considered a termination of employment  hereunder,
and an Hour of  Service  with one  Employer  shall be  considered  as an Hour of
Service with all others. Any Employer may, by appropriate action of its Board of
Directors or noncorporate counterpart,  terminate its participation in the Plan.
Moreover,  the Directors may, in their discretion,  terminate an Employer's Plan
participation at any time.

          18.2 Single  Plan.  For  purposes of the Code and the Act, the Plan as
adopted by the Employers  shall  constitute a single plan rather than a separate
plan of each  Employer.  All assets in the Trust Fund shall be  available to pay
benefits to all Members and their beneficiaries.


                                     XVIII-1

<PAGE>



                          XIX. Miscellaneous Provisions

                            

          19.1 Not Contract of Employment.  The adoption and  maintenance of the
Plan shall not be deemed to be a contract between the Employer and any person or
to be consideration  for the employment of any person.  Nothing herein contained
shall be deemed to give any person the right to be retained in the employ of the
Employer or to restrict the right of the Employer to discharge any person at any
time nor shall the Plan be deemed to give the  Employer the right to require any
person to remain in the employ of the Employer or to restrict any person's right
to terminate his employment at any time.

          19.2 Alienation of Interest  Forbidden.  Except as otherwise  provided
with respect to "qualified domestic relations orders" pursuant to section 206(d)
of the Act and  sections  401(a)(13)  and  414(p)  of the  Code  and  except  as
otherwise  provided under other applicable law, no right or interest of any kind
in any  benefit  shall  be  transferable  or  assignable  by any  Member  or any
beneficiary or be subject to anticipation,  adjustment, alienation, encumbrance,
garnishment,  attachment, execution, or levy of any kind. Plan provisions to the
contrary  notwithstanding,  the  Committee  shall  comply  with  the  terms  and
provisions of any "qualified  domestic relations order," including an order that
requires  distributions  to an  alternate  payee  prior to a Member's  "earliest
retirement age" as such term is defined in section  206(d)(3)(E)(ii)  of the Act
and section 414(p)(4)(B) of the Code, and shall establish appropriate procedures
to effect the same.

          19.3 Payments to Minors and  Incompetents.  If a Member or beneficiary
entitled to receive a benefit  under the Plan is a minor or is determined by the
Committee  in its  discretion  to be  incompetent  or is  adjudged by a court of
competent  jurisdiction  to be legally  incapable  of giving  valid  receipt and
discharge  for a benefit  provided  under the Plan,  the  Committee may pay such
benefit  to the  duly  appointed  guardian  or  conservator  of such  Member  or
beneficiary  for the  account of such Member or  beneficiary.  If no guardian or
conservator has been appointed for such Member or beneficiary, the Committee may
pay such benefit to any third party who is determined by the  Committee,  in its
sole  discretion,  to be  authorized  to receive such benefit for the account of
such Member or  beneficiary.  Such payment shall operate as a full  discharge of
all liabilities and obligations of the Committee, the Trustee, the Employer, and
any fiduciary of the Plan with respect to such benefit.

          19.4 Member's Address. It shall be the affirmative duty of each Member
to inform the Committee of, and to keep on file with the Committee,  his current
mailing address and the current  mailing address of his designated  beneficiary.
If a Member fails to keep the Committee  informed of his current mailing address
and the  current  mailing  address of his  designated  beneficiary,  neither the
Committee,  the Trustee, the Employer, nor any fiduciary under the Plan shall be
responsible  for any late or lost  payment  of a benefit  or for  failure of any
notice to be provided timely under the terms of the Plan.

          19.5 Severability. If any provision of this Plan shall be held illegal
or invalid for any reason,  said  illegality or invalidity  shall not affect the
remaining  provisions hereof; instead, each  provision  shall be fully severable

                                      XIX-1

<PAGE>



and the Plan  shall  be construed  and  enforced as  if said illegal  or invalid
provision had never been included herein.

          19.6 Jurisdiction.  The situs of the Plan and the Trust hereby created
is Texas.  All provisions of the Plan shall be construed in accordance  with the
laws of Texas except to the extent preempted by federal law.



                                      XIX-2

<PAGE>



                              XX. Top-Heavy Status

                                

          20.1  Article   Controls.   Any  Plan   provisions   to  the  contrary
notwithstanding,  the  provisions  of this Article  shall  control to the extent
required to cause the Plan to comply with the requirements imposed under section
416 of the Code.

          20.2  Definitions.  For purposes of this Article,  the following terms
and phrases shall have these respective meanings:

                  (a) Account  Balance:  As of any Valuation Date, the aggregate
         amount  credited  to  an  individual's  account  or  accounts  under  a
         qualified  defined  contribution  plan  maintained by the Employer or a
         Controlled  Entity   (excluding   employee   contributions   that  were
         deductible  within the meaning of section 219 of the Code and  rollover
         or transfer contributions made after December 31, 1983, by or on behalf
         of such  individual to such plan from another  qualified plan sponsored
         by an entity other than the Employer or a Controlled Entity), increased
         by (1) the aggregate  distributions  made to such  individual from such
         plan during a five-year period ending on the Determination Date and (2)
         the  amount  of any  contributions  due as of  the  Determination  Date
         immediately following such Valuation Date.

                  (b) Accrued  Benefit:  As of any Valuation  Date,  the present
         value  (computed  on the basis of the  Assumptions)  of the  cumulative
         accrued benefit  (excluding the portion thereof that is attributable to
         employee  contributions that were deductible pursuant to section 219 of
         the Code, to rollover or transfer contributions made after December 31,
         1983,  by or on behalf  of such  individual  to such plan from  another
         qualified  plan  sponsored  by an entity  other than the  Employer or a
         Controlled Entity, to proportional  subsidies or to ancillary benefits)
         of an individual  under a qualified  defined benefit plan maintained by
         the Employer or a  Controlled  Entity  increased  by (1) the  aggregate
         distributions made to such individual from such plan during a five-year
         period ending on the  Determination  Date and (2) the estimated benefit
         accrued  by  such  individual  between  such  Valuation  Date  and  the
         Determination  Date immediately  following such Valuation Date.  Solely
         for the purpose of determining top-heavy status, the Accrued Benefit of
         an individual  shall be determined  under (1) the method,  if any, that
         uniformly  applies for accrual  purposes  under all  qualified  defined
         benefit plans maintained by the Employer and the Controlled Entities or
         (2) if there is no such  method,  as if such  benefit  accrued not more
         rapidly than under the slowest  accrual rate  permitted  under  section
         411(b)(1)(C) of the Code.

                  (c) Aggregation Group: The group of qualified plans maintained
         by the Employer and each Controlled  Entity consisting of (1) each plan
         in which a Key Employee participates and each other plan that enables a
         plan in which a Key Employee  participates to meet the  requirements of
         section  401(a)(4)  or 410 of the Code or (2) each  plan in which a Key
         Employee  participates,  each other plan that enables a plan in which a
         Key Employee participates to meet the requirements of section 401(a)(4)
         or 410 of the Code and any  other  plan  that the  Employer  elects  to
         include  as a part of  such group; provided, however, that the Employer

                                      XX-1

<PAGE>



         may  elect to  include  a plan  in  such  group only if the group  will
         continue to meet the requirements of  sections 401(a)(4) and 410 of the
         Code with such plan being taken into account.

                  (d) Assumptions:  The interest rate and mortality  assumptions
         specified for top-heavy  status  determination  purposes in any defined
         benefit plan included in the Aggregation Group which includes the Plan.

                  (e) Determination Date:  For the  first Plan Year of any plan,
         the last day of such  Plan Year  and for  each subsequent  Plan Year of
         such plan, the last day of the preceding Plan Year.

                  (f) Key Employee:  A "key employee" as defined  in section 416
         (i) of the Code and the Treasury regulations thereunder.

                  (g) Plan Year: With respect to any plan, the annual accounting
         period used by such plan for annual reporting purposes.

                  (h) Remuneration:  The  total  of  all  amounts  paid  by  the
         Employer  to or for the  benefit of a Member for  services  rendered or
         labor performed for the Employer,  which are required to be reported on
         the Member's  federal  income tax  withholding  statement or statements
         (Form W-2 or its  subsequent  equivalent)  for the calendar year ending
         with the Plan  Year,  limited to  $150,000  for any Plan Year with such
         limitation to be (1) adjusted  automatically  to reflect any amendments
         to  section  401(a)(17)  of the Code and any  cost-of-living  increases
         authorized by section  401(a)(17) of the Code,  (2) prorated for a Plan
         Year of less than twelve months and to the extent otherwise required by
         applicable  law  and  (3) in the  case  of a  Member  who is  either  a
         five-percent  owner of the  Employer  (within  the  meaning  of section
         416(i)(1)(A)(iii)  of  the  Code)  or is one of  the  ten  most  Highly
         Compensated  Employees  for the Plan  Year and who has a spouse  and/or
         lineal descendants who are under the age of nineteen as of the end of a
         Plan Year who receive  Remuneration during such Plan Year, prorated and
         allocated  among such Member,  his spouse,  and/or  lineal  descendants
         under the age of nineteen based on the  Remuneration for such Plan Year
         of each such individual.

                  (i) Valuation  Date:  With  respect  to  any Plan  Year of any
         defined contribution plan, the most recent date within the twelve-month
         period  ending  on a  Determination  Date as of which  the  trust  fund
         established  under  such plan was  valued  and the net income (or loss)
         thereof allocated to participants'  accounts.  With respect to any Plan
         Year of any  defined  benefit  plan,  the  most  recent  date  within a
         twelve-month period ending on a Determination Date as of which the plan
         assets were valued for purposes of computing plan costs for purposes of
         the requirements imposed under section 412 of the Code.


                                      XX-2

<PAGE>



          20.3 Top-Heavy Status.

                  (a) The Plan shall be deemed to be  top-heavy  for a Plan Year
if, as of the  Determination  Date for such Plan  Year,  (1) the sum of  Account
Balances  of Members  who are Key  Employees  exceeds  60% of the sum of Account
Balances of all Members  unless an Aggregation  Group  including the Plan is not
top-heavy  or (2) an  Aggregation  Group  including  the Plan is  top-heavy.  An
Aggregation Group shall be deemed to be top-heavy as of a Determination  Date if
the sum (computed in accordance  with section  416(g)(2)(B)  of the Code and the
Treasury regulations  promulgated thereunder) of (1) the Account Balances of Key
Employees under all defined contribution plans included in the Aggregation Group
and (2) the Accrued  Benefits of Key Employees  under all defined  benefit plans
included in the Aggregation Group exceeds 60% of the sum of the Account Balances
and the Accrued  Benefits of all individuals  under such plans.  Notwithstanding
the foregoing,  the Account Balances and Accrued Benefits of individuals who are
not Key  Employees in any Plan Year but who were Key Employees in any prior Plan
Year shall not be considered in determining the top-heavy status of the Plan for
such Plan Year. Further, notwithstanding the foregoing, the Account Balances and
Accrued Benefits of individuals who have not performed services for the Employer
or any Controlled  Entity at any time during the five-year  period ending on the
applicable Determination Date shall not be considered.

                  (b) If the Plan is determined to be top-heavy for a Plan Year,
the Vested Interest in the Employer  Contribution  Account of each Member who is
credited  with an Hour of Service  during such Plan Year shall be  determined in
accordance with the following schedule:

                                  Years of
                                  Vesting Service                Vested Interest

                 Less than       2   years                               0%
                                 2   years                              25%
                                 3   years                              40%
                                 4   years                              60%
                                 5   years                              80%
                                 6   years or more                     100%

                  (c) If the Plan is determined to be top-heavy for a Plan Year,
the Employer  shall  contribute to the Plan for such Plan Year on behalf of each
Member who is not a Key Employee and who has not terminated his employment as of
the last day of such Plan Year an amount equal to:

                           (1)  The   lesser   of  (A)  3%  of   such   Member's
         Remuneration  for such  Plan  Year or (B) a  percent  of such  Member's
         Remuneration   for  such  Plan  Year  equal  to  the  greatest  percent
         determined  by dividing for each Key Employee the amounts  allocated to
         such Key Employee's Cash or Deferred Account and Employer  Contribution
         Account for such Plan Year by such Key Employee's Remuneration; reduced
         by

                           (2)   The    amount   of    Employer    Discretionary
         Contributions allocated to such Member's Accounts for such Plan Year.

                                      XX-3

<PAGE>



The minimum  contribution  required to be made for a Plan Year  pursuant to this
Paragraph for a Member  employed on the last day of such Plan Year shall be made
regardless  of  whether  such  Member is  otherwise  ineligible  to  receive  an
allocation of the Employer's  contributions for such Plan Year.  Notwithstanding
the  foregoing,  if the Plan is  deemed to be  top-heavy  for a Plan  Year,  the
Employer's  contribution  for such Plan Year pursuant to this Paragraph shall be
increased  by  substituting  "4%" in lieu of "3%" in  Clause  (1)  hereof to the
extent that the Directors  determine to so increase such  contribution to comply
with the  provisions  of  section  416(h)(2)  of the Code.  Notwithstanding  the
foregoing,  no contribution  shall be made pursuant to this Paragraph for a Plan
Year  with  respect  to  a  Member  who  is a  participant  in  another  defined
contribution  plan  sponsored  by the  Employer or a  Controlled  Entity if such
Member receives under such other defined contribution plan (for the plan year of
such plan ending with or within the Plan Year of the Plan) a contribution  which
is equal to or  greater  than  the  minimum  contribution  required  by  section
416(c)(2) of the Code.  Notwithstanding the foregoing,  no contribution shall be
made pursuant to this  Paragraph for a Plan Year with respect to a Member who is
a  participant  in a  defined  benefit  plan  sponsored  by  the  Employer  or a
Controlled  Entity if such Member  accrues under such defined  benefit plan (for
the plan year of such plan  ending  with or within the Plan Year of this Plan) a
benefit that is at least equal to the benefit  described in section 416(c)(1) of
the Code. If the preceding sentence is not applicable,  the requirements of this
Paragraph shall be met by providing a minimum benefit under such defined benefit
plan  which,  when  considered  with the benefit  provided  under the Plan as an
offset,  is at least equal to the benefit  described in section 416(c)(1) of the
Code.

          20.4 Termination of Top-Heavy  Status.  If the Plan has been deemed to
be top-heavy for one or more Plan Years and  thereafter  ceases to be top-heavy,
the  provisions of this Article shall cease to apply to the Plan effective as of
the  Determination  Date on which it is  determined  no longer to be  top-heavy.
Notwithstanding  the  foregoing,  the Vested  Interest of each Member as of such
Determination Date shall not be reduced and, with respect to each Member who has
three or more years of Vesting  Service on such  Determination  Date, the Vested
Interest of each such Member shall continue to be determined in accordance  with
the schedule set forth in Section 20.3(b).

          20.5 Effect of Article.  Notwithstanding  anything contained herein to
the  contrary,  the  provisions  of  this  Article  shall  automatically  become
inoperative and of no effect to the extent not required by the Code or the Act.

                                      XX-4

<PAGE>


         EXECUTED this 18th day of July, 1996.


                                                    SEAGULL ENERGY CORPORATION



                                                    By: /s/ STEVE THORINGTON




                                                    TEXAS COMMERCE BANK NATIONAL
                                                    ASSOCIATION, Trustee



                                                    By: /s/ MICHAEL W. JERDING