<PAGE>
                                                                     EXHIBIT 4.1


             BOWATER INCORPORATED / COATED PAPERS AND PULP DIVISION

                         HOURLY EMPLOYEES' SAVINGS PLAN


                  As Originally Effective January 1, 1985, and
             As Amended and Restated Effective as of January 1, 1997


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                                Table of Contents

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ARTICLE 1:  DEFINITIONS...........................................................................................1

         1.01     Accounts........................................................................................1
         1.02     Active Participant..............................................................................2
         1.03     Affiliated Company..............................................................................2
         1.04     Basic Employee Contribution Accounts............................................................2
         1.05     Beneficiary.....................................................................................2
         1.06     Board...........................................................................................2
         1.07     Code............................................................................................3
         1.08     Committee.......................................................................................3
         1.09     Company.........................................................................................3
         1.10     Current Or Accumulated Profits..................................................................3
         1.11     Disability......................................................................................3
         1.12     Early Retirement Date...........................................................................3
         1.13     Earnings........................................................................................3
         1.14     Effective Date..................................................................................3
         1.15     Employee........................................................................................4
         1.16     Employer........................................................................................4
         1.17     Employment......................................................................................4
         1.18     Enrollment Date.................................................................................4
         1.19     Erisa...........................................................................................4
         1.20     Fiduciary.......................................................................................4
         1.21     Forfeitures.....................................................................................4
         1.22     Gainsharing Contribution Accounts...............................................................4
         1.23     Hour Of Service.................................................................................5
         1.24     Initial Company Contribution Account............................................................5
         1.25     Investment Funds................................................................................5
         1.26     Matching Contribution Account...................................................................5
         1.27     Normal Retirement Date..........................................................................5
         1.28     Participant.....................................................................................5
         1.29     Payroll-Based Employee Stock Ownership Contribution.............................................5
         1.30     Payroll-Based Employee Stock Ownership Contribution Account.....................................5
         1.31     Plan............................................................................................5
         1.32     Plan Administrator..............................................................................5
         1.33     Plan To Plan Transfer...........................................................................5
         1.34     Plan Year.......................................................................................5
         1.35     Severance From Service Date.....................................................................5
         1.36     Share Of Company Stock..........................................................................6
         1.37     Specified Hardship Withdrawal...................................................................6
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         1.38     Spouse..........................................................................................6
         1.39     Supplemental Non Tax-Deferred Employee Contribution Account.....................................7
         1.40     Supplemental Tax-Deferred Employee Contribution Account.........................................7
         1.41     Trust Agreement.................................................................................7
         1.42     Trust Fund......................................................................................7
         1.43     Trustee.........................................................................................7
         1.44     Uniformed Service Leave.........................................................................7
         1.45     Userra..........................................................................................7
         1.46     Valuation Date..................................................................................8
         1.47     Vested Value....................................................................................8
         1.48     Year Of Break In Service........................................................................8
         1.49     Years Of Service................................................................................8

ARTICLE 2:  ELIGIBILITY AND PARTICIPATION.........................................................................8

         2.01     Eligibility.....................................................................................8
         2.02     Participation...................................................................................8
         2.03     Cessation Of Active Participation...............................................................9
         2.04     Effect Of Reemployment On Plan Entry Or Reentry.................................................9
         2.05     Prior Employment With An Affiliated Company....................................................10
         2.06     Effect Of Military Leave.......................................................................10

ARTICLE 3:  PARTICIPANT CONTRIBUTIONS............................................................................10

         3.01     Basic Tax-Deferred Employee Contributions......................................................10
         3.02     Supplemental Tax-Deferred Employee Contributions...............................................10
         3.03     Non Tax-Deferred Employee Contributions........................................................10
         3.04     Gainsharing Contributions:.....................................................................10
         3.05     Mode Of Payment................................................................................11
         3.06     Limitation On Contributions....................................................................11
         3.07     Change In Amount Of Contributions..............................................................21
         3.08     Voluntary Suspension Of Participant Contributions..............................................21
         3.09     Plan To Plan Transfer..........................................................................22
         3.10     Employment With Affiliated Company.............................................................23
         3.11     Rollover Contributions.........................................................................23
         3.12     Contributions Upon Return From Military Leave..................................................23
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ARTICLE 4:  EMPLOYER CONTRIBUTIONS...............................................................................24

         4.01     Matching Contributions.........................................................................24
         4.02     Initial Company Contributions..................................................................24
         4.03     Payroll-Based Employee Stock Ownership Contributions...........................................24
         4.04     Mode Of Payment................................................................................24
         4.05     Return Of Certain Contributions To Employer....................................................25
         4.06     Statutory Limitation On Additions:.............................................................25
         4.07     Combined Plans Limitation......................................................................28
         4.08     Forfeitures....................................................................................28

ARTICLE 5:  INVESTMENT OPTIONS...................................................................................28

         5.01     Investment Of Contributions....................................................................28
         5.02     Investment Elections By Participants...........................................................29
         5.03     Changes In Current Investment Elections........................................................30
         5.04     Transfer Of Accounts...........................................................................30

ARTICLE 6:  VALUATION OF PARTICIPANTS' ACCOUNTS..................................................................30

         6.01     Accounts.......................................................................................30
         6.02     Valuation Of Accounts..........................................................................30
         6.03     Amount Of Participant's Accounts...............................................................31
         6.04     Statement Of Participant Accounts..............................................................31
         6.05     Timing Of Credits And Deductions...............................................................31

ARTICLE 7:  PAYMENT OF BENEFITS..................................................................................31

         7.01     Retirement.....................................................................................31
         7.02     Death..........................................................................................31
         7.03     Disability.....................................................................................31
         7.04     Other Termination Of Employment................................................................31
         7.05     Transfer From Hourly To Salaried Employment....................................................32
         7.06     Election Of Benefits...........................................................................33
         7.07     Method Of Payment..............................................................................34
         7.08     Proof Of Death And Right Of Beneficiary........................................................36
         7.09     Direct Rollover Of Distribution................................................................36
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ARTICLE 8:  WITHDRAWALS AND LOANS................................................................................38

         8.01     General Conditions For Withdrawals.............................................................38
         8.02     Withdrawal Of Matching Contributions And Initial Company Contributions.........................38
         8.03     Withdrawal Of Non Tax-Deferred Employee Contributions And Non Tax-Deferred Gainsharing
         Contributions:..........................................................................................39
         8.04     Specified Hardship Withdrawal..................................................................39
         8.05     Withdrawal After Age 59-1/2....................................................................40
         8.06     Withdrawal Of Payroll-Based Employee Stock Ownership Contribution Account......................40
         8.07     Withdrawal Of Rollover Account.................................................................40
         8.08     Loans..........................................................................................40

ARTICLE 9:  PLAN ADMINISTRATION..................................................................................42

         9.01     Fiduciaries:...................................................................................42
         9.02     Responsibilities Of The Company................................................................42
         9.03     Savings Plan Committee.........................................................................42
         9.04     Operation Of The Committee:....................................................................43
         9.05     Plan Administrator.............................................................................44
         9.06     Reliance On Experts............................................................................45
         9.07     Committee Action...............................................................................45
         9.08     Individual Indemnification.....................................................................45
         9.09     Expenses.......................................................................................45
         9.10     Service In Various Capacities..................................................................46
         9.11     Standards Of Conduct...........................................................................46
         9.12     Claims Procedures:.............................................................................46

ARTICLE 10:  AMENDMENT AND TERMINATION OF THE PLAN...............................................................47

         10.01    Amendment Of The Plan..........................................................................47
         10.02    Merger, Consolidation, Or Transfer Of Assets...................................................47
         10.03    Plan Termination...............................................................................47
         10.04    Procedure......................................................................................48

ARTICLE 11:  CHANGE IN CONTROL...................................................................................48

         11.01    General........................................................................................48
         11.02    Fully Vesting Of Matching Contribution Account.................................................48

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         11.03    Definitions....................................................................................48
         11.04    Amendment Of This Article 11...................................................................50

ARTICLE 12:  EXERCISE OF COMPANY STOCKHOLDER'S RIGHTS............................................................50

         12.01    Voting Rights..................................................................................50
         12.02    Rights Other Than Voting Rights................................................................50

ARTICLE 13:  GENERAL PROVISIONS..................................................................................51

         13.01    Nonalienation Of Benefits......................................................................51
         13.02    Exclusive Benefit Of Participants And Beneficiaries............................................51
         13.03    No Right To Employment.........................................................................51
         13.04    Uniform Administration.........................................................................51
         13.05    Headings.......................................................................................51
         13.06    Construction...................................................................................51
         13.07    Unclaimed Distributions........................................................................51
         13.08    Distributions To A Legal Representative........................................................52
         13.09    Expenses.......................................................................................52
         13.10    Source Of Payment..............................................................................52

ARTICLE 14:  FORMER NUWAY EMPLOYEES..............................................................................52

         14.01    Eligibility And Participation..................................................................52
         14.02    Participant Contributions......................................................................52
         14.03    Employer Contributions.........................................................................52
         14.04    Prior Service Credit...........................................................................53
         14.05    Cessation Of Participation.....................................................................53

ARTICLE 15:  MERGER OF PLAN......................................................................................53
</TABLE>


                                       v



<PAGE>
             BOWATER INCORPORATED / COATED PAPERS AND PULP DIVISION
                         HOURLY EMPLOYEES' SAVINGS PLAN


                  As Originally Effective January 1, 1985, and
             As Amended and Restated Effective as of January 1, 1997

                                    PREAMBLE

Establishment of Plan

         The Bowater Incorporated/Coated Papers and Pulp Division Hourly
Employees' Savings Plan was established effective January 1, 1985 for the
benefit of eligible hourly Employees of the Company, and of such of its
subsidiaries as might adopt the Plan. The Plan was established and is maintained
pursuant to collective bargaining agreements in effect between Bowater
Incorporated/Coated Papers and Pulp Division and the Paper, Allied-Industrial,
Chemical and Energy Workers International Union and with its Locals 925 and
1924.

Amendment and Restatement of Plan

         Effective January 1, 1989, the Plan was amended and restated to comply
with the Tax Reform Act of 1986 and to make the Plan consistent with the Master
Trust Agreement between Bowater Incorporated and Fidelity Management Trust
Company (dated July 1, 1994) and with administrative practice. Effective as of
January 1, 1997, and such other dates as are noted herein, the Plan is hereby
further restated to bring its provisions into compliance with applicable law, to
allow participants to take loans from their Accounts and to further conform the
Plan's language to administrative practice.

Purpose of Plan

         The purpose of the Plan is to provide Employees with an opportunity to
save money for their retirement by contributing to the Plan on both a pre-tax
and an after-tax basis. Employee contributions will be supplemented by Employer
contributions. All funds contributed will be held in trust, as described
hereinafter, and invested to achieve the objective of the Plan. The Plan and
related trust are intended to meet the requirements of Sections 401(a), 401(k),
409 and 501(a) of the Internal Revenue Code, as amended from time to time and
the provisions of the Employee Retirement Income Security Act of 1974, as
amended from time to time.

ARTICLE 1: DEFINITIONS

         The following words and phrases as used in the Plan shall have the
indicated meanings, unless a different meaning is plainly required by the
context. Wherever applicable, masculine pronouns shall include the feminine, and
the singular shall include the plural.

         1.01 ACCOUNTS: The separate accounts maintained for each Participant,
including, but not limited to, a Participant's Basic and Supplemental
Tax-Deferred Employee Contribution Accounts, Basic and Supplemental Non
Tax-Deferred Employee Contribution Accounts, Tax-



<PAGE>

Deferred and Non Tax-Deferred Gainsharing Contribution Accounts, Initial Company
Contribution Account, Payroll-Based Employee Stock Ownership Contribution
Account and Matching Contribution Account, as described under Articles 3 and 4.

         1.02 ACTIVE PARTICIPANT: An eligible Employee who has in effect an
election to have the Employer withhold and contribute to the Plan his
Gainsharing earnings or a portion of his Earnings, or an Employee who has made a
Plan to Plan Transfer to the Plan.

         1.03 AFFILIATED COMPANY: Any division or company within a family of
controlled corporations with the Company within the meaning of Code Section
1563(a) (determined without regard to Sections 1563(a)(4) and 1563(e)(3)(C)), or
a company that is a member of an affiliated service group to which the Company
belongs, within the meaning of Code Section 414(m). With respect to periods
prior to July 23, 1984 (as defined in the previous sentence), "Affiliated
Company" includes any company which would have been an Affiliated Company prior
to the separation under the laws of the United Kingdom of the Company from
Bowater plc.

         1.04 BASIC EMPLOYEE CONTRIBUTION ACCOUNTS: With respect to each
Participant, the portion of the Trust Fund that is attributable to his Basic
Employee Contributions. Basic Tax-Deferred Employee Contributions made under
Section 3.01 shall be maintained in the Participant's Basic Tax-Deferred
Employee Contribution Account. Basic Non Tax-Deferred Employee Contributions
made under Section 3.03 shall be maintained in the Participant's Basic Non
Tax-Deferred Employee Contribution Account.

         1.05 BENEFICIARY: The person, estate or trust designated by a
Participant to receive any benefits payable in the event of his death, provided
that such designation is made in accordance with procedures established by the
Plan Administrator. In the absence of an effective designation, or if the
Participant's Beneficiary does not survive the Participant, the Beneficiary
shall be the first of the following surviving the Participant: the Participant's
(a) surviving spouse; (b) child(ren); (c) parent(s); (d) sibling(s); (e)
executor or administrator.

         Notwithstanding the foregoing, if a Participant is married on the date
of his death, his Beneficiary shall be his surviving Spouse unless:

              (a)  the Participant has designated a Beneficiary other than his
                   Spouse, and

              (b)  the Participant's Spouse has consented in writing to the
                   Participant's designation of an alternate Beneficiary. The
                   spouse's consent must: (i) acknowledge the financial and
                   legal effect of such election, and (ii) be witnessed by a
                   representative of the Committee or a notary public. Such
                   consent requirement may be excused if it is established to
                   the satisfaction of the Committee that such consent cannot be
                   obtained because there is no Spouse or because the Spouse
                   cannot be located.

         1.06 BOARD: The Board of Directors of the Company.



                                       2
<PAGE>

         1.07 CODE: The Internal Revenue Code of 1986, as amended from time to
time. All references to any Section of the Code shall be deemed to refer not
only to such Section but also to any successor statutory provision to such
Section.

         1.08 COMMITTEE: The Savings Plan Committee, as appointed and acting in
accordance with Article 9.

         1.09 COMPANY: Bowater Incorporated, a Delaware corporation, and its
successors by merger, purchase, or otherwise with respect to its Employees.

         1.10 CURRENT OR ACCUMULATED PROFITS: The Employer's net profits
determined in accordance with generally accepted accounting principles before
provision for income taxes and extraordinary items.

         1.11 DISABILITY: The status of being totally and permanently disabled
by reason of physical or mental disability, causing: (a) an Employee to be
incapable of further Employment in the capacity in which he was employed prior
to such physical or mental disability, and (b) the Employee's Employment to be
terminated as a result of such Disability. An Employee must suffer from a
Disability continuously for six (6) months and receive disability payments under
the federal Social Security Act in order to be eligible to receive benefits
under Section 7.03. The Committee, in its sole discretion, shall determine
whether an Employee suffers from a Disability, based on such evidence and
recommendations as it determines to be necessary or appropriate.

         1.12 EARLY RETIREMENT DATE: The date a Participant's Employment
terminates for any reason following his attainment of age 50 and completion of
15 or more Years of Service.

         1.13 EARNINGS: The total compensation paid by the Employer to the
Employee that is reportable as "wages, tips and other compensation" in Box 1 of
the Employee's Federal Wage and Tax Statement (IRS Form W-2), adjusted as
follows:

              (i)  The amount described above shall be increased by any salary
                   reduction contributions made on the Employee's behalf under
                   any plan maintained by the Employer pursuant to Code Section
                   125 or 401(k) and, effective January 1, 1998, elective
                   amounts excluded from taxable income under Section 132(f)(4)
                   of the Code; and

              (ii) The amount described above shall be decreased by
                   reimbursements or other expense allowances, cash and noncash
                   fringe benefits, moving expenses, deferred compensation,
                   welfare benefits, payments received under the Employer's
                   gainsharing program, and stock and stock-related
                   compensation.

         Notwithstanding the foregoing, the amount of an Employee's Earnings
taken into account under the Plan shall not exceed $160,000, (effective January
1, 2002, $200,000), as adjusted for changes in the cost of living as provided
under Code Section 415(d).

         1.14 EFFECTIVE DATE: January 1, 1997, except as otherwise provided
herein.



                                       3
<PAGE>

         1.15 EMPLOYEE: Any individual who is hired to perform duties for an
Employer on an hourly basis, is subject to its control, and receives regular
compensation other than a pension, severance pay, retainer, or fee under
contract. Notwithstanding the foregoing, for eligibility purposes in accordance
with Article 2, the term "Employee" shall not include: (a) any individual
designated by the Company on its records as an independent contractor,
consultant or other service provider to the Company (even if a court, the
Internal Revenue Service or other entity determines that such individual is a
common law employee); (b) any individual designated by the Company on its
records as a leased employee (as defined under Code Section 414(n)) (even if
such individual is so determined to be a common law employee); (c) any seasonal
or temporary employees; and (d) any other employee of the Company whose terms
and conditions of employment are governed by a collective bargaining agreement
with respect to which benefits of the type provided to employees under the Plan
were the subject of good faith bargaining, unless such agreement provides for
participation in the Plan.

         1.16 EMPLOYER: Bowater Incorporated Coated Paper and Pulp Divisions, or
any successors by merger, purchase or otherwise with respect to its Employees,
or any Affiliated Company that elects to participate in the Plan by action of
its board of directors, subject to the approval of the Board. Effective July 12,
1999 through December 31, 2000, "Employer" shall include Bowater Nuway
Incorporated.

         1.17 EMPLOYMENT: An individual's service as an Employee of an Employer
on and after the effective date of the Employer's adoption of the Plan.

         1.18 ENROLLMENT DATE: The first day of each calendar month.
Notwithstanding the foregoing, effective July 12, 1999 through July 31, 2000, a
former employee of Nuway Paper, LLC shall have an Enrollment Date that is the
next applicable payroll period date following such employee's election to
participate in the Plan.

         1.19 ERISA: The Employee Retirement Income Security Act of 1974, as
amended from time to time. All references to any Section of ERISA shall be
deemed to refer not only to such Section but also to any successor statutory
provisions to such Section.

         1.20 FIDUCIARY: A person or entity exercising discretionary control
over the Plan or its assets, as defined in Section 3(21) of ERISA.

         1.21 FORFEITURES: The excess of all amounts held in a Participant's
Accounts, including investment returns, over the Vested Value of his Accounts,
as determined upon the distribution of such Vested Values to the Participant or
his Beneficiary.

         1.22 GAINSHARING CONTRIBUTION ACCOUNTS: With respect to each
Participant, the portion of the Trust Fund that is attributable to the
contribution consisting of an amount that would otherwise be paid to an Eligible
Employee under a Company-sponsored gainsharing plan or program that an Eligible
Employee elects to contribute to the Plan in accordance with Section 3.04.
Tax-Deferred Gainsharing Contributions made in accordance with Section 3.04(a)
shall be maintained in the Participant's Tax-Deferred Gainsharing Contribution
Account. Non Tax-Deferred Gainsharing Contributions made in accordance with




                                       4
<PAGE>

Section 3.04(b) shall be maintained in the Participant's Non Tax-Deferred
Gainsharing Contribution Account.

         1.23 HOUR OF SERVICE: Each hour, or part thereof, for which an Employee
is paid or entitled to payment, directly or indirectly, for the performance of
duties for the Employer.

         1.24 INITIAL COMPANY CONTRIBUTION ACCOUNT: With respect to each
Participant, the portion of the Trust Fund that is attributable to the
contributions made on his behalf by the Employer under Section 4.02.

         1.25 INVESTMENT FUNDS: The funds established from time to time at the
direction of the Company, in accordance with Section 5.01.

         1.26 MATCHING CONTRIBUTION ACCOUNT: With respect to each Participant,
the portion of the Trust Fund that is attributable to contributions made on his
behalf by the Employer under Section 4.01.

         1.27 NORMAL RETIREMENT DATE: The date a Participant's Employment
terminates upon his attainment of age 65.

         1.28 PARTICIPANT: An Active Participant, former Active Participant or
Employee who has a positive balance in his Account(s).

         1.29 PAYROLL-BASED EMPLOYEE STOCK OWNERSHIP CONTRIBUTION: With respect
to each Participant, the portion of the Trust Fund that is attributable to
Payroll-Based Employee Stock Ownership Contributions made on his behalf under
Section 4.03.

         1.30 PAYROLL-BASED EMPLOYEE STOCK OWNERSHIP CONTRIBUTION ACCOUNT: With
respect to each Participant, the portion of the Trust Fund that is attributable
to Payroll-Based Employee Stock Ownership Contributions made on his behalf under
Section 4.03.

         1.31 PLAN: The Bowater Incorporated/Coated Papers and Pulp Division
Hourly Employees' Savings Plan, as set forth herein and amended from time to
time.

         1.32 PLAN ADMINISTRATOR: The Company and its delegatees, as appointed
in accordance with Article 9 by the Board to administer the Plan.

         1.33 PLAN TO PLAN TRANSFER: A direct transfer of an Employee's
Accounts, as made in accordance with Section 3.09.

         1.34 PLAN YEAR: The calendar year.

         1.35 SEVERANCE FROM SERVICE DATE: The earlier of:

              (a)  The date on which the Employee quits, retires, is discharged
                   or dies; and



                                       5
<PAGE>

              (b)  The first anniversary of the start of a period during which
                   the Employee remains absent from Employment with or without
                   pay, for any reason other than those specified in subsection
                   (a) of this Section 1.35, such as vacation, holiday,
                   sickness, disability, leave of absence or layoff.

         In the case of an Employee who is absent from work for maternity or
paternity reasons beyond the first (1st) anniversary of the first (1st) date of
such absence, the Severance From Service Date shall be the second (2nd)
anniversary of the first (1st) date of such absence. For purposes of this
paragraph, an absence from work for maternity or paternity reasons means an
absence resulting from: (i) the pregnancy of the Employee; (ii) the birth of a
child of the Employee; (iii) a placement of a child with the Employee in
connection with the adoption of such child by the Employee; or (iv) the
Employee's caring for a child for a period beginning immediately following the
child's birth or placement.

         In the case of an Employee on a leave of absence described in Section
1.48, the Employee shall not incur a Severance from Service while on such a
leave. However, if such an Employee does not return to employment within the
period described in Section 1.48, such Employee shall be deemed to have incurred
a Severance from Service in accordance with paragraph (a) of this Section 1.35.

         1.36 SHARE OF COMPANY STOCK: A share of common stock of the Company
which has voting power and dividend rights no less favorable than any other
class of common stock issued by such Company.

         1.37 SPECIFIED HARDSHIP WITHDRAWAL: A withdrawal necessitated by the
financial need of the Participant. A Specified Hardship Withdrawal shall be
allowed only for financial need arising out of expenses incurred or assumed by a
Participant (a) for deductible medical expenses of a Participant or his family
member or dependent not covered by insurance; (b) for the payment of tuition,
related educational fees, and room and board expenses for the next twelve (12)
months of post-secondary education for the Participant, his spouse or his
dependents; (c) relating to the acquisition of a primary residence of a
Participant; or (d) expenses to prevent eviction from, or foreclosure on the
mortgage on, the Participant's primary residence.

         A Specified Hardship Withdrawal may not exceed the actual expense
(including reasonably anticipated state and federal taxes and penalties payable
with respect to the receipt of the amount withdrawn) incurred by the Participant
due to the circumstances described in (a)-(d) above. A Specified Hardship
Withdrawal shall not be granted unless the Participant's financial needs cannot
be met through the use of his other reasonably available resources. Such
resources include all distributions or loans (other than Specified Hardship
Withdrawals) under this Plan, the ability to borrow from banks, credit unions or
other legitimate lenders and the disposition of personal assets which can be
readily sold without need for replacement. The Plan Administrator (or his
delegatee) shall determine whether applications for such withdrawal satisfy the
definition for Specified Hardship Withdrawal.

         1.38 SPOUSE: The person legally married to the Participant at the time
an action or event relevant for Plan purposes occurs.


                                       6
<PAGE>

         1.39 SUPPLEMENTAL NON TAX-DEFERRED EMPLOYEE CONTRIBUTION ACCOUNT: With
respect to each Participant, the portion of the Trust Fund that is attributable
to Supplemental Non Tax-Deferred Employee Contributions he makes in accordance
with Section 3.03.

         1.40 SUPPLEMENTAL TAX-DEFERRED EMPLOYEE CONTRIBUTION ACCOUNT: With
respect to each Participant, the portion of the Trust Fund that is attributable
to Supplemental Tax-Deferred Employee Contributions he makes in accordance with
Section 3.02.

         1.41 TRUST AGREEMENT: The Master Trust Agreement between the Company
and Fidelity Management Trust Company (and any successors thereto) as amended
from time to time.

         1.42 TRUST FUND: The aggregate funds held by the Trustee in accordance
with the Trust Agreement.

         1.43 TRUSTEE: Fidelity Management Trust Company and its successors
appointed in accordance with the Trust Agreement.

         1.44 Uniformed Service Leave: An approved leave of absence taken in
order to perform uniformed service, duty or training within the meaning of
USERRA, which is effective as of December 12, 1994. Such Uniformed Service Leave
shall continue from the Participant's date of entry into the uniformed service
until the earliest of the following:

              (a)  the expiration of the period following the date of his
                   discharge from uniformed service during which he is required
                   to apply for reemployment with the Employer under USERRA;

              (b)  the date of his return to employment by the Employer;

              (c)  the date on which he takes employment with an employer other
                   than his prior Employer or an Affiliated Employer (if any);
                   or

              (d)  the date of his death.

         Notwithstanding the foregoing and for all purposes under the Plan,
Uniformed Service Leave shall include only those periods during which an
Employee is protected under USERRA. If an employee takes a leave of absence to
perform uniformed service and fails to return to employment with the Employer
prior to the expiration of his reemployment rights under USERRA, the entire
period of his leave of absence shall be deemed to not qualify as a Uniformed
Service Leave.

         1.45 USERRA: The Uniformed Services Employment and Reemployment Rights
Act of 1994, as amended, or any successor statute, and the rulings and
regulations promulgated thereunder.



                                       7
<PAGE>

         1.46 VALUATION DATE: The last business day of each calendar quarter and
any other date specified by the Trustee, on which the Trust Fund is valued in
accordance with Article 6. As to Accounts maintained in any Investment Fund
which is valued daily, each business day may be deemed to be a Valuation Date.

         1.47 VESTED VALUE: The nonforfeitable portion of a Participant's
Account(s).

         1.48 YEAR OF BREAK IN SERVICE: Any 12 consecutive-month period computed
from an Employee's Severance from Service Date during which he does not complete
one (1) or more Hours of Service. A Year of Break in Service shall occur on the
last day of the first such twelve-month period. Notwithstanding the above, an
Employee shall be deemed to have not incurred a Year of Break in Service if he
is on a leave of absence in excess of 12 months authorized by his Employer and
returns to active Employment prior to the expiration of such leave.

         1.49 YEARS OF SERVICE: The aggregate period of an Employee's
Employment, consisting of Years of Service and parts thereof, with each Year of
Service consisting of 12 months and with each month consisting of 30 days. Years
of Service shall be computed beginning on the date the Employee first completes
an Hour of Service upon commencing or recommencing employment and ending on his
next following Severance from Service Date. Years of Service shall include the
period of time between an Employee's Severance from Service Date and the date he
next completes an Hour of Service, provided that he does not incur a Year of
Break in Service.

ARTICLE 2: ELIGIBILITY AND PARTICIPATION

         2.01 ELIGIBILITY: Each Employee who is an Active Participant in the
Plan on the Effective Date shall continue to be an Active Participant. Subject
to Section 2.05, each other Employee shall be eligible to participate in the
Plan as of the Enrollment Date coinciding with or next following the date he
completes ninety (90) days of Service; provided, however, that each Employee who
transfers from salaried employment with an Employer shall be eligible to make a
Plan to Plan Transfer at any time.

         2.02 PARTICIPATION: Each Employee shall become a Participant as
follows:

              (a)  With respect to Payroll-Based Employee Stock Ownership
                   Contributions, an Eligible Employee shall automatically
                   become a Participant as of the date he first becomes eligible
                   to receive such contribution;

              (b)  An Employee who satisfies the eligibility requirements of
                   Section 2.01 shall become an Active Participant the date the
                   Employee files with the Employer a properly completed
                   enrollment form in accordance with the requirements and time
                   periods established by the Plan Administrator. An eligible
                   Employee who does not file an enrollment form in accordance
                   with the preceding sentence shall become an Active
                   Participant on the first (1st) succeeding Enrollment Date
                   after the date the Employee files such enrollment form with
                   the Employer.




                                       8
<PAGE>

              (c)  With respect to a Plan to Plan Transfer, an Employee shall
                   become a Participant the date he makes such Plan to Plan
                   Transfer.

         2.03 CESSATION OF ACTIVE PARTICIPATION: An Employee shall cease to be
an Active Participant if:

              (a)  he voluntarily suspends his Contributions to the Plan
                   pursuant to Section 3.08;

              (b)  his Employee Contributions to the Plan are mandatorily
                   suspended pursuant to Article 8;

              (c)  he incurs a Year of Break in Service; or

              (d)  there is any change in his Employment status which would make
                   him ineligible to participate in the Plan, under the terms of
                   Section 2.01.

An Employee shall not cease to be a Participant because of subsection (a) or (b)
above, nor as a result of a temporary absence from Employment. The Employee
shall continue to be a Participant until the Vested Value of his Accounts is
distributed in full to him or his Beneficiary.

         2.04 EFFECT OF REEMPLOYMENT ON PLAN ENTRY OR REENTRY: If an Employee's
Employment resumes after he incurs a Severance from Service, the Employee may
enter or reenter the Plan pursuant to the following rules:

              (a)  If the Employee incurred one (1) or more Years of Break in
                   Service before the Vested Value of his Accounts exceeded zero
                   (0), he may enter or reenter the Plan on any Enrollment Date
                   after he satisfies the requirements of Section 2.01;

              (b)  If the Employee was previously a Participant in the Plan and
                   either (i) he did not incur one (1) Year of Break in Service,
                   or (ii) the Vested Value of his Accounts was greater than
                   zero (0) at the time of his termination of Employment, he may
                   reenter the Plan as of the date his Employment resumes.

              (c)  If the Employee did not incur a Year of Break in Service, had
                   satisfied the eligibility conditions of Section 2.01 but
                   terminated Employment prior to becoming a Participant, he may
                   become a Participant in the Plan on the later of: (i) the
                   date his Employment resumes, or (ii) the Enrollment Date on
                   which he would have become a Participant had he not incurred
                   the termination of Employment;

              (d)  Each other Employee shall become a Participant following the
                   resumption of his Employment as of the date he satisfies the
                   requirements of Section 2.01.



                                        9
<PAGE>

         2.05 PRIOR EMPLOYMENT WITH AN AFFILIATED COMPANY: Each Employee who was
previously employed by an Affiliated Company or who previously performed
services for the Company as a leased employee within the meaning of Section
414(n) of the Code shall have such service taken into account under the Plan,
solely for purposes of determining eligibility to participate in the Plan and
the Vested Value of his Accounts.

         2.06 EFFECT OF MILITARY LEAVE: Notwithstanding any provision of the
Plan to the contrary (including Sections 3.06, 4.06 and 4.07), effective
December 12, 1994, participation, contributions, benefits and service credit (as
defined under Code Section 414(u)) with respect to qualified military service
shall be provided under the Plan in accordance with Section 414(u) of the Code.

ARTICLE 3: PARTICIPANT CONTRIBUTIONS

         3.01 BASIC TAX-DEFERRED EMPLOYEE CONTRIBUTIONS: Each Active Participant
may elect to make Basic Tax-Deferred Employee Contributions to the Plan. The
rate of such Contributions shall be 1%, 2%, 3%, 4%, 5% or 6% of the
Participant's Earnings.

         3.02 SUPPLEMENTAL TAX-DEFERRED EMPLOYEE CONTRIBUTIONS: Each Active
Participant who is making contributions of 6% of his Earnings under Section 3.01
may elect to make Supplemental Tax-Deferred Employee Contributions to the Plan.
The rate of such contributions shall be 1%, 2%, or 3% of the Participant's
Earnings.

         3.03 NON TAX-DEFERRED EMPLOYEE CONTRIBUTIONS: Each Active Participant
may elect to make Basic Non Tax-Deferred Employee Contributions to the Plan. The
rate of such contributions shall be 1%, 2%, 3%, 4%, 5%, or 6% of the
Participant's Earnings; provided that the Participant's total of Basic
Tax-Deferred Employee Contributions and Basic Non Tax-Deferred Employee
Contributions shall not exceed 6% of his Earnings. Each Active Participant who
is making Basic (Tax-Deferred or Non Tax-Deferred) Employee Contributions of 6%
of Earnings may make Supplemental Non Tax-Deferred Employee Contributions to the
Plan (which may be made in addition to Supplemental Tax-Deferred Employee
Contributions). The rate of such contributions shall be 1%, 2%, 3%, 4%, 5%, or
6% of Earnings; provided that the total of a Participant's Contributions under
Sections 3.01, 3.02 and 3.03 shall not exceed 15% of his Earnings.

         3.04 GAINSHARING CONTRIBUTIONS:

              (a)  Each Active Participant may elect to contribute all but not
                   less than all of any amount that would otherwise be paid to
                   him under a Company-sponsored gainsharing plan or program as
                   a Gainsharing Contribution to the Plan. Any such election
                   must be made prior to the date and in accordance with
                   procedures established by the Plan Administrator. The
                   Participant may revoke his election to make a Gainsharing
                   Contribution in accordance with procedures established by the
                   Plan Administrator. All Gainsharing Contributions shall be
                   credited to the Participant's Gainsharing Contributions
                   Account. To the extent permitted under Code



                                       10
<PAGE>


                   Section 402(g), a Participant's Gainsharing Contributions for
                   a Plan Year shall be made on a tax-deferred basis.

              (b)  Notwithstanding the foregoing, the amount of any Gainsharing
                   Contributions which, when added to the amount of the
                   Participant's Tax-Deferred Contributions for the Plan Year,
                   exceed the maximum contribution permitted under Code Section
                   402(g) for a Plan Year shall be made on an after-tax basis.

         3.05 MODE OF PAYMENT: Contributions made under Sections 3.01, 3.02 and
3.03 shall be made by means of deductions from a Participant's Earnings in each
payroll period. Contributions made under Sections 3.01, 3.02, 3.03 and 3.04
shall be collected by the Employer, credited to the applicable Accounts, and
paid to the Trustee as soon as reasonably possible, but in no event later than
the 15th business day of the month immediately following the month in which such
amounts would otherwise have been paid to the Participant.

         3.06 LIMITATION ON CONTRIBUTIONS: Notwithstanding any other provision
in the Plan (except Section 2.06), the provisions of this Section 3.06 shall
apply to limit Employee and Company Contributions to the Plan.

              (a)  Definitions: For purposes of this Section 3.06, the following
                   terms shall have the meanings set forth herein:

                   i.   "Actual Deferral Percentage" shall be the average of the
                        ratios ("Actual Deferral Ratios" or "ADRs"), calculated
                        separately for each Employee in the HCE Group and the
                        Non-HCE Group, of:

                        (A) each Employee's Elective Deferrals and amounts
                            treated as his Elective Deferrals actually paid over
                            to the Trust Fund as contributions on behalf of such
                            Employee for the Plan Year, to

                        (B) the Employee's Compensation for the Plan Year.

                        An Elective Contribution will be taken into account in
                        calculating the Actual Deferral Percentage for a Plan
                        Year only if:

                            (1) it relates to Compensation that either would
                                have been received by the Employee during the
                                Plan Year (but for the deferral election) or is
                                attributable to services performed by the
                                Employee during the Plan Year and would have
                                been received by the Employee within 2 1/2months
                                after the close of the Plan Year (but for the
                                deferral election); and

                            (2) it is allocated to the Employee's Accounts as of
                                a date within the relevant Plan Year. For this


                                       11
<PAGE>

                                purpose, an Elective Contribution is considered
                                allocated as of the date the allocation is no
                                longer contingent on participation in the Plan
                                or the performance of services, provided that
                                the Elective Contribution is actually paid to
                                the Trust Fund no later than 12 months after the
                                close of the Plan Year to which the contribution
                                relates.

                        In computing the Actual Deferral Percentage for all
                        Employees, the Employer may elect to take into account
                        Qualified Matching Contributions and Qualified
                        Nonelective Contributions, provided that the
                        requirements of Treasury Regulation Section
                        1.401(k)-1(b)(5) are satisfied.

                        Notwithstanding any other provision of this Section
                        3.06, if Elective Contributions are taken into account
                        for purposes of the Contribution Percentage Test of
                        subsection (d) for any Plan Year, such contributions
                        shall not be taken into account under paragraph (A) of
                        this subsection (a)(i) for such Plan Year.

                   ii.  "Compensation" means compensation as defined under Code
                        Section 414(s), as determined by the Plan Administrator.

                   iii. "Contribution Percentage" shall be the average of the
                        ratios ("Actual Contribution Ratios" or "ACRs"),
                        calculated separately for each Employee in each of the
                        HCE Group and Non-HCE Group, of:

                        (A) the sum of the Matching Contributions and Employee
                            Contributions paid under the Plan on behalf of such
                            Employee for the Plan Year, to

                        (B) Employee's Compensation for the Plan Year.

                        In computing the Contribution Percentage, the Employer
                        may elect to take into account Elective Contributions
                        and Qualified Nonelective Contributions under the Plan
                        or any other plan of the Employer, to the extent
                        permitted under applicable Treasury Regulations.

                        If Matching Contributions are taken into account for
                        purposes of the Actual Deferral Percentage Test of
                        subsection (c) of this Section 3.06 for any Plan Year,
                        such contributions shall not be taken into account under
                        paragraph (A) of this subsection (a)(iii) for such Plan
                        Year.



                                       12
<PAGE>

                   iv.  "Elective Contributions" are contributions by the
                        Employer to a retirement plan that were subject to an
                        election under a cash or deferred arrangement (whether
                        or not a tax-qualified cash or deferred arrangement). No
                        amount that has become currently available to an
                        Employee or that is designated or treated as an
                        after-tax Employee Contribution may be treated as an
                        Elective Contribution.

                   v.   "Elective Deferrals" means, with respect to any taxable
                        year, the sum of:

                        (A) any Elective Contribution under a tax-qualified cash
                            or deferred arrangement (as defined in Code Section
                            401(k)) to the extent not includible in a
                            Participant's gross income for the taxable year
                            under Code Section 402(e)(3) (determined without
                            regard to the limits in Code Section 402(g)),

                        (B) any employer contribution to a simplified employee
                            pension plan (as defined in Section 408(k)) to the
                            extent not includible in a Participant's gross
                            income for the taxable year under Code Section
                            402(h)(1)(B) (determined without regard to the
                            limits in Code Section 402(g)),

                        (C) any employer contribution to purchase an annuity
                            contract under Code Section 403(b) made under a
                            salary reduction agreement (within the meaning of
                            Code Section 3121(a)(5)(D)); unless such
                            contribution is made pursuant to an irrevocable
                            election made by the Employee at the time he becomes
                            eligible to participate in the agreement or is made
                            pursuant to a similar arrangement involving an
                            irrevocable election specified in Treasury
                            Regulations, and

                        (D) any employee contribution to a trust described in
                            Code Section 501(c)(18), to the extent deductible
                            from the Employee's income for the taxable year
                            under Code Section 501(c)(18) (determined without
                            regard to the limits in Code Section 402(g)).

                   vi.  "Employee Contributions" means any mandatory or
                        voluntary contribution to the Plan that is treated at
                        the time of contribution as an after-tax employee
                        contribution and is allocated to a separate account to
                        which attributable earnings and losses are allocated.

                   vii. "Excess Aggregate Contributions" means, with respect to
                        any Plan Year, the excess of:
<PAGE>
                         (A)  the aggregate amount of the Matching Contributions
                              and Employee Contributions actually made on behalf
                              of HCEs for the Plan Year, including any Qualified
                              Nonelective Contribution or Elective Deferral
                              taken into account in computing the Contribution
                              Percentage, but excluding Qualified Matching
                              Contributions treated as Elective Deferrals under
                              subsection (a)(i) of this Section 3.06, over

                         (B)  the maximum amount of contributions described in
                              paragraph (A) above that are permitted under the
                              limitations of subsection (d) of this Section
                              3.06.

                         The amount of Excess Aggregate Contributions for a Plan
                         Year shall be determined only after first determining
                         the Excess Contributions that are treated as Employee
                         Contributions due to Recharacterization under
                         subsection (e)(ii) of this Section 3.06.

                  viii.  "Excess Contributions" means, with respect to any Plan
                         Year, the excess of:

                         (A)  the aggregate amount of Elective Contributions,
                              (including Qualified Nonelective Contributions and
                              Qualified Matching Contributions that are treated
                              as Elective Contributions), actually paid over to
                              the Trust Fund on behalf of HCEs for such Plan
                              Year, over

                         (B)  the maximum amount of such contributions permitted
                              under the limitations of subsection (c) of this
                              Section 3.06.

                  ix.    "Excess Deferral" means the Elective Deferrals of any
                         individual for any taxable year to the extent the
                         amount of such deferrals for the taxable year exceeds
                         the limit in subsection (b) of this Section 3.06, but
                         excluding amounts described in Section 1105(c)(5) of
                         the Tax Reform Act of 1986.

                  x.     "Highly Compensated Employee" means an Employee who
                         performs service during the Determination Year who:

                         (A)  is a five percent (5%) owner (as defined in Code
                              Section 416(i)(1)(A)(iii)) at any time during the
                              Determination Year or the Look-Back Year; or

                         (B)  receives compensation in excess of $80,000
                              (indexed in accordance with Code Section 415(d))
                              during the Look-Back Year and, if the Employer so
                              elects, was a member of the top-paid group during
                              the Look-Back Year.


                                       14
<PAGE>

                         Special Rules: For purposes of this subsection (x)
                         only: (a) the "Determination Year" means the Plan Year
                         for which the identification of HCEs is being made; (b)
                         the "Look-Back Year" means the 12-month period
                         immediately preceding the Determination Year or, if the
                         Employer so elects, the calendar year ending with or
                         within the Determination Year; (c) the "top-paid group"
                         means the top 20% of Employees ranked on the basis of
                         compensation received during the Plan Year; (d)
                         "compensation" means compensation within the meaning of
                         Code Section 415(c)(3), including Elective Deferrals or
                         salary reduction contributions to a cafeteria plan,
                         cash or deferred arrangement or tax-sheltered annuity
                         and, effective January 1, 1998, elective amounts
                         excluded from taxable income under Section 132(f)(4) of
                         the Code; and (e) employers required to be aggregated
                         under Code Sections 414(b), (c), (m) or (o) are treated
                         as a single employer with the Employer.

                  xi.    "HCE Group" means the group consisting of all Highly
                         Compensated Employees.

                  xii.   "Matching Contributions" means:

                         (A)  any contribution to the Plan made by the Employer
                              (including a contribution made at the Employer's
                              discretion) on behalf of an Employee on account of
                              an Employee Contribution made by such Employee,

                         (B)  any contribution to the Plan made by the Employer
                              (including a contribution made at the Employer's
                              discretion) on behalf of an Employee on account of
                              an Elective Deferral made on an Employee's behalf,
                              and

                         (C)  Any Forfeiture allocated on the basis of Employee
                              Contributions, Matching Contributions or Elective
                              Contributions.

                  xiii.  "Nonelective Contributions" means contributions made by
                         the Employer (other than Matching Contributions) with
                         respect to which the Employee may not elect to receive
                         the contributions in cash or other benefits instead of
                         being contributed to the Plan.

                  xiv.   "Non-HCE Group" means the group consisting of all
                         Employees who are not Highly Compensated Employees.

                  xv.    "Qualified Matching Contributions" means Matching
                         Contributions which satisfy the requirements of
                         subsection (a)(xvi).


                                       15
<PAGE>

                  xvi.   "Qualified Nonelective Contributions" means any
                         contribution (other than a Matching Contribution or
                         Elective Contribution) with respect to which the
                         Employee may not elect to receive the contribution in
                         cash instead of being contributed to the Plan, and only
                         if such contribution is nonforfeitable when made and
                         distributable only upon the occurrence of one (1) of
                         the following events:

                         (A)  the Employee's retirement, death, disability or
                              separation from service;

                         (B)  the termination of the Plan without establishment
                              or maintenance of another defined contribution
                              plan (other than an ESOP or SEP) by the Employer;

                         (C)  the Employee's attainment of age 59 1/2;

                         (D)  the sale or other disposition by the Employer to
                              an unrelated corporation of substantially all of
                              the assets used in the trade or business to which
                              the Plan relates, but only with respect to
                              Employees who continue employment with the
                              acquiring corporation which does not maintain the
                              Plan after the disposition; and

                         (E)  the sale or other disposition by the Employer of
                              its interest in a subsidiary to an unrelated
                              entity, but only with respect to Employees who
                              continue employment with the subsidiary, the
                              acquiring entity of which does not maintain the
                              Plan after the disposition.

                         Paragraphs (B), (D) and (E) above apply only if the
                         Employer, as the transferor corporation, continues to
                         maintain the Plan for its remaining Employees.
                         Nonelective Contributions which may be treated as
                         Matching Contributions must satisfy these requirements
                         without regard to whether they are actually taken into
                         account as Matching Contributions.

              (b) Individual Limitation: The amount of Elective Deferrals that a
                  Participant may make in any taxable year shall be limited to
                  $9,500 ($11,000 effective January 1, 2002), as adjusted
                  annually for changes in cost of living pursuant to Code
                  Section 402(g).

                  To the extent a Participant has made Elective Deferrals to the
                  Plan in excess of the amount set forth above, such Excess
                  Deferrals shall be distributed to him no later than April 15
                  following the end of the taxable year during which such
                  Elective Deferrals are made. If a Participant makes Elective
                  Deferrals to this Plan and to any other plan or arrangement

                                       16
<PAGE>

                  in a single taxable year, he may allocate the amount of any
                  Excess Deferrals for such taxable year among all such plans.
                  No later than March 1 following the close of the taxable year
                  during which the Excess Deferrals are made, the Participant
                  shall notify the Plan Administrator in writing of the amount
                  of the Excess Deferrals to be allocated to this Plan. Such
                  amount (including income thereon) shall then be distributed to
                  the Participant no later than the next following April 15th.

              (c) Before-Tax Contribution Limitation: ("Actual Deferral
                  Percentage Test") The Actual Deferral Percentage for the HCE
                  Group for a Plan Year shall bear a relationship to the Actual
                  Deferral Percentage for the Non-HCE Group that meets either of
                  the following tests:

                  i.     The Actual Deferral Percentage for the HCE Group for a
                         Plan Year shall not be more than the Actual Deferral
                         Percentage for the non-HCE Group for the preceding Plan
                         Year, multiplied by 1.25; or

                  ii.    The excess of the Actual Deferral Percentage for the
                         HCE Group for the Plan Year over that of Non-HCE Group
                         for the preceding Plan Year is not more than 2
                         percentage points, and the Actual Deferral Percentage
                         for the HCE Group for the Plan Year is not more than
                         the Actual Deferral Percentage for the Non-HCE Group
                         for the preceding Plan Year, multiplied by 2.

                  For purposes of applying this subsection (c), all Elective
                  Contributions that are made under two (2) or more plans that
                  are aggregated for purposes of Code Sections 401(a)(4) or
                  410(b) (other than Code Section 410(b)(2)(A)(ii)) are to be
                  treated as made under a single plan. If two (2) or more plans
                  are permissively aggregated for purposes of Code Section
                  401(k), the aggregated plans must also satisfy Code Sections
                  401(a)(4) and 410(b) as though they were a single plan.

                  The Actual Deferral Percentage taken into account for any
                  Highly Compensated Employee who is a Participant in two (2) or
                  more cash or deferred arrangements maintained by the Employer
                  or Affiliated Company shall be the sum of the Elective
                  Deferrals for that Employee under each 401(k) plan of the
                  Employer or Affiliated Company, divided by the Participant's
                  Compensation from the Employer and Affiliated Company.

                  Except to the extent provided under regulations or rules of
                  the Secretary of the Treasury, Excess Contributions
                  distributed to Participants who are Highly Compensated
                  Employees in accordance with subsection (b) above shall be
                  treated as Employee Contributions for purposes of this
                  subsection (c).


                                       17
<PAGE>

                  If, in order to satisfy the Actual Deferral Percentage Test of
                  this subsection (c), Excess Contributions must be distributed
                  to Highly Compensated Employees, the total dollar amount of
                  such Excess Contributions determined under this paragraph
                  shall be allocated and distributed in accordance with
                  subsection (e) of this Section 3.06.

              (d) Company and Supplemental Contribution Limitation:
                  ("Contribution Percentage Test") The Contribution Percentage
                  for the HCE Group for a Plan Year shall not exceed the greater
                  of:

                  i.     125% of the Contribution Percentage for the Non-HCE
                         Group for the preceding Plan Year; or

                  ii.    the lesser of 200% of the Contribution Percentage for
                         the Non-HCE Group for the preceding Plan Year, or the
                         Contribution Percentage for the Non-HCE Group for the
                         preceding Plan Year, plus two (2) percentage points.

                  If two (2) or more plans of the Employer to which Matching
                  Contributions, Employee Contributions or Elective Deferrals
                  are made are treated as a single plan for purposes of Code
                  Section 410(b), such plans shall be treated as a single plan
                  for purposes of this subsection (d). The Contribution
                  Percentage taken into account for any Highly Compensated
                  Employee who is a Participant in two (2) or more plans of the
                  Employer or an Affiliated Company to which Matching
                  Contributions or Employee Contributions are made shall be the
                  sum of the Matching Contributions and Employee Contributions
                  made for the HCE under each such plan, divided by his or her
                  Compensation from the Employer and Affiliated Company.

                  Any Employee who is eligible to make an Employee Contribution
                  (or, if the Employer takes Elective Contributions into
                  account, Elective Contributions) or to receive a Matching
                  Contribution shall be considered an eligible Employee. In
                  addition, if an Employee Contribution is required as a
                  condition of participation in the Plan, any Employee who would
                  be a Participant in the Plan if such Employee made such a
                  contribution shall be treated as an eligible Employee on
                  behalf of whom no Employer contributions are made.

                  The Employer may elect to take into account Elective
                  Contributions and/or Qualified Nonelective Contributions
                  allocated to a Participant's Accounts under the Plan or any
                  other plan it sponsors if the conditions described in Section
                  1.401(m)-1(b)(5) of the Treasury regulations are satisfied.


                                       18
<PAGE>

                  If, in order to satisfy the Contribution Percentage Test of
                  this subsection (d), Excess Aggregate Contributions must be
                  distributed to Highly Compensated Employees, the total dollar
                  amount of such Excess Aggregate Contributions determined under
                  this paragraph shall be allocated and distributed in
                  accordance with subsection (e) of this Section 3.06.

                  Notwithstanding the foregoing, Employees who are members of a
                  collective bargaining unit shall not be included in applying
                  the provisions of this subsection (d).

              (e) The Plan shall be treated as satisfying the requirements of
                  subsections (c) and (d) above for any Plan Year if, before the
                  close of the following Plan Year:

                  i.     the Participant's share of Excess Contributions and
                         Excess Aggregate Contributions for such Plan Year is
                         distributed to the Participant; or

                  ii.    in the case of Excess Contributions, the Participant
                         elects to treat his share of such Excess Contributions
                         as distributed and recontributed by the Participant to
                         the Plan as a Non Tax-Deferred Employee Contribution
                         ("Recharacterized"), to the extent allowed under
                         applicable Treasury regulations; or

                  iii.   in the case of Excess Aggregate Contributions, such
                         Contributions are forfeited to the extent they are
                         forfeitable.

                  The Plan Administrator shall determine which of methods (i),
                  (ii), or (iii) above shall be utilized; provided, however,
                  that such determination shall be made on a consistent and
                  non-discriminatory basis.

                  If Excess Contributions are to be distributed to Highly
                  Compensated Employees, the Elective Deferrals of the Highly
                  Compensated Employee with the highest dollar amount of
                  Elective Deferrals for the Plan Year shall be reduced by the
                  amount required to cause that Highly Compensated Employee's
                  Elective Deferrals to equal the dollar amount of Elective
                  Deferrals of the Highly Compensated Employee with the next
                  highest dollar amount of Elective Deferrals. This amount is
                  then distributed to the Highly Compensated Employee with the
                  highest dollar amount. However, if a lesser reduction, when
                  added to the total dollar amount already distributed under
                  this provision, would equal the total Excess Contributions,
                  the lesser reduction amount shall be distributed. If the total
                  dollar amount distributed is less than the total Excess
                  Contributions for the Plan Year for all affected Highly
                  Compensated

                                       19
<PAGE>

                  Employees, this process is repeated until the total dollar
                  amount distributed equals the total Excess Contributions for
                  the Plan Year.

                  Excess Aggregate Contributions shall be distributed to Highly
                  Compensated Employees in the same manner, starting with the
                  Highly Compensated Employee on whose behalf the highest dollar
                  amount of Employee and Matching Contributions were made, until
                  the Contribution Percentage Test is satisfied.

                  The amount of Excess Contributions to be distributed or
                  Recharacterized shall be reduced by Excess Deferrals
                  previously distributed for the taxable year ending in the same
                  Plan Year. Excess Deferrals to be distributed to Participants
                  for a taxable year will be reduced by any Excess Contributions
                  that have previously been distributed or Recharacterized for
                  the Plan Year beginning in the same taxable year.

                  If Matching Contributions have been made by the Employer on
                  account of Excess Contributions which are distributed or
                  Recharacterized, such Matching Contributions and income
                  allocable thereto shall be forfeited and applied to reduce
                  Employer contributions in subsequent Plan Years.

                  Excess Contributions must be corrected by the close of the
                  Plan Year following the Plan Year for which they were made.
                  Excess Contributions that are Recharacterized will remain
                  subject to the nonforfeitability requirements and distribution
                  limitations that apply to Elective Contributions.

              (f) The distribution of Excess Contributions and/or Excess
                  Aggregate Contributions will include the income allocable
                  thereto. The income allocable to Excess Contributions and/or
                  Excess Aggregate Contributions includes income for the Plan
                  Year for which the Excess Contributions and/or Excess
                  Aggregate Contributions were made.

                  i.     Income allocable to an Employee's share of Excess
                         Contributions shall be determined by multiplying the
                         income for the Plan Year allocable to all Elective
                         Contributions and amounts treated as Elective
                         Contributions (for purposes of this paragraph only, the
                         "Effective Elective Contributions") for the Plan Year
                         by a fraction:

                         (A)  the numerator of which is the Employee's share of
                              Excess Contributions for the Plan Year; and

                         (B)  the denominator of which is the sum of: (1) the
                              Employee's total account balance attributable to
                              Effective Elective Contributions as of the
                              beginning of the Plan Year; plus (2) the
                              Employee's Effective Elective Contributions for
                              the Plan Year.

                                       20
<PAGE>

                  ii.    Income allocable to an Employee's Excess Aggregate
                         Contributions shall be determined by multiplying the
                         income allocable to all Matching Contributions,
                         Employee Contributions and any Qualified Nonelective
                         Contributions or Elective Deferrals for the Plan Year
                         that are taken into account in computing the
                         Contribution Percentage, excluding Qualified Matching
                         Contributions treated as Elective Contributions
                         (together, for purposes of this paragraph only, the
                         "Effective Matching/Employee Contributions") by a
                         fraction:

                         (A)  the numerator of which is the Employee's Excess
                              Aggregate Contributions for the Plan Year; and

                         (B)  the denominator of which is the sum of (1) the
                              Employee's total account balance attributable to
                              Effective Matching/Employee Contributions as of
                              the beginning of the Plan Year; plus (2) the
                              Employee's Effective Matching/ Employee
                              Contributions for the Plan Year.

              (g) In addition to the limitations described in subsections (b),
                  (c) and (d) above, solely for Plan Years ending before January
                  1, 2002, if:

                  i.     the Actual Deferral Percentage for the HCE Group
                         exceeds the limits described under subsection (c)(i);
                         and

                  ii.    the Contribution Percentage for the HCE Group exceeds
                         the limits described under subsection (d)(i); and

                  iii.   the sum of Actual Deferral Percentage and the
                         Contribution Percentage exceeds the limit described in
                         Treasury Regulation Section 1.401(m)-2(b)(3),

                  the Employer will reduce the Actual Deferral Percentage of the
                  Highly Compensated Employees in the manner described in
                  Treasury Regulation Section 1.401(k)-1(f)(2), as provided in
                  Treasury Regulation Section 1.401(m)-2(c)(3).

         3.07 CHANGE IN AMOUNT OF CONTRIBUTIONS: Subject to the provisions of
Section 3.06, a Participant may change the rate of his Basic Tax-Deferred
Employee Contributions, Supplemental Tax-Deferred Employee Contributions, Basic
Non Tax-Deferred Employee Contributions or Supplemental Non Tax-Deferred
Contributions by giving prior notice to the Employer in accordance with the
procedure established by the Plan Administrator. Changes will be effective with
the next Enrollment Date following the expiration of the time period prescribed
by the Plan Administrator for the submission of a Participant's notice of
election to change his Contributions.

         3.08 VOLUNTARY SUSPENSION OF PARTICIPANT CONTRIBUTIONS: A Participant
may suspend his Basic Tax-Deferred Employee Contributions, Supplemental
Tax-

                                       21
<PAGE>

Deferred Employee Contributions, Basic Non Tax-Deferred Employee Contributions,
Supplemental Non Tax-Deferred Contributions and Gainsharing Contributions by
giving prior notice to the Employer in accordance with the procedure established
by the Plan Administrator. The Plan Administrator shall establish the time
period in which such notice must be submitted. A suspension of Basic
Tax-Deferred Employee Contributions will automatically cause a suspension of the
Employee's Supplemental Tax-Deferred Employee Contributions. A suspension of
Basic Non Tax-Deferred Employee Contributions will automatically cause a
suspension of the Employee's Supplemental Non Tax-Deferred Employee
Contributions. A Participant may not suspend his contributions for less than six
(6) months. The Participant may resume making contributions as of any Enrollment
Date occurring six (6) months after the effective date of the suspension by
giving prior notice to the Employer in accordance with the procedure established
by the Plan Administrator.

         3.09 PLAN TO PLAN TRANSFER: An Employee who previously participated in
one of the following retirement plans may elect to transfer the vested balance
of his account under such plan to this Plan: the Bowater Incorporated Salaried
Employees' Savings Plan, the Bowater Incorporated Savings Plan for Certain
Hourly Employees or such other tax-qualified retirement plan as may be approved
by the Plan Administrator. The Employee shall continue to accrue service under
such other plan(s) on account of his employment with the Employer, and any
unvested amounts held under such plan(s) shall vest and become eligible for a
Plan to Plan Transfer to this Plan in accordance with the vesting schedule of
such other plan(s). Transfers under this Section 3.09 shall be subject to the
applicable restrictions of Article 8 but shall not be subject to the limitations
of Sections 3.06, 4.06, or 4.07; nor shall amounts transferred under this
Section 3.09 be included in the calculation of the Participant's rate of Basic
or Supplemental Contributions (Tax-Deferred or Non Tax-Deferred) pursuant to
Sections 3.01 through 3.03.

         The amounts transferred shall be treated as follows:

              (a) The portion attributable to pre-tax contributions pursuant to
                  Code Section 401(k) shall be credited to the Employee's
                  Supplemental Tax-Deferred Employee Contribution Account;

              (b) The portion attributable to after-tax contributions pursuant
                  to Code Section 401(a) shall be credited to the Employee's
                  Supplemental Non Tax-Deferred Employee Contribution Account;

              (c) The portion attributable to matching contributions made by the
                  Company or Affiliated Company pursuant to Code Section 401(a)
                  shall be credited to the Employee's Matching Contribution
                  Account.

         The Plan Administrator shall require the Employee to furnish a written
statement containing such information as may be necessary to establish that the
transfer does not contain amounts from sources other than provided above and
that the transfer otherwise meets the requirements of applicable law.

                                       22
<PAGE>

         3.10 EMPLOYMENT WITH AFFILIATED COMPANY: A Participant may not
contribute to the Plan while he is employed by an Affiliated Company which is
not an Employer, except to the extent that he continues to receive Earnings from
an Employer. A Participant's prior and concurrent service with an Affiliated
Company which is not an Employer, or as a leased employee (within the meaning of
Code Section 414(n)) for the Company or an Affiliated Company, shall be counted
as Years of Service under the Plan to the extent such credit would be given
under Section 2.05 if such Affiliated Company had been an Employer. For purposes
of this Section 3.10, the fact that the Participant has made no contributions
under the Plan shall be disregarded.

         3.11 ROLLOVER CONTRIBUTIONS: An Employee may request that the Plan
Administrator direct the Trustee to accept any of the following amounts from or
on behalf of the Employee and place them in a Rollover Contribution Account
established on his behalf:

              (a) amounts transferred to this Plan directly from another trust
                  or annuity contract maintained as part of a plan qualified
                  under Code Section 401(a);

              (b) lump sum distributions received by the Employee from another
                  qualified plan which are eligible for tax-free rollover
                  treatment and which are transferred by the Employee to this
                  Plan within 60 days following his receipt thereof;

              (c) amounts transferred to the Plan from a conduit individual
                  retirement account (as defined in Code Section 408) consisting
                  solely of assets and the income thereon which were previously
                  distributed to the Employee from another tax-qualified
                  retirement plan as part of a qualifying rollover distribution
                  (as defined in Code Section 402(a)(5)) to the individual
                  retirement account within 60 days of their receipt; provided
                  that such assets are transferred directly to the Plan from the
                  conduit individual retirement account or are transferred to
                  the Plan within 60 days of their distribution to the Employee
                  from the conduit individual retirement account.

         Any amounts transferred into the Plan under this Section 3.11 shall be
by check. No securities may be transferred. The Employee shall make application
to the Plan Administrator in writing, submitting whatever information is deemed
necessary and sufficient by the Plan Administrator to establish compliance with
the requirements of this Section 3.11. Amounts accepted by the Plan
Administrator shall be placed in a Rollover Contribution Account established for
the Employee and shall become part of the Trust Fund. The Employee shall have a
fully vested and nonforfeitable right to amounts held in his Rollover
Contribution Account at any time. The Employee shall be able to direct the
investment of his Rollover Contribution Account in accordance with the
provisions of Article 5.

         3.12 CONTRIBUTIONS UPON RETURN FROM MILITARY LEAVE. Effective December
12, 1994, a Participant returning to employment with the Employer from a period
of Uniformed Service Leave shall be entitled to make up the Basic and
Supplemental Tax-Deferred

                                       23
<PAGE>

and Non Tax-Deferred Contributions (excluding interest and earnings on such
contributions) the Participant would have been entitled to make had the
Participant worked for the Employer during the period of Uniformed Service
Leave. To the extent of such make-up contributions allocated to the
Participant's Basic Tax-Deferred and Basic Non Tax-Deferred Employee
Contribution Accounts, the Company shall make Matching Contributions in
accordance with Section 4.01 on behalf of the Participant for such period of
Uniformed Service Leave.

ARTICLE 4: EMPLOYER CONTRIBUTIONS

         4.01 MATCHING CONTRIBUTIONS: With respect to each Active Participant in
its employ, the Employer shall make a Matching Contribution to the Plan equal to
50% of such Participant's Basic Employee Contributions (Tax-Deferred and/or Non
Tax-Deferred). Contributions by the Employer shall be paid to the Trustee
promptly and credited to each Participant's Matching Contribution Account.

         4.02 INITIAL COMPANY CONTRIBUTIONS: With respect to each Employee who
was employed by the Employer on June 23, 1986, the Employer made an Initial
Company Contribution to the Plan from its Current or Accumulated Profits in an
amount sufficient to purchase fifty (50) Shares of Company Stock. Such
Contributions were made as of the first (1st) business day of the quarter after
the Employee was first eligible for participation under Section 2.01(b). Such
Contributions were paid to the Trustee promptly and credited to each
Participant's Initial Company Contribution Account. There shall be no Initial
Company Contributions for individuals who first become Employees after June 23,
1986.

         4.03 PAYROLL-BASED EMPLOYEE STOCK OWNERSHIP CONTRIBUTIONS: Prior to
January 1, 1987, the Employer made Payroll-Based Employee Stock Ownership
Contributions to the Plan which were allocated to the Payroll-Based Employee
Stock Ownership Account of each eligible Employee.

         4.04 MODE OF PAYMENT: Employer contributions made under Sections 4.01
and 4.02 shall be made in cash.

         Employer contributions made under Section 4.03 may be paid in Shares of
Company Stock, cash or both. The amount contributed in Shares of Company Stock
shall be determined by averaging the closing prices of such Shares of Company
Stock reported on the New York Stock Exchange consolidated tape for the 20
consecutive trading days immediately preceding the date of the transfer of such
Shares of Company Stock to the Trust Fund and multiplying the average value so
determined by the number of Shares of Company Stock transferred. Such
contributions will be made within thirty (30) days following the due date,
including extensions, for filing the Employer's Federal income tax return for
the taxable year which coincides with such Plan Year.

         Promptly upon receipt of any cash contribution pursuant to Section
4.03, the Trustee shall apply such contribution to the purchase, in one or more
transactions, of the maximum number of whole Shares of Company Stock obtainable
at the then prevailing prices, including brokerage commissions and other
reasonable expenses incurred in connection with such purchases. Such

                                       24
<PAGE>

purchase shall be made as directed by the Committee in one of the following
ways: (i) privately, from the Company or from another person; (ii) publicly, on
any securities exchange where Shares of Company Stock are traded; or (iii)
pursuant to Section 7.06(c). Purchases shall be on such terms as to price,
delivery and otherwise as the Trustee may determine to be in the best interest
of the Participants. No purchase of Shares of Company Stock shall be made from
the Company at a price in excess of the fair market value of such Shares on the
date of purchase, which shall be the highest sales prices of the Shares as
reported in The Wall Street Journal report of NYSE-Composite Transactions, on
the investment date as of which such purchase is made (or the next preceding day
on which such Shares are traded on the New York Stock Exchange, if the Shares
are not traded on the New York Stock Exchange on the investment date). After
receipt of any cash contributions made under Section 4.03, the Trustee shall use
the cash to acquire Shares of Company Stock no later than the 30th day following
receipt of the contribution, having due regard for any applicable requirement of
law.

         The cash balance of any contribution received pursuant to Section 4.03
which remains after the maximum number of whole Shares of Company Stock shall
have been purchased pursuant to this Section 4.04, shall be held by the Trustee
for future investment.

         4.05 RETURN OF CERTAIN CONTRIBUTIONS TO EMPLOYER: The following
contributions may be returned to an Employer as follows:

              (a) Any contribution made by an Employer under a mistake of fact
                  may be returned to the Employer within one (1) year of the
                  contribution;

              (b) Any contribution which is disallowed as a deduction under Code
                  Section 404 may be returned to an Employer within one (1) year
                  of its disallowance;

              (c) Any contribution made by an Employer that is conditioned on
                  the initial qualification of the Plan under Code Sections
                  401(a), 401(k) and 401(m), may be returned if a timely
                  determination letter request is filed with the Internal
                  Revenue Service and the Plan receives an adverse
                  determination.

         The amount which may be returned to an Employer shall not exceed the
amount of the Employer's contribution, reduced by any investment losses
attributable to the contribution. No contribution or portion thereof will be
returned to an Employer if the return of such amount would cause the value of a
Participant's Accounts to be less than their value had the contribution not been
made.

         4.06 STATUTORY LIMITATION ON ADDITIONS:

              (a) Notwithstanding any other provisions of the Plan except
                  Section 2.06, "the annual additions" to a Participant's
                  Accounts shall not exceed the lesser of:

                  i.     the Maximum Permissible Dollar Amount (as defined
                         below); and

                                       25
<PAGE>

                  ii.    25% (100% effective January 1, 2002) of the
                         Participant's Total Compensation (as defined below) for
                         the Plan Year.

              (b) For purposes of Sections 4.06 and 4.07, the following
                  definitions shall apply:

                  i.     "Annual additions" shall mean the sum of:

                         (A)  Employer contributions and Forfeitures allocated
                              to a Participant's Accounts under Sections 4.01,
                              4.02 and 4.03; and

                         (B)  Employee Contributions allocated to the
                              Participant's Accounts under Sections 3.01, 3.02,
                              3.03 and 3.04; and

                  ii.    The initial "Maximum Permissible Dollar Amount" shall
                         mean $30,000 (effective January 1, 2002, $40,000), and
                         the initial "Maximum Permissible Benefit" shall mean
                         $125,000 (effective January 1, 2001, $140,000). These
                         limitations shall be adjusted automatically as the
                         limits set forth in Code Sections 415(c)(l)(A) and
                         415(b)(1)(A) are adjusted for the cost of living in
                         accordance with Code Section 415(d).

                  iii.   "Total Compensation" shall mean, (A) for Plan Years
                         beginning before December 31, 1997, the amount reported
                         on the Participant's Form W-2 as "wages" for the
                         taxable year that coincides with the Plan Year; and (B)
                         for Plan Years beginning on or after January 1, 1998,
                         all pay that is reported in Box 1 of Internal Revenue
                         Service Form W-2, plus amounts excluded from income
                         under Code Sections 125 and 132(f)(4) and the
                         Participant's Elective Contributions.

              (c) The limitations of this Section 4.06 with respect to any
                  Participant who at any time has been a participant in any
                  other defined contribution plan maintained by the Company or
                  an Affiliated Company shall apply as if the total
                  contributions made under all such defined contribution plans
                  were made to this Plan.

              (d) If the limitations of this Section 4.06 would be exceeded in
                  any Plan Year, the Plan Administrator shall take the following
                  action in any order as required and to the extent necessary to
                  prevent the limitations from being exceeded:

                  i.     discontinue or reduce a Participant's Basic and/or
                         Supplemental Tax-Deferred Employee Contributions for
                         the Plan Year;


                                       26
<PAGE>

                  ii.    discontinue a Participant's Gainsharing Contributions
                         for the Plan Year;

                  iii.   discontinue or reduce the Participant's Basic and/or
                         Supplemental Non Tax-Deferred Employee Contributions
                         for the Plan Year;

                  iv.    instruct the Trustee to return all or a portion of the
                         Participant's Gainsharing Contributions or Supplemental
                         Tax-Deferred or Non Tax-Deferred Employee Contributions
                         made during the Plan Year;

                  v.     instruct the Trustee to return all or a portion of the
                         Participant's Basic Tax-Deferred Employee Contributions
                         made during the Plan Year;

                  vi.    instruct the Employer to reduce or eliminate its
                         Matching Contributions to Participants' Accounts for
                         the remainder of the Plan Year;

                  vii.   instruct the Trustee to return to the Employer all or a
                         portion of any Matching Contributions allocated to
                         Participants' Accounts for the Plan Year; or

                  viii.  apply any amounts in excess of the limitations of this
                         Section 4.06 ("Excess Amounts") to reduce Matching
                         Contributions allocated to a Participant's Account for
                         the next Plan Year (and succeeding Plan Years, as
                         necessary), provided that the Participant is covered by
                         the Plan as of the end of the Plan Year. If the
                         Participant is not covered by the Plan as of the end of
                         the Plan Year, then such Excess Amounts shall be held
                         unallocated in a suspense account for the Plan Year and
                         reallocated in the next Plan Year to the Accounts of
                         all of the remaining Participants. Such reallocation
                         may not result in the limitations of this Section 4.06
                         being exceeded for any Participant for the Plan Year.
                         Any Excess Amounts not allocated to Participants'
                         Accounts from a suspense account shall be used to
                         reduce Matching Contributions allocated to the Accounts
                         of all of the Participants remaining in the Plan in
                         subsequent Plan Years, as necessary to reduce the
                         balance of the suspense account to zero.

         Actions taken under this Section 4.06 shall not be considered a
suspension of Participant Contributions, as provided in Section 3.08.

         Notwithstanding the foregoing, the provisions of this Section 4.06
shall be interpreted in a manner consistent with the provisions of Code Section
415, which are incorporated herein by reference.

                                       27
<PAGE>
         4.07 COMBINED PLANS LIMITATION: For Plan Years beginning before January
1, 2000, if a Participant is also a participant in any defined benefit pension
plan maintained by the Employer, the benefits provided under this Plan shall be
limited so that the sum of the Participant's "defined benefit fraction" and the
"defined contribution fraction" shall not exceed 1.0 for any Plan Year.

         (a)  The term "defined contribution fraction" shall mean a fraction,
              the numerator of which is the sum of annual additions made to the
              Participant's Accounts for all Plan Years as of the end of the
              Plan Year and the denominator of which is the lesser of 125% of:
              (i) the Maximum Permissible Dollar Amount for the Plan Year and
              all prior Years of Service and (ii) 140% of 25% of the
              Participant's Total Compensation for that Plan Year and all prior
              Years of Service.

         (b)  The term "defined benefit fraction" shall mean a fraction, the
              numerator of which is the projected annual benefit for the
              Participant under all qualified retirement plans of the Employer,
              and the denominator of which is the lesser of: (i) 125% of the
              Maximum Permissible Benefit under the retirement plans for the
              Plan Year, and (ii) 140% of the Participant's average Total
              Compensation for the three (3) highest paid years. Such fraction
              shall be determined as of the end of the Plan Year.

         (c)  The Participant's projected annual benefit shall be determined
              under such retirement plans assuming that his earnings continue to
              his Normal Retirement Date at the same level as they are at the
              end of the Plan Year and that his service continues to accrue to
              his Normal Retirement Date without a Year of Break in Service. The
              terms "earnings," "service," "normal retirement date," and "break
              in service" shall have the same meaning as defined in such
              retirement plans.

         4.08 FORFEITURES. The amount of any Forfeitures under Section 7.04
shall be applied to reduce future Employer contributions under the Plan as soon
as practicable after the event giving rise to the Forfeiture shall have
occurred. In the event that the amount of Forfeitures exceeds the amount of
Employer contributions, Forfeitures shall be kept in a suspense account until
such Forfeitures, increased by the Earnings thereon and reduced by the losses
thereon, if any, are applied pursuant to this Section 4.08.

ARTICLE 5: INVESTMENT OPTIONS

         5.01 INVESTMENT OF CONTRIBUTIONS: Participant and Employer
contributions shall be invested by the Trustee, either as required by the Plan
or as directed by a Participant in one (1) or more of the Investment Funds,
which shall include the following:

         (a)  The Company Stock Fund: A fund which invests primarily in Shares
              of Company Stock. A small percentage of the Company Stock Fund
              shall be invested in money market instruments to facilitate daily
              cash transactions.


                                       28
<PAGE>

              Accounts in this Fund shall segregate, separately account for and
              respectively consist of Shares of Company Stock allocable to (i)
              Payroll-Based Employee Stock Ownership Contributions, (ii) Initial
              Company Contributions, and (iii) Employee Contributions (whether
              Basic or Supplemental, Tax-Deferred or Non Tax-Deferred).

              Any cash dividends received by the Trustee with respect to Shares
              of Company Stock held by the Plan shall be invested in additional
              Shares of Company Stock. Shares of Company Stock purchased from
              cash dividends, plus any other Shares of Company Stock received as
              a result of a stock split or a stock dividend, shall be allocated
              to a Participant's Company Stock Fund Accounts in proportion to
              the respective Shares of Company Stock credited to such Accounts
              as of the appropriate record date.

         (b)  Additional Investment Funds: Trustee, at the direction of the
              Company or its designee, shall establish one (1) or more
              additional Investment Funds as shall be deemed appropriate,
              including Investment Funds deemed appropriate for satisfying the
              requirements of ERISA Section 404(c) and regulations thereunder.

         (c)  Temporary Investment: The Trustee may temporarily invest all or
              any part of the Investment Funds in short and medium term
              securities, including but not limited to commercial paper, notes
              of finance companies and obligations of the U.S. Government or any
              instrumentality or agency thereof. The Board or its designee may
              from time to time specify additional temporary investment vehicles
              or may direct the Trustee in the temporary investment of the Trust
              Fund. The Trustee may invest all or part of any Investment Fund
              directly in the securities and obligations authorized for the
              respective Investment Fund or through the medium of any common,
              collective or commingled trust fund which is invested principally
              in securities and obligations authorized for the respective
              Investment Fund.

              The Plan Administrator may authorize changes in the Investment
              Funds as it, in its discretion, deems necessary and appropriate.

         5.02 INVESTMENT ELECTIONS BY PARTICIPANTS: Each Participant must elect
to have all Participant and Employer contributions (other than contributions
made under Sections 4.02 and 4.03) invested in one (1) or more of the available
Investment Funds in whole number percentages of his Contributions, provided that
the sum of such percentages equals 100%. Investment elections shall be made by
written, telephonic or electronic means established by the Plan Administrator
and directed to the Trustee. Basic and Supplemental Tax-Deferred and Non
Tax-Deferred Employee Contribution Accounts, Tax-Deferred and Non Tax-Deferred
Gainsharing Contribution Accounts, Matching Contribution Account and, if
applicable, Rollover Contribution Account shall be established for the
Participant in each Investment Fund in which


                                       29
<PAGE>

such Contributions are invested on his behalf. Contributions and earnings
thereon as to which no current, valid investment election has been made shall be
invested by the Trustee, in its discretion; provided, however, that if the
Trustee does not agree to undertake such investment responsibility, such
Contributions and earnings shall be temporarily invested in one (1) or more of
the investment vehicles authorized in subsection (c) of Section 5.01 until a
valid investment direction is obtained.

         5.03 CHANGES IN CURRENT INVESTMENT ELECTIONS: A Participant may change
his investment election at any time with respect to his Accounts (other than his
Initial Company Contribution Account and Payroll-Based Employee Stock Ownership
Contribution Account). Changes in investment elections shall be made in
accordance with procedures established by the Plan Administrator and must be
expressed as revised whole number percentages of amounts held in his Accounts,
totaling 100%. Investment election changes shall be effective as soon as
practicable after the request is received (which, with respect to Funds which
are valued daily and accessible by telephone or electronic investment direction,
may be the same day as directions are transmitted, if received before 4:00 P.M.
local time, or the next business day thereafter).

         5.04 TRANSFER OF ACCOUNTS: A Participant may elect at any time to
transfer all or part of his Account (other than his Initial Company Contribution
Account and Payroll-Based Employee Stock Ownership Contribution Account) in any
Investment Fund to another Investment Fund. Transfer shall be made in accordance
with procedures established by the Plan Administrator and shall be expressed as
a dollar amount or percentage of a Participant's Account(s). Transfers shall be
effective as soon as practicable after the request is received (which, with
respect to Funds which are valued daily and accessible by telephone or
electronic investment direction, may be the same day as directions are
transmitted, if received before 4:00 P.M. local time, or the next business day
thereafter).

ARTICLE 6: VALUATION OF PARTICIPANTS' ACCOUNTS

         6.01 ACCOUNTS: Each Participant shall have established for him separate
Accounts reflecting all amounts contributed to the Plan on his behalf and the
investment earnings and losses thereon.

         6.02 VALUATION OF ACCOUNTS: As of each Valuation Date, each
Participant's Account shall be adjusted separately to reflect any appreciation
or depreciation in the fair market value of each Investment Fund in which it is
held. The fair market value of each Investment Fund shall be determined by the
Trustee and communicated to the Plan Administrator in writing and shall
represent the fair market value of all securities or other property held in the
Investment Fund, plus cash and accrued earnings, less accrued expenses and
proper charges against the Fund as of the Valuation Date. The Trustee's
determination of the fair market value of the Investment Funds shall be final
and conclusive for all purposes of the Plan. A Participant's Accounts shall be
adjusted in proportion to the balance in each Participant's Account on the
preceding Valuation Date, less distributions.


                                       30
<PAGE>

         6.03 AMOUNT OF PARTICIPANT'S ACCOUNTS: The amount of a Participant's
Accounts for purposes of distribution shall be determined as follows:

         (a)  the value of the Participant's Accounts as of the most recent
              Valuation Date, plus

         (b)  the Participant and Employer contributions made to the
              Participant's Accounts since the most recent Valuation Date, minus

         (c)  the amount of any distribution made since the most recent
              Valuation Date.

         Notwithstanding the foregoing, the Plan Administrator may in its
discretion use the value of the Participant's Accounts as of a special Valuation
Date to determine the proper amount to be distributed. The Plan Administrator
may delay any distribution under the Plan until the special Valuation Date.

         6.04 STATEMENT OF PARTICIPANT ACCOUNTS: Each Participant shall receive
a quarterly statement showing the value of his Accounts as of the most recent
Valuation Date.

         6.05 TIMING OF CREDITS AND DEDUCTIONS: Adjustments of a Participant's
Accounts shall be deemed to have been made on the date to which they relate,
even if they are determined at another date. Notwithstanding the foregoing,
transactions with respect to which Investment Funds are valued daily will be
effected on the date money or investment directions are received from a
Participant prior to 4:00 P.M. local time, otherwise on the next business day.
The Participants' Accounts will be debited or credited, as appropriate, no later
than the date on which transactions are effected.

ARTICLE 7: PAYMENT OF BENEFITS

         7.01 RETIREMENT: Upon a Participant's retirement, the Vested Value of
his Accounts shall equal the total value of his Accounts. The Vested Value of
the Participant's Accounts shall be paid to him in accordance with Sections 7.06
or 7.07 (or, if applicable, Section 13.07).

         7.02 DEATH: Upon the death of a Participant, the Vested Value of his
Accounts shall equal the total value of his Accounts, to the extent not yet
distributed. The Vested Value of the Participant's Accounts shall be paid to his
Beneficiary in accordance with Sections 7.06 and 7.07 (or, if applicable,
Section 13.07).

         7.03 DISABILITY: If a Participant's Employment terminates as a result
of his Disability before his retirement, the Vested Value of his Accounts shall
equal the value of his Accounts. The Vested Value of the Participant's Accounts
shall be paid to him in accordance with Sections 7.06 and 7.07 (or, if
applicable, Section 13.07).

         7.04 OTHER TERMINATION OF EMPLOYMENT: Upon the termination of a
Participant's Employment other than by retirement, death or Disability, and
other than by


                                       31
<PAGE>

transfer to an Affiliated Company which is not an Employer, the Vested Value of
his Accounts shall equal the balance credited to his:

         (a)  Basic Tax-Deferred Employee Contribution Account;

         (b)  Supplemental Tax-Deferred Employee Contribution Account;

         (c)  Basic Non Tax-Deferred Employee Contribution Account;

         (d)  Supplemental Non Tax-Deferred Employee Contribution Account;

         (e)  Tax-Deferred Gainsharing Contribution Account;

         (f)  Non Tax-Deferred Gainsharing Contribution Account;

         (g)  Matching Contribution Account, if the Participant has completed
              three (3) or more Years of Service;

         (h)  Payroll-Based Employee Stock Ownership Contribution Account; and

         (i)  Initial Company Contribution Account, if the Participant has
              completed three (3) or more Years of Service.

         Upon such termination of Employment the Participant shall forfeit the
portion of his Initial Company Contribution and/or Matching Contribution
Accounts that is not included in his Vested Value; provided, however, that
amounts so forfeited shall be reinstated to the Participant's accounts if he is
reemployed by an Employer at any time before he incurs five (5) Years of Break
in Service, and if he then repays the entire amount of his Basic Tax-Deferred
Employee Contribution Account and Basic Non Tax-Deferred Contribution Account
previously distributed to him, if any.

         The Vested Value of such Participant's Accounts shall be paid to the
Participant in a single lump sum payment under Sections 7.06(a) and/or 7.06(c),
or, if the Participant attains age 59-1/2 before or upon the commencement of
benefit payments, in installments under Section 7.06(b). All distributions shall
be subject to the requirements of Section 7.07.

         For purposes of this Section 7.04, a Participant who transfers to
employment with an Affiliated Company that is not an Employer and subsequently
terminates his employment with such Affiliated Company shall be deemed to have
terminated his Employment as of the date his employment with such Affiliated
Company terminates, unless he transfers without intervening employment to
employment with an Employer or other Affiliated Company.

         7.05 TRANSFER FROM HOURLY TO SALARIED EMPLOYMENT: If a Participant
transfers to salaried employment status with an Employer, he may:

         (a)  elect a Plan to Plan Transfer of the Vested Value of his Accounts
              to the Bowater Incorporated Salaried Employees' Savings Plan as of
              any


                                       32
<PAGE>

              Valuation Date, provided that the trustee of such plan is
              authorized to receive such Transfer; or

         (b)  defer such Plan to Plan Transfer or the receipt of any
              distribution from the Plan until a later date. His Accounts will
              remain in the Plan until his retirement, death, Disability or
              termination of employment with the Employer or Affiliated Company,
              or, except for his Payroll-Based Employee Stock Ownership Account
              (if any), until he is eligible to make a withdrawal under Article
              8.

         If a Participant transfers to salaried employment status with an
Affiliated Company which is not an Employer, the disposition of his Accounts
shall be governed by Section 7.04. A Participant will receive credit for Years
of Service for his period of employment with the Employer or Affiliated Company.

         7.06 ELECTION OF BENEFITS: In connection with a Participant's
retirement, he shall elect the form or forms in which benefits due to him upon
his retirement be paid or made available. The Participant shall elect to receive
benefits in one (1) or more of the following methods:

         (a)  in a lump sum payment in cash;

         (b)  in annual installments over a period not to exceed ten (10) years,
              provided such period does not exceed the greater of: (i) the life
              expectancy of the Participant, and (ii) the joint life expectancy
              of the Participant and his Beneficiary. The amount of each
              installment will be determined by dividing the Participant's
              Vested Value by the number of annual installments which remain to
              be made at the time an installment is to be paid.

         (c)  in kind, equal to the full Shares of Company Stock plus the cash
              equivalent of the fair market value of any fractional Shares of
              Company Stock in the Company Stock Fund, together with lump sum
              cash payment(s) representing the Participant's interest in the
              other Investment Funds. In the case of fractional shares, the
              Trustee shall be deemed to have purchased such fractional share
              from the Participant at a price equal to the cash payment made to
              the Participant. Cash for the purchase of fractional shares may be
              taken from dividend receipts or other cash held in the Trust.

         Benefit elections may be made in writing or by electronic or telephonic
means in accordance with procedures established by the Plan Administrator for
each purpose. A Participant may change his election of benefits by filing a new
election form at any time prior to his benefit commencement date.

         A Participant who has previously elected to receive benefits under
subsection (b) above may request that any remaining Vested Value of his account
be paid to him in a lump sum


                                       33
<PAGE>

distribution in cash, such Vested Value to be determined as of the Valuation
Date next preceding the date on which the Plan Administrator approves the
request or next following the Participant's request, whichever is later. Such
amounts shall not include the amount of any installments paid to the Participant
since the preceding Valuation Date.

         Notwithstanding the foregoing or any election made by a Participant, if
the present value of the Vested Value of the Participant's Account equals $3,500
(effective for Plan Years beginning on or after January 1, 1998, $5,000) or
less, the Plan Administrator may direct that the Vested Value of the Account be
distributed to the Participant in the form of a lump sum upon the termination of
his employment for any reason. The Plan Administrator may direct such
distribution without obtaining the Participant's (or, if applicable, his
Spouse's) consent.

         If the Participant's Account balance at the time of any distribution
exceeds $3,500 (effective for Plan Years beginning on or after January 1, 1998,
$5,000) then neither that distribution nor any subsequent distribution shall be
made to the Participant at any time before he attains age 70-1/2 without his or
her consent (which age 70-1/2 distributions shall be made in accordance with
Section 7.07(d)). No such consent shall be valid unless the Participant receives
a general description of the material features and an explanation of the value
of the form of benefit available under the Plan. In addition, the Participant
must be informed of his right to defer receipt of the payment or distribution.
The Plan Administrator shall deliver such written notice to the Participant
during a period beginning no less than 30 days and no more than 90 days before
the Participant's date of commencement of benefits. The written consent of the
Participant to the payment or distribution shall not be made before the
Participant receives the notice and shall not be made more than 90 days before
his or her date of commencement of benefits. Notwithstanding the foregoing, a
distribution may commence less than 30 days after the notice required under
Section 1.411(a)-11(c) of the Treasury Regulations is given, provided that (i)
the Plan Administrator clearly informs the Participant that the Participant has
a right to a period of at least 30 days after receiving the notice to consider
the decision of whether or not to elect a distribution (and, if applicable, a
particular distribution option), and (ii) the Participant, after receiving the
notice, affirmatively elects a distribution.

         7.07 METHOD OF PAYMENT: Benefits shall be paid or made available upon
the direction of the Plan Administrator, as soon as practicable following a
Participant's retirement, death, Disability or other termination of Employment;
provided that no distribution may be made to a Participant without his consent
unless the Vested Value of his Account is less than or equal to $3,500
(effective for Plan Years beginning on or after January 1, 1998, $5,000).

         (a)  Unless a Participant elects otherwise, the distribution of his
              benefits will begin no later than 60 days after the end of the
              Plan Year in which the latest of the following events occurs:

              i.   the Participant's attainment of age 65;

              ii.  the tenth (10th) anniversary of the year in which the
                   Participant commenced participation in the Plan; or

                                       34
<PAGE>

              iii. the Participant's termination of Employment with the Employer
                   and any employment with all Affiliated Companies.

         (b)  If a Participant receiving distributions under Section 7.06(b)
              dies before his entire interest has been distributed, the
              remaining portion of his Accounts will be distributed to his
              Beneficiary at least as rapidly as it was being distributed as of
              the date of his death.

         (c)  If distributions have not begun upon the death of a Participant,
              if no election has been made by the Beneficiary pursuant to
              Section 7.08, the entire interest of the Participant will be
              distributed in accordance with Section 7.06(a) at the end of the
              calendar year containing the fifth (5th) anniversary of the
              Participant's death.

         (d)  The distributions of the Vested Value of a Participant's Accounts
              will commence not later than the "required beginning date." For
              purposes of this Section 7.07, the term "required beginning date"
              means:

              i.   for Plan Years beginning prior to January 1, 1997, April 1 of
                   the calendar year following the calendar year in which the
                   Employee attains age 70-1/2;

              ii.  for Plan Years beginning on or after January 1, 1997:

                   (A)  for a Participant who is not a five percent (5%) owner
                        (as defined under Code Section 416), April 1 of the
                        calendar year following the year in which occurs the
                        later of the Participant's: (A) termination of
                        Employment with the Employer and all Affiliated
                        Companies, and (B) attainment of age 70-1/2; and

                   (B)  for a Participant who is a five percent (5%) owner,
                        April 1 of the calendar year following the calendar year
                        in which the Employee attains age 70-1/2, or such other
                        date as may be prescribed by applicable law or
                        regulations.

              Notwithstanding the foregoing, if a Participant who is not a five
              percent (5%) owner attained age 70-1/2 on or after January 1, 1996
              and is still employed by the Employer or an Affiliated Company on
              April 1 of the calendar year following the year in which he or she
              attained age 70-1/2, such Participant may elect to commence the
              distribution of the vested value of his or her Accounts effective
              as of April 1 of the calendar year following the calendar year in
              which he or she attained age 70-1/2 or to delay the commencement
              of distributions until the termination of his or her employment.

                                       35
<PAGE>

         7.08 PROOF OF DEATH AND RIGHT OF BENEFICIARY: If a Participant who has
begun to receive benefits in annual installments under Section 7.06(b) dies
before the total Vested Value of his Accounts has been distributed, his
Beneficiary will receive the undistributed Vested Value of his Accounts in
annual installments on the same basis as the Participant had elected. The
Beneficiary may elect to receive the remaining Vested Value of the Participant's
Accounts in a lump sum cash payment by filing an election with the Plan
Administrator within 90 days of the Participant's death. If a Participant who
elects to receive benefits under Section 7.06(a) or (c) dies, his Beneficiary
may elect to receive the undistributed value of the Participant's Accounts under
one (1) of the methods described in Section 7.06 by filing an election with the
Plan Administrator within 180 days of the Participant's death, except that the
maximum period in which installment payments may be made under Section 7.06(b)
shall be five (5) years. If the Beneficiary does not elect a distribution within
180 days, the Plan Administrator will distribute the remaining Vested Value of
the Participant's Account in accordance with Section 7.07(c).

         The Plan Administrator may require and rely upon such proof of a
Participant's death and evidence of the right of any Beneficiary to receive
benefits as it deems proper, and its determination shall be conclusive. A
Beneficiary who does not elect to receive benefits in the form of a lump sum
payment shall designate a Beneficiary in a manner prescribed by the Plan
Administrator.

         7.09 DIRECT ROLLOVER OF DISTRIBUTION: Any "Eligible Rollover
Distribution" under the Plan may, at the Participant's election, and subject to
such uniform and nondiscriminatory conditions as the Plan Administrator may
require, be transferred to an "Eligible Retirement Plan," subject to the
provisions of Section 402 of the Code and the regulations thereunder and as
hereinafter provided.

         (a)  The Plan Administrator shall notify any "Distributee" entitled to
              receive an "Eligible Rollover Distribution" no less than thirty
              nor more than ninety days before the starting date of any payment
              (or at such other time as is permitted by law) of his right to
              elect a "Direct Rollover" to an "Eligible Retirement Plan"
              pursuant to the provisions of this section.

         (b)  To elect a Direct Rollover, the Distributee must request to the
              Plan Administrator that all or a specified portion of the Eligible
              Rollover Distribution be transferred directly to one or more
              "Eligible Retirement Plans." If a distribution will be made on
              behalf of the Distributee in more than one year, the notice
              specified in paragraph (a) must be given to the Distributee in
              each year in which there is an Eligible Rollover Distribution, and
              the Distributee must file a new election with the Plan
              Administrator if he wishes to have the Eligible Rollover
              Distribution transferred directly to an Eligible Retirement Plan.

         (c)  The Distributee shall not be entitled to elect a Direct Rollover
              pursuant to this section, unless he has obtained any applicable
              Spousal consent that


                                       36
<PAGE>

              would otherwise be required to obtain a distribution in the amount
              of the Eligible Rollover Distribution.

         (d)  For purposes of this section, the following definitions shall
              apply:

              i.   A "Direct Rollover" is a payment by the Plan to the "Eligible
                   Retirement Plan" specified by the Distributee;

              ii.  A "Distributee" includes Participants, a Participant's
                   surviving Spouse and a Participant's Spouse or former Spouse
                   who is the alternate payee under a qualified domestic
                   relations order, as defined in Code Section 414(p), but only
                   with regard to the interest of such individual under the
                   Plan;

              iii. An "Eligible Retirement Plan" is a retirement plan which
                   meets the requirements of Code Section 401(a), an annuity
                   described in Code Section 403(a), an individual retirement
                   account described in Code Section 408(a), or an individual
                   retirement annuity (other than an endowment contract)
                   described in Code Section 408(b), the terms of which permit
                   the acceptance of a Direct Rollover of the Distributee's
                   Eligible Rollover Distribution. However, in the case of an
                   Eligible Rollover Distribution to the surviving Spouse of a
                   Participant, an Eligible Retirement Plan is an individual
                   retirement account or an individual retirement annuity. The
                   Plan Administrator may establish reasonable procedures for
                   ascertaining that the Eligible Retirement Plan meets the
                   preceding requirements.

              iv.  An "Eligible Rollover Distribution" is any distribution from
                   this Plan of all or any portion of the balance to the credit
                   of the Distributee, except for distributions (or portions
                   thereof) which are:

                   (A)  Part of a series of substantially equal periodic
                        payments (not less frequently than annually) made over
                        the life of the Participant (or the joint lives of the
                        Participant and the Participant's designated
                        Beneficiary), the life expectancy of the Participant (or
                        the joint life and last survivor expectancy of the
                        Participant and the Participant's designated
                        Beneficiary), or a specified period of ten years or
                        more;

                   (B)  Required under Code Section 401(a)(9) (relating to the
                        minimum distribution requirements);

                   (C)  The portion of any distribution that is not includible
                        in gross income (determined without regard to the
                        exclusion


                                       37
<PAGE>

                        for net unrealized appreciation in employer securities
                        described in Code Section 402(e)(4); or

                   (D)  Specified Hardship Withdrawals made on or after January
                        1, 1999, as provided under Section 8.04 of this Plan.

ARTICLE 8: WITHDRAWALS AND LOANS

         8.01 GENERAL CONDITIONS FOR WITHDRAWALS: Subject to this Article 8, a
Participant may withdraw the Vested Value of his Accounts, provided, however,
that no withdrawals may be made under this Article 8 from a Participant's Basic
Tax-Deferred Employee Contribution Account, or Supplemental Tax-Deferred
Employee Contribution Account except pursuant to the provisions of Sections 8.04
and 8.05 hereof. A Participant may request a withdrawal in writing or by
electronic or telephonic means in accordance with procedures established by the
Plan Administrator for such purpose.

         All amounts withdrawn shall be paid in cash. In the case of a
withdrawal of less than the full Vested Value of a Participant's Accounts, the
amount withdrawn from each Investment Fund in which an Account is maintained for
a Participant shall be taken, pro rata, from each such Fund from which
withdrawal is permissible in the same proportion as the value of the
Participant's interest in each such Fund bears to the total value of his
Accounts.

         A Participant may elect to have a withdrawal made under this Section
8.01 transferred directly to an individual retirement account or another
tax-qualified plan, subject to the provisions of Code Section 402 of the Code
and regulations thereunder and in accordance with the procedures described in
Section 7.09 of the Plan.

         8.02 WITHDRAWAL OF MATCHING CONTRIBUTIONS AND INITIAL COMPANY
CONTRIBUTIONS: A Participant may withdraw all or a portion of the Vested Value
of his Initial Company Contribution Account and/or Matching Contribution
Account, excluding any contributions made to such Accounts within the two (2)
years preceding the withdrawal, determined as of the Valuation Date next
preceding the date the withdrawal is made. Amounts not withdrawn may not be
distributed to the Participant until his termination of Employment or until such
amounts have been in the Plan for at least two (2) years, whichever occurs
first.

         A Participant receiving a withdrawal under this Section 8.02 may not
make Non Tax-Deferred Employee Contributions (Basic or Supplemental) for a
period of six (6) months following the withdrawal. The Participant may resume
making Non Tax-Deferred Employee Contributions on any Enrollment Date following
the expiration of the six (6) month suspension period by giving prior notice to
the Employer in accordance with such procedures and within such time period as
the Plan Administrator shall prescribe. The Participant shall not be required to
suspend his Tax-Deferred Employee Contributions following the withdrawal.

         A Participant may not receive more than one (1) withdrawal under this
Section 8.02 during any single Plan Year.


                                       38
<PAGE>

         8.03 WITHDRAWAL OF NON TAX-DEFERRED EMPLOYEE CONTRIBUTIONS AND NON
TAX-DEFERRED GAINSHARING CONTRIBUTIONS:

         (a)  A Participant may withdraw all or a portion of the Vested Value of
              his Basic Non Tax-Deferred Employee Contribution Account,
              determined as of the Valuation Date next preceding the date the
              request for a withdrawal is made. A Participant may not receive
              more than one (1) withdrawal under this subsection (a) during a
              single Plan Year.

              A Participant receiving a withdrawal under this Section 8.03 may
              not make Non Tax-Deferred Employee Contributions (Basic or
              Supplemental) for a period of six (6) months following the
              withdrawal. The Participant shall not be required to suspend his
              Tax-Deferred Employee Contributions following the withdrawal. The
              Participant may resume making Non Tax-Deferred Employee
              Contributions on any Enrollment Date following the expiration of
              the six (6) month suspension period by giving prior notice to the
              Employer in accordance with such procedures and within such time
              period as the Plan Administrator shall prescribe.

         (b)  A Participant may withdraw all or a portion of the Vested Value of
              his Supplemental Non Tax-Deferred Employee Contribution Account
              and Non Tax-Deferred Gainsharing Contribution Account, determined
              as of the Valuation Date preceding the date the request for a
              withdrawal is made. No suspension of contributions shall be
              imposed on a Participant who makes a withdrawal under this
              subsection (b). A Participant may not receive more than one (1)
              withdrawal under this subsection (b) during a single Plan Year.

         8.04 SPECIFIED HARDSHIP WITHDRAWAL: The Plan Administrator (or his
delegatee) may permit a Participant to make a Specified Hardship Withdrawal of
all or a portion of his Basic Tax-Deferred Employee Contributions, Supplemental
Tax-Deferred Employee Contributions and Tax-Deferred Gainsharing Contribution,
excluding investment earnings thereon.

         The value of the Participant's Accounts for purposes of this Section
8.04 shall be determined as of the Valuation Date next preceding the date on
which the Plan Administrator (or his delegatee) approves the Specified Hardship
Withdrawal or the Valuation Date next following the Plan Administrator's receipt
of the Participant's application for a Specified Hardship Withdrawal, whichever
is later. The value shall include Basic Tax-Deferred Employee Contributions and
Supplemental Tax-Deferred Employee Contributions made since the applicable
Valuation Date and shall not include the amount of any withdrawals made by the
Participant since the Valuation Date.

         A Participant who has made a withdrawal under this Section 8.04 shall
be subject to a mandatory suspension of all Employee Contributions for 12 months
following the date the Specified Hardship Withdrawal is made. In addition, the
Participant's Tax-Deferred Employee


                                       39
<PAGE>

Contributions for the Plan Year following the Withdrawal shall not exceed the
limit on Elective Deferrals described under Section 3.05, reduced by the amount
of Tax-Deferred Employee Contributions made by the Participant in the Plan Year
in which he makes the Specified Hardship Withdrawal.

         8.05 WITHDRAWAL AFTER AGE 59-1/2: A Participant who has attained age
59-1/2 may make a withdrawal under the provisions of Section 8.04 without
satisfying the conditions for a Specified Hardship Withdrawal. Upon such a
withdrawal, the Participant shall not incur a mandatory suspension of his
Contributions to the Plan.

         8.06 WITHDRAWAL OF PAYROLL-BASED EMPLOYEE STOCK OWNERSHIP CONTRIBUTION
ACCOUNT: A Participant may not withdraw any amounts from his Payroll-Based
Employee Stock Ownership Contribution Account prior to his termination of
Employment.

         8.07 WITHDRAWAL OF ROLLOVER ACCOUNT: A Participant who has made a
Rollover Contribution under Section 3.11 may withdraw the total value of his
Rollover Account at any time.

         8.08 LOANS: A Participant may request a loan from the Vested Value of
any of his Accounts. The Participant's loan request may be made in writing or by
electronic or telephonic means in accordance with procedures established by the
Plan Administrator for such purpose. The Plan Administrator shall establish
procedures relating to loan requests that shall be uniformly applied to all
similarly situated Participants. Plan loans are subject to the following
requirements of this Section 8.08.

         (a)  A Participant shall not be permitted to have more than one (1)
              outstanding loan at any time.

         (b)  The Company may charge a reasonable fee for processing and
              maintaining loans. Any such fees shall either (i) be paid in
              advance by the Participant and shall not be charged against the
              loan amount or (ii) be charged against the Participant's Account.

         (c)  The minimum principal amount of any loan shall be $1,000. The
              maximum principal amount of any loan shall be the lesser of: (i)
              fifty percent (50%) of the Vested Value of the Participant's
              Accounts, determined as of the last business day of the week
              preceding disbursement of the loan; and (ii) $50,000. Loans shall
              be deemed to have been made on a pro rata basis from each of a
              Participant's Accounts. The Participant's maximum loan amount
              shall be reduced by the Participant's highest outstanding loan
              balance during the one (1) year period ending on the day before
              the date on which the loan is disbursed.

         (d)  The term of the loan may not exceed 60 (in the case of a loan
              taken to acquire the Participant's principal residence, 180)
              months. In the case of a loan whose term exceeds 60 months, the
              Trustee should obtain the Plan


                                       40
<PAGE>

              Administrator's approval of the loan before approving a
              Participant's request therefor. The loan must be repaid in
              substantially level amounts, with payments due not less than
              quarterly. Repayment shall be made through automatic payroll
              deductions beginning in the first (1st) pay period following the
              Participant's receipt of the loan. The loan may not be renewed or
              extended beyond its original maturity date. Loans may be prepaid
              in full without penalty at any time before the loan's maturity
              date. Partial prepayments will not be accepted.

         (e)  The interest rate of the loan shall be set at the time the loan
              request is approved and shall equal the prime lending rate for
              corporate debt, as published in the Wall Street Journal, plus one
              percent (1%).

         (f)  The loan shall be secured by 50% of the balance of the
              Participant's Accounts from which loans are available, to the
              extent of the principal amount of the loan plus accrued interest.
              The Company may request such other collateral for the loan as it
              deems necessary and prudent in order to protect the Plan from risk
              of loss of principal or income if a default were to occur. All
              loans shall be bona fide and evidenced by a note containing such
              additional terms and conditions, consistent with this Section
              8.08, as the Plan Administrator shall require.

         (g)  If the balance of a Participant's Accounts becomes distributable
              (other than amounts distributed under Sections 8.02 through 8.07)
              while the Participant has an outstanding loan balance, amounts
              otherwise distributable shall be reduced by the outstanding amount
              of unpaid principal and interest due on the loan.

         (h)  Notwithstanding any provision of this Section 8.08 to the
              contrary, loan repayments will be suspended under the Plan as
              permitted under Code Section 414(u).

         (i)  If a Participant terminates employment with an outstanding loan
              balance, the entire outstanding balance of the loan shall be
              considered in default and immediately due and payable. If amounts
              due remain delinquent for beyond the close of the calendar quarter
              following the calendar quarter in which the loan amounts become
              due, such outstanding balance shall be reported to the Participant
              as a distribution from the Plan and charged against the
              Participant's Accounts at the earliest date amounts are
              distributable to the Participant under the terms of the Plan.

         (j)  At all times during which a Participant has an outstanding loan
              balance, the Participant shall be obligated to inform the Plan
              Administrator of any declaration of the Participant's personal
              bankruptcy, as issued by a court of competent jurisdiction. The
              entire outstanding balance of the loan shall be considered in
              default and immediately due and payable as of the effective date
              of such declaration. The Plan Administrator shall thereafter seek
              from the Participant a reaffirmation of the loan, or take whatever
              other steps it deems necessary to protect the Plan's interest in
              collecting amounts due, to the extent permitted under applicable
              federal and state bankruptcy laws not preempted by ERISA.

                                       41
<PAGE>

ARTICLE 9: PLAN ADMINISTRATION

9.01 FIDUCIARIES:

         (a)  The Company, the Trustee, the Plan Administrator, members of the
              Savings Plan Committee and persons to whom they delegate
              discretionary authority or control over the Plan shall be
              Fiduciaries.

         (b)  Each Fiduciary's responsibility shall be specified in the Plan or
              by the Company and accepted in writing by each Fiduciary. The
              Fiduciaries may allocate unassigned responsibilities among
              themselves by providing the Company and the Trustee with written
              notification of such allocation. The Trustee may thereafter rely
              upon any actions taken consistent with the allocation, until such
              allocation is revoked.

         9.02 RESPONSIBILITIES OF THE COMPANY: The Company shall have the
following powers and duties with respect to the Plan:

         (a)  to appoint any individual or Committee to whom Fiduciary
              responsibilities have been assigned under the Plan;

         (b)  to delegate any fiduciary responsibilities under the Plan to any
              individuals, committees or entity it may designate; and

         (c)  to exercise any other powers or responsibilities not specifically
              allocated to another fiduciary.

         9.03 SAVINGS PLAN COMMITTEE: The Pension Administration Committee of
the Company (the "PAC") (or such other designee) shall appoint a Savings Plan
Committee (the "Committee") consisting of not less than five (5) persons, two
(2) of whom shall be Employees elected or appointed by the Union locals to serve
on the Committee. Each member of the Committee shall serve for a one (1) year
term which may be continuously renewed, in the sole discretion of the PAC. A
Committee member may resign at any time during his appointment, provided that he
submits written notice to the PAC no later than forty-five (45) days prior to
the effective date of such resignation. The PAC shall have the discretion to
fill vacancies on the Committee, except to the extent that the prior Committee
member had been appointed by a Union local, in which case the appropriate Union
local shall appoint a member of the Union to fill the vacancy. The PAC may waive
the forty-five (45) day notice requirement in its sole discretion. A Committee
member may be removed by the PAC during his term if he fails to perform the
duties of his office in an efficient manner. Committee members shall serve
without compensation.


                                       42
<PAGE>
     9.04 OPERATION OF THE COMMITTEE:

         (a)  Powers and Duties: The Committee shall have the following powers
              and duties:

              i.   to construe and interpret the Plan, in its discretion;

              ii.  to determine, in its discretion, any question of fact under
                   the Plan, including questions relating to eligibility,
                   earnings, service and the entitlement to and amount of
                   benefits;

              iii. to establish such rules and procedures as it deems necessary
                   for the efficient completion of its assigned duties;

              iv.  to establish a funding policy, as described under paragraph
                   (c), below;

              v.   to appoint one or more Investment Managers to have
                   discretionary control over Plan assets, as described under
                   paragraph (d) below; and

              vi.  to employ or retain actuaries, accountants, legal counsel and
                   other experts as it deems necessary for the proper
                   administration of the Plan.

         (b)  Composition and Voting: The Committee shall select a chairperson
              from its members to oversee the Committee's operation. The
              Committee may also establish subcommittees thereof, as it deems
              necessary.

              A majority of the Committee shall constitute a quorum. Actions of
              the Committee shall be taken by a majority vote of a quorum, or,
              in the absence of a meeting, by written action signed by a
              majority of the Committee. All decisions made by majority vote of
              the Committee shall be final and binding on all parties.

         (c)  Funding Policy: The Committee shall formulate a funding policy
              based upon the Plan's short and long term financial needs. Once
              the funding policy has been established for a Plan Year, the
              Committee shall provide a copy thereof to the Trustee, who shall
              follow the policy in its management of the Trust Fund. In
              addition, the Committee shall periodically report to the Board
              regarding the funding policy. The provisions of this paragraph (c)
              shall not apply to that portion of the Trust Fund consisting of
              assets subject to the investment directions of Participants, nor
              during periods in which all assets in the Trust Fund are invested
              pursuant to either provisions of the Plan or Participant
              directions.


                                       43

<PAGE>

         (d)  Investment Managers: The Committee may appoint one or more
              "Investment Managers" to manage, acquire and dispose of all or any
              part of the assets of the Trust Fund. Each Investment Manager
              shall execute a written agreement detailing its responsibilities,
              specifying the Plan assets under its management and acknowledging
              its fiduciary status with respect to the Plan. The Investment
              Manager shall not have physical custody or control of any assets
              of the Plan, which shall be held by the Trustee. An Investment
              Manager must be either: (i) a corporation or partnership
              registered as an investment adviser under the Investment Advisers
              Act of 1940; (ii) a bank, as defined in that Act; or (iii) an
              insurance company qualified to manage, acquire or dispose of any
              asset of an employee benefit pension plan under the laws of more
              than one state. The provisions of this paragraph (d) shall not
              apply to that portion of the Trust Fund consisting of assets
              subject to the investment directions of Participants, nor during
              periods in which all assets in the Trust Fund are invested
              pursuant to either provisions of the Plan or Participant
              directions.

         (e)  The powers, duties, and responsibilities of the Committee may be
              changed by the PAC or the Company only upon written consent of the
              Committee.

     9.05 PLAN ADMINISTRATOR: The Company shall serve as the "Plan
Administrator," who shall be responsible for all duties and obligations imposed
on a plan administrator by ERISA and the Code (to the extent such
responsibilities are not otherwise delegated under the Plan to the Committee).
The Company may designate one (1) or more persons to carry out the duties
delegated to the Plan Administrator under the Plan. Such designee(s) may also
serve as member(s) of the Committee.

         (a)  Powers and Duties: The Plan Administrator shall have the following
              powers and duties with respect to the Plan.

              i.   to comply with all applicable reporting and disclosure
                   requirements of ERISA;

              ii.  sign any registration statements required to be filed with
                   the Securities Exchange Commission;

              iii. sign any applications for determination of the tax-qualified
                   status of the Plan, as filed with the Internal Revenue
                   Service;

              iv.  to maintain such records as are necessary for the proper and
                   efficient administration of the Plan;

              v.   to develop such procedures as it deems necessary for carrying
                   out any other duties delegated to the Plan Administrator
                   under the terms of the Plan;


                                       44

<PAGE>

              vi.  to employ or retain any accountant, attorney, consultant or
                   other expert as it deems necessary for the proper and
                   efficient administration of the Plan; and

              vii. to report to the Committee upon its request so that the
                   Committee may review the Plan Administrator performance.

     9.06 RELIANCE ON EXPERTS: A Fiduciary and its delegatees shall be any
Fiduciary or its delegatees entitled to rely upon all certificates, opinions and
reports made by experts employed to provide such services with respect to the
Plan. The Fiduciary shall be fully protected with respect to any action taken in
good faith reliance on such opinions or reports, provided that a prudent person
acting in like circumstances would have taken the same action. Determinations
and actions made by a Fiduciary in reliance on the report or opinion of a
duly-appointed expert or counsel shall be final and binding on all parties.

     9.07 COMMITTEE ACTION: Unless otherwise directed by the Company, a majority
of the members of any committee(s) established under the Plan shall constitute a
quorum. Decisions with a quorum present shall be made by majority vote. In the
absence of a meeting, a committee may act by written action signed by a majority
of its members. All decisions made by majority vote of a committee shall have
the same effect as if agreed upon by every member.

     9.08 INDIVIDUAL INDEMNIFICATION: To the extent permissible under ERISA, the
Company shall indemnify each Fiduciary and its delegatee against costs, expenses
and liabilities, including attorney's fees, incurred in connection with any
action, or proceeding arising out of any act or omission taken or made in good
faith in his capacity as a Fiduciary (or delegatee thereof, as applicable).

     Upon receiving notice of the commencement of any action, any Fiduciary or
its delegatees entitled to indemnification under this Section 9.08 shall notify
the Company of the commencement of the action. Failure to so notify the Company
will relieve the Company from any liability hereunder. The Company shall be
entitled to, at its own expense, participate in or assume the defense of any
action brought against any party indemnified hereunder. In the event the Company
assumes the defense of any such suit, the Company shall choose counsel
reasonably satisfactory to the indemnified party to conduct such defense, and
the indemnified party shall bear the expense of retaining any additional
counsel.

     9.09 EXPENSES: Any expenses reasonably incurred by a Fiduciary in the
performance of his duties shall be paid by the Company. Such reasonable expenses
include the cost of obtaining personal liability insurance covering actions
taken by the Fiduciary on behalf of or with respect to this Plan. All reasonable
expenses incurred in connection with the administration of the Plan, including
the compensation paid to the Trustee, investment managers and any counsel,
accountant or other expert retained by a Fiduciary in connection with the
administration of the Plan shall be paid: (a) from the Trust Fund to the extent
permissible under ERISA and the Code, and (b) by the Company, to the extent not
payable under (a).


                                       45

<PAGE>

     9.10 SERVICE IN VARIOUS CAPACITIES: Any person may serve in more than one
Fiduciary capacity with respect to the Plan, including service as member of the
Committee, the PAC, the Plan Administrator or Trustee.

     9.11 STANDARDS OF CONDUCT: Fiduciaries shall discharge their duties and
responsibilities in accordance with the standards of care and prudence required
under ERISA. Absent gross negligence or willful misconduct, persons acting for
or on behalf of the Plan (including but not limited to, the Company, the
Committee, the PAC, the Board, the Plan Administrator and the Trustee) shall not
be subject to civil liability under any provision of state, county or local law
pertaining to the conduct of fiduciaries and trustees or the permissibility of
their investments.

     9.12 CLAIMS PROCEDURES:

         (a)  Initial Claim: Claims for benefits under the Plan shall be
              submitted in writing to the Committee. Written notice of the
              Committee's decision with respect to the claim shall be furnished
              to the claimant within thirty (30) days after the claim is filed,
              unless special circumstances require an extension of the decision
              period for up to an additional ninety (90) days. The claimant will
              receive written notice of the need for an extension within the
              initial thirty (30) day period. The written notice shall explain
              the special circumstances requiring the extension and the date by
              which the determination is expected to be made.

         (b)  Written Notice of Denied Claim: The claimant shall receive written
              notice of a claim denial. Such notice shall: (i) set forth the
              specific reason or reasons for the denial, (ii) be written in a
              manner calculated to be understood by the recipient, (iii) refer
              to the specific Plan provisions on which the denial is based; (iv)
              describe any additional information necessary for the claimant to
              perfect the claims; and (v) include a description of the Plan's
              appeal procedures.

         (c)  Review of Claim Denial: Following receipt of a claim denial, the
              claimant or his duly authorized representative may submit a
              written application for review of such denial to the Plan
              Administrator. The claimant or his duly authorized representative
              must submit an application for review within the ninety (90) day
              period following receipt of the claim denial. During such ninety
              (90) day period, the claimant and his representative may submit
              issues and comments with respect to the claim denial, review
              pertinent Plan documents at the Plan Administrator's office, and
              obtain, upon request and free of charge, copies of all information
              relevant to the claim.

         (d)  Hearing: Upon receipt of a timely request for review of a claim
              denial, the Committee may hold a hearing, or, in its discretion,
              appoint one or more of its members to hear the claimant's appeal.
              Such member(s) shall meet promptly with the claimant and/or his
              duly authorized representative and

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<PAGE>

              hear such arguments and examine such documents as the claimant or
              his representative shall  present. The member(s) shall then
              report the results of the hearing to the Committee.

         (e)  Written Decision of Committee: A decision of the Committee on
              review of a claim denial shall be made in writing and shall: (i)
              include specific reasons for the decision; (ii) be written in a
              manner calculated to be understood by the claimant; and (iii)
              refer to specific Plan provisions on which the decision is based.
              The claimant shall be notified in writing of the decision within
              the sixty (60) day period following his submission of the written
              request for review, unless special circumstances require an
              extension of time for reviewing the appeal for up to an additional
              sixty (60) days. The claimant shall be notified of the need for an
              extension of time in writing prior to the expiration of the
              initial sixty (60) day period. The claimant will receive written
              notice of the need for an extension within the initial thirty (30)
              day period. The written notice shall explain the special
              circumstances requiring the extension and the date by which the
              determination is expected to be made.

         (f)  Effect of Committee Decision: Benefits under the Plan will be paid
              only if the Committee decides, in its discretion, that the
              applicant is entitled to them. The decision of the Committee on
              review of a claim denial shall be final and binding on all
              parties.

ARTICLE 10: AMENDMENT AND TERMINATION OF THE PLAN

     10.01 AMENDMENT OF THE PLAN: To the extent permissible under application
collective bargaining agreements, the Board or its designee reserves the right
to amend the Plan in whole or in part, at any time and from time to time,
retroactively or prospectively; provided that no such amendment shall make it
possible for any part of the funds of the Plan to be used for or diverted to
purposes other than the exclusive benefit of Participants or their
Beneficiaries, except to the extent provided under Section 4.05; and provided
further, that no such amendment shall increase the duties of the Trustee without
its consent thereto in writing. Except as may be required to conform with
government regulations, no such amendment shall result in a reduction in the
amount of benefits a Participant or Beneficiary was entitled to receive
immediately prior to the effective date of such amendment.

     10.02 MERGER, CONSOLIDATION, OR TRANSFER OF ASSETS: The Plan shall not
merge or consolidate with, or transfer its assets or liabilities to any other
plan or entity unless each Participant would receive a benefit immediately after
the merger, consolidation, or transfer which is equal to or greater than the
benefit he would have been entitled to receive if the Plan had terminated
immediately before the merger, consolidation or transfer.

     10.03 PLAN TERMINATION: The Company intends to continue the Plan
indefinitely. However, to the extent permissible under applicable collective
bargaining agreements, the Company reserves the right to terminate the Plan or
discontinue contributions thereto, in whole


                                       47

<PAGE>

or in part, at any time. Upon a complete or partial termination of the Plan or
discontinuance of contributions hereunder, the value of the Accounts of each
Participant affected by such termination or discontinuance shall be fully
vested, and payment of benefits shall be made to such Participants and their
Beneficiaries in the same manner as upon the termination of employment under
Section 7.06, subject to the limitations of Code Section 401(k)(10). In the case
of a complete termination or discontinuance of contributions to the Plan, any
Forfeitures not previously applied in accordance with Section 4.08 shall be
credited on a pro rata basis to all Participants' Accounts in proportion to the
amount of Employer contributions credited to their respective Matching
Contribution Accounts during the current calendar year (or the prior calendar
year, if no Matching Contributions have been made during the current calendar
year).

     10.04 PROCEDURE: The termination, partial termination or amendment of this
Plan may be effected by the adoption of a resolution by the Board to that
effect, or by the execution of an instrument amending or terminating the Plan by
a designee of the Board, to whom such authority to so act has been given by
resolution of the Board. The authorization of the Board may be general and need
not be given in contemplation of or with reference to specific terms of
amendment or termination.

ARTICLE 11: CHANGE IN CONTROL

     11.01 GENERAL: In the event of a Change in Control, as hereinafter defined,
the provisions of this Article 11 shall supersede any conflicting provisions in
the Plan.

     11.02 FULLY VESTING OF MATCHING CONTRIBUTION ACCOUNT: Anything in the Plan
to the contrary notwithstanding, upon and following a Change in Control, the
Matching Contribution Account of Participants in the Plan who are Employees of
the Employer as of the date of Change in Control shall become 100% vested.

     11.03 DEFINITIONS: The following definitions apply for purposes of this
Article 11:

         (a)  A "Change in Control" shall be deemed to have occurred upon:

              i.   The date that any Person is or becomes an Acquiring Person.

              ii.  The date that the Company's shareholders approve a merger,
                   consolidation or reorganization of the Company with another
                   corporation or other Person, unless, immediately following
                   such merger, consolidation or reorganization (A) at least 50%
                   of the combined voting power of the outstanding securities of
                   the resulting entity would be held in the aggregate by the
                   shareholders of the Company as of such record date for such
                   approval (provided that securities held by any individual or
                   entity that is an Acquiring Person, or who would be an
                   Acquiring Person if 5% were substituted for 20% in the
                   definition of such term, shall not be counted as securities
                   held by the shareholders of the Company, but shall be counted
                   as outstanding securities for purposes of this


                                       48

<PAGE>

                   determination), or (B) at least 50% of the Board of Directors
                   or similar body of the resulting entity are Continuing
                   Directors.

              iii. The date the Company sells or otherwise transfers all or
                   substantially all of its assets to another corporation or
                   other Person, unless, immediately after such sale or
                   transfer, (A) at least 50% of the combined voting power of
                   the then outstanding securities of the resulting entity
                   immediately following such transaction is held in the
                   aggregate by Company's shareholders as determined immediately
                   prior to such transaction (provided that securities held by
                   any individual or entity that is an Acquiring Person, or who
                   would be an Acquiring Person if 5% were substituted for 20%
                   in the definition of such term, shall not be counted as
                   securities held by the shareholders of the Company, but shall
                   be counted as outstanding securities for purposes of this
                   determination), or (B) at least 50% of the Board of Directors
                   or similar body of the resulting entity are Continuing
                   Directors.

              iv.  The date on which less than two-thirds (50% effective
                   February 26, 1999) of the total membership of the Board
                   consists of Continuing Directors.

         (b)  "Affiliate" and "Associate" shall have the respective meanings
              ascribed to such terms under Rule 12b-2 of the General Rules and
              Regulations under the Securities Exchange Act of 1934.

         (c)  "Acquiring Person" means the Beneficial Owner, directly or
              indirectly, of Common Stock representing 20% or more of the common
              voting power of the Company's then outstanding securities, not
              including (except as provided in clause (i) of the next sentence)
              securities of such Beneficial Owner acquired pursuant to an
              agreement allowing the acquisition of up to and including 50% of
              such voting power approved by two-thirds of the members of the
              Board who are Board members before the Person becomes a Beneficial
              Owner, directly or indirectly, of Common Stock representing 5% or
              more of the combined voting power of the Company's then
              outstanding securities. Notwithstanding the foregoing, (i)
              securities acquired pursuant to an agreement described in the
              preceding sentence will be included in determining whether a
              Beneficial Owner acquires 5% or more of such voting power other
              than pursuant to such an agreement so approved and (ii) a Person
              shall not be an Acquiring Person if such Person is eligible to and
              files a Schedule 13G with respect to such Person's status as a
              Beneficial Owner of all Common Stock of the Company of which the
              Person is a Beneficial Owner.

         (d)  A "Beneficial Owner" of common stock means (i) a Person who
              beneficially owns such common stock, directly or indirectly, or
              (ii) a


                                       49

<PAGE>

              Person who has the right to acquire such common stock
              (whether such right is exercisable immediately or only with the
              passage of time) pursuant to any agreement, arrangement or
              understanding (whether or not in writing) or upon the exercise of
              conversion rights, exchange rights, warrants, options or
              otherwise.

         (e)  "Continuing Directors" means any member of the Board who (i) was a
              member of the Board prior to the date of the event that would
              constitute a Change in Control, and any successor of a Continuing
              Director while such successor is a member of the Board, (ii) is
              not an Acquiring Person or an Affiliate or Associate of an
              Acquiring Person, and (iii) is recommended or elected to succeed
              the Continuing Director by a majority of the Continuing Directors.

         (f)  "Person" means any individual, firm, corporation, partnership,
              trust or other entity.

     11.04 AMENDMENT OF THIS ARTICLE 11: This Article 11 of the Plan shall not
be amended upon or following a Change in Control in any manner that might have
the effect of reducing the vested portion of Participants' Accounts under the
Plan. Nothing in this Section 11.04 shall be construed to prohibit, prior to a
Change in Control, any amendment to the Plan, including to this Article 11, or
any termination of the Plan pursuant to its terms.

ARTICLE 12: EXERCISE OF COMPANY STOCKHOLDER'S RIGHTS

     12.01 VOTING RIGHTS: Each Participant shall be entitled to direct the
Trustee as to the manner in which Company stock allocated to his Accounts is to
be voted. The Trustee, through the Plan Administrator, shall notify Participants
of each occasion for the exercise of their voting rights within a reasonable
time prior to the date such rights are to be exercised but not less than thirty
(30) days prior to such date. The notification shall include all information
distributed to shareholders regarding the exercise of such rights. Not less than
five (5) business days prior to the date on which voting rights are to be
exercised, each Participant wishing to exercise such rights shall inform the
Trustee, in the form and manner prescribed by the Plan Administrator, as to the
manner in which such voting rights are to be exercised. If a Participant does
not direct the Trustee in whole or in part with respect to the exercise of his
voting rights attributable to Company stock allocated to his Account(s), the
Trustee shall not exercise such voting rights. To the extent possible, the
Trustee shall vote the combined fractional shares of Company stock allocated to
Participants' Accounts to reflect the directions of the Participants to whom
such fractional shares of Company stock are allocated.

     Neither the Trustees nor the Plan Administrator nor the Committee may make
any recommendation regarding the manner in which Participants' voting rights are
to be exercised, including whether or not such rights should be exercised.

     12.02 RIGHTS OTHER THAN VOTING RIGHTS: Each Participant shall be entitled
to direct the Trustee, in the form and manner prescribed by the Plan
Administrator, with respect


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<PAGE>

to the exercise of rights, other than voting rights, attributable to Company
stock allocated to his Account(s).

ARTICLE 13: GENERAL PROVISIONS

     13.01 NONALIENATION OF BENEFITS: Except as required under a "qualified
domestic relations order" (as defined under Code Section 414(p)) or in
accordance with Section 206(d)(4) of ERISA, no benefit under the Plan shall be
subject to any manner of anticipation, alienation, sale, transfer, assignment,
pledge, garnishment or encumbrance, and any attempt to do so shall be void. The
Plan Administrator shall comply with any court order determined to be a
"qualified domestic relations order", and it shall adopt procedures for making
such determination. Notwithstanding the preceding sentence, the amount and form
of benefits provided by the Plan shall not be altered by the terms of a
qualified domestic relations order. Effective August 5, 1997, this Section 13.01
shall not apply to an order or requirement to pay that satisfies the
requirements of ERISA Section 206(d)(4) and (5) and Code Section 401(a)(13)(C)
and (D).

     13.02 EXCLUSIVE BENEFIT OF PARTICIPANTS AND BENEFICIARIES: Plan assets
shall be held in the Trust Fund for the exclusive benefit of Participants and
Beneficiaries of the Plan (except, however, contributions which may be returned
to the Employer under Section 4.05).

     13.03 NO RIGHT TO EMPLOYMENT: Nothing contained in the Plan shall be
construed as giving any Employee the right to be retained in the employ of the
Company or as interfering with the Company's rights to discharge an Employee at
any time.

     13.04 UNIFORM ADMINISTRATION: All actions taken by the Plan shall be
uniform in nature as applied to all persons similarly situated, and no such
action shall be taken which will discriminate in favor of highly compensated
Participants or Participants whose principal duties consist of supervising the
work of others.

     13.05 HEADINGS: The headings of the sections of this Plan are for
convenience of reference, and in the case of any conflict between the headings
and the text of the Plan, the text of the Plan shall control.

     13.06 CONSTRUCTION: To the extent not preempted by ERISA or other federal
law, the laws of the State of Delaware shall control the Plan. The Plan and the
Trust shall be construed so as to qualify under Code Sections 401(a), 401(k),
and 501(a), as applicable.

     13.07 UNCLAIMED DISTRIBUTIONS: If any distribution due to a Participant or
Beneficiary is not claimed within the five (5) year period following the date it
becomes payable, the distribution shall be treated as a forfeiture, held in a
suspense account and applied to reduce Employer contributions under the Plan in
future Plan Years, in the manner described in Section 4.06(d)(viii); provided,
however, that the Employer shall restore amounts forfeited if and when the
Participant or Beneficiary entitled to receive the distribution makes a claim
for such amounts. The Employer shall use due care in attempting to distribute
all benefits payable under the Plan.


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<PAGE>


     13.08 DISTRIBUTIONS TO A LEGAL REPRESENTATIVE: If the Plan Administrator
finds that a person entitled to a benefit is unable to care for his affairs
because he is a minor or because of mental or physical incapacity, the Plan
Administrator may direct that any benefits due shall be paid to the
Participant's Spouse, child or legal representative of such person, unless a
claim for such benefits is made by his duly appointed legal representative. Any
payments so made under the direction of the Plan Administrator shall represent a
complete discharge of the Plan's liabilities therefor.

     13.09 EXPENSES: All costs and expenses incurred in administering the Plan
shall be paid from Plan assets, to the extent permissible under ERISA and the
Code. The Company shall pay any expenses not paid from the Plan. Direct charges
and expenses arising out of the purchase or sale of securities or other assets
and taxes levied on or measured by such transactions may be charged against the
Accounts of the Participants in the Investment Fund(s) for which the transaction
took place.

     13.10 SOURCE OF PAYMENT: Benefits under the Plan shall be payable only out
of the Trust Fund. The Company shall have no obligation, responsibility or
liability to make any direct payment of benefits under the Plan.

ARTICLE 14: FORMER NUWAY EMPLOYEES

     Notwithstanding any other provision in the Plan, the provisions of this
Article shall apply to former employees of Nuway Paper, LLC ("Nuway") for
purposes of determining their eligibility, participation, and participant and
employer contributions to the Plan.

     14.01 ELIGIBILITY AND PARTICIPATION: Each former employee of Nuway who was
a participant in the Nuway Paper, LLC 401(k) Retirement Plan (the "Nuway Plan")
shall immediately become an Active Participant in the Plan as of July 12, 1999.
Effective July 12, 1999 through July 31, 2000, a former employee of Nuway must
have at least one year of service with Nuway and/or the Bowater Nuway
Incorporated to participate in the Plan, and participation will then begin as of
the next Enrollment Date. Effective August 1, 2000, a former employee of Nuway
must satisfy the eligibility requirements of Article 2 prior to commencing
participation in the Plan.

     14.02 PARTICIPANT CONTRIBUTIONS: An Employee who becomes an Active
Participant pursuant to this Article may elect to make Basic Tax-Deferred
Employee Contributions of up to 15% of his Earnings.

     14.03 EMPLOYER CONTRIBUTIONS: With respect to each Active Participant
pursuant to this Article, the Employer shall make a Matching Contribution to the
Plan equal to 50% of such Active Participant's Basic Tax-Deferred Employee
Contribution which do not exceed 4% of the Active Participant's Earnings. Each
Plan Year, the Employer may make an additional Matching Contribution equal to a
uniform discretionary percentage of the Earnings of each Active Participant who
made Basic Tax-Deferred Employee Contribution during the Plan Year, the exact
percentage, if any, to be determined each year by the Employer. Contributions


                                       52

<PAGE>

made pursuant to this subsection shall be paid to the Trustee promptly and
credited to each Participant's Matching Contribution Account.

     14.04 PRIOR SERVICE CREDIT: Former employees of Nuway who become Active
Participants in the Plan shall receive service credit under the Plan for their
accrued service under the Nuway Plan as of July 12, 1999 for purposes of
eligibility under Section 2.01, participation under Section 2.02 and vesting
under Article 7.

     14.05 CESSATION OF PARTICIPATION: Effective December 31, 2000, former
employees of Nuway shall no longer participate in the Plan.

ARTICLE 15: Merger of Plan

     Notwithstanding any provision in the Plan to the contrary, effective as of
December 31, 2001, the Plan is merged into and with the Bowater Incorporated
Savings Plan.

                                     * * * *

     IN WITNESS WHEREOF, BOWATER INCORPORATED has caused this document to be
executed by its duly authorized officers and its corporate seal to be affixed
hereto.

                                         BOWATER INCORPORATED


                                         By /s/ James T. Wright
                                            -------------------
                                         Name: James T. Wright
                                               ----------------
                                         Title: Vice President - Human Resources
                                               ---------------------------------
                                         Date Signed: February 19, 2002
                                                      --------------------------

                                       53