<PAGE>
 
                                                                     EXHIBIT 4.4




                            SOUTHWEST BANK OF TEXAS
                              401(k) SAVINGS PLAN

                            As amended and restated
                                     as of
                                January 1, 1994
<PAGE>
 
                            SOUTHWEST BANK OF TEXAS
                              401(K) SAVINGS PLAN

                               TABLE OF CONTENTS


ARTICLE I
     DEFINITIONS
     1.01       "Account"................................................2
     1.02       "Accounting Date"........................................2
     1.03       "Accrued Benefit"........................................2
     1.04       "Administrative Committee"...............................2
     1.05       "Beneficiary"............................................2
     1.06       "Break in Service".......................................2
     1.07       "Code"...................................................2
     1.08       "Compensation"...........................................3
     1.09       "Determination of Top Heavy Status"......................4
     1.10       "Disability".............................................6
     1.11       "Effective Date".........................................6
     1.12       "Employee"...............................................6
     1.13       "Employer"...............................................6
     1.14       "ERISA"..................................................7
     1.15       "Fiduciary"..............................................7
     1.16       "Forfeiture Break in Service"............................7
     1.17       "Highly Compensated Employee"............................7
     1.18       "Hour of Service"........................................8
     1.19       "Leased Employee"........................................9
     1.20       "Normal Retirement Age"..................................9
     1.21       "Normal Retirement Date"................................10
     1.22       "Participant"...........................................10
     1.23       "Plan"..................................................10
     1.24       "Plan Administrator"....................................10
     1.25       "Plan Entry Date".......................................10
     1.26       "Plan Year".............................................10
     1.27       "Retirement"............................................10
     1.28       "Separation from Service"...............................10
     1.29       "Trust".................................................10
     1.30       "Trust Fund"............................................10
     1.31       "Trustee"...............................................10
     1.32       "Vested"................................................10

ARTICLE II
     EMPLOYEE PARTICIPANTS
     2.01       ELIGIBILITY.............................................11
     2.02       YEAR OF SERVICE - ELIGIBILITY/PARTICIPATION.............11
     2.03       BREAK IN SERVICE - ELIGIBILITY/PARTICIPATION............11
     2.04       PARTICIPATION UPON REEMPLOYMENT.........................11


                                      -i-
<PAGE>
 
     2.05       OMISSION OF ELIGIBLE EMPLOYEE...........................11
     2.06       INCLUSION OF INELIGIBLE EMPLOYEE........................11

ARTICLE III
     EMPLOYER CONTRIBUTIONS AND FORFEITURES   
     3.01       AMOUNT..................................................12
     3.02       SALARY REDUCTION........................................13
     3.03       SPECIAL RULES FOR DEFERRAL CONTRIBUTIONS................13
     3.04       ACTUAL DEFERRAL PERCENTAGE ("ADP") TEST.................14
     3.05       NONDISCRIMINATION RULES FOR EMPLOYER
                MATCHING CONTRIBUTIONS/EMPLOYEE CONTRIBUTIONS...........19
     3.06       MULTIPLE USE LIMITATION.................................21
     3.07       DETERMINATION OF CONTRIBUTION...........................22
     3.08       TIME OF PAYMENT OF CONTRIBUTION.........................22
     3.09       CONTRIBUTION ALLOCATION.................................22
     3.10       FORFEITURE ALLOCATION...................................25
     3.11       ACCRUAL OF BENEFIT......................................25
     3.12       LIMITATIONS ON ALLOCATIONS TO PARTICIPANTS' ACCOUNTS....27
     3.13       DEFINITIONS - ARTICLE III...............................29
 
ARTICLE IV
     PARTICIPANT CONTRIBUTIONS
     4.01       PARTICIPANT VOLUNTARY CONTRIBUTION......................33
     4.02       PARTICIPANT ROLLOVER CONTRIBUTIONS......................33
 
ARTICLE V
     TERMINATION OF SERVICE - PARTICIPANT VESTING
     5.01       TERMINATION OF SERVICE UPON DEATH, DISABILITY OR
                RETIREMENT..............................................35
     5.02       TERMINATION OF SERVICE OTHER THAN UPON DEATH,
                DISABILITY OR RETIREMENT................................35
     5.03       CASHOUT DISTRIBUTION TO PARTIALLY
                VESTED PARTICIPANTS/RESTORATION OF FORFEITED
                MATCHING AND EMPLOYER CONTRIBUTION ACCOUNT..............35
     5.04       SEGREGATED ACCOUNT FOR REPAID AMOUNT....................37
     5.05       YEAR OF SERVICE - VESTING...............................37
     5.06       INCLUDED YEARS OF SERVICE - VESTING.....................37
     5.07       FORFEITURE OCCURS.......................................38
 
ARTICLE VI
     TIME AND METHODS OF PAYMENT OF BENEFITS
     6.01       TIME OF PAYMENT OF ACCRUED BENEFIT......................39
     6.02       METHOD OF PAYMENT OF ACCRUED BENEFIT....................41
     6.03       BENEFIT PAYMENT ELECTIONS...............................44
     6.04       ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING
                SPOUSES.................................................45


                                     -ii-
<PAGE>
 
     6.05       WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY..46
     6.06       WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY........47
     6.07       HARDSHIP/IN-SERVICE DISTRIBUTION RULES FROM
                DEFERRAL CONTRIBUTIONS ACCOUNT..........................48
     6.08       DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS...........49
     6.09       DIRECT ROLLOVER.........................................50
         
ARTICLE VII
     EMPLOYER ADMINISTRATIVE PROVISIONS
     7.01       INFORMATION TO COMMITTEE................................52
     7.02       NO LIABILITY............................................52
     7.03       INDEMNITY OF COMMITTEE..................................52
     7.04       EMPLOYER DIRECTION OF INVESTMENT........................52
     7.05       AMENDMENT TO VESTING SCHEDULE...........................52
         
ARTICLE VIII
     PARTICIPANT ADMINISTRATIVE PROVISIONS
     8.01       BENEFICIARY DESIGNATION.................................54
     8.02       NO BENEFICIARY DESIGNATION..............................54
     8.03       PERSONAL DATA TO COMMITTEE..............................55
     8.04       ADDRESS FOR NOTIFICATION................................55
     8.05       ASSIGNMENT OR ALIENATION................................55
     8.06       NOTICE OF CHANGE IN TERMS...............................55
     8.07       LITIGATION AGAINST THE TRUST............................55
     8.08       INFORMATION AVAILABLE...................................56
     8.09       APPEAL PROCEDURE FOR DENIAL OF BENEFITS.................56
     8.10       PARTICIPANT DIRECTION OF INVESTMENT.....................57
         
ARTICLE IX
     ADMINISTRATIVE DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNT
     9.01       MEMBERS' COMPENSATION EXPENSES..........................58
     9.02       TERM AND NUMBER.........................................58
     9.03       POWERS..................................................58
     9.04       GENERAL.................................................58
     9.05       FUNDING POLICY..........................................59
     9.06       MANNER OF ACTION........................................59
     9.07       AUTHORIZED REPRESENTATIVE...............................59
     9.08       INTERESTED MEMBER.......................................59
     9.09       INDIVIDUAL ACCOUNTS.....................................59
     9.10       VALUE OF PARTICIPANT'S ACCRUED BENEFIT..................60
     9.11       ALLOCATION AND DISTRIBUTION OF NET INCOME, GAIN
                OR LOSS.................................................60
     9.12       INDIVIDUAL STATEMENT....................................61
     9.13       ACCOUNT CHARGED.........................................62
     9.14       UNCLAIMED ACCOUNT PROCEDURE.............................62


                                    -iii-
<PAGE>
 
ARTICLE X
     TRUSTEE, POWERS AND DUTIES
     10.01      ACCEPTANCE..............................................63
     10.02      RECEIPT OF CONTRIBUTIONS................................63
     10.03      INVESTMENT POWERS.......................................63
     10.04      RECORDS AND STATEMENTS..................................65
     10.05      FEES AND EXPENSES FROM FUND.............................66
     10.06      PARTIES TO LITIGATION...................................66
     10.07      PROFESSIONAL AGENTS.....................................66
     10.08      DISTRIBUTION OF CASH OR PROPERTY........................66
     10.09      DISTRIBUTION DIRECTIONS.................................66
     10.10      THIRD PARTY.............................................66
     10.11      RESIGNATION.............................................67
     10.12      REMOVAL.................................................67
     10.13      INTERIM DUTIES AND SUCCESSOR TRUSTEE....................67
     10.14      VALUATION OF TRUST......................................67
     10.15      LIMITATION ON LIABILITY - IF INVESTMENT MANAGER
                APPOINTED...............................................67
     10.16      INVESTMENT IN GROUP TRUST FUND..........................68
 
ARTICLE XI
     MISCELLANEOUS
     11.01      EVIDENCE................................................69
     11.02      NO RESPONSIBILITY FOR EMPLOYER ACTION...................69
     11.03      FIDUCIARIES NOT INSURERS................................69
     11.04      WAIVER OF NOTICE........................................69
     11.05      SUCCESSORS..............................................69
     11.06      WORD USAGE..............................................69
     11.07      STATE LAW...............................................69
     11.08      EMPLOYMENT NOT GUARANTEE................................69

ARTICLE XII
     EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
     12.01      EXCLUSIVE BENEFIT.......................................71
     12.02      AMENDMENT BY EMPLOYER...................................71
     12.03      DISCONTINUANCE..........................................72
     12.04      FULL VESTING ON TERMINATION.............................72
     12.05      MERGER/DIRECT TRANSFER..................................72
     12.06      TERMINATION.............................................73


                                     -iv-
<PAGE>
 
                            SOUTHWEST BANK OF TEXAS
                              401(K) SAVINGS PLAN

     Southwest Bank of Texas, N.A., a corporation organized under the laws of
the State of Texas, makes this Agreement with David Farries, Paul Murphy, Sharon
K. Sokol and Kim Zabin, Trustees.

WITNESSETH:

     SOUTHWEST BANK OF TEXAS 401(k) SAVINGS PLAN continues, within this Plan and
Trust Agreement, the Plan formerly known as the Southwest Bank of Texas National
Association Savings Plan for the administration and distribution of
contributions made by the Employer for the purpose of permitting Participants to
save for their retirement with pre-tax dollars and rewarding eligible Employees
for past service.  This Plan is an amended plan, in restated form, the original
plan being established on the 1st day of January, 1985.  The provisions of this
Plan, as amended, apply solely to an Employee whose employment with the Employer
terminates on or after the restated Effective Date of the Employer's Plan.  If
an Employee's employment with the Employer terminates prior to the restated
Effective Date, that Employee is entitled to benefits under the Plan formerly
known as the Southwest Bank of Texas National Association Savings Plan as that
Plan existed on the date of the employee's termination of employment.  This Plan
is intended to be the type commonly referred to as a "profit sharing plan with a
cash or deferred arrangement".

     Now, therefore, in consideration of their mutual covenants, the Employer
and the Trustee agree as follows:

                                      -1-
<PAGE>
 
                                   ARTICLE I
                                  DEFINITIONS

 1.01   "Account" means the separate account(s) which the Plan Administrator
        or the Trustee maintains for a Participant under the Plan.
 
 1.02   "Accounting Date" means March 30, June 30, September 30, and December 30
        of each Plan Year. Unless otherwise specified in the Plan, the Plan
        Administrator will make all plan allocations for a particular Plan Year
        as of the Accounting Date of that Plan Year.

 1.03   "Accrued Benefit" means the amount standing in a Participant's
        Account(s) as of any date. A Participant's Account includes his
        "Deferral Contributions Account" and his "Employer Contributions
        Account."

 1.04   "Administrative Committee" means the Employer's Administrative Committee
        as from time to time constituted pursuant to Article I.

 1.05   "Beneficiary" means a person designated by a Participant who is or may
        become entitled to a benefit under the Plan. A Beneficiary who becomes
        entitled to a benefit under the Plan remains a Beneficiary under the
        Plan until the Trustee has fully distributed his benefit to him. A
        Beneficiary's right to (and the Plan Administrator's or a Trustee's duty
        to provide to the Beneficiary) information or data concerning the Plan
        does not arise until he first becomes entitled to receive a benefit
        under the Plan.

 1.06   "Break in Service" means a Participant's failure to complete at least
        five hundred and one (501) Hours of Service with the Employer during any
        Plan Year. This concept of "Break in Service" has no application to
        Participants who are Vested upon termination of employment.

        Solely for purposes of determining whether the Employee incurs a Break
        in Service under any provision of this Plan, the Plan Administrator must
        credit Service during an Employee's unpaid absence period due to
        maternity or paternity leave. The Plan Administrator considers an
        Employee on maternity or paternity leave if the Employee's absence is
        due to the Employee's pregnancy, the birth of the Employee's child, the
        placement with the Employee of an adopted child, or the care of the
        Employee's child immediately following the child's birth or placement.
        The Plan Administrator credits Service under this Section 1.06 on the
        basis of a Service, as described in Section 1.30, the Employee would
        receive if he were paid during the absence period. The Plan
        Administrator will credit only the Service necessary to prevent an
        Employee's Break in Service. The Plan Administrator credits all Service
        described in this Section 1.06 to the computation period in which the
        absence period begins or, if the Employee does not need the Service to
        prevent a Break in Service in the computation period in which his
        absence period begins, the Plan Administrator credits the Service to the
        immediately following computation period.

1.07    "Code" means the Internal Revenue Code of 1986, as amended.

                                      -2-
<PAGE>
 
1.08    "Compensation" means the Participant's W-2 wages for purposes of federal
        income tax withholding under Code section 3401(a), excluding bonuses,
        reimbursements or other expenses allowances, fringe benefits (cash and
        noncash) and moving expenses, but determined without regard to any rules
        that limit remuneration included in wages based on the nature, except as
        otherwise excluded, or location of the employment or the services
        performed. Compensation also includes elective contributions made by the
        Employer on the Employee's behalf. "Elective contributions" are amounts
        excludable from the Employee's gross income under Code sections 125,
        402(a)(8), 402(h) or 403(b), and contributed by the Employer, at the
        Employee's election, to a Code section 401(k) arrangement, a Simplified
        Employee Pension, cafeteria plan or tax-sheltered annuity. The term
        "Compensation" does not include:

        (i)   Employer contributions (other than "elective contributions") to a
              plan of deferred compensation to the extent the contributions are
              not included in the gross income of the Employee for the taxable
              year in which contributed, employer contributions on behalf of an
              Employee to a Simplified Employee Pension Plan to the extent such
              contributions are excludable from the Employee's gross income, and
              any distributions from a plan of deferred compensation, regardless
              of whether such amounts are includible in the gross income of the
              Employee when distributed.

        (ii)  Amounts realized from the exercise of a non-qualified stock
              option, or when restricted stock (or property) held by an Employee
              either becomes freely transferable or is no longer subject to a
              substantial risk of forfeiture.

        (iii) Amounts realized from the sale, exchange or other disposition of
              stock acquired under a qualified stock option.

        (iv)  Other amounts which receive special tax benefits, such as premiums
              for group term life insurance (but only to the extent that the
              premiums are not includible in the gross income of the Employee).

        Any reference in this Plan to Compensation is a reference to the
        definition in this Section 1.08, unless the Plan reference specifies a
        modification to this definition. The Plan Administrator will take into
        account all Compensation for the entire Plan Year.

        (A)   LIMITATIONS ON COMPENSATION.

              (1) COMPENSATION DOLLAR LIMITATION. For any Plan Year beginning
                  after December 31, 1988, the Plan Administrator must take into
                  account only the first $200,000 (or beginning January 1, 1990,
                  such larger amount as the Commissioner of Internal Revenue may
                  prescribe) of any Participant's Compensation. For any Plan
                  Year beginning prior to January 1, 1989, this $200,000
                  limitation (but not the family aggregation requirement)
                  applies only if the Plan is top heavy for such Plan Year.

                                      -3-
<PAGE>
 
              (2) APPLICATION OF COMPENSATION LIMITATION TO CERTAIN FAMILY
                  MEMBERS. The $200,000 Compensation limitation applies to the
                  combined Compensation of the Employee and of any family member
                  aggregated with the Employee under Section 1.17 who is either
                  (i) the Employee's spouse; or (ii) the Employee's lineal
                  descendant under the age of 19. If, for a Plan Year, the
                  combined Compensation of the Employee and such family members
                  who are Participants entitled to an allocation for that Plan
                  Year exceeds the $200,000 (or adjusted) limitation,
                  "Compensation" for each such Participant, for purposes of the
                  contribution and allocation provisions of Article III, means
                  his Adjusted Compensation. Adjusted Compensation is the amount
                  which bears the same ratio to the $200,000 (or adjusted)
                  limitation as the affected Participant's Compensation (without
                  regard to the $200,000 Compensation limitation) bears to the
                  combined Compensation of all the affected Participants in the
                  family unit.

        (B)   NONDISCRIMINATION. For purposes of determining whether the Plan
              discriminates in favor of Highly Compensated Employees,
              Compensation means Compensation as defined in this Section 1.08.
              The Employer also may elect to use an alternate nondiscriminatory
              definition, in accordance with the requirements of Code (S) 414(s)
              and the regulations issued under that Code section. In determining
              Compensation under this Section 1.08(B), the Employer may elect to
              include all elective contributions made by the Employer on behalf
              of the Employees. The Employer's election to include elective
              contributions must be consistent and uniform with respect to
              Employees and all plans of the Employer for any particular Plan
              Year. The Employer may make this election to include elective
              contributions for nondiscrimination testing purposes, irrespective
              of whether this Section 1.08 includes elective contributions in
              the general Compensation definition applicable to the Plan.

1.09    "Determination of Top Heavy Status". If this Plan is the only qualified
        plan maintained by the Employer, the Plan is top heavy for a Plan Year
        if the top heavy ratio as of the Determination Date exceeds 60%. The top
        heavy ratio is a fraction, the numerator of which is the sum of the
        present value of Accrued Benefits of all Key Employees as of the
        Determination Date and the denominator of which is a similar sum
        determined for all Employees. The Plan Administrator must include in the
        top heavy ratio, as part of the present value of Accrued Benefits, any
        contribution not made as of the Determination Date but includible under
        Code section 416 and the applicable Treasury regulations, and
        distributions made within the Determination Period. The Plan
        Administrator must calculate the top heavy ratio by disregarding the
        Accrued Benefit (and distributions, if any, of the Accrued Benefit) of
        any Non-key Employee who was formerly a Key Employee, and by
        disregarding the Accrued Benefit (including distributions, if any, of
        the Accrued Benefit) of an individual who has not received credit for at
        least one Hour of Service with the Employer during the Determination
        Period. The Plan Administrator must calculate the top heavy ratio,
        including the extent to which it must take into account distributions,
        rollovers and transfers, in accordance with Code section 416 and the
        regulations under that Code section.

                                      -4-
<PAGE>
 
     If the Employer maintains other qualified plans (including a simplified
     employee pension plan), or maintained another such plan which now is
     terminated, this Plan is top heavy only if it is part of the Required
     Aggregation Group, and the top heavy ratio for the Required Aggregation
     Group and for the Permissive Aggregation Group, if any, each exceeds 60%.
     The Plan Administrator will calculate the top heavy ratio in the same
     manner as required by the first paragraph of this Section 1.09, taking into
     account all plans within the Aggregation Group.  To the extent the Plan
     Administrator must take into account distributions to a Participant, the
     Plan Administrator must include distributions from a terminated plan which
     would have been part of the Required Aggregation Group if it were in
     existence on the Determination Date.  The Plan Administrator will calculate
     the present value of Accrued Benefits under defined benefit plans or
     simplified employee pension plans included within the group in accordance
     with the terms of those plans, Code section 416 and the regulations under
     that Code section.  If a Participant in a defined benefit plan is a Non-key
     Employee, the Plan Administrator will determine his Accrued Benefit under
     the accrual method, if any, which is applicable uniformly to all defined
     benefit plans maintained by the Employer or, if there is no uniform method,
     in accordance with the slowest accrual rate permitted under the fractional
     rule accrual method described in Code section 411(b)(1)(C).  To calculate
     the present value of benefits from a defined benefit plan, the Plan
     Administrator will use the actuarial assumptions (interest and mortality
     only) prescribed by the defined benefit plan(s) to value benefits for top
     heavy purposes.  If an aggregated plan does not have a valuation date
     coinciding with the Determination Date, the Plan Administrator must value
     the Accrued Benefits in the aggregated plan as of the most recent valuation
     date falling within the twelve-month period ending on the Determination
     Date, except as Code section 416 and applicable Treasury regulations
     require for the first and second plan year of a defined benefit plan.  The
     Plan Administrator will calculate the top heavy ratio with reference to the
     Determination Dates that fall within the same calendar year.

     DEFINITIONS.  For purposes of applying the provisions of this Section 1.09:

     (a) "Key Employee" means, as of any Determination Date, any Employee or
         former Employee (or Beneficiary of such Employee) who, for any Plan
         Year in the Determination Period: (i) has Compensation in excess of 50%
         of the dollar amount prescribed in Code section 415(b)(1)(A) (relating
         to defined benefit plans) and is an officer of the Employer; (ii) has
         Compensation in excess of the dollar amount prescribed in Code section
         415(c)(1)(A) (relating to defined contribution plans) and is one of the
         Employees owning the ten largest interests in the Employer; (iii) is a
         more than 5% owner of the Employer; or (iv) is a more than 1% owner of
         the Employer and has Compensation of more than $150,000. The
         constructive ownership rules of Code section 318 (or the principles of
         that section, in the case of an unincorporated Employer,) will apply to
         determine ownership in the Employer. The number of officers taken into
         account under clause (i) will not exceed the greater of 3 or 10% of the
         total number (after application of the Code section 414(q)(8)
         exclusions) of Employees, but no more than 50 officers. The Plan
         Administrator will make the determination of who is a Key Employee in
         accordance with Code section 416(i)(1) and the regulations under that
         Code section.

                                      -5-
<PAGE>
 
        (b) "Non-key Employee" is an employee who does not meet the definition
            of Key Employee.

        (c) "Compensation" means Compensation as determined under Section 1.17
            (relating to the Highly Compensated Employee definition).

        (d) "Required Aggregation Group" means: (1) each qualified plan of the
            Employer in which at least one Key Employee participates at any time
            during the Determination Period; and (2) any other qualified plan of
            the Employer which enables a plan described in clause (1) to meet
            the requirements of Code section 401(a)(4) or Code section 410.

        (e) "Permissive Aggregation Group" is the Required Aggregation Group
            plus any other qualified plans maintained by the Employer, but only
            if such group would satisfy in the aggregate the requirements of
            Code section 401(a)(4) and Code section 410. The Plan Administrator
            will determine the Permissive Aggregation Group.

        (f) "Employer" means the Employer that adopts this Plan.

        (g) "Determination Date" for any Plan Year is the Accounting Date of the
            preceding Plan Year or, in the case of the first Plan Year of the
            Plan, the Accounting Date of that Plan Year.

        (h) "Determination Period" is the 5 year period ending on the
            Determination Date.

1.10    "Disability" means the Participant, because of a physical or mental
        disability, will be unable to perform the duties of his customary
        position of employment (or is unable to engage in any substantial
        gainful activity) for an indefinite period which the Plan Administrator
        considers will be of long continued duration. A Participant also is
        disabled if he incurs the permanent loss or loss of use of a member or
        function of the body, or is permanently disfigured, and incurs a
        Separation from Service. The Plan considers a Participant disabled on
        the date the Plan Administrator determines the Participant satisfies the
        definition of disability. A Participant may be required to submit to a
        physical examination, by a licensed physician chosen by the Plan
        Administrator, in order to confirm disability. The Plan Administrator
        will apply the provisions of this Section 1.10 in a nondiscriminatory,
        consistent and uniform manner.

1.11    "Effective Date" of this Plan as amended and restated is January 1,
        1994.

1.12    "Employee" means any individual who receives compensation from the
        Employer which is reportable on Form W-2, except that the term
        "Employee" shall also include a Leased Employee as described in Section
        1.19, irrespective of the fact that such a Leased Employee does not
        receive compensation from the Employer which is reportable on Form W-2.

1.13    "Employer" means SOUTHWEST BANK OF TEXAS, N.A., and all subsidiaries
        thereof who adopt this Plan. The term Employer includes all corporations
        which are members of a

                                      -6-
<PAGE>
 
        controlled group of corporations (as defined in Code section 414(b)),
        trades or businesses (whether or not incorporated) which are under
        common control (as defined in Code section 414(c)) or an affiliated
        service group (as defined in Code section 414(m) or Code section 414(o))
        as a related group.

        If the Employer is a member of a related group, the term "Employer"
        includes the related group members for purposes of crediting Hours of
        Service, determining years of Service and Breaks in Service under
        Article II and V, applying the Participants Test and Coverage Test under
        the suspension of accrual requirements of Section 3.11(c), applying the
        limitations on allocations in Part 2 of Article III, applying the top
        heavy rules and the minimum allocation requirements of Article III, the
        definitions of Employee, Highly Compensated Employee, Compensation and
        Leased Employee, and for any other purposes required by the applicable
        Code section or by the Plan provisions. However, only SOUTHWEST BANK OF
        TEXAS, N.A. and all subsidiaries thereof who adopt this Plan may
        contribute to the Plan and only an Employee employed by SOUTHWEST BANK
        OF TEXAS, N.A. and all subsidiaries thereof who adopt this Plan is
        eligible to participate in this Plan.

1.14    "ERISA" means the Employee Retirement Income Security Act of 1974, as
        amended.

1.15    "Fiduciary" means any person who (a) exercises any discretionary
        authority or control as to management of the Plan or exercises any
        authority or control respecting management or disposition of its assets,
        (b) renders investment advise for a fee or other compensation, direct or
        indirect, with respect to any monies or other property of the Plan, or
        (c) has any discretionary authority or responsibility in the
        administration of the Plan, including, but not limited to, the Trustee,
        the Employer and its representatives, and the Administrator.

1.16    "Forfeiture Break in Service" means a Participant's incurring five (5)
        consecutive Breaks in Service.

1.17    "Highly Compensated Employee" means an Employee who, during the Plan
        Year or during the preceding 12 month period:

        (a) is a more than 5% owner of the Employer (applying the constructive
            ownership rules of Code section 318, and applying the principles of
            Code section 318, for an unincorporated entity);

        (b) has Compensation in excess of $75,000 (as adjusted by the
            Commissioner of Internal Revenue for the relevant year);

        (c) has Compensation in excess of $50,000 (as adjusted by the
            Commissioner of Internal Revenue for the relevant year) and is part
            of the top-paid 20% group of employees (based on Compensation for
            the relevant year);

        (d) has Compensation in excess of 50% of the dollar amount prescribed in
            Code section 415(b)(1)(A) (relating to defined benefit plans) and is
            an officer of the Employer.

                                      -7-
<PAGE>
 
     If the Employee satisfies the definition in clause (b), (c), or (d) in the
     Plan Year but not during the preceding 12 month period and does not satisfy
     clause (a) in either period, the Employee is a Highly Compensated Employee
     only if he is one of the 100 most highly compensated Employees for the Plan
     Year.  The number of officers taken into account under clause (d) will not
     exceed the greater of 3 or 10% of the total number (after application of
     the Code section 414(q) exclusions) of Employees, but no more than 50
     officers.  If no Employee satisfies the Compensation requirement in clause
     (d) for the relevant year, the Plan Administrator will treat the highest
     paid officer as satisfying clause (d) for that year.

     For purposes of this Section 1.17, "Compensation" means Compensation as
     defined in Section 1.08 except that bonuses, reimbursements or other
     expense allowances, fringe benefits (cash and noncash) and moving expenses
     will be included as Compensation.  The Plan Administrator must make the
     determination of who is a Highly Compensated Employee, including the
     determinations of the number and identity of the top paid 20% group, the
     top 100 paid Employees, the number of officers includible in clause (d) and
     the relevant Compensation, consistent with Code section 414(q) and
     regulations issued under that Code section.  The Employer may make a
     calendar year election to determine the Highly Compensated Employees for
     the Plan Year, as prescribed by Treasury regulations.  A calendar year
     election must apply to all plans and arrangements of the Employer.  For
     purposes of applying any nondiscrimination test required under the Plan or
     under the Code, in a manner consistent with applicable Treasury
     regulations, the Plan Administrator will not treat as a separate Employee a
     family member (a spouse, a lineal ascendant or descendant, or a spouse of a
     lineal ascendant or descendant) of a Highly Compensated Employee described
     in clause (a) of this Section, or a family member of one of the ten Highly
     Compensated Employees with the greatest Compensation for the Plan Year, but
     will treat the Highly Compensated Employee and all such family members as a
     single Highly Compensated Employee.  This aggregation rule applies to a
     family member even if that family member is a Highly Compensated Employee
     without family aggregation.

     The term "Highly Compensated Employee" also includes any former Employee
     who separated from Service (or has a deemed Separation from Service, as
     determined under Treasury regulations) prior to the Plan Year, performs no
     Service for the Employer during the Plan Year, and was a Highly Compensated
     Employee either for the separation year or any Plan Year ending on or after
     his 55th birthday.  If the former Employee's Separation from Service
     occurred prior to January 1, 1987, he is a Highly Compensated Employee only
     if he satisfied clause (a) of this Section 1.17 or received Compensation in
     excess of $50,000 during:  (1) the year of his Separation from Service (or
     the prior year); or (2) any year ending after his 54th birthday.

1.18 "Hour of Service" means:

     (a) Each Hour of Service for which the Employer, either directly or
         indirectly, pays an Employee, or for which the Employee is entitled to
         payment, for the performance of duties. The Plan Administrator credits
         Hours of Service under this sub-Section (a) to the Employee for the
         computation period in which the Employee performs the duties,
         irrespective of when paid;

                                      -8-
<PAGE>
 
     (b) Each Hour of Service for back pay, irrespective of mitigation of
         damages, to which the Employer has agreed or for which the Employee has
         received an award. The Plan Administrator credits Hours of Service
         under this sub-Section (b) to the Employee for the computation
         period(s) to which the award or the agreement pertains rather than for
         the computation period in which the award, agreement or payment is
         made; and

     (c) Each Hour of Service for which the Employer, either directly or
         indirectly, pays an Employee, or for which the Employee is entitled to
         payment (irrespective of whether the employment relationship is
         terminated), for reasons other than for the performance of duties
         during a computation period, such as leave of absence, vacation,
         holiday, sick leave, illness, incapacity (including disability),
         layoff, jury duty or military duty.

     The Plan Administrator will not credit an Hour of Service under more than
     one (1) of the above sub-Sections.  A computation period for purposes of
     this Section 1.18 is the Plan Year, year of Service period, Break in
     Service period or other period, as determined under the Plan provision for
     which the Plan Administrator is measuring an Employee's Hours of Service.
     The Plan Administrator will resolve any ambiguity with respect to the
     crediting of an Hour of Service in favor of the Employee.

1.19 "Leased Employee".  The Plan treats a Leased Employee as an Employee
     of the Employer. A Leased Employee is an individual (who otherwise is not
     an employee of the Employer) who, pursuant to a leasing agreement between
     the Employer and any other person, has performed services for the Employer
     (or for the Employer and any persons related to the Employer within the
     meaning of Code section 144(a)(3)) on a substantially full time basis for
     at least one year and who performs services historically performed by
     employees in the Employer's business field.  If a Leased Employee is
     treated as an Employee by reason of this Section 1.19 of the Plan,
     "Compensation" includes compensation from the leasing organization which is
     attributable to services performed for the Employer.

     Safe harbor plan exception.  The Plan does not treat a Leased Employee as
     an Employee if the leasing organization covers the employee in a safe
     harbor plan and, prior to application of this safe harbor plan exception,
     20% or less of the Employer's Employees (other than Highly Compensated
     Employees are Leased Employees.  A safe harbor plan is a money purchase
     pension plan providing immediate participation, full and immediate vesting,
     and a nonintegrated contribution formula equal to at least 10% of the
     employee's compensation without regard to employment by the leasing
     organization on a specified date.  The safe harbor plan must determine the
     10% contribution on the basis of compensation as defined in Code section
     415(c)(3) plus elective contributions (as defined in Section 1.08).

     Other requirements.  The Plan Administrator must apply this Section 1.19 in
     a manner consistent with Code sections 414(n) and 414(o) and the
     regulations issued under those Code sections.

1.20 "Normal Retirement Age" means attainment of age sixty-five (65) years.

                                      -9-
<PAGE>
 
1.21 "Normal Retirement Date" means the Accounting Date coincident with or
     next following the Participant's Separation from Service with the Employer
     after attainment of Normal Retirement Age.  For a Participant separating
     from Service with the Employer prior to his attainment of Normal Retirement
     Age, "Normal Retirement Date" means the first Accounting Date coincident
     with or next following his attainment of Normal Retirement Age.

1.22 "Participant" means an Employee who is eligible to be and becomes a
     Participant in accordance with the provisions of Section 2.01.  An Employee
     who becomes a Participant will remain a Participant under the Plan until
     the Trustee has fully distributed his Vested Accrued Benefit to him.

1.23 "Plan" means the retirement plan, formerly known as the Southwest Bank
     of Texas National Association Savings Plan, established by the Employer and
     continued in the form of this Agreement, designated as the Southwest Bank
     of Texas 401(k) Savings Plan.

1.24 "Plan Administrator" means the Employer unless the Employer designates
     another person to hold the position of Plan Administrator.  In addition to
     other duties, the Plan Administrator has full responsibility for compliance
     with the reporting and disclosure rules under ERISA as respects this
     Agreement.

1.25 "Plan Entry Date" means the restated Effective Date and every January
     1, April 1, July 1, and October 1 after the restated Effective Date.

1.26 "Plan Year" means the calendar year.

1.27 "Retirement" means a Participant's Separation from Service after
     attaining Normal Retirement Age.

1.28 "Separation from Service" means the date the Employee no longer has an
     employment relationship with the Employer maintaining this Plan.  The
     employment relationship is terminated on the earliest of the date the
     Employee quits, retires, is discharged or dies, or the first anniversary of
     the first date of a period during which an Employee is absent from service
     for any other reason.

1.29 "Trust" means the separate Trust created under the Plan.

1.30 "Trust Fund" means all property of every kind held or acquired by the
     Trustee under this Agreement.

1.31 "Trustee" means David Farries, Sharon K. Sokol, Paul Murphy and Kim
     Zabin, or any successor in office who in writing accepts the position of
     Trustee.

1.32 "Vested" means the extent to which a Participant's Accrued Benefit is
     nonforfeitable.  Other forms of the word "Vest" will have the meaning that
     the suffix would normally connote, given the meaning of Vesting.

                                      -10-
<PAGE>
 
                                  ARTICLE II
                             EMPLOYEE PARTICIPANTS

2.01 ELIGIBILITY.  Each Employee, except those Employees who are hourly
     paid, becomes a Participant in the Plan on the first day of the quarter
     coinciding with or next following the later of the date on which he
     completes one Year of Service or attains age eighteen (18). Each Employee
     who was a Participant in the Plan on the day before the Effective Date of
     this restated Plan continues as a Participant in the Plan.

2.02 YEAR OF SERVICE - ELIGIBILITY/PARTICIPATION.  "Year of Service" for
     Eligibility and Participation purposes means an Employee shall be credited
     with a Year of Service in any Computation Period that he completes 1,000
     Hours of Service, unless such Service can be disregarded under the Break in
     Service rules.  "Computation Period" shall be measured on the twelve
     consecutive month period beginning with the Employee's Employment
     Commencement Date and each anniversary thereof.

2.03 BREAK IN SERVICE - ELIGIBILITY/PARTICIPATION.  For purposes of
     Eligibility and Participation in the Plan, a Break in Service occurs after
     a twelve consecutive month period which begins on a Participant's
     Separation from Service and ends on the earlier of:  the date which is
     twelve months later or the date a Participant is reemployed.

2.04 PARTICIPATION UPON REEMPLOYMENT.  A Participant whose employment with
     the Employer terminates will reenter the Plan as a Participant on the date
     of his reemployment. An Employee who satisfies the Plan's eligibility
     conditions but who terminates employment with the Employer prior to
     becoming a Participant will become a Participant in the Plan on the later
     of the Plan Entry Date on which he would have entered the Plan had he not
     terminated employment or the date of his reemployment.  Any employee who
     terminates employment prior to satisfying the Plan's eligibility conditions
     becomes a Participant in accordance with the provisions of Section 2.01.

2.05 OMISSION OF ELIGIBLE EMPLOYEE.  If, in any Plan year, any Employee who
     should be included as a Participant in the Plan is erroneously omitted and
     discovery of such omission is not made until after a contribution by his
     Employer for the year has been made, the Employer shall make a subsequent
     contribution with respect to the omitted Employee in the amount which the
     said Employer would have contributed with respect to him had he not been
     omitted.  Such contribution shall be made regardless of whether or not it
     is deductible in whole or in part in any taxable year under applicable
     provisions of the Code.

2.06 INCLUSION OF INELIGIBLE EMPLOYEE.  If, in any Plan year, any person
     who should not have been included as a Participant in the Plan is
     erroneously included and discovery of such incorrect inclusion is not made
     until after a contribution for the year has been made, the Employer shall
     not be entitled to recover the contribution made with respect to the
     ineligible person regardless of whether or not a deduction is allowable
     with respect to such contribution.  In such event, the amount contributed
     with respect to the ineligible person shall constitute a forfeiture for the
     Plan Year in which the discovery is made.

                                      -11-
<PAGE>
 
                                  ARTICLE III
                     EMPLOYER CONTRIBUTIONS AND FORFEITURES

PART 1. AMOUNT OF EMPLOYER CONTRIBUTIONS AND PLAN ALLOCATIONS:  SECTIONS 3.01
        THROUGH 3.11

3.01    AMOUNT.  For each Plan Year, the Employer will contribute to the Trust
        the following amounts:

        (a) DEFERRAL CONTRIBUTIONS. "Deferral Contributions" means the amount by
            which each Participant has elected to reduce his Compensation for
            the Plan Year under his salary reduction agreement on file with the
            Plan Administrator.

        (b) EMPLOYER MATCHING CONTRIBUTIONS. "Employer Matching Contributions"
            means an amount equal to a percentage the Employer from time to time
            may deem advisable of each Participant's "eligible contributions",
            but only to the extent the Participant's eligible contributions do
            not exceed 6% of the Participant's Compensation for the Plan Year.
            For purposes of this Section 3.01, "eligible contributions" means
            the Deferral Contributions allocated to the Participant for that
            Plan Year. Deferral Contributions that are excess deferrals under
            Article III are not included as "eligible contributions". For this
            purpose: (a) excess deferrals relate first to Deferral Contributions
            for the Plan Year not otherwise eligible for a Matching
            Contribution; and (2) if the Plan Year is not a calendar year, the
            excess deferrals for a Plan Year are the last deferrals made for a
            calendar year. The Employer may designate all or a portion of its
            Employer Matching Contributions as Qualified Matching Contributions.

        (c) DISCRETIONARY CONTRIBUTIONS. "Discretionary Contributions" means the
            additional amount the Employer may from time to time deem advisable.
            The Employer, in its sole discretion, may designate all or any
            portion of its Discretionary Contribution as a Qualified Nonelective
            Contribution at the time it makes the contribution.

     The Employer may make its contribution under the Plan, irrespective of
     whether it has net profits.  Although, the Employer may contribute to this
     Plan irrespective of whether it has net profits, the Employer intends this
     Plan to be a profit sharing plan for all purposes under the Code.  The
     Employer will not make a contribution to the Trust for any Plan Year to the
     extent the contribution would exceed the Participants' "Maximum Permissible
     Amount" under Section 3.13.

     The Trustee, upon written request from the Employer, must return to the
     Employer the amount of the Employer's contribution made by the Employer by
     mistake of fact or the amount of the Employer's contribution disallowed as
     a deduction under Code section 404. The Trustee will not return any portion
     of the Employer's contribution under the provisions of this paragraph more
     than one (1) year after the Employer made the contribution by mistake of
     fact; or the disallowance of the contribution as a deduction, and then,
     only to the extent of such disallowance.

                                      -12-
<PAGE>
 
     The Trustee will not increase the amount of the Employer contribution
     returnable under this Section 3.01 for any earnings attributable to the
     contribution, but the Trustee will decrease the Employer contribution
     returnable for any losses attributable to it.  The Trustee may require the
     Employer to furnish it whatever evidence the Trustee deems necessary to
     enable the Trustee to confirm the amount the Employer has requested be
     returned is properly returnable under ERISA.

3.02 SALARY REDUCTION.  The Employer contribution described in section
     3.01(a) is an elective deferral (i.e. "401(k)") arrangement.  An Employee
     who is eligible to participate in the 401(k) Plan may file a salary
     reduction agreement with the Plan Administrator.  A salary reduction
     agreement executed by such Employee may not be effective earlier than its
     execution date, and in no event earlier than the Employee's Plan Entry Date
     (or in the case of a reemployed Employee, his reparticipation date under
     Article II).  A salary reduction agreement must specify the percentage of
     Compensation the eligible Employee wishes to defer to the Plan.  The salary
     reduction agreement will apply only to Compensation (including increases in
     Compensation) which would otherwise become currently available to the
     Employee after the effective date of the salary reduction agreement.

     If the salary reduction agreement specifies the reduction amount as a
     percentage of Compensation, the percentage may not be less than one percent
     (1%) of Compensation.  An Employee's Deferral Contributions for a Plan
     Year, subject to the deferral limitations in Section 3.03, may not exceed
     fifteen percent (15%) of his Compensation for each pay period. An Employee
     may modify his salary reduction agreement, either to reduce or to increase
     the amount of Deferral Contributions, as of any January 1, April 1, July 1
     or October 1.  The Employee will make this modification by filing a new
     salary reduction agreement with the Plan Administrator as soon as
     administratively practicable prior to the January 1, April 1, July 1 or
     October 1 for which the modification is to be first effective.  An Employee
     may suspend his salary reduction agreement at any time.  An Employee who
     suspends his salary reduction agreement may file a new salary reduction
     agreement effective as of any subsequent calendar quarter following six
     calendar months from the effective date the suspension of salary reduction
     agreement.

3.03 SPECIAL RULES FOR DEFERRAL CONTRIBUTIONS.

     ANNUAL ELECTIVE DEFERRAL LIMITATION.  A Participant's elective deferrals
     for a calendar year may not exceed the limitation on elective deferrals
     determined under section 402(g) of the Code.  The 402(g) limitation is the
     greater of $7,000 or the adjusted amount determined by the secretary of the
     Treasury.  If the Employer determines the Participant's elective deferrals
     for a calendar year would exceed the limitation on elective deferrals under
     section 402(g) of the Code for the calendar year, the Employer will not
     make any additional Deferral Contributions with respect to that Participant
     for the remainder of that calendar year, paying in cash to the Participant
     any amounts which would cause the Deferral Contributions to exceed the
     limitation on elective deferrals under section 402(g) of the Code.  If,
     after the close of a calendar year, the Plan Administrator determines a
     Participant's Deferral Contributions exceed the limitation on elective
     deferrals under section 402(g) of the Code, the Plan Administrator will
     distribute the amount in excess of the limitation (the "excess

                                      -13-
<PAGE>
 
     deferral"),  as adjusted for allocable income or loss, no later than April
     15 of the following calendar year.  If the Plan Administrator distributes
     the excess deferral by the appropriate April 15, it may make the
     distribution irrespective of any other provision under this Plan or under
     the Code.

     If a Participant participates in another Plan under which he makes elective
     deferrals pursuant to a Code section 401(k) arrangement, elective deferrals
     under a Simplified Employee Pension, or salary reduction contributions to a
     tax sheltered annuity, irrespective of whether the Employer maintains the
     other plan, the Participant may provide the Plan Administrator a written
     claim for excess deferrals made for a calendar year.  The Participant must
     submit the claim no later than the March 1 following the close of the
     particular calendar year and the claim will specify the amount of the
     Participant's Deferral Contributions under this Plan which are excess
     deferrals.  If the Plan Administrator receives a timely claim, it will
     distribute to the Participant the excess deferral, as adjusted for
     allocable income or loss, which the Employee has assigned to this Plan in
     accordance with the distribution procedure described in the immediately
     preceding paragraph.

     ALLOCABLE INCOME.  For purposes of making a distribution of excess
     deferrals pursuant to this Section 3.03, allocable income means net income
     or net loss allocable to the excess deferrals for the calendar year in
     which the Employee made the excess deferral and for the "gap period"
     measured from the beginning of the next calendar year to the date of
     distribution. If the distribution of excess deferrals occurs during the
     calendar year in which the Employee made the excess deferral, the Plan
     Administrator will treat as a "gap period" the period from he first day of
     that calendar year to the date of distribution.  The Plan Administrator
     will determine the allocable income in the same manner as described in
     Section 3.04 for excess contributions, except the numerator of the
     allocation fraction will be the amount of the Employee's excess deferrals
     and the denominator of the allocation fraction will be the Employee's
     Accrued Benefit attributable to his elective deferrals.

3.04 ACTUAL DEFERRAL PERCENTAGE ("ADP") TEST.  For each Plan Year, the
     401(k) arrangement must satisfy one of the following actual deferral
     percentage ("ADP") tests:

     (i) The average ADP for the Highly Compensated Group does not exceed 1.25
         times the average ADP of the Nonhighly Compensated Group; or

     (ii) The average ADP for the Highly Compensated Group does not exceed the
          average ADP for the Nonhighly Compensated Group by more than two (2)
          percentage points (or the lesser percentage permitted by the multiple
          use limitation in Section 3.11) and the average ADP for the Highly
          Compensated Group is not more than twice the average ADP for the
          Nonhighly Compensated Group .

     Unless otherwise specified, for purposes of applying Section 3.01, the ADP
     and ACP tests, the following definitions apply:

     (a) "Compensation" means Compensation as defined in Section 1.08 for
         applying Section 3.01 and as defined in section 1.17 for purposes of
         applying the ADP and

                                      -14-
<PAGE>
 
     ACP tests.  The Employer may elect to define Compensation to include or
     exclude elective deferrals under a Code section 401(k) arrangement or under
     a Simplified Employee Pension maintained by the Employee, and Compensation
     paid by the Employer which is not currently includible in gross income
     pursuant to Code sections 125 or 403(b).  The Employer's election must be
     consistent and uniform with respect to all Employees and all plans of the
     Employer for any particular Plan Year. The Employer may change the election
     provided the change does not result in discrimination in favor of the
     Highly Compensated Employees.  The Plan Administrator will disregard an
     Eligible Employee's Compensation in excess of $200,000 (or the adjusted
     limitation prescribed by the Secretary of the Treasury). The $200,000 (or
     adjusted) limitation on Compensation will apply to the combined
     Compensation of any family members aggregated under Section 1.17 who are
     spouses and any aggregated lineal descendants who are under the age of 19.

(b)  "Deferral Contributions" means the sum of the Deferral Contributions
     the Employer contributes on the Eligible Employee's behalf for the Plan
     Year, pursuant to section 3.01.  "Elective Deferrals" are the Deferral
     Contributions the Employer contributes to the Trust at the election of an
     Eligible Employee.  If the Code Section 401(k) arrangement includes a cash
     or deferred feature, any portion of a cash or deferred contribution
     contributed to the Trust because of the Employee's failure to make a cash
     election is an Elective Deferral, but any portion of a cash or deferred
     contribution over which the Employee does not have a election is not an
     Elective Deferral. Elective Deferrals do not include amounts designated as
     nondeductible employee contributions at the time of deferral or
     contribution.

(c)  "Distribution Restrictions" means a Plan will not permit distribution
     of the Accrued Benefit attributable to the specified contribution (nor
     earnings on those contributions) except in the event of (1) the
     Participant's death, disability, termination of employment or attainment of
     age 59 1/2, (2) financial hardship satisfying the requirements of Code
     Section 401(k) and the applicable Treasury regulations, (3) Plan
     termination, without establishment of a successor Defined Contribution Plan
     (other than an ESOP), (4) a sale of substantially all of the assets (within
     the meaning of Code section 409(d)(2)) used in a trade or business, but
     only to an Employee who continues employment with the corporation acquiring
     those assets, or (5) a sale by a corporation of its interest in a
     subsidiary (within the meaning of Code section 409(d)(3), but only to an
     Employee who continues employment with the subsidiary.  For Plan Years
     beginning after December 31, 1988, a distribution on account of financial
     hardship, as described in clause (2), may not include earnings on elective
     deferrals credited as of a date later than December 31, 1988, and may not
     include Qualified Matching Contributions and Qualified Nonelective
     Contributions, nor any earnings on such contributions, credited after 1988.
     A distribution described in clauses (3), (4) and (5), if made, after March
     31, 1988, must be in a lump sum distribution, as required under Code
     Section 401(k)(10).

(d)  "Eligible Employee" means (1) for purposes of the ADP test, a
     Participant on whose behalf the Employer makes Deferral Contributions (as
     described in Section 3.01) or

                                      -15-
<PAGE>
 
     who is eligible to elect Deferral Contributions for the Plan Year,
     irrespective of whether the Employer actually makes Deferral Contributions
     on behalf of the Participant and (2) for purposes of the ACP test, a
     Participant who is eligible to receive an allocation of Employer Matching
     Contributions (as described in Section 3.01) or would be eligible if he
     made the type of contributions necessary to receive an allocation of
     Matching Contributions.  The Plan Administrator treats a Participant as an
     Eligible Employee irrespective of whether the Participant is employed by
     the Employer on the last day of the Plan Year.

(e)  "Employer Matching Contributions" are contributions made by the
     Employer on account of elective deferrals under a Code section 401(k)
     arrangement.  "Qualified Matching Contributions" are Employer Matching
     Contributions which are one hundred percent (100%) Vested at all times and
     which are subject to the Distribution restrictions described in paragraph
     (c).

(f)  "Employer Nonelective Contributions" are contributions made by the
     Employer which are not subject to a deferral election by the Employee and
     which are not matching contributions.  "Qualified Nonelective
     Contributions" are Employer Nonelective Contributions which are one hundred
     percent (100%) Vested at all times and which are subject to the
     Distribution Restrictions described in paragraph (c).

(g)  "Highly Compensated Group" means the eligible Employees who are Highly
     Compensated Employees for the Plan Year.

(h)  "Nonhighly Compensated Group" means the Eligible Employees who are not
     Highly Compensated Employees and are not family members treated as Highly
     Compensated Employee under Section 1.17.

     CALCULATION OF ADP.  The "average ADP" for a group is the average of the
     separate ADP's calculated for each Eligible Employee who is a member of
     that group.  An Eligible Employee's ADP for a Plan Year is the ratio of (1)
     the sum of Deferral Contributions allocated to the Eligible Employee for
     the Plan Year, to (2) his Compensation for the Plan Year.  For aggregated
     family members treated as a single Eligible Employee under Section 1.17,
     the ADP of the family unit is the ADP determined by combining the Deferral
     Contributions and Compensation of all aggregated family members.  A
     Nonhighly Compensated Employee's ADP does not include elective deferrals
     made to this Plan or to any other Plan maintained by the Employer, to the
     extent such elective deferrals exceed the limitation on elective deferrals
     under section 402(g) of the Code.

     The Plan Administrator may determine (in a manner consistent with Treasury
     regulation) the ADP's of  the Eligible Employees by taking into account
     Qualified Nonelective Contributions or Qualified Matching Contribution, or
     both, made to this Plan or to any other qualified Plan maintained by the
     Employer.  The Plan Administrator may not include Qualified Nonelective
     Contributions in the ADP test unless the allocation of Employer Nonelective
     Contributions is nondiscriminatory when the Plan Administrator takes into
     account all Nonelective Contributions (including Qualified Nonelective
     Contributions) and also when the Plan

                                      -16-
<PAGE>
 
     Administrator takes into account only those Qualified Nonelective
     Contributions not used in the ADP test or the ACP Test described in Section
     3.05.  For Plan Years beginning after December 31, 1989, the Plan
     Administrator may not include in the ADP test any Qualified Nonelective
     Contributions or Qualified Matching Contributions under another qualified
     plan unless that plan has the same plan year as this Plan.  The Plan
     Administrator must maintain records to demonstrate compliance with the ADP
     test, including the extent to which the Plan used Qualified Nonelective
     Contributions or Qualified Matching Contributions to satisfy the test.

     SPECIAL AGGREGATION RULE FOR HIGHLY COMPENSATED EMPLOYEES.  To determine
     the ADP for any Highly Compensated Employee, the Deferral Contributions
     taken into account must include any elective deferrals made by the Highly
     Compensated Employee under any other Code section 401(k) arrangement
     maintained by the Employer, unless the deferrals are to an ESOP.  If the
     Plans containing the Code 401(k) arrangements have different Plan Years,
     the Plan Administrator will determine the combined deferral contributions
     on the basis of the Plan Years ending in the same calendar year.

     AGGREGATION OF CERTAIN CODE 401(K) ARRANGEMENTS.  If the Employer treats
     two plans as a unit for coverage or nondiscrimination purposes, the
     Employer must combine the Code Section 401(k) arrangements under such Plans
     to determine whether either Plan satisfies the ADP test.  This aggregation
     rule applies to the ADP determination for all Eligible Employees,
     irrespective of whether an Eligible Employee is a Highly Compensated
     Employee or a Nonhighly Compensated Employee.  The Plan Administrator also
     may elect to aggregate the Code Section 401(k) arrangements under Plans
     which the Employer does not treat as a unit for coverage or
     nondiscrimination purposes.  For Plan Years beginning after December 31,
     1989, an aggregation of Code Section 401(k) arrangements under this
     paragraph does not apply to Plans which have different Plan Years, and for
     Plan Years beginning after December 31, 1988, the Plan Administrator may
     not aggregate an ESOP (or the ESOP portion of a Plan) with a non-ESOP Plan
     (or non-ESOP portion of Plan).

     CHARACTERIZATION OF EXCESS CONTRIBUTIONS.  If, pursuant to this Section
     3.04, the Plan Administrator has elected to include Qualified Matching
     Contributions in the average ADP, the Plan Administrator will treat excess
     contributions as attributable proportionately to Deferral Contributions and
     to Qualified Matching Contributions allocated on the basis of those
     Deferral Contributions.  If the total amount of a Highly Compensation
     Employee's excess contributions for the Plan Year exceeds his Deferral
     Contributions or Qualified Matching Contributions for the Plan Year, the
     Plan Administrator will treat the remaining portion of  his excess
     contributions as attributable to Qualified Nonelective Contributions. The
     Plan Administrator will reduce the amount of excess contributions for a
     Plan Year distributable to a Highly Compensated Employee by the amount of
     excess deferrals (as defined in Section 3.30), if any, previously
     distributed to that Employee for the Employee's taxable year ending in that
     Plan Year.

     DISTRIBUTION OF EXCESS CONTRIBUTIONS.  If the Plan Administrator determines
     the Plan fails to satisfy the ADP test for a Plan Year, it will distribute
     the excess contributions as adjusted for allocable income or loss, no later
     than the last day of the succeeding Plan Year.

                                      -17-
<PAGE>
 
     However, the Employer will incur an excise tax equal to ten percent (10%)
     of the amount of excess contributions for a Plan Year not distributed to
     the appropriate Highly Compensated Employees by 2  1/2 months following the
     close of that Plan Year.  The excess contributions are the amount of
     Deferral Contributions and Qualified Nonelective Contributions allocated to
     Highly Compensated Employees which causes the Plan to fail to satisfy the
     ADP test.  The Plan Administrator will distribute to each Highly
     Compensated Employee his respective share of the excess contributions.  The
     Plan Administrator will determine the respective shares of excess
     contributions.  The Plan Administrator will determine the respective shares
     of excess contributions by starting with the Highly Compensated Employee(s)
     who has the greatest ADP, reducing his ADP to the next highest ADP, then,
     if necessary, reducing the ADP of the Highly Compensated Employee(s) at the
     next highest ADP level (including the ADP of the Highly Compensated
     Employee(s) whose ADP the Plan Administrator already has reduced), and
     continuing in this matter until the average ADP for the Highly Compensated
     Group satisfies the ADP test.  If the Highly Compensated Employee is a part
     of an aggregated family group, the Plan Administrator, in accordance with
     the applicable Treasury regulations, will determine each aggregated family
     member's allocable share of the excess contributions assigned to the family
     unit.

     ALLOCABLE INCOME.  To determine the amount of the corrective distribution
     required under this section 3.04, the Plan Administrator must calculate the
     allocable income for the Plan Year in which the excess contributions arose
     and for the "gap period" measured from the beginning of the next Plan Year
     to the date of the distribution.  "Allocable income" means net income or
     net loss.  To calculate allocable income for the Plan year, the Plan
     Administrator:  (1) first will determine the net income or net loss for the
     Plan year on the Highly Compensated Employee's Accrued Benefit attributable
     to Deferral Contributions; and (2) then will multiply this net income or
     net loss by the following fraction:

        Amount of the Highly Compensated Employee's Excess Contribution
             Accrued Benefit Attributable to Deferral Contributions

     The Accrued Benefit attributable to Deferral Contributions includes the
     Accrued Benefit attributable to Qualified Matching Contributions and
     Qualified Nonelective Contributions taken into account in the ADP test for
     the Plan Year or for any prior Plan year.  For purposes of the denominator
     of the fraction, the Plan Administrator will calculate the Accrued Benefit
     attributable to Deferral Contributions as of the last day of the Plan Year
     (without regard to the net income or net loss for the Plan year on that
     Accrued Benefit).

     To calculate allocable income for the "gap period," the Plan Administrator
     will perform the same calculation as described in the preceding paragraph,
     except in clause (1) the Plan Administrator will determine, as of the last
     day of the month preceding the date of distribution, the net income or net
     loss for the "gap period" and in clause (2) will calculate the Accrued
     Benefit attributable to Deferral Contributions as of the day before the
     distribution.  If the Plan does not perform a valuation on the last day of
     the month preceding the date of distribution, the Plan Administrator, in
     lieu of the calculation described in this paragraph, will calculate
     allocable income for each month in the "gap period" as equal to 10% of the
     allocable income for the Plan Year.  Under this alternate calculation, the
     Plan

                                      -18-
<PAGE>
 
     Administrator will disregard for the month in which the distribution
     occurs, if the Plan makes the distribution no later than the 15th day of
     that month.

3.05 NONDISCRIMINATION RULES FOR EMPLOYER MATCHING CONTRIBUTIONS/EMPLOYEE
     CONTRIBUTIONS.  For Plan Years beginning after December 31, 1986, the Plan
     Administrator must determine whether the annual Employer Matching
     Contributions (other than Qualified Matching Contributions used in the ADP
     under Section 3.04), if any, and the Employee contributions, if any,
     satisfy one of the following average contribution percentage ("ACP") tests:

     (i)  The ACP for the Highly Compensated Group does not exceed 1.25 times
          the ACP of the Nonhighly Compensated Group; or

     (ii) The ACP for the Highly Compensated Group does not exceed the ACP for
          the Nonhighly Compensated Group by more than two percentage points (or
          the lesser percentage permitted by the multiple use limitation in
          Section 3.06) and the ACP of the Highly Compensated Group is not more
          than twice the ACP for the Nonhighly Compensated Group.

     CALCULATION OF ACP.  The average contribution percentage for a group is the
     average of the separate contribution percentages calculated for each
     Eligible Employee who is a member of that group.  An Eligible Employee's
     contribution percentage for a Plan Year is the ratio of the Eligible
     Employee's aggregate contributions for the Plan Year to the Employee's
     Compensation for the Plan Year.  "Aggregate contributions" are Employer
     matching contributions (other than Qualified Matching Contributions used in
     the ADP test under Section 3.04) and employee after tax contributions, if
     any.  For aggregated family members treated as a single Highly Compensated
     Employee, the contribution percentage of the family unit is the
     contribution percentage determined by combining the aggregate contributions
     and Compensation of all aggregated family members.

     The Plan Administrator, in a manner consistent with Treasury regulations,
     may determine the contribution percentages of the Eligible Employees by
     taking into account Qualified Nonelective Contributions (other than
     Qualified Nonelective Contributions used in the ADP test under Section
     3.04) or elective deferrals, or both, made to this Plan or to any other
     qualified Plan maintained by the Employer.  The Plan Administrator may not
     include qualified nonelective contributions in the ACP test unless the
     allocation of nonelective contributions is nondiscriminatory when Plan
     Administrator takes into account all nonelective contributions (including
     the qualified nonelective contributions) and also when the Plan
     Administrator takes into account only the nonelective contributions not
     used in either the ADP test described in Section 3.04) or the ACP test
     described in this Section 3.05). The Plan Administrator may not include
     Elective Deferrals in the ACP test, unless the Plan which includes the
     Elective Deferrals satisfies the ADP test both with and without the
     Elective Deferrals included in this ACP test.  For Plan Years beginning
     after December 31, 1989, the Plan Administrator may not include in the ACP
     test any Qualified Nonelective Contributions or Elective Deferrals under
     another qualified plan unless that plan has the same plan year as this
     Plan.  The Plan Administrator must maintain records to demonstrate

                                      -19-
<PAGE>
 
     compliance with ACP test, including the extent to which the Plan used
     Qualified Nonelective Contributions or Elective Deferrals to satisfy the
     test.

     SPECIAL AGGREGATION RULE FOR HIGHLY COMPENSATED EMPLOYEES.  To determine
     the contribution percentage of any Highly Compensated Employee, the
     aggregate contributions taken into account must include any Matching
     Contributions (other than Qualified Matching Contributions used in the ADP
     test) and any Employee contributions made on his behalf to any other plan
     maintained by the Employer, unless the other plan is an ESOP.  If the plans
     have different plan years, the Plan Administrator will determine the
     combined aggregate contributions on the basis of the plan years ending in
     the same calendar year.

     AGGREGATION OF CERTAIN PLANS.  If the Employer treats two plans as a unit
     for coverage or nondiscrimination purposes, the Employer must combine the
     plans to determine whether either plan satisfies the ACP test.  This
     aggregation rule applies to the contribution percentage determination for
     all Eligible Employees irrespective of whether an Eligible Employee is a
     Highly Compensated Employee or a Nonhighly Compensated Employee.  The Plan
     Administrator also may elect to aggregate plans which the Employer does not
     treat as a unit for coverage or nondiscrimination purposes.  For Plan Years
     beginning after December 31, 1989, an aggregation of plans under this
     paragraph does not apply to plans which have different plan years and, for
     Plan Years beginning after December 31, 1988, the Plan Administrator may
     not aggregate an ESOP (or the ESOP portion of a plan) with a non ESOP plan
     (or non ESOP portion of a plan).

     DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS.  The Plan Administrator
     will determine excess aggregate contributions after determining excess
     deferrals under Section 3.03 and excess contributions under Section 3.04.
     If the Plan Administrator determines the Plan fails to satisfy the ACP test
     for a Plan Year, it must distribute the excess aggregate contributions, as
     adjusted for allocable income, during the next Plan Year.  However, the
     Employer will incur an excise tax equal to 10% of the amount of excess
     aggregate contributions for a Plan year not distributed to the appropriate
     Highly Compensated Employees during the first 2-1/2 months of that next
     Plan Year.  The excess aggregation contributions are the amount of the
     aggregate contributions allocated on behalf of the Highly Compensated
     employees which causes the Plan to fail to satisfy the ACP test.  The Plan
     Administrator will distribute to each Highly Compensated Employee his
     respective share of the excess aggregate contributions. The Plan
     Administrator will determine the respective shares of excess aggregate
     contributions by starting with the Highly Compensated Employee(s) who has
     the greatest contribution percentage, reducing his contribution percentage
     to the next highest contribution percentage then, if necessary, reducing
     the contribution percentage of the Highly Compensated Employee(s) at the
     next highest contribution percentage (including the contribution percentage
     of the Highly Compensated Employee(s) whose contribution percentage the
     Plan Administrator already has reduce), and continuing in this manner until
     the ACP for the Highly Compensated Group satisfies the ACP test.  If the
     Highly Compensated Employee is part of an aggregated family group, the Plan
     Administrator, in accordance with the applicable Treasury regulations, will
     determine each aggregated family member's allocable share of the excess
     aggregate contributions assigned to the family unit.

                                      -20-
<PAGE>
 
     ALLOCABLE INCOME.  To determine the amount of the corrective distribution
     required under this Section 3.05, the Plan Administrator must calculate the
     allocable income for the Plan Year in which the excess aggregate
     contributions arose and for the "gap period" measured from the beginning of
     the next Plan Year to the date of the distribution.  "Allocable income"
     means net income or net loss.  The Plan Administrator will determine
     allocable income in the same manner as described in Section 3.04 for excess
     contributions, except the numerator of the allocation fraction will be the
     Highly Compensated Employee's excess aggregate contributions and the
     denominator of the allocation fraction will be the Employee's Accrued
     Benefit attributable to aggregate contributions and, if applicable, to
     qualified nonelective contributions and elective deferral included in the
     ACP test for the Plan Year or for any prior Plan Year.

     CHARACTERIZATION OF EXCESS AGGREGATE CONTRIBUTIONS.  The Plan Administrator
     will treat a Highly Compensation Employee's allocable share of excess
     aggregate contributions in the following priority:  (1) first as
     attributable to his Employee contributions which are voluntary
     contributions, if any; (2) then as matching contributions allocable with
     respect to excess contributions determined under the ADP test described in
     Section 3.04; (3) then on a pro rata basis to matching contributions and to
     the deferral contributions relating to those matching contributions which
     the Plan Administrator has included in the ACP test; (4) then on a pro rata
     basis to Employee contributions which are mandatory contributions, if any,
     and to the matching contributions allocated on the basis of those mandatory
     contributions; and (5) last to qualified nonelective contributions used in
     the ACP test.  To the extent the Highly Compensated Employee's excess
     aggregate contributions are attributable to matching contributions, and he
     is not 100% vested in his Accrued Benefit attributable to matching
     contributions, the Plan Administrator will distribute on the vested portion
     and forfeit the nonvested portion.  The vested portion of the Highly
     Compensated Employee's excess aggregate contributions attributable to
     Employer matching contributions is the total amount of such excess
     aggregate contributions (as adjusted for allocable income) multiplied by
     his vested percentage (determined as of the last day of the Plan Year for
     which the Employer made the matching contribution).  The Plan will allocate
     forfeited excess aggregate contributions to reduce Employer matching
     contributions for the Plan Year following the Plan Year for which the
     Employer made the matching contributions.

3.06 MULTIPLE USE LIMITATION.  For Plan Years beginning after December 31,
     1988, if at least one Highly Compensated Employee is includible in the ADP
     test under Section 3.04 and in the ACP test under Section 3.05, the sum of
     the Highly Compensated Group's ADP and ACP may not exceed the multiple use
     limitation.

     The multiple use limitation is the sum of (i) and (ii):

     (i)  125% of the greater of:  (a) the ADP of the Nonhighly Compensated
          Group under the Code section 401(k) arrangement; or (b) the ACP of the
          Nonhighly Compensated Group for the Plan Year beginning with or within
          the Plan Year of the Code section 401(k) arrangement.

                                      -21-
<PAGE>
 
     (ii)  2% plus the lesser of (i)(a) or (i)(b), but no more than twice the
           lesser of (i)(a) or (i)(b).

     The Plan Administrator, in lieu of determining the multiple use limitation
     as the sum of (i) and (ii), may elect to determine the multiple use
     limitation as the sum of (iii) and (iv).

     (iii) 125% of the lesser of: (a) the ADP of the Nonhighly Compensated Group
           under the Code Section 401(k) arrangement; or (b) the ACP of the
           Nonhighly Compensated Group for the Plan Year beginning with or
           within the Plan Year of the Code Section 401(k) arrangement.

     (iv)  2% plus the greater of (iii)(a) or (iii)(b), but no more than twice
           the greater of (iii)(a) or (iii)(b).

     The Plan Administrator will determine whether the Plan satisfies the
     multiple use limitation after applying the ADP test under Section 3.04 and
     ACP test under Section 3.05 and after making any corrective distributions
     required by those Sections.  If, after applying this Section 3.06, the Plan
     Administrator determines the Plan has failed to satisfy the multiple use
     limitation, the Plan Administrator will correct the failure by treating the
     excess amount as excess aggregate contributions under Section 3.05.  The
     multiple use does not apply unless, prior to its application, the ADP and
     the ACP of the Highly Compensated Employee Group each exceeds 125% of the
     respective percentages for the Nonhighly Compensated Group.

3.07 DETERMINATION OF CONTRIBUTION.  The Employer, from its records,
     determines the amount of any contributions to be made by it to the Trust
     under the terms of the Plan.

3.08 TIME OF PAYMENT OF CONTRIBUTION. The Employer may pay its contribution for
     each Plan Year in one (1) or more installments without interest. The
     Employer must make its contribution to the Treasury within the time
     prescribed by the Code or applicable Treasury regulations. Deferral
     Contributions are Employer contributions for all purposes under this Plan,
     except to the extent the Code or Treasury regulations prohibit the use of
     these contributions to satisfy the qualification requirements of the Code.

3.09 CONTRIBUTION ALLOCATION.

     (a)  METHOD OF ALLOCATION.  To make allocations under the Plan, the Plan
          Administrator shall establish a Deferral Contributions Account, a
          Qualified Matching Contributions Account, a Regular Matching
          Contributions Account, a Qualified Nonelective Contributions Account
          and an Employer Discretionary Contributions Account.  The Plan
          Administrator will allocate and credit each annual Employer
          contribution to the Treasury as follows:

          (1)  DEFERRAL CONTRIBUTIONS.  The Plan Administrator shall allocate to
               each Participant's Deferral Contributions Account the Deferral
               Contributions the

                                      -22-
<PAGE>
 
               Employer makes to the Treasury on behalf of the Participant for
               the Plan Year.

          (2)  MATCHING CONTRIBUTIONS.  The Plan Administrator shall allocate
               the Matching Contributions and, to the extent the Employer makes
               Qualified Matching Contributions, the Qualified Matching
               Contributions to the Matching Contributions Account and the
               Qualified Matching Contributions Account, respectively, of each
               Participant who satisfies the accrual requirements of Section
               3.11.  The allocation of Matching Contributions and Qualified
               Matching Contributions is in the same proportion that each
               Participant's eligible contributions (as defined in Section 3.01)
               bears to the total eligible  contributions of all Participants,
               taking into account only the eligible contributions subject to
               the matching contribution formula.

               SPECIAL ALLOCATION PROVISIONS FOR EMPLOYER MATCHING CONTRIBUTION
               ACCOUNT AND QUALIFIED MATCHING CONTRIBUTIONS ACCOUNT.  As of
               January 1, 1994, the Employer Matching Contribution Account and
               if applicable, the Qualified Matching Contribution Account will
               be primarily invested in Employer securities.  To accomplish
               this, on September 30 of each year, the Plan Administrator will
               initiate an annual Employer stock purchase using funds in the
               Employer Matching Contribution Account and if applicable, the
               Qualified Matching Contribution Account.  The number of Employer
               securities actually allocated to each Participant is dependent
               upon the fair market value of the Employer securities as of each
               September 30.  The fair market value of Employer securities shall
               be determined annually by an independent third-party appraiser.
               Contributions allocated to the Employer Matching Contribution
               Account and if applicable, the Qualified Matching Contribution
               Account prior to the annual Employer stock purchase shall be
               temporarily invested in a money market type investment.

          (3)  QUALIFIED NONELECTIVE CONTRIBUTIONS.  Subject to the conditions
               of Section 3.11, the Plan Administrator shall allocate and credit
               the Discretionary Contribution, if any, the Employer designates
               as a Qualified Nonelective Contribution, to the Qualified
               Nonelective Contributions Account of each Participant in the same
               ratio that each Participant's Compensation for the Plan Year
               bears to the total Compensation of all Participants for the Plan
               Year.

               The Plan Administrator may include a Qualified Nonelective
               Contribution in the ADP test described in Section 3.03 to the
               extent necessary to satisfy the test.  For purposes of allocating
               the Qualified Nonelective Contribution, the term "Participant"
               means Participants who are Nonhighly Compensated Employees who
               satisfy the conditions of Section 3.11.

          (4)  DISCRETIONARY CONTRIBUTIONS.  Subject to Sections 3.09(b), 3.11
               and 3.12 and any restoration allocation required under Section
               5.03 and Section 9.14,

                                      -23-
<PAGE>
 
               the Plan Administrator shall allocate the Employer's
               Discretionary Contributions, if any, which the Employer does not
               designate as a Qualified Nonelective Contribution, to the
               Discretionary Contributions Account of each Participant in the
               same ratio that each Participant's Compensation for the Plan Year
               bears to the total Compensation of all Plan Year for the Plan
               Year.

     (b)  TOP HEAVY MINIMUM ALLOCATION.

          (1)  MINIMUM ALLOCATION.  If the Plan is top heavy in any Plan Year:

               (i)  Each Non-key Employee (as defined in Section 1.09) who is a
                    Participant and is employed by the Employer on the last day
                    of the Plan Year will receive a top heavy minimum allocation
                    for that Plan Year.

               (ii) The top heavy minimum allocation is the lesser of 3% of the
                    Non-key Employee's Compensation for the Plan Year or the
                    highest contribution rate for the Plan Year made on behalf
                    of any Key Employee (as defined in Section 1.09).  However,
                    if a defined benefit plan maintained by the Employer which
                    benefits a Key Employee depends on this Plan to satisfy the
                    antidiscrimination rules of Code section 401(a)(4) or the
                    coverage rules of Code section 410 (or another plan
                    benefiting the Key Employee so depends on such defined
                    benefit plan), the top heavy minimum allocation is 3% of the
                    Non-key Employee's Compensation regardless of the
                    contribution rate for the Key Employees.

          (2)  SPECIAL DEFINITIONS.  For purposes of this Section 3.09(b), the
               term "Participant" includes any Employee otherwise eligible to
               participate in the Plan but who is not a Participant because of
               his failure to make elective deferrals under a 401(k) arrangement
               or because of his failure to make mandatory employee
               contributions.  For purposes of clause (b), "Compensation" means
               Compensation as defined in Section 1.08, disregarding elective
               contributions and disregarding the requirements of Section 3.11.

          (3)  DETERMINING CONTRIBUTION RATES.  For purposes of this Section
               3.09(b), a Participant's contribution rate is the sum of Employer
               contributions (not including Employer contributions to Social
               Security) and forfeitures allocated to the Participant's Account
               for the Plan Year divided by his Compensation for the entire Plan
               Year.  However, for purposes of satisfying a Participant's top
               heavy minimum in Plan Years beginning after December 31, 1988, a
               Participant's contribution rate does not include any elective
               contributions under a Code section 401(k) arrangement nor any
               Qualified Matching Contributions subject to the nondiscrimination
               requirements of Code section 401(k) or of Code section 401(m).
               To determine a Participant's

                                      -24-
<PAGE>
 
               contribution rate, the Plan Administrator must treat all
               qualified top heavy defined contribution plans maintained by the
               Employer as a single plan.

          (4)  NO ALLOCATION.  If, for a Plan Year there are no allocations of
               Employer contributions for any Key Employee, the Plan does not
               require any top heavy minimum allocation for the Plan Year,
               unless a top heavy minimum allocation applies because of the
               maintenance by the Employer of more than one plan.

          (5)  METHOD OF COMPLIANCE.  The Plan will satisfy the top heavy
               minimum allocation in accordance with this Section 3.09(b)(5).
               The Plan Administrator first will allocate the Employer
               contribution (and Participant forfeitures, if any) for the Plan
               Year in accordance with the allocation formula under Section
               3.09(a).  The Employer then will contribute an additional amount
               for the Account of any Participant who is entitled under this
               Section 3.09(b) to a top heavy minimum allocation and whose
               contribution rate for the Plan Year is less than the top heavy
               minimum allocation.  The additional amount is the amount
               necessary to increase the Participant's contribution rate to the
               top heavy minimum allocation.  The Plan Administrator will
               allocate the additional contribution to the Account of the
               Participant on whose behalf the Employer makes the contribution.

3.10 FORFEITURE ALLOCATION.  Subject to any restoration allocation required
     under Section 5.03 or 9.14, the Plan Administrator may apply any amount of
     a Participant's Accrued Benefit forfeited under the Plan to pay expenses
     under the Plan that would otherwise be paid by the Employer.  Forfeitures
     not used to pay expenses shall be allocated under the Plan to all
     Participants in the Plan at the Accounting Date.  The allocation to
     Participants for all contributions other than Employer Matching
     Contributions shall be made to the Participants Account in the same
     proportion that each Participant's Compensation for the Plan Year bears to
     the total Compensation of all Participant's Compensation for such Plan
     Year.  The allocation to Participants of Employer Matching contributions
     shall be made to the Participants Account in proportion to each
     Participant's Compensation for the Plan Year. The allocation to
     Participants of Employer Matching contributions shall be made to the
     Participants Account in proportion to each Participant's Compensation for
     the Plan Year. The Plan Administrator will continue to hold the
     undistributed, nonvested portion of a terminated Participant's Accrued
     Benefit in his Account solely for his benefit until a forfeiture occurs at
     the time specified in Section 5.07.  Except as provided under Section 5.03,
     a Participant will not share in the allocation of a forfeiture of any
     portion of his Accrued Benefit.

3.11 ACCRUAL OF BENEFIT.  The Plan Administrator will determine the
     Employer Contributions on the basis of the Plan Year.

     (a)  COMPENSATION TAKEN INTO ACCOUNT.  In allocating any Employer
          contribution designated as Qualified Matching Contribution, Qualified
          Nonelective Contribution or Discretionary Contribution, the Plan
          Administrator, except for purposes of

                                      -25-
<PAGE>
 
          determining the top heavy minimum contribution under Section 3.04(b),
          will take into account Compensation determined for the entire Plan
          Year.  In allocating Deferral Contributions, the Plan Administrator,
          for Plan Years beginning prior to the later of January 1, 1992, or 60
          days after the Treasury issues final regulations under Code sections
          401(k) and 401(m), the Plan may limit Compensation taken into account
          to Compensation received only for the portion of the Plan Year in
          which the Employee was an Eligible Employee and only for the portion
          of the Plan Year in which the Plan or the Code section 401(k)
          arrangement was in effect.  For subsequent Plan Years, Compensation
          must include Compensation for the entire Plan Year, irrespective of
          whether the Plan or the Code section 401(k) arrangement was in effect
          for the entire Plan Year or whether the Employee begins, resumes or
          ceases to be an Eligible Employee during the Plan Year.

     (b)  HOURS OF SERVICE REQUIREMENT.  The Plan Administrator will not
          allocate any portion of an Employer contribution designated as
          Qualified Matching Contribution, Qualified Nonelective Contribution or
          Discretionary Contribution for a Plan Year to any Participant's
          Account if the Participant does not complete a minimum of 1,000 hours
          of Service during the Plan Year, unless the Participant terminates
          employment during the Plan Year due to Retirement, death or Disability
          in the current Plan Year or in a Prior Plan Year.  Notwithstanding the
          preceding sentence, the Plan Administrator will allocate any portion
          of an Employer contribution for a Plan Year to any Participant's
          Account if the Participant satisfies the top heavy minimum allocation
          requirement of Section 3.09(b).

     (c)  EMPLOYMENT REQUIREMENT.  A Participant who, during a particular Plan
          Year, completes the Hours of Service requirement under this Section
          3.11 will not share in the allocation of Employer contributions,
          designated as Qualified Matching Contributions, Qualified Nonelective
          Contributions or Discretionary Contributions, and Participant
          forfeitures, if any, for that Plan Year unless he is employed by the
          Employer on the last day of that Plan Year.  A Participant must be
          actively employed on the last day of the quarter to share in the
          allocation of Employer Matching Contributions, regardless of the Hours
          of Service completed in a Plan Year.  This employment condition does
          not apply, if the Participant terminates employment during the Plan
          Year due to Retirement, death or Disability in the current Plan Year
          or in a prior Plan Year.

     (d)  SUSPENSION OF ACCRUAL REQUIREMENTS.  The Plan suspends the accrual
          requirements under Section 3.11(b) and (c) if, for any Plan Year
          beginning after December 31, 1993, the Plan fails to satisfy the
          Participation Test or the Coverage Test.  A Plan satisfied the
          Participant Test if, on each day of the Plan Year, the number of
          Employees who benefit under the Plan is at least equal to the lesser
          of 50 or 40% of the total number of Includible Employees as of such
          day.  A Plan satisfies the Coverage Test if, on the last day of each
          quarter of the Plan Year, the number of Nonhighly Compensated
          Employees who benefit under the Plan is at least equal to 70% of  the
          total number of includible Nonhighly Compensated Employees as of such
          day.  "Includible" Employees are all Employees other than:  (1) those

                                      -26-
<PAGE>
 
          Employees excluded from participating in the Plan for the entire Plan
          Year by reason of the collective bargaining unit exclusion or the
          nonresident alien exclusion described in the Code or by reason of the
          age and service requirements of Article II; and (2) any Employee who
          incurs a Separation from Service during the Plan Year and fails to
          complete at least 501 Hours of Service for the Plan Year.  A
          "Nonhighly Compensated Employee" is an Employee who is not a Highly
          Compensated employee and who is not a family member aggregated with a
          Highly Compensated employee pursuant to Section 1.17 of the Plan.  For
          purposes of the Participation Test and the Coverage Test, an Employee
          is benefiting under the Plan on a particular date if he is entitled to
          an allocation for the Plan Year.  For any portion of the Plan subject
          to the discrimination test described in Section 3.04, an Employee is
          benefiting if he is an Eligible Employee for purposes of Section 3.04
          and the Coverage Test applies separately to that portion of the Plan.

          If this Section 3.11(d) applies for a Plan Year, the Plan
          Administrator will suspend the accrual requirements for the includible
          Employees who are Participants, beginning first with the includible
          Employee(s) employed with the Employer on the last day of the Plan
          Year, then the Includible Employee(s) who have the latest Separation
          from Service during the Plan Year and continuing to suspend the
          accrual requirements for each includible Employee who incurred an
          earlier Separation from Service, from the latest to the earliest
          Separation from Service date, until the Plan satisfies both the
          Participation Test and the Coverage Test for the Plan Year.  If two or
          more includible Employees have a Separation from Service on the same
          day, the Plan Administrator will suspend the accrual requirements for
          all such includible Employees, irrespective of whether the Plan can
          satisfy the Participation Test and the Coverage Test by accruing
          benefits for fewer than all such includible Employees, irrespective of
          whether the Plan can satisfy the Participation Test and the Coverage
          Test by accruing benefits for fewer than all such includible
          Employees.  If the Plan suspends the accrual requirements for an
          includible Employee, that Employee will share in the allocation of
          Employer contributions and Participant forfeitures, if any, without
          regard to the number of Hours of Service he has earned for the Plan
          Year and without regard to whether he is employed by the Employer on
          the last day of the Plan Year.

PART 2.  LIMITATIONS ON ALLOCATIONS:  SECTION 3.12 AND 3.13

3.12 LIMITATIONS ON ALLOCATIONS TO PARTICIPANTS' ACCOUNTS.  The amount of
     Annual Additions Which the Plan Administrator may allocate under this Plan
     on a Participant's behalf for a Limitation Year may not exceed the Maximum
     Permissible Amount.  If the amount the Employer otherwise would contribute
     to the Participant's Account would cause the Annual Additions for the
     Limitation Year to exceed the Maximum Permissible Amount, the Employer will
     reduce the amount of its contribution so the Annual Additions for the
     Limitation Year will equal the Maximum Permissible Amount.  If an
     allocation of employer contributions, pursuant to Section 3.09, would
     result in an Excess Amount (other than an Excess Amount resulting from the
     circumstances described in Section 3.12(b)) to the Participant's Account,
     the Plan Administrator will reallocate the

                                      -27-
<PAGE>
 
     Excess Amount to the remaining Participants who are eligible for an
     allocation of Employer contributions for the Plan Year in which the
     Limitation Year ends.  The Plan Administrator will make this reallocation
     on the basis of the allocation method under the Plan as if the Participant
     whose Account otherwise would receive the Excess Amount is not eligible for
     an allocation of Employer contributions.

     (a)  ESTIMATION OF COMPENSATION.  Prior to the determination of the
          Participant's actual Compensation for a Limitation Year, the Plan
          Administrator may determine the Maximum Permissible Amount on the
          basis of the Participant's estimated annual Compensation for such
          Limitation Year.  The Plan Administrator must make this determination
          on a reasonable and uniform basis for all Participants similarly
          situated.  The Plan Administrator must reduce any Employer
          contributions based on estimated annual Compensation by any Excess
          Amount carried over from prior years. As soon as is administratively
          feasible after the end of the Limitation Year, the Plan Administrator
          will determine the Maximum Permissible Amount for such Limitation Year
          on the basis of the Participant's actual Compensation for such
          Limitation Year.

     (b)  DISPOSITION OF EXCESS AMOUNT.  If pursuant to Section 3.12(a), there
          is an Excess Amount with respect to a Participant for a Limitation
          Year, the Plan Administrator will dispose of such Excess Amount as
          follows:

          (1)  The Plan Administrator will return any nondeductible voluntary
               Employee contributions to the Participant to the extent that the
               return would reduce the Excess Amount.  Such amounts returned are
               disregarded for purposes of Section 3.05.

          (2)  If, after the application of sub-Section (1), an Excess Amount
               still exists, and the Plan covers the Participant at the end of
               the Limitation Year, then the Plan Administrator will use the
               Excess Amount(s) to reduce future Employer contributions under
               the Plan for the next Limitation Year and for each succeeding
               Limitation Year, as is necessary, for the Participant.  The
               Participant may elect to limit his Compensation for allocation
               purposes to the extent necessary to reduce his allocation for the
               Limitation Year to the Maximum Permissible Amount and eliminate
               the Excess Amount.

          (3)  If, after the application of sub-Section (1), an Excess Amount
               still exists, and the Plan does not cover the Participant at the
               end of the Limitation Year, then the Plan Administrator will hold
               the Excess Amount unallocated in a suspense account.  The Plan
               Administrator, will apply the suspense account to reduce Employer
               contributions for all remaining Participants in the next
               Limitation Year, and in each succeeding Limitation Year if
               necessary.

          (4)  Except as provided in "(1)" above, the Plan Administrator will
               not distribute any Excess Amount(s) to Participants or to former
               Participants.

                                      -28-
<PAGE>
 
          (5)  Notwithstanding, paragraphs, (1), (2), (3) or (4) of this
               Section, the Plan may provide for the distribution of 401(k)
               Contributions, to the extent that the distribution or return
               would reduce the excess amounts in the Participant's Account.
               These amounts are disregarded for purposes of Sections 3.03 and
               3.04.

     (c)  DEFINED BENEFIT PLAN LIMITATION.  If the Participant presently
          participates, or has ever participated under a defined benefit plan
          maintained by the Employer, then the sum of the defined benefit plan
          fraction and the defined contribution plan fraction for the
          Participant for that Limitation Year must not exceed 1.0.  The extent
          necessary to satisfy the limitation under Section 3.13, the Employer
          will reduce the Participant's projected annual benefit under the
          defined benefit plan under which the Participant participates and
          then, if necessary, its contribution or allocation on behalf of the
          Participant to the defined contribution plan under which the
          Participant participates.

3.13 DEFINITIONS - ARTICLE III.  For purposes of Article III, the following
     terms mean:

     (a)  "Annual Addition" means the sum of the following amounts allocated on
          behalf of a Participant for a Limitation Year:  (i) all Employer
          contributions; (ii) all forfeitures; and (iii) all Employee
          contributions.  Except to the extent provided in Treasury regulations,
          Annual Additions include excess contributions described in Code
          section 401(k), excess aggregate contributions described in Code
          Section 401(m) and excess deferrals described in Code section 402(g),
          irrespective of whether the plan distributes or forfeits such excess
          amounts.  Annual Additions also include Excess Amounts reapplied to
          reduce Employer contributions under Section 3.12.  Amounts allocated
          after March 31, 1984, to an individual medical account (as defined in
          Code section 415 (1)(2)) included as part of a defined benefit plan
          maintained by the Employer are Annual Additions.  Furthermore, Annual
          Additions include contributions paid or accrued after December 31,
          1985, for taxable years ending after December 31, 1985, attributable
          to post-retirement medical benefits allocated to the separate account
          of a key employee (as defined in Code section 419A(d)(3)) under a
          welfare benefit fund (as defined in Code section 419(e)) maintained by
          the Employer, but only for purposes of the dollar limitation
          applicable to the Maximum Permissible Amount.

     (b)  "Compensation" - For purposes of applying the limitations of Part 2 of
          this Article III, "Compensation" means Compensation as defined in
          Section 1.08, disregarding elective contribution.

     (c)  "Maximum Permissible Amount" - The lesser of (i) $30,000 (or, if
          greater, one fourth (1/4) of the defined benefit dollar limitation
          under Code section 415(b)(1)(A)), or (ii) twenty-five percent (25%) of
          the Participant's Compensation for the Limitation Year. If there is a
          short Limitation Year because of a change in Limitation Year, the Plan
          Administrator will multiply the $30,000 (or adjusted) limitation by
          the following fraction:

                                      -29-
<PAGE>
 
                 Number of months in the short Limitation Year
                                       12

     (d)  "Employer" - The Employer that adopts this Plan and any related
          employers.  Solely for purposes of applying the limitations of Part 2
          of this Article III, the Plan Administrator will determine related
          employers by modifying Code sections 414(b) and (c) in accordance with
          Code section 415(h).

     (e)  "Excess Amount" means the excess of the Participant's Annual Additions
          for the Limitation Year over the Maximum Permissible Amount.

     (f)  "Limitation Year" means the Plan Year.  If the Employer amends the
          Limitation Year to a different 12 consecutive month period, the new
          Limitation Year must begin on a date within the Limitation Year for
          which the Employer makes the amendment, creating a short Limitation
          Year.

     (g)  "Defined Contribution Plan" means a retirement plan which provides for
          an individual account for each Participant and for benefits based
          solely on the amount contributed to the Participant's account, and any
          income, expenses, gains and losses, and any forfeitures of accounts of
          other Participants which the plan may allocate to such Participant's
          account.  The Plan Administrator must treat all defined contribution
          plans (whether or not terminated) maintained by the Employer as a
          single plan.  For purposes of the limitations of Part 2 of this
          Article III, the Plan Administrator will treat employee contributions
          made to a defined benefit plan maintained by the Employer as a
          separate defined contribution plan.  The Plan Administrator also will
          treat as a defined contribution plan an individual medical account (as
          defined in Code section 415(1)(2)) included as part of a defined
          benefit plan maintained by the Employer and, for taxable years ending
          after December 31, 1985, a welfare benefit fund under Code section
          419(c) maintained by the Employer to the extent there are post-
          retirement medical benefits allocated to the separate account of a key
          employee (as defined in Code section 419 A(d)(3)).

     (h)  "Defined Benefit Plan" means a retirement plan which does not provide
          for individual accounts for Employer contributions.  The Plan
          Administrator must create all defined benefit plans (whether or not
          terminated) maintained by the Employer as a single plan.

     (i)  "Defined Benefit Plan Fraction" means

               Projected annual benefit of the Participant under the defined
               benefit plan(s)

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

          The lesser of (i) 125% (subject to the "100% limitation" in paragraph
          (k)) of the dollar limitation in effect under Code section
          415(b)(1)(A) for the Limitation Year, or (ii) 140% of the
          Participant's average Compensation for his high 3 consecutive years of
          service.

                                      -30-
<PAGE>
 
          To determine the denominator of this fraction, the Plan Administrator
          will make any adjustment required under Code section 415(b) and will
          determine a year of service as a Plan Year.  The "projected annual
          benefit" is the annual retirement benefit (adjusted to an actuarially
          equivalent straight life annuity if the plan expresses such benefit in
          a form other than a straight life annuity or qualified joint and
          survivor annuity) of the Participant under the terms of the defined
          benefit plan on the assumptions he continues employment until his
          normal retirement age (or current age, if later) as stated in the
          defined benefit plan, his Compensation continues at the same rate as
          in effect in the Limitation year under consideration until the date of
          his normal retirement age and all other relevant factors used to
          determine benefits under the defined benefit plan remain constant as
          of the current Limitation Year for all future Limitation Years.

          CURRENT ACCRUED BENEFIT.  If the Participant accrued benefits in one
          or more defined benefit plans maintained by the Employer which were in
          existence on May 5, 1986, the dollar limitation used in the
          denominator of this fraction will not be less than the Participant's
          Current Accrued Benefit.  A Participant's Current Accrued Benefit is
          the sum of the annual benefits under such defined benefit plans which
          the Participant had accrued as of the end of the 1986 Limitation Year
          (the last Limitation Year beginning before January 1, 1987),
          determined without regard to any change in the terms or conditions of
          the Plan made after May 5, 1986, and without regard to any cost of
          living adjustment occurring after May 5, 1986.  This Current Accrued
          Benefit rule applies only if the defined benefit plans individually
          and in the aggregate satisfied the requirements of Code section 415 as
          in effect at the end of the 1986 Limitation  year.

     (j)  "Defined contribution plan fraction" means

          The sum of the Annual Additions to the Participant's Account under the
          defined contribution plan(s) and welfare benefit funds (as defined in
          Code section 419(c)) as of the close of the Limitation Year

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

          the sum of the lesser of the following amounts determined for the
          Limitation Year and for each prior Year of Service with the Employer:
          (i) 125% of the dollar limitation in effect under Code section
          415(c)(1)(A) for the Limitation Year (determined without regard to the
          special dollar limitations for employee stock ownership plans), or
          (ii) 35% of the Participant's Compensation for the Limitation Year

          The Plan Administrator may use on a uniform basis any transitional
          rules prescribed by law to compute the Participant's defined
          contribution plan fraction.  For purposes of determining the defined
          contribution plan fraction, the Plan Administrator will not recompute
          Annual Additions in Limitations Years beginning prior to January 1,
          1987, to treat all Employee contributions as Annual Additions.  If the
          plan satisfied Code section 415 for Limitation Years beginning prior
          to January 1, 1987, the Plan Administrator will redetermine the
          defined contribution plan fraction and the defined

                                      -31-
<PAGE>
 
          benefit plan fraction as of the end of the 1986 Limitation year, in
          accordance with this Section 3.08.  If the sum of the redetermined
          fractions exceeds 1.0, the Plan Administrator will subtract
          permanently from the numerator of the defined contribution plan
          fraction an amount equal to the product of (i) the excess of the sum
          of the fractions over 1.0, times (ii) the denominator of the defined
          contribution plan fraction.  In making the adjustment, the Plan
          Administrator will disregard any accrued benefit under the defined
          benefit plan which is in excess of the Current Accrued Benefit.

          (k) "100% limitation" means if the 100% limitation applies, the Plan
          Administrator must determine the denominator of the defined benefit
          plan fraction and the denominator of the defined contribution plan
          fraction by substituting 100% for 125%. The 100% limitation applies
          only if:  (i) the Plan's top heavy ratio exceeds 90%; or (ii) the
          Plan's top heavy ratio is greater than 60%, and the Employer does not
          provide extra minimum benefits which satisfy Code section 416(h)(2).

                                      -32-
<PAGE>
 
                                  ARTICLE IV
                           PARTICIPANT CONTRIBUTIONS

4.01 PARTICIPANT VOLUNTARY CONTRIBUTION

     The Plan does not require nor permit Participant voluntary contributions.

4.02 PARTICIPANT ROLLOVER CONTRIBUTIONS.  Any Participant, with the
     Employer's written consent and after filing with the Trustee the form
     prescribed by the Plan Administrator, may contribute cash only to the Trust
     other than as a voluntary contribution if the contribution is a "rollover
     contribution" which the Code permits an employee to transfer directly or
     indirectly from one qualified plan to another qualified plan.  Before
     accepting a rollover contribution, the Trustee may require an Employee to
     furnish satisfactory evidence that the proposed transfer is in fact a
     "rollover contribution" which the Code permits an employee to make to a
     qualified plan.  A rollover contribution is not an Annual Addition under
     Part 2 of Article III.

     The Trustee may invest the rollover contribution in a segregated investment
     Account for the Participant's sole benefit unless the Plan Administrator,
     in its sole discretion, agrees to invest the rollover contribution as part
     of the Trust Fund.  A rollover contribution invested as part of the Trust
     Fund as of the Accounting Date (or other valuation date) for each Plan
     Year, will share in earnings and the amount of any realized or unrealized
     appreciation or depreciation in the related investment fund for the period
     since the last valuation date as described in Section 9.11.  The Trustee
     will not have any investment responsibility with respect to a Participant's
     segregated rollover Account.  The Participant, however, from time to time,
     may direct the Trustee in writing as to the investment of his segregated
     rollover Account; provided however, the Participant may not direct the
     Trustee to make loans to his Employer. A Participant's segregated rollover
     Account alone will bear any extraordinary expenses resulting from
     investments made at the direction of the Participant.  As of the Accounting
     Date (or other valuation date) for each Plan Year, the Plan Administrator
     will allocate and credit the net income (or net loss) from a Participant's
     segregated rollover Account and the increase and decrease in the fair
     market value of the assets of a segregated Account solely to that Account.
     The Trustee is not liable nor responsible for any loss resulting to any
     Beneficiary, nor to any Participant, by reason of any sale or investment
     made or other action taken pursuant to and in accordance with the direction
     of the Participant.  In all other respects, the Trustee will hold,
     administer and distribute a segregate rollover contribution in the same
     manner as any Employer contribution made to the Trust.  A rollover
     contribution shall not be subject to forfeiture for any reason and may not
     be withdrawn by, or distributed to the Participant in whole, or in part,
     except at Normal Retirement Date, or on such other date when the
     Participant or his Beneficiary is entitled to receive benefits.

     An eligible Employee, prior to satisfying the Plan's eligibility
     conditions, may make a rollover contribution to the Trust to the same
     extent and in the same manner as a Participant. If an Employee makes a
     rollover contribution to the Trust prior to satisfying the Plan's
     eligibility conditions, the Plan Administrator and Trustee must treat the
     Employee as a Participant for all purposes of the Plan except the Employee
     is not a Participant for purposes

                                      -33-
<PAGE>
 
     of sharing in Employer contributions or Participant forfeitures under the
     Plan until he actually becomes a Participant in the Plan.  If the Employee
     has a Separation from Service prior to becoming a Participant, the Trustee
     will distribute his Rollover Contribution Account to him as if it were an
     Employer contribution Account.

                                      -34-
<PAGE>
 
                                 ARTICLE V
                  TERMINATION OF SERVICE - PARTICIPANT VESTING

5.01 TERMINATION OF SERVICE UPON DEATH, DISABILITY OR RETIREMENT.  Upon
     Separation from Service due to death, Disability or Retirement, a
     Participant will be 100% Vested in his Accrued Benefit.  A Participant who
     remains in the employ of the Employer after attaining Normal Retirement Age
     will continue to participate in Employer contributions.

5.02 TERMINATION OF SERVICE OTHER THAN UPON DEATH, DISABILITY OR
     RETIREMENT.  A Participant's Deferral Contributions Account, Qualified
     Matching Contributions Account, Qualified Nonelective Contributions Account
     and Rollover Account will be 100% Vested at all times.  Except as provided
     in Section 5.01, for each year of Service, a Participant's Vested
     Percentage of his Matching Contributions Account and Discretionary
     Contributions Account equals the percentage in the following vesting
     schedule:

 
                         Years of       Percent   
                         Service         Vested   
                         --------       --------  
                                                 
                       Less than 1          0%  
                            2              20%  
                            3              40%  
                            4              60%  
                            5              80%  
                        6 or more         100%

5.03 CASHOUT DISTRIBUTION TO PARTIALLY VESTED PARTICIPANTS/RESTORATION OF
     FORFEITED MATCHING AND EMPLOYER CONTRIBUTION ACCOUNT.  If, pursuant to
     Article VI, a partially Vested Participant receives a cashout distribution
     before he incurs a Forfeiture Break in Service (as defined in Section
     1.16), the cashout distribution will result in an immediate forfeiture of
     the cash portion of the Participant's Employer Matching Contribution and
     Discretionary Contribution Accounts which are not Vested.  Notwithstanding
     any other provisions to the contrary, the portion of any partially Vested
     Participant's Employer Matching Contribution and Discretionary Contribution
     Account which accrued after July 1, 1993, shall not be considered forfeited
     until the September 30th Accounting Date following the Participant's
     Separation from Service.  See Section 5.07.  A partially Vested Participant
     is a Participant whose nonforfeitable percentage determined under Section
     5.02 is less than 100%.  A cashout distribution is a distribution of the
     entire present value of the Participant's Employer Matching Contribution
     and Discretionary Contribution Accounts.

     (a)  RESTORATION AND CONDITIONS UPON RESTORATION.  A partially Vested
          Participant who is reemployed by the Employer after receiving a
          cashout distribution of the Vested percentage of his Employer Matching
          Contribution and Discretionary Contribution Accounts may repay the
          Trustee the amount of the cashout distribution, unless the Participant
          no longer has a right to restoration under the requirements of this

                                      -35-
<PAGE>
 
          Section 5.03.  If a partially Vested Participant makes the cashout
          distribution repayment, the Plan Administrator, subject to the
          conditions of this paragraph (a), must restore his Employer Matching
          Contribution and Discretionary Contribution Accounts to the same
          dollar as the dollar amount of his Employer Matching Contribution and
          Discretionary Contribution Accounts on the Accounting Date, or other
          valuation date, immediately preceding the date of the cashout
          distribution, unadjusted for any gains or losses occurring subsequent
          to that Accounting Date, or other valuation date.  Restoration of the
          Participant's Employer Matching Contribution and Discretionary
          Contribution Accounts includes restoration of all Code section
          411(d)(6) protected benefits with respect to that restored Matching
          and Employer Contribution Accounts, in accordance with applicable
          Treasury regulations.  The Plan Administrator will not restore a
          reemployed Participant's Employer Matching Contribution and
          Discretionary Contribution Accounts under this paragraph if:

          (1)  5 years have elapsed since the Participant's first reemployment
               date following the cashout distribution; or

          (2)  The Participant incurred a Forfeiture Break in Service.  This
               condition also applies if the Participant makes repayment within
               the Plan Year in which he incurs the Forfeiture Break in Service
               and that Forfeiture Break in Service would result in a complete
               forfeiture of the amount the Plan Administrator otherwise would
               restore.

     (b)  TIME AND METHOD OF RESTORATION.  If neither of the two conditions
          preventing restoration of the Participant's Employer Matching
          Contribution and Discretionary Contribution Accounts applies, the Plan
          Administrator will restore the Participant's Employer Matching
          Contribution and Discretionary Contribution Accounts as of the Plan
          Year Accounting Date coincident with or immediately following the
          repayment. To restore the Participant's Employer Matching Contribution
          and Discretionary Contribution Accounts, the Plan Administrator, to
          the extent necessary, will allocate to the Participant's Account:

          (1)  First, the amount, if any, of Participant forfeitures the Plan
               Administrator would otherwise allocate under Section 3.10;

          (2)  Second, the amount, if any, of the Trust Fund net income or gain
               for the Plan Year; and

          (3)  Third, the Employer Matching or Discretionary Contributions for
               the Plan Year to the extent made.

     To the extent the amounts described in clauses (1), (2), and (3) are
     insufficient to enable the Plan Administrator to make the required
     restoration, the Employer must contribute, without regard to any
     requirement or condition of Section 3.01, the additional money necessary to
     enable the Plan Administrator to make the required restoration.  If, for a
     particular Plan Year,

                                      -36-
<PAGE>
 
     the Plan Administrator must restore the Employer Matching Contribution and
     Discretionary Contribution Accounts of more than one reemployed
     Participant, then the Plan Administrator will make the restoration
     allocation(s) to each such Participant's Account in the same proportion
     that a Participant's restored amount for the Plan Year bears to the
     restored amount for the Plan Year of all reemployed Participants.  The Plan
     Administrator will not take into account the allocation under this Section
     5.03 in applying the limitation on allocations under Part 2 of Article III.

     (c)  0% VESTED PARTICIPANT.  The deemed cashout rule applies to 0% Vested
          Participant. A 0% Vested Participant is a Participant whose Employer
          Matching Contribution and Discretionary Contribution Accounts are
          entirely forfeitable at the time of his Separation from Service.
          Under the deemed cashout rule, the Plan Administrator will treat the
          0% Vested Participant as having received a cashout distribution on the
          date of the Participant's Separation from Service or, if the
          Participant's Account is entitled to an allocation of Matching and
          Employer contributions for the Plan Year in which the separates from
          Service, on the last day of that Plan Year.  For purposes of applying
          the restoration provisions of this Section 5.03, the Plan
          Administrator will treat 0% Vested Participant as repaying his cashout
          "distribution" on the first date of his reemployment with the
          Employer.

5.04 SEGREGATED ACCOUNT FOR REPAID AMOUNT.  Until the Plan Administrator
     restores the Participant's Employer Matching Contribution and Discretionary
     Contribution Accounts, as described in Section 5.03, the Trustee will
     invest the cashout amount the Participant has repaid in a segregated
     Account maintained solely for that Participant.  The Trustee must invest
     the amount in the Participant's segregated Account in Federally insured
     interest bearing savings account(s) or time deposit(s) (or a combination of
     both), or in other fixed income investments.  Until commingled with the
     balance of the Trust Fund on the date the Plan Administrator restores the
     Participant's Employer Matching Contribution and Discretionary Contribution
     Accounts, the Participant's segregated Account remains a part of the Trust,
     but it alone shares in any income it earns and it alone bears any expense
     or loss it incurs.  Unless the repayment qualifies as a rollover
     contribution, the Plan Administrator will direct the Trustee to repay to
     the Participant as soon as is administratively practicable the full amount
     of the Participant's segregated Account if the Plan Administrator
     determines either of the conditions of Section 5.03(a) prevents restoration
     as of the applicable Accounting Date, notwithstanding the Participant's
     repayment.

5.05 YEAR OF SERVICE - VESTING.  For purposes of Vesting and all other
     provisions of the Plan, "Year of Service" means each Participant shall be
     credited with a year of Service in any Plan Year during which he completes
     at least 1,000 Hours of Service with the Employer unless the Plan reference
     specifies a modification to this definition.

5.06 INCLUDED YEARS OF SERVICE - VESTING.  For purposes of determining Vesting
     years of Service, the Plan takes into account all years of Service an
     Employee completes with the Employer, except any year of Service before the
     Plan Year in which the Participant attained the age of 18. For the sole
     purpose of determining a Participant's Vested percentage of his Employer
     Matching Contribution and Discretionary Contribution Accounts derived from

                                      -37-
<PAGE>
 
     Employer contributions which accrued for his benefit prior to a Forfeiture
     Break in Service, the Plan disregards any year of Service after the
     Participant first incurs a Forfeiture Break in Service.

5.07 FORFEITURE OCCURS.  A Participant's forfeiture, if any, of his
     Employer matching Contribution and Discretionary Contribution Accounts
     occurs under the Plan on the earlier of:

          (a)  The last day of the Plan Year in which the Participant first
               incurs a Forfeiture Break in Service; or

          (b)  The date the Participant receives a cashout distribution.

     The Plan Administrator determines the percentage of a Participant's
     Employer Matching Contributions and Discretionary Contributions Accounts
     forfeiture, if any, under this Section 5.07 solely by reference to the
     Vesting schedule of Section 5.02.  A Participant will nor forfeit any
     portion of his Employer Matching Contributions and Discretionary
     Contributions Accounts for any other reason or cause except as expressly
     provided by this Section 5.07 or as provided under Section 9.14.  A
     Participant's

                                      -38-
<PAGE>
 
                                  ARTICLE VI
                    TIME AND METHODS OF PAYMENT OF BENEFITS

6.01 TIME OF PAYMENT OF ACCRUED BENEFIT.  Unless, pursuant to Section 6.03,
     the Participant or the Beneficiary elects in writing to a different method
     of payment, the Plan Administrator will direct the Trustee to commence
     distribution of a Participant's Vested Accrued Benefit in accordance with
     the Section 6.01.  A Participant must consent, in writing, to any
     distribution required under this Section 6.01 if the present value of the
     Participant's Vested Accrued Benefit, at the time of the distribution to
     the Participant, exceeds $3,500 and the Participant has not attained Normal
     Retirement Age.  A "Distribution Date" under this Article VI, unless
     otherwise specified within the Plan, is the end of the calendar year
     coincident with or immediately following the date of Separation of Service
     or as soon as administratively practicable or any subsequent end of a
     calendar quarter as directed by the Participant.  For purposes of the
     consent requirements under this Article VI, if the present value of the
     Participant's Vested Accrued Benefit, at the time of any distribution,
     exceeds $3,500, the Plan Administrator must treat that present value as
     exceeding $3,500 for purposes of all subsequent Plan distributions to the
     Participant.

     (a)  TERMINATION OF EMPLOYMENT FOR A REASON OTHER THAN DISABILITY OR DEATH.
          For a Participant who terminates employment with the Employer for a
          reason other than Disability or death, the Plan Administrator will
          direct the Trustee to commence distribution of the Participant's
          Accrued Benefit, as follows:

          (1)  PARTICIPANT'S VESTED ACCRUED BENEFIT NOT EXCEEDING $3,500.  In a
               lump sum, on the first Distribution Date coincident with or
               immediately following the Participant's Separation from Service.

          (2)  PARTICIPANT'S VESTED ACCRUED BENEFIT EXCEEDING $3,500.  In a form
               and at the time elected by the Participant, pursuant to Section
               6.03.  In the absence of an election by the Participant, the Plan
               Administrator will direct the Trustee to distribute the
               Participant's Vested Accrued Benefit on the 60th day following
               the close of the Plan Year in which the Participant attains
               Normal Requirement Age.

     (b)  REQUIRED BEGINNING DATE.  If any distribution commencement date
          described under Paragraph (a) of this Section 6.01, either by Plan
          provision or by Participant election (or nonelection), is later than
          the Participant's Required Beginning Date, the Plan Administrator
          instead must direct the Trustee to make distribution under this
          Section 6.01 on the Participant's Required Beginning Date.  A
          Participant's Required Beginning Date is the April 1 following the
          close of the calendar year in which the Participant attains age
          seventy and one-half (70 1/2).  However, if the Participant, prior to
          incurring a Separation from Service, attained age 70 1/2 by  January
          1, 1988, and, for the five Plan Year period ending in the calendar
          year in which he attained age 70 1/2 and for all subsequent years, the
          Participant was not a more than 5% owner (as defined in Section
          1.17(a)), the Required Beginning Date is the April 1 following the
          close of the calendar year in which the Participant separates from

                                      -39-
<PAGE>
 
          Service or, if earlier, the April 1 following the close of the
          calendar year in which the Participant becomes a more than 5% owner.
          Furthermore, if a Participant who was not a more than 5% owner
          attained age 70 1/2 during 1988 and did not incur a Separation from
          Service prior to January 1, 1989, his Required Beginning Date is April
          1, 1990.  A mandatory distribution at the Participant's Required
          Beginning Date will be in the manner prescribed in Section 6.02
          referring to Minimum Distribution.

     (c)  DISABILITY OF THE PARTICIPANT.  For a Participant who Separates from
          Service with the Employer due to Disability, the Plan Administrator
          will direct the Trustee to commence distribution of the Participant's
          Accrued Benefit, as follows:

          (1)  DISABLED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT DOES NOT
               EXCEED $3,500.  In a lump sum, on the first Distribution Date
               coincident with or immediately following the Participant's
               Separation from Service due to Disability.

          (2)  DISABLED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS
               $3,500. The Plan Administrator will direct the Trustee to
               distribute the Disabled Participant's Nonforfeitable Accrued
               Benefit at the time and in the form elected by the Participant
               (or, if applicable, by the Beneficiary) as permitted under this
               Article VI.  In the absence of an election, the Plan
               Administrator will direct the Trustee to distribute the
               Participant's undistributed Nonforfeitable Accrued Benefit in a
               lump sum on the Distribution Date coincident with or immediately
               following the determination of the Participant's Disability or,
               if later, the first Distribution Date following the date the Plan
               Administrator receives notification of or otherwise confirms the
               Participant's Disability.

     (d)  DEATH OF THE PARTICIPANT.  The Plan Administrator will direct the
          Trustee, in accordance with this Section 6.01(d), to distribute to the
          Participant's Beneficiary the Participant's Vested Accrued Benefit
          remaining in the Trust at the time of the Participant's death.

          (1)  DECEASED PARTICIPANT'S VESTED ACCRUED BENEFIT DOES NOT EXCEED
               $3,500. The Plan Administrator will direct the Trustee to pay the
               deceased Participant's Vested Accrued Benefit in a single cash
               sum, on the first Distribution Date following the Participant's
               death or, if later, the date on which the Plan Administrator
               receives notification of or otherwise confirms the Participant's
               death.

          (2)  DECEASED PARTICIPANT'S VESTED ACCRUED BENEFIT EXCEEDS $3,500.
               The Plan Administrator will direct the Trustee to pay the
               deceased Participant's Vested Accrued Benefit at the time and in
               the form elected by the Participant, or if applicable, by the
               Beneficiary, pursuant to Section 6.03.  In the absence of an
               election, the Plan Administrator will direct the Trustee to
               distribute the Participant's undistributed Vested Accrued Benefit
               on the first Distribution

                                      -40-
<PAGE>
 
               Date following the close of the Plan Year in which the
               Participant's death occurs or, if later, the first Distribution
               Date following the date the Plan Administrator receives
               notification of or otherwise confirms the Participant's death.

               If the death benefit is payable in full to the Participant's
               surviving spouse, the surviving spouse, in addition to the
               distribution options provided in this Section 6.01(d), may elect
               distribution at any time or in any form (other than the joint and
               survivor annuity) this Article VI would permit for a Participant.

6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT.  A Participant's Accrued
     Benefit, credited for the periods beginning after December 31, 1993, shall
     be distributed only in a cash lump sum except to the extent required for an
     active Employee to satisfy the minimum distribution requirements under
     Section 401(a)(9).

     A Participant's Accrued Benefit, credited for periods prior to January 1,
     1994, shall be distributed in cash under any one or a combination of
     options listed below:

     (a)  lump sum;

     (b)  Periodic Installments.  The amount payable to a Participant under this
          option shall be paid in equal monthly, quarterly, semiannual, or
          annual cash installments.  In order to provide such installment
          payments the Plan Administrator may direct that the Participant's
          interest in the Plan be segregated and invested separately, and that
          the funds in the segregated account be used for the payment of the
          installments.  The period over which such payment(s) are made shall
          not extend beyond the Participant's life expectancy (or the life
          expectancy of the participant and his designated Beneficiary);

     (c)  Purchase of or providing any annuity.  However such annuity may not be
          in any form that will provide for payments over a period extend beyond
          either the life of the Participant (or the lives of the Participant
          and his designated Beneficiary) or the life expectancy of the
          Participant (or the life expectancy of the Participant and his
          designated Beneficiary).

     (d)  Joint and Survivor Annuity.  The Joint and Survivor Annuity is an
          annuity that commences immediately and shall be equal in value to a
          single life annuity.  Such joint and survivor benefits following the
          Participant's death shall continue to the spouse during the spouse's
          lifetime at a rate equal to 50% of the rate at which such benefits
          were payable to the Participant.  This Joint and Survivor Annuity
          shall be considered the designated qualified Joint and Survivor
          Annuity and automatic form of payment for the purposes of this Plan.
          However, the Participant may elect to receive a smaller annuity
          benefit with continuation of payments to the spouse at a rate of
          seventy-five percent (75%) or one hundred percent (100%) of the rate
          payable to a participant during his lifetime which alternative Joint
          and Survivor Annuity shall be equal in value to the automatic Joint
          and 50% Survivor Annuity.  An unmarried

                                      -41-
<PAGE>
 
          Participant shall receive the value of his benefit in the form of a
          life annuity.  Such unmarried Participant, however, may elect to waive
          the life annuity.

     MINIMUM DISTRIBUTION REQUIREMENTS FOR PARTICIPANTS.  The Plan Administrator
     may not direct the Trustee to distribute the Participant's Vested Accrued
     Benefit, nor may the Participant elect to have the Trustee distribute his
     Vested Accrued Benefit, under a method of payment which, as of the Required
     Beginning Date, does not satisfy the minimum distribution requirements
     under Code section 401(a)(9) and the applicable Treasury regulations.  The
     minimum distribution for a calendar year equals the Participant's Vested
     Accrued Benefit as of the latest valuation date preceding the beginning of
     the calendar divided by the Participant's life expectancy or, if
     applicable, the joint and last survivor expectancy of the Participant and
     his designated Beneficiary (as determined under Article VIII, subject to
     the requirements of the Code section 401(a)(9) regulations).  The Plan
     Administrator will increase the Participant's Vested Accrued Benefit, as
     determined on the relevant valuation date, for contributions or forfeitures
     allocated after the valuation date and by December 31 of the valuation
     calendar year, and will decrease the valuation by distributions made after
     the valuation date and by December 31 of the valuation calendar year.  For
     purposes of this valuation, the Plan Administrator will treat any portion
     of the minimum distribution for the first distribution calendar year made
     after the close of that year as a distribution occurring in that first
     distribution calendar year.  In computing a minimum distribution, the Plan
     Administrator must use the unisex life expectancy multiples under Treasury
     Regulation section 1.72-9.  The Plan Administrator, only upon the
     Participant's written request, may compute the minimum distribution for a
     calendar year subsequent to the first calendar year for which the Plan
     requires a minimum distribution by redetermining the applicable life
     expectancy.  However, the Plan Administrator may not redetermine the joint
     life and last survivor expectancy of the Participant and a nonspouse
     designated Beneficiary in a manner which takes into account any adjustment
     to a life expectancy other than the Participant's life expectancy.

     If the Participant's spouse is not his designated Beneficiary, a method of
     payment to the Participant (whether by Participant election or by Plan
     Administrator direction) may not provide more than incidental benefits to
     the Beneficiary.  The Plan must satisfy the minimum distribution incidental
     benefit ("MDIB") requirement in the Treasury regulations issued under Code
     section 401(a)(9) for distributions made on or after the Participant's
     Required Beginning Date and before the Participant's death.  To satisfy the
     MDIB requirement, the Plan Administrator will compute the minimum
     distribution required by this Section by substituting the applicable MDIB
     divisor for the applicable life expectancy factor, if the MDIB divisor is a
     lesser number.  Following the Participant's death, the Plan Administrator
     will compute the minimum distribution required by this Section solely on
     the basis of the applicable life expectancy factor and will disregard the
     MDIB factor.  For Plan Years beginning prior to January 1, 1989, the Plan
     satisfies the incidental benefits requirement if the distributions to the
     Participant satisfied the MDIB requirement or if the present value of the
     retirement benefits payable solely to the Participant is greater than 50%
     of the present value of the total benefits payable to the Participant and
     his Beneficiaries.  The Plan Administrator must determine whether benefits
     to the Beneficiary are incidental as of the

                                      -42-
<PAGE>
 
     date the Trustee is to commence payment of the retirement benefits to the
     Participant, or as of any date the Trustee redetermines the payment period
     to the Participant.

     The minimum distribution for the first calendar year is due by the
     Participant's Required Beginning Date.  The minimum distribution for each
     subsequent distribution calendar year, including the calendar year in which
     the Participant's Required Beginning Date falls, is due by December 31 of
     that year.

     MINIMUM DISTRIBUTION REQUIREMENTS FOR BENEFICIARIES.  The method of
     distribution to the Participant's Beneficiary must satisfy Code section
     401(a)(9) and the applicable Treasury regulations.  If the Participant's
     death occurs after his Required Beginning Date, the method of payment to
     the Beneficiary must provide for completion of payment over a period which
     does not exceed the payment period which had commenced for the Participant.
     If the Participant's death occurs prior to his Required Beginning Date, the
     method of payment to the Beneficiary, must provide for completion of
     payment to the Beneficiary over a period not exceeding:  (i) five (5) years
     after the date of the Participant's death; or (ii) if the Beneficiary is a
     designated Beneficiary, the designated Beneficiary's life expectancy.  The
     Plan Administrator may not direct payment of the Participant's Vested
     Accrued Benefit over a period described in clause (ii) unless the Trustee
     will commence payment to the designated Beneficiary no later than the
     December 31 following the close of the calendar year in which the
     Participant's death occurred or, if later, and if the designated
     Beneficiary is the Participant's surviving spouse, December 31 of the
     calendar year in which the Participant would have attained age seventy and
     one-half (70-1/2).  If the Trustee will make distribution in accordance
     with clause (ii), the minimum distribution for a calendar year equals the
     Participant's Vested Accrued Benefit as of the latest valuation date
     preceding the beginning of the calendar year divided by the designated
     Beneficiary's life expectancy.  The Plan Administrator must use the unisex
     life expectancy multiples under Treasury Regulation section 1.72-9 for
     purposes of applying this paragraph.  The Plan Administrator, only upon the
     written request of the Participant or the Participant's surviving spouse,
     may recalculate the life expectancy of the Participant's surviving spouse
     not more frequently than annually, but may not recalculate the life
     expectancy of a nonspouse designated Beneficiary after the Trustee
     commences payment to the designated Beneficiary.  The Plan Administrator
     will apply this paragraph by treating any amount paid to the Participant's
     child, which becomes payable to the Participant's surviving spouse upon the
     child's attaining the age of majority, as paid to the Participant's
     surviving spouse.  Upon the Beneficiary's written request, the Plan
     Administrator must direct the Trustee to accelerate payment of all, or any
     portion, of the Participant's unpaid Accrued Benefit, as soon as
     administratively practicable following the effective date of that request.

     TRANSITIONAL ELECTIONS.  Notwithstanding the provisions of this Section, if
     the Participant (or Beneficiary) signed a written distribution designation
     prior to January 1, 1984, the Plan Administrator must distribute the
     Participant's Vested Accrued Benefit in accordance with that designation,
     subject however, to the survivor requirements, if applicable, of Section
     6.04.  This paragraph does not apply to a pre-1984 distribution
     designation, and the Plan Administrator will not comply with that
     designation, if any of the following applies: (1) the method of
     distribution would have disqualified the Plan under Code section 401(a)(9)

                                      -43-
<PAGE>
 
     as in effect on December 31, 1983; (2) the Participant did not have an
     Accrued Benefit as of December 31, 1983; (3) the distribution designation
     does not specify the timing and form of the distribution and the death
     Beneficiaries (in order of priority); (4) the substitution of a Beneficiary
     modifies the payment period of the distribution; or (5) the Participant (or
     Beneficiary) modifies or revokes the distribution designation.  In the
     event of a revocation, the Plan must distribute, no later than December 31
     of the calendar year following the year of revocation, the amount which the
     Participant (or Beneficiary) would have received under this Section 6.02 if
     the distribution designation had not been in effect.  The Plan
     Administrator will apply this paragraph to rollovers and transfers in
     accordance with Part J of the Code section 401(a)(9) Treasury regulations.

6.03 BENEFIT PAYMENT ELECTIONS.  Not earlier than 90 days, but not later
     than 30 days before the Participant (or Beneficiary) commences receipt of
     his Accrued Vested Benefit, the Plan Administrator must provide a benefit
     notice to a Participant who is eligible to make an election under this
     Section 6.03.  For distributions after September 30, 1993, a Participant's
     Account Balance is eligible for distribution as of the valuation date
     immediately preceding the date of the Participant's Separation from
     Service, except however, that portion of the Participant's Account Balance
     derived from the Employer Matching Contribution Account and if applicable,
     the Qualified Matching Contribution Account accrued after January 1, 1994,
     shall be valued on the September 30 immediately following the date which
     the Participant separates from Service.  The benefit notice must explain
     the valuation of his Vested Account Balance as well as the optional forms
     of benefit in the Plan, including the material features, and the values of
     those options, and the Participant's right to defer distribution until he
     attains Normal Retirement Age.

     If a Participant or Beneficiary makes an election prescribed by this
     Section 6.03, the Plan Administrator will direct the Trustee to distribute
     the Participant's Vested Accrued Benefit in accordance with that election.
     Any election under this Section 6.03 is subject to the requirements of
     Section 6.02.  The Participant or Beneficiary must make an election under
     this Section 6.03 by filing his election form with the Plan Administrator
     at any time before the Trustee otherwise would commence to pay a
     Participant's Vested Accrued Benefit in accordance with the requirements of
     Article VI.

     (a)  PARTICIPANT ELECTIONS AFTER TERMINATION OF EMPLOYMENT.  If the present
          value of a Participant's Vested Accrued Benefit exceeds $3,500, he may
          elect to have the Trustee commence distribution as of any Distribution
          Date after the Participant's Separation from Service but no later than
          his Normal Retirement Date.  For purposes of this Article VI, the term
          "Normal Retirement Date" means the end of the year immediately
          following the Participant's attaining Normal Retirement Age.

          If the Participant is partially Vested in his Accrued Benefit, an
          election under this Paragraph (a) to distribute prior to the
          Participant's incurring a Forfeiture Break in Service, must be in the
          form of a cashout distribution (as defined in Article V).  A
          Participant may not receive a cashout distribution if, prior to the
          time the Trustee actually makes the cashout distribution, the
          Participant returns to employment with the Employer.

                                      -44-
<PAGE>
 
     (b)  PARTICIPANT ELECTIONS PRIOR TO TERMINATION OF EMPLOYMENT.  The Plan
          does not permit a Participant, other than as provided in Section 5.07,
          to elect to receive a distribution of his Account Balance prior to
          termination of employment.

     (c)  DEATH BENEFIT ELECTIONS.  If the present value of the deceased
          Participant's Vested Accrued Benefit exceeds $3,500, the Participant's
          Beneficiary may elect to have the Trustee distribute the Participant's
          Vested Accrued Benefit in a form and within a period permitted under
          Section 6.02.  The Beneficiary's election is subject to any
          restrictions designated in writing by the Participant and not revoked
          as of his date of death.

6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES.  A transfer
     agreement described in Section 12.05 may not permit a plan which is subject
     to the provisions of Code section 417 to transfer assets to this Plan,
     unless the transfer is an elective transfer, as described in Section 12.05.

     JOINT AND SURVIVOR ANNUITY.  The Administrative Committee must direct the
     Trustee to distribute a Participant's Nonforfeitable Account Balance in the
     form of a qualified joint and survivor annuity, unless the Participant
     makes a valid waiver election (described in Section 6.05 within the 90 day
     period ending on the annuity starting date.  If, as of the annuity starting
     date, the Participant is married, a qualified joint and survivor annuity is
     an immediate annuity which is purchasable with the Participant's
     Nonforfeitable Account Balance and which provides a life annuity for the
     Participant and a survivor annuity payable for the remaining life of the
     Participant's surviving spouse equal to 50% of the amount of the annuity
     payable for the remaining life of the Participant's surviving spouse equal
     to 50% of the amount of the annuity payable during the life of the
     Participant.  If, as of the annuity starting date, the Participant is not
     married, a qualified joint and survivor annuity is an immediate life
     annuity for the Participant which is purchasable with the Participant's
     Nonforfeitable Account Balance.  On or before the annuity starting date,
     the Administrative Committee, without Participant or spousal consent, must
     direct the Trustee to pay the Participant's Nonforfeitable Account Balance
     in a lump sum, in lieu of a qualified joint and survivor annuity, in
     accordance with Section 6.01, if the Participant's Nonforfeitable Account
     Balance is not greater than $3,500.

     PRERETIREMENT SURVIVOR ANNUITY.  If a married Participant dies prior to his
     annuity starting date, the Administrative Committee will direct the Trustee
     to distribute a portion of the Participant's Nonforfeitable Account Balance
     to the Participant's surviving spouse in the form of a preretirement
     survivor annuity, unless the Participant has a valid waiver election (as
     described in Section 6.06) in effect, or unless the Participant and his
     spouse were not married throughout the one year period ending on the date
     of his death.  A preretirement survivor annuity is an annuity which is
     purchasable with 50% of the Participant's Nonforfeitable Account Balance
     (determined as of the date of the Participant's death) and which is payable
     for the life of the Participant's surviving spouse.  The value of the
     preretirement survivor annuity is attributable to Employer contributions
     and to Employee contributions in the same proportion as the Participant's
     Nonforfeitable Account Balance is attributable to those contributions.  The
     portion of the Participant's Nonforfeitable Account

                                      -45-
<PAGE>
 
     Balance not payable under this paragraph is payable to the Participant's
     Beneficiary, in accordance with the other provisions of this Article VI.
     If the present value of the preretirement survivor annuity does not exceed
     $3,500, the Administrative Committee, on or before the annuity starting
     date, must direct the Trustee to make a lump sum distribution to the
     Participant's surviving spouse, in lieu of a preretirement survivor
     annuity.

     SURVIVING SPOUSE ELECTIONS.  If the present value of the preretirement
     survivor annuity exceeds $3,500, the Participant's surviving spouse may
     elect to have the Trustee commence payment of the preretirement survivor
     annuity at any time following the date of the Participant's death, but not
     later than the mandatory distribution periods described in Section 6.02,
     and may elect any of the forms of payment described in Section 6.02, in
     lieu of the preretirement survivor annuity.  In the absence of an election
     by the surviving spouse, the Administrative Committee must direct the
     Trustee to distribute the preretirement survivor annuity on the first
     distribution date following the close of the Plan Year in which the latest
     of the following events occurs:  (i) the Participant's death; (ii) the date
     the Administrative Committee receives notification of or otherwise confirms
     the Participant's death; (iii) the date the Participant would have attained
     Normal Retirement Age; or (iv) the date the Participant would have attained
     age 62.

     SPECIAL RULES.  If the Participant has in effect a valid waiver election
     regarding the qualified joint and survivor annuity or the preretirement
     survivor annuity, the Administrative Committee must direct the Trustee to
     distribute the Participant's Nonforfeitable Account Balance in accordance
     with Sections 6.01, 6.02 and 6.03.  The Administrative Committee will
     reduce the Participant's Nonforfeitable account Balance by any security
     interest (pursuant to any offset rights authorized by Section 10.03) held
     by the Plan by reason of a Participant loan to determine the value of the
     Participant's Nonforfeitable Account Balance distributable in the form of a
     qualified joint and survivor annuity or preretirement survivor annuity,
     provided any post-August 18, 1985, loan satisfied the spousal consent
     requirement described in Section 10.03 of the Plan.  For purposes of
     applying this Article VI, the Administrative Committee treats a former
     spouse as the Participant's spouse or surviving spouse to the extent
     provided under a qualified domestic relations order described in Section
     6.08.  The provisions of this Section 6.04, and of Section 6.05 and 6.06,
     apply separately to the portion of the Participant's Nonforfeitable Account
     Balance subject to the qualified domestic relations order and to the
     portion of the Participant's Nonforfeitable Account Balance not subject to
     that order.

     LIMITED APPLICATION OF SECTION 6.04.  The preceding provisions of this
     Section 6.04 apply only to a Participant whose Account Balance includes a
     portion which was accrued prior to January 1, 1994.  Sections 6.05 and 6.06
     only apply to Participants to whom the preceding provisions of this Section
     6.04 apply.

6.05 WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY.  Not earlier
     than 90 days, but not later than 30 days, before the Participant's annuity
     starting date, the Administrative Committee must provide the Participant a
     written explanation of the terms and conditions of the qualified joint and
     survivor annuity, the Participant's right to make, and the effect of, an
     election to waive the joint and survivor form of benefit, the rights of the

                                      -46-
<PAGE>
 
     Participant's spouse regarding the waiver election and the Participant's
     right to make, and the effect of, a revocation of a waiver election.  The
     Plan does not limit the number of times the Participant may revoke a waiver
     of the qualified joint and survivor annuity or make a new waiver during the
     election period.

     A married Participant's waiver election is not valid unless (a) the
     Participant's spouse (to whom the survivor annuity is payable under the
     qualified joint and survivor annuity), after the Participant has received
     the written explanation described in this Section 6.05, has consented in
     writing to the waiver election, the spouse's consent acknowledges the
     effect of the election, and a notary public or the Plan Administrator (or
     his representative) witnesses the spouse's consent, (b) the spouse consents
     to the alternative form of payment designated by the Participant or to any
     change in that designated form of payment, and (c) unless the spouse is the
     Participant's sole primary Beneficiary, the spouse consents to the
     Participant's Beneficiary designation or to any change in the Participant's
     Beneficiary designation.  The spouse's consent to a waiver of the qualified
     joint and survivor annuity is irrevocable, unless the Participant revokes
     the waiver election.  The spouse may execute a blanket consent to any form
     of payment designation or to any Beneficiary designation made by the
     Participant, if the spouse acknowledges the right to limit that consent to
     a specific designation but, in writing, waives that right.  The consent
     requirements of this Section 6.05 apply to a former spouse of the
     Participant, to the extent required under a qualified domestic relations
     order described in Section 6.08.

     The Administrative Committee will accept as valid a waiver election which
     does not satisfy the spousal consent requirements if the Administrative
     Committee establishes the Participant does not have a spouse, the
     Administrative Committee is not able to locate the Participant's spouse,
     the Participant is legally separated or has been abandoned (within the
     meaning of State law) and the Participant has a court order to that effect,
     or other circumstances exist under which the Secretary of the Treasury will
     excuse the consent requirement.  If the Participant's spouse is legally
     incompetent to given consent, the spouse's legal guardian (even if the
     guardian is the Participant) may give consent.

6.06 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY.  The Administrative
     Committee must provide a written explanation of the preretirement survivor
     annuity to each married Participant, within the following period which ends
     last: (1) the period beginning on the first day of the Plan Year in which
     the Participant attains age 32 and ending on the last day of the Plan Year
     in which the Participant attains age 34; (2) a reasonable period after an
     Employee becomes a Participant; (3) a reasonable period after the joint and
     survivor rules become applicable to the Participant; or (4) a reasonable
     period after a fully subsidized preretirement survivor annuity no longer
     satisfies the requirements for a fully subsidized benefit.  A reasonable
     period described in clauses (2), (3) and (4) is the period beginning one
     year before and ending one year after the applicable event.  If the
     Participant separates from Service before attaining age 35, clauses (1),
     (2), (3) and (4) do not apply and the Administrative Committee must provide
     the written explanation within the period beginning one year before and
     ending one year after the Separation from Service.  The written explanation
     must describe, in a manner consistent with Treasury regulations, the terms
     and conditions of the preretirement survivor annuity comparable to the
     explanation of the

                                      -47-
<PAGE>
 
     qualified joint and survivor annuity required under Section 6.05.  The Plan
     does not limit the number of times the Participant may evoke a waiver of
     the preretirement survivor annuity or make a new waiver during the election
     period.

     A Participant's waiver election of the preretirement survivor annuity is
     not valid unless (a) the Participant makes the waiver election no earlier
     than the first day of the Plan Year in which he attains age 35 and (b) the
     Participant's spouse (to whom the preretirement survivor annuity is
     payable) satisfies the consent requirements described in Section 6.05,
     except the spouse need not consent to the form of benefit payable to the
     designated Beneficiary.  The spouse's consent to the waiver of the
     preretirement survivor annuity is irrevocable, unless the Participant
     revokes the waiver election.  Irrespective of the time of election
     requirement described in clause (a), if the Participant separates from
     Service prior to the first day of the Plan Year in which he attains age 35,
     the Administrative Committee will accept a waiver election as respects the
     Participant's Account Balance attributable to his Service prior to his
     Separation from Service.  Furthermore, if a Participant who has not
     separated from Service makes a valid waiver election, except for the timing
     requirement of clause (a), the Plan Administrator will accept that election
     as valid, but only until the first day of the Plan Year in which the
     Participant attains age 35.  A waiver election described in this paragraph
     is not valid unless made after the Participant has received the written
     explanation described  in this Section 6.06.

6.07 HARDSHIP/IN-SERVICE DISTRIBUTION RULES FROM DEFERRAL CONTRIBUTIONS
     ACCOUNT.  The distribution provisions in this Section 6.07 apply to
     withdrawals from the Deferral Contributions Account, Qualified Matching
     Contributions Account and the Qualified Nonelective Contributions Account
     by a Participant who has not Separated from Service with the Employer.  The
     Participant, until he retires, has a continuing election to receive a
     distribution of 50% of his Vested Account Balance from his Deferral
     Contributions Account, Qualified Matching Contributions Account and
     Qualified Nonelective Contributions Account if he has attained age fifty-
     nine and one-half (59 1/2). If the Participant incurs an immediate and
     heavy financial hardship, he may receive a distribution only to the extent
     of the elective deferral portion of the Deferral Contributions Account plus
     (1) any earnings on the Participant's elective deferrals credited before
     January 1, 1989, and (2) his Qualified matching Contributions and Qualified
     Nonelective Contributions, and earnings on such contributions, if credited
     after December 31, 1988. Notwithstanding any other provision to the
     contrary, the Plan shall not permit distribution of any amounts which
     accrued after January 1, 1994, from the Employer Matching Contributions
     Account, the Discretionary Contributions Account or the Qualified Matching
     Contribution Account, if any, under the hardship distribution provisions of
     the Plan.

     A hardship distribution is on account of an immediate and heavy financial
     need only if the distribution is for any of the following reasons:  (1)
     medical expenses described in Code section 213(d) incurred by the
     Participant, by the Participant's spouse, or by any of the Participant's
     dependents, or necessary to obtain such medical care; (2) the purchase
     (excluding mortgage payments) of a principal residence for the Participant;
     (3) the payment of post-secondary education tuition, for the next 12 month
     period, for the Participant, for the Participant's spouse or for any of the
     Participant's dependents (as defined in Code

                                      -48-
<PAGE>
 
     section 152); (4) to prevent the eviction of the Participant from his
     principal residence or the foreclosure on the mortgage of the Participant's
     principal residence; or (5) any need prescribed by the Revenue Service in a
     revenue ruling, notice or other document of general applicability which
     satisfies the safe harbor definition of hardship.

     RESTRICTIONS ON HARDSHIP DISTRIBUTIONS.  The following restrictions apply
     to a Participant's hardship distribution.

     (a) The Participant will not have the right to make a deferral election
         under the 401(k) arrangement prescribed by Section 3.01(a) for the 12
         month period following the date of his hardship distribution.

     (b) The distribution may not exceed the amount of the immediate and heavy
         financial need. The distribution will not exceed the amount of an
         immediate and heavy financial need even though the Plan Administrator,
         at its discretion, has elected to include in the amount of the
         immediate and heavy financial need, those amounts necessary to pay any
         federal, state or local income taxes or penalties reasonably
         anticipated to result from the distribution. The Plan Administrator
         will apply the provisions of this Section 6.07(b) in a
         nondiscriminatory, consistent and uniform manner.

     (c) The Participant must have obtained all distributions, other than
         hardship distributions, and all nontaxable loans (determined at the
         time of the loan) currently available under this Plan and all other
         qualified plans maintained by the Employer.

     (d) The Participant must agree to limit elective deferrals (as defined in
         Section 3.03) under this Plan and under any other qualified Plan
         maintained by the Employer, for the Participant's taxable year
         immediately following the taxable year of the hardship distribution, to
         the limitation on elective deferrals under section 402(g) of the Code
         reduced by the amount of the Participant's elective deferrals made in
         the taxable year of the hardship distribution.

     The suspension of elective deferrals and employee contributions described
     in clause (a) also must apply to all other qualified plans and to all
     nonqualified plans of deferred compensation maintained by the Employer,
     other than any mandatory employee contributions portion of a defined
     benefit plan, including stock options, stock purchase and other similar
     plans, but not including health or welfare benefit plans (other than the
     cash or deferred arrangement portion of a cafeteria plan).

     After the Participant separates from service with the Employer, the
     provisions of this Article VI other than this Section 6.07 will apply to
     the distribution of the Participant's Accrued Benefit, including the
     portion attributable to his Deferral Contributions Account.

6.08 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS.  Nothing contained in
     this Plan prevents the Trustee, in accordance with the direction of the
     Plan Administrator, from complying with the provisions of a qualified
     domestic relations order (as defined in Code

                                      -49-
<PAGE>
 
     section 414(p)).  This Plan specifically permits distribution to an
     alternate payee under  a qualified domestic relations order at any time,
     irrespective of whether the Participant has attained his earliest
     retirement age (as defined under Code section 414(p)) under the Plan. A
     distribution to an alternate payee prior to the Participant's attainment of
     earliest retirement age is available only if:  (1) the order specifies
     distribution at that time or permits an agreement between the Plan and the
     alternate payee to authorize an earlier distribution; and (2) if the
     present value of the alternate payee's benefits under the Plan exceeds
     $3,500, and the order requires, the alternate payee consents to any
     distribution occurring prior to the Participant's attainment of earliest
     retirement, age.  Nothing in this Section 6.08 permits a Participant a
     right to receive distribution at a time otherwise not permitted under the
     Plan nor does it permit the alternate payee to receive a form of payment
     not permitted under the Plan.

     The Plan Administrator must establish reasonable procedures to determine
     the qualified status of a domestic relations order.  Upon receiving a
     domestic relations order, the Plan Administrator promptly will notify the
     Participant and any alternate payee named in the order, in writing, of the
     receipt of the order and the Plan's procedures for determining the
     qualified status of the order.  Within  a reasonable period of time after
     receiving the domestic relations order, the Plan Administrator must
     determine the qualified status of the order and must notify the Participant
     and each alternate payee, in writing, of its determination.  The Plan
     Administrator must provide notice under this paragraph by mailing to the
     individual's address specified in the domestic relations order, or in a
     manner consistent with Department of Labor regulations.

     If any portion of the Participant's Vested Accrued Benefit is payable
     during the period the Plan Administrator is making its determination of the
     qualified status of the domestic relations order, the Plan Administrator
     must make a separate accounting of the amounts payable.  If the Plan
     Administrator determines the order is a qualified domestic relations order
     within eighteen (18) months of the date amounts first are payable following
     receipt of the order, the Plan Administrator will direct the Trustee to
     distribute the payable amounts in accordance with the order.  If the Plan
     Administrator does not make its determination of the qualified status of
     the order within the eighteen (18) month determination period, the Plan
     Administrator will direct the Trustee to distribute the payable amounts in
     the manner the Plan would distribute if the order did not exist and will
     apply the order prospectively if the Plan Administrator later determines
     the order is a qualified domestic relations order.

     To the extent it is not inconsistent with the provisions of the qualified
     domestic relations order, the Plan Administrator may direct the Trustee to
     invest any partitioned amount in a segregated subaccount or separate
     account and to invest the account in Federally insured, interest-bearing
     savings account(s) or time deposit(s) (or a combination of both), or in
     other fixed income investments. A segregated subaccount remains a part of
     the Trust, but it alone shares in any income it earns, and it alone bears
     any expense or loss it incurs.  The Trustee will make any payments or
     distributions required under this Section 6.08 by separate checks or other
     separate distribution to the alternate payee(s).

6.09 DIRECT ROLLOVER.  This Section applies to distributions made on or
     after January 1, 1993.  Notwithstanding any provisions of the plan to the
     contrary that would otherwise limit

                                      -50-
<PAGE>
 
     a Distributee's election under this Section, a Distributee may elect, at
     the time and in the manner prescribed by the Plan Administrator, to have
     any portion of an Eligible Rollover Distribution paid directly to an
     Eligible Retirement Plan specified by the Distributee in a Direct Rollover.

     The following definitions apply for purposes of this Section.

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

     Distributee.  A Distributee includes an Employee or former Employee.  In
     addition, the Employee's or former Employee's surviving spouse and the
     Employee's or former Employee's spouse or former spouse who is the
     alternate payee under a qualified domestic relations order, as defined in
     section 414(p) of the Code, are Distributees with regard to the interest of
     the spouse or former spouse.

     Eligible Retirement Plan.  An Eligible Retirement Plan is an individual
     retirement account described in section 408(a) of the Code, an individual
     retirement annuity described in section 408(b) of the Code, an annuity plan
     described in section 403(a) of the Code, or a qualified trust described in
     section 401(a) of the Code, that accepts the Distributee's Eligible
     Rollover Distribution.  However, in the case of an Eligible Rollover
     Distribution to the surviving spouse, an Eligible Retirement Plan is an
     individual retirement account or individual retirement annuity.

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

                                      -51-
<PAGE>
 
                                 ARTICLE VII
                       EMPLOYER ADMINISTRATIVE PROVISIONS


7.01 INFORMATION TO COMMITTEE.  The Employer must supply current
     information to the Plan Administrator as to the name, date of birth, date
     of employment, annual Compensation, leaves of absence, Years of Service and
     date of termination of employment of each Employee who is, or who will be
     eligible to become, a Participant under the Plan, together with any other
     information which the Plan considers necessary.  The Employer's records as
     to the current information the Employer furnishes to the Plan Administrator
     are conclusive as to all persons.

7.02 NO LIABILITY.  The Employer assumes no obligation or responsibility to
     any of its Employees, Participants or Beneficiaries for any act of, or
     failure to act, on the part of its Administrative Committee (unless the
     Employer is the Administrative Committee), the Trustee or the Plan
     Administrator (unless the Employer is the Plan Administrator).

7.03 INDEMNITY OF COMMITTEE.  The Employer indemnifies and saves harmless
     the Plan Administrator and the members of the Administrative Committee, and
     each of them, from and against any and all loss resulting from liability to
     which the Plan Administrator and the Administrative Committee, or the
     members of the Administrative Committee may be subjected by reason of any
     act or conduct (except willful misconduct or gross negligence) in their
     official capacities in the administration of this Trust or Plan or both,
     including all expenses reasonably incurred in their defense, in case the
     Employer fails to provide such defense.  The indemnification provisions of
     this Section 7.03 do not relieve the Plan Administrator or any
     Administrative Committee member from any liability he may have under ERISA
     for breach of a fiduciary duty.  Furthermore, the Plan Administrator and
     the Administrative Committee members and the Employer may execute a letter
     agreement further delineating the indemnification agreement of this Section
     7.03, provided the letter agreement is consistent with and does not violate
     ERISA.  The indemnification provisions of this Section 7.03 extend to the
     Trustee solely to the extent provided by letter agreement executed by the
     Trustee and the Employer.


7.04 EMPLOYER DIRECTION OF INVESTMENT.  The Employer has the right to
     direct the Trustee with respect to the investment and re-investment of
     assets comprising the Trust Fund only if the Trustee consents in writing to
     permit such direction.  If the Trustee consents to Employer direction of
     investment, the Trustee and the Employer must execute a letter agreement as
     a part of this Plan containing such conditions, limitations and other
     provisions they deem appropriate before the Trustee will follow any
     Employer direction as respects the investment or re-investment of any part
     of the Trust Fund.

7.05 AMENDMENT TO VESTING SCHEDULE.  Though the Employer reserves the right
     to amend the Vesting schedule at any time, the Plan Administrator will not
     apply the amended Vesting schedule to reduce the Vested percentage of any
     Participant's Employer Matching Contributions and Discretionary
     Contributions Accounts (determined as of the later of the

                                      -52-
<PAGE>
 
     date the Employer adopts the amendment, or the date the amendment becomes
     effective) to a percentage less than the Vested percentage computed under
     the Plan without regard to the amendment.

     If the Employer makes a permissible amendment to the Vesting schedule, each
     Participant having at least three (3) Years of Service with the Employer
     may elect to have the percentage of his Vested Accrued Benefit computed
     under the Plan without regard to the amendment. The Participant must file
     his election with the Plan Administrator within sixty (60) days of the
     latest of (a) the Employer's adoption of the amendment; (b) the effective
     date of the amendment; or (c) his receipt of a copy of the amendment.  The
     Plan Administrator, as soon as practicable, must forward a true copy of any
     amendment to the Vesting schedule to each affected Participant, together
     with an explanation of the effect of the amendment, the appropriate form
     upon which the Participant may make an election to remain under the Vesting
     schedule provided under the Plan prior to the amendment and notice of the
     time within which the Participant must make an election to remain under the
     prior Vesting schedule.  For purposes of this Section 7.05, an amendment to
     the Vesting schedule includes any Plan amendment which directly or
     indirectly affects the computation of the Vested percentage of an
     Employee's rights to his Employer Matching Contributions and Discretionary
     Contributions Accounts.

                                      -53-
<PAGE>
 
                                 ARTICLE VIII
                     PARTICIPANT ADMINISTRATIVE PROVISIONS

8.01 BENEFICIARY DESIGNATION.  Any Participant may from time to time designate,
     in writing, any person or persons, contingently or successively, to whom
     the Trustee will pay his Accrued Benefit on event of his death, and the
     Participant may designate the form and method of payment. The Plan
     Administrator will prescribe the form for the written designation of
     Beneficiary and, upon the Participant's filing the form with the Plan
     Administrator, the form effectively revokes all designations filed prior to
     that date by the same Participant.

     COORDINATION WITH SURVIVOR REQUIREMENTS.  If the joint and survivor
     requirements of Article VI apply to the Participant, this Section 8.01 does
     not impose any special spousal consent requirements on the Participant's
     Beneficiary designation.  However, in the absence of spousal consent (as
     required by Article VI) to the Participant's Beneficiary designation: (1)
     any waiver of the joint and survivor annuity or of the preretirement
     survivor annuity is not valid; and (2) if the Participant dies prior to his
     annuity starting date, the Participant's Beneficiary designation will apply
     only to the portion of the death benefit which is not payable as a
     preretirement survivor annuity.  Regarding clause (2), if the Participant's
     surviving spouse is a primary Beneficiary under the Participant's
     Beneficiary designation, the Trustee will satisfy the spouse's interest in
     the Participant's death benefit first from the portion which is payable as
     a preretirement survivor annuity.

     SPECIAL RULE FOR EXEMPT PARTICIPANTS.  The Beneficiary designation of a
     married Exempt Participant is not valid unless the Participant's spouse
     consents (in a manner described in Section 6.06) to the Beneficiary
     designation.  An "Exempt Participant" is a Participant who is not subject
     to the joint and survivor consent requirements of Article VI.  The spousal
     consent requirement in this paragraph does not apply if the Participant and
     his spouse are not married throughout the one year period ending on the
     date of the Participant's death, or if the Participant's spouse is the
     Participant's sole primary Beneficiary.

     A married Participant's Beneficiary designation is not valid unless the
     Participant's spouse consents, in writing, to the Beneficiary designation.
     The spouses' consent must acknowledge the effect of that consent and a
     notary public or the Plan (or his representative) must witness that
     consent.  The spousal consent requirements of this paragraph do not apply
     if (1) the Participant and his spouse are not married throughout the one
     year period ending on the date of the Participant's death; (2) the
     Participant's spouse is the Participant's sole primary beneficiary; (3) the
     Plan Administrator is not able to locate the Participant's spouse; (4) the
     Participant is legally separated or has been abandoned (within the meaning
     of State law) and the Participant has a court order to that effect; or (5)
     other circumstances exist under which the Secretary of the Treasury will
     excuse the consent requirement.  If the Participant's spouse is legally
     incompetent to give consent, the spouse's legal guardian (even if the
     guardian is the Participant) may give consent.

8.02 NO BENEFICIARY DESIGNATION.  If a Participant fails to name a
     Beneficiary in accordance with Section 8.01, or if the Beneficiary named by
     a Participant predeceases him

                                      -54-
<PAGE>
 
     or dies before complete distribution of the Participant's Accrued Benefit
     as prescribed by the Participant's Beneficiary form, then the Trustee will
     pay the Participant's Accrued Benefit in accordance with Section 6.02 in
     the following order of priority to:

     (a) The Participant's surviving spouse;

     (b) The Participant's surviving children, including adopted children, in
         equal shares;

     (c) The Participant's surviving parents, in equal shares; or

     (d) The legal representative of the estate of the last to die of the
         Participant and his Beneficiary.

     The Plan Administrator will direct the Trustee as to the method and to whom
     the Trustee will make payment under this Section 8.02

8.03 PERSONAL DATA TO COMMITTEE.  Each Participant and each Beneficiary of
     a deceased Participant must furnish to the Plan Administrator such
     evidence, data or information as the Plan Administrator considers necessary
     or desirable for the purpose of administering the Plan.  The provisions of
     this Plan are effective for the benefit of each Participant upon the
     condition precedent that each Participant will furnish promptly full, true
     and complete evidence, data and information when requested by the Plan
     Administrator, provided the Plan Administrator advises each Participant of
     the effect of his failure to comply with its request.

8.04 ADDRESS FOR NOTIFICATION.  Each Participant and each Beneficiary of a
     deceased Participant must file with the Plan Administrator from time to
     time, in writing, his post office address and any change of post office
     address.  Any communication, statement or notice addressed to a
     Participant, or Beneficiary, at his last post office address filed with the
     Plan Administrator, or as shown on the records of the Employer, binds the
     Participant, or Beneficiary, for all purposes of this Plan.

8.05 ASSIGNMENT OR ALIENATION.   Subject to Code section 414(p) relating to
     qualified domestic relations orders, neither a Participant nor a
     Beneficiary may anticipate, assign or alienate (either at law or in equity)
     any benefit provided under the Plan, and the Trustee will not recognize any
     such anticipation, assignment or alienation.  Furthermore, a benefit under
     the Plan is not subject to attachment, garnishment, levy, execution or
     other legal or equitable process.

8.06 NOTICE OF CHANGE IN TERMS.  The Plan Administrator, within the time
     prescribed by ERISA and the applicable regulations, must furnish all
     Participants and Beneficiaries a summary description of any material
     amendment to the Plan or notice of discontinuance of the Plan and all other
     information required by ERISA to be furnished without charge.

8.07 LITIGATION AGAINST THE TRUST.  A court of competent jurisdiction may
     authorize any appropriate equitable relief to redress violations of ERISA
     or to enforce any provisions

                                      -55-
<PAGE>
 
     of ERISA or the terms of the Plan.  A fiduciary may receive reimbursement
     of expenses properly and actually incurred in the performance of his duties
     with the plan.

8.08 INFORMATION AVAILABLE.  Any Participant in the Plan or any Beneficiary
     may examine copies of the Plan description, latest annual report, this Plan
     and Trust, contract or any other instrument under which the Plan was
     established or is operated.  The Plan Administrator will maintain all of
     the items listed in this Section 8.08 in his office, or in such other place
     or places as he may designate from time to time in order to comply with the
     regulations issued under ERISA, for examination during reasonable business
     hours.  Upon the written request of a Participant or Beneficiary the Plan
     Administrator will furnish him with a copy of any item listed in this
     Section 8.08.  The Plan Administrator may make a reasonable charge to the
     requesting person for the copy so furnished.

8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS.  The Plan Administrator (or
     on appeal, the Plan Administrator) is authorized to use its discretion in
     construing all terms of the Plan.  The Plan Administrator will provide
     adequate notice in writing to any Participant or to any Beneficiary
     ("Claimant") whose claim for benefits under the Plan the Plan Administrator
     has denied.  The Plan Administrator's notice to the Claimant must set
     forth:

     (a) The specific reason for the denial;

     (b) Specific references to pertinent Plan provisions on which the Plan
         Administrator based its denial;

     (c) A description of any additional material and information needed for the
         Claimant to perfect his claim and an explanation of why the material or
         information is needed; and

     (d) That any appeal the Claimant wishes to make of the adverse
         determination must be in writing to the Plan Administrator within
         seventy-five (75) days after receipt of the Plan Administrator's notice
         of denial of benefits. The Plan Administrator's notice must further
         advise the Claimant that his failure to appeal the action to the Plan
         Administrator in writing within the seventy-five (75) day period will
         render the Participant's determination final, binding and conclusive.

     If the Claimant should appeal to the Plan Administrator, he, or his duly
     authorized representative, may submit, in writing, whatever issues and
     comments he, or his duly authorized representative, feels are pertinent.
     The Plan Administrator will re-examine all facts related to the appeal and
     make a final determination as to whether the denial of benefits is
     justified under the circumstances.  The Plan Administrator must advise the
     Claimant of its decision within sixty (60) days of the Claimant's written
     request for review, unless special circumstances (such as a hearing) would
     make the rendering of a decision within the sixty (60) day limit
     unfeasible, but in no event may the Plan Administrator render a decision
     respecting a denial for a claim for benefits later than one hundred twenty
     (120) days after its receipt of a request for review.

                                      -56-
<PAGE>
 
     The Plan Administrator's notice of denial of benefits must identify the
     name of each member of the Plan Administrator and the name and address of
     the Plan Administrator member to whom the Claimant may forward his appeal.

8.10 PARTICIPANT DIRECTION OF INVESTMENT.  A Participant may elect to have
     amounts credited to his Account invested in the investment funds made
     available by the Plan Administrator.

     (a)  The Employee will make an election as to the investment funds upon
          becoming a Participant in the Plan.  If no election is made, all
          amounts in a Participant's Account will be invested in a money market
          type fund.  The Committee will provide each Participant with
          information and forms to enable him to make his election.

     (b)  On January 1, April 1, July 1, or October 1, a Participant may elect
          how future contributions and allocations to his Account will be
          invested among the investment funds.  Amounts invested in the funds
          will be in increments of five percent (5%). Such elections will be
          made at such time, in such manner and in such form as the Committee
          may prescribe through uniform and nondiscriminatory rules.

     (c)  On January 1, April 1, July 1, or October 1, a Participant may elect
          to transfer amounts between any of the investment funds.  Amounts
          transferred among the funds will be in increments of five percent
          (5%).  Such elections shall be at such time, in such manner and in
          such form as the Plan Administrator may prescribe through uniform and
          nondiscriminatory rules.

     (d)  Effective January 1, 1994 monies allocated to the Employer Matching
          Contributions Account, the Discretionary Contributions Account, and
          the Qualified Matching Contribution Account, if any, shall be invested
          in Employer Stock.  After, January 1, 1994, a Participant has no right
          to transfer any amounts to or from the Employer Matching Contribution
          Account, the Discretionary Contributions Account, and if applicable,
          the Qualified Matching Contribution Account.

     (e)  The Plan Administrator reserves the right to change the investment
          options under the Plan.

                                      -57-
<PAGE>
 
                                  ARTICLE IX
                             ADMINISTRATIVE DUTIES
                     WITH RESPECT TO PARTICIPANTS' ACCOUNT

9.01 MEMBERS' COMPENSATION EXPENSES.  The Employer may appoint an
     Administrative Committee to administer the Plan, the members of which may
     or may not be Participants in the Plan.  The members of the Administrative
     Committee will serve without compensation for services as such, but the
     Employer will pay all expenses of the Administrative Committee.

9.02 TERM AND NUMBER.  Each member of the Administrative Committee serves
     until the appointment of his successor.  The Administrative Committee will
     consist of at least three (3) members.

9.03 POWERS.  In case of a vacancy in the membership of the Administrative
     Committee, the remaining members of the Administrative Committee may
     exercise any and all of the powers, authority, duties and discretion
     conferred upon the Administrative Committee pending the filling of the
     vacancy.

9.04 GENERAL.  The Plan Administrator or Administrative Committee, if one
     is appointed, have the following powers and duties:

     (a)  To select a Secretary, who need not be a member of the Administrative
          Committee;

     (b)  To determine the rights of eligibility of an Employee to participate
          in the Plan, the value of a Participant's Accrued Benefit and the
          Vested percentage of each Participant's Accrued Benefit;

     (c)  To adopt rules of procedure and regulations necessary for the proper
          and efficient administration of the Plan provided the rules are not
          inconsistent with the terms of this Agreement;

     (d)  To enforce the terms of the Plan and the rules and regulations it
          adopts;

     (e)  To direct the Trustee as respects the crediting and distribution of
          the Trust;

     (f)  To review and render decisions respecting a claim for (or denial of a
          claim for) a benefit under the Plan;

     (g)  To furnish the Employer with information which the Employer may
          require for tax or other purposes;

     (h)  To engage the service of agents whom it may deem advisable to assist
          it with the performance of its duties;

                                      -58-
<PAGE>
 
     (i)  To engage the services of an Investment Manager or Managers (as
          defined in ERISA section 3(38)), each of whom will have full power and
          authority to manage, acquire or dispose (or direct the Trustee with
          respect to acquisition or disposition) of any Plan asset under its
          control; and

     (j)  To establish a nondiscriminatory policy which the Trustee must observe
          in making loans, if any, to Participants.

     The Plan Administrator must exercise all of its powers, duties and
     discretion under the Plan in a uniform and nondiscriminatory manner.

     LOAN POLICY.  If the Plan Administrator adopts a loan policy, pursuant to
     paragraph (j), the loan policy must be a written document and must include:
     (1) the identity of the person or positions of authority authorized to
     administer the participant loan program; (2) a procedure for applying for
     the loan; (3) the criteria for approving or denying the loan; (4) the
     limitations, if any, on the types and amounts of loans available; (5) the
     procedure for determining a reasonable rate of interest; (6) the types of
     collateral which may secure the loan; and (7) the events constituting
     default and the steps the Plan will take to preserve plan assets in the
     event of default.  This Section 9.04 specifically incorporates a written
     loan policy as part of the Employer's Plan.

9.05 FUNDING POLICY.  The Plan Administrator will review, not less often
     than annually, all pertinent Employee information and Plan data in order to
     establish the funding policy of the Plan and to determine the appropriate
     methods of carrying out the Plan's objectives.  The Plan Administrator must
     communicate periodically, as its deems appropriate, to the Trustee and any
     Plan Investment Manager the Plan's short-term and long-term financial needs
     so investment policy can be coordinated with Plan financial requirements.

9.06 MANNER OF ACTION.  The decision of a majority of the members appointed
     and qualified controls.

9.07 AUTHORIZED REPRESENTATIVE.  The Plan Administrator may authorize any
     one (1) of the members of the Administrative Committee, or is Secretary, to
     sign on its behalf any notices, directions, applications, certificates,
     consents, approvals, waivers, letters or other documents.  The Plan
     Administrator must evidence this authority by an instrument signed by all
     members and filed with the Trustee.

9.08 INTERESTED MEMBER.  No member of the Administrative Committee may
     decide or determine any matter concerning the distribution, nature or
     method of settlement of his own benefits under the Plan, except in
     exercising an election available to that member in his capacity as a
     Participant.

9.09 INDIVIDUAL ACCOUNTS.  The Plan Administrator will maintain, or direct
     the Trustee to maintain, a separate Account, or multiple Accounts, in the
     name of each Participant to reflect the Participant's Accrued Benefit under
     the Plan.  If  Participant re-enters the Plan subsequent to his having a
     Forfeiture Break in Service, the Plan Administrator, or the

                                      -59-
<PAGE>
 
     Trustee, must maintain a separate Account for the Participant's pre-
     Forfeiture Break in Service Accrued Benefit and a separate Account for his
     post-Forfeiture Break in Service Accrued Benefit, unless the Participant's
     entire Accrued Benefit under the Plan is one hundred percent (100%) Vested.

     The Plan Administrator will make its allocations, or request the Trustee to
     make its allocations, to the Accounts of the Participants in accordance
     with the provisions of Section 9.11.  The Plan Administrator may direct the
     Trustee upon restoration of a partially Vested Participant's Account, as
     described in Section 5.03, to maintain a temporary segregated investment
     Account in the name of a Participant to prevent a distortion of income,
     gain or loss allocations under Section 9.11.  Such a temporary separate
     account would be required upon the restoration of account.  The Plan
     Administrator must maintain records of its activities.

9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT.  The value of each
     Participant's Account Balance consists of that proportion of the net worth
     (at fair market value) of the Employer's Trust Fund which the net credit
     balance in his Account bears to the total net credit balance in the
     Accounts (exclusive of the cash value of the incidental benefit insurance
     contracts) of all Participants plus the cash surrender value of any
     incidental benefit insurance contracts held by the Trustee on the
     Participants life.

     For purposes of a distribution under the Plan, the value of a Participant's
     Account Balance is its value as of the valuation date immediately preceding
     the date of the distribution except, however, that portion of the
     Participant's Account Balance derived from the Employer Matching
     Contribution Account and if applicable, the Qualified Matching Contribution
     Account shall be valued on the September 30 immediately following the date
     which the Participant separates from Service.

9.11 ALLOCATION AND DISTRIBUTION OF NET INCOME, GAIN OR LOSS.  A "valuation
     date" under this Plan is each Accounting Date and each interim valuation
     date determined under Section 10.14.  As of each valuation date the Plan
     Administrator must adjust Accounts to reflect net income, gain or loss
     since the last valuation date.  The valuation period is the period
     beginning the day after the last valuation date and ending on the current
     valuation date.

     TRUST FUND ACCOUNTS.  The allocation provisions of this paragraph apply to
     all Participant Accounts other than segregated investment Accounts.  The
     Plan Administrator first shall determine the earnings and the amount of any
     realized or unrealized appreciation or depreciation in the fair market
     value of the Trust's portion of each of the investment funds offered
     pursuant to the Plan.  The Plan Administrator shall, for purposes of this
     Section 9.11 only, partition each Participant's Deferral Contributions
     Account, Qualified Matching Contributions Account, Employer Matching
     Contributions Account, Qualified Nonelective Contributions Account,
     Discretionary Contribution Accounts and Rollover Accounts into sub-Accounts
     in respect of each investment fund in which the Participant's Accounts are
     invested.  The value of each sub-Account for each Participant shall be
     determined as of the immediately preceding valuation date.  For this
     purpose, such value shall be deemed to be

                                      -60-
<PAGE>
 
     the same value as that determined as of such previous valuation date, but
     adjusted for any forfeitures during the current valuation period arising
     under Section 5.07 or under Section 9.14, and for amounts charged during
     the current valuation period to the Accounts in accordance with Section
     9.13 (relating to distributions).  Each sub-Account's shares of earnings
     and the amount of any realized or unrealized appreciation or depreciation
     in the related investment fund for the period since the last valuation date
     shall be determined by multiplying that sub-Account's Allocation Fraction
     by the amount determined for the related investment fund pursuant to the
     second sentence of this paragraph.  "Allocation Fraction" means the ratio
     of the sub-Account's Allocation Balance to the total Allocation Balances
     for all sub-Accounts (for all Participants) invested in the same investment
     fund.  With respect to sub-Accounts of a Participant's Deferral
     Contribution Account, "Allocation Balance" means such Account's value as of
     the last valuation date as determined above increased by one-half of the
     Participant's Deferral Contributions contributed and allocated to that sub-
     Account since the last valuation date.  With respect to sub-Accounts of a
     Participant's Rollover Account, "Allocation Balance" means rollover
     contribution amount determined by taking the number of days the rollover
     was in the sub-Account during the valuation period in which the rollover
     was made divided by the days in the valuation period times the amount of
     any nonsegregated rollover contribution made during the current valuation
     period.

     SPECIAL PROVISIONS FOR EMPLOYER MATCHING CONTRIBUTION ACCOUNT AND QUALIFIED
     MATCHING CONTRIBUTIONS ACCOUNT.  Effective for the periods after January 1,
     1994, the Employer Matching Contribution Account and if applicable, the
     Qualified Matching Contribution Account receives all income it earns and
     bears all expense or loss it incurs resulting from investment in any
     temporary money market investment or Employer securities. The fair market
     value of the Employer securities will be determined annually by a
     independent third party appraiser.

     SEGREGATED INVESTMENT ACCOUNTS.  A segregated investment Account receives
     all income it earns and bears all expense or loss it incurs.  As of the
     valuation date, the Plan Administrator must reduce a segregated Account for
     any forfeiture arising under Section 5.07 after the Plan Administrator has
     made all other allocations, changes or adjustments to the Account for the
     Plan Year.

     ADDITIONAL RULES.  An Excess Amount or suspense account described in Part 2
     of Article III does not share in the allocation of net income, gain or loss
     described in this Section 9.11. This Section 9.11 applies solely to the
     allocation of net income, gain or loss of the Trust. The Plan Administrator
     will allocate the Employer contributions and Participant forfeitures, if
     any, in accordance with Article III.

9.12 INDIVIDUAL STATEMENT.  As soon as practicable after the Accounting
     Date of each Plan Year, but within the time prescribed by ERISA and the
     regulations under ERISA, the Plan Administrator will deliver to each
     Participant (and to each Beneficiary) a statement reflecting the condition
     of this Accrued Benefit in the Trust as of the date and such other
     information ERISA requires be furnished the Participant or Beneficiary.  No
     Participant, except a member of the Plan Administrator, has the right to
     inspect the records reflecting the Account of any other Participant.

                                      -61-
<PAGE>
 
9.13 ACCOUNT CHARGED.  The Plan Administrator will charge all distributions
     made to a Participant or to his Beneficiary from his Account against the
     Account of the Participant when made.

9.14 UNCLAIMED ACCOUNT PROCEDURE.  The Plan does not require either the
     Trustee or the Plan Administrator to search for, or ascertain the
     whereabouts of, any Participant or Beneficiary.  At the time the
     Participant's or Beneficiary's benefit becomes distributable under Article
     VI, the Plan Administrator, by certified or registered mail addressed to
     his last known address of record with the Plan Administrator or the
     Employer, must notify any Participant, or Beneficiary, that he is entitled
     to a distribution under this Plan.  The notice must quote the provisions of
     this Section 9.14 and otherwise must comply with the notice requirements of
     Article VI.  If the Participant, or Beneficiary, fails to claim his
     distributive share or make his whereabouts known in writing to the Plan
     Administrator within six (6) months from the date of mailing of the notice,
     the Plan Administrator will treat the Participant's or Beneficiary's
     unclaimed payable Accrued Benefit as forfeited and will reallocate the
     unclaimed payable Accrued Benefit in accordance with Section 3.05.  Where
     the benefit is distributable to the Participant, the forfeiture under this
     paragraph occurs as of the last day of the notice period, if the
     Participant's Vested Accrued Benefit does not exceed $3,500, or as of the
     first day the benefit is distributable without the Participant's consent,
     if the present value of the Participant's Vested Accrued Benefit exceeds
     $3,500.  Where the benefit is distributable to a Beneficiary, the
     forfeiture occurs on the date the notice period ends except, if the
     Beneficiary is the Participant's spouse and the Vested Accrued Benefit
     payable to the spouse exceeds $3,500, the forfeiture occurs as of the first
     day the benefit is distributable without the spouse's consent.  Pending
     forfeiture, the Plan Administrator, following the expiration of the notice
     period, may direct the Trustee to segregate the Vested Accrued Benefit in a
     segregated Account and to invest the segregated Account in Federally
     insured interest bearing savings accounts or time deposits (or in a
     combination of both), or in other fixed income investments.

     If a Participant or Beneficiary who has incurred a forfeiture of his
     Accrued Benefit under the provisions of the first paragraph of this Section
     9.14 makes a claim, at any time, for his forfeited Accrued Benefit, the
     Plan Administrator must restore the Participant's or Beneficiary's
     forfeited Accrued Benefit to the same dollar amount as the dollar amount of
     the Accrued Benefit forfeited, unadjusted for any gains or losses occurring
     subsequent to the date of the forfeiture.  The Plan Administrator will make
     the restoration during the Plan Year in which the Participant or
     Beneficiary makes the claim first from the amount, if any, of Participant
     forfeitures the Plan Administrator otherwise would allocate for the Plan
     Year, then from the amount, if any, of the Trust Fund net income or gain
     for the Plan Year and then from the amount, or additional amount, the
     Employer contributes to enable the Plan Administrator to make the required
     restoration.  The Plan Administrator will direct the Trustee to distribute
     the Participant's or Beneficiary's restored Accrued Benefit to him in
     accordance with Article VI.  The forfeiture provisions of this Section 9.14
     apply solely to the Participant's or to the Beneficiary Accrued Benefit
     derived from Employer contributions.

                                      -62-
<PAGE>
 
                                   ARTICLE X
                           TRUSTEE, POWERS AND DUTIES

10.01 ACCEPTANCE.  The Trustee accepts the Trust created under the plan and
      agrees to perform the obligations imposed.  The Trustee must provide bond
      for the faithful performance of its duties under the Trust to the extent
      required by ERISA.

10.02 RECEIPT OF CONTRIBUTIONS. The Trustee is accountable to the Employer for
      the funds contributed to it by the Employer, but does not have any duty to
      see that the contributions received comply with the provisions of the
      Plan. The Trustee is not obliged to collect any contributions from the
      Employer, nor is obliged to see that funds deposited with it are deposited
      according to the provisions of the Plan.

10.03 INVESTMENT POWERS.

      TRUSTEE POWERS. The Trustee has full discretion and authority with regard
      to the investment of the Trust Fund except with respect to a Plan asset
      under the control or direction of a properly appointed Investment Manager,
      or with respect to a Plan asset subject to Employer, Participant or Plan
      Administrator direction of investment. The Trustee must coordinate its
      investment policy with Plan financial needs as communicated to it by the
      Plan Administrator. The Trustee is authorized and empowered, but not by
      way of limitation, with the following powers, rights and duties:

      (a)  To invest any part or all of the Trust Fund in any common or
           preferred stocks, open-end or closed-end mutual funds, put and call
           options traded on a national exchange, United States retirement plan
           bonds, corporate bonds, debentures, convertible debentures,
           commercial paper, U.S. Treasury bills, U.S. Treasury notes and other
           direct or indirect obligations of the United States Government or its
           agencies, improved or unimproved real estate situated in the United
           States, insurance contracts of any type, limited partnerships,
           mortgages, notes or other property of any kind, real or personal, and
           to buy or sell options on common stock on a nationally recognized
           exchange with or without holding the underlying common stock, and to
           make any other investments the Trustee deems appropriate, as a
           prudent man would do under like circumstances with due regard for the
           purposes of this Plan. Any investment made or retained by the Trustee
           in good faith is proper but must be of a kind constituting a
           diversification considered by law suitable for trust investments;

      (b)  To acquire and hold "qualifying Employer securities" and "qualifying
           Employer real property", as those terms are defined in the Act,
           further provided, that the Trustee shall be permitted to acquire any
           qualifying Employer securities or qualifying Employer real property
           even if, immediately after the acquisition of such securities or
           property, the fair market value of all qualifying Employer securities
           or qualifying Employer real property held by the Trustees hereunder
           should amount to 100% of the fair market value of all assets in the
           Trust Fund.

                                      -63-
<PAGE>
 
     (c)  To retain in cash so much of the Trust Fund as it may deem advisable
          to satisfy liquidity needs of the Plan and to deposit any cash held in
          the Trust Fund in a bank account at reasonable interest.  If the
          Trustee is a bank or similar financial institution supervised by the
          United States or by a State, this paragraph (b) includes specific
          authority to invest in any type of deposit of the Trustee (or of a
          bank related to the Trustee within the meaning of Code section 414(b))
          at a reasonable rate of interest or in a common trust fund (provisions
          of which govern the investment of such assets and which the Plan
          incorporates by this reference) as described in Code section 584 which
          the Trustee (or its affiliate, as defined in Code section 1504)
          maintains exclusively for the collective investment of money
          contributed by the bank (or the affiliate) in its capacity as trustee
          and which conforms to the rules of the Comptroller of the Currency;

     (d)  To manage, sell, contract to sell, grant options to purchase, convey,
          exchange, transfer, abandon, improve, repair, insure, lease for any
          term even though commencing in the future or extending beyond the term
          of the Trust, and otherwise deal with all property, real or personal,
          in such manner, for such considerations and on such terms and
          conditions as the Trustee decides.

     (e)  To credit and distribute the Trust as directed by the Plan
          Administrator.  The Trustee is not obliged to inquire as to whether
          any payee or distributee is entitled to any payment or whether the
          distribution is proper or within the terms of the Plan, or as to the
          manner of making any payment or distribution.  The Trustee is
          accountable only to the Plan Administrator for any payment or
          distribution made by it in good faith on the order or direction of the
          Plan Administrator.

     (f)  To compromise, contest, arbitrate or abandon claims and demands, in
          its discretion;

     (g)  To have with respect to the Trust all of the rights of an individual
          owner, including the power to give proxies, to participate in any
          voting trusts, mergers, consolidations or liquidations, and to
          exercise or sell stock subscriptions or conversion rights;

     (h)  To hold any securities or other property in the name of the Trustee or
          its nominee, with depositories or agent depositories or in another
          form as it may deem best, with or without disclosing the trust
          relationship;

     (i)  To perform any and all other acts in its judgment necessary or
          appropriate for the proper and advantageous management, investment and
          distribution of the Trust;

     (j)  To retain any funds or property subject to any dispute without
          liability for the payment of interest, and to decline to make payment
          or delivery of the funds or property until final adjudication is made
          by a court of competent jurisdiction;

     (k)  To file all tax returns required of the Trustee;

                                      -64-
<PAGE>
 
      (l)  To furnish to the, Employer, the Plan Administrator and the Plan
           Administrator an annual statement of account showing the condition of
           the Trust Fund and all investments, receipts, disbursements and other
           transactions effected by the Trustee during the Plan Year covered by
           the statement and also stating the assets of the Trust held at the
           end of the Plan Year, which accounts are conclusive on all persons,
           including the Employer, the Plan Administrator and the Administrative
           Committee, except as to any act or transaction concerning which the
           Employer, the Plan Administrator or the Administrative Committee
           files with the Trustee written exceptions or objections within ninety
           (90) days after the receipt of the accounts or for which ERISA
           authorizes a longer period within which to object; and

      (m)  To begin, maintain or defend any litigation necessary in connection
           with the administration of the Plan, except that the Trustee is not
           obliged or required to do so unless indemnified to its satisfaction.

      PARTICIPANT LOANS. This Section specifically authorizes the Trustees to
      make loans on a nondiscriminatory basis to a Participant or to a
      beneficiary in accordance with the loan policy established by the Plan
      Administrator, provided: (1) the loan policy satisfies the requirements of
      Section 9.04; (2) loans are available to all Participants and
      Beneficiaries on a reasonable equivalent basis and are not available in a
      greater amount for Highly Compensated Employees than for other Employees;
      (3) any loan is adequately secured and bears a reasonable rate of
      interest; (4) the minimum loan amount is $1,000 and the maximum loan
      amount is the lessor of $50,000 or 50% of a Participants Vested Account
      Balance; (5) the loan provides for repayment within five years except for
      certain home loan which must be repaid within fifteen years; (6) the
      default provisions of the note prohibit offset of the Participant's
      Nonforfeitable Accrued Benefit prior to the time the Trustee otherwise
      would distribute the Participant's Nonforfeitable Accrued Benefit; (7) the
      amount of the loan does not exceed (at the time the Plan extends the loan
      the present value of the Participant's Nonforfeitable Accrued Benefit; (8)
      the loan shall be treated as a Directed Investment; and (9) the loan
      otherwise conforms to the exemption provided by Code Section 4975(d)(1).
      If the joint and survivor requirements of Article VI apply to the
      Participant, the Participant may not pledge any portion of his Account
      Balance as security for a loan made after August 18, 1985, unless, within
      the 90 day period ending on the date the pledge becomes effective, the
      Participant's spouse, if any, consents (in a manner described in Section
      6.05 other than the requirement relating to the consent of a subsequent
      spouse) to the security or, by separate consent, to an increase in the
      amount of security. If the Employer is an "S Corporation", a Participant
      who is a shareholder-Employee (an employee or an officer) who, at any time
      during the Employer's taxable year, owns more than 5%, either directly or
      by attribution under Code Section 318(a)(1), of the Employer's outstanding
      stock may not receive a loan from the Plan. Notwithstanding any other
      provision to the contrary, the Plan shall not permit distribution of any
      amounts which accrued after January 1, 1994, from the Employer Matching
      Contributions Account, the Discretionary Contributions Account or the
      Qualified Matching Contribution Account, if any, under the loan provisions
      of the Plan.

10.04 RECORDS AND STATEMENTS.  The records of the Trustee pertaining to the
      Plan must be open to the inspection of the Plan Administrator,
      Administrative Committee and the

                                      -65-
<PAGE>
 
      Employer at all reasonable times and may be audited from time to time by
      any person or persons as the Plan Administrator, Employer or
      Administrative Committee may specify in writing. The Trustee must furnish
      the Plan Administrator or Administrative Committee with whatever
      information relating to the Trust Fund the Administrative Committee or
      Plan Administrator considers necessary.

10.05 FEES AND EXPENSES FROM FUND. The Trustee will receive reasonable annual
      compensation as may be agreed upon from time to time between the Employer
      and the Trustee. The Trustee will pay all fees and expenses reasonably
      incurred by it in its administration of the Plan from the Trust Fund
      unless the Employer pays the fees and expenses. The Plan Administrator
      will not treat any fee or expense paid, directly or indirectly, by the
      Employer as an Employer contribution, provided the fee or expense relates
      to the ordinary and necessary administration of the Fund. No person who is
      receiving full pay from the Employer may receive compensation for services
      as Trustee.

10.06 PARTIES TO LITIGATION. Except as otherwise provided by ERISA, only the
      Employer, the Plan Administrator, the Administrative Committee, and the
      Trustee are necessary parties to any court proceeding involving the
      Trustee or the Trust Fund. No Participant, or Beneficiary, is entitled to
      any notice of process unless required by ERISA. Any final judgment entered
      in any proceeding will be conclusive upon the Employer, the Plan
      Administrator, the Administrative Committee, the Trustee, Participants and
      Beneficiaries.

10.07 PROFESSIONAL AGENTS. The Trustee may employ and pay from the Trust Fund
      reasonable compensation to agents, attorneys, accountants and other
      persons to advise the Trustee as in its opinion may be necessary. The
      Trustee may delegate to any agent, attorney, accountant, or other person
      selected by it any non-Trustee power or duty assigned it by the Plan, and
      the Trustee may act or refrain from acting on the advice or opinion of any
      agent, attorney, accountant or other person so selected.

10.08 DISTRIBUTION OF CASH OR PROPERTY. The Trustee may make distribution under
      the Plan in cash or property, other than Employer Stock, or partly in
      each, at its fair market value as determined by the Trustee. For purposes
      of a distribution to a Participant or to a Participant's designated
      Beneficiary or surviving spouse, "property" includes a nontransferable
      annuity contract, provided the contract satisfies the requirements of this
      Plan. In no event shall a distributions be made to a Participant or his
      Designated Beneficiary in Employer Stock.

10.09 DISTRIBUTION DIRECTIONS. If no one claims a payment of distribution made
      from the Trust, the Trustee must promptly notify the Plan Administrator
      and then dispose of the payment in accordance with the subsequent
      direction of the Plan Administrator.

10.10 THIRD PARTY. No person dealing with the Trustee is obligated to see to the
      proper application of any money paid or property delivered to the Trustee,
      or to inquire whether the Trustee has acted pursuant to any of the terms
      of the Plan. Each person dealing with the Trustee may act upon any notice,
      request or representation in writing by the Trustee, or by the Trustee's
      duly authorized agent, and is not liable to any person in so acting. The

                                      -66-
<PAGE>
 
      certificate of the Trustee that it is acting in accordance with the Plan
      will be conclusive in favor of any person relying on the certificate. If
      more than two persons act as Trustee, the decision of a majority of such
      persons controls with respect to any decision regarding the administration
      or investment of the Trust Fund.

10.11 RESIGNATION.  The Trustee may resign at any time as Trustee of the
      Plan by giving thirty (30) days' written notice in advance to the Employer
      and to the Plan Administrator.  If the Employer fails to appoint a
      successor Trustee within 60 days of its receipt of the Trustee's written
      notice of resignation, the Trustee will treat the Employer as having
      appointed itself as Trustee and as having filed its acceptance of
      appointment with the former Trustee.

10.12 REMOVAL.  The Employer, by giving thirty (30) days' written notice in
      advance to the Trustee, may remove any Trustee. In the event of the
      resignation or removal of a Trustee, the Employer must appoint a successor
      Trustee if it intends to continue the Plan. If two or more persons hold
      the position of Trustee, in the event of the removal of one such person,
      during any period the selection of a replacement is pending, or during any
      period such person is unable to serve for any reason, the remaining person
      or persons will act as the Trustee.

10.13 INTERIM DUTIES AND SUCCESSOR TRUSTEE.  Each successor Trustee succeeds to
      the title to the Trust vested in his predecessor by accepting in writing
      his appointment as successor Trustee and filing the acceptance with the
      former Trustee and the Plan Administrator without the signing or filing of
      any further statement. The resigning or removed Trustee, upon receipt of
      acceptance in writing of the Trust by the successor Trustee, must execute
      all documents and do all, acts necessary to vest the title of record in
      any successor Trustee. Each successor Trustee has and enjoys all of the
      powers, both discretionary and ministerial, conferred under this Agreement
      upon his predecessor. A successor Trustee is not personally liable for any
      act or failure to act of any predecessor Trustee, except as required under
      ERISA. With the approval of the Employer and the Plan Administrator, a
      successor Trustee, with respect to the Plan, may accept the account
      rendered and the property delivered to it by a predecessor Trustee without
      incurring any liability or responsibility for so doing.

10.14 VALUATION OF TRUST.  The Trustee shall value the Trust Fund as of each
      Accounting Date to determine the fair market value of the cash portion of
      each Participant's Deferral Contributions Account and the segment of the
      Employer Matching Contributions Account and Qualified Matching
      Contributions Account, if any, accrued prior to January 1, 1994. That
      portion of the Participant's Account Balance allocated to the Employer
      Matching Contributions Account, the Discretionary Contributions Account
      and the Qualified Matching Contributions Account, if any, allocated after
      January 1, 1994, shall be valued as of the annual stock valuation date,
      September 30. The Trustee also may value the Trust Fund on such other
      interim valuation dates as he deems appropriate.

10.15 LIMITATION ON LIABILITY - IF INVESTMENT MANAGER APPOINTED.  The Trustee is
      not liable for the acts or omissions of any Investment Manager or Managers
      the Plan Administrator may appoint, nor is the Trustee under any
      obligation to invest or otherwise manage any asst of the Plan which is
      subject to the management of the properly

                                      -67-
<PAGE>
 
      appointed Investment Manager. The Plan Administrator, the Trustee and any
      properly appointed Investment Manager may execute a letter agreement as
      part of this Plan delineating the duties, responsibilities and liabilities
      of the Investment Manager with respect to any part of the Trust Fund under
      the control of the Investment Manager.

10.16 INVESTMENT IN GROUP TRUST FUND.  The Trustee, for collective investment
      purposes, may combine into one (1) trust fund the Trust created under this
      Plan with the trust created under any other qualified retirement plan the
      Employer maintains. However, the Trustee must maintain separate records of
      account for the assets of each trust, in order to reflect properly each
      Participant's Accrued Benefit under the plan(s) in which he is a
      Participant.

                                      -68-
<PAGE>
 
                                  ARTICLE XI
                                 MISCELLANEOUS

11.01 EVIDENCE.  Anyone required to give evidence under the terms of the Plan
      may do so by certificate, affidavit, document or other information which
      the person to act in reliance may consider pertinent, reliable and
      genuine, and to have been signed, made or presented by the proper party or
      parties. Both the Plan Administrator and the Trustee are fully protected
      in acting and relying upon any evidence described under the immediately
      preceding sentence.

11.02 NO RESPONSIBILITY FOR EMPLOYER ACTION.  Neither the Trustee nor the Plan
      Administrator has any obligation nor responsibility with respect to any
      action required by the Plan to be taken by the Employer, any Participant
      or eligible Employee, or for the failure of any of the above persons to
      act or make any payment or contribution, or to otherwise provide any
      benefit contemplated under this Plan. Furthermore, the Plan does not
      require the Trustee or the Plan Administrator to collect any contribution
      required under the Plan, or to determine the correctness of the amount of
      any Employer contribution. Neither the Trustee nor the Plan Administrator
      need inquire into or be responsible for any action or failure to act on
      the part of the others. Any action required of a corporate Employer must
      be by its Board of Directors or its designate.

11.03 FIDUCIARIES NOT INSURERS.  The Trustee, the Plan Administrator, the Plan
      Administrator and the Employer in no way guarantee the Trust fund from
      loss or depreciation. The Employer does not guarantee the payment of any
      money which may be or becomes due to any person from the Trust Fund. The
      liability of the Plan Administrator and the Trustee to make any payment
      from the Trust Fund at any time and all times is limited to the then
      available assets of the Trust.

11.04 WAIVER OF NOTICE.  Any person entitled to notice under the Plan may
      waive the notice.

11.05 SUCCESSORS.  The Plan is binding upon all persons entitled to benefits
      under the Plan, their respective heirs and legal representatives, upon the
      Employer, its successors and assigns, and upon the Trustee and the Plan
      Administrator and their successors.

11.06 WORD USAGE.  Words used in the masculine also apply to the feminine where
      applicable, and wherever the context of the Employer's Plan dictates, the
      plural includes the singular and the singular includes the plural.

11.07 STATE LAW.  Texas law will determine all questions arising with
      respect to the provisions of this Agreement except to the extent Federal
      statute supersedes Texas law.

11.08 EMPLOYMENT NOT GUARANTEE.  Nothing contained in this Plan, or with respect
      to the establishment of the Trust, or any modification or amendment to the
      Plan or Trust, or in the creation of any Account, or the payment of any
      benefit, gives any Employee, Participant or any Beneficiary any right to
      continue employment, any legal or equitable right against the Employer, or
      Employee of the Employer, or against the Trustee, or its agents or
      employees,

                                      -69-
<PAGE>
 
      or against the Plan Administrator, except as expressly provided by the
      Plan, the Trust, ERISA or by a separate agreement.

                                      -70-
<PAGE>
 
                                  ARTICLE XII
                   EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION

12.01 EXCLUSIVE BENEFIT.  Except as provided under Article III, the Employer has
      no beneficial interest in any asset of the Trust and no part of any asset
      in the Trust may ever revert to or be repaid to an Employer, either
      directly or indirectly; nor prior to the satisfaction of all liabilities
      with respect to the Participants and their Beneficiaries under the Plan,
      may any part of the corpus or income of the Trust Fund, or any asset of
      the Trust, be (at any time) used for, or diverted to, purposes other than
      the exclusive benefit of the Participants or their Beneficiaries.

12.02 AMENDMENT BY EMPLOYER.  The Employer has the right at any time and
      from time to time:

      (a)  To amend this Agreement in any manner it deems necessary or advisable
           in order to qualify (or maintain qualification of) this Plan and the
           Trust created under it under the appropriate provisions of Code
           section 401(a); and

      (b)  To amend this Agreement in any other manner.

      No amendment may authorize or permit any of the Trust Fund (other than the
      part which is required to pay taxes and administration expenses) to be
      used for or diverted to purposes other than for the exclusive benefit of
      the Participants or their Beneficiaries or estates. No amendment may cause
      or permit any portion of the Trust Fund to revert to or become a property
      of the Employer. The Employer also may not make any amendment which
      affects the rights, duties or responsibilities of the Trustee, the Plan
      Administrator or the Administrative Committee without the written consent
      of the affected Trustee, the Plan Administrator or the affected member of
      the Administrative Committee.

     CODE SECTION 411(D)(6) PROTECTED BENEFITS.  An amendment (including the
     adoption of this Plan as a restatement of an existing plan) may not
     decrease a Participant's Accrued Benefit, except to the extent permitted
     under Code section 412(c)(8), and may not reduce or eliminate Code section
     411(d)(6) protected benefits determined immediately prior to the adoption
     date (or, if later, the effective date) of the amendment.  An amendment
     reduces or eliminates Code section 411(d)(6) protected benefits if the
     amendment has the effect of either (1) eliminating or reducing an early
     retirement benefit or a retirement-type subsidy (as defined in Treasury
     regulations), or (2) except as provided by Treasury regulations,
     eliminating an optional form of benefit.  The Plan Administrator must
     disregard an amendment to the extent application of the amendment would
     fail to satisfy this paragraph. If the Plan Administrator must disregard an
     amendment because the amendment would violate clause (1) of clause (2), the
     Plan Administrator must maintain a schedule of the early retirement option
     or other optional forms of benefit the Plan must continue for the affected
     Participants.  The Employer must make all amendments in writing.  Each
     amendment must state the date to which it is either retroactively or
     prospectively effective.

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<PAGE>
 
12.03 DISCONTINUANCE.  The Employer has the right, at any time, to suspend or
      discontinue its contributions under the Plan, and to terminate, at any
      time, this Plan and the Trust created under this Agreement. The Plan will
      terminate upon the first to occur of the following:

      (a)  The date terminated by action of the Employer;

      (b)  The date the Employer is judicially declared bankrupt or insolvent,
           unless the proceeding authorized continued maintenance of the Plan;

      (c)  The dissolution, merger, consolidation or reorganization of the
           Employer or the sale by the Employer of all or substantially all of
           its assets, unless the successor or purchaser makes provision to
           continue the Plan, in which event the successor or purchaser must
           substitute itself as the Employer under this Plan.

12.04 FULL VESTING ON TERMINATION. Upon either full or partial termination of
      the Plan, or if applicable, upon complete discontinuance of profit sharing
      contributions to the Plan, an affected Participant's right to his Accrued
      Benefit is one hundred percent (100%) Vested, irrespective of the Vested
      percentage which otherwise would apply under Article V.

12.05 MERGER/DIRECT TRANSFER.  The Trustee may not consent to, or be a party to,
      any merger or consolidation with another plan, or to a transfer of assets
      or liabilities to another plan, unless immediately after the merger,
      consolidation or transfer, the surviving Plan provides each Participant a
      benefit equal to or greater than the benefit each Participant would have
      received had the Plan terminated immediately before the merger or
      consolidation or transfer. The Trustee possesses the specific authority to
      enter into merger agreements or direct transfer of assets agreements with
      the trustees of other retirement plans described in Code section 401(a),
      including an elective transfer, and to accept the direct transfer of plan
      assets, or to transfer plan assets, as a party to any such agreement.

      The Trustee may accept a direct transfer of plan assets on behalf of an
      Employee prior to the date the Employee satisfies the Plan's eligibility
      condition(s). If the Trustee accepts a direct transfer of plan assets, the
      Plan Administrator and Trustee must treat the Employee as a Participant
      for all purposes of the Plan except the Employee is not a Participant for
      purposes of sharing in Employer contributions or Participant forfeitures
      under the Plan until he actually becomes a Participant in the Plan. For
      all purposes of this Section 12.05, the Plan will only accept a directed
      transfer in the form of cash.

      The Trustee may not consent to, or be a party to a merger, consolidation
      or transfer of assets with a defined benefit plan, except with respect to
      an elective transfer. The Trustee will hold, administer and distribute the
      transferred assets as a part of the Trust Fund and the Trustee must
      maintain a separate Employer contribution Account for the benefit of the
      Employee on whose behalf the Trustee accepted the transfer in order to
      reflect the value of the transferred assets. Unless a transfer of assets
      to this Plan is an elective transfer, the Plan will preserve all Code
      section 411(d)(6) protected benefits with respect to those transferred
      assets, in the manner described in Section 12.02. A transfer is an
      elective transfer if: (1) the transfer satisfies the first paragraph of
      this Section 12.05; (2) the transfer is voluntary, under a fully

                                      -72-
<PAGE>
 
      informed election by the Participant; (3) the Participant has an
      alternative that retains his Code section 411(d)(6) protected benefits
      (including an option to leave his benefit in the transferor plan, if that
      plan is not terminating); (4) the transfer satisfies the applicable
      spousal consent requirements of the Code; (5) the transferor plan
      satisfies the joint and survivor notice requirements of the Code, if the
      Participant's transferred benefit is subject to those requirements; (6)
      the Participant has the right to immediate distribution from the
      transferor plan, in lieu of the elective transfer; (7) the transferred
      benefit is at least the greater of the single sum distribution provided by
      the transferor plan for which the Participant is eligible or the present
      value of the Participant's accrued benefit under the transferor plan
      payable at that plan's normal retirement age; (8) the Participant has a
      100% Vested interest in the transferred benefit; and (9) the transfer
      otherwise satisfies applicable Treasury regulations. An elective transfer
      may occur between qualified plans of any type.

      DISTRIBUTION REQUIREMENTS UNDER CODE SECTION 401(K).  If the Plan receives
      a direct transfer (by merger or otherwise) of elective contributions (or
      amounts treated as elective contributions) under a Plan with a Code
      section 401(k) arrangement, the distribution restrictions of Code sections
      401(k)(2) and (10) continue to apply to those transferred elective
      contributions.

12.06 TERMINATION.  Upon termination of the Plan, the distribution provisions of
      Article VI remain operative, with the following exceptions:

      (a)  If the present value of the Participant's Vested Accrued Benefit does
           not exceed $3,500, the Plan Administrator will direct the Trustee to
           distribute the Participant's Vested Accrued Benefit to him in a lump
           sum as soon as administratively practicable after the plan
           terminates; and

      (b)  If the present value of the Participant's Vested Accrued Benefit
           exceeds $3,500, the Participant or the Beneficiary, in addition to
           the distribution events permitted under Article VI, may elect to have
           the Trustee commence distribution of his Vested Accrued Benefit as
           soon as administratively practicable after the Plan terminates.

      To liquidate the Trust, the Plan Administrator will purchase a deferred
      annuity contract for each Participant which protects the Participant's
      distribution rights under the Plan, if the Participant's Vested Accrued
      Benefit exceeds $3,500 and the Participant does not elect an immediate
      distribution pursuant to Paragraph (2). The Trust will continue until the
      Trustee in accordance with the direction of the Plan Administrator has
      distributed all of the benefits under the Plan.

      If this paragraph applies, in lieu of the preceding provisions of this
      Section 12.06 and the distributions provisions of Article VI, the Plan
      Administrator will direct the Trustee to distribute each Participant's
      Vested Accrued Benefit, in lump sum, as soon as administratively
      practicable after the termination of the Plan, irrespective of the present
      value of the Participant's Vested Accrued Benefit and whether the
      Participant consents to that distribution. This paragraph applies only if:
      (1) the Plan does not provide any annuity option; (2) the Plan is a profit
      sharing plan at the time of its termination date; and (3) as of

                                      -73-
<PAGE>
 
     the period between the Plan termination date and the final distribution of
     assets, the Employer does not maintain any other defined contribution plan
     (other than an ESOP).

     On each valuation date, the Plan Administrator will credit any part of a
     Participant's Accrued Benefit retained in the Trust with its proportionate
     share of the Trust's income, expenses, gains and losses, both realized and
     unrealized.  Upon termination of the Plan, the amount, if any, in a
     suspense account under Article III will revert to the Employer, subject to
     the conditions of the Treasury regulation s permitting such a reversion.  A
     resolution or amendment to freeze all future benefit accrual but otherwise
     to continue maintenance of the Plan, is not a termination for purposes of
     this Section 12.06.

     SPECIAL RULE FOR DEFERRAL CONTRIBUTIONS ACCOUNT.  Notwithstanding the
     provisions of this Section 12.06, the Participant may not receive a
     distribution of his Deferral Contributions Account, Qualified Matching
     Contributions Account and Qualified Nonelective Contribution Account
     pursuant to the termination of the Plan unless; (a) the Participant
     otherwise is entitled to a distribution from these accounts under the Plan;
     or (b) the Plan termination occurs without the establishment of a successor
     Plan.  A successor Plan under clause (b) is a defined contribution plan
     (other than and ESOP) maintained by the Employer (or by a related Employer)
     at the time of the termination of the Plan or within the period ending
     twelve months after the final distribution of assets.  A distribution made
     after March 31, 1988, pursuant to clause (b), must be part of a lump sum
     distribution to the Participant of his Vested Accrued Benefit.

                                      -74-
<PAGE>
 
IN WITNESS WHEREOF, the Employer and the Trustee have executed this Plan and
Trust this ____ day of ___________________________________________, 19_______.


     SOUTHWEST BANK OF TEXAS, N.A.       ____________________________
                                         David Farries - Trustee


     BY:_________________________        ____________________________
                                         Paul Murphy - Trustee


                                         ____________________________
                                         Sharon K. Sokol - Trustee


                                         ____________________________
                                         Kim Zabin - Trustee

                                      -75-