<PAGE>
 
                                                                   EXHIBIT 10.38



                              HALTER MARINE GROUP
                                 PENSION PLAN




                           EFFECTIVE OCTOBER 1, 1996

<PAGE>
 
                               TABLE OF CONTENTS

<TABLE> 
                                   ARTICLE I

<S>                                                                          <C>
GENERAL....................................................................    2
     1.01   Purpose........................................................    2
     1.02   Exclusive Benefit of Employees.................................    2

                                  ARTICLE II
DEFINITIONS................................................................    2
     2.01   ACCRUED BENEFIT................................................    2
     2.02   ACTIVE PARTICIPANT.............................................    2
     2.03   ACTUAL RETIREMENT..............................................    2
     2.04   ACTUARIAL EQUIVALENT...........................................    2
     2.05   AFFILIATE......................................................    3
     2.06   AUTHORIZED LEAVE OF ABSENCE....................................    3
     2.07   BASIC PENSION..................................................    3
     2.08   BENEFICIARY....................................................    4
     2.09   BOARD..........................................................    4
     2.10   BREAK IN SERVICE...............................................    4
     2.11   CODE...........................................................    4
     2.12   COMMITTEE or PENSION COMMITTEE.................................    4
     2.13   COMPANY........................................................    4
     2.14   COMPENSATION...................................................    4
     2.15   CREDITED SERVICE...............................................    5
     2.16   DEATH BENEFIT..................................................    5
     2.17   EARLY RETIREMENT...............................................    5
     2.18   EARLY RETIREMENT DATE..........................................    6
     2.19   EFFECTIVE DATE.................................................    6
     2.20   ELAPSED-TIME EMPLOYMENT........................................    6
     2.21   ELIGIBLE EMPLOYEE..............................................    6
     2.22   EMPLOYEE.......................................................    6
     2.23   EMPLOYER or PARTICIPATING EMPLOYER.............................    7
     2.24   EMPLOYMENT COMMENCEMENT DATE...................................    7
     2.25   ERISA..........................................................    7
     2.26   EXTENDED ABSENCE EMPLOYEE......................................    7
     2.27   FIDUCIARY or SPECIFIED FIDUCIARY...............................    8
     2.28   FINAL MONTHLY COMPENSATION.....................................    8
     2.29   HOUR OF SERVICE................................................    8
     2.30   HOURLY-WAGE EMPLOYEE...........................................    9
     2.31   LATE RETIREMENT DATE...........................................    9
     2.32   LATE RETIREMENT................................................    9
     2.33   NORMAL RETIREMENT DATE.........................................    9
     2.34   NORMAL RETIREMENT..............................................    9
     2.35   PARTICIPANT....................................................    9
     2.36   PLAN...........................................................    9
     2.37   PLAN YEAR......................................................    9
     2.38   RE-EMPLOYMENT COMMENCEMENT DATE................................    9
     2.39   RETIRED PARTICIPANT............................................    9
     2.40   SERVICE........................................................   10
     2.41   SEVERANCE FROM SERVICE.........................................   10
     2.42   SPOUSE.........................................................   10
</TABLE> 

                                      -i-

<PAGE>
 
<TABLE> 
<S>                                                                          <C>
     2.43   TERMINATED PARTICIPANT..........................................  10
     2.44   TRUST...........................................................  10
     2.45   TRUSTEE.........................................................  10
     2.46   TRUST FUND......................................................  10

                                  ARTICLE III

PARTICIPATION AND SERVICE...................................................  11
     3.01   Participation...................................................  11
     3.02   Service and Credited Service....................................  11
     3.03   Transfer From or To Job as an Employee..........................  14
     3.04   Employment by More Than One Participating
            Employer........................................................  15
     3.05   Special Rules for Certain Participants in
            Trinity Industries, Inc. Marine Group Pension
            Plan............................................................  16

                                  ARTICLE IV

CONTRIBUTIONS...............................................................  17
     4.01   Employer Contributions..........................................  17
     4.02   Participant Contributions.......................................  17
     4.03   Cost............................................................  17
     4.04   Payment of Contributions........................................  17
     4.05   Reversion.......................................................  18

                                   ARTICLE V

RETIREMENT..................................................................  18
     5.01   Normal Retirement Date..........................................  18
     5.02   At Early Retirement Date........................................  18
     5.03   At Late Retirement Date.........................................  19


                                  ARTICLE VI

DEATH.......................................................................  19
     6.01   Prior to Actual Retirement or Other Severance
            from Service....................................................  19
     6.02   After Actual Retirement or Other Severance
            From Service....................................................  20
     6.03   Earliest Retirement Date........................................  20
     6.04   No Duplication of Benefit.......................................  21

                                  ARTICLE VII

OTHER SEVERANCE FROM SERVICE................................................  21
     7.01   Benefits........................................................  21
     7.02   Effect of Prior Distribution....................................  21
     7.03   Early Retirement Age............................................  22
     7.04   Terminated Participant's Address................................  22
     7.05   Payment of Terminated Participant's Benefits....................  22
     7.06   Limitation Amount...............................................  23
     7.07   Deemed Cashout..................................................  23
</TABLE>

                                     -ii-

<PAGE>
 
                                       ARTICLE VIII


<TABLE> 
<S>                                                                                              <C> 
SETTLEMENT OPTIONS-DISTRIBUTION OF BENEFITS....................................................  23
     8.01      When Payable....................................................................  23
     8.02      Basic Pension...................................................................  24
     8.03      Optional Pensions...............................................................  25
     8.04      Directed Transfer of Eligible Rollover Distributions............................  26
     8.05      Mandatory Distribution of Retirement Benefits...................................  27
     8.06      One-Time Election for Commencement of Normal Retirement Income at Normal
               Retirement Date While Continuing in Employment..................................  32
     8.07      Suspension of Benefits After Retirement.........................................  32
     8.08      Preservation of Protected Benefits and Optional Forms of Benefit under 
               Merged Plans....................................................................  33

                                             ARTICLE IX

PLAN TERMINATION...............................................................................  33
     9.01      Right to Terminate..............................................................  33
     9.02      Partial Termination.............................................................  34
     9.03      Liquidation of Trust Fund.......................................................  34
     9.04      Manner of Distribution..........................................................  37
     9.05      Residual Amounts................................................................  38
     
                                             ARTICLE X

SUCCESSOR EMPLOYER AND MERGER OR CONSOLIDATION OF PLANS........................................  38
     10.01     Successor Employer..............................................................  38
     10.02     Merger or Consolidation of Plans................................................  38

                                             ARTICLE XI


RESTRICTIONS ON BENEFITS PAYABLE TO HIGHLY COMPENSATED PARTICIPANTS............................  39
     11.01     Restrictions....................................................................  39
     11.02     Effectiveness...................................................................  40

                                             ARTICLE XII

ADMINISTRATION.................................................................................  40
     12.01     Allocation of Responsibility Among Specified Fiduciaries for Plan and Trust
               Administration..................................................................  40
     12.02     Appointment of Committee........................................................  41
     12.03     Claims Procedure................................................................  42
     12.04     Records and Reports.............................................................  42
     12.05     Other Committee Powers and Duties...............................................  42
     12.06     Rules and Decisions.............................................................  43
     12.07     Committee Procedures............................................................  44
     12.08     Authorization of Benefit Payments...............................................  44
     12.09     Application and Forms for Benefits..............................................  45
     12.10     Facility of Payment.............................................................  45
</TABLE> 

                                     -iii-
<PAGE>
 
<TABLE> 
<S>                                                                                              <C> 
     12.11     Indemnification.................................................................  45
     12.12     Beneficiary Designations........................................................  45
     12.13     Diligence to Locate.............................................................  46

                                 ARTICLE XIII
FIDUCIARY RESPONSIBILITY.......................................................................  46
     13.01     Fiduciary.......................................................................  46
     13.02     Fiduciary Responsibility........................................................  47
     13.03     Liability for Breach by Co-fiduciary............................................  47
                                  
                                  ARTICLE XIV

AMENDMENT, MODIFICATION OR TERMINATION OF PLAN.................................................  48
     14.01     Change..........................................................................  48
     14.02     Modification....................................................................  48
     14.03     Adoption by Others..............................................................  48
     14.04     Recovery........................................................................  49

                                  ARTICLE XV

MAXIMUM BENEFITS AND TOP-HEAVY PROVISIONS......................................................  49
     15.01     Maximum Benefit.................................................................  49
     15.02     Top-Heavy Provisions............................................................  54           

                                  ARTICLE XVI

MISCELLANEOUS..................................................................................  58
     16.01     Nonguarantee of Employment......................................................  58
     16.02     Rights to Trust Assets..........................................................  59
     16.03     Nonalienation of Benefits.......................................................  59
     16.04     Release.........................................................................  59
     16.05     Certain Social Security Increases...............................................  59
     16.06     Titles, Gender and Number.......................................................  60
     16.07     Construction....................................................................  60
     16.08     Counterparts....................................................................  60
     16.09     Return of Contributions.........................................................  60
     16.10     Duplication of Benefits Prohibited..............................................  60
</TABLE>

                                     -iv-
<PAGE>
 
                              HALTER MARINE GROUP
                                 PENSION PLAN


     On this _______ day of  _____________________, 1996, HALTER MARINE GROUP, 
INC., a corporation organized and existing under the laws of the State of 
Delaware (the "Company"), hereby adopts the HALTER MARINE GROUP PENSION PLAN, 
effective October 1, 1996 or as otherwise specified herein:

                             W I T N E S S E T H :

     WHEREAS, the Company wishes to establish a defined benefit pension plan for
certain of its eligible employees; and 
     
     WHEREAS, the Company has authorized the execution of this agreement 
intended to establish a defined benefit pension plan, known as the Halter 
Marine Group Pension Plan (the "Plan"); and 

     WHEREAS, the Company has authorized the execution of the Halter Marine 
Group Pension Trust (the "Trust") for the purpose of carrying out the terms of 
the Plan and which Trust is intended to form a part of the Plan; and 

     WHEREAS, it is intended that the Plan and Trust meet the requirements of 
Sections 401(a) and 501(a) of the Internal Revenue Code of 1986, as amended, and
the requirements of the Employee Retirement Income Security Act of 1974, as 
amended; and 

     WHEREAS, the provisions of this Plan shall apply solely to an employee who 
terminates employment with the Company, or with any affiliate of the Company 
which adopts this Plan, on or after the effective date of this Plan;

     NOW, THEREFORE, in consideration of the premises HALTER MARINE GROUP, INC. 
hereby agrees as follows:

                                      -1-
<PAGE>
 
                                   ARTICLE I

                                    GENERAL
                                    -------

1.01      Purpose
          -------
     
          The purpose of the Plan is to provide retirement benefits to the
          eligible employees of the Company and of any affiliate of the Company
          which adopts this Plan, as hereinafter provided.

1.02      Exclusive Benefit of Employees
          ------------------------------

          The Plan (including the Trust) is established for the exclusive
          benefit of the eligible employees of each Participating Employer (as
          hereinafter defined). It is intended that none of the Trust corpus or
          income shall revert to any Participating Employer, except as otherwise
          provided under Sections 9.05 and 16.09 hereof.

                                  ARTICLE II

                                  DEFINITIONS
                                  -----------

The following words and phrases, when used herein, unless their context clearly 
indicates otherwise, shall have the following respective meanings:

2.01      ACCRUED BENEFIT means the monthly benefits to which a Participant is
          entitled under the Plan, as computed in accordance with Section 5.01
          as a Basic Pension using Compensation and Credited Service as of the
          applicable date of calculation.

2.02      ACTIVE PARTICIPANT means an Employee who meets the eligibility
          requirements set forth in Section 3.01 of this Plan but who has not
          incurred a Severance from Service.

2.03      ACTUAL RETIREMENT means the retirement of a Participant under the
          terms of this Plan, irrespective of whether such retirement is Normal
          Retirement, Early Retirement or Late Retirement.

2.04      ACTUARIAL EQUIVALENT means the equality in value of aggregate amounts
          expected to be received under different forms of payment based on the
          interest rate and mortality assumptions, in effect on the date as of
          which the benefit is to commence, as such assumptions are defined
          below, unless otherwise specifically provided in the Plan:

                                      -2-
<PAGE>
 
          (a)  The interest rate used for purposes of computing alternative
               periodic forms of benefits or a single-sum payment shall be seven
               percent (7%).

          (b)  The present value of a single-sum payment (except a death
               benefit) shall be the present value calculated using the
               applicable mortality table and the applicable interest rate. The
               applicable mortality table is the table prescribed by the
               Secretary of Treasury under Section 417(e)(3) of the Code.
               Except as otherwise provided below, the applicable interest rate
               is the average annual rate of interest on 30-year Treasury
               securities for November of the year preceding the Plan Year
               during which the distribution is paid.

          (c)  In determining Actuarial Equivalence for all purposes of Section
               15.02, the mortality assumptions used shall be based on the
               applicable mortality table described in paragraph (b) of this
               Section.

2.05      AFFILIATE means any company (other than an Employer) which is (i) a
          member of a controlled group of corporations (as defined in Section
          414(b) of the Code) which includes an Employer; (ii) a trade or
          business (whether or not incorporated) which is under common control
          (as defined in Section 414(c) of the Code) with an Employer; (iii) an
          organization (whether or not incorporated) which is a member of an
          affiliated service group (as defined in Section 414(m) of the Code)
          which includes an Employer; or (iv) any other entity required to be
          aggregated with an Employer pursuant to Section 414(o) of the Code.

2.06      AUTHORIZED LEAVE OF ABSENCE means any absence (including military
          leave) authorized by a Participating Employer under its standard
          personnel practices, uniformly applied, and in accordance with
          applicable federal law (other than ERISA); provided, however, that no
          absence shall be considered an Authorized Leave of Absence unless the
          Employee returns to employment immediately (in the case of military
          leave, within the 90-day period after his discharge or release or
          within the period prescribed by applicable law, whichever is longer)
          upon the expiration of such absence.

2.07      BASIC PENSION means either the MARRIED BASIC PENSION or UNMARRIED
          BASIC PENSION, as applicable. The MARRIED BASIC PENSION means the
          monthly pension computed in accordance with Section 5.01 hereof and
          payable to a Participant described in Section 8.02(2)hereof pursuant
          to the form described in such Section 8.02(2). The UNMARRIED BASIC
          PENSION means the monthly pension

                                      -3-
<PAGE>
 
          computed in accordance with Section 5.01 hereof and payable to a
          Participant described in Section 8.02(1) hereof pursuant to the form
          described in such Section 8.02(1).

2.08      BENEFICIARY means any person or fiduciary designated by a Participant
          who is or may become entitled to receive any Death Benefit payable
          under the provisions of this Plan. A Beneficiary who becomes entitled
          to a benefit under the Plan shall remain a Beneficiary under the Plan
          until the Trustee has fully distributed the benefits to the
          Beneficiary. A Beneficiary's right to information or data concerning
          the Plan, and the respective duties of the Committee and the Trustee
          to provide to the Beneficiary information or data concerning the Plan,
          shall not arise until the Beneficiary first becomes entitled to
          receive a benefit under the Plan. For purposes of determining whether
          the Plan is a Top-Heavy Plan, a Beneficiary of a deceased Participant
          shall be considered a Key Employee or a Non-Key Employee in accordance
          with applicable Treasury Regulations.

2.09      BOARD means the Board of Directors of the Company, or any person or
          committee duly authorized to act for and represent the Board.

2.10      BREAK IN SERVICE means a Severance from Service having a duration of
          at least twelve (12) continuous months, as more particularly described
          in Section 3.02(2) (d) hereof.

2.11      CODE means the Internal Revenue Code of 1986, as amended from time to 
          time.

2.12      COMMITTEE or PENSION COMMITTEE means the persons appointed under the 
          provisions of Article XII hereof to administer the Plan.

2.13      COMPANY means Halter Marine Group, Inc., a corporation organized and
          existing under the laws of the State of Delaware, or its successor or
          successors.

2.14      COMPENSATION means the total of all amounts paid to a Participant by
          his Employer for personal services as reported on the Participant's
          Federal Income Tax Withholding Statement (Form W-2) plus any amounts
          not included in the Participant's gross income pursuant to Section 125
          or 401(k) of the Code, but excluding (i) any other contributions made
          under this Plan or any other plan of deferred compensation, (ii)
          tuition reimbursement payments, (iii) moving expense payments, (iv)
          excess life insurance imputed income, (v) income from non-qualified
          stock options, (vi) automobile allowance payments, (vii) medical
          allowance payments, (viii) safe driving bonuses, (ix) employee awards,
          (x) lodging allowance payments,

                                      -4-
<PAGE>
 
          (xi) tool allowance payments, (xii) road expense reimbursement
          payments, (xiii) commuting allowance payments, (xiv) meal allowance
          payments, (xv) third-party sick pay, (xvi) attendance/safety bonuses,
          (xvii) travel allowances, (xviii) company automobile, and (xix) such
          other similar amounts as the Committee may from time to time exclude
          in its sole discretion. Any compensation in excess of $150,000 (as
          automatically increased in accordance with Treasury Department
          regulations to reflect cost-of-living adjustments), shall not be
          considered Compensation under this Plan. In applying the limitations
          described above, in the case of a highly compensated employee who is
          subject to the aggregation rules of Section 414(q) (6) of the Code
          because such Participant is either a 5% owner of an Employer or one of
          the 10 highest paid highly compensated employees, such highly
          compensated employee and his family members shall be treated as a
          single Participant; provided, however, that "family member" shall mean
          the Participant's spouse and any lineal descendants who have not
          attained age 19 before the close of the year. If, as a result of the
          application of these rules, the limitation is exceeded, then the
          limitation shall be prorated among the Participant and family members
          in proportion to the Compensation of each prior to the application of
          the limitation. Notwithstanding the preceding provisions of this
          Section 2.14, in the case of a Participant who is an Hourly-Wage
          Employee, no more than $30,000 of annual compensation shall be taken
          into account.

2.15      CREDITED SERVICE means the period of a Participant's employment
          considered in the determination of the amount of benefit payable to or
          on behalf of a Participant in accordance with Section 3.02.

2.16      DEATH BENEFIT means the total that is payable under the provisions of
          this Plan, by reason of the death of a Participant, to such
          Participant's Spouse or other Beneficiary.

2.17      EARLY RETIREMENT means the Actual Retirement of a Participant on the
          first day of the month coinciding with or immediately following the
          earlier of (1) the date when such Participant has thirty (30) or more
          Years of Service and shall have reached or passed his fifty-fifth
          (55th) birthday, (2) the date when such Participant has twenty-five
          (25) or more Years of Service and shall have reached or passed his
          sixtieth (60th) birthday or (3) the date when such Participant has
          twenty (20) or more Years of Service and shall have reached or passed
          his sixty-second (62) birthday. Notwithstanding the foregoing, Early
          Retirement means, with respect to a Participant described in Section
          3.05 hereof, the earlier of (1) the date the Participant satisfies the
          requirements for Early

                                      -5-
<PAGE>
 
          Retirement under the merged plan, or (2) the date the Participant 
          satisfies the requirements of this Section 2.17.

2.18      EARLY RETIREMENT DATE means the date on which a Participant has taken 
          Early Retirement.

2.19      EFFECTIVE DATE of this Plan means October 1, 1996 or as otherwise 
          herein specified.

2.20      ELAPSED-TIME EMPLOYMENT means, with respect to an Employee, the period
          beginning on his Employment Commencement Date (or Re-employment
          Commencement Date, as the case may be) and ending on the date of his
          Severance from Service. Such period shall be determined without regard
          to the actual number of Hours of Service completed by the Employee
          during such period.

2.21      ELIGIBLE EMPLOYEE means an Employee--

          (a)  whose wages from the Employer are subject to withholding for
               purposes of Federal income taxes and for purposes of the Federal
               Insurance Contributions Act,

          (b)  who is not included in a unit of employees covered by a
               collective bargaining agreement unless, in the execution of such
               agreement, retirement benefits under this Plan were the subject
               of good-faith bargaining,

          (c)  who is not a Leased Employee (as defined in Section 2.22 hereof),

          (d)  who is not classified as a project status employee, and

          (e)  who is not an employee or within a class of employees designated 
               on Appendix I, attached hereto,

          Notwithstanding the foregoing, the term "Eligible Employee" shall not
          include any individual who is a participant, or is eligible to become
          a participant, in a defined benefit pension plan (other than this
          Plan) maintained by a Participating Employer. In addition, the term
          "Eligible Employee" may be revised from time to time by the Pension
          Committee, pursuant to duly adopted resolutions, to include other
          individuals employed by the Company.

2.22      EMPLOYEE means any individual currently employed by an Employer 
          maintaining the Plan or by any other employer

                                      -6-


<PAGE>
 
          required to be aggregated with the Employer under Code Sections 
          414(b), (c), (m) or (o).

          The Plan treats any Leased Employee as an Employee. A Leased Employee
          is an individual (i) who otherwise is not an Employee of an Employer,
          (ii) 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 (1) year, and (iii) who performs services historically
          performed by Employees in the Employer's business field. The
          Compensation of a Leased Employee includes compensation from the
          leasing organization which is attributable to services performed for
          the Employer.

          Notwithstanding the foregoing, a Leased Employee shall not be treated
          as an Employee of an Employer if the leasing organization covers the
          Leased Employee in a Safe Harbor Plan and, prior to the application of
          this exception, twenty percent (20%) or less of the Employer's
          Employees (other than highly compensated employees, as defined in the
          Code) 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
          ten percent (10%) of the employees "compensation" (defined in Code
          Section 415(c) (3) and including salary deferrals) without regard to
          employment by the leasing organization on a specified date.

2.23      EMPLOYER or PARTICIPATING EMPLOYER means the Company; Equitable
          Shipyards, Inc.; Gretna Machine & Ironworks, Inc.; Gulf Coast
          Fabrication, Inc.; Halter Marine, Inc.; Halter Marine Services, Inc.;
          Trinity Gulf Repair, Inc.; Trinity Marine Gulfport, Inc.; Trinity
          Marine Panama City, Inc.; Trinity Marine Pascagoula, Inc.; Trinity
          Yachts, Inc.; and Washington Marine Fabricators, Inc.; or any other
          entity affiliated with the Company which, with the consent of the
          Company by appropriate resolutions, has adopted this Plan.

2.24      EMPLOYMENT COMMENCEMENT DATE means the first date on which an Employee
          completes an Hour of Service.

2.25      ERISA means Public Law No. 93-406, the Employee Retirement Income 
          Security Act of 1974, as amended from time to time.

2.26      EXTENDED ABSENCE EMPLOYEE means any Employee whose absence from
          employment with the Employers is attributable to (i) the Employee's
          pregnancy, (ii) the birth of the Employee's child, (iii) the placement
          of a
                                      -7-
<PAGE>
 
          child with the Employee in connection with the adoption of the child
          by the Employee, or (iv) the care of a child by the Employee during
          the period immediately following such child's birth to, or placement
          with, the Employee.

2.27      FIDUCIARY or SPECIFIED FIDUCIARY means any Participating Employer, the
          Committee, and the Trustee, but only with respect to the specific
          responsibilities of each for Plan and Trust administration, all as
          described in Section 12.01.

2.28      FINAL MONTHLY COMPENSATION means a Participant's monthly average
          Compensation during the five (5) consecutive calendar years of his
          employment which provide the highest average out of his ten (10)
          completed calendar years of employment with the Employers immediately
          preceding the earlier of his Normal Retirement Date, death, or other
          Severance from Service; provided, however, that in the case of a
          Participant who has been employed by the Employers for a period of
          less than five (5) calendar years immediately preceding the earlier of
          his Normal Retirement Date, death, or other Severance from Service,
          "Final Monthly Compensation" shall mean his monthly average
          compensation during his total completed calendar years of active
          employment with the Employers. For these purposes, (i) any calendar
          year in which a Participant received no Compensation shall be
          disregarded, and (ii) in determining monthly average Compensation,
          only those months during which the Participant received Compensation
          shall be taken into account.

2.29      HOUR OF SERVICE means, with respect to an Employee, any hour for which

          (1)  such Employee is paid, or entitled to payment, by a Participating
               Employer for the performance of duties;

          (2)  such Employee is paid, or entitled to payment, by a Participating
               Employer on account of a period of time during which he performs
               no duties (irrespective of whether the employment relationship
               has terminated) due to vacation, holiday, illness, incapacity,
               jury duty or any Authorized Leave of Absence (other than military
               leave); or

          (3)  back pay is, or is agreed to be, awarded to such Employee by a
               Participating Employer.

          The rules stated in Department of Labour Regulations Sections
          2530.200b-2(b) and (c) shall be applied, where relevant, in computing
          Hours of Service under this Plan.

                                      -8-
<PAGE>
 
          Hours of Service shall be determined from records maintained by each
          Employer; provided, however, that an Employer may elect to determine
          Hours of Service for any classification of Employees which is
          reasonable, non-discriminatory and consistently applied, on the basis
          that Hours of Service include forty-five (45) Hours of Service for
          each week or portion thereof during which an Employee is credited with
          one (1) Hour of Service.

2.30      HOURLY-WAGE EMPLOYEE means an individual compensated on an hourly-wage
          basis (exclusive of office or clerical workers).

2.31      LATE RETIREMENT DATE means the first day of any calendar month
          coinciding with or next following the date of Actual Retirement of an
          Active Participant who remains in active service subsequent to his
          Normal Retirement Date.

2.32      LATE RETIREMENT means the Actual Retirement of a Participant on his 
          Late Retirement Date.

2.33      NORMAL RETIREMENT DATE for each Participant shall be the first day of
          the calendar month coinciding with or immediately following his sixty-
          fifth (65th) birthday or if later, the fifth (5th) anniversary of the
          Participant's Employment Commencement Date; provided, however, that
          the Normal Retirement Date of any Participant whose employment
          commenced after attainment of age sixty (60) years shall be the later
          of age sixty-five (65) years or the fifth (5th) anniversary of the
          date on which such participation commenced.

2.34      NORMAL RETIREMENT means the Actual Retirement of a Participant on his 
          Normal Retirement Date.

2.35      PARTICIPANT means any Active Participant, Retired Participant, 
          Terminated Participant, or any one or more thereof.

2.36      PLAN means the Halter Marine Group Pension Plan, the Plan set forth 
          herein, as amended from time to time.

2.37      PLAN YEAR means the period beginning April 1 and ending on the next 
          succeeding March 31.

2.38      RE-EMPLOYMENT COMMENCEMENT DATE means the first date on which an
          Employee completes an Hour of Service on his return to the employment
          of a Participating Employer after a Break in Service.

2.39      RETIRED PARTICIPANT means a once Active Participant who is currently
          receiving, or is entitled to receive, retirement benefits from the
          Trust under the terms of the Plan by reason of Actual Retirement.

                                      -9-
<PAGE>
 
2.40      SERVICE means the period of a Participant's employment considered in
          the determination of his vested interest hereunder and his eligibility
          herein for Early Retirement, in accordance with Section 3.02.

2.41      SEVERANCE FROM SERVICE means, with respect to an Employee, the later 
          of (1) or (2) where--

          (1)  is the earlier of (a) the date on which he quits, or is
               discharged from, the employment of the Participating Employers,
               or the date of his Actual Retirement or death, or (b) the first
               anniversary of the first date of a period in which he remains
               absent from the employment of the Participating Employers, with
               or without pay, for any reason other than one specified in (a),
               such as vacation, holiday, sickness, Authorized Leave of Absence
               or layoff; and

          (2)  is, in the case of an Extended Absence Employee, the second 
               anniversary of such Employee's absence.

          For purposes of paragraph (1)(b) of this Section, an Employee shall be
          treated as on layoff status only if (i) such Employee's employment has
          been terminated because of an involuntary reduction in workforce and
          (ii) such Employee returns to active employment within a twelve (12)-
          month period beginning on the date of such termination of employment.

2.42      SPOUSE means the spouse of a Participant who is and has been legally
          married to the Participant under the laws of the jurisdiction in which
          the marriage was contracted for a period of at least one (1) year
          ending on the earlier of (i) the date of the Participant's death or
          (ii) the date on which his benefits hereunder commence.

2.43      TERMINATED PARTICIPANT means a once Active Participant who incurs a
          Severance from Service for a reason other than Actual Retirement or
          death. Except as otherwise provided in Article VII hereof, a
          Terminated Participant shall forfeit all benefits under this Plan.

2.44      TRUST means the Halter Marine Group Pension Plan Trust, as amended 
          from time to time.

2.45      TRUSTEE means the corporation or individuals appointed by the Company 
          to administer the Trust.

2.46      TRUST FUND means the cash, securities and other property held by the 
          Trustee pursuant to the terms of the Trust.

                                     -10-
<PAGE>
 
                                  ARTICLE III

                           PARTICIPATION AND SERVICE
                           -------------------------

3.01      Participation
          -------------

          An Eligible Employee shall become a Participant in this Plan as 
          follows:

          (1)  Any Eligible Employee as of the Effective Date who has both
               attained the age of eighteen (18) years and completed a twelve
               (12)-month computation period beginning on his Employment
               Commencement Date (or anniversaries thereof) and ending prior
               to the Effective Date of not less than one thousand (1,000) Hours
               of Service shall become a Participant on the Effective Date.

          (2)  The participation of any Eligible Employee not described above
               shall commence on the date as of which he has both attained the
               age of eighteen (18) years (or such younger age as may be
               required by applicable legislation) and completed a twelve (12)-
               month computation period ending prior to said date and beginning
               on his Employment Commencement Date (or anniversaries thereof) of
               not less than one thousand (1,000) Hours of Service.

          An Active Participant who incurs a Severance from Service and who is
          subsequently re-employed by a Participating Employer shall immediately
          re-enter the Plan as an Active Participant on the date of his 
          re-employment.

          The Committee is hereby authorized to identify, in writing on Appendix
          I, those Employees or classes of Employees employed at a location of
          an Employer who are not eligible to participate in the Plan. The
          Committee is further authorized and directed to revise Appendix I, or
          to have Appendix I revised by the appropriate person designated by the
          Committee, to reflect any necessary additions and deletions thereto as
          soon as administratively possible following such identification by the
          Committee. Revisions to Appendix I shall require the adoption of a
          Plan amendment and, notwithstanding the provisions of Section 14.01
          hereof, the Board of Directors of the Company hereby delegates to the
          Committee (or the Committee's authorized representative) the authority
          to execute such an amendment from time to time.

3.02      Service and credited Service
          ----------------------------

          A Participant's Service and Credited Service shall be determined in 
          accordance with the following:

                                     -11-
<PAGE>
 
          (1)  In General.  Subject to the Break in Service provisions of
               ----------
               paragraph (4) of this Section 3.02, an Employee's Service and
               Credited Service shall equal the total of his Elapsed-time
               Employment. Service shall be counted in years and days, and
               Credited Service shall be counted in years and completed months.

          (2)  Transfers from Affiliates.  In the event that an Employee who at
               -------------------------
               any time was employed by an Affiliate either commences
               employment with a Participating Employer, or returns to the
               employment of a Participating Employer, then, except as otherwise
               provided below, such Employee shall receive Service (but not
               Credited Service) with respect to the period of his employment
               with such Affiliate (to the extent not credited under paragraph
               (3) of this Section 3.02)). In applying the provisions of the
               preceding sentence--

               (a)  such Employee shall not receive Service with respect to any
                    period of employment with such Affiliate completed prior to
                    the date on which such Affiliate became an Affiliate;

               (b)  the amount of such Service shall be determined in accordance
                    with paragraph (1) of this Section 3.02, as if such
                    Affiliate were a Participating Employer; and

               (c)  if such Employee incurs a Break in Service (as defined in
                    paragraph (4) of this Section 3.02, and determined as if
                    such Affiliate were a Participating Employer) prior to his
                    commencement of employment with the Participating Employer
                    or return to the employment of the Participating Employer,
                    then the amount of such Employee's Service attributable to
                    the period of his employment with such Affiliate shall be
                    determined in accordance with paragraph (4) of this Section
                    3.02.

               In determining any benefit of such Employee under this Plan, his
               Compensation and Final Monthly Compensation shall be calculated
               as if all Affiliates were Participating Employers.

          (3)  Transfers to Affiliate.  In the event that a Participant who at
               ----------------------
               any time was employed by a Participating Employer either
               commences employment with an Affiliate, or returns to the
               employment of an Affiliate, then, except as otherwise provided
               below, such Participant shall receive Service (but

                                     -12-
<PAGE>
 
               not Credited Service) with respect to the period of his
               employment with such Affiliate (to the extent not credited under
               paragraph (2) of this section 3.02). In applying the provisions
               of the preceding sentence--

               (a)  the amount of such Service shall be determined in accordance
                    with paragraph (1) of this Section 3.02, as if such
                    Affiliate were a Participating Employer; and

               (b)  if such Participant incurs a Break in Service (as defined in
                    paragraph (4) of this Section 3.02 and determined as if such
                    Affiliate were a Participating Employer) prior to his
                    commencement of employment with the Affiliate or return to
                    the employment of the Affiliate, then the amount of such
                    Participant's Service attributable to his prior period of
                    employment with the participating Employer shall be
                    determined in accordance with paragraph (4) of this Section
                    3.02.

               In determining any benefit of such Participant under this Plan,
               his Compensation and Final Monthly Compensation shall be
               calculated as if all Affiliates were Participating Employers. In
               addition, except as otherwise provided in Section 9.03, such
               Participant shall receive no benefits under this Plan prior to
               the date on which he incurs a Severance from Service, determined
               as if all Affiliates were Participating Employers.

          (4)  Break in Service. An Employee who incurs a Severance from Service
               ----------------
               and who fails to complete at least one (1) Hour of Service during
               the twelve (12)-month period beginning on the date of such
               Severance from Service shall have a Break in Service. If, during
               the twelve (12)-month period beginning on the date of an
               Employee's Severance from Service, the Employee shall return to
               the employment of a Participating Employer by completing at least
               one (1) Hour of Service within such twelve (12)-month period,
               then such Employee will not have a Break in Service and shall
               receive Service (but not Credited Service) for the period
               beginning on the date of his Severance from Service and ending on
               the date of his re-employment; provided, however, that in the
               case of an Employee who is absent from the employment of the
               Participating Employers for a reason specified in Section 2.41
               (1) (b) hereof and who, prior to the first anniversary of the
               first date of such absence incurs a Severance from Service for a
               reason

                                     -13-
<PAGE>
 
               specified in Section 2.41 (1) (a) hereof, such Employee shall
               receive Service only if he completes at least one (1) Hour of
               Service within the twelve (12)-month period beginning on the
               first date of such absence and shall receive such Service only
               for the period beginning on the first day of such absence and
               ending on the date of his re-employment. Upon incurring a Break
               in Service, an Employee's rights and benefits under the Plan
               shall be determined in accordance with his Service, Credited
               Service and Compensation at the time of the Break in Service. For
               a Participant who, at the time of a Break in Service, satisfied
               any requirements of this Plan for vested benefits, his pre-break
               Service and Credited Service shall, upon his Re-employment
               Commencement Date, be restored in determining his rights and
               benefits under the Plan. For an Employee who, at the time of a
               Break in Service, had not fulfilled such requirements, periods of
               pre-break Service and Credited Service shall, upon his Re-
               employment Commencement Date, be restored only if the consecutive
               periods of Break in Service were less than the greater of sixty
               (60) months or the total periods of pre-break Service or Credited
               Service, as the case may be.

          (5)  Special Rule for Extended Absence Employees. Notwithstanding the
               -------------------------------------------
               preceding provisions of this Section 3.02, in the case of an
               Extended Absence Employee defined in Section 2.26 hereof, the
               period between the first and second anniversaries of such
               Employee's absence shall, under no circumstances, be treated as a
               period of Service or Credited Service.

3.03      Transfer From or To Job as an Employee
          --------------------------------------

          It is contemplated that an individual who is an Eligible Employee as
          defined in Section 2.21 hereof may be transferred to a job provided by
          an Employer which will result in his no longer being an Eligible
          Employee as defined in such Section, and, conversely, that an
          individual employed by an Employer who is not an Eligible Employee as
          defined in Section 2.21 hereof may be transferred to a job provided by
          an Employer which will result in his being an Eligible Employee as
          defined in such Section. The eligibility of such and individual for
          benefits hereunder, and/or the amount of benefit payable to him or on
          his behalf, shall be determined in accordance with the following
          provisions:

          (1)  If an individual who is an Eligible Employee as defined in
               Section 2.21 hereof ceases to be an Eligible Employee as defined
               in such Section, then

                                     -14-
<PAGE>
 
               he shall receive Service (but not Credited Service) for the
               period of his continued employment with the Employers. Except
               as otherwise provided in Section 9.03, such individuals shall
               receive no benefits under this Plan prior to the date on which he
               incurs a Severance from Service. For purposes of determining his
               Accrued benefit, his Final Monthly Compensation shall be computed
               by reference to the period ending with the date of his Severance
               From Service.

          (2)  If an individual who is not an Employee as defined in Section
               2.21 hereof is transferred to a job as an Eligible Employee as
               defined in such Section, he shall become a Participant hereunder
               as of the date of such transfer if he had satisfied the
               requirements of Section 3.01 hereof; provided, however, that in
               determining whether he had satisfied such requirements, such
               individual shall be credited with Hours of Service completed
               prior to the date of transfer. Such individual shall receive
               Service (but not Credited Service) for his period of employment
               with the Employers prior to the date of such transfer. For
               purposes of determining his Accrued Benefit, his Final Monthly
               Compensation shall be determined by including his period of
               employment with the Employers prior to the date of such transfer.

          (3)  If a Participant is entitled to a benefit under the Plan and any
               other qualified defined benefit plan maintained by the Employer
               for individuals who do not qualify as Eligible Employees as
               defined in Section 2.21 hereof as of his date of Severance from
               Service, the administrators of the plans may, by mutual
               agreement, provide for payment of the entire monthly income or
               other benefit from one trust fund with appropriate reimbursement
               to the trustee of the trust fund from which the benefits are to
               be paid by transfer of funds equal to the single-sum value of the
               benefits payable under the other plan to the trust fund from
               which benefits actually will be paid.

3.04      Employment by More Than One Participating Employer
          --------------------------------------------------

          In the event that a Participant has been or is employed by more than
          one Participating Employer as of his Severance from Service, his
          benefit under the Plan, if any, shall be computed by applying the
          benefit formulas as if all the Employers were a single Employer;
          provided, however, there must be a proper allocation (taking into
          account the Credited Service and Compensation applicable to each
          Employer) of the costs of the resulting benefits

                                     -15-
<PAGE>
 
          among the Employers by which such Participant has been or is employed.

3.05      Special Rules for Certain Participants in Trinity Industries, Inc. 
          ------------------------------------------------------------------
          Marine Group Pension Plan
          -------------------------

          Notwithstanding any provision to the contrary herein contained, the
          following special rules shall apply with respect to any Employee as of
          October 11, 1996 who immediately prior to October 1, 1996 was an
          active participant (including a participant on an authorized leave of
          absence, but not including a participant on layoff status) in the
          Trinity Industries, Inc. Marine Group Pension Plan (the "Trinity
          Marine Plan") maintained by Trinity Industries, Inc.:

          (1)  Such Employee shall become a Participant in this Plan on October 
               1, 1996.

          (2)  Such Employee shall be credited with Service under Section 3.02
               hereof only for periods of employment completed on and after
               October 1, 1996. In addition, (a) such Employee shall receive
               Service with respect to periods of employment completed prior to
               October 1, 1996, and credited to such Employee under the Trinity
               Marine Plan in calculating his vested interest under such Trinity
               Marine Plan, and (b) such Employee's vested percentage as
               determined pursuant to Section 7.01 hereof shall not be less than
               the vested percentage he would have had under the Trinity Marine
               Plan, based on the vesting provisions of the Trinity Marine Plan
               as in effect on September 30, 1996 and his years of Service
               (including Service credited under (a) of this paragraph).
               
          (3)  Such Employee's Accrued Benefit under this Plan shall be based on
               (a) credited service completed prior to October 1, 1996 and
               calculated in accordance with the Trinity Marine Plan and (b)
               Credited Service granted for periods of employment completed on
               and after October 1, 1996 and calculated in accordance with the
               provisions of this Plan. Notwithstanding the preceding provisions
               of this paragraph (3), under no circumstances shall such
               Employee's Accrued Benefit be less than his Accrued Benefit
               determined under the benefit formula of the Trinity Marine Plan
               as of September 30, 1996, taking into account all periods of
               employment which were or would have been credited to such
               Employee under the Trinity Marine Plan in calculating his accrued
               benefit under such Trinity Marine Plan as of September 30, 1996.

                                     -16-
<PAGE>
 
                                  ARTICLE IV

                                 CONTRIBUTIONS
                                 -------------

4.01      Employer Contributions
          ----------------------

          Each Participating Employer shall make periodic contributions
          necessary to meet the cost of the Plan with respect to its
          Participants. The Pension Committee shall, each Plan Year, determine
          the contributions to be made to this Plan by all Participating
          Employers for such Year. All such contributions shall be delivered to
          the Trustee.

4.02      Participant Contributions
          -------------------------

          Participants are neither required nor permitted to make contributions 
          to the Plan.

4.03      Cost
          ----

          All contributions will be subject to ERISA and to the Code, and all
          regulations promulgated thereunder, and subject to any other
          appropriate governmental regulatory authority, and will be declared
          paid within the time permitted by law.

          All contributions to this Plan by an Employer shall consist of amounts
          sufficient, as determined by the Pension Committee under the funding
          policy it has established, and consistent with the minimum funding
          standards of ERISA, to provide the benefits that will accrue under
          this Plan, unless because of business hardship, the Secretary of the
          Treasury of the United States shall waive the minimum standards as
          provided in Section 4.04. Contributions may be in cash or kind;
          provided, however, that contributions may be made in kind only if such
          contributions qualify under the Code (and the rules, regulations and
          guidelines promulgated thereunder) and under any other appropriate
          governmental regulatory authority, and are acceptable to the Trustee.

          All credits under this Plan due to Trust Fund earnings in excess of
          the assumed return on assets, together with all gains, forfeitures, or
          other experience adjustments shall be used to reduce the cost of the
          Plan.

4.04      Payment of Contributions
          ------------------------

          Contributions by an Employer for a particular Plan Year shall be
          delivered to the Trustee no later than two and one-half (2-1/2) months
          after the close of the Employer's fiscal year with respect to which
          such contributions are made, or within such longer period, not to
          exceed six (6) additional months, as may be permitted under
          regulations

                                     -17-

<PAGE>
 
          of the Secretary of the Treasury of the United States. However, if,
          under such regulations, a waiver of a particular Plan Year's
          contributions shall have been granted for substantial business
          hardship, the time limits of this Section 4.04 shall be disregarded.

4.05      Reversion
          ---------

          Except as otherwise provided in Section 9.05 and 16.09 hereof, under
          no circumstances shall any Participating Employer recover any assets
          of the Trust Fund. No assets of the Trust Fund shall be diverted to
          any purpose other than (1) the exclusive benefit of the Participants
          or their Beneficiaries, and (2) defraying reasonable expenses of
          administering the Plan and Trust.


                                   ARTICLE V

                                  RETIREMENT
                                  ----------

5.01      Normal Retirement Date
          ----------------------

          An Active Participant who attains his Normal Retirement Date shall be
          fully vested in his Accrued Benefit. In the event of such
          Participant's Normal Retirement, he shall be entitled to a monthly
          benefit equal to the product of (1) times (2), where--

          (1)  is the lesser of (i) the number of his years of Credited Service
               (and fractions thereof, rounded off to whole months); or (ii) if
               the Participant is an Hourly-Wage Employee, twenty (20); and

          (2)  is three-fourths of one percent (.75%) of his Final Monthly 
               Compensation.

5.02      At Early Retirement Date
          ------------------------

          An Active Participant who elects to retire on his Early Retirement
          Date shall remain fully vested in his Accrued Benefit and shall
          receive a monthly benefit to commence on his Early Retirement Date in
          an amount equal to his Accrued Benefit reduced on an Actuarially
          Equivalent basis for the period by which the starting date of pension
          payments precedes his Normal Retirement Date; provided, however, that
          the Participant may elect to defer commencement of benefits until his
          Normal Retirement Date or until such earlier date which is prior to
          his Normal Retirement Date and subsequent to his Early Retirement
          Date, and, in the event of such election to defer, his monthly benefit
          shall be determined under the provisions of Article VII hereof.

                                     -18-
          
<PAGE>
 
5.03      At Late Retirement Date
          -----------------------

          (1)  If a Participant remains in the employ of a Participating
               Employer after his Normal Retirement Date, he shall be fully
               vested in his Accrued Benefit as of such Normal Retirement Date,
               but, except as otherwise provided in Section 8.06 hereof, shall
               not be entitled to receive any payment of retirement benefits
               from this Plan until his Actual Retirement. Such Participant
               shall continue to accrue benefits after his Normal Retirement
               Date if his Accrued Benefit would increase because of additional
               Credited Service or Compensation. Such Participant's Accrued
               Benefit at Actual Retirement Date shall be the greater of (i) his
               Accrued Benefit earned at his Normal Retirement Date, increased
               by interest for the period beginning on his Normal Retirement
               Date and ending on the date of his Actual Retirement, where all
               computations shall be on the basis of the interest and mortality
               assumptions used to determine Actuarial Equivalence as of his
               Normal Retirement Date; or (ii) his Accrued Benefit, determined
               as of the date of his Actual Retirement, taking into account
               Credited Service and Compensation earned after his Normal
               Retirement Date. Such benefit shall be payable in accordance with
               the provisions of Article VIII.

          (2)  The Accrued Benefit for any Participant who remains in the employ
               of a Participating Employer after the Required Beginning Date
               defined in Section 8.05 shall be reduced by the Actuarial
               Equivalent of the total distributions made to the Participant as
               of the close of each Plan Year during which distribution is made,
               and recalculated as of each January 1 following the Required
               Beginning Date.


                                  ARTICLE VI

                                     DEATH
                                     -----

6.01      Prior to Actual Retirement or Other Severance from Service
          ----------------------------------------------------------

          In the event of the death of an Active Participant who is vested in
          his Accrued Benefit, his Spouse will be entitled to receive a Death
          Benefit equal to fifty percent (50%) of the monthly benefit to which
          the Participant would have been entitled at his earliest retirement
          date, determined as if his benefits had commenced on such date and
          were payable pursuant to the form specified in Section 8.02(2) hereof.

                                     -19-
<PAGE>
 
          Such benefit shall be paid in the form of a life annuity and, in the
          case of a Participant who dies prior to his earliest retirement date,
          shall commence no later than such earliest retirement date; provided
          that, with the consent of the Committee, the Participant's Spouse may
          elect that the value of such Death Benefit be paid in any Actuarially
          Equivalent form of payment. Any such form of payment must be
          distributed in accordance with the provisions of Section 8.05 hereof.

6.02      After Actual Retirement or Other Severance From Service
          -------------------------------------------------------

          In the event of the death of a Retired Participant or a Terminated 
          Participant who is vested in his Accrued Benefit, the following 
          provisions shall apply:

          (1)  Before Commencement of Benefits.  If the Participant dies before
               -------------------------------
               his benefits have commenced, then (i) if the Participant is a
               Retired Participant, his Spouse shall be entitled to the monthly
               benefit to which such Spouse would have been entitled under
               Section 8.02(2) hereof had the Participant's benefits commenced
               on the day immediately prior to the date of his death; or (ii) if
               the Participant is a Terminated Participant, his Spouse shall be
               entitled to fifty percent (50%) of the monthly benefit to which
               such Participant would have been entitled at his earliest
               retirement date, determined as if he had survived to his earliest
               retirement date and had retired on the day immediately prior to
               the date of his death, with his benefits payable at his earliest
               retirement date in the form specified in Section 8.02(2) hereof.

          (2)  After Commencement of Benefits.  If the Participant dies after 
               ------------------------------
               his benefits have commenced, the only benefit payable on behalf
               of such Participant shall be the benefit, if any, payable under
               the form of pension which is in effect in accordance with Section
               8.02 or which the Participant had elected under Section 8.03.

6.03      Earliest Retirement Date
          ------------------------

          For purposes of this Article VI, a Participant's "earliest retirement
          date" shall be his Early Retirement Date, determined solely by
          reference to the earliest age requirement for Early Retirement;
          provided that, in the case of a Participant who terminates employment
          before satisfying the service requirement for Early Retirement, such
          Participant's "earliest retirement date" shall be his Normal
          Retirement Date.

                                     -20-
<PAGE>
 
6.04      No Duplication of Benefit   
          -------------------------

          Notwithstanding the foregoing, with respect to a Participant who is
          entitled to a Death Benefit under this Plan and one or more other
          qualified defined benefit pension plans maintained by the Employers,
          the total amount of Death Benefit payable to the Participant under
          this Plan shall be offset (but not below zero) by the value of the
          death benefits payable under such other plans.


                                  ARTICLE VII
                         
                         OTHER SEVERANCE FROM SERVICE
                         ----------------------------
          
7.01      Benefits
          --------

          When a Participant incurs a Severance from Service for reasons other
          than death or Actual Retirement, such Terminated Participant shall be
          entitled to a monthly retirement income to commence on his Normal
          Retirement Date (or on such earlier date specified in Section 7.03
          below) in an amount equal the product of--

          (1)  the Participant's Vested Percentage (as specified in the Vesting
               Schedule described in subsection (4)) based on his years of
               Service as of the date of his Severance from Service, multiplied
               by

          (2)  his Accrued Benefit on the date of his Severance from Service.
          
          (3)  A transfer from one Participating Employer to another
               Participating Employer or from a Participating Employer to an
               Affiliate shall not constitute a Severance from Service for these
               purposes.
          
          (4)  The following Vesting Schedule shall apply: 

               Years of Services             Vested Percentage
               -----------------             -----------------
            
               Less than 5 years                       0%
               5 years or more                       100%   

7.02      Effect of Prior Distribution
          ----------------------------

          (1)  In the event that a Terminated Participant receives payment of
               the present value of his vested Accrued Benefit (determined under
               Section 7.01 hereof) and later is re-employed by a Participating
               Employer and re-commences participation in the Plan as an Active
               Participant, then--

                                      -21-

<PAGE>
 
               (a)  if the Participant had voluntarily elected payment of such 
                    Accrued Benefit, the Credited Service attributable to the
                    Participant's prior period of employment shall, subject to
                    the provisions of paragraph (2) of this Section 7.02, be
                    forfeited; or

               (b)  if the Participant had not voluntarily elected payment of
                    such Accrued Benefit and had received payment of the present
                    value of his entire Accrued Benefit, the Credited Service
                    attributable to the Participant's prior period of employment
                    shall, subject to the provisions of paragraph (2) of this
                    Section 7.02, be forfeited.

          (2)  Notwithstanding the provisions of paragraph (1), above, if a
               Terminated Participant is re-employed by an Employer and if, by
               the end of a 5-year period beginning on his Re-employment
               Commencement Date, he repays to the Trustee the full amount of
               his previous payments (with interest equal to the lesser of (i)
               five percent (5%), or (ii) interest computed on the basis of the
               interest and mortality assumptions used for the actuarial
               valuation of the Trust Fund coincident with or immediately
               preceding his Re-employment Commencement Date), then the Credited
               Service attributable to his prior period of employment shall not
               be forfeited and shall be fully restored.

7.03      Early Retirement Age
          --------------------

          In the event a Terminated Participant who is entitled to a benefit
          under Section 8.01 above has, at the time of his Severance from
          Service, completed the Service requirement for Early Retirement, but
          not the age requirement, such Terminated Participant shall, upon
          application, be entitled to request commencement of such benefit as of
          the first day of any month coincident with or next following his
          attainment of the required age, with such benefit reduced for early
          payment as described in Section 5.02.

7.04      Terminated Participant's Address
          --------------------------------

          It shall be the obligation of a Terminated Participant to keep the 
          Pension Committee informed of his current address.

7.05      Payment of Terminated Participant's Benefits
          --------------------------------------------

          Except as otherwise provided in Section 7.03, payment of a benefit to 
          a Terminated Participant shall commence at

                                     -22-

<PAGE>
 
          the time such Terminated Participant would have been entitled to
          benefits had he continued in active employment to the earlier of his
          Normal Retirement Date or death, with such benefit to be payable
          pursuant to the provisions of Sections 8.01 and 8.02 hereof; provided
          that a Terminated Participant who incurs a Break in Service prior to
          April 1, 1998, the present value of whose Accrued Benefit under this
          Plan (plus, in the case of a Participant described in Section 3.05
          hereof, any accrued benefit to which he may be entitled under the
          Terminated Plan referred to in Section 3.05 of the Trinity Marine
          Plan) is Ten Thousand Dollars ($10,000.00) or less, may elect that the
          present value of his Accrued Benefit be paid to him in a lump sum as
          soon as administratively feasible after the end of the Plan Year in
          which he incurs such Break in Service, with such election to be made
          on a form or forms provided by the Pension Committee for this purpose.

7.06      Limitation Amount
          -----------------

          Notwithstanding anything herein to the contrary, if the present value
          of (i) a Terminated Participant's vested Accrued Benefit under this
          Plan, plus (ii) in the case of a Participant described in Section 3.05
          hereof, any accrued benefit to which he may be entitled under the
          Terminated Plan referred to in Section 3.05 of the Trinity Marine 
          Plan, is less than Three thousand five hundred dollars ($3,500.00),
          such benefit, to the extent not payable pursuant to the annuity
          contract referred to in paragraph (4) of Section 3.05 of the Trinity
          Marine Plan, shall be paid in a lump sum as soon as practicable after
          the end of the Plan Year in which such Participant has incurred a
          Break in Service (as defined in Section 3.02(2) (d) hereof).

7.07      Deemed Cashout
          --------------

          A Terminated Participant who incurs a Severance from Service without a
          Vested Percentage in his Accrued Benefit pursuant to Section 7.01
          hereof shall be deemed to have received a distribution of zero dollars
          on the date of such Severance from Service.

                                 ARTICLE VIII

                  SETTLEMENT OPTIONS-DISTRIBUTION OF BENEFITS
                  -------------------------------------------

8.01      When Payable
          ------------

          No Participant or his Beneficiary shall receive any payment under this
          Plan until the occurrence of one of the following events:

                                     -23-
<PAGE>
 
          (1)  the Participant's Normal, Early or Late Retirement;
     
          (2)  the death of the Participant;

          (3)  the Participant's Break in Service; and

          (4)  the termination of this Plan.

          In no event shall any Participant have any interest in the Trust Fund 
          except as provided in this Plan and the Trust.

8.02      Basic Pension
          -------------

          (1)  Unmarried Basic Pension.  Subject to the provisions of Section 
               -----------------------
               8.03 hereof, each Participant entitled to a distribution as
               herein provided and who does not have a Spouse on the date of
               which payment of his benefits begins, shall receive an Unmarried
               Basic Pension, consisting of monthly payments during the life of
               the Participant.

          (2)  Married Basic Pension.  (a)  Automatic Payment.  Each Participant
               ---------------------        -----------------
               who is entitled to a distribution as herein provided and who has
               a Spouse on the date on which payment of his benefits begins
               shall receive a Married Basic Pension, consisting of a "qualified
               joint and survivor annuity". The qualified joint and survivor
               annuity is a form of payment under which a modified monthly
               amount is payable to the Participant for his life, and, upon his
               death, fifty percent (50%) of such monthly amount is payable to
               his Spouse, if surviving, for the remainder of the Spouse's life.
               The modification shall be such that the Married Basic Pension is
               Actuarially Equivalent to the Unmarried Basic Pension the
               Participant would have received if he were not married on the
               date on which payment of his benefits begins.

               (b)  Election.  (i) When Made.  Notwithstanding the provisions of
                    ------------------------   
                    subparagraph (a) of this paragraph (2), a Participant
                    described in such subparagraph (a) may, in lieu of the
                    qualified joint and survivor annuity, elect to receive his
                    benefits as an Unmarried Basic Pension or in any other
                    optional form provided under Section 8.03; provided,
                    however, that such election shall be effective only if the
                    Participant's Spouse consents to such election in an
                    instrument acknowledging the effect of such election. The
                    election described in the preceding sentence shall be made
                    in writing on forms provided by the Pension Committee for

                                     -24-
<PAGE>
 
                    this purpose and within the ninety (90)-day period ending
                    on the benefits commencement date. Any election made during
                    such period may be revoked in writing prior to the end of
                    such period.

                    (ii) Materials to be Furnished. The Pension Committee shall
                         -------------------------
                    furnish to a Participant described in subparagraph (a) of
                    this paragraph (2) a written explanation of the terms and
                    financial effect of the qualified joint and survivor
                    annuity, the circumstances under which it will be provided
                    unless an election is made not to receive benefits in such
                    form, and the availability of the election described in
                    clause (i) of this subparagraph (b). The materials described
                    in this clause (ii) shall be furnished to such Participant
                    within a reasonable time prior to the benefits commencement
                    date but, in all events, neither earlier than ninety (90)
                    days nor later than thirty (30) days prior thereto.

8.03      Optional Pensions
          -----------------

          In the event a Participant prefers a mode of payment other than one
          described in Section 8.02 hereof, he may request in writing that the
          Pension Committee distribute his benefits under one of the following
          options (which must be Actuarially Equivalent to the Basic Pension):

          (1)  By monthly payments to be made to such Participant for life, with
               or without a minimum guaranteed period or a Death Benefit;

          (2)  By payment in the form of a joint and survivor annuity where the
               survivor's annuity shall be fifty percent (50%), sixty-six and
               two-thirds percent (66-2/3%), seventy-five percent (75%) or one
               hundred percent (100%) of the amount paid to the Participant
               during the joint lives of the Participant and his surviving
               annuitant.

          (3)  In the case of a Participant or Beneficiary who incurs a
               Severance from Service prior to April 1, 1998 (or any Beneficiary
               of such Participant), the present value of whose Accrued Benefit
               under this Plan (plus, in the case of a Participant described in
               Section 3.05 hereof, any accrued benefit to which he may be
               entitled under the Terminated Plan referred to in Section 3.05 of
               the Trinity Marine Plan) is Ten Thousand Dollars ($10,000.00) or
               less, by payment of the present value of his Accrued Benefit in
               the form of a lump sum.

                                     -25-
<PAGE>
 
          In no event shall the form of payment have a guaranteed period of
          payment running beyond the then life expectancy of the Participant or
          the joint life expectancy of the Participant and his Beneficiary
          designated in accordance with Section 12.12. Except as provided in
          Article VI hereof, no Death Benefit shall be payable under any one of
          the foregoing optional pensions in the event that the Participant dies
          prior to the date on which his benefits hereunder commence. In
          addition, no election made by a Participant under this Section 8.03
          shall be given effect if such election would cause the present value
          of the payments to be made to such Participant to be fifty percent
          (50%) or less than the present value of the total payments to be made
          to the Participant and his Beneficiary.

8.04      Directed Transfer of Eligible Rollover Distributions
          ----------------------------------------------------

          (1)  General. Notwithstanding any provision of the Plan to the
               -------
               contrary that would otherwise limit a "Distributee's" election
               under this Section, a "Distributee" may elect, at the time and in
               the manner prescribed by the Committee, to have any portion of an
               "Eligible Rollover Distribution" paid directly to an "Eligible
               Retirement Plan" specified by the "Distributee" in a "Direct
               Rollover," as each such term is hereinafter defined.

          (2)  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: (a) any distribution that is one
               of a series of substantially equal periodic payments made not
               less frequently than annually for the life (or life expectancy)
               of the Distributee (or the joint lives or joint life expectancies
               of the Distributee) and the Distributee's designated Beneficiary,
               or for a specified period of ten years or more; (b) any
               distribution to the extent that such distribution is required
               under Code Section 401 (a)(9); and (c) the portion of any
               distribution that is not includable in the recipient's gross
               income.

          (3)  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

                                     -26-



<PAGE>
 
               Distribution to a Participant's surviving spouse, an Eligible
               Retirement Plan is an individual retirement account or individual
               retirement annuity.

          (4)  Distributee. A Distributee includes an Employee or former
               -----------
               Employee. In addition, the surviving spouse of an Employee or
               former Employee and the spouse or former spouse of an Employee or
               former Employee, if such spouse or former spouse is an 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 such spouse, surviving spouse or former spouse.

          (5)  Direct Rollover. A Direct Rollover is a payment by the Plan to an
               ---------------
               Eligible Retirement Plan specified by the Distributee.

8.05      Mandatory Distribution of Retirement Benefits
          ---------------------------------------------

          (1)  In General. Subject to the provisions of this Section 8.05,
               ----------
               commencement of a benefit will, unless the Participant elects
               otherwise in writing, begin not later than the 60th day after the
               later of (i) the close of the Plan Year in which the Participant
               attains his Normal Retirement Date or (ii) the close of the Plan
               Year which contains the date on which the Participant incurs a
               Severance from Service.

               For purposes of this Section, life expectancy and joint and last
               survivor expectancy are to be computed by the use of the return
               multiples contained in Section 1.72-9 of the Income Tax
               Regulations.

               All distributions required under this Section will be determined
               and made in accordance with the Income Tax Regulations issued
               under Code Section 401(a)(9).

          (2)  Mandatory Distribution to Participant. Payment of a Participant's
               -------------------------------------
               benefits must begin no later than the April 1 immediately
               following the calendar year in which he attains age 70-1/2 years
               ("Required Beginning Date"). A Participant's benefits must either
               be distributed in the calendar year containing his Required
               Beginning Date or must be paid over a period not exceeding one of
               the following periods:

               (a) the lifetime of the Participant;

                                     -27-
<PAGE>
 
               (b)  the lifetime of the last survivor of the Participant and the
                    Participant's designated Beneficiary;

               (c)  the life expectancy of the Participant; or

               (d)  the joint life and last survivor expectancy of the 
                    Participant and the Participant's designated Beneficiary.

          (3)  Determination of Amount To Be Distributed Each Year.  If the 
               ---------------------------------------------------
               Participant's interest is to be paid in the form of annuity
               distributions under the Plan, payments under the annuity must
               satisfy the following requirements:

               (a)  The annuity distributions must be paid in periodic payments 
                    made at intervals no longer than one year;

               (b)  The distribution period must be over a life (or lives) or
                    over a period certain not longer than a life expectancy or
                    joint life and last survivor expectancy described in Code
                    Section 401(a) (9) (A) (ii) or 401(a) (9) (B) (iii),
                    whichever is applicable;

               (c)  The life expectancy or joint life and last survivor
                    expectancy for purposes of determining the period certain
                    must be determined without recalculation of life expectancy;

               (d)  Once payments have begun over a period certain, the period
                    certain may not be lengthened even if the period certain is
                    shorter than the maximum permitted;

               (e)  Payments must either be non-increasing or increase only as 
                    follows:

                    (i)    in accordance with any percentage increase in a
                           specified and generally recognized cost-of-living
                           index;

                    (ii)   to the extent of the reduction in the amount of the
                           payment to the Participant necessary to provide for a
                           survivor benefit upon death, but only if the
                           Beneficiary whose life was being used to determine
                           the distribution period described in paragraph (2) of
                           this Section dies and the payments continue

                                     -28-




<PAGE>
 
                           otherwise according to that Section over the life of
                           the Participant; or

                    (iii)  because of an increase in benefits under the Plan.

               (f)  If the annuity is a life annuity (or a life annuity with a
                    period certain not exceeding 20 years), the amount which
                    must be distributed on or before the Participant's Required
                    Beginning Date will be the payment which is required for one
                    payment interval. The second payment need not be made until
                    the end of the next payment interval even if that payment
                    interval ends in the next calendar year. Payment intervals
                    are the periods for which payments are received--e.g.,
                    bimonthly, monthly, semiannually or annually.
 
                    If the annuity is a period certain annuity without a life
                    contingency or is a life annuity with a period certain
                    exceeding 20 years, periodic payments for each year must be
                    combined and treated as an annual amount. The amount which
                    must be distributed by the Participant's Required Beginning
                    Date (or, in the case of distributions after the
                    Participant's death, the date distributions are required to
                    begin pursuant to paragraph (4) of this Section) is the
                    annual amount for the first calendar year of distribution.
                    The annual amount for other calendar years of distribution,
                    including the annual amount for the calendar year in which
                    the Participant's Required Beginning Date occurs, must be
                    distributed on or before December 31 of the calendar year
                    for which the distribution is required.

               (g)  Purchased annuities are subject to the following additional 
                    conditions:

                    (i)    Unless the Participant's spouse is the designated
                           Beneficiary, if the Participant's interest is being
                           distributed in the form of a period certain annuity
                           without a life contingency, the period certain as of
                           the beginning of the first calendar year of
                           distribution may not exceed the applicable period
                           determined using the table set forth in Q&A-5 of
                           Treasury Regulation Section 1.401(a) (9)-2.

                                     -29-
          




<PAGE>
 
                    (ii)   If the Participant's interest is being distributed in
                           the form of a joint and survivor annuity for the
                           joint lives of the Participant and a non-spouse
                           Beneficiary, annuity payments to be made on or after
                           the Participant's Required Beginning Date to the
                           designated Beneficiary after the Participant's death
                           must not at any time exceed the applicable percentage
                           of the annuity payment for the period that would have
                           been payable to the Participant using the table set
                           forth in Q&A-6 of Treasury Regulation Section
                           1.401(a) (9)-2.

               (h)  Any additional benefits accruing to the Participant after
                    his Required Beginning Date must be distributed as a
                    separate and identifiable component of the annuity beginning
                    with the first payment interval ending in the calendar year
                    in which the amount accrues.

               (i)  Any part of the Participant's interest which is in the form
                    of an individual account must be distributed in a manner
                    satisfying the requirements of Code Section 401(a) (9) and
                    the regulations thereunder.

          (4)  Mandatory Distribution to Beneficiaries. (a) If a Participant
               ---------------------------------------
               dies after distribution of his interest has begun, the remaining
               portion of the interest must continue to be distributed at least
               as rapidly as under the method of distribution being used before
               the Participant's death.

               (b)  If the Participant dies before distribution of his interest
                    begins, the Participant's entire interest must be
                    distributed no later than five years after the Participant's
                    death except that the Participant may elect that--

                    (i)    if any portion of the Participant's interest is
                           payable to a non-spouse designated Beneficiary, such
                           portion be distributed in substantially equal
                           installments over the lifetime or over a period
                           certain no greater than the life expectancy of the
                           designated Beneficiary. Distributions must begin no
                           later than December 31 of the calendar year
                           immediately following the calendar year in which the
                           Participant dies; or

                                     -30-











<PAGE>
 

                    (ii)   if any portion of the Participant's interest is
                           payable to the Participant's spouse, such portion be
                           distributed in substantially equal installments over
                           the lifetime or over a period certain no greater than
                           the life expectancy of the spouse. Such distribution
                           must commence no later than the later of (i) December
                           31 of the calendar year immediately following the
                           calendar year in which the Participant dies or (ii)
                           December 31 of the calendar year in which the
                           Participant would have attained age 70-1/2. If the
                           spouse dies before payments begin, distributions
                           shall be made as if the spouse had been the
                           Participant.

               If a Participant does not make an election pursuant to this
               subparagraph (b) by the date of his death, the Participant's
               designated Beneficiary may elect the method of distribution no
               later than the earlier of December 31 of the calendar year in
               which distributions would be required to begin under this section
               or December 31 of the calendar year which contains the fifth
               anniversary of the date of death of the Participant. If the
               Participant has no designated Beneficiary, or if the designated
               Beneficiary does not elect a method of distribution, distribution
               of the Participant's entire interest must be completed by
               December 31 of the calendar year containing the fifth anniversary
               of the Participant's death.

          (5)  Special Rules.  For purposes of this Section 8.05--
               -------------
               (a)  the life expectancy of a surviving spouse may be
                    recalculated annually; however, in the case of any other
                    designated Beneficiary, life expectancy will be calculated
                    at the time payment first begins without further
                    recalculation;

               (b)  any amount paid to a child of the Participant will be
                    treated as if it had been paid to the Participant's 
                    surviving spouse if the amount becomes payable to such
                    surviving spouse when the child reaches the age of 
                    majority; and
             
               (c)  distribution of a Participant's interest is considered to
                    begin on the Participant's Required Beginning Date or, if
                    the surviving spouse dies before payments begin, the date on
                    which distribution is required to begin to the

                                     -31-
               
<PAGE>
 
                    surviving spouse. If distribution in the form of an annuity
                    described above irrevocably commences to the Participant 
                    before the Required Beginning Date, the date distribution
                    is considered to begin is the date distribution actually
                    commences.

8.06      One-Time Election for Commencement of Normal Retirement Income at
          -----------------------------------------------------------------
          Normal Retirement Date While Continuing in Employment
          -----------------------------------------------------

          An Active Participant who continues in the employ of the Employers
          after his Normal Retirement Date may elect irrevocably and on a one-
          time only basis to start receiving his benefits at any time on or
          after such Normal Retirement Date, subject to the distribution
          requirements of Sections 8.02 and 8.03, with such benefits to be
          payable from and after the date of election. Any additional benefit
          accruals that such Participant is entitled to receive because of his
          continued employment shall be determined as of his Late Retirement
          Date or Required Beginning Date, as defined in Section 8.05, whichever
          is earlier, and no adjustment in the payments to such Participant
          shall be made prior thereto. If the Participant continues employment
          beyond his Required Beginning Date, a recalculation of the
          Participant's retirement benefit payments shall be made as of each
          January 1 following such date until the January 1 following the
          January 1 on or immediately after the Participant's Late Retirement
          Date. In determining the additional retirement benefit payable to any
          such Participant, the Actuarial Equivalent of the retirement benefit
          payments that he has received shall be applied as an offset against
          such additional benefit (but such offset shall not result in a
          reduction of the retirement benefit payable to the Participant below
          the amount that he was receiving prior to his Actual Retirement Date).

8.07      Suspension of Benefits After Retirement
          ---------------------------------------
          
          The following provisions shall apply in the case of a Participant
          who is re-employed after his Early, Normal or Late Required:

          (1)  Before Normal Retirement Date. In the event the Participant is
               -------------------------------
               re-employed by an Employer or an Affiliate after commencement of
               retirement benefits but prior to his Normal Retirement Date, his
               benefit payments shall be suspended during such period of
               re-employment. Upon the Participant's subsequent retirement or
               termination of employment, he will be entitled to a benefit under
               Section 5.01, 5.02, 5.03, 6.01 or 6.02 of the Plan, whichever is
               applicable, using his Compensation and
          
                                     -32-



<PAGE>
 
               Credited Service during both his previous period of employment
               and his period of re-employment but his Accrued Benefit for 
               purposes of determining the benefit payable under Section 5.01,
               5.02, 5.03, 6.01 or 6.02 of the Plan upon his subsequent 
               retirement or termination of service shall not be less than his 
               Accrued Benefit as of his previous date of retirement and the
               benefit payable under such applicable section of the Plan upon
               his subsequent retirement or termination of employment shall be
               reduced on an Actuarially Equivalent basis by an amount equal to
               the sum of the retirement income payments which he received prior
               to his date of re-employment.

          (2)  After Normal Retirement Date. In the event the Participant is 
               -----------------------------      
               re-employed by an Employer after commencement of retirement
               benefits and after his Normal Retirement Date, benefit payments
               shall continue in the same form and manner as in effect 
               immediately prior to his re-employment date. A re-employed 
               Participant who has one (1) hour of Service in any such Plan Year
               shall participate in the additional accrual of benefits under the
               Plan.

8.08      Preservation of Protected Benefits and Optional Forms of Benefit
          ----------------------------------------------------------------
          Under Merged Plans
          ------------------

          An amendment (including any merger with another 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 (i) eliminating or
          reducing an early retirement benefit or a retirement-type subsidy (as
          defined in Income Tax Regulations) or (ii) except as provided in
          Income Tax Regulations, eliminating an optional form of benefit. The
          Pension Committee shall disregard an amendment to the extent that
          application of the amendment would fail to satisfy the requirements of
          this Section 8.08.

                                  ARTICLE IX
               
                               PLAN TERMINATION
                               ----------------


9.01      Right to Terminate
          ------------------

          In accordance with the procedures set forth in this Article IX, the
          Company, acting through the Board, may

                                     -33-
<PAGE>
 
          terminate the Plan at any time. Subject to applicable requirements, if
          any, of ERISA governing termination of" Employee Pension Benefit
          Plans, "the Company, acting through the Board, shall direct and
          require the Trustee to liquidate the Trust Fund, or the applicable
          portion thereof, in accordance with the provisions of this Article IX.

9.02      Partial Termination
          -------------------
          
          Upon termination of the Plan with respect to a group of Participants
          which constitutes a partial termination of the plan, the Trustee shall
          allocate and segregate for the benefit of such Participants the
          proportionate interest of such Participants in the Trust Fund. Such
          proportionate interest shall be determined by an independent,
          government enrolled actuary. Such actuary shall make this
          determination on the basis of the contributions made, the provisions
          of this Article, and such other considerations as the actuary deems
          appropiate. The Employers, the Trustee and the Pension Commitee shall
          have no responsibililty with respect to the determination of any such
          proportionate interest.

          The funds so allocated and segregated shall be used by the Trustee   
          to pay benefits to or on behalf of such Participants in accordance
          with Section 9.03.

9.03      Liquidation of Trust Fund
          -------------------------
          
          Upon termination of the Plan with respect to all Participants, or upon
          termination of the Plan with respect to a group of Participants
          constituting a partial termination of the Plan, each such
          Participant's Accrued Benefit, based on his Credited Service and
          Compensation prior to the date of termination, shall become fully
          vested and nonforfeitable; provided, however, that the Participant's
          recourse against the Trust Fund for satisfaction of such
          nonforfeitable benefit shall be limited by the extent to which such
          benefit is funded. In the case of Participants described in Section
          3.05 hereof, the annuity contracts described in Section 3.05(4) of the
          Trinity Marine Plan shall be distributed to all affected Participants
          in complete satisfaction of all benefits described in Section 3.05(3)
          (a) of such Trinity Marine Plan. The remaining assets of the Trust
          Fund, or the remaining portion thereof segregated in accordance with
          Section 9.02, shall be liquidated (after provision is made for the
          expenses of liquidation) by the payment or provision for the payment
          of benefits (other than those described in Section 3.05(3) (a) of the
          Trinity Marine Plan) in the following order of preference.
          
                                     -34-

<PAGE>
 
          (1)  Certain benefits Payable Three Years Prior to Termination.
               ----------------------------------------------------------
               The available assets of the Trust Fund shall first be allocated
               to provide benefits that became payable three (3) or more years
               before the effective date of Plan termination, or that could have
               become payable at the beginning of such three-year period had the
               Participant not deferred the commencement of his benefits by 
               failing to elect earlier commencement or that could have become 
               payable had a Participant's retirement a immediately prior
               to the beginning of such three-year period, provided that 

               (a)  The portion of the benefits payable to a Participant or the 
                    Beneficiary of a Participant (or that could have been 
                    payable) shall be based on the provisions of the Plan in
                    effect five (5) years prior to the effective date of Plan
                    termination; and for this purpose, the first Plan Year in 
                    which an amendment became effective, or was adopted, if 
                    later, shall constitute the first year an amendment was in 
                    effect; and further provided that, 

               (b)  if the benefits payable under the Plan had been reduced,
                    either by amendment or due to the form in which the benefits
                    are being paid, during the three-year period ending on the
                    effective date of Plan termination, then the lowest benefit
                    in pay status during such three-year period shall be
                    considered the benefit in pay status for purposes of this
                    category.

          (2)  Other benefits Eligible for Termination Insurance.
               --------------------------------------------------
               To the extent that the amount of a benefit has not been provided 
               under paragraph (1) , above, the remaining assets shall be 
               allocated to provide any benefits provided under the Plan for a 
               Participant whose employment terminated prior to the effective 
               date of Plan termination, or any immediate deferred benefit
               that would have been payable to or on behalf of a Participant had
               his employment been severed for a reason other than death on the 
               effective date of Plan termination; provided that the amount of 
               benefits to be provided under this paragraph (2) shall be the 
               sum of the following: 

               (a)  the portion of the benefits payable to a Participant or the
                    Beneficiary of a Participant (or that could have been
                    payable) based on the provisions of the Plan in effect five 
                    (5) years prior to the effective date of 

                                     -35-

<PAGE>
 
               Plan termination; and for this purpose, the first Plan Year in
               which an amendment became effective, or was adopted if later,
               shall constitute the first year an amendment was in effect; plus

          (b)  the portion of the benefits payable to a Participant or the
               Beneficiary of a Participant which would have been included in 
               (a) above had the Plan or a Plan amendment been in effect five
               (5) years prior to the effective date of Plan termination, 
               determined as the greater of (i) twenty percent (20%)for each 
               Plan Year (less than five) that the Plan or an amendment thereto
               was in effect, multiplied by the amount that would have been 
               included under subparagraph (a) for such Participant or 
               Beneficiary had the Plan or the amendment been in effect for five
               (5) Plan Years as of the effective date of Plan termination or 
               (ii) $20 for each Plan Year (less than five) that the Plan or 
               amendment thereto was in effect; provided that,

          (c)  no benefit payable under this paragraph (2) to a Participant or 
               Beneficiary shall exceed an amount with an actuarially eqivalent 
               value of a monthly benefit in the form of a life-only annuity 
               commencing a age sixty-five (65) equal to Seven hundred fifty 
               dollars ($750.00) multiplied by a fraction, the numerator of 
               which is the contribution and benefit base determined under 
               Section 230 of the Social Security Act in effective date of Plan 
               termination and the denominator of which is the contribution and 
               benefit base in effect in calendar year 1974.
              
     (3)  Other Vested Benefits. To the extent that the amount of a benefit has
          ---------------------
          not provided under paragraphs (1) and (2), above, the remaining assets
          shall be allocated to provide the benefits payable under the Plan to
          or on behalf of a Participant whose employment was severed prior to
          the effective date of Plan termination, in the following order of
          preference:

          (a)  to any Participant who had retired prior to the effective 
               date of Plan termination under Section 5.01 or 5.03 or who 
               was eligible to retire on the effective date of Plan 
               termination under any of said Sections;

                                     -36-


<PAGE>
 
               (b)  to any Participant who had retired prior to the effective
                    date of Plan termination under Section 5.02, or who was
                    eligible to retire on the effective date of Plan termination
                    under said Section; or

               (c)  to any Participant whose employment had terminated prior to
                    the effective date of Plan termination with entitlement to a
                    vested benefit under Section 7.01, or who would have been
                    eligible for a vested benefit under said Section had his
                    employment terminated on the effective date of Plan
                    termination.
       
          (4)  Other Benefits. To the extent that the amount of a benefit has 
               --------------
               not been provided under paragraphs (1), (2) and (3) above, the
               remaining assets shall be allocated to provide the benefits
               accrued under the Plan, without regard to the satisfaction of the
               vesting requirements of this Plan, with respect to each
               Participant whose employment had not been severed as of the
               effective date of Plan termination, according to the respective
               actuarial value of each such Participant's Accrued Benefit.

          If the assets of the Trust Fund applicable to any of the above
          categories are insufficient to provide full benefits for all persons
          in such group, the benefits otherwise payable to such persons shall be
          reduced proportionately. An independent, government-enrolled actuary
          shall calculate the allocation of the assets of the Trust Fund in
          accordance with the above priority categories, and certify his
          calculations to the Company, the Pension Committee, and the Trustee.
          No liquidation of assets and payment of benefits (or provisions
          therefor) shall actually be made by the Trustee until after it is
          advised by the Company in writing that the applicable requirements, if
          any, of ERISA governing termination of "Employee Pension Benefit
          Plans" have been, or are being, complied with or that appropriate
          authorizations, waivers, exemptions or variances have been, or are
          being, obtained. 

9.04      Manner of Distribution 
          ---------------------- 

          Subject to the foregoing provisions of this Article IX, any  
          distribution after termination of the Plan may be made, in whole or in
          part, to the extent that no discrimination in value results, in cash,
          in securities or other assets in kind, or in nontransferable annuity
          contracts, as the Pension Committee in its discretion shall determine;
          provided, that any such distribution shall be subject to the
          provisions of Section 8.02 hereof.

                                     -37-
<PAGE>
 
9.05      Residual Amounts
          ----------------
         
          In no event shall any Participating Employer receive any amounts from
          the Trust Fund upon termination of the Plan, except that, and
          notwithstanding any other provision of the Plan, such Employer shall
          receive such amounts, if any, as may remain after the satisfaction of
          all liabilities of the Plan and arising out of any variations between
          actual requirements and expected actuarial requirements.

       
                                  Article X  
                         
                         SUCCESSOR EMPLOYER AND MERGER
                           OR CONSOLIDATION OF PLANS
                           -------------------------   

10.01     Successor Employer  
          ------------------
   
          In the event of the dissolution, merger, consolidation or
          reorganization of Participating Employer, provision may be made by
          which the Plan and Trust will be continued by the successor; and, in
          that event, such successor shall be substituted for such Employer
          under the Plan. The substitution of the successor shall constitute an
          assumption of the Plan liabilities by the successor and the successor
          shall have all of the powers, duties and responsibilities of such
          Employer under the Plan. Nothing in this Section 10.01 shall be
          construed so as to require continuation of the Plan and Trust by a
          successor.
          
10.02     Merger or Consolidation of Plans 
          --------------------------------
       
          In this event of any merger or consolidation of the Plan with, or
          transfer in whole or in part of the assets and liabilities of the
          Trust Fund to another trust fund held under any other plan of deferred
          compensation maintained or to be established for the benefit of all or
          some of the Participants of this Plan, the assets of the Trust Fund
          applicable to such Participants shall be transferred to the other
          trust fund only if:

          (1)  each Participant would (if either this plan or the other Plan
               then terminated) receive a benefit immediately after the merger,
               consolidation or transfer which is equal to or greater than the
               benefit he would have been entitled to receive immediately before
               the merger, consolidation or transfer (if this Plan had then
               terminated);

          (2)  resolutions of the Board shall authorize such transfer of assets;
               and

                                     -38-
 

<PAGE>
 
          (3)  such other plan and trust are qualified under Sections 401(a) and
               501(a) of the Code.

                                  ARTICLE XI

                       RESTRICTIONS ON BENEFITS PAYABLE
                      TO HIGHLY COMPENSATED PARTICIPANTS
                      ---------------------------------- 

11.01     Restrictions    
          ------------ 
 
          This Section sets forth the limitations applicable to Employer
          contributions which may be used for he benefits of certain Employees
          as required by Treasury Department regulations.

          (1)  This Section shall apply to an Employee who is a highly
               compensated employee within the meaning of Section 414(q) of the
               Code or a highly compensated former employee within the meaning
               of Section 414(q)(9) of the Code and is within the group of
               twenty-five (25) such highly compensated employees and highly
               compensated former employees with the greatest compensation in
               the current or any prior Year.

          (2)  The annual payments to an Employee subject to this Section 11.01
               shall not exceed an amount equal in each Year to the payments
               that would be made on behalf of the Employee under--
      
               (a)  a straight line annuity that is the actuarial equivalent of
                    the Accrued Benefit and other benefits to which the Employee
                    is entitled under the Plan (other than a Social Security
                    supplement), and

               (b)  the amount of the payments that the Employee is entitled to
                    receive under a Social Security supplement.

               The term "benefit" includes, among other benefits, any Death
               Benefit not provided for by insurance on the Employee's life.

          (3)  The restrictions of Section 11.01(2) shall not apply if any one
               of the following requirements is satisfied:

               (a)  after payment to an Employee subject to this Section 11.01
                    of all benefits payable to such Employee under the Plan, the
                    value of Plan assets equals or exceeds one hundred ten
                    percent (110%) of the value of current

                                     -39-

<PAGE>
 
                    liabilities, as defined in Section 412(1)(7) of the Code;
          
               (b)  the value of the benefits payable under the Plan to an
                    Employee subject to this Section 11.01 is less than one 
                    percent (1%) of the value of current liabilities before 
                    distribution; or

               (c)  the value of benefits payable under the Plan to an Employee 
                    subject to this Section 11.01 does not exceed Three thousand
                    five hundred dollars ($3,500.00) as determined under Section
                    8.06 hereof.

               For purposes of this Section 11.01(3), an Employer may use the
               value of current liabilities as reported on schedule B of the 
               Employee's most recent, timely filed Form 5500 or Form 5500 C/R,
               or, alternatively, an Employer may determine current liabilities 
               as of a later date; provided, however, that the value of Plan 
               assets and the value of current liabilities must be determined as
               of the same date.

          (4)  Notwithstanding the above provisions of this Section 11.01, in
               the event of Plan termination, the benefit of any highly
               compensated employee and former highly compensated employee shall
               be limited to a benefit that is nondiscriminatory under Section 
               401(a)(4) of the Code and Treasury Department regulations 
               thereunder

          (5)  The provisions of this Section 11.01 shall apply separately as to
               each Employer.

11.02     Effectiveness 
          -------------
          
          The limitations and restrictions set forth in this Article XI shall 
          automatically become inoperative and of no effect upon a ruling by the
          Internal Revenue Service that they are not required.

                                  ARTICLE XII

                                ADMINISTRATION
                                --------------

12.01     Allocation of Responsibility Among Specified Fiduciaries for Plan and 
          ---------------------------------------------------------------------
          Trust Administration
          --------------------
          
          The Specified Fiduciaries shall have only those specific powers,
          duties, responsibilities and obligations as are specifically given
          them under this Plan or the Trust. In

                                               -40-
<PAGE>
 
          general, the Employers shall have the sole responsibility for making
          the contributions provided for under Section 4.01. In addition, the
          Company shall have the sole authority to appoint and remove the
          Trustee, members of the Committee and any Investment Manager which may
          be provided for under the Trust and to amend or terminate, in whole or
          in part, this Plan or the Trust; provided, however, that any one
          Participating Employer may terminate its participation in the Plan.
          The Committee shall have the sole responsibilitiy for the
          administration of this Plan, which responsibility is specifically
          described in this Plan and the Trust. The Trustee shall have
          responsibility for the administration of the Trust and the management
          of the assets held under the Trust, to the extent provided in the
          Trust. Each Fiduciary warrants that any directions given, information
          furnished, or action taken by it shall be in accordance with the
          provisions of the Plan or the Trust, as the case may be, authorizing
          or providing for such direction, information or action. Futhermost,
          each Fiduciary may rely upon any such direction, information or action
          of another Fiduciary as being proper under this Plan or the Trust, and
          is not required under this Plan or the Trust to inquire into the
          propriety of any such direction, information or action. It is intended
          under this Plan and the Trust that each Fiduciary shall be responsible
          for the proper exercise of its own powers, duties, responsibilities
          and obligations under this Plan and the Trust and, expect as provided
          in Section 13.03, shall not be responsible for any act or failure to
          act of another Fiducary. No Fiduciary guarantees the Trust Fund in any
          manner against investment loss or depreciation in asset value.

12.02     Appointment of Committee            
          ------------------------

          The Plan will be administered by a Pension Committee appointed by the
          Board, consisting of a chairman and not more than six (6) additional
          members. The Pension Committee so appointed shall have responsibility
          for the administration of this Plan and, to the extent specified by
          the Board, any other plan maintained by an Employer. Each member may,
          but need not, be a director, officer, or Employee of an Employer, and
          each such member shall be appointed the Board to serve until his
          successor shall be appointed by in like manner. An individual member
          of the Committee may resign by delivering his written resignation to
          the Board and to the other members of the Committee. The Board may
          remove an individual member of the Committee by so notifying the
          member and the other Committee members in writing. Vacancies on the
          Committee shall be filled by action of the Board. All usual and
          reasonable expenses of the Committee (including the premiums payable
          with respect to any bond under which the

                                     -41-

 
























 




 








<PAGE>
 
          Committee members may be required by law to serve) may be paid in
          whole or in part by the Employees, and any expenses not paid by the
          Employees shall be paid by the Trustee out of the principal or income
          of the Trust Fund. Any members of the Committee who are Employees
          shall not receive compensation with respect to their services for the
          Committee.
          
12.03     Claims Procedure
          ----------------
          
          The Committee shall make all determinations as to the right of any
          person to a benefit. Any denial by the Committee of a claim for
          benefits under the Plan by a Participant or Beneficiary shall be
          stated in writing by the Committee and delivered or mailed to the
          Participant or Beneficiary; and such notice shall set forth the
          specific reasons for the denial, written to the best of the
          Committee's ability in a manner that may be understood without legal
          or actuarial counsel. In addition, the Committee shall afford a
          reasonable opportunity to any Participant or Beneficiary whose claim
          for benefits has been denied for a review of the decision denying the
          claim.

12.04     Records and Reports   
          -------------------
          
          The Committee shall exercise such authority and responsibility as it
          deems appropriate in order to comply with ERISA and governmental
          regulations issued thereunder relating to records of Service, Credited
          Service, Accrued Benefits and the percentages of such Benefits which
          are nonforfeitable under the Plan, notifications to Participants,
          annual registration with the Internal Revenue Service, annual reports
          to the Department of Labor, and reports to the Pension Benefit
          Guaranty Corporation.
          
12.05     Other Committee Powers and Duties    
          ---------------------------------
          
          The Committee shall have such duties and powers as may be necessary to
          discharge its duties hereunder, including, but not by way of
          limitation, the following:
               
               (1)  to construe and interpret the Plan, decide all questions of
                    eligibility and determine the amount, manner and time of
                    payment of any benefits hereunder;

               (2)  to prescribe procedures to be followed by Participants or
                    Beneficiaries filing applications for benefits;

                                     -42-
<PAGE>
 
          (3)  to prepare and distribute, in such manner as the Committee 
               determines to be appropriate, information explaining the
               Plan;
          
          (4)  to receive from the Employers and from Participants such
               information as shall be necessary for the proper administration
               of the Plan;

          (5)  to furnish each Employer, upon request, such annual reports
               with respect to the administration of the Plan as are reasonable
               and appropriate;

          (6)  to receive, review and keep on file (as it deems convenient or
               proper) reports of the financial condition, and of the receipts
               and disbursements, of the Trust Fund from the Trustee;

          (7)  to appoint or employ (either directly or through its secretary)
               individuals to assist in the administration of the Plan and any
               other agents it deems advisable, including legal and actuarial
               counsel;

          (8)  to receive and review the periodic valuation of the Plan
               made by the Plan's actuary; and

          (9)  to direct the Trustee from time to time with respect to the
               investment and reinvestment of any part or all of the assets of
               the Trust Fund and with respect to the retention of any asset,
               including cash.

          With respect to the directive authority set forth in paragraph
          (9) above, the Committee shall be under no obligation to exercise such
          authority.

          The Committee shall have no power to add to, subtract from or modify
          any of the terms of the Plan, or to change or add to any benefits
          provided by the Plan, or to waive or fail to apply any requirements of
          eligibility for a benefit under the Plan.

12.06     Rules and Decisions                    
          -------------------

          The Committee, or the secretary of the Committee in the absence of a
          full Committee meeting, shall have the authority to make such rules
          and regulations and to take such action as may be necessary to carry
          out the provisions of the Plan. The Committee may delegate any part of
          its authority and duties as it deems expedient. All rules and
          decisions of the Committee shall be uniformly and consistently applied
          to all Participants in similar circumstances. When making a
          determination or calculation, the Committee shall be entitled to rely
          upon
          
                                     -43-

<PAGE>
 
          information furnished by a Participant or Beneficiary, the Employers,
          the legal counsel of an Employer, any actuary servicing the Plan, or
          the Trustee.

12.07     Committee Procedures
          --------------------

          The Committee may act at a meeting or in writing without a meeting.
          The Committee shall elect one of its members as Chairman, appoint a
          secretary, who may or may not be a Committee member, and advise the
          Trustee of such actions in writing. Any written memorandum signed by
          the secretary or any member of the Committee or one or more
          individuals who have been authorized to perform specific acts on
          behalf of the Committee shall have the same force and effect as a
          formal resolution adopted in open meeting. Minutes of all meetings of
          the Committee and a record of any action taken by the Committee shall
          be kept in written form, such record to be kept by the secretary
          appointed by the Committee. The secretary of the Committee may, from
          time to time, give to the Trustee any order, direction, consent or
          advice required under the terms of the Trust, and the Trustee shall be
          entitled to rely on any instrument delivered to it and signed by the
          secretary or any other authorized member of the Committee as
          evidencing the action of the Committee. The Committee may adopt such
          bylaws and regulations as it deems desirable for the conduct of its
          affairs. All decisions of the Committee shall be made by the vote of
          the majority including actions in writing taken without a meeting. A
          dissenting Committee member who, within a reasonable time after he has
          knowledge of any action or failure to act by the majority, registers
          his dissent in writing delivered to the other Committee members, the
          Employers and the Trustee, shall not be responsible for any such
          action or failure to act. A member of the Committee may not vote or
          decide upon any matter relating solely to himself or vote in any case
          in which his individual right or claim to any benefit under the Plan
          is involved. If in any case in which an individual Committee member is
          so disqualified to act, the remaining members cannot agree, the Board
          will appoint a temporary substitute member to exercise all of the
          powers of a qualified member concerning the matter with respect to
          which the disqualified member is not qualified to act.

12.08     Authorization of Benefit Payments
          ---------------------------------

          The Committee shall issue directions to the Trustee concerning all
          benefits which are to be paid from the Trust Fund pursuant to the
          provisions of the Plan, and warrants that all such directions are in
          accordance with this Plan.

                                     -44-
<PAGE>
 
12.09     Application and Forms for Benefits
          ----------------------------------

          The Committee may require a Participant to complete and file with the
          Committee an application for a benefit and all other forms approved by
          the Committee, and to furnish all pertinent information requested by
          the Committee. The Committee may rely upon all such information so
          furnished it, including the Participant's current mailing address. The
          failure by a Participant to file a claim for benefits will not result
          in the forfeiture of any benefits which are otherwise nonforfeitable
          under this Plan.

12.10     Facility of Payment
          -------------------

          Whenever, in the Committee's opinion, a person entitled to receive any
          payment of a benefit or installment thereof hereunder is under a legal
          disability or is incapacitated in any way so as to be unable to manage
          his financial affairs, the Committee may direct the Trustee to make
          payments to such person or to his legal representative or to a
          relative or friend of such person for his benefit, or the Committee
          may direct the Trustee to apply the payment for the benefit of such
          person in such manner as the Committee considers advisable. Any
          payment of a benefit or installment thereof in accordance with the
          provisions of this Section shall be a complete discharge of any
          liability for the making of such payment under the provisions of the
          Plan.

12.11     Indemnification
          ---------------

          The Employers shall indemnify and hold harmless each member of the
          Committee against all loss, cost, expenses or damages, including
          attorneys' fees and court costs: (a) occasioned by any act or omission
          to act in connection with the responsibility of such member for the
          administration of this Plan; (b) arising under or by virtue of the
          provisions of Part 4, Subtitle B, Title I or ERISA; provided, however,
          that the Employers shall not indemnify and hold harmless any such
          member against any loss, cost, expenses and damages occasioned by the
          gross negligence or willful misconduct of such member.

12.12     Beneficiary Designations
          ------------------------

          Subject to the provisions of Article VI hereof, each Participant shall
          have the right at any time to designate, and rescind or change any
          designation of, a primary and a contingent Beneficiary or
          Beneficiaries to receive benefits in the event of his death. If a
          Participant's benefits are payable pursuant to any form of joint and
          survivor annuity, the Participant's joint annuitant shall be deemed
          his designated Beneficiary. If there is no

                                     -45-
<PAGE>
 
          designated Beneficiary (other than a joint annuitant) alive when a
          Death Benefit becomes payable,the benefit shall be paid, in the
          discretion of the Committee, either (i) to the estate of the
          Participant or (ii) to any one or more of the Participant's heirs at-
          law, and in whatever form the Committee shall determine. If a primary
          Beneficiary (other than a joint annuitant) dies before receiving Death
          Benefits to which he is entitled, the balance of such payments shall
          be paid to the contingent Beneficiary. If there is no contingent
          Beneficiary, or if the contingent Beneficiary dies before receiving
          all Death Benefits payments to which he is entitled, the balance of
          such payments shall be paid, in the discretion of the Committee,
          either (i) to the estate of the Participant or (ii) to any one or more
          of the Participant's heirs-at-law, and in whatever form the Committee
          shall determine. Neither a Participating Employer nor the Trustee (in
          its capacity as such) shall be named as Beneficiary. A designation or
          change of Beneficiary shall be made in writing on such form or forms
          as the Committee may require. The designation, by a married
          Participant, of a Beneficiary other than his spouse shall require the
          consent of such spouse.
          
12.13     Diligence to Locate
          -------------------
          It shall be the duty of the Pension Committee to use reasonable 
          diligence to locate and to pay a Retired Participant or a Terminated
          Participant when any payment becomes due hereunder. The sending of a
          letter by certified mail, postage prepaid, to the Participant's
          address last known to the Pension Committee shall be deemed reasonable
          diligence.

                                 ARTICLE XIII

                           FIDUCIARY RESPONSIBILITY
                           ------------------------

13.01     Fiduciary
          ---------
          
          The term "fiduciary" means any person who
          
          (1)  exercises any discretionary authority or control over the
               management or the Plan and Trust or the management or disposition
               of its assets;

          (2)  renders investments advice for a fee with respect to the funds or
               property of the Trust or has the authority to do so; or
          
          (3)  has any discretionary authority or responsibility in the 
               administration of the Plan and Trust.

                                     -46-

<PAGE>
 
13.02     Fiduciary Responsibility
          ------------------------

          A fiduciary shall discharge his or its duties with respect to the Plan
          and Trust solely in the interest of the Participants and
          Beneficiaries; and

          (1)  for the exclusive purpose of:

               (a) providing benefits to Participants and their Beneficiaries; 
                   and

               (b) defraying reasonable expenses of administering the Plan and 
                   Trust;

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

          (3)  if applicable, by diversifying the investments of the Trust so as
               to minimize the risk of large losses, unless under the
               circumstances it is clearly prudent not to do so; and

          (4)  in accordance with the documents and instruments governing the 
               Plan and Trust, insofar as such documents and instruments are
               consistent with the provisions of ERISA.

13.03     Liability for Breach by Co-fiduciary
          ------------------------------------

          A fiduciary shall be liable for a breach of fiduciary responsibility
          by another fiduciary in the following circumstances:
          
          (1)  if he participates knowingly in, or knowingly undertakes to 
               conceal, an act or omission of such other fiduciary, knowing such
               act or omission is a is a breach;

          (2)  if, by his failure to comply with Section 13.02 in the 
               administration of his specific responsibilities which give rise
               to his status as a fiduciary, he has enabled such other fiduciary
               to commit a breach; or

          (3)  if he has knowledge of a breach by such other fiduciary, unless
               he makes reasonable efforts under the circumstances to remedy the
               breach

                                     -47-

<PAGE>
 
                                  ARTICLE XIV

                AMENDMENT, MODIFICATION OR TERMINATION OF PLAN
                ----------------------------------------------

14.01     Change
          ------

          It is the intention of the Employers to continue the Plan and Trust 
          indefinitely; however, the Company reserves the right to amend or
          modify this Plan at any time or from time to time, or to terminate
          this Plan at any time, by action of the Board. Notwithstanding
          anything to the contrary, in order to qualify this Plan under Section
          401(a) of the  Code, any amendment may, to the extent provided in
          Section 401(b) of such Code, be made retroactively if necessary to
          bring this Plan into conformity with Internal Revenue laws and
          regulations.

14.02     Modification
          ------------

          Unless made to secure the approval of the Internal Revenue Service or 
          other governmental bureau or agency, no amendment or modification
          hereof by the Company shall--

          (1)  operate retroactively to reduce or divest the then vested 
               interest of any Participant or Beneficiary in any Accrued
               Benefit, or to reduce or divest any benefit then payable
               hereunder, unless all Participants and Beneficiaries then having
               an Accrued Benefit affected thereby shall consent to such
               amendments or modifications, or

          (2)  change the duties or responsibilities of the Trustee without the 
               written consent of the Trustee.

          Each such amendment shall be in writing signed by a duly authorized
          officer of the Company and shall become effective upon delivery
          thereof to the Trustee.

14.03     Adoption by Others
          ------------------

          Any Affiliate of the Company may adopt this Plan and thereby become a 
          Participating Employer; provided, however, that the Board approves
          such adoption; provided, further, that the administrative powers and
          control of the Company as provided herein shall not be deemed
          diminished under the Plan by reason of the adoption of the Plan by any
          other Participating Employer, and such administrative powers and
          control granted in Section 12.01 hereof to the Company with respect to
          the appointment of the Committee and other matters shall apply only
          with respect to the Company and not to any other Participating
          Employer; provided, further, that each Participating Employer shall
          have the obligation to

                                     -48-


<PAGE>
 
          pay the contributions for its own Employees and no other Participating
          Employer shall have such obligation, and any failure by a
          Participating Employer to satisfy its obligations under the Plan shall
          have no effect on any other Participating Employer. No Employee shall
          receive Service or Credited Service for any period of his employment
          with a Participating Employer completed prior to the date on which
          such Participating Employer is included in a "controlled group of
          corporations" (as determined pursuant to Section 2.05 hereof) within
          which the Company is also included; provided, however, that the Board
          may, from time to time, provide otherwise with respect to all
          Employees of a given Participating Employer.

14.04     Recovery
          --------

          Anything in this Plan to the contrary notwithstanding, none of the 
          funds deposited with the Trustee hereunder may be used other than
          for the exclusive benefit of the Participants and their Beneficiaries
          and for the payment of the normal expenses in connection with this
          Plan.  Under no circumstances shall an Employer recover any amount
          from the Trust except as provided in Section 9.05 and 16.09.  All
          losses incurred by the Trust Fund and the expenses of administering
          this Plan not paid by the Participating Employers shall be charged to
          the Trust Fund and any such losses or expenses may be covered by 
          additional contributions of the Participating Employers.


                                  ARTICLE XV

                  MAXIMUM BENEFITS AND TOP-HEAVY PROVISIONS 
                  -----------------------------------------  

15.01     Maximum Benefit
          ---------------

          Nothwithstanding anything contained herein to the contrary, the 
          benefit payable to a Participant shall be subject to the following:

          (1)  When expressed as a monthly pension, a benefit shall not exceed
               the lesser of $7,500 (the "Dollar Limitation"), or 100% of the
               Participant's "average monthly compensation," during the three
               (3) consecutive calendar years when the total Compensation paid
               to him was the highest (the "Compensation Limitation"),  
               subject to the following:

               (a)  The maximum shall apply to the pension payable to the 
                    Participant either pursuant to the qualified joint and
                    survivor form described in Section 8.02 hereof or pursuant
                    to an option

                                    -49-   

<PAGE>
 
                    described in Section 8.03 hereof where the contingent
                    annuitant is the Participant's Spouse; but if the pension is
                    payable in a form other than the foregoing and other than a
                    single-life pension, the maximum shall apply to the single-
                    life pension which is the Actuarial Equivalent of such
                    pension.

               (b)  If benefits begin prior to the Participant's Social Security
                    Retirement Age, but on or after age sixty-two (62), the
                    Dollar Limitation shall be determined as follows:

                    (i)  If a Participant's Social Security Retirement Age is
                         age sixty-five (65), the Dollar Limitation for benefits
                         commencing on or after age sixty-two (62) is determined
                         by reducing the Dollar Limitation by 5/9 of one percent
                         for each month by which benefits commence before the
                         month in which the Participant attains age sixty-five
                         (65).

                    (ii) If a Participant's Social Security Retirement Age is
                         greater than age sixty-five (65), the Dollar Limitation
                         for benefits commencing on or after age sixty-two (62)
                         is determined by reducing the Dollar Limitation by 5/9
                         of one percent for the first thirty-six (36) months and
                         5/12 of one percent for each of the additional months,
                         up to twenty-four (24) months, by which benefits
                         commence before the month in which the Participant
                         attains the Social Security Retirement Age.

                    If benefits commence prior to age sixty-two (62), the Dollar
                    Limitation shall be the Actuarial Equivalent of an annual
                    benefit beginning at age sixty-two (62), as determined
                    above, reduced for each month by which benefits commence
                    before the month in which the Participant attains age sixty-
                    two (62). For purposes of this Section 15.01(1) (b),
                    Actuarial Equivalent shall have the same meaning as defined
                    in Section 5.02 hereof, except that the interest rate
                    assumption shall not be less than the greater of five
                    percent (5%) or the rate derived under Section 5.02 for
                    determining early retirement benefits. For purposes of this
                    Section 15.01(1)(b), in determining Actuarial Equivalence,
                    the interest rate assumption shall not be less

                                     -50- 
<PAGE>
 
                    than the greater of five percent (5%) or the rate 
                    determined under Section 5.02 for determining early 
                    retirement benefits.

                    For purposes of this Section 15.01(1)(b) and 15.01(1)(c),
                    "Social Security Retirement Age" shall mean the age used as 
                    the retirement age under Section 216(1) of the Social 
                    Security Act, applied without regard to the age increase 
                    factor and as if the early retirement age under Section 
                    216(1)(2) of the Act were sixty-two (62).

               (c)  If a pension begins after the Social Security Retirement 
                    Age, the maximum Dollar Limitation shall be the Actuarial
                    Equivalent of the Dollar Limitation where the Dollar 
                    Limitation is deemed to be a pension commencing at the 
                    Social Security Retirement Age. For purposes of this 
                    Section 15.01(1)(c), Actuarial Equivalent shall have the 
                    same meaning as defined in Section 2.04 hereof, except that 
                    the interest rate assumptions shall be equal to five percent
                    (5%). For purposes of this Section 15.01(1)(c), "Social
                    Security Retirement Age" shall have the same meaning as for
                    Section 15.01(1)(b) above.

               (d)  If the Participant has fewer than ten (10) years of 
                    participation in the Plan, the Dollar Limitation shall be 
                    multiplied by a fraction, the numerator of which is his 
                    years of participation in the Plan and the denominator of 
                    which is ten (10), but not less than 1/10 of the Dollar
                    Limitation.

               (e)  If the Participant has fewer than ten (10) years of 
                    Credited Service, the Compensation Limitation shall be 
                    multiplied by a fraction, of which the numerator is his
                    Credited Service and the denominator is ten (10), but not
                    less than 1/10 of the Compensation Limitation.

               (f)  For all purposes of this Plan, the maximum Dollar Limitation
                    of $7,500 shall be automatically increased as permitted by
                    Treasury Department regulations to reflect cost-of-living
                    adjustments. As a result of such an adjustment, a pension
                    which had been limited by the provisions of this Section in
                    a previous Plan Year may be increased with respect to future
                    payments to the lesser of the adjusted Dollar Limitation
                    amount or the amount of pension which would have been 

                                     -51-
<PAGE>
 
                    payable under this Plan without regard to the provisions of
                    this Section 15.01.

               (g)  For purposes of this Section 15.01, a Participant's "total
                    compensation" includes earned income, wages, salaries, fees
                    for professional service and other amounts received for
                    personal services actually rendered in the course of
                    employment with the Employer (including, but not limited to,
                    commissions paid salesmen, compensation for services on the
                    basis of a percentage of profits, commissions on insurance
                    premiums, tips, and bonuses) and excluding the following:
                    (i) Employer contributions to a plan of deferred
                    compensation to the extent contributions are not included in
                    gross income of the Participant for the taxable year in
                    which contributed, or on behalf of a Participant to a
                    simplified employee pension plan to the extent such
                    contributions are deductible under Section 219(b)(7) of the
                    Code, and any distributions from a plan of deferred
                    compensation whether or not includable in the gross income
                    of the Participant when distributed; (ii) amounts realized
                    from the exercise of a non-qualified stock option, or when
                    restricted stock (or property) held by a Participant 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, or contributions made by the Employer
                    (whether or not under a salary reduction agreement) for the
                    purchase of a 403(b) annuity contract (whether or not the
                    contributions are excludable from the gross income of the
                    Participant); and (v) compensation for a year in excess of
                    $150,000 (as automatically increased in accordance with
                    Treasury Department regulations to reflect cost-of-living
                    adjustments).

          (2)  Notwithstanding the foregoing, the otherwise permissible annual
               benefits for any Participant under this Plan may be further
               reduced to the extent necessary, as determined by the Committee,
               to prevent disqualification of the Plan under Section 415 of the
               Code, which imposes the following additional limitations of the
               benefits payable to Participants who also may be

                                     -52-
<PAGE>
 
               participating in another tax qualified pension, profit sharing,
               savings or stock bonus plan of the Employers: If an individual is
               a Participant at any time in both a defined benefit plan and a
               defined contribution plan maintained by the Employers, the sum of
               the defined benefit plan fraction and the defined contribution
               plan fraction for any Plan Year may not exceed 1.0. The defined
               benefit plan fraction for any Plan Year is a fraction, the
               numerator of which is the Participant's projected annual benefit
               under the Plan (determined at the close of the Plan Year) and the
               denominator of which is the lesser of (i) 1.25 multiplied by the
               Dollar Limitation, as adjusted, or (ii) 1.4 multiplied by the
               Compensation Limitation. The defined contribution plan fraction
               for any Plan Year is a fraction, the numerator of which is the
               sum of the annual additions to the Participant's accounts in such
               Plan Year and for all prior Plan Years and the denominator of
               which is the sum of the applicable maximum amounts of annual
               additions which could have been made under section 415(c) of the
               Code for such Plan Year and for all prior years of such
               Participant's employment (assuming for this purpose, that said
               Section 415(c) had been in effect during such prior years). The
               applicable amount for any Plan Year shall be equal to the lesser
               of (i) 1.25 multiplied by the dollar limitation in effect for
               such Plan Year under Section 415(c)(1)(A) of the Code, or (ii)
               1.4 multiplied by twenty-five percent (25%) of the Participant's
               total annual Compensation for such Plan Year.

          (3)  For purposes of the above limitation, all defined benefit plans
               of the Employers, whether or not terminated, are to be treated as
               one defined benefit plan and all defined contribution plans of
               the Employers, whether or not terminated, are to be treated as
               one defined contribution plan. The extent to which the benefit
               payable under this Plan shall be reduced as compared to the
               extent to which the annual benefit under any other defined
               benefit plans or defined contribution plans shall be reduced in
               order to achieve compliance with the limitations of Section 415
               of the Code shall be determined by the Committee in such a manner
               so as to maximize the aggregate benefits payable to such
               Participant. If such reduction is under this Plan, the Committee
               shall advise affected participants of any additional limitation
               on their annual benefits required by this paragraph.

                                     -53-
<PAGE>
 
          (4)  The above limitations are intended to comply with the provisions
               of Section 415 of the Code so that the maximum benefits provided
               by plans of the Employers shall be exactly equal to the maximum
               amounts allowed under Section 415 of the Code and Treasury
               Department regulations thereunder. If there is any discrepancy
               between the provisions of this Section 15.01 and the provisions
               of Section 415 of the Code and Treasury Department regulations
               thereunder, such discrepancy shall be resolved in such a way as
               to give full effect to the provisions of Section 415 of such
               Code.

          (5)  For purposes of the Plan, the "Limitation Year" shall be the
               calendar year.

15.02     Top-Heavy Provisions
          --------------------

          The following provisions shall become effective in any Plan Year
          beginning on or after the Effective Date in which the Plan is
          determined to be a Top-Heavy Plan:

          (1)  Determination of Top-Heavy.  The Plan will be considered a Top-
               --------------------------
               Heavy Plan for the Plan Year if, as of the last day of the
               preceding Plan Year (the "determination date"), (1) the present
               value of the Accrued Benefits of Participants who are Key
               Employees (as defined in Section 416(i) of the Code) exceeds
               sixty percent (60%) of the present value of the Accrued Benefits
               of all Participants (the "60% Test"), or (2) the Plan is part of
               a required aggregation group (within the meaning of Section
               416(g)(2) of the Code) and the required aggregation group is top-
               heavy. However, and notwithstanding the results of the 60% test,
               the Plan shall not be considered a Top-Heavy Plan for any Plan
               Year in which the Plan is a part of a required or permissive
               aggregation group (within the meaning of Section 416(g)(2) or the
               Code) which is not top-heavy; provided that, if any aggregation
               group consists of two or more defined benefit plans, the same
               actuarial assumptions must be used with respect to all such plans
               and must be specified in such plans. For purposes of the "60%
               Test" for any Plan Year, (i) Accrued Benefits shall be those
               amounts calculated as of the first day of the Plan Year ending on
               the determination date and the present value of those amount
               shall be based on the actuarial assumptions used in the actuarial
               valuation made as of the first of such Plan Year; (ii) the value
               of the Accrued Benefits of individuals who are former Key
               Employees shall not be taken into account; and (iii) the value of

                                     -54-
<PAGE>
 
                    the Accrued Benefits of individuals who have not rendered
                    services to the Employer for the five (5)-year period
                    ending on the determination date shall not be taken into
                    account. Section 416(g)(2) of the Code, referred to above,
                    provides as follows:

               "(2)      AGGREGATION - For purposes of this subsection 
 
                         (A)  Aggregation Group--

                              (i)  Required Aggregation - The term 'aggregation 
                              group' means--

                                   (I)  each plan of the employer in which a key
                                        employee is a participant;

                                  (II)  each other plan of the employer which
                                        enables any plan described in subclause
                                        (I) to meet the requirements of section
                                        401(a) (4) or 410; and

                                 (III)  any plan terminated by the employer
                                        within five years of the determination
                                        date of the plan year in question that
                                        would, but for the fact that it was
                                        terminated, be described in subclause
                                        (I) or (II). For purposes of section
                                        416, a terminated plan is one that has
                                        been formerly terminated, has ceased
                                        crediting service for benefit accruals
                                        and vesting, and has been or is
                                        distributing all plan assets to
                                        participants of their beneficiaries
                                        as soon as administratively feasible.
                                        

                             (ii)  Permissive Aggregation - The employer may
                                   treat any plan not required to be included in
                                   an aggregation group under clause (i) as
                                   being part of such group if such group would
                                   continue to meet the requirements of section
                                   401(a) (4) and 410 with such plan being taken
                                   into account.

                                     -55-

<PAGE>
 
                              (B)  Top-Heavy Group--The term 'top-heavy group'
                              means any aggregation group if-

                                   (i)  the sum (as of the determination date)
                                        of-

                                        (I)  the present value of the cumulative
                                             accrued benefits for key employees
                                             under all defined benefit plans
                                             included in such group, and

                                       (II)  the aggregate of the accounts of
                                             key employees under all defined
                                             contribution plans included in such
                                             group,

                                  (ii)  exceeds 60 percent of a similar sum 
                                        determined for all employees."

               For purposes of this Section 15.02(1), a "Key Employee" is an
               Employee as defined in Section 416(i)(1) of the Code and Treasury
               Department regulations thereunder. Generally, and Employee or
               former Employee (as well as each of his Beneficiaries) is
               considered a Key Employee if he, at any time during the Plan Year
               or any of the preceding four (4) Plan Years, is or has been --

               (a)  an officer of the Employer (as that term is defined in
                    Treasury Department regulations under Section 416 of the
                    Code) having annual Compensation greater than 50 percent of
                    the amount in effect under Section 415(b)(1)(A) of the Code
                    for any such Plan Year.

               (b)  one of the ten (10) Employees having annual Compensation
                    from the Employer for a Plan Year greater than the dollar
                    limitation in effect under Section 415(c)(1)(A) of the Code
                    for the calender year in which such Plan Year ends and
                    owning (or considered as owning within the meaning of
                    Section 318 of the Code) the largest interests in the
                    Employer.

               (c)  a "five percent owner" of the Employer. A "five percent
                    owner" is any person who owns (or is considered as owning
                    within the meaning of Section 318 of the Code) more than
                    five percent (5%) of the outstanding stock of the Employer
                    or stock possessing more than five precent (5%) of the total
                    combined voting power of all stock of the Employer or, in
                    the case of an unincorporated business, any person who owns
                    more that five percent (5%) of the capital or profits
                    interest
                            
                                     -56-

<PAGE>
 
                    in the Employer. In determining percentage ownership
                    hereunder, employers that would otherwise be aggregated
                    under Sections 414(b), (c), and (m) of the Code shall be
                    treated as separate employers.

               (d)  a "one percent owner" of the Employer having an annual
                    Compensation from the Employer of more than $150,000. "One
                    percent owner" means any person who owns (or is considered
                    as owning within the meaning of Section 318 of the Code)
                    more than one percent (1%) of the outstanding stock of the
                    Employer or stock possessing more than one percent (1%) of
                    the total combined voting power of all stock of the Employer
                    or, in the case of an unincorporated business, any person
                    who owns more than one percent (1%) of the capital or
                    profits interest in the Employer. In determining percentage
                    ownership hereunder,employers that would otherwise be
                    aggregated under Sections 414(b), (c), and (m) of the Code
                    shall be treated as separate employers. However, in
                    determining whether an individual has Compensation of more
                    than $150,000, Compensation from each employer required to
                    be aggregated under Sections 414(b), (c), and (m) of the
                    Code shall be taken into account.

               The determination of Compensation shall be made without regard to
               Sections 125, 402(a)(8), 402(h)(1)(B) of the Code and, in the
               case of Employer contributions made pursuant to a salary
               reduction agreement, without regard to Section 403(b) of the
               Code. For purposes of this Section 15.02, a non-Key Employee
               shall mean any Employee who is not a Key Employee.

          (2)  Minimum Benefits. Notwithstanding the provisions of Section
               ----------------
               5.01, for any Year during which the Plan is deemed a Top-Heavy
               Plan, the minimum pension for a Participant terminating
               employment at or after his Normal Retirement Date, and the
               minimum Accrued Benefit, payable at Normal Retirement Date, for a
               Participant who terminates employment prior thereto with
               entitlement to a pension, shall be equal to the product of (i) 2%
               of his average monthly earnings during his five (5) highest-paid
               consecutive calendar years of Credited Service multiplied by (ii)
               each of the first ten (10) years of his Credited Service after
               March 31, 1984 in which the Plan is a Top-Heavy Plan.

          (3)  Minimum Vesting.  Notwithstanding the provisions of Section 7.01,
               ---------------
               a Terminated Participant shall have a vested interest in his
               Accrued Benefit (or, in the case of a Participant described in
               Section 3.05, that

                                     -57-

<PAGE>
 
               portion of his Accrued Benefit described in paragraph (3)(b) of
               such Section) if, while the Plan is a Top-Heavy Plan, his
               employment is terminated before death or Retirement after he has
               completed at least two (2) years of Service. The vested
               percentage shall be determined in accordance with the following
               table:

<TABLE> 
<CAPTION> 
                         Years of Service         Vested Percentage
                         ----------------         -----------------
                         <S>                      <C> 
                         2 but less than 3               20%
                         3 but less than 4               40%
                         4 but less than 5               60%
                         5 or more                      100%    
</TABLE> 

          (4)  Change in Top-Heavy Status.  If the Plan becomes a Top-Heavy Plan
               --------------------------
               and subsequently ceases to be such, the vesting schedule in
               paragraph (3) of this Section shall continue to apply with
               respect to any Participant who had at least three (3) years of
               Service as of March 31 in the last Plan Year of top-heaviness.
               For other Participants, said schedule shall apply only to their
               Accrued Benefits as of such March 31.

          (5)  Impact on Maximum Benefits.  For any Plan year in which the Plan
               --------------------------
               is a Top-Heavy Plan, Section 15.02 shall be read by substituting
               the number "1.00" for the number "1.25" wherever it appears
               therein; provided, however, that, where the Plan is not a "Super"
               Top-Heavy Plan (as defined in Section 416(h) (2) (B) of the
               Code), no such substitution shall occur if, for such Plan Year,
               the minimum benefits determined pursuant to paragraph (2) of this
               Section are determined by reference to 3%, in lieu of 2%, of
               average monthly compensation.

          (6)  "Compensation" Defined.  The term "Compensation" as used in this
               ----------------------
               Section 15.02 shall have the same meaning as that set forth in
               Section 15.02(1) (g) hereof.


                                  ARTICLE XVI
            
                                 MISCELLANEOUS
                                 ------------- 

16.01          Nonguarantee of Employment
               --------------------------

               Nothing contained in this Plan shall be construed as a contract
               of employment between an Employer and any Employee, or as a right
               of any Employee to be continued in the employment of an Employer,
               or as a limitation of the right of an Employer to discharge any
               of its Employees, with or without cause.

                                     -58-
<PAGE>
 
16.02     Rights to Trust Assets
          ----------------------

          No Employee shall have any right to or interest in any assets of the
          Trust Fund upon termination or his employment or otherwise, except as
          provided from time to time under this Plan and then only to the extent
          of the benefits payable under the Plan to such Employee out of the
          assets of the Trust Fund. Except as otherwise provided under Title IV
          of ERISA, all payments of benefits as provided for in this Plan shall
          be made solely out of the assets of the Trust Fund and none of the
          Specified Fiduciaries shall be liable therefore in any manner.

16.03     Nonalienation of Benefits
          -------------------------

          Except to the extent subject to a "qualified domestic relations
          order" as defined in Section 414(p) of the Code, benefits payable
          under this Plan shall not be subject in any manner to anticipation,
          alienation, sale, transfer, assignment, pledge, encumbrance, charge,
          garnishment, execution, or levy of any kind, either voluntary or
          involuntary, prior to actually being received by the person entitled
          to the benefit under the terms of the Plan, and any attempt to
          anticipate, alienate, sell, transfer, assign, pledge, encumber,
          charge, or otherwise dispose of any right to benefits payable
          hereunder, shall be void. The Trust Fund shall not in any manner be
          liable for, or subject to, the debts, contracts, liabilities,
          engagements or torts of any person entitled to benefits hereunder.

16.04     Release
          -------

          Distributions to a Participant or Beneficiary, except persons under
          legal disability, shall be made only to such Participant or
          Beneficiary upon his personal receipt or endorsement, and no interest
          in the Trust Fund, or any part thereof, shall be assignable in
          anticipation of payment, either by voluntary or involuntary act or by
          operation of law.

16.05     Certain Social Security Increases
          ---------------------------------

          In the case of a Participant, or the Beneficiary of a Participant, who
          is receiving benefits under this Plan, or in the case of a Terminated
          Participant who has a vested right to benefits hereunder, such
          benefits shall not be decreased by reason of any increase in the
          benefit levels payable under Title II of the Social Security Act or in
          the wage base under Title II; provided that such increase occurs after
          the date of the Participant's Severance from Service.

                                     -59-





<PAGE>
 
16.06     Titles, Gender and Number
          -------------------------

          Article, Section or other headings, as used in this Plan, do not
          constitute a part of this Plan and in no way alter the construction of
          the provisions hereof. Such headings are inserted merely for ease of
          reading and convenience of reference. Words used herein in the
          masculine gender include the feminine gender and vice versa, unless
          the context clearly indicates otherwise. Words used in the singular or
          in the plural include the plural or singular unless the context
          clearly indicates otherwise. The use of the words "herein," "hereof,"
          and other similar compounds of the word "here" shall mean and refer to
          the entire Plan and not to any particular provision or Section.

16.07     Construction
          ------------

          This Plan shall be construed, whenever possible, to be in conformity
          with the Code and with ERISA. To the extent not in conflict with the
          preceding sentence, the construction of this Plan shall be governed
          by, and its validity determined under, the laws of the State of Texas.
          In the event any provision hereof is declared invalid, all other
          provisions shall remain in effect.

16.08     Counterparts
          ------------

          This Plan may be executed in any number of counterparts, each of which
          shall constitute one and the same agreement.

16.09     Return of Contributions
          -----------------------

          Notwithstanding any provision to the contrary herein contained, and as
          expressly provided in Section 403(c) (2) of ERISA, upon an Employer's
          request, a contribution which was made by a mistake of fact, or
          conditioned upon the deductibility of the contribution under Section
          404 of such Code, shall be returned to the Employer within one (1)
          year after the payment of the contribution, or the disallowance of the
          deduction (to the extent disallowed), whichever is applicable.

16.10     Duplication of Benefits Prohibited
          ----------------------------------

          If a former Participant again becomes a Participant, no duplication of
          such Participant's benefit shall occur because of Credited Service he
          had completed prior to his most recent period of Credited Service.

                                     -60-








<PAGE>
 
     IN TESTIMONY WHEREOF, HALTER MARINE GROUP, INC. has caused this instrument 
to be executed in its name and on its behalf on this 21st day of October, 1996, 
effective as of October 1, 1996.

                                                  HALTER MARINE GROUP, INC.


                                                  By:       /s/ John Dane
                                                     ---------------------------
                                                  Title:  President & CEO
                                                        ------------------------

ATTEST:

/s/ Janice C. Rogers
-------------------------

                                     -61-
<PAGE>
 
     Joined by EQUITABLE SHIPYARDS, INC. on this 21st day of October, 1996, 
effective as of October 1, 1996.

                                             EQUITABLE SHIPYARDS, INC.


                                             By:     /s/ John Dane
                                                --------------------------------
                                             Title:  President & CEO
                                                   -----------------------------

ATTEST:

/s/ Janice C. Rogers
---------------------------

          
     Joined by GRETNA MACHINE & IRONWORKS, INC. on this 21st day of October,
1996, effective as of October 1, 1996.


                                             GRETNA MACHINE & IRONWORKS, INC. 


                                             By:     /s/ John Dane
                                                --------------------------------
                                             Title:  President & CEO
                                                   -----------------------------

ATTEST:

/s/ Janice C. Rogers
---------------------------


     Joined by GULF COAST FABRICATION, INC. on this 21st day of October, 1996,
effective as of October 1, 1996.


                                             GULF COAST FABRICATION, INC.


                                             By:     /s/ John Dane
                                                --------------------------------
                                             Title:  President & CEO
                                                   -----------------------------

ATTEST:

/s/ Janice C. Rogers
---------------------------

                                     -62-
<PAGE>
 
     Joined by HALTER MARINE, INC. on this 21st day of October, 1996, effective
as of October 1, 1996.

                                             HALTER MARINE, INC.


                                             By:     /s/ John Dane
                                                --------------------------------
                                             Title:  President & CEO
                                                   -----------------------------

ATTEST:

/s/ Janice C. Rogers
---------------------------

          
     Joined by HALTER MARINE SERVICES, INC. on this 21st day of October, 1996,
effective as of October 1, 1996.


                                             HALTER MARINE SERVICES, INC. 


                                             By:     /s/ John Dane
                                                --------------------------------
                                             Title:  President & CEO
                                                   -----------------------------

ATTEST:

/s/ Janice C. Rogers
---------------------------

     Joined by TRINITY GULF REPAIR, INC. on this 21st day of October, 1996,
effective as of October 1, 1996.


                                             TRINITY GULF REPAIR, INC. 


                                             By:     /s/ John Dane
                                                --------------------------------
                                             Title:  President & CEO
                                                   -----------------------------


ATTEST:

/s/ Janice C. Rogers
-----------------------------

                                     -63-
<PAGE>
 

     Joined by TRINITY MARINE GULFPORT, INC. on this 21st day of October, 1996,
effective as of October 1, 1996.

                                        TRINITY MARINE GULFPORT, INC.

                                        
                                        By: /s/ John Dane
                                            ----------------------------------
                                        Title:  PRESIDENT & CEO
                                              --------------------------------


ATTEST:


/s/ Janice C. Rogers 
-----------------------------


     Joined by TRINITY MARINE PANAMA CITY, INC. on this 21st day October, 1996,
                                                        ----     -------       
effective as of October 1, 1996.

                                        TRINITY MARINE PANAMA CITY, INC.


                                        By:/s/ John Dane
                                           ------------------------------------
                                        Title: PRESIDENT & CEO
                                              ---------------------------------


ATTEST:

/s/ Janice C. Rogers
-----------------------------


     Joined by TRINITY MARINE PASCAGOULA, INC. on this 21st day of October,
1996, effective as of October 1, 1996.

                                        TRINITY MARINE PASCAGOULA, INC.


                                        By:/s/ John Dane
                                           ------------------------------------
                                        Title: PRESIDENT & CEO
                                              ---------------------------------


ATTEST:

/s/ Janice C. Rogers
-----------------------------

                                     -64-
<PAGE>
 
     Joined by TRINITY YACHTS, INC. on this 21st day of October, 1996, effective
                                            ---         -------
as of October 1, 1996.

                                        TRINITY YACHTS, INC.


                                        By: /s/ John Dane
                                           ------------------------------------
                                        Title: PRESIDENT & CEO
                                              ---------------------------------


ATTEST:

/s/ Janice C. Rogers
-----------------------------


     Joined by WASHINGTON MARINE FABRICATORS, INC. on this 21st day of October,
                                                           ----        ------- 
1996, effective as of October 1, 1996.

                                        WASHINGTON MARINE FABRICATORS, INC.


                                        By: /s/ John Dane
                                           ------------------------------------
                                        Title: PRESIDENT & CEO
                                              ---------------------------------


ATTEST:

/s/ Janice C. Rogers
-----------------------------

                                     -65-
<PAGE>
 
THE STATE OF Mississippi  (S)
             ------------
                          (S)
COUNTY OF    Jackson      (S)
             ------------

     This instrument was acknowledged before me on the 21st day of October, 
1996, by John Dane III, President & CEO of HALTER MARINE GROUP, INC., a
Delaware corporation, on behalf of said corporation.


                                                  /s/ DeVeta Elaine Morris
                                                  ----------------------------
                                                  Notary Public in and for the
                                                  State of Mississippi

My Commission Expires:

[NOTARY STAMP APPEARS HERE]




THE STATE OF Mississippi  (S)
             ------------
                          (S)
COUNTY OF    Jackson      (S)
             ------------

     This instrument was acknowledged before me on the 21st day of October, 
1996, by John Dane III, President & CEO of EQUITABLE SHIPYARDS, INC., a
Louisiana corporation, on behalf of said corporation.


                                                  /s/ DeVeta Elaine Morris
                                                  ----------------------------
                                                  Notary Public in and for the
                                                  State of Mississippi

My Commission Expires:

[NOTARY STAMP APPEARS HERE]

                                     -66-
<PAGE>
 
THE STATE OF Mississippi  (S)
             ------------
                          (S)
COUNTY OF    Jackson      (S)
             ------------

     This instrument was acknowledged before me on the 21st day of October, 
1996, by John Dane III, President & CEO of GRETNA MACHINE & IRONWORKS., a 
Louisiana on behalf of said corporation.


                                                  /s/ DeVeta Elaine Morris
                                                  ----------------------------
                                                  Notary Public in and for the
                                                  State of Mississippi

My Commission Expires:

[NOTARY STAMP APPEARS HERE]




THE STATE OF Mississippi  (S)
             ------------
                          (S)
COUNTY OF    Jackson      (S)
             ------------

     This instrument was acknowledged before me on the 21st day of October, 
1996, by John Dane III, President & CEO of GULF COAST FRABRICATION, INC., a
Mississippi corporation, on behalf of said corporation.

Mississippi corporation, on behalf of said corporation.


                                                  /s/ DeVeta Elaine Morris
                                                  ----------------------------
                                                  Notary Public in and for the
                                                  State of Mississippi

My Commission Expires:

[NOTARY STAMP APPEARS HERE]

                                     -67-
<PAGE>
 
 
THE STATE OF Mississippi  (S)
             ------------
                          (S)
COUNTY OF    Jackson      (S)
             ------------

     This instrument was acknowledged before me on the 21st day of October, 
1996, by John Dane III, President & CEO of HALTER MARINE, INC., a Louisiana
corporation, on behalf of said corporation.


                                                  /s/ DeVeta Elaine Morris
                                                  ----------------------------
                                                  Notary Public in and for the
                                                  State of Mississippi

My Commission Expires:

[NOTARY STAMP APPEARS HERE]




THE STATE OF Mississippi  (S)
             ------------
                          (S)
COUNTY OF    Jackson      (S)
             ------------

     This instrument was acknowledged before me on the 21st day of October, 
1996, by John Dane III, President & CEO of HALTER MARINE SERVICES, INC., a
Mississippi corporation, on behalf of said corporation.


                                                  /s/ DeVeta Elaine Morris
                                                  ----------------------------
                                                  Notary Public in and for the
                                                  State of Mississippi

My Commission Expires:

[NOTARY STAMP APPEARS HERE]

                                     -68-
<PAGE>
 
THE STATE OF Mississippi  (S)
             ------------
                          (S)
COUNTY OF    Jackson      (S)
             ------------

     This instrument was acknowledged before me on the 21st day of October, 
1996, by John Dane III, President & CEO of TRINITY GULF REPAIR, INC., a
Delaware corporation, on behalf of said corporation.


                                                  /s/ DeVeta Elaine Morris
                                                  ----------------------------
                                                  Notary Public in and for the
                                                  State of Mississippi

My Commission Expires:

[NOTARY STAMP APPEARS HERE]




THE STATE OF Mississippi  (S)
             ------------
                          (S)
COUNTY OF    Jackson      (S)
             ------------

     This instrument was acknowledged before me on the 21st day of October, 
1996, by John Dane III, President & CEO of TRINITY MARINE GULFPORT, INC., a
Nevada corporation, on behalf of said corporation.


                                                  /s/ DeVeta Elaine Morris
                                                  ----------------------------
                                                  Notary Public in and for the
                                                  State of Mississippi

My Commission Expires:

[NOTARY STAMP APPEARS HERE]

                                     -69-
<PAGE>
 
THE STATE OF Mississippi (S)
             -----------  
                         (S)
COUNTY OF    Jackson     (S) 
             -----------  

     This instrument was acknowledged before my on the 21st day of October,
1996, by John Dane III President & CEO of TRINITY MARINE PANAMA CITY, INC.,
a Delaware corporation, on behalf of said corporation.

                                               /s/ DeVeta Elaine Morris
                                               ----------------------------
                                               Notary Public in and for the 
                                               State of Mississippi
                                               
My Commission Expires:

[NOTARY STAMP APPEARS HERE]


 
THE STATE OF Mississippi (S)
             -----------  
                         (S)
COUNTY OF    Jackson     (S) 
             -----------  

     This instrument was acknowledged before my on the 21st day of October,
1996, by John Dane III, President & CEO of TRINITY MARINE PASCAGOULA, INC.,
a Delaware corporation, on behalf of said corporation.

                                               /s/ DeVeta Elaine Morris
                                               ----------------------------
                                               Notary Public in and for the 
                                               State of Mississippi
                                               
My Commission Expires:

[NOTARY STAMP APPEARS HERE]

                                     -70-
<PAGE>
 
THE STATE OF Mississippi (S)
             -----------  
                         (S)
COUNTY OF    Jackson     (S) 
             -----------  

     This instrument was acknowledged before me on the 21st day of October,
1996, by John Dane III President & CEO of TRINITY YACHTS INC., a Delaware
corporation, on behalf of said corporation.

                                               /s/ DeVeta Elaine Morris
                                               ----------------------------
                                               Notary Public in and for the 
                                               State of Mississippi
                                               
My Commission Expires:

[NOTARY STAMP APPEARS HERE]


 
THE STATE OF Mississippi (S)
             -----------  
                         (S)
COUNTY OF    Jackson     (S) 
             -----------  

     This instrument was acknowledged before my on the 21st day of October,
1996, by John Dane III President & CEO of WASHINGTON MARINE FABRICATORS, INC.,
a Washington corporation, on behalf of said corporation.

                                               /s/ DeVeta Elaine Morris
                                               ----------------------------
                                               Notary Public in and for the 
                                               State of Mississippi
                                               
My Commission Expires:

[NOTARY STAMP APPEARS HERE]

                                     -71-