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                                                                   Exhibit 10(i)


                                 ROYAL APPLIANCE
                                401(K) PLUS PLAN

                                                        EFFECTIVE:  JULY 1, 1996


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                                401(K) PLUS PLAN

     This Plan is hereby adopted on this ___ day of June, 1996, effective July
1, 1996, by ROYAL APPLIANCE MFG. CO. (the "Company"), on its behalf and on
behalf of certain of its subsidiaries and affiliated companies which are
Participating Employers hereunder.

I. NAME AND PURPOSE

       1.1.   NAME. The name of this Plan shall be the ROYAL APPLIANCE 401(K)
              PLUS PLAN.

       1.2.   PURPOSE. This Plan is hereby established to provide unfunded
              deferred compensation to certain management and highly compensated
              employees of the Company and other Participating Employers under
              certain conditions specified herein.

       1.3.   PLAN FOR A SELECT GROUP. This Plan shall only cover employees of a
              Participating Employer who are members of a "select group of
              management or highly compensated employees" as provided in
              Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of ERISA.
              This Plan shall be administered in such a manner, and benefits
              hereunder shall be so limited, notwithstanding any contrary
              provision of this Plan, that this Plan shall constitute such a
              plan.

       1.4.   NOT A FUNDED PLAN. It is the intention and purpose of the Company
              that this Plan shall be deemed to be "unfunded" for tax purposes
              as well as being such a plan as would properly be described as
              "unfunded" for purposes of Title I of ERISA. This Plan shall be
              administered in such a manner, notwithstanding any contrary
              provision of this Plan, that it will be so deemed and would be so
              described.

II. DEFINITIONS

       2.1.   "ACCOUNTS" mean the Participants' Elective Accounts and Match
              Accounts maintained on the books of a Participating Employer for a
              Participant under this Plan. A Participant's Accounts shall not
              constitute or be treated as a trust fund of any kind.

       2.2.   "ADMINISTRATOR" means the person, persons, corporation,
              partnership or other entity designated as Administrator under
              Section 7.1.

       2.3.   "AGREEMENT" means the 401(k) Plus Plan Deferral Agreement(s)
              executed between a Participant, the Company, 



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              and the Participant's Participating Employer (if other than the 
              Company) whereby a Participant agrees to defer a portion of his
              Compensation, Salary, Bonus or other remuneration pursuant to the
              provisions of the Plan, and his Participating Employer agrees to
              make benefit payments in accordance with the provisions of the
              Plan.

       2.4.   "APPEALS COMMITTEE" means the Appeals Committee established
              pursuant to Article VII.

       2.5.   "BENEFICIARY" means the person, persons or entity so designated,
              or deemed to be so designated, by a Participant pursuant to
              Section 4.10.

       2.6.   "BOARD OF DIRECTORS" means the Board of Directors of the Company.

       2.7.   "BONUS" means gross monies payable from a Participating Employer
              under a pay incentive plan unreduced by any amounts deferred under
              the Retirement Savings Plan or this Plan. In all respects, the
              amount of Bonus shall be determined in accordance with the
              information contained in the payroll records of the Company and
              its subsidiaries and affiliated companies.

       2.8.   "CODE" means the Internal Revenue Code of 1986, as amended and any
              lawful regulations or other pronouncements promulgated thereunder.

       2.9.   "COMPANY" means Royal Appliance Mfg. Co, and any successor
              corporation or business organization which shall assume the duties
              and obligations of Royal Appliance Mfg. Co. under this Plan.

       2.10.  "COMPENSATION" means for any Participant his Compensation under
              the Retirement Savings Plan, except that such amount shall not be
              subject to the limitation on the annual compensation which may be
              taken into account under the Retirement Savings Plan pursuant to
              Section 401(a)(17) of the Code. In all respects, the amount of
              Compensation shall be determined in accordance with the
              information contained in the payroll records of the Company and
              its subsidiaries and affiliated companies.

       2.11.  "DETERMINATION DATE" means the last day of each calendar quarter,
              and with respect to each Participant's Retirement Savings Plan
              Contribution Amount, either the transfer date of such amount as
              set forth in Section 3.11 below or the date of distribution of
              such amount as set forth in Section 4.1 below.

       2.12.  "DISABILITY" shall have the same meaning as the phrase "Total and
              Permanent Disability" under the Retirement Savings Plan.

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       2.13.  "EFFECTIVE DATE" means the date this Plan shall become effective
              which date shall be July 1, 1996.

       2.14.  "ELECTION YEAR" means the period from the Effective Date through
              December 31, 1996 and any calendar year thereafter.

       2.15.  "ELECTIVE AMOUNT" means for each Participant an amount equal to
              the amount by which his Compensation, Salary, Bonus or other
              remuneration are reduced pursuant to Section 3.4 hereof.

       2.16.  "ENTRY DATE" means, with respect to any Participant with respect
              to any Election Year, the beginning of such Election Year or, if,
              pursuant to Section 3.2, such Participant first participates for
              such Deferral Year as of July 1, then July 1 of such Election
              Year.

       2.17.  "ERISA" means the Employee Retirement Income Security Act of 1974,
              as amended and any lawful regulations or other pronouncements
              promulgated thereunder.

       2.18.  "MATCH ACCOUNTS" mean for each Participant the bookkeeping account
              maintained by his Participating Employer on his behalf to reflect
              his Match Amounts for an Election Year and all earnings, gains and
              losses thereon.

       2.19.  "MATCH AMOUNTS" mean for each Participant the amounts credited to
              a Match Account on behalf of such Participant pursuant to Section
              3.6 which match a portion of his Elective Amounts.

       2.20.  "NORMAL RETIREMENT DATE" means the date a Participant attains age
              65.

       2.21.  "PARTICIPANT" means an employee of a Participating Employer who is
              designated to be an eligible employee pursuant to Section 3.1 who
              enters into an Agreement, and who has commenced Compensation,
              Salary, Bonus or other remuneration reductions pursuant to such
              Agreement. A Participant shall cease to be a Participant, and
              shall become a former Participant, upon the earlier of his
              Termination of Employment and the date the employee ceases to be
              designated by the Company to be eligible to participate. However,
              the word Participant may also include, where the context
              indicates, any former Participant in this Plan.

       2.22.  "PARTICIPANT ELECTIVE ACCOUNT" means for each Participant the
              bookkeeping account maintained by his Participating Employer on
              his behalf to reflect his Elective Amounts for an Election Year
              and all earnings, gains and losses thereon.

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       2.23.  "PARTICIPATING EMPLOYER" means the Company and such subsidiaries
              and affiliated companies of the Company which participate in the
              Plan with the consent of the Board of Directors.

       2.24.  "PLAN" means the Royal Appliance 401(k) Plus Plan as set forth in
              this instrument, as amended from time to time.

       2.25.  "RETIREMENT SAVINGS PLAN" means the Royal Appliance 401(k)
              Retirement Savings Plan, as amended from time to time.

       2.26.  "RETIREMENT SAVINGS PLAN CONTRIBUTION AMOUNT" means with respect
              to each Participant the lesser of:

              (a)    the amount that is permitted to be made to the Retirement
                     Savings Plan for an Election Year on behalf of each
                     Participant as a Participant's salary reduction election
                     deemed to be an Employer's Elective Contribution in excess
                     of any such amounts already contributed for such Election
                     Year on behalf of such Participant taking into account any
                     limitations under the Retirement Savings Plan as determined
                     by the Company for such Election Year;

              (b)    the Elective Amount contributed by a Participant to this
                     Plan for such Election Year pursuant to Section 3.4 below;
                     or

              (c)    the value on the date of transfer as set forth in Section
                     3.11 below to the Retirement Savings Plan of the Elective
                     Amount contributed by a Participant to this Plan for such
                     Election Year pursuant to Section 3.4 below.

       2.27.  "RETIREMENT SAVINGS PLAN TRANSFER AMOUNT" means an amount equal to
              (a) plus (b) where:

              (a)    equals a Participant's Retirement Savings Plan Contribution
                     Amount; and

              (b)    the percentage, if any, as determined by the Company under
                     the Retirement Savings Plan, of the amount set forth in
                     paragraph (a) above that is permitted to be made to the
                     Retirement Savings Plan as a matching contribution for such
                     Participant taking into account any limitations under the
                     Retirement Savings Plan as determined by the Company for
                     the appropriate Election Year.

       2.28.  "SALARY" means the Participant's gross base salary, unreduced by
              any amounts deferred under the Retirement Savings Plan or this
              Plan, payable during a calendar year. In all respects, the amount
              of Salary shall be

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              determined in accordance with the information contained in the
              payroll records of the Company and its subsidiaries and affiliated
              companies.

       2.29.  "TERMINATION OF EMPLOYMENT" means the Participant's cessation of
              his service with a Participating Employer for any reason
              whatsoever, whether voluntarily or involuntarily, including by
              reason of retirement, death, or Disability.

       2.30.  "TRUST" means any trust established pursuant to Article VI hereof.

       2.31.  "YEARS OF SERVICE" means a Participant's period of continuous
              employment with the Company and a Participating Employer
              commencing on his most recent date of hire and ending on his
              Termination of Employment.

III. PARTICIPATION, COMPENSATION REDUCTIONS AND ACCOUNTS

       3.1.   ELIGIBILITY. An employee of a Participating Employer shall be
              eligible to participate in the Plan for any Election Year if the
              employee is designated by the Company to qualify as a member of a
              "select group of management or highly compensated employees" as
              provided in Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6)
              of ERISA for such Election Year and as a "highly compensated
              employee" as provided in Section 414(q) of the Code for such
              Election Year.

       3.2.   PARTICIPATION. Each employee who has satisfied the eligibility
              requirements set forth in Section 3.1 shall become a Participant
              and actively participate for an Election Year by completing and
              filing an Agreement described in Section 3.3 with his
              Participating Employer prior to the first day of the Election Year
              (June 30, 1996, in the case of the initial Election Year). In the
              event an employee first meets such eligibility requirements after
              the beginning of a Election Year, such employee may become a
              Participant and actively participate for the period commencing on
              the first day of the month coincident with or after which he meets
              the eligibility requirements until the end of such Election Year
              by completing and filing an Agreement described in Section 3.3
              with his Participating Employer prior to the first day of such
              month. Such Agreement shall contain such provisions as the Company
              shall require and shall otherwise be in such form as the
              Administrator shall determine.

       3.3.   DEFERRAL ELECTIONS UNDER AN AGREEMENT. With respect to each
              Election Year, each eligible employee may elect, under his
              Agreement for such Election Year, to make one

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              or more of the deferrals described below for which he is eligible.

              (a)    Salary Deferral: Each eligible employee may defer a whole
                     percentage of up to 100% of the Salary for the Election
                     Year which is payable each payroll period commencing on or
                     after such employee's Entry Date.

              (b)    Bonus Deferral: (1) Each eligible employee may defer up to
                     100% of his Bonus otherwise payable thereunder (to the
                     extent payable after his Entry Date) in 1% increments.

              (c)    Retirement Savings Plan Deferral: Each eligible employee
                     may defer all or a portion of his Retirement Savings Plan
                     Contribution Amount.

              (d)    Other Deferrals: In addition, the Administrator, with the
                     consent of the Company, may establish procedures to permit
                     some or all Participants to elect to make additional or
                     other deferrals of their Compensation, Salary, Bonus or
                     other remuneration. Such elections must be made at least a
                     reasonable time, as determined by the Company in its sole
                     discretion, prior to the time any such deferred amounts
                     would otherwise be payable to such Participants. Any such
                     other deferral shall be evidenced by an Agreement in a form
                     acceptable to the Administrator.

      3.4. COMPENSATION REDUCTIONS AND DEFERRAL AMOUNTS.

              (a)    A Participant's election to defer pursuant to 3.3(a) shall
                     cause an equivalent reduction in the Participant's Salary
                     at the time such Salary would otherwise be payable.

              (b)    A Participant's election to defer pursuant to 3.3(b) shall
                     cause an equivalent reduction in the Participant's Bonus at
                     the time such Bonus would otherwise be payable.

              (c)    A Participant's election to defer pursuant to 3.3(c) shall
                     cause his Retirement Savings Plan Contribution Amount to be
                     transferred to the Retirement Savings Plan pursuant to
                     Section 3.11 below instead of such amount being paid to
                     such Participant pursuant to Section 4.1 below.

              (d)    A Participant's election to defer in accordance with 3.3(d)
                     shall cause an equivalent reduction in the Participant's
                     Compensation, Salary, Bonus or other remuneration at the
                     time such amounts would otherwise be payable.

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              An amount equal to such reductions in a Participant's
              Compensation, Salary, Bonus and other remuneration pursuant to
              (a), (b) and (d) above shall constitute an Elective Amount
              hereunder and shall be credited to such Participant's Elective
              Account as of the time of such reductions.

       3.5.   ALTERATION OF DEFERRALS. A Participant's deferral election made
              pursuant to Section 3.3 above shall be irrevocable except that in
              the event that the Participant has received a distribution on
              account of an unforeseeable financial emergency pursuant to
              Section 4.2, the Administrator may, at its option, discontinue the
              Participant's deferrals for the remainder of the then current
              Election Year, and preclude the Participant from making any
              deferrals for all or part of the succeeding Election Year.

       3.6.   MATCH AMOUNTS. In the event that a Participant has elected to make
              deferrals under Section 3.3 above then, for each Election Year,
              his Participating Employer shall credit his Match Account with an
              amount equal to the same amount that would have been allocated to
              the Participant's account under the Retirement Savings Plan for
              such Election Year, computed as provided therein, but without
              regard to the limitations of Code Sections 401(a)(17), 401(k)(3),
              401(m)(2) and 415. Notwithstanding the foregoing, a Participant
              under this Plan who is not a participant under the Retirement
              Savings Plan shall be entitled to a Match Amount under this Plan
              only with respect to deferrals made under this Plan commencing on
              the date that he first becomes eligible to participate in the
              Retirement Savings Plan.

       3.7.   ESTABLISHMENT OF ACCOUNTS. Each Participating Employer shall
              establish a Participant Elective Account and a Match Account in
              the name of each Participant who is employed by it on the books
              and records of such Participating Employer. All amounts so
              credited to the Accounts of any Participant or former Participant
              shall constitute a general, unsecured liability of such
              Participating Employer to such person.

       3.8.   ALLOCATION OF ELECTIVE AMOUNTS AND MATCHING AMOUNTS. At the time a
              Participant's Compensation, Salary, Bonus or other remuneration
              are reduced pursuant to Section 3.4 hereof, the Participating
              Employer employing such Participant shall credit the Participant
              Elective Account of such Participant with the Participant's
              Elective Amount with respect to such Compensation, Salary, Bonus
              or other remuneration, respectively. At the end of each calendar
              month, such Participating Employer shall credit each Participant's
              Match Account with his Match Amount for such calendar month, if
              any.


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       3.9.   CREDITING OF EARNINGS. Each Participating Employer shall credit
              each Account of each Participant who is an employee for it with
              earnings, gains and losses under one of the following methods, as
              determined by the Company:

              (a)    crediting earnings, gains and losses on such Account as if
                     an amount equal to the Participant's Account balance had
                     been invested in accordance with any investment directions
                     the Company permits such Participant to make pursuant to
                     Section 6.4 hereof;

              (b)    crediting earnings, gains and losses on such Account as if
                     an amount equal to the Participant's Account balance had
                     been invested in the same manner as the assets of any Trust
                     established under Section 6.1 hereunder; or

              (c)    in such other manner as the Company may determine.

       3.10.  DETERMINATION OF ACCOUNT. The balance of each Participant's
              Accounts as of each Determination Date shall be calculated as
              follows, using the terms and methods in the order defined below:

              (a)    Earnings, gains and losses determined pursuant to Section
                     3.9 shall be allocated based on the Participant's Adjusted
                     Account. A Participant's Adjusted Account is equal to the
                     Participant's Account as of the prior Determination Date,
                     plus transfers posted into the investment fund, plus 50% of
                     Elective and Match Amounts, less transfers posted out of
                     the investment fund, less forfeitures, and less
                     distributions, which occurred after the prior Determination
                     Date and up through and including the current Determination
                     Date.

              (b)    In the event that a Participant receives an Emergency
                     Benefit pursuant to Section 4.4 below, the Participant's
                     Adjusted Account will be reduced by the Weighted
                     Distribution Amount instead of the full distribution
                     amount. The Weighted Distribution Amount shall be equal to
                     the Emergency Benefit multiplied by the ratio of the number
                     of days that have elapsed between the Emergency Benefit
                     payment date and the current Determination Date, to 90. In
                     no event shall the ratio exceed 1.0.

       3.11.  RETIREMENT SAVINGS PLAN TRANSFER AMOUNT. On a date determined by 
              the Company which shall be on or before the March 15 after the
              end of an Election Year, each Participating Employer shall
              transfer from this Plan to the Retirement Savings Plan an amount
              credited to the Accounts of a Participant hereunder who is an
              eligible

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              participant in the Retirement Savings Plan on the last day of such
              Election Year and who has made a Retirement Savings Plan Deferral
              election for such Election Year equal to the Retirement Savings
              Plan Transfer Amount. The amount of such Retirement Savings Plan
              Transfer Amount attributable to Elective Amounts shall be debited
              against the Participant Elective Account of the Participant and
              the amount attributable to Match Amounts shall be debited against
              the Participant's Match Account.

IV. BENEFITS

       4.1.   DISTRIBUTION OF RETIREMENT SAVINGS PLAN CONTRIBUTION. On or before
              the March 15 after an Election Year, a Participating Employer
              shall pay to a Participant his Retirement Savings Plan
              Contribution Amount in a lump sum; provided, however, that such
              payment shall not be made in the event that a Participant has made
              a Retirement Savings Plan Deferral election pursuant to Section
              3.3(c) above to have his Retirement Savings Plan Contribution
              Amount transferred to the Retirement Savings Plan in accordance
              with Section 3.11 above.

       4.2.   IN-SERVICE DISTRIBUTION. A Participant who is in the active employ
              of the Company may request to withdraw all or a portion of his
              Accounts, provided that any such amounts have been credited to his
              Accounts for two (2) or more calendar years at the time of
              distribution. Such request shall be made in writing in a form and
              manner specified by the Company and must specify the amounts to be
              withdrawn and the date upon which such amounts shall be paid which
              must be as soon as administratively possible following a
              Determination Date that is at least one (1) year after the date on
              which the request is made. Any such request shall be irrevocable
              unless, prior to payment, the Participant has a Termination of
              Employment, dies, or becomes disabled, at which time the request
              shall become null and void and the Participant's Accounts shall be
              paid as provided in Section 4.5, 4.6, 4.7, 4.8 or 4.9 hereof,
              whichever shall be applicable.

       4.3.   PARTICIPANT CALL PROVISION. A Participant (or the Participant's
              Beneficiary in the case of the death of the Participant) at any
              time may request an accelerated distribution of all or a portion
              of the amounts credited to his Accounts except those amounts that
              have been contributed during the Election Year when such request
              is made, subject to the forfeiture of an amount equal to ten
              percent (10%) of such accelerated amount. Such request shall be
              made in writing in a form and manner specified by the Company. The
              Company shall distribute to the Participant or Beneficiary such
              accelerated amount in the form of a lump sum as soon as
              administratively possible after the Determination Date that
              coincides with or is

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              immediately after the date on which the Company receives the
              request. Such distribution shall completely discharge the Company
              from all liability with respect to the Participant's or
              Beneficiary's Accounts or portion thereof that is either
              distributed or forfeited as set forth herein. Further, if the
              Participant is in the active employ of the Company at the time of
              the distribution, the Participant may not make any further
              deferrals into the Plan until January 1 of the second calendar
              year following the calendar year in which the Participant receives
              the distribution.

       4.4.   EMERGENCY BENEFIT. In the event that the Administrator, upon
              written petition of the Participant or his Beneficiary, determines
              in its sole discretion, that the Participant or his Beneficiary
              has suffered an unforeseeable financial emergency, a Participating
              Employer shall pay to the Participant or his Beneficiary as soon
              as practicable following such determination, an amount, not in
              excess of the Participant's Accounts necessary to satisfy the
              emergency, excluding, however, those amounts that have been
              contributed during the Election Year when such unforeseeable
              financial emergency occurs. The Administrator may, if it decides
              in its sole discretion that it is necessary to do so, pay a
              portion of an amount distributable under this Section 4.4 based
              upon the value of the Participant's Accounts as of the immediately
              prior Determination Date and the balance of such amounts as soon
              as administratively possible after the Determination Date that
              coincides with or is immediately after the final determination
              that an amount is payable under this Section 4.4. For purposes of
              this Plan, an unforeseeable financial emergency is an
              unanticipated emergency that is caused by an event beyond the
              control of the Participant or Beneficiary and that would result in
              severe financial hardship to the individual if the emergency
              distribution were not permitted, as may result from illness,
              casualty loss or sudden financial reversal. Cash needs arising
              from foreseeable events, such as the purchase of a residence or
              education expenses for children shall not be considered the result
              of an unforeseeable financial emergency.

       4.5.   SHORT SERVICE TERMINATION BENEFIT. Upon the Termination of
              Employment of a Participant, for reasons other than death or
              Disability, before the date that he has completed five (5) Years
              of Service, he shall be entitled to receive a distribution of the
              balance of his Accounts. Unless otherwise directed by the
              Administrator, this termination benefit shall be payable in a lump
              sum as soon as administratively as possible after the December
              31st of the calendar year in which his Termination of Employment
              occurs.


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       4.6.   LONG SERVICE TERMINATION BENEFIT. Upon the Termination of
              Employment of a Participant, for reasons other than death or
              Disability, on or after the date that he has completed at least
              five (5) Years of Service, he shall be entitled to receive a
              distribution of the balance of his Accounts. Such distribution
              shall be in the form of benefit provided in Section 4.10 and shall
              be paid or commence to be paid as soon as administratively
              possible after a Determination Date that is at least one (1) year
              after the date on which such a Participant makes a written request
              for distribution; provided, however, that such payment or
              commencement date shall in no event be later than a date which is
              as soon as administratively possible after the January 1st
              coinciding with or immediately after the later of either the
              Participant's Normal Retirement Date or his date of actual
              retirement.

       4.7.   DEATH PRIOR TO BENEFIT COMMENCEMENT. Upon the Participant's death
              prior to commencement of benefits hereunder, the Beneficiary of
              the deceased Participant shall be entitled to a death benefit
              equal to the balance of the Participant's Accounts. Such
              distribution shall be in the form of benefit determined under
              Section 4.10, shall commence as of the date determined under
              Section 4.11 and shall be in lieu of all other benefits under this
              Plan.

       4.8.   DEATH SUBSEQUENT TO BENEFIT COMMENCEMENT. Upon the death of a
              Participant subsequent to commencement of his benefits, the
              Beneficiary of the deceased Participant shall be entitled to
              receive a distribution of the Participant's remaining Accounts.
              Such distribution shall be in the form of benefit determined under
              Section 4.10, shall commence as of the date determined under
              Section 4.11 and shall be in lieu of all other benefits under this
              Plan.

       4.9.   DISABILITY. In the event the Administrator has determined that the
              Participant has incurred a Termination of Employment due to a
              Disability of at least six months duration which first manifests
              itself after the Effective Date and prior to his Normal Retirement
              Date, a disabled Participant shall be entitled to receive a
              distribution of the balance of his Accounts. Such distribution
              shall be in the form of benefit determined under Section 4.10 and
              shall commence as of the date determined under Section 4.11;
              provided, however, that the payment or commencement date shall not
              be later than a date which is as soon as administratively possible
              after the Determination Date coinciding with or immediately
              following the Participant's Normal Retirement Date.


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       4.10.  FORM AND AMOUNT OF BENEFIT PAYMENT.

              (a)    Subject to such rules, procedures, limits and restrictions
                     as the Administrator may establish from time to time, a
                     Participant, may elect that distributions payable under
                     Sections 4.6, 4.7, 4.8 and 4.9 shall be made in a single
                     sum or in the form of annual installments over a period of
                     no less than two (2) calendar years and no more than ten
                     (10) calendar years.

              (b)    Initially, the amount of any installments under any
                     installment form of payment shall be equal to the balance
                     of the Accounts to be distributed divided by the number of
                     installments to be paid. The amount of the installment
                     payments shall be recomputed annually and the installment
                     payments shall be increased or decreased to reflect any
                     changes in the Accounts due to fluctuations in earnings,
                     gains and losses on the remaining balance and the number of
                     remaining installments.

              (c)    In the event of the death of the Participant, as described
                     in Sections 4.7 or 4.8, the Participant's Beneficiary may,
                     with the consent of the Administrator, request an
                     alternative form of benefit payment, such as a lump-sum
                     payment or an installment form with an installment period
                     of less than ten (10) years. Such request shall be made in
                     accordance with such procedures as the Administrator may
                     establish. Any such procedures shall either require such
                     request be made a reasonable period of time, as determined
                     by the Company in its sole discretion, before the amounts
                     affected by such a request shall be distributable, or
                     require a forfeiture of a significant portion of such
                     amounts. The Administrator may, but is not required to,
                     grant any such requests.

              (d)    The Administrator, with the consent of the Company, may
                     establish procedures to permit some or all Participants to
                     request to change their prior elections regarding the form
                     of their benefit payments hereunder, provided that any such
                     procedures shall either require such request be made a
                     reasonable period of time, as determined by the Company in
                     its sole discretion, before the amounts affected by such
                     request shall be distributable, or require a forfeiture of
                     a significant portion of such amounts. The Administrator
                     may, but is not required to, grant any such requests.

              (e)    Notwithstanding anything in this Section IV to the
                     contrary, in no event shall any distribution under

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                     Section 4.2, 4.3 or 4.4 hereunder be less than the lesser
                     of One Thousand Dollars ($1,000.00) or the entire balance
                     of the Participant's Accounts hereunder.

       4.11.  COMMENCEMENT OF PAYMENTS.

              (a)    Except as otherwise provided, commencement of payments
                     under this Plan shall be as soon as administratively
                     possible following receipt of notice by the Administrator
                     of an event which entitles a Participant or a Beneficiary
                     to payments under this Plan. All payments shall be made as
                     of the first day of the month.

              (b)    Subject to such rules, procedures, limits and restrictions
                     as the Administrator may establish from time to time, a
                     Participant may elect that any single sum distributions
                     payable under this Article IV be made as soon as
                     administratively possible after the start of any calendar
                     year after the event permitting payment.

              (c)    In the event of the death of the Participant, as described
                     in Sections 4.7 or 4.8, the Participant's Beneficiary may,
                     with the consent of the Administrator, request to change
                     the time of commencement of benefits hereunder. Such
                     request shall be made in accordance with such procedures as
                     the Administrator may establish. Any such procedures shall
                     either require such request be made a reasonable period of
                     time, as determined by the Company in its sole discretion,
                     before the amounts affected by such a request shall be
                     distributable, or require a forfeiture of a significant
                     portion of such amounts. The Administrator may, but is not
                     required to, grant any such requests.

              (d)    The Administrator, with the consent of the Company, may
                     establish procedures to permit some or all Participants to
                     request to change their prior elections regarding the time
                     of commencement of benefits hereunder, provided that any
                     such procedures shall either require that the request be
                     made a reasonable period of time, as determined by the
                     Company in its sole discretion, before the amounts affected
                     by such request shall be distributable, or require a
                     forfeiture of a significant portion of such amounts. The
                     Administrator may, but is not required to, grant any such
                     requests.

       4.12.  DESIGNATION OF BENEFICIARY. Subject to rules and procedures
              promulgated by the Administrator, a

                                       13


<PAGE>   15



              Participant may sign a document designating a Beneficiary or
              Beneficiaries. In the event that a Participant fails to designate
              any Beneficiary in accordance with the provisions of this Section,
              he shall be deemed to have designated his spouse, or if no spouse
              is then living, his estate, as his Beneficiary.

       4.13.  PROTECTIVE DISTRIBUTIONS. In the event that the Administrator
              determines, in its sole discretion, that a Participant is not, or
              may not be, a member of a "select group of management or highly
              compensated employees" within the meaning of Sections 201(2),
              301(a)(3), 401(a)(1) or 4021(b)(6) of ERISA or a "highly
              compensated employee" within the meaning of Section 414 (q) of the
              Code, then the Administrator may, in its sole discretion,
              terminate such Participant's participation in this Plan, and
              distribute all amounts credited to such Participant's Accounts in
              a single lump sum payment. Any such distribution shall be made at
              such time as the Administrator determines in its sole discretion.

       4.14.  TAX WITHHOLDING. A Participating Employer may withhold from any
              payment made by it under the Plan of such amount or amounts as may
              be required for purposes of complying with the tax withholding or
              other provisions of the Code or the Social Security Act or any
              state or local income or employment tax act or for purposes of
              paying any estate, inheritance or other tax attributable to any
              amounts payable hereunder.

V. RIGHTS OF PARTICIPANTS

       5.1.   CREDITOR STATUS OF PARTICIPANTS. The Elective Amounts and Match
              Amounts of a Participant shall be merely unfunded, unsecured
              promises of the Participating Employer by which he is employed to
              make benefit payments in the future and shall be liabilities
              solely against the general assets of such Participating Employer.
              The Company and the other Participating Employers shall not be
              required to segregate, set aside or escrow the Elective Amounts or
              Match Amounts nor any earnings, gains and losses credited thereon.
              With respect to amounts credited to any Accounts hereunder and any
              benefits payable hereunder, a Participant and his Beneficiary
              shall have the status of general unsecured creditors of the
              Participating Employer by which such Participant is employed, and
              may look only to such Participating Employer and its general
              assets for payment of such Accounts and benefits.

       5.2.   RIGHTS WITH RESPECT TO THE TRUST. Any trust, and any assets held
              thereby to assist the Company or other Participating Employer in
              meeting its obligations under

                                       14


<PAGE>   16



              the Plan, shall in no way be deemed to controvert the provisions
              of the preceding Section.

       5.3.   INVESTMENTS. In the Company's sole discretion, the Participating
              Employers may acquire insurance policies, annuities or other
              financial vehicles for the purpose of providing future assets of
              Participating Employers to meet their anticipated liabilities
              under this Plan. Such policies, annuities or other investments,
              shall at all times be and remain unrestricted general property and
              assets of the Participating Employers or property of a trust
              established pursuant to Article VI hereof. Participants and
              beneficiaries shall have no rights, other than as general
              creditors, with respect to such policies, annuities or other
              acquired assets.

VI. TRUST.

       6.1.   ESTABLISHMENT OF TRUST. Notwithstanding any other provision or
              interpretation of this Plan, the Company may establish a Trust in
              which to hold cash, insurance policies or other assets to be used
              to make, or reimburse the Company or any other Participating
              Employer for, payments to the Participants or beneficiaries of all
              or part of the benefits under this Plan. Any Trust assets shall at
              all times remain subject to the claims of general creditors of the
              Company or any other Participating Employer in the event of their
              insolvency as more fully described in the Trust.

       6.2.   OBLIGATION OF THE PARTICIPATING EMPLOYERS. Notwithstanding the
              fact that a Trust may be established under Section 6.1, the
              Participating Employers shall remain liable for paying the
              benefits under this Plan. However, any payment of benefits to a
              Participant or Beneficiary made by such a Trust shall satisfy the
              appropriate Participating Employer's obligation to make such
              payment to such person.

       6.3.   TRUST TERMS. A Trust established under Section 6.1 may contain
              such terms as the Company may determine to be necessary or
              desirable. The Company may terminate or amend a Trust established
              under Section 6.1 at any time, and in any manner it deems
              necessary or desirable, subject to the terms of any agreement
              under which any such Trust is established or maintained.

       6.4.   INVESTMENT FUNDS AND ELECTIONS. The Company from time to time may
              permit all or some of the Participants, former Participants, and
              beneficiaries of deceased Participants to elect that their
              Accounts shall be credited with earnings, gains and losses as if
              such accounts held actual assets and such assets were invested in
              accordance with such individuals' directions among such Investment

                                       15


<PAGE>   17



              Funds as the Company may designate. Any such direction of
              investment shall be subject to such rules as the Company and
              Administrator may prescribe, including, without limitation, rules
              concerning the manner of providing investment directions, the
              frequency of changing such investment directions, and method of
              crediting earnings, gains and losses for any portion of an Account
              which is not covered by any valid investment directions. The
              Investment Funds which the Company may designate shall include but
              not be limited to the following types of funds, which can be
              managed on an individual basis or as part of a mutual fund, as the
              Company shall determine:

              (a)    money market funds;

              (b)    common stock funds;

              (c)    bond funds;

              (d)    balanced funds; and

              (e)    investment funds which are primarily invested in insurance
                     contracts; and

              (f)    investment funds which are provided for under insurance
                     contracts.

              The Company shall have the sole discretion to determine the number
              of Investment Funds to be designated hereunder and the nature of
              the funds and may change or eliminate the Investment Funds
              provided hereunder from time to time. The Company shall in its
              sole discretion determine the rate of earnings, gains and losses
              to be credited to Accounts under this Plan with respect to any
              such Investment Fund for any period, taking into account the
              return, net of any expenses, of such Investment Funds for such
              period.

VII. ADMINISTRATION AND CLAIMS PROCEDURE

       7.1.   ADMINISTRATOR. The Company shall be the Administrator unless and
              until the Board shall appoint some other person, persons,
              committee, corporation, partnership or other entity as
              Administrator.

       7.2.   GENERAL RIGHTS, POWERS, AND DUTIES OF ADMINISTRATOR. The
              Administrator shall be the Plan Administrator under ERISA. The
              Administrator shall be responsible for the general administration
              of the Plan and shall have all powers as may be necessary to carry
              out the provisions of the Plan and may, from time to time,
              establish rules for the administration of the Plan and the
              transaction of the Plan's business. In addition to any powers,
              rights and

                                       16


<PAGE>   18



              duties set forth elsewhere in the Plan, it shall have the
              following powers and duties:

              (a)    To enact such rules, regulations, and procedures and to
                     prescribe the use of such forms as it shall deem advisable;

              (b)    To appoint or employ such agents, attorneys, actuaries,
                     accountants, assistants or other persons (who may also be
                     Participants in the Plan or be employed by or represent a
                     Participating Employer) at the expense of the Participating
                     Employers, as it may deem necessary to keep its records or
                     to assist it in taking any other action authorized or
                     required hereunder;

              (c)    To interpret the Plan, and to resolve ambiguities,
                     inconsistencies and omissions, to determine any question of
                     fact, to determine the right to benefits of, and the amount
                     of benefits, if any, payable to, any person in accordance
                     with the provisions of the Plan and resolve all questions
                     arising under the Plan;

              (d)    To administer the Plan in accordance with its terms and any
                     rules and regulations it establishes;

              (e)    To maintain such records concerning the Plan as it deems
                     sufficient to prepare reports, returns and other
                     information required by the Plan or by law; and

              (f)    To direct a Participating Employer to pay benefits under
                     the Plan, and to give such other directions and
                     instructions as may be necessary for the proper
                     administration of the Plan.

       7.3.   INFORMATION TO BE FURNISHED TO ADMINISTRATOR. A Participating
              Employer shall furnish the Administrator with such data and
              information as it may reasonably require. The records of a
              Participating Employer shall be determinative of each
              Participant's period of employment, termination of employment and
              the reason therefor, leave of absence, reemployment, years of
              service, personal data, and data regarding Compensation, Salary,
              Bonus and other remuneration, and all reductions thereof under
              this Plan. Participants and their Beneficiaries shall furnish to
              the Administrator such evidence, data or information and execute
              such documents as the Administrator requests.

       7.4.   CLAIM FOR BENEFITS. Any claim for benefits under the Plan shall be
              made in writing to the Administrator in such a manner as the
              Administrator shall prescribe. The Administrator shall process
              each such claim and determine

                                       17


<PAGE>   19



              entitlement to benefits within ninety (90) days following its
              receipt of a completed application for benefits unless special
              circumstances require an extension of time for processing the
              claim. If such an extension of time for processing is required,
              written notice of the extension shall be furnished to the claimant
              prior to the termination of the initial ninety (90) day period. In
              no event shall such extension exceed a period of ninety (90) days
              from the end of such initial period. The extension notice shall
              indicate the special circumstances requiring an extension of time
              and the date as of which the Administrator expects to render the
              final decision.

              If such claim is wholly or partially denied by the Administrator,
              the Administrator shall notify the claimant of the denial of the
              claim in writing, delivered in person or mailed by first class
              mail to the claimant's last known address. Such notice of denial
              shall be in writing and shall contain:

              (a)    the specific reason or reasons for denial of the claim;

              (b)    a reference to the relevant Plan provisions upon which the
                     denial is based;

              (c)    a description of any additional material or information
                     necessary for the claimant to perfect the claim, together
                     with an explanation of why such material or information is
                     necessary; and

              (d)    an explanation of the Plan's claim review procedure.

              If no such notice is provided, the claim shall be deemed denied.
              The interpretations, determinations and decisions of the
              Administrator shall be final and binding upon all persons with
              respect to any right, benefit and privilege hereunder, subject to
              the review procedures set forth in this Article.

       7.5.   REQUEST FOR REVIEW OF A DENIAL OF A CLAIM FOR BENEFITS. Any
              claimant or any authorized representative of such claimant whose
              claim for benefits under this Plan has been denied or deemed
              denied, in whole or in part, by the Administrator may upon written
              notice to the Appeals Committee request a review by the Appeals
              Committee of such denial of her or his claim for benefits. Such
              claimant shall have sixty (60) days from the date the claim is
              deemed denied, or sixty (60) days from receipt of the notice
              denying the claim, as the case may be, in which to request a
              review by written application delivered to the Appeals Committee,
              which must specify the relief requested and the reason such
              claimant believes the denial should be reversed.

                                       18


<PAGE>   20




       7.6.   APPEALS PROCEDURE. The Appeals Committee is hereby authorized to
              review the facts and relevant documents as well as this Plan, to
              interpret this Plan and other relevant documents and to render a
              decision on the claim of the claimant. Such review may be made by
              written briefs submitted by the claimant and the Administrator or
              at a hearing, or by both as shall be deemed necessary by the
              Appeals Committee. Any such hearing shall be held in the main
              offices of the Company or such other location as the Appeals
              Committee shall select on such date and at such time as the
              Appeals Committee shall designate upon not less than fifteen (15)
              days notice to the claimant and the Administrator unless both of
              them accept shorter notice. The notice shall specify that such
              claimant must indicate in writing, at least five (5) days in
              advance of the time established for such hearing, his intention to
              appear at the appointed time and place, or the hearing will be
              automatically cancelled. The reply shall specify any other persons
              who will accompany him to the hearing, or such other persons will
              not be admitted to the hearing. The Appeals Committee shall make
              every effort to schedule the hearing on a day and at a time which
              is convenient to both the claimant and the Administrator. The
              claimant, or his duly authorized representative, may review all
              pertinent documents relating to the claim in preparation for the
              hearing and may submit issues and comments in writing prior to or
              during the hearing.

       7.7.   DECISION UPON REVIEW OF DENIAL OF CLAIM FOR BENEFITS. After the
              review has been completed, the Appeals Committee shall render a
              decision in writing, a copy of which shall be sent to both the
              applicant and the Administrator. In making its decision the
              Appeals Committee shall have full power and discretion to
              interpret the Plan, and to resolve ambiguities, inconsistencies
              and omissions, to determine any question of fact, to determine the
              right to benefits of, and the amount of benefits, if any, payable
              to, any person in accordance with the provisions of the Plan. The
              Appeals Committee shall render a decision on the claim review
              promptly, but no more than sixty (60) days after the receipt of
              the claimant's request for review, unless special circumstances
              (such as the need to hold a hearing) require an extension of time,
              in which case the sixty (60) day period shall be extended to one
              hundred twenty (120) days. Such decision shall include specific
              reasons for the decision and contain specific references to the
              relevant Plan provisions upon which the decision is based. The
              decision on review shall be furnished to the claimant within the
              appropriate time described above. If the decision on review is not
              furnished within such time, the claim shall be deemed denied on
              review. The decision of the Appeals Committee shall be final and
              binding in all respects on the Administrator and the Participating
              Employer and claimant involved. The review

                                       19


<PAGE>   21



              procedures of this Article shall be the sole and exclusive remedy
              and shall be in lieu of all actions at law, in equity, pursuant to
              arbitration or otherwise.

       7.8.   ESTABLISHMENT OF APPEALS COMMITTEE. The Company shall appoint the
              members of an Appeals Committee which shall consist of three (3)
              or more members. The Company may appoint one Appeals Committee to
              hear all appeals of denied benefits that may arise under the Plan
              or a number of Appeals Committees with different members to hear
              the appeals of denied benefits that arise from Participants
              employed by a Participating Employer or group of Participating
              Employers. The members of the Appeals Committee shall remain in
              office at the will of the Company and the Company, from time to
              time, may remove any of said members with or without cause. A
              member of the Appeals Committee may resign upon written notice to
              the remaining member or members of the Appeals Committee and to
              the Company, respectively. The fact that a person is a Participant
              or a former Participant or a prospective Participant shall not
              disqualify him from acting as a member of the Appeals Committee,
              nor shall any member of the Appeals Committee be disqualified from
              acting on any question because of his interest therein, except
              that no member of the Appeals Committee may act on any claim which
              such member has brought as a Participant, former Participant, or
              Beneficiary under this Plan. In case of the death, resignation or
              removal of any member of the Appeals Committee, the remaining
              members shall act until a successor-member shall be appointed by
              the Company. At the Administrator's request, the Secretary of the
              Company shall notify the Administrator in writing of the names of
              the original members of the Appeals Committee, of any and all
              changes in the membership of the Appeals Committee, of the member
              designated as Chairman, and the member designated as Secretary,
              and of any changes in either office. Until notified of a change,
              the Administrator shall be protected in assuming that there has
              been no change in the membership of the Appeals Committee or the
              designation of Chairman or of Secretary since the last
              notification was filed with it. The Administrator shall be under
              no obligation at any time to inquire into the membership of the
              Appeals Committee or its officers. All communications to the
              Appeals Committee shall be addressed to its Secretary at the
              address of the Company.

       7.9.   OPERATIONS OF APPEALS COMMITTEE. On all matters and questions, the
              decision of a majority of the members of the Appeals Committee
              shall govern and control; but a meeting need not be called or held
              to make any decision. The Appeals Committee shall appoint one of
              its members to act as its Chairman and another member to act as
              Secretary. The terms of office of these members shall be
              determined by the Appeals Committee, and the Secretary and/or
              Chairman may be removed by the other members of

                                       20


<PAGE>   22



              the Appeals Committee for any reason which such other members may
              deem just and proper. The Secretary shall do all things directed
              by the Appeals Committee. Although the Appeals Committee shall act
              by decision of a majority of its members as above provided,
              nevertheless in the absence of written notice to the contrary,
              every person may deal with the Secretary and consider his acts as
              having been authorized by the Appeals Committee. Any notice served
              or demand made on the Secretary shall be deemed to have been
              served or made upon the Appeals Committee.

       7.10.  LIMITATION OF DUTIES. The Company, the Participating Employers,
              the Administrator, the Appeals Committee, and their respective
              officers, members, employees and agents shall have no duty or
              responsibility under the Plan other than the duties and
              responsibilities expressly assigned to them herein or delegated to
              them pursuant hereto. None of them shall have any duty or
              responsibility with respect to the duties or responsibilities
              assigned or delegated to another of them.

       7.11.  EXPENSES OF ADMINISTRATION AND THE APPEALS COMMITTEE. No fee or
              compensation shall be paid to the Administrator or any member of
              the Appeals Committee for his or its services as such, but the
              Administrator and Appeals Committee may be reimbursed for its
              expenses from any Trust established by the Company in connection
              herewith, or, if no funds exist therein or if the Company
              determines that they should not be paid by such Trust, by one or
              more of the Participating Employers as directed by the Company.
              The Appeals Committee and the Administrator may hire such
              attorneys, accountants, actuaries, agents, clerks, and secretaries
              as it may deem desirable in the performance of its functions, any
              of whom may also be advisors to any Participating Employer or any
              affiliated company, and the expense associated with the hiring or
              retention of any such person or persons shall be paid directly by
              the Company or from such Trust, as directed by the Company.

       7.12.  INDEMNIFICATION. In addition to whatever rights of indemnification
              any individual who serves as a delegate of the Administrator,
              Company or other Participating Employer hereunder and the members
              of the Appeals Committee may be entitled to under the articles of
              incorporation, regulations or bylaws of the Participating
              Employers, under any provision of law or under any other
              agreement, including the Retirement Savings Plan, the
              Participating Employers shall satisfy any liability actually
              incurred by any such individual including reasonable expenses and
              attorneys' fees, and any judgments, fines, and amounts paid in
              settlement, in connection with any threatened, pending or
              completed action, suit or proceeding which is related to the

                                       21


<PAGE>   23



              exercise or failure to exercise by such individual of any powers,
              authority, responsibilities or discretion provided under this Plan
              or reasonably believed by such member to be provided hereunder,
              and any action taken by such individual in connection therewith.
              This indemnification for all such acts taken or omitted is
              intentionally broad, but shall not provide indemnification for
              embezzlement or diversion of Plan funds for the benefit of any
              such individual. Such indemnification will not be provided to any
              person who is not a present or former employee of a Participating
              Employer or a subsidiary or affiliated company thereof nor shall
              it be provided for any claim by a Participating Employer or a
              subsidiary or affiliated company thereof against any such person.
              No indemnification shall be provided to any person who is not an
              individual.

       7.13.  LIMITATION OF ADMINISTRATIVE LIABILITY. Neither the Administrator
              nor the Appeals Committee while acting on behalf of the
              Administrator, nor any of their respective officers, members,
              employees, agents and delegates shall be liable for any act taken
              by such person or entity pursuant to any provision of the Plan
              except for gross abuse of the discretion given it and them
              hereunder. No member of the Appeals Committee shall be liable for
              the act of any other member. No member of the Board of Directors
              of the Company shall be liable to any person for any action taken
              or omitted in connection with the administration of this Plan.

       7.14.  LIMITATION OF SPONSOR LIABILITY. Any right or authority
              exercisable by the Company or Board pursuant to any provision of
              this Plan shall be exercised in the Company's capacity as sponsor
              of the Plan, or on behalf of the Company in such capacity, and not
              in a fiduciary capacity, and may be exercised without the approval
              or consent of any person in a fiduciary capacity. Neither the
              Company, nor the Board, nor any of their respective officers,
              members, employees, agents and delegates, shall have any liability
              to any party for its exercise of any such right or authority.

VIII. AMENDMENT AND TERMINATION

       8.1.   AMENDMENT, MODIFICATION AND TERMINATION. This Plan may be amended,
              modified or terminated by the Company at any time, or from time to
              time, by a document executed on behalf of the Company by an
              officer thereof, which amendment, modification or termination is
              authorized or ratified by the Board. No such amendment,
              modification or termination shall reduce the amounts credited to
              any Participant's Accounts, all determined as of the date of such
              amendment, modification or termination.


                                       22


<PAGE>   24



       8.2.   ACTIONS BINDING ON PARTICIPATING EMPLOYERS. Any amendments made to
              this Plan shall be binding on all the Participating Employers
              without the approval or consent of such Participating Employers.
              The Company may, by amendment, also terminate this Plan on behalf
              of all or any one of the Participating Employers in its sole
              discretion.

       8.3.   DISTRIBUTIONS ON TERMINATION. In the event this Plan is
              terminated, the amounts then credited to all Participants'
              Accounts may, in the Company's sole discretion, (i) be distributed
              to the Participants in quarterly installments over such period not
              more than fifteen (15) years as the Company may determine, (ii) be
              distributed to the Participants in a lump sum, or (iii) continue
              to be credited with earnings, gains and losses pursuant to Article
              III and be distributed pursuant to Article IV.

IX. PARTICIPATING EMPLOYERS

       9.1.   LIST OF PARTICIPATING EMPLOYERS. The initial Participating
              Employers as of the Effective Date are as follows:

                            Participating Employers
                            -----------------------

                           Royal Appliance Mfg. Co.

              The Company may designate additional Participating Employers or
              remove Participating Employers during the period of the Plan's
              existence by action of an appropriate officer of Company
              authorized or ratified by the Board. Such addition or deletion
              shall not require a formal amendment hereto.

       9.2.   DELEGATION OF AUTHORITY. The Company is hereby fully empowered to
              act on behalf of itself and the other Participating Employers as
              it may deem appropriate in maintaining this Plan and any Trust.
              Furthermore, the adoption by the Company of any amendment to the
              Plan or any Trust, or the termination of the Plan or any Trust,
              will constitute and represent, without any further action on the
              part of any Participating Employer, the approval, adoption,
              ratification or confirmation by each Participating Employer of any
              such amendment or termination. In addition, the appointment of or
              removal by the Company of any Appeals Committee member, any
              Administrator, any trustee or other person under the Plan or any
              Trust shall constitute and represent, without any further action
              on the part of any Participating Employer, the appointment or
              removal by each Participating Employer of such person.


                                       23


<PAGE>   25



X. MISCELLANEOUS

       10.1.  NO IMPLIED RIGHTS. Neither the establishment of the Plan nor any
              amendment thereof shall be construed as giving any Participant,
              Beneficiary or any other person any legal or equitable right
              unless such right shall be specifically provided for in the Plan
              or conferred by specific action of the Company in accordance with
              the terms and provisions of the Plan. Except as expressly provided
              in this Plan, neither the Company nor any other Participating
              Employer shall be required or be liable to make any payment under
              the Plan.

       10.2.  NO RIGHT TO PARTICIPATING EMPLOYER ASSETS. Neither the Participant
              nor any other person shall acquire by reason of the Plan any right
              in or title to any assets, funds or property of a Participating
              Employer whatsoever including, without limiting the generality of
              the foregoing, any specific funds, assets or other property which
              a Participating Employer, in its sole discretion, may set aside in
              anticipation of a liability hereunder. Any benefits which become
              payable hereunder shall be paid from the general assets of a
              Participating Employer. The Participant shall have only a
              contractual right to the amounts, if any, payable hereunder
              unsecured by any asset of a Participating Employer. Nothing
              contained in the Plan constitutes a guarantee by a Participating
              Employer that the assets of a Participating Employer shall be
              sufficient to pay any benefit to any person.

       10.3.  NO EMPLOYMENT RIGHTS CREATED. This Plan shall not be deemed to
              constitute a contract of employment between any of the
              Participating Employers and any Participant, nor confer upon any
              Participant or employee the right to be retained in the service of
              any Participating Employer for any period of time, nor shall any
              provision hereof restrict the right of any Participating Employer
              to discharge or otherwise deal with any Participant or other
              employees, with or without cause. Nothing herein shall be
              construed as fixing or regulating the Compensation, Salary, Bonus
              or other remuneration payable to any Participant or other employee
              of a Participating Employer.

       10.4.  OFFSET. If, at the time payments or installments of payments are
              to be made hereunder, the Participant or the Beneficiary or both
              are indebted or obligated to a Participating Employer, then the
              payments remaining to be made to the Participant or the
              Beneficiary or both may, at the discretion of the Company, be
              reduced by the amount of such indebtedness or obligation,
              provided, however, that an election by the Company not to reduce
              any such payment or payments shall not constitute a waiver of its
              claim for such indebtedness or obligation.

                                       24


<PAGE>   26




       10.5.  NON-ASSIGNABILITY. Neither the Participant nor any other person
              shall have any voluntary or involuntary right to commute, sell,
              assign, pledge, anticipate, mortgage or otherwise encumber,
              transfer, hypothecate or convey in advance of actual receipt the
              amounts, if any, payable hereunder, or any part thereof, and any
              attempt to do so shall be void. All benefits or amounts credited
              to Accounts under this Plan are expressly declared to be
              unassignable and non-transferable. No part of the benefits or
              amounts credited to Accounts under this Plan shall be, prior to
              actual payment, subject to seizure or sequestration for the
              payment of any debts, judgments, alimony or separate maintenance
              owed by the Participant or any other person, or be transferable by
              operation of law in the event of the Participant's or any other
              person's bankruptcy or insolvency.

       10.6.  NOTICE. Any notice required or permitted to be given under the
              Plan shall be sufficient if in writing and hand delivered, or sent
              by registered or certified mail, and if given to the Company,
              delivered to the principal office of the Company, directed to the
              attention of the Vice President of Human Resources. Such notice
              shall be deemed given as of the date of delivery or, if delivery
              is made by mail, as of the date shown on the postmark or the
              receipt for registration or certification.

       10.7.  GOVERNING LAWS. The Plan shall be construed and administered
              according to the laws of the State of Ohio to the extent not
              preempted by the laws of the United States of America.

       10.8.  INCAPACITY. If the Administrator determines that any Participant
              or Beneficiary entitled to payments under the Plan is incompetent
              by reason of physical or mental disability and is consequently
              unable to give a valid receipt for payments made hereunder, or is
              a minor, the Administrator may order the payments becoming due to
              such Participant or Beneficiary to be made to another person for
              the benefit of such Participant or Beneficiary, without
              responsibility on the part of the Administrator to follow the
              application of amounts so paid. Payments made pursuant to this
              Section shall completely discharge the Plan, any Trust, the
              Administrator, the Participating Employers and the Appeals
              Committee with respect to such payments.

       10.9.  ADMINISTRATIVE FORMS. All applications, elections and designations
              in connection with the Plan made by a Participant or Beneficiary
              shall become effective only when duly executed on forms provided
              by the Administrator and filed with the Administrator.

       10.10. INDEPENDENCE OF PLAN. Except as otherwise expressly provided
              herein, this Plan shall be independent of, and

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<PAGE>   27



              in addition to, any other employee benefit agreement or plan or
              any rights that may exist from time to time thereunder.

       10.11. RESPONSIBILITY FOR LEGAL EFFECT. Neither the Company, any other
              Participating Employer, the Administrator, the Appeals Committee,
              nor any officer, member, delegate or agent of any of them, makes
              any representations or warranties, express or implied, or assumes
              any responsibility concerning the legal, tax, or other
              implications or effects of this Plan.

       10.12. SUCCESSORS. The terms and conditions of this Plan shall inure to
              the benefit of and bind the Company, the Participating Employers,
              the Administrator, the Appeals Committee and its members, the
              Participants, their beneficiaries, and the successors, assigns,
              and personal representatives of any of them.

       10.13. HEADINGS AND TITLES. The Section headings and titles of Articles
              used in this Plan are for convenience of reference only and shall
              not be considered in construing this Plan.

       10.14. GENERAL RULES OF CONSTRUCTION. The masculine gender shall include
              the feminine and neuter, and vice versa, as the context shall
              require. The singular number shall include the plural, and vice
              versa, as the context shall require. The present tense of a verb
              shall include the past and future tenses, and vice versa, as the
              context may require.

       10.15. SEVERABILITY. In the event that any provision or term of this
              Plan, or any agreement or instrument required by the Administrator
              hereunder, is determined by a judicial, quasi-judicial or
              administrative body to be void or not enforceable for any reason,
              all other provisions or terms of this Plan or such agreement or
              instrument shall remain in full force and effect and shall be
              enforceable as if such void or nonenforceable provision or term
              had never been a part of this Plan, or such agreement or
              instrument.

       10.16. ACTIONS BY THE COMPANY. Except as otherwise provided herein, all
              actions of the Company under this Plan shall be taken by the
              Board, by any officer of the Company, or by any other person
              designated by any of the foregoing.

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<PAGE>   28


IN WITNESS WHEREOF, the Company, by two of its appropriate officers duly
authorized, has executed this 401(k) Plus Plan as of the date first above
written.

                                           ROYAL APPLIANCE MFG. CO.
                                           ("Company")

                                           By______________________________

                                           Title___________________________

                                           And_____________________________

                                           Title___________________________


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