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                                                                    EXHIBIT 10.1





                     UNITED COMPANIES FINANCIAL CORPORATION

                    EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
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                               TABLE OF CONTENTS

<TABLE>
<CAPTION>                                                               
                                                                                PAGE
<S>                       <C>                                <C>                <C>
ARTICLE I                 INTRODUCTION . . . . . . . . . . . .                   1
                                                                        
ARTICLE II                DEFINITIONS  . . . . . . . . . . . .                   3
                                                                        
ARTICLE III               ELIGIBILITY AND PARTICIPANTS . . . .                  33
                                                                        
ARTICLE IV                CONTRIBUTIONS TO THE TRUST . . . . .                  35
                                                                        
ARTICLE V                 ALLOCATION OF EMPLOYER                        
                          CONTRIBUTIONS  . . . . . . . . . . .                  38
                                                                        
ARTICLE VI                INVESTMENT OF TRUST ASSETS:                   
                          ALLOCATIONS TO PARTICIPANT'S                  
                          ACCOUNT  . . . . . . . . . . . . . .                  40
                                                                        
ARTICLE VII               DISTRIBUTION OF BENEFITS . . . . . .                  43
                                                                        
ARTICLE VIII              LIMITATIONS ON ALLOCATIONS . . . . .                  56
                                                                        
ARTICLE IX                PLAN ADMINISTRATOR . . . . . . . . .                  60
                                                                        
ARTICLE X                 RESTRICTIONS ON DISPOSITION  . . . .                  65
                                                                        
ARTICLE XI                NO REVERSION TO EMPLOYER . . . . . .                  66
                                                                        
ARTICLE XII               TRUSTEE POWERS, RIGHTS AND DUTIES  .                  67
                                                                        
ARTICLE XIII              AMENDMENT, TERMINATION,                       
                          OR DISCONTINUANCE  . . . . . . . . .                  75
                                                                        
ARTICLE XIV               CLAIMS FOR BENEFITS:  DENIALS AND             
                          APPEALS . . . . . . . . . . . . . . .                 77
                                                                        
ARTICLE XV                FUNDING . . . . . . . . . . . . . . .                 78
                                                                        
ARTICLE XVI               TOP-HEAVY PLAN LIMITS  . . . . . . . .                79
                                                                        
ARTICLE XVII              LOAN PROVISIONS  . . . . . . . . . . .                80
                                                                        
ARTICLE XVIII             RIGHTS AND OPTIONS ON DISTRIBUTED             
                          SHARES OF COMPANY STOCK  . . . . . . .                87
                                                                        
ARTICLE XIX               VALUATION OF EMPLOYER SECURITIES:             
                          TRANSACTIONS INVOLVING                        
                          EMPLOYER SECURITIES  . . . . . . . . .                88
                                                                        
ARTICLE XX                MISCELLANEOUS  . . . . . . . . . . . .                91
</TABLE>
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                     UNITED COMPANIES FINANCIAL CORPORATION


                    EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST


STATE OF LOUISIANA

PARISH OF EAST BATON ROUGE

         BE IT KNOWN, that on the  1st day of  September , 1994, and at the
places hereinafter written, and in the presence of the witnesses hereinafter
named and undersigned, personally came and appeared:

         UNITED COMPANIES FINANCIAL CORPORATION, a corporation organized under
         the laws of the State of Louisiana with its principal place of
         business located at 4041 Essen Lane, Baton Rouge, LA 70809,
         represented herein by  Dale E. Redman   , its Executive Vice
         President, duly authorized to act by virtue of a corporate resolution
         attached hereto and made a part hereof

         (hereinafter referred to as "Company" or "Employer");

                                      AND

         HIBERNIA NATIONAL BANK, a national banking association organized under
         the laws of the United States of America, with its principal place of
         business in Baton Rouge, Louisiana, represented by its undersigned
         Trust Officer, duly authorized to represent the Bank

         (hereinafter referred to as "Trustee").


                                  WITNESSETH:

         WHEREAS, the Employer wishes to reward the performance of its
employees and to aid them in providing for themselves and their families; and

         WHEREAS, the Plan herein has been formulated by the Board of Directors
of the Company and said Board has resolved that in its opinion the continuation
and restatement of the Plan and Trust is advisable; and



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         WHEREAS, for the purpose of carrying out the Plan, the Board of
Directors has authorized its officers to enter into an agreement of Trust with
the above named Trustee(s);

         NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, it is mutually covenanted and agreed as follows:


                                   ARTICLE I
                                  INTRODUCTION

         A  Profit Sharing Plan was originally adopted by the Company,
effective January 1, 1960, as evidenced by an agreement entered into on
December 31, 1960.  The Profit Sharing Plan, as evidenced by the aforementioned
trust agreement, including all amendments thereto, provided certain benefits,
including retirement, death, disability and termination benefits, to employees
who were eligible to participate thereunder, and such plan, as converted to a
stock bonus plan on September 1, 1975, as amended and restated July 11, 1984,
as amended and restated November 17, 1990, and as amended thereafter and as in
effect on this date is hereinafter referred to as "Superseded Plan."

         Effective on the Effective Date of the amendment as herein defined,
the above described Superseded Plan has been amended and restated as set forth
in this agreement by and between United Companies Financial Corporation and
Hibernia National Bank as Trustee, entitled UNITED COMPANIES FINANCIAL
CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN (hereinafter referred to as the
"Plan" or "Trust or "Plan and Trust").  The Superseded Plan is specifically
designated as a leveraged employee stock ownership plan as that term is defined
in Code section 4975(e)(7).  The restatement of the Superseded Plan as the Plan
and Trust is continuous and uninterrupted, and no gap either in time or effect
exists between them or shall ever be construed to exist between them.

         The Plan is designed to invest primarily in Qualifying Employer
Securities.  The purpose of the Plan, as revised and restated, is to enable
eligible Employees of the Employer to share in the profits of the Employer's
business, to assist and encourage Employees to maintain a regular savings
program, to provide an effective means for them to accumulate funds for their
own retirement, to afford greater inducement for them to remain in the service
of the Employer, and to enable them to share in the appreciation or
depreciation and in the distribution of Qualifying Employer Securities
accumulated in accordance with the Plan and Trust.

         Each Employee's interest hereunder and all assets acquired under the
Plan as a result of Employer Contributions thereto and all income and other
additions thereto shall be administered,





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distributed, forfeited or otherwise governed by the provisions of this Plan.
The Plan and Trust is designed to provide a technique of corporate finance for
the Employer as well as intended to be for the exclusive benefit of
Participants in the Plan and their Beneficiaries.  Accordingly, it may be used
to accomplish the following objectives:

                 (1)      To meet general financing requirements of the
Employer, including capital growth and transfers in the ownership of Employer
Stock.

                 (2)      To receive Loans (or other extensions of credit) to
finance the acquisition of Qualifying Employer Securities with such Loans (or
credit) secured by the Qualifying Employer Securities acquired with the
proceeds of the Loan, by the guarantee of the Employer or an owner or Affiliate
of the Employer, or by a commitment by the Employer to pay Employer
Contributions to the Trust in amounts sufficient to enable principal and
interest on such Loans to be paid.

         All covered Employees will be treated alike under the Plan and Trust;
however, all benefits accrued to the benefit of Employees covered under the
Superseded Plan as of the Effective Date of this restatement and amendment have
been preserved for such Employees and such amounts will be credited to their
accounts under the Plan or made available to them as distributions from the
Plan as provided herein.


                                   ARTICLE II
                                  DEFINITIONS

         In this Plan, unless the context clearly implies otherwise, the
singular includes the plural, and the masculine includes the feminine and the
following words and phrases shall have the meanings set forth in this Article:

         2.01  "ACCRUED BENEFIT" means the balance of each Participant's
account.  A Participant's right to his Accrued Benefit shall be nonforfeitable
upon his death, his attaining Normal Retirement Age, or in the event he suffers
a Disability.

         2.02  "ADJUSTMENT FACTOR" shall mean the cost-of-living adjustment
factor prescribed by the Secretary of the Treasury under section 415(d) of the
Code for years beginning after December 31, 1987, as applied to such items and
in such manner as the Secretary shall provide.

         2.03  "AFFECTED EMPLOYEE" shall mean an Employee who is affected by a
partial termination of the Plan.  In the case of the partial termination
resulting from the disposition of Foster Mortgage Corporation and/or its assets
or business, the group of





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Affected Employee consists of those Employees who satisfy the following
conditions:

         (a)     The Employee has commenced participation in the Plan on or
before September 30, 1993;

         (b)     The Employee is employed by Foster Mortgage Corporation on
September 30, 1993 and does not at any time between September 30, 1993 and
December 31, 1993 (prior to actual distribution of his benefit) complete an
Hour of Service for the Company or for an Affiliated Employer other than Foster
Mortgage Corporation; and

         (c)     The Employee is in the Eligible Class of Employees at
September 30, 1993.

         2.04  "AFFILIATED EMPLOYER" shall mean the Employer and any
corporation which is a member of a controlled group of corporations (as defined
in section 414(b) of the Code) which includes the Employer; any trade or
business (whether or not incorporated) which is under common control (as
defined in section 414(c) of the Code) with the Employer; any organization
(whether or not incorporated) which is a member of an Affiliated Service Group
which includes the Employer; and any other entity required to be aggregated
with the Employer pursuant to regulations under section 414(o) of the Code.

         2.05  "AFFILIATED SERVICE GROUP" shall mean a group consisting of
corporations or other entities with employees, one or more of which is a
primary service organization and one or more of which is a service organization
providing services to the primary service organization(s).  The terms "primary
service organization" and "service organization" shall be as defined in section
414(m) of the Code and the term "Affiliated Service Group" is intended to
include all entities which are members of a group having the relationship
described in section 414(m).

         2.06  "AGE" of a person as determined with respect to any date shall
mean the age on his most recent Birthday.

         2.07  "AGGREGATION GROUP" shall mean the group of qualified Plans
maintained by the Employer (including all commonly controlled employers and all
members of an Affiliated Service Group with the Employer) which are aggregated
with the Plan for purposes of determining whether the Plan (and all aggregated
plans) is a Top-Heavy Plan.  The required Aggregation Group means all such
plans in which a Key Employee participates, and all other plans of the Employer
which enable any plan of the Employer in which a Key Employee participates to
meet the requirements of Code sections 401(a)(4) or 410.  The permissive
Aggregation Group means the required Aggregation Group, plus any other plan or
plans of the Employer which, considered together as a group with





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<PAGE>   7
the required Aggregation Group would continue to satisfy Code sections
401(a)(4) and 410.  Plans of the Employer which are in the permissive
Aggregation Group shall be included if the Plan Administrator of the Plan or
Plans, if required to be aggregated, and the Plan Administrator of the plan or
plans, if any, not required to be aggregated but allowed to be aggregated
concur in writing to such aggregation on or before the last day of the first
Plan Year to which the Top-Heavy rules apply.  If the Plans not required to be
aggregated would not be Top-Heavy, and if the group, including such plans,
would be Top-Heavy for a Plan Year, then such plans shall not be included in
the Aggregation Group for such Plan Year.

         2.08  "ALLOCATION LIMITATION YEAR" or "LIMITATION YEAR" means the
calendar year, unless another twelve (12) consecutive month period is adopted
by the Company for all plans of the Employer and all affiliated Employers
pursuant to a written resolution of the Board.

         2.09  "ANNIVERSARY DATE" means January 1, 1989 and each succeeding
anniversary thereof.

         2.10  "ANNUAL ADDITION" shall mean the amount allocated to a
Participant's account during the Limitation Year that constitutes:  (i)
Employer Contributions, (ii) Employee Contributions, (iii) Forfeitures, and
(iv) Amounts described in sections 415(l)(1) and 419A(d)(2) of the Code.

         Amounts forfeited and reapplied to reduce Employer Contributions shall
also be included as Annual Additions.  The Excess Amount applied under section
8.01(d) to reduce Employer Contributions will be considered an Annual Addition
for the Limitation Year of such reduction.

         In the event that no more than one-third of Employer Contributions
which are deductible under Code section 404(a)(9) as repayments of principal or
interest on a Loan incurred for the purpose of acquiring Qualifying Employer
Securities are allocated  to Participants who are Highly Compensated Employees,
Annual Additions shall not include

                 (a)      Forfeitures of Employer Securities acquired with the
proceeds of such a Loan; and

                 (b)      Employer Contributions which are deductible under
Code section 404(a)(9)(B) as Contributions used to pay the interest due on such
a Loan, and which are charged against the Participant's account.

         Such exclusions shall apply to Forfeitures of Employer Securities
purchased with the proceeds of a Loan and payments of interest on such Loans
for all employee stock ownership plans of





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<PAGE>   8
all employers which are aggregated for the purposes of determining the
limitations on Contributions and benefits for any Participant under Article
VIII and Code section 415.

         2.11  "BENEFICIARY" shall mean the person or persons (including an
individual, testamentary or intervivos trust, estate, partnership, corporation,
or other person or combination thereof) entitled to receive his Accrued Benefit
at his death by executing the form prescribed by the Plan Administrator.  If no
designation is made or if the designation made is invalid, then the Beneficiary
shall be deemed to be the Participant's spouse, if the spouse survives him; or
if none then his surviving children, if any, sharing equally; or if none, then
his surviving heirs at law, if any, sharing equally or if none, then his
estate; however, if a Court of competent jurisdiction directs the payment to
any other person, such as pursuant to a Qualified Domestic Relations Order,
then such person shall be deemed the Beneficiary hereunder.  A designated or
deemed Beneficiary may waive his rights as a Beneficiary by written notice to
the Trustee prior to distribution, in which case the Beneficiary shall be
determined as if such person were not designated or deemed a Beneficiary.

         2.12  "BOARD" means the board of directors of the Company.

         2.13  "BREAK IN SERVICE" or "ONE YEAR BREAK IN SERVICE" means a twelve
(12) consecutive month period during which the Participant has not completed
500 Hours of Service, except that a Participant shall not incur a One-Year
Break in Service while on an authorized leave of absence.  The twelve (12)
consecutive month period shall be the same as the period used to compute Years
of Service as defined in this Article II.

         2.14  "CODE" means the Internal Revenue Code of 1986, as amended and
in effect at the time of execution of this Plan & Trust document.

         2.15  "COMMON CONTROL" of a corporation, partnership or proprietorship
or other entity with the Employer shall mean that such corporation is in the
relationship to the Employer described in section 414(b) of the Code or that
such other entity is in the relationship to the Employer described in section
414(c) of the Code.  For purposes of applying the limitations of Article VIII,
section 414(b) and section 414(c) of the Code shall be as modified by section
415(h) of the Code.

         2.16  "COMMON-LAW EMPLOYEE" a person who is an employee of the
employer or who was an employee of a Former Employer which maintained a
retirement plan which is a predecessor Plan to this Plan, but who is not and
was not a Self- Employed Individual with respect to such Employer or Former
Employer.





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<PAGE>   9
         2.17  "COMPANY" means UNITED COMPANIES FINANCIAL CORPORATION.

         2.18  "COMPANY STOCK" shall mean that class of common stock of the
Company which is publicly traded.

         2.19  "COMPENSATION" for a Participant for a Plan Year means such a
Participant's Earned Income, wages, salaries, and fees for professional
services and other amounts received for personal services actually rendered in
the course of employment with the Employer maintaining the Plan (including, but
not limited to, commissions paid salesmen, Compensation for services on the
basis of a percentage of profits, commissions on insurance premiums, tips,
bonuses, fringe benefits, reimbursements, and expense allowances) specifically
including for purposes of Articles IV and V, but not for purposes of Articles
VIII and XVI, any amounts which would be includible in a Participant's income
but for the fact that he made an election under a flexible benefits program (as
described in Code Section  125) maintained by the Employer or Elective
Deferrals under the United Companies Financial Corporation Employees' Savings
Plan.

         Compensation shall, however, exclude the following:

                 (a)      Employer contributions to a plan of deferred
compensation to the extent such contributions are not included in gross income
of the Employee for the taxable year in which contributed, or on behalf of an
Employee to a simplified employee pension plan to the extent such contributions
are deductible under section 219(b)(7), and any distributions from a plan of
deferred compensation whether or not includible in the gross income of the
employee when distributed;

                 (b)      Amounts realized from the exercise of a nonqualified
stock option, or when restricted stock (or property) held by an Employee
becomes freely transferable or is no longer subject to a substantial risk of
forfeiture;

                 (c)      Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and

                 (d)      Other amounts which receive special tax benefits, or
contributions made by an employer (whether or not under a salary reduction
agreement) towards the purchase of a 403(b) annuity contract (whether or not
the contributions are excludible from the gross income of the employee);

                 (e)      Reimbursements of other expense allowances, fringe
benefits (cash or noncash), moving expenses, deferred compensation, and welfare
benefits; and





                                       7
<PAGE>   10
                 (f)    Any compensation earned while an Inactive Participant
(such as when the Employee is not a member of the Eligible Class of Employees),
except that a Participant who participates for less than the full Plan Year on
account of the age and service requirements shall include his compensation for
the entire Plan Year.  For purposes of Articles VIII and XVI, Compensation
earned while an Inactive Participant shall be included.

         For purposes of allocations under Article V of the Plan any Elective
Deferrals under a Code section 401(k) plan maintained by the Employer or salary
reduction amounts under a Code section 125 plan maintained by the Employer,
shall not reduce Compensation even though they may not be includible in the
income of the Employee, except that such Elective Deferrals and other salary
reductions shall be excluded from Compensation for purposes of determining the
limitation on Annual Additions in Article VIII and the percentage of
Compensation needed to meet the minimum Employer Contribution under Article XVI
for a Plan Year in which the Plan is a Top Heavy Plan.

         For Plan Years beginning after December 31, 1988 and on or before
December 31, 1993, Compensation of any Employee shall be limited to $200,000,
as adjusted by the Adjustment Factor.

         In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provision of the plan to the contrary, for plan years
beginning on or after January 1, 1994, the annual compensation of each employee
taken into account under the plan shall not exceed the OBRA '93 annual
compensation limit.  The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with section 401(a)(17)(B) of the Internal Revenue Code.  The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding
12 months, over which compensation is determined (determination period)
beginning in such calendar year.  If a determination period consists of fewer
than 12 months, the OBRA '93 annual compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in the determination
period, and the denominator of which is 12.

         For plan years beginning on or after January 1, 1994, any reference in
this plan to the limitation under section 401(a)(17) of the Code shall mean the
OBRA '93 annual compensation limit set forth in this provision.

         If the compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current plan
year, the compensation for that prior determination period is subject to the
OBRA '93 annual compensation limit in effect for that prior determination
period.





                                       8
<PAGE>   11
For this purpose, for determination periods beginning before the first day of
the first plan year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.

         For purposes of applying the $200,000 limit or $150,000 limit (as
adjusted) on Compensation, all participants who are Family Members of a Highly
Compensated Employee who is a Five Percent Owner or who is one of the ten (10)
highest paid Employees participating in the Plan will be considered as being
one (1) Employee and the $200,000 limit or $150,000 limit (as adjusted) will be
allocated among such individuals by reducing the salary of any Family Member
who is limited by Code section 415 to the lowest amount which permits this
limit to be reached, thereafter by reducing the salary of the highest paid
Family Member(s) until the aggregate dollar limit is met or until the next
highest Family Member's compensation is reached in which case such next highest
Family Member's compensation shall also be reduced at the same rate.  This
process shall be repeated until the $200,000 limit or $150,000 limit (as
adjusted by the Adjustment Factor) is reached.  A Family Member for this
purpose shall include only the spouse of the Highly Compensated Employee and
any lineal descendants of the Highly Compensated Employee who have not attained
Age 19 before the last day of the Plan Year.

         If a Plan determines Compensation on a period of time that contains
fewer than 12 calendar months, then the annual Compensation limit is applied by
taking an amount equal to the annual Compensation limit for the calendar year
in which the Compensation period begins, and multiplying such amount by the
fraction obtained by dividing the number of full calendar months in the period
by 12.

         2.20  "CONTRIBUTION" means the amount of cash paid or securities
transferred by the Employer to the Trustee pursuant to Article IV for any Plan
Year.  The Employer Contribution for a Plan Year shall mean the amount paid on
account of such Plan Year by the Employer pursuant to section 4.01 to the
Trustee during the period provided in Article IV for which Contributions may be
made for the Plan Year and designated by the Employer as made for such Plan
Year.  Rollover Contributions shall be as defined in this Article II.

         2.21  "DEFINED BENEFIT DOLLAR LIMITATION" shall mean the limitation
set forth in section 415(b)(1) of the Code, as adjusted by the Adjustment
Factor for the year in question.

         2.22  "DEFINED BENEFIT PLAN FRACTION" of a Participant for any
Limitation Year shall mean a fraction, the numerator of which is the sum of the
Participant's Projected Annual Benefit under all defined benefit pension plans
maintained by the Employer and any Affiliated Employer as of the last day of
the Limitation Year





                                       9
<PAGE>   12
associated with such Plan Year, and the denominator of which is the lesser of

                 (a)      The product of 1.25 and the Defined Benefit Dollar
Limitation, as adjusted by the Adjustment Factor.

                 (b)      The product of 1.4 and the amount which is the
Participant's highest average annual Compensation for three (3) consecutive
years.

         2.23  "DEFINED CONTRIBUTION DOLLAR LIMITATION" shall mean $30,000 or,
if greater, one-fourth of the defined benefit dollar limitation set forth in
section 415(b)(1) of the Code as in effect for the Limitation Year.

         2.24  "DEFINED CONTRIBUTION PLAN FRACTION" of a Participant for any
Limitation Year shall mean a fraction, the numerator of which is the sum of
Annual Additions to the Participant's account as of the close of the Plan Year
associated with such Limitation Year, and the denominator of which is the sum
of the lesser of the following amounts determined for such Plan Year and for
each prior Year of Service which the Participant completed with the Employer:

                 (a)      The product of 1.25 and the Defined Contribution
Dollar Limitation, or

                 (b)      The product of 1.4 and twenty-five (25%) percent of
the Participant's Compensation for the Limitation Year.

         The Annual Additions for any Limitation Year beginning before January
1, 1987 shall not be recomputed to treat all Employee Contributions as Annual
Additions.

         2.25  "DESIGNATED BENEFICIARY" shall mean the individual who is the
Designated Beneficiary specified on the Beneficiary Designation Form provided
by the Plan Administrator; if there is no Designated Beneficiary specified on
such form, then the surviving spouse, if any, shall be deemed to be the
Designated Beneficiary.  If no Beneficiary is named and if there is no
surviving spouse, then the Participant's oldest child, if any, shall be deemed
to have been designated.  If no individual but a Trust is the named Beneficiary
and if no Designated Beneficiary is specified, then the individual who is the
largest beneficiary (using equivalent present value at Internal Revenue Service
rates) of such Trust shall be considered the Designated Beneficiary; if several
individuals are equal, then the oldest.  If more than one individual is named,
then the individual who is to receive the greatest amount (using equivalent
present value) shall be the Designated Beneficiary; if more than one individual
receives the largest amount, then the oldest shall be considered the Designated
Beneficiary.  The Designated Beneficiary is the





                                       10
<PAGE>   13
Beneficiary over whose life or life expectancy the payment of benefits may be
made under Article VII.

         2.26  "DETERMINATION DATE" for a Plan Year means the date as of which
the Plan is determined to be a Top-Heavy Plan or not for such Plan Year.  The
Determination Date is the last day of the Plan Year preceding the Plan Year for
which the determination is made, or, in the case of the first Plan Year of any
Plan, the last day of such Plan Year.

         2.27  "DIRECT ROLLOVER"  A Direct Rollover is a payment by the Plan to
the Eligible Retirement Plan specified by the Distributee.

         2.28  "DISABILITY" shall mean the inability of the Participant by
reason of any medically determinable bodily injury or disease, to meet the
requirements of his position with his Employer and which, in the opinion of a
physician chosen by the Plan Administrator, will be permanent and continuous
during the remainder of the Participant's lifetime and which, in the opinion of
such physician, was not contracted, suffered or incurred while the Participant
was engaged in or did not result from his having engaged in a criminal
enterprise.  A Participant or former Participant with such a permanent
Disability shall be considered "Disabled".

         A Participant or former Participant shall not be considered to have
such a Disability (notwithstanding his satisfaction of the requirements of the
preceding paragraph) if in the reasonable opinion of the Plan Administrator,
the Disability is a result of:

                 (a)      Injury or disease sustained by the Participant or
former Participant while willfully and illegally participating in fights,
riots, civil insurrections or while committing a felony;

                 (b)      Injury or disease sustained by the Participant or
former Participant which was diagnosed or discovered subsequent to the date his
employment was terminated.

         A Participant may not be considered Disabled for purposes of this Plan
until he has completed two (2) Years of Service with the Employer.

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





                                       11
<PAGE>   14
         2.31  "DOMESTIC RELATIONS ORDER" means a judgment, decree or order
(including the approval of a property settlement agreement) that relates to the
provision of child support, alimony payments, or marital property rights to a
spouse, former spouse, child or other dependent of a Participant and is made a
pursuant to a state domestic relations law, including a community property law.

         2.32  "EARLY RETIREMENT DATE" of a Participant shall mean the date on
which the sum of the Years of Service a Participant has completed with the
Employer and the Participant's Age equals 75.

         2.33  "EARNED INCOME" of a Self-Employed Individual means the net
earnings from self-employment in the trade or business with respect to which
the Plan is established, for which personal services of the individual are a
material income-producing factor.  Net earnings will be determined without
regard to items not included in gross income and the deductions allocable to
such items.  Net earnings are reduced by contributions by the Employer to a
qualified plan to the extent deductible under section 404 of the Code.

         2.34  "EFFECTIVE DATE" shall be January 1, 1960.  The Effective Date
of this amendment and restatement shall be January 1, 1989, except as otherwise
provided herein.

         2.35  "ELIGIBILITY COMPUTATION PERIOD" shall mean the 12-month period
beginning with the date on which the Employee completes an Hour of Service with
the Employer and the successive 12-month periods beginning with anniversaries
of such date.

         2.36  "ELIGIBLE CLASS OF EMPLOYEES" shall mean the group of Employees
of the Employer which includes all Employees, except those Employees who are
members of a collective bargaining unit operating under a collective bargaining
agreement in which retirement benefits were the subject of good faith
negotiations,  Employees who are nonresident alien individuals earning no
earned income from sources within the United States, Leased Employees, and
Employees of a non-adopting Affiliated Employer.  No Owner-Employee or
Shareholder-Employee shall be in the Eligible Class of Employees in his
capacity as an Owner-Employee or Shareholder-Employee.  The Eligible Class of
Employees shall, beginning October 1, 1993, not include any Employees of Foster
Mortgage Corporation with regard to Compensation earned from Foster Mortgage
Corporation.

         An Employee of the former Foster Mortgage Corporation which has been
acquired by the Employer through an asset purchase at November 1, 1990 shall be
entitled to credit his service with the predecessor acquired corporation, but
shall not meet the eligibility requirements until up to and including the date
of acquisition, November 1, 1990.  Accordingly, an Employee who is





                                       12
<PAGE>   15
in this Eligible Class of Employees and who has met the service requirements
solely as a result of his service with Foster Mortgage Corporation shall be
entitled to participate on the Entry Date next following November 1, 1990,
which is January 1, 1991.  Furthermore, such Employees of Foster Mortgage
Corporation shall cease to be members of this Eligible Class of Employees on
October 1, 1993, the date of transfer of Foster Mortgage Corporation.

         2.37  "ELIGIBLE RETIREMENT PLAN" shall mean an Individual Retirement
Account described in section 408(a) of the Code, an individual retirement
annuity described in section 408(b) of the Code, an annuity plan described in
section 403(a) of the Code, or a qualified trust described in section 401(a) of
the Code, that accepts the Distributee's Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to the surviving
spouse, an Eligible Retirement Plan is an Individual retirement Account or
Individual Retirement Annuity.

         2.38  "ELIGIBLE ROLLOVER DISTRIBUTION" An Eligible Rollover
Distribution is any distribution of all or any portion of the balance to the
credit of the Distributee, except that an Eligible Rollover Distribution does
not include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or
life expectancy of the Distributee 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; any distribution to the extent
such distribution is required under section 401(a)(9) of the Code; and the
portion of any distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect to
Employer Securities).

         2.39  "EMPLOYEE" means any person who is employed by the Employer, as
the term Employee is defined in section 3121(d) of the Code and specifically
excluding a person operating as an independent contractor with respect to the
Employer.  Employee shall include owner-employees and Self-Employed
Individuals, as well as Shareholders and Common Law Employees.  Employee shall
include a Leased Employee.

         A Leased Employee shall not be considered an Employee of the recipient
if:

                 (a)      Such Employee is covered by a money purchase pension
plan providing:

                          (i)       A nonintegrated Employer Contribution rate
of at least ten (10%) of Compensation, as defined in section 415(c)(3) of the
Code, but including amounts contributed pursuant to a salary reduction
agreement which are excludible from the





                                       13
<PAGE>   16
Employee's gross income under section 125, section 402(a)(8), section 402(h) or
section 403(b) of the Code,

                          (ii)      Immediate participation, and

                          (iii)     Full and immediate vesting; and

                 (b)      Leased Employees do not constitute more than 20% of
the recipient's nonhighly compensated workforce.

         Notwithstanding any other provisions of this Plan, for purposes of
determining the number or identity of Highly Compensated Employees or for
purposes of the pension requirements of section 414(n)(3) of the Code, the
Employees of the Employer shall include Leased Employees, excluding those
Leased Employees described in the preceding paragraph.

         2.40  "EMPLOYEE CONTRIBUTIONS" shall mean Contributions to the Plan
made by an Employee during the Plan Year.  No such Contributions are permitted,
except for Rollover Contributions, subject to the limitations of Article XII
and those set by the Plan Administrator and Trustee.  However, the Plan shall
not accept Rollover Contributions and direct asset transfers where such
Contributions are made other than in cash or are attributable to Deductible
Voluntary Employee Contributions, after-tax Employee Contributions, or amounts
accumulated on behalf of an Owner-Employee.  No asset transfers shall be
accepted which would require the Plan & Trust to provide a Life Annuity or
Joint & Survivor Annuity or which would restrict payment to those circumstances
permitted for Elective Deferrals in Cash or Deferred arrangements or earnings
thereon.

         2.41  "EMPLOYER" means the Company and any corporation or corporations
or other entities which have adopted this Plan and any other corporation or
entity that was, may be, or may become a parent, a subsidiary, an affiliate or
an associate of the Company; provided that the inclusion of a corporation or
other entity within, or the removal of a corporation or other entity within
from the meaning of the word "Employer" shall be effected only by action of its
Board of Directors (or other governing body) and the Board of Directors of the
Company.  Employer shall also include any successor by merger or any business
organization that acquires the business of a sponsoring Employer and adopts the
Plan (with the concurrence of the Company).  The business known as Foster
Mortgage Corporation shall be considered an Employer under this Plan for the
period from the acquisition of its assets by the Company, November 1, 1990, to
the date its employees ceased to participate in this Plan, October 1, 1993;
employees of the former Foster Mortgage Corporation shall be considered
employees of an Employer during the period set forth above, but shall be given
credit for service with Foster Mortgage Corporation prior to the acquisition
date for limited enumerated





                                       14
<PAGE>   17
purposes under the Plan.  Furthermore entities which are Affiliated Employers
with the Employer may adopt the Plan by resolution of Board of Directors of the
Company and by resolution of the governing body of each of the newly adopting
entities.  For purposes of determining discrimination in vesting,
discrimination in eligibility, the limitations of Article VIII, the Present
Value of the Accrued Benefit, and the definitions of the terms Top-Heavy Plan,
Defined Benefit Plan Fraction, and Defined Contribution Plan Fraction, Employer
shall mean all entities adopting the Plan and all other entities which are
Affiliated Employers with an adopting Employer.  By authorizing the adoption of
this Plan the governing body of any Employer other than the Company delegates
to the Company (and its Board, as appropriate) all of the functions which the
Company (or its board) may perform pursuant to this Plan.

         2.42  "ENTRY DATE" means the Effective Date and the first day of each
Plan Year, January 1.

         2.43  "ERISA" means the Employee Retirement Income Security Act of
1974, as amended and in effect at the date of the execution of this document.

         2.44  "EXCESS AMOUNT" means the excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Annual Addition, less
loading and other administrative charges allocable to such excess.

         2.45  "FAMILY MEMBER" shall mean an individual described in section
414(q)(6) of the Code and Regs. section 1.414(q)-1T, Question and Answer 11 and
12.  Specifically, an individual who is a Family Member for purposes of the
above provisions shall include, with respect to any Employee or former
Employee, such Employee's or former Employee's spouse and lineal ascendants or
descendants and the spouses of such lineal ascendants and descendants.  In
determining whether an individual is a Family Member with respect to an
Employee or former Employee, legal adoptions shall be taken into account.

         If an individual is a Family Member with respect to an Employee or
former Employee on any day during the Plan Year, such individual shall be
considered a Family Member for the entire Plan Year.

         2.46  "FISCAL YEAR" means the Employer's taxable year for Federal
income tax purposes.

         2.47  "FIVE PERCENT OWNER" of the Employer shall mean

                 (a)      If the Employer is a corporation, any person who owns
(or is considered as owning within the meaning of section 318 of the Code) more
than five (5%) percent of the outstanding





                                       15
<PAGE>   18
stock of the corporation or stock possessing more than five (5%)percent of the
total combined voting power of all stock of the corporation, or

                 (b)      If the Employer is not a corporation, any person who
owns more than five (5%) percent of the capital or profits interest in the
Employer.

         For purposes of this section, subparagraph (C) of section 318(a)(2) of
the Code shall be applied by substituting "5%" for "50%" therein, and the rules
of subsections (b), (c) and (m) of section 414 of the Code shall not apply for
purposes of determining ownership.

         2.48  "FORFEITURE" shall mean that portion of a Participant's Accrued
Benefit which is not vested (i.e., not nonforfeitable) and which is forfeited
pursuant to the provisions of Article VII.

         2.49  "HIGHLY COMPENSATED EMPLOYEE" shall mean an Employee who, during
the Plan Year or the preceding Plan Year


                 (a)      Was at any time a Five Percent owner,

                 (b)      Received Compensation from the Employer in excess of
$75,000,

                 (c)      Received Compensation from the Employer in excess of
$50,000 and was in the Top-Paid group of Employees for such Plan Year, or

                 (d)      Was at any time an officer of the Employer and
received Compensation from the Employer in an amount greater than 50% of the
Defined Benefit Dollar Limitation for such year.

         Amounts in (b) and (c) shall be adjusted by the Adjustment Factor each
year.  Highly Compensated Employee includes any Family Member of a Highly
Compensated Employee.  Compensation from an Affiliated Employer shall be
included.  An Employee shall not be included in (b), (c) or (d) above unless he
is a member of the group consisting of the 100 Employees paid the greatest
Compensation for the Plan Year.

         For purposes of determining Highly Compensated Employees, the number
of officers is limited to fifty (50) (or, if less, the greater of three (3)
Employees or ten  (10%) percent of Employees).  And when no officer has
Compensation in excess of fifty (50%) percent of the section 415(b)(1)(A)
limit, the highest paid officer is treated as a Highly Compensated Employee.
Affiliated Employers aggregated under section 414(b),(c),(m), or (o) shall be
treated as the Employer.





                                       16
<PAGE>   19
         A highly compensated active Employee includes any Employee who
performs service for the Employer during the determination year and who, during
the look-back year:

                 (a)      Received Compensation from the Employer in excess of
$75,000 (as adjusted pursuant to section 415(d) of the Code);

                 (b)      Received Compensation from the Employer in excess of
$50,000 (as adjusted pursuant to section 415(d) of the Code) and was a member
of the Top-Paid Group for such year; or

                 (c)      Was an officer of the Employer and received
Compensation during such year that is greater than fifty (50%)  percent of the
dollar limitation in effect under section 415(b)(1)(A) of the Code.

         The term Highly Compensated Employee also includes:

                 (a)      Employees who are both described in the preceding
sentence if the term "determination year" is substituted for the term
"look-back year" and the Employee is one of the 100 Employees who received the
most Compensation from the Employer during the Determination Year; and

                 (b)      Employees who are Five Percent Owners at any time
during the look-back year or Determination Year.

         If no officer has satisfied the Compensation requirement of (iii)
above during either a Determination year or look-back year, the highest paid
officer for such year shall be treated as a Highly Compensated Employee.

         For this purpose, the Determination Year shall be the Plan Year.  The
look-back year shall be the twelve-month period immediately preceding the
Determination Year.

         A highly compensated former Employee includes any Employee who
separated from service (or was deemed to have separated) prior to the
Determination Year, performs no service for the Employer during the
Determination Year, and was a highly compensated active Employee for either the
separation year or any Determination Year ending on or after the Employee's
55th birthday.

         If an Employee is, during a Determination Year or look-back year, a
Family Member of either a Five Percent Owner who is an active or former
Employee or a Highly Compensated Employee who is one of the ten most Highly
Compensated Employees ranked on the basis of Compensation paid by the Employer
during such year, then the Family Member and the Five Percent Owner of top-ten
Highly Compensated Employee shall be aggregated.  In such case, the Family
Member and Five Percent Owner or top-ten Highly





                                       17
<PAGE>   20
Compensated Employee shall be treated as a single Employee receiving
Compensation and Plan Contributions or benefits equal to the sum of such
Compensation and Contributions or benefits of the Family Member and Five
Percent Owner or top- ten Highly Compensated Employee.  For purposes of this
section, Family Member includes the spouse, lineal ascendants and descendants
of the Employee or former Employee and the spouse of such lineal ascendants and
descendants.

         The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of Employees in the Top-Paid
Group, the top 100 Employees, the number of Employees treated as officers and
the Compensation that is considered, will be made in accordance with section
414(q) of the Code and the regulations thereunder.

         2.50  "HOURS OF SERVICE" shall be determined on the basis of actual
hours for which an Employee is paid or entitled to payment.  Such hours
include:

                 (a)      Each hour for which an Employee is directly or
indirectly paid or entitled to payment by the Employer for the performance of
duties during the Allocation Limitation Year or other applicable computation
period, including hours actually worked on overtime;

                 (b)      Each hour an Employee is not working due to a dispute
for which back pay has been either awarded or agreed to by the Employer,
irrespective of mitigation of damages, but no credit shall be given for the
same hours under two of the subsections (a) or (b) or (c) or (d) of this
section, and the limitations of subsection (c) shall apply if the back pay is
awarded for a period covered by subsection (c); and

                 (c)      Each hour for which an Employee is paid, or entitled
to payment, by the Employer on account of a period of time during which no
duties are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability) lay-off, jury duty, military duty or leave of absence, except that:

                          (i)       No more than 501 Hours of Service are
required to be credited under this subsection (c) to an Employee on account of
any single continuous period during which the Employee performs no duties
(whether or not such period occurs in a single computation period);

                          (ii)      Hours of Service are not required to be
credited for a payment which solely reimburses an Employee for medical or
medically related expenses incurred by the Employee.





                                       18
<PAGE>   21
                          (iii)     An hour for which an Employee is directly
or indirectly paid, or entitled to payment, on account of a period during which
no duties are performed is not required to be credited to the Employee if such
payment is made or due under a plan maintained solely for the purpose of
complying with applicable workmen's compensation, or unemployment compensation
or disability insurance laws; and

                          (iv)      An Employee shall not be credited on
account of a period during which no duties are performed with a number of Hours
of Service which is greater than the number of Hours of Service regularly
scheduled for the performance of duties during such period.

         For purposes of this subsection (c), a payment shall be deemed to be
made by or due from an Employer regardless of whether such payment is made by
or due from the Employer directly, or indirectly through, among others, a trust
fund, or insurer, to which the Employer contributes or pays premiums and
regardless of whether contributions made or due to the Trust, fund, insurer or
other entity are for the benefit of particular employees or are on behalf of a
group of employees in the aggregate.

                 (d)      In the case of a Participant who is absent from work
for any period by reason of the pregnancy of the Participant, the birth of a
child of or the adoption of a child by the Participant, or for purposes of
caring for such a child for the period beginning immediately after such birth
or adoption, the following Hours of Service shall be credited solely for
purposes of determining whether a one (1) year Break in Service has occurred:

                          (i)       Hours of Service which otherwise would
normally have been credited to such individual but for such absence; or

                          (ii)      If the Hours cannot be determined under
(1), eight (8) Hours of Service shall be credited for each normal workday of
absence.

         No more than five hundred one (501) Hours of Service may be credited
on account of such pregnancy or adoption.  Such Hours of Service shall be
credited only in the Plan Year (for vesting purposes) or Eligibility
Computation Period (for participation purposes) in which the absence from work
begins, if the Participant would be prevented from incurring a one-year Break
in Service in such Plan Year (for vesting purposes) or Eligibility Computation
Period (for participation purposes) solely because the period of absence is
treated as Hours of Service as provided in this paragraph.  Otherwise, such
Hours of Service shall be credited in the immediately following Plan Year (for
vesting





                                       19
<PAGE>   22
purposes) or Eligibility Computation Period (for participation purposes).  The
Plan Administrator may require, as a condition of the crediting of any such
service, that the Participant furnish the Plan Administrator with such timely
information as the Plan Administrator may reasonably require (in accordance
with Article IX) in order to ensure that such service should be credited.

                 (e)      Hours of Service shall be credited to the computation
period in which the duties are performed.  Hours of Service for the period of
time during which no duties are performed shall be credited in accordance with
section 2530.200b-2(b) and (c) of the Department of Labor regulations.

                 (f)      Hours of Service worked as an employee for an
Affiliated Employer, whether or not such Affiliated Employer adopts this Plan,
shall be counted as Hours of Service for eligibility and vesting purposes under
this Plan, but only during the period of such Common Control or affiliated
service, unless provided otherwise in Articles III and VII.  Credit shall not
be given by the Plan for Compensation earned during such period from any
nonparticipating employer for which such service is credited.

         2.51  "INACTIVE PARTICIPANT" shall mean any Employee or former
Employee who has ceased to be eligible to receive an allocation of Employer
Contributions or forfeitures and on whose behalf an account is maintained under
the Plan.  An Employee who has become a Participant and who ceases to be a
member of the Eligible Class of Employees shall be an Inactive Participant
during the period in which he is not a member of the Eligible Class of
Employees (or with respect to services performed as an Employee who is not a
member of the Eligible Class of Employees).

         2.52  "KEY EMPLOYEE" for a Plan Year beginning in 1984 or later means
an Employee or former employee or Beneficiary of such Employee or former
Employee who, at any time during the Plan Year containing the Determination
Date for the Plan Year or any one of the four (4) preceding Plan Years, is or
was

                 (a)      An officer of the Employer (but no more than 50
Employees, or if less, the greater of three Employees or ten (10%) percent of
the Employees) having an annual Compensation from the Employer for the
Limitation year associated with the Plan Year greater than fifty (50%) percent
of the Defined Benefit Dollar Limitation for any such Plan Year, or

                 (b)      An owner (including one who is considered an owner
under Code section 318) of the Employer

                          (i)       Who is one (1) of the ten (10) Employees
having an annual Compensation from the Employer for the Limitation Year
associated with the Plan Year greater than the Defined Contribution Dollar
Limitation for any such Plan Year and





                                       20
<PAGE>   23
owning (or considered as owning with the meaning of Code section 318) the
largest interest in the Employer, or

                          (ii)      Who is a Five (5%) Percent Owner of the
Employer, or

                          (iii)     Who owns one (1%) percent or more of the
Employer and whose Compensation from the Employer exceeds $150,000.

         For purposes of clause (i) of subsection (b) above, if two (2)
Employees have the same interest in the Employer, the Employee having greater
annual Compensation for the Plan Year from the Employer shall be treated as
having a larger interest, furthermore, an Employee must own (or be considered
to own under Code section 318) at least one-half percent of the Employer.  For
purposes of determining ownership in the Employer under subsection (b) above,
the aggregation rules of subsections (b), (c) and (m) of Code section 414 shall
not apply.

         Beneficiaries of an Employee acquire the character of the Employee who
performed service for the Employer.  Also, inherited benefits will retain the
character of the benefits of the Employee who performed service for the
Employer.

         2.53  "LEASED EMPLOYEE" shall mean a person who is not an employee of
an employer (the "recipient") and who provides services to the recipient under
the following conditions:

                 (a)      Such services are provided pursuant to an agreement
between the recipient and any other person (otherwise referred to as a "leasing
organization"),

                 (b)      Such person has performed such services for the
recipient (or for the recipient and related persons) on a substantially
full-time basis for a period of at least one (1) year (six (6) months in the
case of core health benefits), and

                 (c)      Such services are of a type historically performed,
in the business field of the recipient, by employees. IRC section 414(n)(2).

         A leased employee is treated as an employee of the recipient for
purposes of determining the recipient's compliance with employee benefit rules.
IRC section 414(n)(3).

         Employers who are under common control or affiliated may be considered
a single "recipient."

         A person who is reported as an "independent contractor" performing
services for the employer may be a leased employee, even if his independent
contractor status is accurate.





                                       21
<PAGE>   24
         Certain other persons who are "leased managers" or "leased owners" may
trigger other aggregation rules.  Prop.  Treas. Regs.   section 1.414(o)-1(b),
(c).  Certain inside corporate directors may be aggregated with respect to
their directors' fees.  Prop. Treas. Regs. section 1.414(o)-1(g).

         2.54  "LEAVE OF ABSENCE" shall mean a temporary period of absence from
the employ of the Employer which is applied for by the Participant and
authorized by the Employer.  A Leave of  Absence may not exceed one (1) year,
and such Leave may be granted for reasons of maternity, illness, injury,
reduction of work force, educational purposes, required military service during
which the Employee's reemployment rights are protected by law, and any other
reasonable purpose which the Employer determines under the limits of its Leave
policy.  A Leave of Absence may be paid or unpaid.

         2.55  "LIFE ANNUITY" means an annuity payable for a period of time
which is dependent or which may be dependent on the life of the Participant or
the joint lives of the Participant and his spouse.

         2.56  "LOAN" means any loan to the Trustee made or guaranteed by a
disqualified person (within the meaning of section 4975(e)(2) of the Code),
including but not limited to, a direct loan of cash, a money-purchase
transaction, an assumption of an obligation of the Trustee, an unsecured
guarantee of the use of assets of a disqualified person (within the meaning of
section 4975(e)(2) of the Code) as collateral for a Loan.

         2.57  "MAXIMUM ANNUAL ADDITION" with respect to any Participant for an
Allocation Limitation Year shall be the lesser of

                 (a)      Defined Contribution Dollar Limitation, or

                 (b)      25% of the Participant's Compensation for the
Allocation Limitation Year;

but in no event later than last day of the Plan Year beginning on or before
July 12, 1989, the dollar limit of subsection (a) as adjusted may be increased
under the following conditions:

                 (c)      The dollar amount shall not exceed the sum of (a)
above and the lesser of (a) above or the amount of Qualifying Employer
Securities contributed to the Plan, or purchased with cash contributed to the
Plan, for the Allocation Limitation Year; and

                 (d)      No more than one-third of the Employer Contributions
for the Allocation Limitation Year may be allocated to Participants who are
Highly Compensated Employees.





                                       22
<PAGE>   25
         If the application of the increase in the dollar limit under (c) above
would result in an allocation in excess of that provided in (d) above, then
such dollar limit shall be reduced for all Participants (but not below the
dollar amount of (a) above) to the extent necessary to reach the limitation on
the allocation provided under (d) above, for the Allocation Limitation Year.

         The Maximum Annual Addition may be further reduced in the manner set
forth in Article VIII in the event that the Employer or an Affiliated Employer
maintains or has maintained a defined benefit pension plan under which the
Participant has received or could receive a benefit.

         2.58  "NAMED FIDUCIARY" means any person who exercises any
discretionary authority or discretionary control representing the management or
disposition of Plan assets, who renders any investment advice for a fee or
other compensation, or who exercises any discretionary authority or
responsibility for Plan Administration.  The Trustee, Employer, Plan
Administrator, the Appeals Committee or Appeals Officer, if named by the Plan
Administrator, and any other party to this Plan and Trust which meets this
definition will be considered a Named Fiduciary.

         2.59  "NET PROFITS"  means taxable income for Federal income tax
purposes computed without deductions for contributions to any qualified
Employee profit sharing retirement plan.  The Employer may estimate the amount
of Net Profits by any reasonable method consistently applied in accordance with
established accounting principles.

         2.60  "NONALLOCATION PERIOD"  means the period beginning on the date
of the sale of the qualified securities to the Plan which sale is subject to
the Code sections 1042 and 2057 and ending on the later of (i) the date which
is 10 years after the date of the sale, or (ii) the date of the plan allocation
attributable to the final payment of acquisition indebtedness incurred in
connection with such sale.

         2.61  "NONHIGHLY COMPENSATED EMPLOYEE" shall mean an Employee of the
Employer who is neither a Highly Compensated Employee nor a member of the
family, as defined in section 414(q)(6)(B) of the Code of a Highly Compensated
Employee.

         2.62  "NONKEY EMPLOYEE" shall mean an Employee (or Beneficiary of an
Employee) who is not a Key Employee and shall include an Employee (or
Beneficiary of an Employee) who was previously a Key Employee and who is no
longer a Key Employee (i.e., a former Key Employee).

         2.63  "NORMAL RETIREMENT DATE" or "NORMAL RETIREMENT AGE"  of a
Participant means that date when the Participant has





                                       23
<PAGE>   26
attained Age 65.  In no event may the Normal Retirement Age exceed any
mandatory retirement age enforced by the Employer.

         2.64  "OWNER EMPLOYEE" means an Employee or former Employee who is or
was the sole proprietor, if any Employer or former Employer is or was a
sole-proprietorship, or a partner who owns or at one time owned more than 10%
of either the capital interest or the profits interest in a partnership if any
Employer or Former Employer is or was a partnership.

         2.65  "PARTICIPANT" means an Employee in the Eligible Class of
Employees, as defined in this Article II, who shall satisfy the requirements
set forth in Article III, except that a Participant shall cease to participate
in the Plan if he terminates employment with the Employer (and with any
Affiliated Employer), and is paid or deemed to be paid his vested Accrued
Benefit.

         2.66  "PARTICIPATION COMMENCEMENT DATE" shall mean the first day of
the first Plan Year in which the Participant commenced participation in the
Plan.

         2.67  "PLAN" means the stock bonus plan and trust restated and
continued by this Act, which shall be known as the United Companies Financial
Corporation Employee Stock Ownership Plan and Trust (hereinafter sometimes
referred to as "Plan", "Trust", or "Plan and Trust").

         2.68  "PLAN ADMINISTRATOR"  means the Named Fiduciary, as such term is
defined above and in ERISA, who has the powers and duties as set forth in
Article IX.  The Plan Administrator shall be appointed by the Employer by Board
resolution.  In the event of the failure of such appointment, or if all such
appointees decline to accept the appointment, or in the event of resignation of
the Plan Administrator, the Company shall serve as Plan Administrator.

         2.69  "PLAN YEAR" means the twelve (12) month accounting period of the
Plan and Trust, which shall end on December 31 of each year.  The initial Plan
Year shall commence with the Effective Date of the Plan.

         2.70  "POST-1986 EMPLOYER SECURITIES" shall mean Qualifying Employer
Securities acquired by the Plan and Trust after December 31, 1986.

         For this purpose, the purchase is considered to take place after
December 31, 1986 if the sale is completed after December 31, 1986 and was not
made pursuant to a fixed and binding obligation to acquire stock entered into
prior to December 31, 1986 and allocable to a Plan Year ending on or before
December 31, 1986.  An Employer Contribution of Qualifying Employer





                                       24
<PAGE>   27
Securities shall be considered to give rise to Employer Securities acquired by
the Plan after December 31, 1986 if made after December 31, 1986, for a Plan
Year ending after such date.

         The portion of a Participant's account balance attributable to
Employer Securities which were acquired by the Plan after December 31, 1986
shall be determined by separately accounting for such securities acquired under
the normal accounting rules of Article VI.  If Qualifying Employer securities
are purchased after December 31, 1986 with assets of the Trust from the Other
Investments Accounts of Participants, then such Qualifying Employer Securities
shall be allocated to the Company Stock Accounts in the proportion of the Other
Investment Accounts of said Participants (except for Participants whose
accounts are segregated for whatever reason).

         Forfeitures of Qualifying Employer Securities shall retain their
character as Post-1986 Employer Securities, or not, in the account of the
Participants to whom allocated even though the allocation of the forfeiture may
take place after December 31, 1986.

         If shares of Qualifying Employer Securities are distributed from an
Employee's account, they shall be deemed to come from Post-1986 Employer
Securities and other Employer Securities in the ratio of such accounts.

         2.71  "PRESENT VALUE OF THE ACCRUED BENEFIT" of an Employee or former
Employee or Beneficiary as of a Determination Date means, in the case of the
Plan and any other plan or plans which are members of the Aggregation Group
which are defined contribution plans, the account balance (or sum of the
account balances), other than amounts attributable to Deductible Voluntary
Employee Contributions and to Rollover Contributions made on or after December
31, 1983, and initiated by the Employee and made from a Plan not maintained by
the Employer, held in such plan for the benefit of the Employee, former
employee or Beneficiary on the Determination Date, plus any distributions made
from the plan or plans to such Employee, former employee or Beneficiary during
the Plan Year in which the Determination Date occurs or in the four (4)
preceding Plan Years, including any contributions allocated to the account or
accounts of the Employee, former employee or Beneficiary on or before the
Determination Date, but not including any distributions which were rolled over
or recontributed to another plan in the Aggregation Group.  If one or more of
the plans which are in the Aggregation Group is a defined benefit pension plan,
the Present Value of the Accrued Benefit as of the Determination Date of an
Employee or former employee who is or was a participant in such plan or plans
means the present value of the Accrued Benefit of such Employee or former
Employee as of the most recent Valuation Date of such plan occurring within the
twelve (12) month period





                                       25
<PAGE>   28
ending on the Determination Date, computed as if the Employee who had not
already terminated service had terminated employment with the Employer as of
the Valuation Date, plus the amount of any distributions made to such employee
or former employee during the five (5) year period ending on the Determination
Date (except that if a distribution is made to an Employee or former employee
after the Valuation Date but before the Determination Date, such distribution
shall not be counted to the extent that it is reflected in the Accrued Benefit
as of the Valuation Date).  If the defined benefit pension plan is in its first
Plan Year, then the Plan Administrator of such plan shall elect, in writing,
with appropriate notice to the Plan Administrators of the other plan or plans
in the Aggregation Group, whether the Accrued Benefit shall be determined (a)
as if the individual had terminated service as of the Determination Date, or
(b) as if the individual terminated service as of the Valuation Date, but
taking into account the estimated Accrued Benefit as of the Determination Date.

         The assumptions used in determining the Present Value of the Accrued
Benefit of any individual shall be the same mortality, interest and
cost-of-living assumptions used in determining actuarial equivalence under the
defined benefit pension plan, if any; however, the interest rate used may not
exceed the applicable rate as used by the Pension Benefit Guaranty Corporation.
In the event a Joint and Survivor Annuity is the normal form of benefit, the
actual Age of the spouse shall be used.

         2.72  "PROJECTED ANNUAL BENEFIT" shall mean a Participant's annual
benefit (adjusted to the actuarial equivalent of a Straight Life Annuity if
expressed in a form other than a Straight Life or Qualified Joint and Survivor
Annuity) under any qualified defined benefit pension plan maintained by the
Employer or an Affiliated Employer, assuming that no Participant Contributions
or Rollover Contributions are taken into account in determining the benefit
that the Participant will continue employment until the later of his current
Age or his Normal retirement Age under such plan, and that the Participant's
Compensation for the Limitation Year and all other relevant factors used to
determine benefits under the Plan will remain constant for all future
Limitation Years.

         2.73  "PUT OPTION" shall mean the grant by the Employer to a
distributee of Qualifying Employer Securities by the Plan & Trust of an option
to sell such Qualifying Employer Securities to the Employer at the fair market
value of such shares as of the most recent Valuation Date.  A Put Option shall
further mean the grant of such an option by the Plan & Trust prior to the
exercise of such option given by the Employer.  Any Put Option given under this
Plan shall satisfy the terms of Article XVII with respect to Put Options
whether or not the Plan engages in a Loan.  The





                                       26
<PAGE>   29
Employer may adopt a policy of giving a Put Option even if not required under
the terms of the Plan; such a policy may extend to giving an irrevocable Put
Option.

         2.74  "QUALIFIED DOMESTIC RELATIONS ORDER" is a Domestic Relations
Order which creates or recognizes the existence of an alternate payee's right
to, or assigns to an alternate payee the right to, receive all or a portion of
the benefit payable to a Participant under the Plan; specifies the name and
last known address of the Participant and each alternate payee, the amount or
percentage of the Participant's benefits to be paid to any alternate payee, the
number of payments to which the order applies, and the Plan to which the order
relates; and does not alter the amount or form of Plan benefits.  For this
purpose, a Domestic Relations Order alters the form of benefit if it requires
the Plan to provide any type or form of benefit or any option which is not
otherwise provided for in the Plan, requires the Plan to provide increased
benefits (i.e., benefits with a greater Actuarial Equivalent than would be
required to be provided to the Participant alone), or requires the payment of
benefits to a second alternate payee which are already required to be made to a
first alternate payee.

         2.75  "QUALIFIED ELECTION PERIOD" shall mean the six (6) Plan Year
period beginning with the later of (i) the first Plan Year  beginning after
December 31, 1986; or (ii) the Plan Year in which the Participant first becomes
a Qualified Participant.  For purposes of the preceding sentence, an Employer
may elect to treat an individual first becoming a Qualified Participant in the
first Plan Year beginning in 1987 as having become a Participant in the first
Plan Year beginning in 1988.  In accordance with I. R. Notice 88-56, the
initial Qualified Election Period may be extended to September 6, 1988.

         2.76  "QUALIFIED PARTICIPANT" shall mean a Participant who has
attained Age 55 and who has completed at least ten (10) Years of Participation
in the Plan.  Such a Participant shall be considered a Qualified Participant
during the Qualified Election Period.  His status as a Qualified Participant
shall apply for the first Plan Year during which he completes the age and
participation requirements and for the next five (5) following Plan Years,
after which he shall cease to be a Qualified Participant; however, the first
Plan Year in which a Participant becomes a Qualified Participant shall not
commence earlier than the first Plan Year beginning after December 31, 1986.

         2.77  "QUALIFYING EMPLOYER REAL PROPERTY" shall mean parcels of
immovable property which are leased to the Employer or an affiliate of the
Employer, dispersed geographically, and suitable for more than one use, and
which otherwise comply with the requirements of Title I of ERISA (other than
sections 406 and 407).





                                       27
<PAGE>   30
         2.78  "QUALIFYING EMPLOYER SECURITY" means

                 (a)      With respect to shares acquired with the proceeds of
a Loan, common stock issued by the Employer having a combination of voting
power and dividend rights equal to or in excess of that class or classes of
common stock of the Employer having the greatest voting power and dividend
rights.  Noncallable preferred stock shall be treated as a Qualifying Employer
Security if such stock is convertible at any time into common stock meeting the
definition of Qualifying Employer Security and if such conversion is at a price
which (as of the date of the acquisition by the Employee Stock Ownership Plan)
is reasonable;

                 (b)      With respect to shares acquired by other means than a
Loan, any instrument issued by the Employer and meeting the requirements of
section 4975(e)(8) of the Code.

         2.79  "REGISTRATION TYPE QUALIFYING EMPLOYER SECURITY" is a class of
securities which are Qualifying Employer Securities which securities are
required to be registered under section 12 of the Securities Exchange Act of
1934 or which would be required to be so registered if it did not qualify for
the exemption from registration provided in section 12(g)(2)(H) of said Act.

         2.80  "REQUIRED BEGINNING DATE" with respect to a Participant or
former Participant means April 1 of the calendar year following the calendar
year in which the employee attains age 70 1/2.

         For taxable years of the Employee beginning before December 31, 1988,
Required Beginning Date with respect to a Participant or former Participant who
is not a Five Percent Owner and has not been a Five Percent Owner during the
five (5)- Plan-Year period ending on the calendar year in which the Employee
attains Age 70 1/2, means April 1 of the calendar year following the later of:

                 (a)      The calendar year in which the Employee attains Age
70 1/2, or

                 (b)      The calendar year in which the Employee retires.

         Notwithstanding the above, the Required Beginning Date of an employee
who makes the election provided under section 242(b) of the Tax Equity & Fiscal
Responsibility Act of 1982 ("TEFRA") to defer receipt of distribution shall be
the date of deferral pursuant to such election.  If such election is revoked,
the Required Beginning Date shall be the last day of the year of the
revocation, and the amount of the minimum distribution for such year shall be
the sum of all amounts which would have been due for past and present years if
the election had not been made.





                                       28
<PAGE>   31
         2.81  "RIGHT OF FIRST REFUSAL" means a right given to the Plan and
Trust, thereafter to the Employer, by the distributee to purchase any shares of
Qualifying Employer Securities distributed by the Plan and Trust from the
distributee prior to any transfer of such shares to a third party.  A Right of
First Refusal may be required only in the event that a Put Option is given.
The terms of the Right of First Refusal must satisfy the requirements of
Article XVII.

         2.82  "ROLLOVER CONTRIBUTION" shall mean a contribution to the Plan by
a Participant or a direct transfer of assets from another Plan in which a
Participant formerly participated, which represents all or part of such
Participant's interest in a qualified retirement plan in which he previously
participated and which was paid out to him in a lump sum or as part of a lump
sum distribution, or directed by him as a Rollover Contribution to this Plan,
either directly or indirectly, as defined in sections 402(a)(5), 403(A)(4),
409(b)(3)(c) of the Code.  A Participant may make a Rollover Contribution if so
provided in Article XII and if he meets any reasonable condition set forth for
making such contribution by the Plan Administrator.  The Plan Administrator may
allow Rollover Contributions of all lump sum distributions except that the Plan
Administrator may allow a Rollover Contribution of other distributions without
allowing the rollover of funds attributable to Deductible Voluntary Employee
Contributions.

         2.83  "SELF-EMPLOYED INDIVIDUAL" means an individual who had Earned
Income for a prior taxable year from the business with respect to which this
Plan or a predecessor plan is or was established; or who would have had Earned
Income but for the fact that the business had no net profits for the taxable
year.

         2.84  "SHAREHOLDER EMPLOYEE" means an Employee or officer of an
Employer which is an electing small business corporation who owns more than
five (5%) percent of the outstanding stock of the Employer, as defined in
section 1379(d) of the Code.

         2.85  "SUPER TOP-HEAVY PLAN" for any Plan Year beginning after
December 31, 1983 means a Plan in which any of the following conditions exists:

                 (a)      If the Top-Heavy Ratio for this Plan exceeds ninety
(90%) percent and this Plan is not part of any required Aggregation Group or
permissive Aggregation Group of Plans.

                 (b)      If this Plan is a part of a Required Aggregation
Group of plans but not part of a Permissive Aggregation Group and the Top-Heavy
Ratio for the Required Aggregation Group of plans exceeds ninety (90%) percent.





                                       29
<PAGE>   32
                 (c)      If this Plan is a part of a Required Aggregation
Group and part of a Permissive Aggregation Group of plans and the Top-Heavy
Ratio for the Permissive Aggregation Group exceeds ninety (90%) percent.

         2.86  "TOP-HEAVY PLAN" for any Plan Year beginning after December 31,
1983, means a Plan in which any of the following conditions exists:

                 (a)      If the Top-Heavy Ratio for this Plan exceeds sixty
(60%) percent and this Plan is not part of any required Aggregation Group or
permissive Aggregation Group of Plans.

                 (b)      If this Plan is a part of a Required Aggregation
Group of plans but not part of a Permissive Aggregation Group and the Top-Heavy
Ratio for the Required Aggregation Group of plans exceeds sixty (60%) percent.

                 (c)      If this Plan is a part of a Required Aggregation
Group and part of a Permissive Aggregation Group of plans and the Top-Heavy
Ratio for the Permissive Aggregation Group exceeds sixty (60%) percent.

         2.87  "TOP-HEAVY RATIO" of a plan or group of plans for any Plan Year
means the ratio determined as follows:

                 (a)      If the Employer or an Affiliated Employer maintains
one or more defined contribution plans (including any Simplified Employee
Pension Plan) and the Employer or an Affiliated Employer has never maintained
any defined benefit plan which has covered or could cover a Participant in this
Plan, the Top-Heavy Ratio is a fraction, the numerator of which is the sum of
the account  balances of all key employees as of the determination date
(including any part of any account balance distributed in the five (5) year
period ending on the determination date), and the denominator of which is the
sum of all account balances (including any part of any account balance
distributed in the five year period ending on the determination date) of all
participants as of the determination date.  Both the numerator and denominator
of the top-heavy ratio are adjusted to reflect any contribution which is due
but unpaid as of the determination date.  Accrued Benefits and distributions in
any terminated plans formerly maintained by the Employer or an Affiliated
Employer shall be included in the computation.

                 (b)      If the Employer or an Affiliated Employer maintains
one or more defined contribution plans (including any Simplified Employee
Pension Plan) and the Employer or an Affiliated Employer maintains or has
maintained one or more defined benefit plans which have covered or could cover
a Participant in this Plan, the Top-Heavy Ratio is a fraction, the numerator of
which is the sum of account balances under the





                                       30
<PAGE>   33
defined contribution plans for all Key Employees and the Present Value of
Accrued Benefits under the defined benefit plans for all Key Employees, and the
denominator of which is the sum of the account balances under the defined
contribution plans for all Participants and the Present Value of the Accrued
Benefit under the defined benefit plans for all participants.  Both the
numerator and denominator of the Top-Heavy Ratio are adjusted for any
distribution of an account balance or an accrued benefit made in the five year
period ending on the Determination Date and any contribution due but unpaid as
of the Determination Date.  Accrued Benefits and distributions in any
terminated plans formerly maintained by the Employer or an Affiliated Employer
shall be included in the computation.

                 (c)      For purposes of (a) and (b) above, the value of
account balances and the Present Value of the Accrued Benefit will be
determined as of the most recent Valuation Date that falls within or ends with
the twelve month period ending on the Determination Date.  The account balances
and Accrued Benefits of a Participant who is not a Key Employee but who was a
Key Employee in a prior Plan Year will be disregarded.  If any individual has
not performed any service for the Employer or an Affiliated Employer at anytime
during the five (5) year period ending on the Determination Date, any Accrued
benefit for such individual shall not be taken into account.  The calculation
of the Top-heavy Ratio, and the extent to which distributions, rollover, and
transfers are taken into account will be made in accordance with section 416 of
the Code and the regulations thereunder.  Deductible Voluntary Employee
Contributions will not be taken into account for purposes of computing the
Top-Heavy Ratio.  When aggregating plans, the value of account balances and
Accrued Benefits will be calculated with reference to the Determination Dates
that fall within the same calendar year.

         2.88  "TOP-PAID GROUP" of Employees for any Plan Year shall mean those
Employees who are among the highest paid twenty (20%) percent of Employees when
ranked on the basis of compensation paid during such Plan Year.  The following
Employees shall not be included in determining the Top-Paid Group:

                 (a)      Employees who have not completed six (6) months of
service;

                 (b)      Employees who normally work less than 17 1/2 hours
per week;

                 (c)      Employees who normally work during not more than six
(6) months of any year;

                 (d)      Employees who have not attained Age 21;





                                       31
<PAGE>   34
                 (e)      Except to the extent provided in regulations,
Employees who are included in a unit of Employees covered by an agreement which
the Secretary of Labor finds to be a collective bargaining agreement between
Employee representatives and the Employer; and

                 (f)      Employees who are nonresident aliens and who receive
no Earned Income (within the meaning of section 911(d)(2)) from the Employer
which constitutes income from sources within the United States (within the
meaning of section 861(a)(3)).

         2.89  "TOTAL DISTRIBUTION" shall mean a distribution to a Participant
or a Participant's beneficiary, within one taxable year of such recipient, of
the entire balance to the credit of the Participant.

         2.90  "TRUST" for each participating Employer, means the Trust created
or continued by execution of this Plan and Trust document and the contribution
of funds thereto.

         2.91  "TRUSTEE" means the person or persons or corporation having
trust powers named herein and any named successor trustee or trustees.

         2.92  "VALUATION DATE" means the date on which the value of the assets
of the Trust is determined in accordance with the terms of Article VI.  The
value of each account and subaccount which is maintained under this Plan and
Trust shall be determined on the Valuation Date.  In each Plan Year the
Valuation Date shall be the last day of the Plan Year.  In addition, the Plan
Administrator may designate from time to time, so long as the Trustee agrees,
that another date or dates shall be Valuation Dates with respect to a specific
Plan Year.

         2.93  "YEAR OF PARTICIPATION" shall mean a Plan Year during which an
Employee met the eligibility requirements of the Plan with respect to Age and
service, was a member of the Eligible Class of Employees, and received an
allocation of Employer Contributions or Forfeitures or would have received an
allocation if there had been Employer Contributions or Forfeitures for the Plan
Year.  No Participant shall be credited with Years of Participation prior to
the Effective Date of the Plan.

         2.94  "YEAR OF SERVICE" means a twelve (12) consecutive month period
during which the Employee completes 1,000 Hours of Service.

                 (a)      For purposes of eligibility, the twelve (12) month
period coincides with the Eligibility Computation Period.





                                       32
<PAGE>   35
                 (b)      For purposes of vesting, the twelve (12) month period
is the Plan Year.


                                  ARTICLE III
                         ELIGIBILITY AND PARTICIPATION

         3.01  Any Employee who is a member of the Eligible class of Employees
shall be eligible to participate on the nearest Entry Date which shall occur
closest to or coinciding with the date on which the Employee satisfies the
following eligibility requirements:

                 (a)      He shall have completed one (1) Year of Service with
the Employer and any Affiliated Employer; and

                 (b)      He shall have attained twenty-one (21) years of Age.

         An Employee of the former Foster Mortgage Corporation which has been
acquired by the Employer through an asset purchase at November 1, 1990 shall be
entitled to credit his service with the predecessor acquired corporation, but
shall not meet the eligibility requirements until the date of acquisition;
accordingly, an Employee who is in this Eligible Class of Employees and who has
met the service requirements solely as a result of his service with Foster
Mortgage Corporation shall be entitled to participate on the next following
Entry Date, which is January 1, 1991.

         3.02  Completion of a Year of Service shall mean that the twelve (12)
consecutive month Eligibility Computation Period shall have expired, and the
Employee shall have completed the number of Hours of Service during such
Eligibility Computation Period required for a Year of Service.

         3.03  All annual reports and other documents required to be filed by
the Company with the Secretary of the Treasury or Secretary of Labor shall be
open to inspection to all Plan Participants during the Company's regular
business hours.  A summary of each annual report will be furnished to each
Participant when such report has become due and filed with the Internal Revenue
Service.  A statement as to the balance standing in each Participant's account
and the Participant's vested percentage therein shall be furnished to such
Participant if so requested by the Participant in writing.

         3.04  If an Employee who has become a Participant in the Plan
terminates employment with the Employer, he shall cease to be an active
Participant in the Plan as of the last day of the Plan Year in which he
terminates employment with the Employer.  He shall no longer be entitled to
accrue benefits such as





                                       33
<PAGE>   36
Employer Contributions or Forfeitures; however, until his vested account
balance is paid to him, his account balance shall continue to share in the
earnings and losses of the Trust, and he shall be entitled to exercise the
rights of a Participant hereunder as to elections, claims for benefits, receipt
of information and any other applicable rights.

         3.05  If a Participant terminates employment after he has earned a
nonforfeitable right to a portion of his account balance derived from Employer
Contributions, he shall participate immediately upon returning to the employ of
the Employer (so long as he is a member of the Eligible Class of Employees).
If a Participant incurs five (5) consecutive One-Year Breaks in Service before
he has earned a nonforfeitable right to a portion of his account balance
derived from Employer Contributions, he shall participate immediately upon
returning to the employ of the Employer so long as he is a member of the
Eligible Class of Employees at that time, but only if the number of consecutive
One-Year Breaks in Service is less than the aggregate number of Years of
Service.  In the case of an Employee who does not have any nonforfeitable right
to the account balance derived from Employer Contributions, Years of Service
before a period of consecutive One-Year Breaks in Service will not be taken
into account in computing eligibility service if the number of consecutive
One-Year Breaks in Service in such period equals or exceeds the greater of five
(5) or the aggregate number of Years of Service.  Such an Employee must again
meet the eligibility requirements under section 3.01.  Such aggregate number of
Years of Service will not include any Years of Service disregarded under the
preceding sentence by reason of prior Breaks in Service.  An Employee who has
terminated employment prior to September 30, 1991 shall become an Inactive
Participant upon such termination of employment.  An Employee who terminates
employment and who completes at least one (1) Hour of Service after September
30, 1991 shall become an Inactive Participant on the first day of the Plan Year
following such termination of employment.  An Employee who has not terminated
employment shall become an Inactive Participant when he incurs such number of
consecutive One Year Breaks in Service which exceeds the greater of five (5) or
the number of Years of Service.

         3.06  As provided above, Employees covered by an agreement which the
Secretary of Labor of the United States finds to be a collective bargaining
agreement between Employees' representatives and one or more Employers, are not
eligible to participate in the Plan if retirement benefits were the subject of
good faith bargaining between such Employees' representatives and the Employer
or Employers.  In the event any Employees become ineligible to participate in
this Plan because they are no longer members of the Eligible Class of
Employees, such Employees shall cease to participate as of the date they cease
to be members of the Eligible Class of Employees.  If an Employee who is
otherwise





                                       34
<PAGE>   37
eligible but who has been ineligible because he is not a member of the Eligible
Class of Employees becomes a member of such Eligible Class of Employees, he
shall cease to be ineligible under this subsection, and he will automatically
become a Participant as of the date that he becomes a member of the Eligible
Class of Employees.

         3.07  Notwithstanding any other provisions of the Plan, for purposes
of the pension requirements of section 414(n)(3) of the Code, the employees of
the Employer shall include Leased Employees as defined in Article II.

         A Leased Employee within the meaning of section 414(n)(2) of the Code
shall become a Participant in, or accrue benefits under, the Plan based on
service as a Leased Employee only as provided in provisions of the Plan other
than this section.

         Contributions and benefits provided to a Leased Employee by the
leasing organization which are attributable to services performed for the
recipient Employer shall be treated as provided by the recipient Employer.

         This section shall be effective for services performed after December
31, 1986.

         3.08  In the case of any Participant who has a one-year Break in
Service, years of eligibility service before such break will not be taken into
account until the Employee has completed a Year of Service after returning to
employment.

         Such Year of Service will be measured by the twelve (12) consecutive
month period beginning on an Employee's reemployment commencement date and, if
necessary, subsequent twelve (12) consecutive month periods beginning on
anniversaries of the reemployment commencement date.


                                   ARTICLE IV
                           CONTRIBUTIONS TO THE TRUST

         4.01  The Employer shall contribute to the Trust such amounts of cash
or of Qualifying Employer Securities as shall be voted from time to time by the
Board of the Company; subject to the limitation that Annual Additions to a
Participant's account shall not exceed applicable limits under the Code and
Article VIII.  Such limitation shall be accomplished by reducing Annual
Additions in the priority created by Article VIII, to the extent of any Excess
Amounts for any individual Participant to whom such limitations may apply.
Notwithstanding such limitation, Employer Contributions shall be paid in cash
in such amounts as needed to provide the Trust with funds sufficient to make
any principal and interest payments under a Loan incurred by the Trustee
pursuant





                                       35
<PAGE>   38
to Article XVII to finance the acquisition of Qualifying Employer Securities,
except to the extent such principal and interest payments have been satisfied
by the Trustee from cash dividends paid to it with respect to Qualifying
Employer Securities.

         The Employer Contribution may be made out of the Net Profits of the
Employer for its Fiscal Year, except that the Contribution may be made out of
the Net Profits of the Employer (reduced to the extent of prior contributions
to qualified plans) which have accumulated from prior years.  Employer
Contributions need not be related to Net Profits, but may be determined by
reference to Net Profits.  Regardless of current or accumulated Net Profits,
Employer Contributions shall be made in order to make principal and interest
payments on a Loan.

         The amount of the contribution to be made for any Plan Year shall not
exceed fifteen (15%) percent of the total Compensation of Participants entitled
to receive an allocation of Employer Contributions and Forfeitures for the
Allocation Limitation Year associated with such Plan Year, except for carryover
amounts under section 4.05 and except for amounts used to pay principal and
interest payments on a Loan as provided in section 4.07.  All Employer
Contributions shall be conditioned on their deductibility for the Plan Year for
which made, under section 404 of the Code.

         Foster Mortgage Corporation or the Company on behalf of Foster
Mortgage Corporation, shall contribute for eligible Employees of Foster
Mortgage Corporation a percentage of compensation of such eligible Employees
earned during the period January 1, 1993 to September 30, 1993 and during which
they were eligible to participate in the plan.  Such percentage shall be as
determined by the Board of Directors of Foster Mortgage Corporation, or of the
Company, if applicable.

         4.02  While the contribution to be made by the Employer is not fixed
by any formula, it is intended that the Contribution for each Plan Year shall
be recurring and substantial.  If the Trustee enters into a Loan, the Employer
shall adopt a policy whereby contributions shall be made in amounts necessary
to amortize the Loan over a reasonable period of time.

         4.03  Employee Contributions to the Plan are not permitted, except for
Rollover Contributions (subject to the limitations of Article XII and the
discretion of the Plan Administrator and Trustee).  An Employee is authorized
to make, with the approval of and subject to the discretion of both the Trustee
and the Plan Administrator, a Rollover Contribution to the Plan from a
qualified retirement plan in which he has participated.  Any such rollover
shall be limited as provided in Article XII and shall not include funds
attributable to Deductible Voluntary Employee Contributions.





                                       36
<PAGE>   39
         4.04  The Employer Contribution for each Plan Year shall be paid to
the Trustee not later than the time prescribed by law for filing the Federal
corporate income tax return for the taxable year ending with or within such
Plan Year (including extensions thereof).  At the time each Contribution is
made to the Trust, the Employer or Plan Administrator shall designate the Plan
Year for which such Contribution is made, either by amount or by formula.
Contributions shall not be made on behalf of a Participant who completes less
than 1,000 Hours of Service during the Plan Year.  For a Participant who
terminates employment on or before September 30, 1991, Employer Contributions
shall not be made for a Plan Year on behalf of such Participant if the
Participant terminates employment before the last day of the Plan Year,
regardless of whether he completes 1,000 Hours of Service during the Plan Year.
For a Participant who completes at lest one (1) Hour of Service with the
Employer on or after September 30, 1991, Employer Contributions shall be made
for the Plan Year on behalf of such Participant, provided that he completes at
least 1,000 Hours of Service during the Plan Year.

         4.05  If for any Allocation Limitation Year, the Employer shall
contribute to the Trust, or to any other qualified trust which it then
maintained, an amount less than the maximum which otherwise could have been
contributed as specified under the provisions of this Article IV, and Code
section 404(a)(2), the amount of such deficiency may be carried forward by the
Employer, who may determine to contribute additional amounts for any succeeding
Allocation Limitation Year(s), not in excess of such deficiency, without regard
to this Article IV, but not to exceed twenty-five (25%) percent of the total
Compensation otherwise paid (or accrued, if applicable) during such Allocation
Limitation Year associated with such Plan Year to all Participants.  If an
Employer Contribution includes such carryover amounts, the Employer
Contribution shall nonetheless be subject to the limitations on Annual
Additions contained in Article VIII.  Carryover amounts will not include any
excess attributable to Plan Years beginning after December 31, 1986; only
carryovers of amounts attributable to 1986 and earlier years may be carried
forward under this section and such amounts are considered to have been used
for Plan Years beginning after December 31, 1986 as if they had been used to
the maximum extent permitted in such Plan Year, in chronological order, in
order to determine the carryover which shall be available in future years.

         4.06  Forfeitures under the Plan shall be allocated or used to reduce
Employer Contributions, as provided in Article VII.  If Forfeitures are
allocated in addition to Employer Contributions, then such Contributions will
be adjusted in order to satisfy the limitations of Article VIII, before the
allocation of Forfeitures is affected.  If Forfeitures are used to reduce
Employer Contributions, shares forfeited shall reduce Employer Contributions to
the extent of the fair market value of such





                                       37
<PAGE>   40
shares at the date of Forfeiture, regardless of the date of the corresponding
reduction and regardless of the fact that such shares will continue to carry
the same basis in the hands of the Trust.  It is intended by this provision
that Forfeitures shall equal reduced contributions under this section, thereby
causing Annual Additions to be unaffected by Forfeitures and by changes in the
value of the shares subsequent to the date of the Forfeiture.

         4.07  Employer Contributions made to the Plan which are used by the
Plan to make principal payments on a Loan on or before the due date (with
extensions) for the employer's Federal income tax return for the taxable year
shall be treated as made for the Plan Year if so designated by the Employer.
Such Employer Contributions may not exceed twenty- five (25%) percent of the
eligible Compensation of Participants (other than Inactive Participants) for
the Plan Year.  Notwithstanding the limitations of Article VIII, Forfeitures
attributable to Qualifying Employer Securities acquired with the proceeds of
the Loan shall not reduce the Employer Contribution hereunder.

         In addition to the foregoing, Employer Contributions shall be made to
the extent of interest payments on the Loan, provided that the payments are
made by the Plan & Trust on the Loan by the due date (with extensions) for the
Employer's Federal income tax return for the taxable year associated with the
Plan Year and are designated as made for such Plan Year.

         4.08  The decisions regarding the investment, reinvestment and
accounting of Employer Contributions and Forfeitures allocated to each
Participant's account shall be governed by the provisions of Articles VI and
XII.

                                   ARTICLE V
                      ALLOCATION OF EMPLOYER CONTRIBUTIONS

         5.01  As of each Valuation Date which is the last day of a Plan Year,
the account of each Participant (who has completed 1,000 Hours of Service
during the Plan Year and who has either (i) not terminated employment with the
Employer prior to the last day of the Plan Year or (ii) completed at least one
(1) Hour of Service with the Employer during 1991 if the termination was in
1991 after September 30, 1991), shall be credited with a portion of the
Employer Contribution and Forfeitures, if any, for the appropriate Plan Year,
allocated as set forth in section 5.02, below.  For purposes of this
allocation, an Inactive Participant shall not be counted as a Participant.

         For 1991, a Participant shall not be considered to have terminated
employment on or before September 30, 1991 if such Participant completed an
Hour of Service with the Employer after September 30, 1991; an Hour of Service
must be actually worked or





                                       38
<PAGE>   41
directly paid for.  An Employee whose pay is computed on a period of time, such
as severance pay of a certain period's pay, shall not be considered to have
completed an Hour of Service for any particular period unless the pay is
designated for such period.  Thus, an Employee who terminates employment before
October 1, 1991 and does not perform any services after such date shall be
considered so terminated even though he may be paid severance pay equal to his
pay for a period of time which, if considered to extend from his termination
date, would have extended past September 30, 1991.

         5.02  Each Participant who has completed 1,000 Hours of Service during
the Plan Year for which the Employer Contribution is made and who has either
(i) not terminated employment with the Employer or an Affiliated Employer prior
to the last day of the Plan Year,  or (ii) terminated employment during 1991,
but not terminated employment with the Employer prior to October 1, 1991, shall
be credited with that portion of the Employer Contribution to the Plan and
Forfeitures, if any, equal to the percentage which such Participant's units for
such Plan Year bear to the units of all Participants in the Plan for the
Allocation Limitation Year ending with or within such Plan Year.  Each
Participant is credited with one unit for each Year of Service (vesting) and
one unit for each $100 of compensation.

         Employer Contributions which are used to pay a Loan shall be allocated
to Participants by prorating the released shares (nonmonetary units) in the
same manner as in the preceding paragraph.  For this purpose, the number of
released shares for any Plan Year shall be as provided in section 17.03 and the
terms of the Loan; if the shares purchased with the proceeds of the Loan are
not pledged, then they shall be allocated as if pledged and released in
accordance with section 17.03.

         For Plan Years ending before January 1, 1988, Employer Contributions
and Forfeitures were allocated to Participants who terminated employment with
the Employer before the last day of the Plan Year on account of death,
Disability and normal retirement.

         5.03  The allocations provided herein are subject to and subordinate
to the limitations provided by Article VIII and the Code.  If a Participant
would be allocated an Excess Amount (as defined in Article VIII) were it not
for the limitation of Article VIII, then the allocations to his account shall
be reduced as provided in Article VIII.  In addition, if this Plan is a
Top-heavy Plan in any Plan Year, the allocations made under this Article shall
be superseded for such Plan Year to the extent necessary to satisfy the rules
regarding Top-heavy Plans set forth in Article XVI.





                                       39
<PAGE>   42
                                   ARTICLE VI
                          INVESTMENT OF TRUST ASSETS;
                     ALLOCATIONS TO PARTICIPANT'S ACCOUNTS

         6.01  Trust Assets under the Plan will be invested primarily in
Qualifying Employer Securities.  The Plan Administrator may direct the Trustee
to incur debt from time to time to finance the acquisition of Qualifying
Employer Securities by the Trust or otherwise.  Employer Contributions (and
other Trust assets) may be used to acquire shares of Qualifying Employer
Securities from Company shareholders (including former Participants) or from
the Company.

         Qualifying Employer Securities purchased with the proceeds of a Loan
shall be held in a Suspense Account pending release and reallocation to other
Accounts as the Loan is paid.  Qualifying Employer Securities purchased with
amounts allocated to Participants' Other Investments Accounts shall upon
purchase be credited pro rata to the corresponding Participants.

         6.02  Separate Company Stock Accounts and Other Investments Accounts
will be established to reflect Participants' interests under the Plan.  If the
Trust has Qualifying Employer Securities which were acquired on or before
December 31, 1986 and also has Post-1986 Employer Securities, then a separate
subaccount of the Company Stock Account of each Participant shall be maintained
for such pre- and Post-1986 Employer Securities.  Records shall be kept by the
Plan Administrator from which can be determined the portion of each Other
Investments Account which at any time is available to meet obligations under a
Loan and the portion which is not so available.

         6.03  The Company Stock Account maintained for each Participant will
be credited with his allocable share of Qualifying Employer Securities
(including fractional shares) purchased with cash paid to the Trust, with
contributions in kind to the Trust, with Forfeitures of Qualifying Employer
Securities and with any stock dividends on Qualifying Employer Securities
allocated to his Company Stock Account.  Stock dividends shall not be credited
to accounts for a Plan Year for Participants who have been paid or forfeited
their benefits during the Plan Year.  Stock splits shall be credited to the
accounts of Participants whose stock has not been distributed to them as of the
record date but whose stock is distributed to them at a later date during the
Plan Year.  Qualifying Employer Securities acquired by the Trust with the
proceeds of a Loan shall be allocated to the Company Stock Accounts of
Participants as the Qualifying Employer Securities are released from Suspense
Accounts as provided for in Article XVII.

         6.04  The Other Investments Account maintained for each Participant
will be credited (or debited) with its share of the





                                       40
<PAGE>   43
net income (or loss) of the Trust, other than that portion of the Trust which
is invested in Qualifying Employer Securities (any cash dividends on Qualifying
Employer Securities allocated to the Company Stock Account of the Participant
for whose benefit the stock is held), and with Employer Contributions in cash
and in other than Qualifying Employer Securities.  Each will be debited for its
share of any cash payments for the acquisition of Qualifying Employer
Securities for the benefit of Company Stock Accounts or for any repayment of
principal and interest on any Loan or other debt chargeable to Participants'
Company Stock Accounts; provided that only the portion of each Other
Investments Account which is available to meet obligations under Loans shall be
used to pay principal or interest on a Loan.

         6.05  Employer Contributions and Forfeitures will be allocated as of
the last day of each Plan Year among the accounts of Participants so entitled
in accordance with Article V and this Article VI.

         6.06  The net income (or loss) of the Trust for each Plan Year (not
attributable to Qualifying Employer Securities) will be determined as of the
Valuation Date.  Each Participant's share of the net income (or loss) will be
allocated to his Other Investments Accounts in the ratio which the balance of
each such Account on the preceding Valuation Date (reduced by amount of any
distribution from such Account and increased by Employer Contributions other
than in stock made after such date but accrued as of such date and made on
account of the year ending on such date) bears to the sum of such balances for
all Participants as of that date.  The net income (or loss) of the Trust
includes the increase (or decrease) in the fair market value of Trust Assets
(other than Qualifying Employer Securities), interest income, dividends and
other income (or loss) attributable to Trust Assets (other than allocated
Company Stock) since the preceding Valuation Date.  For purposes of computing
net income (or loss), interest paid on any Loan or other Debt shall be
disregarded.

         6.07  The Plan Administrator shall adopt accounting procedures for the
purpose of making the allocations, valuations and adjustments to Participants'
Accounts provided for in this Article.  Except as provided in Treasury
Regulation section 54.4975-11, Qualifying Employer Securities acquired by the
Plan shall be accounted for as provided in Treasury Regulation section
1.402(a)-1(b)(2)(ii).  Allocations of Qualifying Employer Securities shall be
made separately for each class of stock, and the Plan Administrator shall
maintain adequate records of the cost basis of all shares of Qualifying
Employer Securities allocated to each Participant's Company Stock Accounts.
From time to time the Plan Administrator may modify the accounting procedures
for the purpose of achieving equitable and nondiscriminatory allocations among
the Accounts of Participants





                                       41
<PAGE>   44
in accordance with the general concepts of the Plan and the provisions of this
section.  Annual valuations of Trust Assets shall be made at fair market value,
as described in section 6.06 above.

         6.08  If, by reason of the application of Break in Service rules, or
by any other rule such as that on partial plan termination, a portion of a
Participant's Accrued Benefit attributable to Employer Contributions is subject
to a different vesting percentage from another portion of such account balance,
then the Plan Administrator shall cause to be maintained a separate account or
subaccount for each such portion for each such Participant.

         6.09  This paragraph shall apply only if the shares of Company Stock
cease to be publicly traded.  If a sale of Qualifying Employer Securities is
made to the Plan for which nonrecognition of gain is elected under Code section
1042 and if the Plan Administrator is notified by the Employer, in a written
statement which conforms to the requirements of Code section 1042(b)(3), that
the Employer consents to the application of Code section 4978(a) and 4979A with
respect to such transaction and if the Plan Administrator consents to such
transaction and its accounting treatment hereunder, then no portion of the
assets of the Plan attributable to or allocable in lieu of Employer Securities
acquired by the Plan in a sale to which Code section 1042 applies may accrue
(or be allocated directly or indirectly) under any Plan of the Employer meeting
the requirements of Code section 401(a), to the following persons:

                 (a)      During the Nonallocation Period, for the benefit of
the taxpayer who sold such Qualifying Employer Securities and elected
nonrecognition under Code section 1042;

                 (b)      During the Nonallocation Period, for the benefit of
any member of the family of the taxpayer described in (a) above (within the
meaning of Code section 267(b)); or

                 (c)      For the benefit of any other person who owns (after
application to Code section 318(a) without regard to paragraph (2)(B)(i)
thereof) more than twenty-five (25%) percent of (1) any class of outstanding
stock of the Corporation which issued such Employer securities or of any
corporation which is a member of the same controlled group of corporations (as
defined in Code section 409(l)(4)) as such corporation, or (2) the total value
of any class of outstanding stock of any such corporation.

         The Plan Administrator shall not be permitted to consent to the above
sale and allocation in connection with this transaction if the Plan does not
own more than thirty (30%) percent of the total value of Qualifying Employer
Securities outstanding immediately after the sale or if the Other Investments
Accounts





                                       42
<PAGE>   45
of the Participants to whom the special allocation is to be made do not have
sufficient assets for such purchase.

                                  ARTICLE VII
                            DISTRIBUTION OF BENEFITS

         7.01  Each Participant who shall retire at his Normal Retirement Date
shall be entitled to a Benefit equal to his Accrued Benefit as of the date of
his retirement.  Upon the termination of a Participant's employment by reason
of his retirement, his Accrued Benefit on the date of such termination, shall
be distributed, or commence to be distributed, to the Participant as soon
thereafter as practicable as provided in this Article VII.  Upon reaching
Normal Retirement Age while still employed by the Employer, a Participant shall
become fully vested in his Accrued Benefit.

         A Participant who has reached his Early Retirement Date and who has
also attained Age 65 shall be allowed to elect, one time after attainment of
the above dates, to receive a distribution of all or part of his Accrued
Benefit in any form permitted under this Plan, notwithstanding his continued
employment with the Employer.

         7.02  If a Participant, with the consent of the Employer, shall
continue in active employment with the Employer after his Normal Retirement
Date, he shall continue to participate as a Participant under this Trust
Agreement, and he may take late retirement.  Upon such late retirement, a
Participant shall be  entitled to his Accrued Benefit as of the actual
retirement date determined by reference to the most recent Valuation Date, plus
his share of any Employer Contributions made or to be made in the year in which
his late retirement occurred.  His Accrued Benefit, plus his share of the
Employer Contribution set forth above, shall be distributed, or commence to be
distributed, to him as soon as practicable as provided in this Article VII.  In
any event, payment shall be made or shall commence on or before the Required
Beginning Date.

         7.03  If a Participant is determined by the Plan Administrator to be
eligible for Disability retirement, he shall be fully vested in, and shall be
entitled to, a benefit equal to his Accrued Benefit as of the date of his
actual retirement, plus his share of any Employer Contributions and Forfeitures
made or to be made in the years in which his retirement occurred.  His Accrued
Benefit shall be distributed, or commence to be distributed, to him as soon as
practicable as provided in this Article VII, or may be held as part of the
assets of the Trust and continue to share in the gains and losses of the Trust
until the Participant reaches his Normal Retirement Age, the decision as to
such payout or such deferral to be made by the Participant.





                                       43
<PAGE>   46
An Inactive Participant shall not be eligible for Disability retirement.

         7.04  Upon the death of a Participant while still employed by the
Employer, his Accrued Benefit on the date of his death, plus his share of any
Employer Contributions and Forfeitures made or to be made in the years in which
his retirement occurred shall be distributed, or commence to be distributed,
following the date of death to the person provided in section 7.12.  Upon the
death of a Participant, while still employed by the Employer, his Accrued
Benefit shall be fully vested.

         If the Participant dies after distribution of his or her interest has
commenced, the remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of distribution being used
prior to the Participant's death.  If the Participant dies before distribution
of his or her interest commences, the Participant's entire interest will be
distributed no later than five (5) years after the Participant's death except
to the extent that an election is made to receive distributions in accordance
with (a) or (b) below:

         (a)  if any portion of the Participant's interest is payable to a
Designated Beneficiary, distributions may be made in substantially equal
installments over the life expectancy of the Designated Beneficiary commencing
no later than One (1) year after the Participant's death;

         (b)  if the Designated Beneficiary is the Participant's surviving
spouse, the date distributions are required to begin in accordance with (a)
above shall not be earlier than the date on which the Participant would have
attained Age 70 1/2; and, if the spouse dies before payments begin, subsequent
distributions shall be made as if the spouse had been the Participant.

         For purposes of the above calculation, payments will be calculated by
use of the return multiples specified in section 1.72-9 of the Income Tax
Regulations.  Life expectancy of a surviving spouse may be recalculated
annually; however, in the case of any other Designated Beneficiary, such life
expectancy will be calculated at the time payment first commences without
further recalculation.

         For purposes of this section, any amount paid to a child of the
Participant will be treated as if it had been paid to the surviving spouse if
the amount becomes payable to the surviving spouse when the child reaches the
age of majority.

         Notwithstanding the other requirements of this Article, distribution
on behalf of any Participant, including a Five Percent Owner, may be made in
accordance with all of the





                                       44
<PAGE>   47
following requirements (regardless of when such distribution commences):

         (a)  The distribution by the trust is one which would not have
disqualified such trust under section 401(a)(9) of the Internal Revenue Code as
in effect prior to amendment by the Deficit Reduction Act of 1984.

         (b)  The distribution is in accordance with a method of distribution
designated by the Participant whose interest in the trust is being distributed
or, if the Participant is deceased, by a Beneficiary of such Participant.

         (c)  Such designation was in writing, was signed by the Participant or
the Beneficiary, and was made before January 1, 1984.

         (d)  The Participant had accrued a benefit under the Plan as of
December 31, 1983.

         (e)  The method of distribution designated by the Participant or the
Beneficiary specifies the time at which distribution will commence, the period
over which distributions will be made, and in the case of any distribution upon
the Participant's death, the Beneficiaries of the Participant listed in order
of priority.  A distribution upon death will not be covered by this
transitional rule unless the information in the designation contains the
required information described above with respect to the distributions to be
made upon the death of the Participant.  For any distribution which commences
before January 1, 1984, but continues after December 31, 1983, the Participant,
or the Beneficiary, to whom such distribution is being made, will be presumed
to have designated the method of distribution under which the distribution is
being made if the method of distribution was specified in writing and the
distribution satisfies the requirements in (a) and (e) above.  If a designation
is revoked any subsequent distribution must satisfy the requirements of section
401(a)(9) as amended.  Any changes in the designation will be considered to be
a revocation of the designation.  However, the mere substitution or addition of
another Beneficiary (one not named in the designation) under the designation
will not be considered to be a revocation of the designation, so long as such
substitution or addition does not alter the period over which distributions are
to be made under the designation, directly or indirectly (for example, by
altering the relevant measuring life).

         The surviving spouse who is entitled to receive such benefits, if any,
may direct the commencement of benefits within a reasonable time after the
death of the Participant, subject to the foregoing limitations.





                                       45
<PAGE>   48
         7.05  After the termination of employment of a Participant for any
reason other than death, Disability or retirement, his vested percentage in his
Accrued Benefit shall be distributed to him after his retirement at or after
Normal Retirement Age except to the extent of Post-1986 Employer Securities
which, at the election of the Participant must not be distributed later than at
the time(s) provided in sections 7.17 and 7.18.  The distribution of the
Accrued Benefit of any Participant shall be made or shall commence on or before
the Required Beginning Date.

         Except in the case of death, Disability or retirement while still
employed by the Employer, and in the case of Rollover Contribution, which cause
the Participant to be one hundred (100%) percent vested, and except as
otherwise provided in Article XVI in a Plan Year in which the Plan is a
Top-Heavy Plan, the Participant's vested interest in his Accrued Benefit
derived from Employer Contributions shall be determined in accordance with the
following vesting schedule:

<TABLE>
<CAPTION>
          Years of Service Completed        % Vested
          --------------------------        --------
                   <S>                          <C>
                       0-4                       0%
                       5                         25%
                       6                         30%
                       7                         35%
                       8                         40%
                       9                         45%
                      10                         50%
                      11                         60%
                      12                         70%
                      13                         80%
                      14                         90%
                   15 or more                   100%
</TABLE>


         The above schedule shall apply to all Participants who do not complete
an Hour of Service with the Employer or an Affiliated Employer on or after the
first day of the Plan Year beginning after December 31, 1988.

         For Plan Years beginning after December 31, 1988, the following
vesting schedule shall apply:

<TABLE>
<CAPTION>
          Years of Service Completed        % Vested
          --------------------------        --------
                <S>                           <C>
                Less than 5                     0%
                 5 or more                    100%.
</TABLE>

         This vesting schedule shall apply only to a Participant who completes
at least one (1) Hour of Service during or after the Plan Year beginning after
December 31, 1988; otherwise, the vesting schedule in the preceding paragraph
shall apply.





                                       46
<PAGE>   49

         However, if such a Participant has completed three (3) Years of
Service or more as of December 31, 1989 and also completes at least one (1)
Hour of Service after December 31, 1988, then his vested interest shall be
determined under the following vesting schedule:

<TABLE>
<CAPTION>
          Years of Service Completed        % Vested
          --------------------------        --------
                 <S>                          <C>
                 Less than 3                    0%
                     3                         20%
                     4                         40%
                  5 or more                   100%
</TABLE>


         Years of Service by the Participant with the Employer referred to in
determining the Participant's place on the vesting schedule shall exclude
service excluded under the rule of parity in section 7.14.

         Years of Service by the Participant referred to in determining the
Participant's place on the vesting schedule shall include:

                 (a)      Service with the Employer before the Employer
established this Plan or a predecessor plan;

                 (b)  Service with any entity or entities which were formerly
under Common Control with the Employer, but only during the period in which
they were under such Common Control; and

                 (c)      Service for the following entities which have been
absorbed into the business of the Employer through merger, asset purchase or
otherwise:  Foster Mortgage Company ("FMC"), during the period of ownership by
the Company and prior to the acquisition of the FMC by the Company, but not
after the disposition of FMC by the Company effective October 1, 1993;

                 (d)      Years of Service with the Employer before the
Participant participated in the Plan, including Years of Service with the
Employer in non-covered employment, shall be included in Years of Service
unless such period of service would have been excluded for some other reason
stated herein.

         7.06 If a Participant terminates service with the Employer for a
reason other than death, Disability or retirement, then the payment of such
Accrued Benefit shall commence as soon as practicable following the last day of
the Plan Year in which the Participant attains his Normal or Early Retirement
Date, except as provided in Sections 7.15 and 7.16 with respect to Post-1986
Employer Securities.





                                       47
<PAGE>   50
         If, notwithstanding the above, a Participant receives a distribution
which is less than the value of the Participant's Accrued Benefit derived from
Employer Contributions, and resumes employment covered under this Plan, the
Participant's account (including Forfeitures) will be restored to the amount on
the date of distribution (adjusted for earnings) if the Participant repays to
the Plan the full amount of the distribution on or before the date on which the
Participant incurs five (5) consecutive one-year Breaks in Service following
the date of distribution, or, if earlier, the date which is five (5) years from
the date of distribution.  The restoration will be made from other Forfeitures,
and if such Forfeitures are insufficient, then from additional Employer
Contributions.

         If distributions are not made or deemed made under this section,
section 7.15 or section 7.16, then the Forfeiture shall occur when the
Participant or former Participant incurs five (5) consecutive one-year Breaks
in Service following his termination of service.

         7.07  An authorized Leave of Absence not in excess of one (1) year
shall not be construed as a termination of employment, provided that a
Participant on such Leave shall return to employment within the time
prescribed.  If a Participant on an unpaid Leave of Absence does not so return,
he shall be deemed to have terminated his employment upon the effective date of
his Leave of Absence and the provisions of this Article VII shall be applied.

         The account of a Participant who is on such Leave of Absence shall
share in the allocation of Contributions and Forfeitures as specified under the
provisions of Article V and Article VII for the Plan Year to the extent that
the Participant receives Compensation from the Employer in any Allocation
Limitation Year and actually completes 1,000 Hours of Service during the Plan
Year, and such account shall continue to share in allocation of Trust fund
income or loss under the provisions of Article VI.

         7.08  As soon as practicable after the close of the Plan Year in which
the vested Accrued Benefit provided under this Article VII becomes payable,
such benefits (except for Post-1986 Employer Securities) shall (or shall
commence to) be distributed to a Participant, his spouse, his Beneficiary who
is entitled to receive benefits, his children, or his estate, as the case may
be, in such manner as the distributee(s) shall elect (by execution of a form
provided by the Plan Administrator), in accordance with one or more of the
following ways:

                 (a)      In a lump sum payable in cash, in the shares of
United Companies Financial Corporation, or in a combination of cash and shares;
or





                                       48
<PAGE>   51
                 (b)      In substantially equal annual installments, over a
certain period of not more than fifteen (15) years, payable in cash, in the
shares of United Companies Financial Corporation, or in combination of cash and
shares which is determined prior to the commencement of benefit payments.

         Any Participant with vested Accrued Benefit greater than $3,500 shall
be provided with a written notice of the material features of, and an
explanation of the relative value of, the optional form of benefit available
under the Plan.  Such notice shall be provided at least 30 days prior and not
more than 90 days prior to the distribution of the benefit.  The consent of the
Participant (and spouse, if applicable) to the immediate distribution of
benefits shall be made not earlier than 90 days and not later than 30 days
prior to the distribution of the benefit.

         The distribution shall be made in whole shares of the stock of United
Companies Financial Corporation, or its successor; however, in the event that
the Trust does not have sufficient shares, then distribution may be made in the
form of cash.  Notwithstanding this provision, the Participant may require that
his Accrued Benefit be distributed solely in the shares of United Companies
Financial Corporation, except when the ownership of such shares is restricted,
as provided below, and except that the Trustee may, for ease in administration
and accounting, distribute cash in lieu of any fractional shares.  Otherwise,
the Plan Administrator shall determine whether distributions are made in cash,
in shares of United Companies Financial Corporation, or in a combination of
cash and shares, although the Participant shall have the right to elect payment
in any form which is available under the Plan.  If the charter or bylaws of
United Companies Financial Corporation restrict ownership of substantially all
outstanding shares of Qualifying Employer Securities to Employees of United
Companies Financial Corporation or to a Trust under a Plan qualified under Code
section 401(a) and require any former Employee to resell any Qualifying
Employer Securities to United Companies Financial Corporation or to the Trust
upon termination of service with the Employer, and if Participants are given
the right to receive distributions in cash, then the Participant may not
require that his vested Accrued Benefit be distributed in Qualifying Employer
Securities.  Such restriction shall apply by its terms to any common stock;
however, in order to be valid, such provision must apply to all of the shares
of stock issued by United Companies Financial Corporation.

         The method of distribution shall not prevent the Trustee or the
Employer from giving any distributee a Put Option as to such distributed
shares, payable in a lump sum or in installments at a reasonable rate of
interest.  Any policy of providing such Put Option shall not discriminate in
favor of Highly Compensated





                                       49
<PAGE>   52
Employees or against Nonhighly Compensated Employees.  Furthermore, the policy
of providing such Put Option may be discontinued, at the direction of the Plan
Administrator, if it shall become apparent that such Put Option is not required
(such as when publicly traded shares are readily tradeable on an established
securities market).

         7.09  Any distribution made pursuant to this Article VII shall be
made, or shall commence, unless the Participant makes a revocable election not
to receive such benefits, in writing to the Plan Administrator, not later than
the sixtieth day after the close of the Plan Year in which the latest of the
following dates occurs:

                 (a)      The date the Participant attains Age;

                 (b)      The tenth anniversary of the Participant's
Participation Commencement Date; or

                 (c)      The date the Participant terminated his service with
the Employer.

         If a Participant elects to defer the receipt of any benefit pursuant
to this section, such election shall not have the effect of creating a death
benefit which is more than incidental.  Such election is revocable.  Payment
after death shall satisfy the requirements of section 7.04.  In no event may
the date of the distribution or of the commencement of distributions be later
than the Required Beginning Date, unless the Participant or his Beneficiary has
elected on or before December 31, 1983, to receive benefits at a later date or
in a slower manner, in accordance with the terms of the Plan as of such date.
Except for payments pursuant to such election, any method of distribution which
would be payable over a period of years shall not be payable for any such
period longer than the joint and last survivor life expectancies of the
Participant and his Designated Beneficiary determined as of the date of the
election; however, such life expectancies may be readjusted once each Plan Year
(and the life expectancy of a Designated Beneficiary other than the
Participant's spouse may not be readjusted), but no more frequently than
annually.

         7.10  Distributions from the Plan shall be made in accordance with the
requirements of Code section 401(a)(9), including the minimum distribution
incidental benefit requirements of Proposed IRS Regulations section 1.401(a)(9)
2, Code section 401(a)(9)(G), Proposed IRS Regulations sections 1.401(a)(9)-1,
(Q&As A-3 and F-4A), and 1.401(a)(9)-2.  The following will also apply:

                 (a)      If a Participant's entire Interest is distributed in
a form other than a single sum payment over a period in excess of the
Participant's life expectancy, the method of distribution





                                       50
<PAGE>   53
must provide that at least fifty (50%) percent of the Participant's entire
interest will be paid within the life expectancy of the Participant.

                 (b)      If a Participant's entire interest is distributed in
a form other than a single sum payment, the minimum amount distributed each
year must equal or exceed the quotient of (i) the Participant's remaining
entire interest, divided by (ii) the Participant's life expectancy or the joint
and last survivor life expectancy of the Participant and his or her
Beneficiary. Upon the Participant's or surviving spouse's request, the Plan
Administrator shall permit the life expectancy of the Participant or the
surviving spouse to be redetermined, but not more frequently than annually.

                 (c)      If the Participant dies after benefit payments have
begun, the remaining entire interest of the Participant's Accounts must be
distributed at least as rapidly as under the distribution method that was in
effect prior to death.

                 (d)      If distributions have not commenced before the
Participant's death, the Participant's entire interest must be distributed
within five (5) years of the date of death; provided, however, that a
distribution in the form of installments is not subject to this five (5) year
rule, but such installments must commence within one (1) year of the
Participant's death.

         7.11  This paragraph applies to Distributions made on or after January
1, 1993.  Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this Article, a Distributee may
elect, at the time and in the manner prescribed by the Plan Administrator, to
have any portion of an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan specified by the Distributee in a Direct Rollover.

         7.12  As soon as possible after he becomes eligible to participate,
each Participant in the Plan shall receive from the Plan Administrator a
Beneficiary designation form.  The form shall be in a format as directed by the
Plan Administrator in its discretion.  If the Participant is married at the
time of his death, and if the payment of benefits has not already commenced,
then the surviving spouse must consent to the naming and payment of the
Beneficiary prior to the date of death.  The spousal consent must designate a
specific beneficiary and a specific form of benefit which may not be changed
without the consent of the spouse.  Any spousal consent shall be binding only
with respect to the spouse executing the consent.  The form shall provide the
Participant with the opportunity to select the person or persons (including an
individual, trust, partnership, corporation or any combination of the
foregoing) to whom he wishes to have his Accrued Benefit paid in the event that
he dies before receiving





                                       51
<PAGE>   54
the entire amount.  The form may provide for contingent Beneficiaries, to
receive all or a portion of the Participant's Accrued Benefit in the event that
the primary Beneficiary or Beneficiaries die.  The form shall be in a form
valid to pass the assets held for the benefit of the Participant under both
ERISA and Louisiana law, if possible.

         To be valid, the form shall be executed by the Participant as
indicated thereon and filed with the Plan Administrator.  If the Participant is
married at the time of his death, and if the payment of benefits has not
already commenced, then the surviving spouse must consent to the naming and
payment of the Beneficiary prior to the date of death.  The spousal consent
must be in writing, must be witnessed by a representative of the Plan
Administrator or a Notary Public, and must acknowledge the effect of such
election as well as the specific beneficiary.  The designation may be changed
at any time by the filing of a new form by the Participant, with the
appropriate spousal consent, if applicable, and the most recent designation
shall govern.  Subject to the provisions of section 7.04, the Trustee shall be
obligated to distribute the deceased Participant's Accrued Benefit to the
person or persons designated on the Beneficiary designation form.  But if no
proper designation is on file with the Plan Administrator or if the Beneficiary
or Beneficiaries named on the most recent designation form, both primary and
contingent, predeceased (or otherwise terminated existence prior to the death
of the Participant) the Participant, or if the Beneficiary designation is
rendered impossible by reason of applicable State law, then the Participant's
spouse shall be considered the designated Beneficiary.  If the Participant is
not married or if the spouse is deceased or renounces, then the Participant's
children will be presumed as the Beneficiary or Beneficiaries as if so
designated by the Participant.  If no children survive the Participant, then
the Participant's estate will be presumed as the Beneficiary or Beneficiaries
as if specifically designated by the Participant and will receive said benefits
with all rights of a named Beneficiary.  The Plan Administrator, after
consultation with the Beneficiary or Beneficiaries, including a deemed
Beneficiary, shall direct the Trustee as to the form of payment.

         7.13  The nonforfeitable interest of a Participant as determined under
this Article VII shall not be forfeited for any cause.  The value of any
forfeitable Accrued Benefit of any Participant shall be forfeited as of the
last day of the Plan Year in which he incurs five (5) consecutive one-year
Breaks in Service, or on the last day of the Plan Year in which a cash-out as
described in section 7.06 occurs, if earlier.  In the case of a "cash-out", the
Forfeiture will take place at the time of the cash out and restored upon later
buyback.  The amount of the Forfeiture shall be computed as of the end of the
Plan Year in which said Forfeiture occurs and allocated in proportion to the





                                       52
<PAGE>   55
Compensation of all Participants entitled to receive allocations for the next
succeeding Plan Year.  Forfeitures shall be reallocated among all Participants
who are Employees of all Affiliated Employers sponsoring the Plan, and shall
not be limited to Employees of the Employer of the person whose account is
forfeited.  The amount of any such Forfeiture shall be first deducted from the
terminated Participant's Other Investment Account.  If such amount is not
sufficient to reduce the fair market value of his Accrued Benefit to the
percentage of his Accrued Benefit determined under section 7.05, the remainder
of the Forfeiture shall be deducted from his Company Stock Account,  but shall
come from that portion of his Company Stock Account which does not consist of
securities purchased with the proceeds of a Loan.  Subject to the proviso that
securities acquired with the proceeds of a Loan are forfeited last, if a
Participant's Company Stock Account includes more than one class of stock, the
Forfeiture will consist of the same proportion of each class of stock.

         7.14  Years of Service with the Employer, which shall not be taken
into account in computing the nonforfeitable percentage under Article VII, as
provided in section 7.05, are as follows:

                 (a)      In the case of a Participant who incurs a One-Year
Break in Service, the Years of Service before such break shall not be taken
into account until such Employee has completed a Year of Service after his
return;

                 (b)      In the case of a Participant who has five (5)
consecutive One-Year Breaks in Service, Years of Service completed after such
five (5) year period shall not be taken into account for the purpose of
determining the nonforfeitable percentage of the Participant's Accrued Benefit
derived from Employer Contributions and which accrued before such break;

                 (c)      In the case of a former Employee who did not have any
nonforfeitable right to any Accrued Benefit derived from Employer Contributions
at the time of his termination, the Years of Service with the Employer
completed by the former Participant before any One-Year Break in Service shall
not be taken into account if the number of consecutive One-Year Breaks in
Service equals or exceeds the greater of (i) five (5) Years; or (ii) the
aggregate number of years of Service completed prior to such break.  If any
Years of Service are not required at one time to be taken into account by
reason of this subsection, then such Years of Service shall not be taken into
account with respect to this subsection in determining the number of Years of
Service after a subsequent Break in Service.

         7.15  The Plan Administrator shall set the policy with respect to
withholding of Federal income taxes on the payment of benefits hereunder,
notice to Participants and Beneficiaries of





                                       53
<PAGE>   56
their right to elect not to have withholding apply, and the manner and form of
exercising or revoking such election.  The Plan Administrator shall be
responsible for providing appropriate forms for election purposes and shall
direct the Trustee as to the manner of withholding.  The Trustee and the Plan
Administrator shall coordinate the provision of notice and election forms and
the payment of benefits.

         Effective January 1, 1993, the Trustee shall withhold from Eligible
Rollover Distributions which are not directly transferred to an Eligible
Retirement Plan pursuant to section 7.11, twenty (20%) percent of the total
value of the Eligible Rollover Distribution.  No withholding shall be required
from a distribution of Company Stock, nor shall withholding be required for a
cash distribution where the cash is in lieu of a partial share and does not
exceed $200 or for a cash distribution where the total value of the
distribution does not exceed a de minimis amount.

         7.16  During the minority, interdiction, or limited interdiction of
any person entitled to receive benefits hereunder, the Plan Administrator may
direct the Trustee to make payments directly to such person, or to his spouse,
or to a relative or to any individual or institution having custody of such
person.  Neither the Plan Administrator nor the Trustee shall be required to
see to the application of any payments so made, and the receipt of the payee
(including the endorsement of a check or checks) shall be conclusive as to all
interested parties.  The Plan Administrator shall be entitled to rely on the
representations of the legal representative of such person as to the proper
means and manner of payment and as to the proper payee.  The Plan Administrator
may require that any documentation of such status be provided as a condition of
payment.

         7.17  Each Participant who is or becomes a Qualified Participant shall
be entitled to elect, beginning with the first Plan Year in which he is a
Qualified Participant, within ninety (90) days following the close of such Plan
Year, to have up to twenty-five (25%) percent of the sum of (a) his vested
Accrued Benefit attributable to Post-1986 Employer Securities, and (b)any prior
distributions of such Post-1986 Employer Securities, paid to him.  The
Participant shall be entitled to elect during each of the next five (5)
following Plan Years of the Qualified Election Period to have up to such
twenty-five (25%) percent of the sum of (a) his Accrued Benefit attributable to
Post-1986 Employer Securities, and (b) any prior distributions of such
Post-1986 Employer Securities, at the time of such election, paid to him,
except that in the last Plan Year in which he is a Qualified Participant, the
election may be made with respect to fifty (50%) percent of his Accrued Benefit
attributable to Post-1986 Employer Securities.  In computing the amount to be
distributed in the current year, the amount determined to be





                                       54
<PAGE>   57
distributable under the formula above shall be reduced by prior distributions
of Post-1986 Employer Securities during the Qualified Election Period, if any.
Distribution shall be made within ninety (90) days after the close of the
Election Period.  Distributions and elections which would be required under
these provisions prior to September 6, 1988 may be extended to such date, as
provided by I.R. Notice 88-56.

         This section shall not apply if the Qualified Participant's Accrued
Benefit attributable to Employer Securities otherwise subject to this section
for the Plan Year does not exceed $500.

         7.18  Notwithstanding the other provisions of this Article, if the
Participant elects, if applicable pursuant to sections 401(a)(11) and 417, with
the consent of his spouse, the distribution of the Participant's vested Accrued
Benefit attributable to Post-1986 Employer Securities shall be made, or shall
commence, not later than one (1) year after the close of the Plan Year:

                 (a)      In which the Participant separates from service on
account of death, disability or attainment of Normal Retirement Age; or

                 (b)      Which is the fifth Plan Year following the Plan Year
in which the Participant separates from service with the Employer, provided
that the Participant has not become reemployed by the Employer before the date
of distribution.

         The period of distribution may not be greater that the lesser of

                          (i)     Ten (10) years, or

                          (ii)    The greater of five (5) years, or the number
of years which corresponds to the value of the Participant's vested Accrued
Benefit (determined as of the date of distribution, based on the most recent
valuation of the Qualifying Employer Securities), divided by $100,000, with a
full year to be credited for each fraction of $100,000.

         For purposes of determining the Participant's vested Accrued Benefit,
the Accrued Benefit shall not include any Employer securities acquired with the
proceeds of a Loan until the close of the Plan Year in which the Loan is repaid
in full.  The $100,000 and $500,000 figures above shall be adjusted by the
Adjustment Factor.

         If a Participant separates from service for a reason other than those
described in paragraph (a) above, and is employed by the Employer as of the
last day of the Plan Year following the Plan Year of such separation from
service, distribution to the





                                       55
<PAGE>   58
Participant, prior to any subsequent separation from service, shall be in
accordance with terms of the Plan other than this section.  For purposes of
this section, Qualifying Employer Securities shall not include any Qualifying
Employer Securities acquired with the proceeds of a Loan described in section
404(a)(9) of the Code until the close of the Plan Year in which such Loan is
paid in full.

         7.19  Notwithstanding any provisions to the contrary, the following
provisions are adopted to override existing plan language.

         Plan provisions which restrict the availability of an alternate form
of benefit to a certain select group or classification of participants or
beneficiaries which favors the group of Highly Compensated Employees shall be
considered null and void, with the result that such alternate form of benefit
is now available to all participants.  Plan provisions will be considered to
favor the group of Highly Compensated Employees if the group of employees to
whom the benefit is available does not satisfy either the seventy percent test
of section 410(b)(1)(A) or the nondiscriminatory classification test of section
410(b)(1)(A) of the Internal Revenue Code.

         Provided however, any plan provision that mandates a single sum
distribution where the present value of a participant's nonforfeitable accrued
benefit is not more than $3,500 will not be considered to favor the group of
Highly Compensated Employees.


                                  ARTICLE VIII
                           LIMITATIONS ON ALLOCATIONS

         8.01  (a)        If the Participant does not participate in, and has
never participated in another qualified plan maintained by the Employer or a
welfare benefit fund, as defined in section 419(e) of the Code maintained by
the Employer, or an individual medical account, as defined in section 415(l)(2)
of the Code, maintained by the Employer, which provides an Annual Addition as
defined in Article II, the amount of Annual Additions which may be credited to
the Participant's account for any Limitation Year will not exceed the lesser of
the Maximum Annual Addition or any other limitation contained in this Plan.  If
the Employer Contribution that would otherwise be contributed or allocated to
the Participant's account would cause the Annual Additions for the Limitation
year to exceed the Maximum Annual Addition, the amount contributed or allocated
will be reduced so that the Annual Additions for the Limitation Year will equal
the Maximum Annual Addition.

                 (b)      Prior to the determination of the Participant's
actual compensation for an Allocation Limitation Year, the





                                       56
<PAGE>   59
Maximum Annual Addition may be determined on the basis of the Participant's
estimated Compensation for such Allocation Limitation Year.  Such estimated
Compensation shall be determined on a reasonable basis and shall be uniformly
determined for all Participants similarly situated.  Any Employer Contributions
(including allocation of Forfeitures) based on estimated Compensation shall be
reduced by any Excess Amounts carried over from prior years.

                 (c)      As soon as is administratively feasible after the end
of the Allocation Limitation Year, the Maximum Annual Addition for such
Allocation Limitation Year shall be determined on the basis of the
Participant's actual Compensation for such Allocation Limitation Year.

                 (d)      If, pursuant to section 8.01, subsection (c) there is
an Excess Amount with respect to a Participant for an Allocation Limitation
Year, such Excess Amount shall be disposed of as follows:

                          (i)       First, any nondeductible voluntary
Participant Contributions, to the extent that the return would reduce the
Excess Amount, shall be returned to the Participant.


                          (ii)      Excess Amounts will be substracted from the
participant's accounts in the order of the last allocation (the reverse of the
order of allocation, i.e., Employer Contributions used to pay Loans shall not
be reduced until other discretionary Employer Contributions are reduced first)
as if never allocated, and shall be reallocated to other Participants in the
current Limitation Year to the extent such allocations do not exceed the
Maximum Annual Addition.  Any Excess Amounts that cannot be allocated will be
held in a suspense account.  All amounts in the suspense account must be
allocated and reallocated to the Participant's accounts (subject to the
limitations of section 415) in succeeding Limitation Years before any Employer
Contribution or nondeductible Participant Contribution which would constitute
an Annual Addition may be made to the Plan.

                 (e)      If a suspense account is in existence at any time
during the Limitation Year pursuant to this section, it will not participate in
the allocation of the Trust's investment gains and losses.

         8.02  (a)        If, in addition to this Plan, the Employer maintains
any other qualified defined contribution plan, the amount of Annual Additions
which may be allocated under this Plan on a Participant's behalf for an
Allocation Limitation Year, shall not exceed the lesser of:





                                       57
<PAGE>   60
                          (i)       The Maximum Annual Addition, reduced by the
sum of any Annual Additions allocated to the Participant's accounts for the
same Allocation Limitation Year under this Plan and such other defined
contribution plans; or

                          (ii)      Any other limitation contained in this
Plan.

                 (b)      Prior to the determination of the Participant's
actual Compensation for the Allocation Limitation Year, the amounts referred to
in (a)(i), above, may be determined on the basis of the participant's estimated
annual Compensation for such Allocation Limitation Year.  Such estimated annual
Compensation shall be determined on a reasonable basis and shall be uniformly
determined for all Participants similarly situated.  Any Employer Contribution
(including allocation of Forfeitures) based on estimated annual Compensation
shall be reduced by any Excess Amounts carried over from prior years.

                 (c)      As soon as is administratively feasible after the end
of the Allocation Limitation Year, the amounts referred to in (a)(i) shall be
determined on the basis of the Participant's actual compensation for such
Allocation Limitation Year.

                 (d) If a Participant's Annual Additions under his Plan and all
such other plans result in an Excess Amount, such Excess Amount shall be deemed
to consist of the Amounts last allocated.  In particular, if amounts are
allocated as of the same date, Elective Deferrals under the United Companies
Financial Corporation Employees' Savings Plan or any other cash or deferred
arrangement shall be allocated first; any required Employer Contributions and
Qualified Nondeductible Employee Contributions under the United Companies
Financial Corporation Employees' Savings Plan or any other cash or deferred
arrangement in order to satisfy nondiscrimination tests will be allocated
second; Matching Contributions under a Plan which permits such Contributions
shall be allocated third; discretionary Employer Contributions under the United
Companies Financial Corporation Employees' Savings Plan and Trust shall be
considered allocated fourth; Forfeitures of stock acquired with the proceeds of
an Employee Stock Ownership Plan Loan shall be allocated fifth and generally
not constitute Annual Additions; amounts allocated as a result of payment of an
Employee Stock Ownership Plan Loan under this Plan shall be allocated sixth;
and Employer Contributions allocated under a Plan which provides for
discretionary Employer Contributions, such as this Plan & Trust, shall be
considered to have been allocated last.  Thus, Elective Deferrals and Matching
Contributions which are allocated prior to the last day of the Plan Year, such
as on quarterly allocation dates, will be allocated before any of the above
which are allocated on the last day of the Plan Year.  Notwithstanding the
above, Annual Additions attributable to a welfare benefit fund, if any, will be





                                       58
<PAGE>   61
deemed to have been allocated first, regardless of the actual allocation date.

         Furthermore, notwithstanding the above, to the extent provided in the
United Companies Financial Corporation Employees' Savings Plan & Trust,
Elective Deferrals under said Employees' Savings Plan & Trust, may be returned
to Participants to the extent of Excess Amounts of such Participants still
present after the adjustments made under this ESOP have been made, with such
return of Elective Deferrals to take place prior to other adjustments in the
Employees' Savings Plan & Trust.  This paragraph shall be effective January 1,
1994.

                 (e)      If an Excess Amount was allocated to a Participant on
an allocation date of another plan, the Excess Amount attributed to this Plan
will be determined by applying the order in (d) above.  To the extent that the
ordering as between this Plan and the other plan is not specified or is
determined to be the same, then the excess amount attributed to this Plan shall
be the product of,

                          (i)       The total Excess Amount allocated as of
such date (including any amount which would have been allocated but for the
limitations of section 415 of the Code), times





                                       59
<PAGE>   62
                          (ii)      The ratio of (1) the amount allocated to the
Participant as of such date under this Plan, divided by (2) the total amount
allocated as of such date under all qualified defined contribution plans
(determined without regard to the limitations of section 415 of the Code).

                 (f)      Any Excess Amounts attributed to this Plan shall be
disposed of as provided in section 8.01, subsection (d).

         8.03    (a)      If the employer maintains one or more defined
contribution plans and one or more defined benefit plans, the sum of the
Defined Contribution Plan Fraction and the Defined Benefit Plan Fraction,
cannot exceed 1.0 for any Limitation Year.

                 (b)      For purposes of this section, employee contributions
to a qualified defined benefit plan are treated as a separate defined
contribution plan.

                 (c)      For purposes of this section, all defined
contribution plans of an employer are to be treated as one defined contribution
plan and all defined benefit plans of an employer are to be treated as one
defined benefit plan, whether or not such plans have been terminated.

                 (d)      If the sum of the Defined Contribution Plan Fraction
and Defined Benefit Plan Fraction exceeds 1.0; the annual addition to the
defined contribution plans for the limitation year will be reduced so that the
sum of the fractions will not exceed 1.0.

         8.04  For purposes of this Article, the following terms shall be
defined as follows:

                 (a)      Compensation shall be as defined in Article II,
except that all Compensation which is includible in income shall be included,
including Compensation from all Affiliated Employers, even during a period of
nonparticipation.  Exclusions of fringe benefits from the definition in Article
II shall not be taken into account for purposes of this Article.  Aggregation
of Family Members of Highly Compensated Employees shall not be taken into
account for purposes of this Article.

                 (b)      Employer shall mean the Company and each Employer
which adopts this Plan and all Affiliated Employers, except that Common Control
shall be determined as modified by Code section 415(h), which Employers shall
be considered a single Employer for purposes of applying the limitations of
this Article.

                 (c)      Limitation Year shall mean the Allocation Limitation
Year as defined in Article II.





                                       60
<PAGE>   63
                 (d)      Average Compensation shall mean the average
Compensation during a Participant's high 3 Years of Service, which period is
the 3 consecutive calendar years (or, the actual number of consecutive years of
employment for those Employees who are employed for less than 3 consecutive
years with the Employer) during which the Employee had the greatest aggregate
compensation from the Employer.

                                   ARTICLE IX
                               PLAN ADMINISTRATOR

         9.01  The Board of Directors of the Company shall appoint a Plan
Administrator.  The Plan Administrator shall consist of not less than one (1)
nor more than nine (9) persons, corporations, or other legal entities.  The
Plan Administrator shall serve at the pleasure of the Company and vacancies in
the position of Plan Administrator arising by reason of resignation, death,
removal, or otherwise, shall be filled by the Company.  Any Plan Administrator
may resign of his own accord by delivering his written resignation to the
Company.  If the Company does not designate a Plan Administrator, or if the
position of Plan Administrator is vacant for any reason, then the Company shall
serve as the Plan Administrator.

         9.02  The Plan Administrator shall administer the Plan and is
authorized to make rules and regulations as it may deem necessary to carry out
the provisions of the Plan and to employ investment counsel, attorneys,
accountants, and such other persons as it shall deem necessary or desirable in
the administration of the Plan.  The Plan Administrator shall determine any
question arising in the administration, interpretation, and application of the
Plan, which determination shall be binding and conclusive on all persons.
Employment and compensation shall be determined by the Plan Administrator from
the records of the Employer.  The Plan Administrator shall exercise all voting
powers granted to the Trust through ownership of any shares of the Company.
All powers granted to the Plan Administrator shall be discharged in a
nondiscriminatory manner and for the exclusive benefit of Participants and
their beneficiaries or for defraying the reasonable costs of administration.
In addition, the Plan Administrator shall discharge its duties and power in
conformance 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.

         Except as provided for hereinafter, the Plan Administrator shall
direct the Trustee as to the exercise of all voting powers over any shares of
Qualifying Employer Securities.  The Participant shall be entitled to direct
the Trustee as to the exercise of all voting powers over shares allocated to
his





                                       61
<PAGE>   64
account that are Registration Type Qualifying Employer Securities.  The
Participant shall be entitled to direct the Trustee as to the manner in which
the voting rights will be exercised over shares allocated to his account that
are not Registration Type Qualifying Employer Securities with respect to any
corporate matter which involves the voting of such shares allocated to the
Participant's account with respect to the approval or disapproval of any
corporate merger or consolidation, recapitalization, reclassification,
liquidation, dissolution, sale of substantially all assets of a trade or
business, or such similar transaction as may be prescribed in Treasury
regulations.

         At the time proxy materials are forwarded to company shareholders for
each annual or special meeting of company shareholders, the Plan Administrator
will send to each Participant who has Qualifying Employer Securities then
allocated to his account(s) and who is entitled to vote such securities
pursuant to the terms herein set forth the proxy form on which may be set forth
the Participant's instructions as to the manner of voting the shares (including
fractional shares) of Qualifying Employer Securities.  All shares of Qualifying
Employer Securities which have not been allocated to the Accounts of
Participants shall be voted by the Trustee at such meeting in the same
proportion in which allocated shares of Qualifying Employer Securities are
voted.

         9.03  The Plan Administrator shall maintain accounts showing the
fiscal transactions of the Plan.  The Plan Administrator shall prepare annually
a report showing in reasonable detail the assets and liabilities of the Plan
and giving a brief account of the operation of the Plan for the past year.
Such report shall be submitted to the Board of Directors of the Employer and
the Participants in the Plan and shall be filed in the office of the Plan
Administrator.

         9.04  The Plan Administrator may appoint a Chairman and a Secretary
and such other officers as it shall deem advisable.  The Plan Administrator
shall act by a majority of its members at the time in office and such action
may be taken either by a vote at a meeting or in writing without a meeting.
The Plan Administrator may by such majority action authorize any one or more of
its members to execute any document or documents on behalf of the Plan
Administrator.

         9.05  Unless otherwise determined by the Employer, the Plan
Administrator shall serve without compensation for services rendered.  Expenses
of the Plan Administrator related to Plan establishment, design and termination
shall be paid by the Employer.  Other expenses shall be paid by the Employer or
by the Trust.  Such expenses shall include any expenses incident to the
functioning of the Plan Administrator, including, but not limited to, salaries
of employees, fees of investment counsel, attorneys'





                                       62
<PAGE>   65
fees, accounting charges, and other costs of administering the Plan.

         9.06  The Employer shall indemnify and hold harmless each member of
the Plan Administrator from any and all claims, loss, damages, and expenses,
arising from any act or omission of such member, except when the same is
judicially determined to be due to violations of the Employee Retirement Income
Security Act of 1974.  No Plan assets may be used for any such indemnification.

         9.07  The Plan Administrator shall arrange for such bonding as may be
required by the Employee Retirement Income Security Act of 1974, but no bonding
in excess of the minimum amount required by law shall be considered as required
by the Plan.

         9.08  The Plan Administrator may consent to exclude from the
allocation of Qualifying Employer Securities acquired by the Plan in a
transaction in which the selling taxpayer elected nonrecognition under Code
section 1042, the seller and such other persons stated in Article VI for the
Nonallocation Period.  The Plan Administrator may require a demonstration that
the transaction is in fact eligible for such treatment as a condition of such
special allocation and shall have complete discretion as to whether to permit
such Qualifying Employer Securities to be so allocated.

         The Plan Administrator shall not be permitted to consent to the above
allocation in connection with this transaction if the Plan does not own more
than thirty (30%) percent of the total value of Qualifying Employer Securities
outstanding immediately after the sale or if the Other Investments Accounts of
the Participants to whom the special allocation is to be made do not have
sufficient assets for such purchase.  The determination of the Plan
Administrator to engage in such a purchase shall constitute the exercise of
fiduciary responsibility, and shall accordingly only be made when prudent and
in the best interests of Plan Participants and their Beneficiaries.

         9.09  The Plan Administrator may, as a condition for the crediting of
the service of a Participant for periods of pregnancy, birth, adoption or child
care after birth or adoption in order to avoid a Break in Service, adopt a
policy of requiring such Participant to furnish certain information within a
reasonable time.  Any such policy shall be communicated to Participants in a
manner (including in a summary plan description) reasonably designed to apprise
each Participant of such Policy.  The Participant may be required to establish
that the absence from work is for pregnancy, birth of the Participant's child,
adoption of a child by the Participant, or the care of such newborn or adopted
child for a period immediately following such birth or adoption.  The
Participant may also be required to establish the number of days for which





                                       63
<PAGE>   66
there was such an absence.  The Plan Administrator may require such information
as is reasonable to satisfy it as to the accuracy of the such claimed service.

         9.10  The Plan Administrator shall establish reasonable procedures to
determine the qualified status of Domestic Relations Orders.  The Plan
Administrator shall be responsible for the interpretation of any Domestic
Relations Order, but may request clarification from the Participant, the
alternate payee or payees, the Court rendering such Domestic Relations Order,
or any other affected persons.

         In the case of any Domestic Relations Order received by a Plan, the
Plan Administrator shall promptly notify the Participant and any alternate
payee of the receipt of such order and the Plan's procedures for determining
the qualified status of the Domestic Relations Orders.  As part of such
procedure, the Plan Administrator may request a legal opinion from the Plan's
legal counsel, after notification of the affected parties, of the provisions of
any such Domestic Relations Order, with the Participant and all alternate
payees to bear the expense of such opinion.  The Plan Administrator may also
request a court of competent jurisdiction for a determination of the status of
a Domestic Relations Order.

         During any period in which the issue of whether a Domestic Relations
Order is a Qualified Domestic Relations Order is being determined, the Plan
Administrator shall segregate in a separate account in the Plan or in an escrow
account the amounts which would have been payable to the alternate payee during
such period if the order had been determined to be a Qualified Domestic
Relations Order.  Within a reasonable period after receipt of a Domestic
Relations Order, the Plan Administrator shall determine whether such order is a
Qualified Domestic Relations Order and notify the Participant and each
alternate payee of such determination.  If within eighteen (18) months after
the date on which the first payment would be required to be made under the
Domestic Relations Order the Plan Administrator determines that the Domestic
Relations Order is a Qualified Domestic Relations Order, then payment shall be
made to the alternate payee of any amount held in the segregated account of
escrow account.  If within eighteen (18) months after the date on which the
first payment would be required to be made under the Domestic Relations Order
either (a) it is determined that the Domestic Relations Order is not a
Qualified Domestic Relations Order, or (b) the issue of qualification cannot be
resolved, then the Plan Administrator shall cause to be paid the segregated
amounts (with interest, if applicable) to the person or persons who would have
been entitled to such payment in the absence of the Domestic Relations Order.





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<PAGE>   67
         9.11  In the event that a tender offer is made for some or all of the
shares of Company Stock, each Participant or Beneficiary shall have the right
to direct whether those shares allocated to his account, whether or not vested,
shall be tendered.  This right shall be exercised in the manner set forth
herein.  In the absence of a written directive from or election by a
Participant or Beneficiary to the Plan Administrator, after having been
notified, the Participant or Beneficiary shall be deemed to have chosen not to
tender his or her shares, and the Plan Administrator shall direct the Trustee
not to tender such shares.  Because the choice is to be given to the
Participants, the Plan Administrator and the Trustee shall not have fiduciary
responsibility with respect to the decision to tender or not or whether to
tender all of such shares or only a portion thereof.

         In order to facilitate the decision of Participants whether to tender
their shares in a tender offer (or how many shares to tender), the Plan
Administrator shall provide election forms for the Participants, whereby they
may elect to tender or not and whereby they may elect to tender all or a
portion of such shares.  Such election may be made or changed at any time prior
to the day before the expiration date of the tender offer (with extensions);
any election or change in election must be received by the Plan Administrator,
or a designated representative of the Plan Administrator, on or before the day
preceding the expiration date of the tender offer (with extensions, if any).
The election shall be binding on the Plan Administrator and the Trustee.  The
Plan Administrator shall make every effort to distribute the notice of the
tender, election forms and other communications related to the tender offer to
all Participants as soon as practicable following the announcement of the
tender offer, including mailing such notice and form to Participants and
posting such notice in places designed to be reviewed by Participants.

         Shares which are not allocated to the account of any Participant shall
not be tendered and the proceeds used to repay an exempt loan unless the tender
offer may result in Employer Securities no longer being available and the price
fixed during the tender offer would produce a financial gain to the Plan
Participants as compared with the alternative of not tendering such stock.  The
Plan Administrator shall make such determination.  Subject to this limitation,
such shares shall be tendered or not as the majority of shares held by
Participants and directed by them is tendered or not.


                                   ARTICLE X
                          RESTRICTIONS ON DISPOSITION

         10.01  This Trust shall be a spendthrift trust as that term is defined
in the Louisiana Trust Code, and the assets herein





                                       65
<PAGE>   68
shall be held subject to the maximum restraint on voluntary or involuntary
alienation by the Participants and their respective Beneficiaries permitted by
the provisions of the Louisiana Trust Code.  These restrictions on disposition
shall apply to any person for whom an account is maintained hereunder,
including Inactive Participants.

         10.02  The assets of the Trust shall not be subject to alienation,
assignment, Trustee process, garnishment, attachment, execution, or levy of any
kind, except as may be necessary to repay advances made by the Trustee for its
fee and expenses of the Trust, and no attempt to cause such assets to be so
subjected shall be recognized except to such extent as may be required by law.
If any Participant shall attempt to alienate or assign his interest provided in
the Trust, or if the right to any benefit payable with respect to a participant
is created, assigned or recognized in favor of another person, the Trustee
shall take such steps as it deems necessary to preserve such interest for the
benefit of the Participant or his Beneficiaries.

         10.03  Notwithstanding the limitation on alienability contained
herein, the Trustee shall not be precluded from complying with a court order of
a court of competent jurisdiction, so long as such order is a Qualified
Domestic Relations Order.


                                   ARTICLE XI
                            NO REVERSION TO EMPLOYER

         11.01  At no time shall it be possible for the plan assets to be used
for, or diverted to, any purpose other than for the exclusive benefit of the
Participants and their Beneficiaries, except that Contributions made by the
Employer may be returned to the Employer if:

                 (a)      The Contribution was conditioned on the initial
qualification of the Plan under the Internal Revenue Code, the Plan does not so
qualify and the contribution is returned within one year after the Plan is
found to not so qualify;

                 (b)      The Contribution was made due to a mistake of fact;
and the Contribution is returned within one year of the mistaken payment of the
Contribution; or

                 (c)      The Contribution was conditioned on its
deductibility, the deduction is disallowed, and the Contribution is returned
within one year of the disallowance of the deduction.

         11.02  In the case of a Contribution made due to a mistake of fact,
the amount of the Contribution returned may not exceed the difference between
the amount actually contributed and the





                                       66
<PAGE>   69
amount which would have been contributed had there been no mistake of fact and
may not include the earnings attributable to such Contribution.  The amount of
the Contribution returned must be reduced by any losses attributable to the
Contribution, and no Participant may have his Employer Contribution Account
reduced by the return of the Contribution to less than such account would have
been had the returned Contribution never been made.

         11.03  In the case of a Contribution conditioned on its deductibility,
the deduction for all or part of which is disallowed, the amount of the
Contribution returned may not exceed the difference between the amount actually
contributed and the amount which would have been contributed had there been no
error in determining the deduction and may not include the earnings
attributable to such Contribution.  The amount of the Contribution returned
must be reduced by any losses attributable to the Contribution, and no
Participant may have his Employer Contribution Account reduced by the return of
the Contribution to less than such account would have been had the returned
Contribution never been made.


                                  ARTICLE XII
                       TRUSTEE POWERS, RIGHTS AND DUTIES

         12.01  Subject to the terms and provisions of the Plan, and the
directions and rules and regulations of the Plan Administrator issued pursuant
thereto, the Trustee shall have all of the powers that may be exercised by a
Trustee under Louisiana law, including, but not limited to, those powers that
Trustees are permitted to exercise under the provisions of the Louisiana Trust
Code, and such additional powers as may hereafter be permitted Trustees by
Louisiana law.

         12.02  Pursuant to the direction of the Plan Administrator, the
Trustee shall invest any cash received for the account of any Participant or
credited to the account of any Participant to the extent practicable in
Qualifying Employer Securities, in accordance with Article VI.  Investment
direction by the Plan Administrator shall be binding upon the Trustee and in
following the Plan Administrator's written direction, the Trustee shall assume
no liability or responsibility for such investments, so long as they are
consistent with the terms of the Plan and ERISA.

         12.03  Subject to the foregoing limitations, the Trustee may invest in
bonds, notes, mortgages, commercial paper, preferred stocks, common stocks, or
other securities, rights, obligations of property, real or personal, including
shares and certificates of participation issued by investment companies or
investment trust whether or not such investments be authorized for Trust funds
and including stock, securities and Qualifying Employer Real Property of the
Employer and any Affiliated Employer; and





                                       67
<PAGE>   70
except as provided for in Article IX may vote personally or by proxy any shares
of stock; and may lease, mortgage or pledge any of the property upon such terms
as it deems advisable; and may borrow money with or without mortgaging the
Trust assets; and may compromise or arbitrate any claim in favor of the Trust.

         The Trustee may also purchase insurance for the benefit of the Trust
on the lives of shareholders of the Employer and on the lives of those
employees whose death could result in a reduction of the Employer's profits.
The Trustee may retain in cash a portion of the Trust fund either awaiting
investment or to meet contemplated payments under this Trust.  Funds of the
Plan may be invested in deposit accounts or certificates of deposit bearing a
reasonable rate of interest in the Hibernia National Bank.

         12.04  The Trustee is further authorized and empowered to sell,
assign, exchange, or transfer assets held from time to time and to purchase
other assets from the proceeds thereof, and to receive, hold, invest and
reinvest the income from the increment of the funds.

         12.05  The Plan Administrator may direct the Trustee to obtain Loans.
Any such Loan will meet all requirements necessary to constitute an "exempt
loan" within the meaning of Treasury Regulation section 54.4975-7(b)(1)(iii)
and shall be used primarily for the benefit of the Participants and
Beneficiaries.  The proceeds of any such Loan shall be used, within a
reasonable time after the Loan is obtained, only to purchase Qualifying
Employer Securities, repay the Loan, or repay any prior Loan.  Any such Loan
shall further meet the requirements of Article XVII.

         12.06  The Trustee shall have the right to borrow or raise money for
the purpose of the Trust in such amount and upon such terms and conditions as
the Trustee shall deem advisable; and, for any amount so borrowed, to issue his
promissory note as Trustee and to secure the repayment thereof by pledging all
or any part of the Trust fund; and no person lending money to the Trustee shall
be bound to verify the application of the money lent or to inquire into the
validity, expediency or propriety of any such borrowing.  In the event,
however, that the Trustee desires to borrow money upon the security of a pledge
of insurance policies outstanding with respect to the lives of Participants
under the Plan, the power to borrow heretofore stated is subject to the
conditions that such borrowing shall be for the sole purpose of the payment of
premiums on such policies.

         12.07  The Trustee may act with the same care as would a prudent man,
who was familiar with such matters, when acting in a like capacity in a similar
enterprise having similar purposes; and, unless it is "prudent" not to do so,
the Trustee must diversify the Plan's investments so as to minimize the risk of





                                       68
<PAGE>   71
large losses, except with regard to the purchase of Qualifying Employer
Securities.

         12.08  The Trustee may not:

                 (a)      Deal with the assets of the Plan and Trust for his
own account;

                 (b)      Act, in any capacity in any transaction involving the
Plan and Trust, on behalf of a party whose interests are adverse to the Plan
and Trust or its Participants;

                 (c)      Receive any consideration from any party in
connection with any transaction involving fund assets; or

                 (d)      Maintain indicia of ownership of any Plan and Trust
assets outside of the jurisdiction of the United States District Courts.

         12.09  Except as hereinafter provided, the Trustee or other fiduciary
may not engage in a transaction which constitutes an acquisition, sale or lease
of property between the Trust and a "Party-in-Interest" except that the
acquisition, sale or lease of Qualifying Employer Securities between the Trust
and a Party-in-Interest shall be permitted, provided the transaction is carried
on in an arm's-length basis and for adequate consideration and no commission is
charged with respect thereto, and such transaction otherwise meets the
requirements of section 408(b) of ERISA and section 4975(d)(3) of the Code.

         Except as hereinafter provided, the Trustee or other fiduciary may not
engage in any transaction which constitutes the direct or indirect lending of
money or extension of credit between the Trust and a party-in-interest except
that direct or indirect Loans for the acquisition of Qualifying Employer
Securities made by a party(s)-in- interest to the Trust shall be permitted if
the Loan is primarily for the benefit of Participants, if the Loan bears a
reasonable interest rate, and if, when collateral is given for such Loan, it
consists only of Qualifying Employer Securities.

         Except as hereinafter provided, the Trustee or other fiduciary cannot
engage in any transaction which constitutes the direct or indirect:

                 (a)      Furnishing of goods, services or facilities between
the Trust and a party-in-interest;

                 (b)      Transfer to, or use by or for, the benefit of a
Party-in-interest of any of the Trust's assets; or





                                       69
<PAGE>   72
                 (c)      Acquisition by the Plan of any Employer security or
Employer real property which is not qualifying or which is in excess of that
permitted by the Employee Retirement Income Security Act of 1974, as amended.

         12.10  Notwithstanding the above, the Trustee may engage in the
transactions otherwise prohibited hereunder in the following circumstances:

                 (a)      An exemption from the Secretary of Labor under
section 408 of Title I of the Employee Retirement Income Security Act of 1974
("ERISA") has been received or may reasonably be expected to be received
because the terms of such transaction were of an arm's-length nature;

                 (b)      The transaction is necessary in order to correct a
previous prohibited transaction or transactions, whether entered into before or
after the enactment of ERISA;

                 (c)      The transaction is made pursuant to a directive or
suggested course of action of the U.S. Comptroller of the Currency, the Federal
Deposit Insurance Corporation, the Secretary of the Treasury, the Secretary of
Labor, or any other Federal or State regulatory agency;

                 (d)      The transaction is entered into pursuant to advice or
recommendation or opinion of counsel that it may reasonably be undertaken in
order to effect a correction or satisfy a directive stated in (b) or (c) above,
or that the transaction is not a prohibited transaction as that term is defined
in ERISA; or

                 (e)      The transaction is the subject of, or probably the
subject of, a class exemption issued by the Internal Revenue Service and/or
U.S. Department of labor.

         If, notwithstanding the above, the Trustee engages in a prohibited
transaction, he shall immediately notify the Plan Administrator, and together
the Trustee and Plan Administrator shall notify the Participants, the U.S.
Department of Labor and the Internal Revenue Service of the transaction within
the period provided in ERISA for such notification, and shall take action to
correct the transaction, to obtain an exemption referred to above or to report
and pay taxes thereon.

         12.11  If permitted by the Trustee and the Plan Administrator pursuant
to a policy of uniform applicability, individual insurance and annuity
contracts may be purchased for the Other Investment Accounts of Participants.
Insurance coverage is intended to be incidental to the purpose of this Plan.
Accordingly, if a portion of Employer Contributions is to be used to pay the
premiums of ordinary life insurance contracts





                                       70
<PAGE>   73
on the life of an active Participant, and if such payments and contracts are
allocated to the account of the insured Participant, then the aggregate
premiums paid for such contracts for any Participant shall be less than 50% of
the aggregate Employer Contributions made on such Participant's behalf at any
particular time; for term type insurance contract, the aggregate premiums for
such contracts shall be less than 25% of the aggregate Employer Contributions
made on such Participant's behalf at any particular time.  If whole life and
term insurance are acquired for the benefit of a Participant's account, the sum
of one-half of the aggregate premiums for whole life insurance and all of the
aggregate premiums for term insurance shall be less than  twenty-five (25%)
percent of the aggregate Employer Contributions made on such Participant's
behalf as of any date.  However, Employer Contributions held under the Plan on
behalf of the Participant for at least two (2) years shall be available for
payment of premiums in addition to the foregoing limits.  Furthermore, the Plan
may purchase insurance contracts on the lives of Key Employees on whom the
value of Company Stock depends.  Such contracts shall not be held in the
accounts of any Participants and shall not be subject to the foregoing limits.

         12.12  The Trustee may accept, but is not required to accept, at the
direction of the Plan Administrator, a qualified Rollover Contribution or a
rollover amount from another qualified trust from an Employee as permitted
under the Code.  The Trustee may require such documentation and written
representations as he feels necessary to ensure that such contribution is a
qualifying Rollover Contribution, rollover amount, or direct transfer.  Such a
Contribution by an Employee shall be adjusted as hereinafter provided for
earnings and asset reevaluations, but shall not in any event enter into the
allocation of Forfeitures.  Such a Contribution shall not be considered an
Annual Addition or Employer Contribution for purposes of determining the
maximum amount of Annual Additions which may be made on behalf of a Participant
or deductible Employer Contribution which may be made to the Plan.  The Trustee
may accept funds transferred directly from another corporate employee
retirement plan upon the termination or merger of such plan into this Employee
Stock Ownership Plan or upon the merger of the corporate employer under such
other plan into the Company.  If such funds include Employee Contributions,
then amounts attributable to Employee Contributions shall be separately
accounted for and shall not be used to purchase Qualifying Employer Securities.
Such funds will share in the earnings and losses of the fund.  All Participants
in this Plan, including Participants in the merged Plan and in this Plan prior
to merger who are still participating at the time of the Forfeiture allocation,
shall share in the allocation of Forfeitures occurring in this Plan subsequent
to such merger.

         12.13  The Trustee shall not be responsible in any way for the
collection of contributions provided for under the Trust.





                                       71
<PAGE>   74
The Trustee shall accept and hold under the Trust such Contributions of money,
or other property approved by the Employer for acceptance by the Trustee, on
behalf of the Employer and Participants as it may receive from time to time
from the Employer.  All such Contributions shall be accompanied by written
instructions from the Employer accounting for the manner in which they are to
be credited.

         12.14  On a receipt of a written order from the Plan Administrator
certifying that a Participant's benefits are payable pursuant to the Trust, the
Trustee shall take such action as may be necessary to make distribution in such
form and at such time as the order for payment so directs.  However, before
making any such distribution in the event of a Participant's death, the Trustee
shall be furnished with any and all certificates, tax waivers and other
documents which may be requested in its discretion.

         12.15  The Trustee may retain or consult counsel, including an
investment adviser, which may be the counsel to the Employer, to the Trustee or
to the Plan Administrator, with respect to the meaning, or construction of
terms of the Trust or Plan, or with respect to its obligations or duties
thereunder, or with respect to any claim, action, proceeding or question of
law.  The Trustee may engage agents to assist in its carrying out the
provisions of the Trust.  The Trustee shall be fully protected in any action
taken or not taken by it in good faith pursuant to advice of counsel or agents,
and shall in no event be liable for the action or nonaction of such agents,
provided the Trustee shall have exercised due care in selection of such agents.

         12.16  The Trustee shall not be responsible for the purpose or
propriety of any distribution made pursuant to directive of the Plan
Administrator or any action or nonaction taken pursuant to the written
instructions of the Plan Administrator, including investment directions, as
long as these instructions are made in accordance with the terms of this Plan
document and are not contrary to Title I of the Employee Retirement Income
Security Act of 1974.

         12.17  Fees, taxes and expenses of the Trust shall be subject to the
provisions of this Article as follows:

                 (a)      Fees -- The Trustee in consideration of its services
under the Trust shall receive such reasonable compensation as the Employer and
the Trustee mutually agree.  If the Trustee is in the business of providing
trust services, then the Trustee's normal charges shall be considered
reasonable and the Employer shall be considered to have agreed thereto.  The
Trustee may change such compensation at any time upon thirty (30) days' written
notice to the Employer, or may agree to waive fees.  If a Trustee is an
individual Trustee who is also an Employee or





                                       72
<PAGE>   75
officer of any Employer hereunder, such person shall not be entitled to such
fees and shall not be paid any fees hereunder.  Reasonable fees and expenses
incurred by the Trustee in connection with the affairs of the Trust may be paid
by the Trust or by the Employer.

                 (b)      Taxes -- Any income, gift, estate and inheritance
taxes and other taxes of any kind whatsoever, including transfer taxes incurred
in connection with the investment, reinvestment or distribution of the assets
of the Trust, that may be levied or assessed in respect to such assets or
interest of specific Participants, shall be charged to such accounts or
interests and if not so allocable they shall be charged proportionately to the
accounts or interest of all Participants, or to the Employer, as the
circumstances shall require.

                 (c)      Expenses -- All other administrative expense incurred
by the Trustee in the performance of its duties, including fees for legal
services rendered to the Trustee, shall be paid from the assets of the Trust,
but in the discretion of the Employer such expenses may be paid by the Employer
after a statement of such expenses is rendered by the Trustee to the Employer.
Expenses of Plan establishment, design and termination must be paid by the
Employer.

                 (d)      Collection -- All fees of the Trustee and taxes and
other administrative expenses charged to the Trust shall, at the Trustee's
option, be paid by the Employer to the Trustee with the amount of the first
contribution for each Trust Year which is to be credited to the Trust; if no
contribution is made thereto in that year, and if the assets of the trust are
insufficient to satisfy such charges, the Employer shall pay any deficit
therein to the Trustee.

                 (e)      Bonding -- An individual Trustee need not furnish
security or bond, as otherwise required under Title 9, section 2171 of the
Louisiana Revised Statutes, except as may be required under ERISA or other
Federal law.  The Employer shall bear the expense of any such bond required.

         12.18  The Trustee may resign at any time upon thirty (30) days'
written notice to the Company, or if so requested in writing by the Company,
shall resign with thirty (30) days following receipt of such request.  Upon
resignation by the Trustee, the Company shall appoint a Successor Trustee.
Upon receipt by the Trustee of written acceptance of such appointment of a
Successor Trustee, the Trustee shall convey, assign, and deliver to such
Successor Trustee the assets of the Trust, together with all records pertaining
thereto.  The Trustee is authorized, however, to reserve such assets as it may
deem advisable for payment of all fees, compensation, costs and expenses, or
for payment of any other liabilities and constituting a charge on or against
the assets of the Trust or on or against the Trustee, with any balance
remaining after the


                                      73
<PAGE>   76
payment of all such items to be paid over to the Successor Trustee.  The
Successor Trustee shall have the right, title and interest in the assets paid
over to it, and all powers, rights and duties under the Trustee vested in the
Trustee shall vest in such Successor Trustee immediately upon its appointment
and acceptance, and thereupon all further duties and liabilities of the Trustee
who has been succeeded shall terminate, except for an accounting as may be
required.

         12.19  If two or more persons are designated as Trustee, any one of
the said persons shall have the authority and power to act on behalf of all
Trustees with the approval of all Trustees, and to sign and execute any and all
such forms, instruments and documents as may be required in the capacity of
Trustee.  When so signed or executed any such document shall be accepted by any
person as conclusive and binding upon all Trustees and upon this Trust, as to
any and all matters contained therein, and any person dealing with the said
Trustees or with this Trust shall be fully protected in acting in reliance on
the provisions of any such form, instrument or document signed by any one of
the said Trustees.

         12.20  The Employer agrees to indemnify the Trust fund and the Trustee
against any liability imposed as a result of a claim asserted by any person or
persons under the laws of any state or the federal government where the Trustee
has acted under this Plan in good faith in reliance on a written direction of
the Plan Administrator or an instrument, certificate or paper it believed
genuine.

         12.21  Notwithstanding any other provisions of the Plan, the Trustee
hereof may cause any part or all of the monies and assets of this Trust to be
commingled with monies and assets to be invested as a part of any collective
investment trust which then provides for the pooling of assets of plans
described in section 401(a) of the Code and exempt from tax under section
501(a) of the Code, provided that such collective investment trust is exempt
from tax under the Code or regulations or rulings issued by the Internal
Revenue Service and is then maintained by the Trustee.  Monies and assets of
this trust invested in such a Trust shall be held and administered by the
Trustee strictly in accordance with the terms of or under the powers granted in
said declarations of trust as they may be amended from time to time, and the
document governing any such collective investment trust are hereby made a part
of the Plan.  Without limiting the generality of the foregoing, the following
declarations of trust executed by the Trustee are hereby incorporated by
reference: any common trust fund or mutual fund maintained by Hibernia National
Bank or its affiliates.





                                       74
<PAGE>   77
                                  ARTICLE XIII
                    AMENDMENT, TERMINATION OR DISCONTINUANCE

         13.01  While it is the intention of the Company that this Plan shall
be permanent, the Company reserves the right at any time to amend any of the
provisions of this Trust or to revoke it in its entirety.  Any such revocation
or amendment to this Trust shall become effective immediately, upon receipt by
the Trustee of a written instrument or revocation or amendment signed on behalf
of the Employer by its duly authorized representative.  Each Employer may
continue or withdraw from the Plan in the manner provided herein; otherwise,
the Company shall act on behalf of all Employers.

         13.02  Notwithstanding the provisions of this Article XIII, or of any
other provisions of this Plan, any amendment may be made, retroactively if
necessary, which the Company deems necessary or appropriate to conform the Plan
to, or to satisfy the conditions of any law, government regulation or ruling,
and to permit the Plan to meet the requirements for qualification under section
401 of the Code, and to permit the Trust to meet the requirements for tax-
exempt status under section 501 of the Code.  Any such amendment shall conform
with the provisions of Code section 401(b).  No amendment shall reduce the
Accrued Benefit of any Participant.

         13.03  No amendment to this Trust shall operate to deprive any
Participant of his vested interest in his distributive share.  In the case of
any merger or consolidation with, or transfer of assets or liabilities to, any
other plan, each Participant in the Plan would (if the Plan is 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 the Plan
had then terminated).

         13.04  Upon the termination or partial termination of this Trust or
upon the discontinuance of contributions by the Company and by each
participating Employer without formal termination of this Trust, the Trustee
shall revalue and redetermine the Accrued Benefit of each Participant who is
affected by said termination or partial termination.  The entire Accrued
Benefit of each Participant (or each Affected Employee in the case of a partial
termination) shall be nonforfeitable.  In the case of a complete termination,
the Accrued Benefit shall be paid and distributed to such Participant, or in
the case of his death before such distribution, to the Beneficiary or
Beneficiaries designated by such Participant.  A Participant's right to his
Accrued Benefit is not conditioned upon a sufficiency of Plan assets in the
event of termination.





                                       75
<PAGE>   78
         13.05  Notwithstanding such termination of this Trust as herein
provided, the Trustee shall continue the Trust in force and effect for the sole
purpose of liquidating the distributive shares of the respective Participants.

         13.06  Upon termination of the Plan or a complete discontinuance of
contributions under the Plan, any funds which remain unallocated under the
provisions of Article VIII shall be allocated to the Participants in proportion
to their compensation for the Plan Year in which the termination takes place,
except that the limitations of Article VIII shall apply with respect to each
Participant for such Plan Year.  Any unallocated portion thus remaining shall
be allocated in proportion to compensation.

         13.07  If an amendment is made to the Plan which either directly or
indirectly affects its vesting schedule, then for any Employee who is a
Participant in the Plan on the later of the date the Plan is amended or the
effective date of the amendment, his nonforfeitable percentage shall not be
reduced by reason of such amendment.  Furthermore, if such Participant has
completed three (3) or more Years of Service with the Employer (as defined
either before or after the amendment), he shall be entitled to elect to have
his nonforfeitable interest determined without regard to the amendment,
provided that the opportunity for such election shall not be afforded to those
Participants whose nonforfeitable percentage under the Plan, as amended, at any
time cannot be less than the percentage determined without regard to such
amendment.  The period of the election shall begin on the date that the
amendment is adopted and shall end on the latest of the following dates:  (i)
60 days after the adoption date; (ii) 60 days after the effective date of the
amendment; or (iii) 60 days after the Participant is issued written notice of
the amendment.  The Plan Administrator shall prescribe the form of such written
notice in the election by the Participant.  The election, once made, shall be
irrevocable.

         13.08  No amendment shall be made which reduces or restricts, directly
or indirectly, the accrued benefit of any Participant or which eliminates or
reduces early retirement benefit or optional form of benefit; however, this
plan as an Employee Stock Ownership Plan shall not be treated as failing to
meet this requirement merely because it modifies distribution options in a
nondiscriminatory manner.

         Any plan provision which restricts or would deny a participant through
the withholding of consent or the exercise of discretion by some person or
persons other than the participant (and where relevant, other than the
participant's spouse) of an alternative form of benefit is hereby amended by
the deletion of the consent and/or discretion requirement.





                                       76
<PAGE>   79
         An alternate form of benefit, by definition, encompasses the different
forms of benefit payment available under the plan which provides that:

                 (a)      Participant's benefits under the plan may be paid in
more than one form, or

                 (b)      Payment of a particular form of benefit may commence
at sometime earlier or later than the normal date for the commencement of such
benefit.

         Notwithstanding the above, the elimination of the distribution in the
event of financial hardship shall not be considered the elimination of a form
of benefit which shall be covered by this section.  This paragraph and such
elimination of distribution shall be conditioned on the approval of the
Internal Revenue Service.


                                  ARTICLE XIV
                    CLAIMS FOR BENEFITS: DENIALS AND APPEALS

         14.01  A Participant or Beneficiary shall automatically be paid the
benefit due him under the provisions of Article VII.  The Plan Administrator
shall have the full discretion and authority to interpret the Plan and to
determine, in accordance with its reasonable interpretation of the Plan
documents, the amount of any benefit due any Participant or Beneficiary and the
timing of the payment to any Participant or Beneficiary by the Plan.  If,
however, a Participant or Beneficiary disagrees with the amount or time of
payment of a benefit paid or to be paid him or believes that he is due to be
paid a benefit which the Plan Administrator has indicated will not be paid to
him, then he shall make a claim for benefits in accordance with the terms of
this Article.

         14.02  A Participant must make a claim in writing to the Plan
Administrator for any benefit pursuant to the provisions of this Article XIV
after such time as all Participants have been notified as to the identity of
such Plan Administrator.  Otherwise, a benefit hereunder may be considered to
have been claimed if any employee has in writing informed any executive officer
of the employer that he is interested in knowing whether he is entitled to any
benefit under this Plan.

         14.03  The Plan Administrator shall have full discretion and authority
to determine the merits of any claim for benefits, consistent with the Plan
Administrator's reasonable interpretation of the Plan documents.  The Plan
Administrator shall, within ninety (90) days of receipt of such claim, if he
denies in whole or in part a claim for the benefit, write a letter to the
claimant setting forth the reasons for denial with





                                       77
<PAGE>   80
reference to specific provisions of the Plan which are applicable and an
explanation of the necessary steps under this Article XIV, below.

         14.04  Any claimant for a benefit (or, as applicable, his estate or
other representative or beneficiary) may, within sixty (60) days after receipt
of the letter referred to in section 14.03 appeal to an Appeals Committee (if
more than one person) or Appeals Officer from time to time appointed (if and
when required) by the employer as named fiduciary and request a review of the
denial of benefit with opportunity to submit his position in writing.  The
Appeals Committee or Officer not later than sixty (60) days (or one hundred
(100) days, if a hearing is held) after the request for review referred to in
the foregoing provisions of this Article XIV is received, shall render a
written decision and mail same to claimant at the last address known to the
Employer specifying by reference to the Plan the reasons for denial of such
part or all of the claimed benefit as it or he denies upon review of the
appeal.

         14.05  If a former Participant cannot be located by the Trustee and
the Plan Administrator, after diligent search and the lapse of at least two (2)
years, then the account of such former Participant shall be forfeited as of the
last day of the Plan Year of such lapse.  However, if such former Participant
comes forward at a later date, benefits shall be restored to him.



                                   ARTICLE XV
                                    FUNDING

         15.01  The Plan Administrator shall be responsible for the
establishment and implementation of a funding policy.  Such policy shall take
into account the objectives of the Plan and the requirements of ERISA.  The
Plan Administrator shall determine such a policy within six (6) months of the
establishment of the Plan, or the amendment of the Plan, as the case may be, if
such a policy has not previously been established.  The Plan Administrator
shall review the Plan's short-run and long-run needs for liquidity or for
investment growth and shall direct the Trustee as to those investments which
best satisfy such needs.

         15.02  The funding policy established by the Plan Administrator shall
be communicated to the Participants in a general manner.  Changes in the
funding policy shall be communicated as soon as practicable after their
adoption by the Plan Administrator.

         15.03  The funding policy shall be reviewed annually by the Plan
Administrator.  Any changes in Plan objectives shall be considered.  Any
changes in the composition of the Plan





                                       78
<PAGE>   81
Participants shall be reviewed and appropriate corrections in funding policy
made.

         15.04  Should the Trustee make a Loan, the Plan Administrator shall be
responsible for obtaining a commitment from the Employer to fund the principal
and interest requirements of the Loan through cash contribution to the Plan or
by taking other measures to ensure that the Loan will be repaid.  The Plan
Administrator shall review the Plan's financial requirements with reference to
current and future commitments under the Loan.


                                  ARTICLE XVI
                             TOP HEAVY PLAN LIMITS

         16.01  In any Plan Year in which the Plan is a Top Heavy Plan, each
Participant who is not a Key Employee and who is employed on the last day of
the Plan Year, including a Participant who completes less than 1,000 Hours of
Service during the Plan Year, shall be allocated an amount of Employer
Contributions which is the higher of the following:

                 (a)      The portion of Employer Contributions which he would
have been allocated under Article V had the Plan not been Top Heavy;

                 (b)      The lesser of

                          (i)       Three (3%) percent of his Compensation, and

                          (ii)      The highest percentage of Compensation of a
participating Key Employee which is allocated to such Key Employee Participant.

         This Plan and the United Companies Financial Corporation Employee
Savings Plan and Trust shall be considered together for purposes of the minimum
Employer Contribution requirement.  If a Participant in the Savings Plan would
not receive the minimum Employer Contribution between this Plan and the Savings
Plan before the application of the Top Heavy rules, then an additional Employer
Contribution shall be made to the Savings Plan to ensure that he does receive
the minimum Employer Contribution.  If a Participant in this Plan is not a
Participant in the Savings Plan, then the minimum Employer Contribution shall
be satisfied by this Plan.

         Any amounts which a Key Employee elects to defer under a Code section
401(k) arrangement shall be treated as Employer Contributions for purposes of
paragraph (b)(ii) above.  Elective deferrals and withholding contributions for
a Nonkey Employee





                                       79
<PAGE>   82
under a Code section 401(k) arrangement shall not be treated as Employer
Contributions for purposes of satisfying the top-heavy minimum Employer
Contribution.

         16.02  In any Plan Year in which the Plan is a Top-Heavy Plan, the
vested percentage of each Participant's Accrued Benefit attributable to
Employer Contributions shall be one hundred (100%) percent after three (3)
Years of Service with the Employer.  If the Plan has been Top Heavy and is no
longer Top Heavy in a subsequent Plan Year, then the vested percentage of any
Participant shall be the greater of his vested percentage as determined under
section 7.06 or his vested percentage as determined under this section for the
most recent Plan Year in which the Plan was Top Heavy.  The provisions of
section 13.07 shall apply to the vesting schedule in the event of a change in
the Plan's status from a Top-Heavy Plan to a Plan which is not a Top-Heavy
Plan; such status change shall be treated as if it were a plan amendment
affecting the vesting schedule for purposes of section 13.07.

         16.03  For purposes of this Article, Compensation of a Participant for
a Plan Year shall mean Compensation as defined in Article II, except that
Compensation shall include all Compensation included in gross income for the
Plan Year, notwithstanding any exclusions listed therein; shall be determined
with respect to the entire Limitation Year associated with the Plan Year,
regardless of the Participant's nonparticipation during a portion of such Plan
Year; and shall further include Compensation from all Affiliated Employers.

         16.04  In any Plan Year in which the Plan is a Top-Heavy Plan, the
figure "1.0" shall be substituted for "1.25" in subsection (a) of the second
paragraph of the sections in Article II defining Defined Benefit Plan Fraction
and Defined Contribution Plan Fraction.

         16.05  For the purposes of this Article XVI, all plans in the
Aggregation Group shall be considered together in determining whether the Plan
is a Top-Heavy Plan and for purposes of satisfying the requirements of this
Article.


                                  ARTICLE XVII
                                LOAN PROVISIONS

         17.01  The Plan may enter into a Loan, including a Loan with the
Trustee or a Loan which is guaranteed by the Employer or a related person.  If
the Plan Administrator directs the Trustee to enter into a Loan, any such Loan
shall be for the benefit of Participants and Beneficiaries, shall conform to
the terms of an arm's length transaction and provide for no more than a
reasonable rate of interest as determined under Treasury





                                       80
<PAGE>   83
Regulation section 54.4975-7(b)(7), and must be without recourse against the
Plan.  The number of years to maturity under the Loan must be definitely
ascertainable at all times.  The only assets of the Plan that may be given as
collateral on a Loan are shares of Qualifying Employer Securities acquired with
the proceeds of the Loan and shares of Qualifying Employer Securities that were
used as collateral on a prior Loan repaid with the proceeds of the current
Loan.  Such Qualifying Employer Securities so pledged shall be placed in a
Suspense Account.  If Qualifying Employer Securities so acquired are not
pledged, they shall be placed in a Suspense Account for allocation purposes and
shall be released from the Suspense Account in the same manner as if they had
been pledged.

         17.02  No person entitled to payment under a Loan shall have recourse
against Trust Assets other than such collateral, Employer Contributions (other
than contributions of Company Stock) that are available under the Plan to meet
obligations under the Loan and earnings attributable to such collateral and the
investment of such contributions.  All Employer Contributions paid during the
Plan Year in which a Loan is made (whether before or after the date the
proceeds of the Loan are received), all Employer Contributions paid thereafter
until the Loan has been repaid in full, all earnings from investment of such
Employer Contributions which earnings have been allocated to Participants'
Other Investments Accounts, and dividends on Company Stock acquired with the
proceeds of the Loan shall be available to meet obligations under the Loan,
unless otherwise provided by the Company at the time any such Employer
Contribution is made.  Two or more Loans may be considered together as one Loan
for purposes of meeting the requirements of this Section.

         17.03  This provision shall apply to any Loan which  provides for the
release of  shares from the Suspense Account in proportion to principal
payments.  The loan must provide for annual payments of principal and interest
at a cumulative rate that is not less rapid at any time than level annual
payments of such amounts for ten (10) years.

         Interest included in any payment is disregarded only to the extent
that it would be determined to be interest under standard loan amortization
tables; the disregard of interest is not applicable from the time that, by
reason of a renewal, extension, or refinancing, the sum of the expired duration
of the exempt loan, the renewal period, the extension period, and the duration
of a new exempt loan exceeds ten years.

         17.04  Any pledge of Qualifying Employer Securities must provide for
the release of shares so pledged upon the payment of any portion of the Loan.
For each Plan Year during the duration of the Loan, the pledge must equal the
number of encumbered securities held immediately before release for the current
Plan





                                       81
<PAGE>   84
Year multiplied by a fraction.  The numerator of the fraction is the amount of
principal paid for the year.  The denominator of the fraction is the sum of the
numerator and the principal to be paid for all future years.  If the Plan
Administrator so directs for any Loan entered into on or after January 1, 1990,
the numerator of the fraction shall be the sum of principal and interest paid
on such Loan for the year and the denominator shall be the sum of the numerator
and the principal and interest to be paid for such Loan for all future years.
If the shares held in the Suspense Account include more than one class of
Qualifying Employer Securities, the number of shares of each class to be
released for a Plan Year must be determined by applying the same fraction to
each class.

         17.05  Payments of principal and interest on any such Loan during a
Plan Year shall be made by the Trustee (as directed by the Plan Administrator)
only from

                 (a)      Employer Contributions to the Trust made to meet the
Plan's obligations under a Loan and from any earnings attributable to
Qualifying Employer Securities held as collateral for the Loan (both received
during or prior to the Plan Year), less such payment in prior years; and

                 (b)      The proceeds of a subsequent Loan made to repay a
prior loan.

         If and only if the Loan is in default, Qualifying Employer Securities
held as collateral for the Loan may be sold.  In the case of a default, the
proceeds of the sale of any Qualifying Employer Securities held as collateral
for the Loan may be used to repay the Loan.

         Except as provided in Section 9.11 in the case of a tender offer,
assets transferred in satisfaction of a Loan shall not exceed the amount of the
default.  In the case of a Loan involving a disqualified person, any assets
transferred to satisfy the default may not exceed the value of the amount then
due under the Loan payment schedule.

         Such contributions, earnings and proceeds must be accounted for
separately by the Plan until the Loan is repaid.  Two or more loans may be
considered as one Loan for purposes of this section.

         17.06  Qualifying Employer Securities released by reason of the
payment of principal or interest on a Loan from amounts allocated to
Participants' Other Investments Accounts shall immediately upon payment be
credited pro rata to the corresponding Participants' Company Stock Accounts.
If Qualifying Employer Securities are not pledged as security, they shall be
allocated as if pledged and released in accordance with section 17.03.





                                       82
<PAGE>   85
         17.07  The Employer shall contribute to the Trust sufficient amounts
to enable the Trust to pay principal and interest on any such Loans as they are
due; provided, however, that no such Contribution shall exceed the limitations
in Article VIII.  In the event that such Contributions by reason of the
limitations in Article VIII are insufficient to enable the Trust to pay
principal and interest on such Loan as it is due, then upon the Trustee's
request the Employers shall make a Loan to the Trust, as described in Treasury
Regulation section 54.49757(b)(4)(iii), in sufficient amounts to meet all
requirements of an "exempt loan" within the meaning of Treasury Regulation
section 54.4975-7(b)(1)(iii).  Qualifying Employer Securities released from the
pledge of the prior Loan shall be pledged as collateral to secure the new Loan.
Such Qualifying Employer Securities will be released from this new pledge and
allocated to the accounts of the Participants in accordance with applicable
provisions of the Plan.

         If the Loan is in default, then any Qualifying Employer Securities
pledged as collateral may be sold in an amount necessary to provide the Trustee
with sufficient funds to meet the principal and interest payments due under the
Loan.  Any such sale by the Plan shall meet the requirements of section 408(e)
of ERISA.

         However, the Employer shall not, pursuant to the provisions of this
subsection, do, fail to do or cause to be done any act or thing which would
result in a disqualification of the Plan as an employee stock ownership plan
under the Code which would result in a prohibited transaction which is not
exempt under one of the various statutory or regulatory exceptions, to the
knowledge of the Employer.

         17.08  Except as provided in sections 17.09 and 17.10 below, and
notwithstanding any amendment to or termination of the Plan which causes it to
cease to qualify as an employee stock ownership plan within the meaning of
section 4975(e)(7) of the Code, no shares of Qualifying Employer Securities
acquired with the proceeds of a Loan obtained by the trust to purchase Company
Stock may be subject to a put, call or other option, or buy-sell or similar
arrangement while such shares are held by and when distributed from the Plan.

         The Plan and Trust may not be obligated to acquire Employer Securities
from a particular security holder at an indefinite time determined by the
happening of an event such as the death of the holder.

         Any transactions involving Employer Securities shall be made in
accordance with Article XIX.  The limitations of Article XVIII, if applicable,
shall be in addition to those of this section.





                                       83
<PAGE>   86
         17.09  Shares of Qualifying Employer Securities purchased with the
proceeds of a Loan and distributed by the Trustee may be subject to a Right of
First Refusal.  Such a Right of First Refusal shall provide that prior to any
subsequent transfer, the shares must first be offered in writing to the Trust
and then, if refused by the Trust, to the Company at a price equal to the
greater of

                 (a)      The then fair market value of such shares of
Qualifying Employer Securities as determined in good faith by the Plan
Administrator, in accordance with Treasury Regulation section 54.4975-11(d)(5)
from time to time, or

                 (b)      The purchase price offered by a buyer, other than the
Company or Trustee, making a good faith (as determined by the Plan
Administrator) offer to purchase such shares of Qualifying Employer Securities.

         The Trust or the Company, as the case may be, may accept the offer as
to part or all of the Qualifying Employer Securities at any time during a
period not exceeding fourteen (14) days after receipt of such offer by the
Trust, on terms and conditions no less favorable to the shareholder than those
offered by the independent third party buyer.  Any installment purchase shall
be made pursuant to a note secured by the shares purchased and shall bear a
reasonable rate of interest as determined by the Administrator.  If the offer
is not accepted by the Trust, the Company, or both, then the proposed transfer
may be completed within a reasonable period following the end of the fourteen
(14) day period, but only no less favorable to the Shareholder upon terms and
conditions of the third party buyer's prior offer.  Shares of Qualifying
Employer Securities which are publicly traded within the meaning of Treasury
Regulation section 54.4975- 7(b)(1)(iv) at the time such rights may otherwise
be exercised shall not be subject to this Right of First Refusal.

         Any transactions involving Employer Securities shall be made in
accordance with Article XIX.  The limitations of Article XVIII, if applicable,
shall be in addition to those of this section.

         17.10  The Plan and Trust may not be obligated to acquire Employer
Securities from a particular security holder at an indefinite time determined
by the happening of an event such as the death of the holder.  Shares of
Qualifying Employer Securities acquired with the proceeds of a Loan by the
Trust shall be subject to a Put Option at the time of distribution, provided
that at such time the shares are not publicly traded within the meaning of
Treasury Regulation section 54.4975-7(b)(1)(iv) or are subject to a trading
restriction within the meaning of Treasury Regulation section 54.4975-7(b)(10).





                                       84
<PAGE>   87
                 (a)      The Put Option shall be exercisable by the
Participant or beneficiary, by the donees of either, of by the Trustee of a
qualified Plan or Trustee or Custodian of an Individual Retirement Account to
which such shares have been transferred in a Rollover transfer, or by a person
(including an estate or its distributee) to whom Qualifying Employer Securities
pass by reason of the Participant's or Beneficiary's death.

                 (b)      The Put Option shall provide that for a period of at
least sixty (60) days after such shares are distributed the holder of the
option shall have the right to cause the Company, by notifying it in writing,
to purchase such shares at their fair market value, as determined by the Plan
Administrator, in accordance with Treasury Regulation section 54.4975-11(d)(5).
The period during which the Put Option is exercisable shall not include any
period during which the holder is unable to exercise such Put Option because
the Company is prohibited from honoring it by federal or state law.

                 (c)      The Plan Administrator may direct the Trustee to
assume the rights and obligations of the Company at the time the Put Option is
exercisable, insofar as the repurchase of Qualifying Employer Securities is
concerned.

                 (d)      If shares of Qualifying Employer Securities are
publicly traded without restriction on the date of distribution, but cease to
be publicly traded or become subject to a restriction (as described above)
within sixty (60) days after such date, the stock distributed shall be subject
to the Put Option described herein for the balance of the sixty (60) day
period.  The Company shall give written notice to each shareholder within ten
(10) days of the date the Qualifying Employer Securities cease to be publicly
traded that the Qualifying Employer Securities is subject to the Put Option for
the remainder of the sixty (60) day period.

                 (e)      The terms of payment for the purchase of such shares
of the Qualifying Employer Securities shall be as set forth in the Put Option
and may be either in a lump-sum or in installments, as determined by the Plan
Administrator.  An installment payment in connection with such Put Option
shall:

                          (i)     Be adequately secured, as determined by the
Plan Administrator;

                          (ii)    Bear a reasonable rate of interest, as
determined by the Plan Administrator;

                          (iii) Require equal annual payment;

                          (iv)    Have a payment period not longer than the
greater of:





                                       85
<PAGE>   88
                                  (a)      Five (5) years from the date the Put
Option is exercised, or

                                  (b)      The earlier of (a) ten (10) years
from the date the Put Option is exercised, or (b) the date any Loan used by the
Plan to acquire Qualifying Employer Securities subject to the Put Option has
been entirely repaid;

                          (v)     Require that any payments pursuant to the
installment obligations must begin to be made no later than thirty (30) days
after the date the Put Option is exercised; and

                          (vi)    In all respects satisfy the requirements of
Treasury Regulation section 54.4975-7(b)(12)(iii).

                 (f)      With respect to Post-1986 Employer Securities, the
Put Option shall provide for payments in a lump sum if the distribution of
shares is being received in installments.

                 (g)      The Put Option provided for by this section 17.09
shall continue to apply to shares of Qualifying Employer Securities purchased
by the Trustee with the proceeds of a Loan as described herein notwithstanding
any amendment to or termination of this Plan which causes the Plan to cease to
be an employee stock ownership plan within the meaning of section 4975(e)(7) of
the Code.

                 (h)      After the close of the employer's taxable year in
which lapse of a Participant's Put Option occurs, and following a determination
of the Fair Market Value of the Qualifying Employer Securities as of the
anniversary date, the Employer will notify the Participant (who did not
exercise the initial Put Option) of the new Fair Market Value of the Qualifying
Employer Securities.  Each such Participant will then have an additional sixty
(60) days to require that the employer repurchase his stock.  If the
Participant does not exercise this second put option, then the Qualifying
Employer Securities will no longer by subject to a Put Option.

         The Put Option shall further meet the requirements of Article XVIII
with respect to Post-1986 Employer Securities.

         17.11  The Plan Administrator shall direct the Trustee, in writing, to
apply dividends attributable to Employer Stock acquired with the proceeds of an
Exempt Loan (a) to repay such Loan, or (b) to the purchase of additional
Employer Stock.  If dividends are used to repurchase additional Employer Stock,
then the Employer Stock acquired with such dividends shall be allocated to
Participant's accounts for whom the dividends are attributable.





                                       86
<PAGE>   89
         17.12  The protections and rights afforded Participants under this
Article shall be nonterminable.  Upon the amendment or conversion of this Plan,
such provisions shall continue to apply so long as any Qualifying Employer
Securities remain in the Plan which were accumulated under the Employee Stock
Ownership Plan provisions of the Plan.


                                ARTICLE XVIII
         RIGHTS AND OPTIONS ON DISTRIBUTED SHARES OF COMPANY STOCK

         18.01  Shares of Qualifying Employer Securities distributed by the
Trustee shall be subject (if a Put Option is granted), in accordance with
Treasury Regulations section 54.4975-7(b)(9), to a Right of First Refusal in
favor of the Trust, the Company or both.  The terms and conditions of any such
Right of First Refusal will be determined by the Plan Administrator.

         18.02  A Participant (or Beneficiary) shall be granted, in accordance
with Treasury Regulations section 54.4975-7(b)(10) through (12) at the time
that shares of Qualifying Employer Securities are distributed to him, a Put
Option to sell the shares, or any part of them to the Company.  The Trust may
not be required to give such a Put Option, but may assume the responsibility of
the Employer under a Put Option.  The terms and conditions of any such Put
Option will be determined by the Plan Administrator.  The Put Option shall be a
nonterminable right of the Participant, but it shall apply only if the
Qualifying Employer Securities are not readily tradeable on an established
securities market at the time of the distribution.

         18.03  The provisions of sections 18.01 and 18.02 shall apply only to
Qualifying Employer Securities not purchased with the proceeds of a Loan.
Qualifying Employer Securities purchased with the proceeds of such a Loan are
subject to the provisions of Article XVII relating to the Put Option and Right
of First Refusal.

         18.04  With respect to distributions of Employer Securities from the
Plan which are attributable to Post-1986 Employer Securities, if such Employer
Securities are not readily tradeable on an established securities market, the
Participant or Beneficiary receiving a Total Distribution shall be given a Put
Option by the Employer which provides for payments beginning not later than
thirty (30) days after the exercise of the Put Option and lasting for not
longer than five (5) years and which further provides for adequate security to
be given to the recipient and reasonable interest to be paid on the unpaid
balance.

         With respect to distributions of Employer Securities from the Plan
which are attributable to Post-1986 Employer Securities, if such Employer
Securities are not readily tradeable on an





                                       87
<PAGE>   90
established securities market, the Participant or Beneficiary receiving
installment distributions shall be given a Put Option by the Employer which
provides for payments to be made not later than thirty (30) days after each
such installment distribution.

         The obligations under the Put Options to be given by the Employer
under this section may be assumed by the Plan & Trust, at the discretion of the
Plan Administrator.  If such obligations under the Put Option are assumed by
the Plan & Trust, the Employer shall be relieved of its obligations under the
Put Option.

         The restrictions on the Put Option contained in this section shall be
a further limitation on the requirements of Article XVII and shall apply to
Post-1986 Employer Securities.


                                  ARTICLE XIX
                        VALUATION OF EMPLOYER SECURITIES
                   TRANSACTIONS INVOLVING EMPLOYER SECURITIES

         19.01  If the securities of the Employer are not readily tradeable on
an established securities market as described in section 409(h)(1) of the Code,
so that a reasonable valuation may not be obtained from the marketplace, then
such Qualifying Employer Securities must be valued at least annually by an
independent appraiser who is not associated with the Employer, the Plan
Administrator, the Trustee, or any person related to any fiduciary under the
Plan.  The independent appraiser may be associated with a person who is merely
a contract administrator with respect to the Plan, but who exercises no
discretionary authority and is not a Plan fiduciary.

         The independent appraiser shall be qualified to perform such
appraisals and shall have engaged to perform appraisals of value of businesses
for a significant number of persons, so that the appraiser shall not be
dependent on the Employer or the Plan for a substantial proportion of such
appraisal work.  The independent appraiser must satisfy the conditions imposed
under the regulations under Code section 170(a)(1) for independence of the
appraiser and the appraisal.  The independent appraiser shall be engaged by and
answerable to the Plan and its fiduciaries; however, the fees of the
independent appraiser may be paid by the Employer.

         19.02  If there is a public market for Qualifying Employer Securities
of the type held by the Plan, (but such market is such so that the securities
are not readily tradeable) then the Plan Administrator may use as the value of
the shares the price at which such shares traded in such market, provided that
such valuation is representative of the fair market value of such shares in the
opinion of the Plan Administrator.





                                       88
<PAGE>   91
         19.03  For purposes of determining the annual valuation of the Plan &
Trust and for reporting to Participants and regulatory authorities, the assets
of the Plan shall be valued at least annually on the Valuation Date or Dates of
the Plan.  The fair market value of Qualifying Employer Securities shall be
determined on such a Valuation Date.  The value of Employer Securities as of
the most recent Valuation Date shall apply for purposes of valuing
distributions and other transactions of the Plan & Trust, except:

                 (a)      Transactions in which such valuation is clearly
inapplicable;

                 (b)      Transactions for which a further valuation is
obtained or required to be obtained (such as transaction involving a
party-in-interest);

                 (c)      In the event that the securities shall become
publicly held or that a market with recognizable valuations on a more frequent
basis develops for the securities; and

                 (d)      In the event that circumstances relating to the
business of the Employer change in such a manner as to cause a reasonable man
to expect a change in value subsequent to the most recent valuation.

         19.04  For purposes of determining the value of Qualifying Employer
Securities for purposes of a transaction involving a party-in-interest, the
fair market value of such securities as of the date of the transaction shall be
used.  If there has been no substantial change in the business of the
corporation and if the transaction is to take place upon the receipt of a
valuation by an independent appraiser of the Qualifying Employer Securities as
of the most recent Valuation Date, then the value of such securities may be the
same as that obtained as the result of such most recent valuation, provided
that the independent appraiser certifies that such value has not changed and
the current value fair market value of the Qualifying Employer Securities is
the same as at the time of such prior valuation.

         19.05  If the Employer Securities held by the Plan are not readily
tradeable on an established securities market, a Put Option  shall be granted
by the Employer upon the distribution of Employer Securities to the
Participants, regardless of whether the Employer Securities were acquired with
the proceeds of the exempt Loan.  At the time of the grant of a Put Option
hereunder, the value of Qualifying Employer Securities to which such Put Option
applies shall be determined as of the most recent Valuation Date (or at a more
recent value determined in accordance with this Article) at the time of the
grant of such Put Option, regardless of the period for which such Put Option is
given.





                                       89
<PAGE>   92
         19.06  The determination of fair market value of Qualifying Employer
Securities for all purposes under the Plan shall be made by the Plan
Administrator, who, in order to make such determination, shall retain, at the
expense of the Employer or of the Plan if used for Plan purposes, a qualified
appraiser who customarily makes such appraisals and who is independent of any
party to a transaction involving the Plan and Employer Securities.  In making
the determination of fair market value, the independent appraiser shall
consider the following additional criteria:

                 (a)      Any current and historical practices which have been
consistently and uniformly utilized to value Qualifying Employer Securities in
sales transactions between the Company and the stockholders or among and
between stockholders.

                 (b)      Any agreements, restrictions or limitations with
respect to or imposed upon the sale or transfer of Qualifying Employer
Securities which establish or stipulate the price at which the Company or Trust
may or must purchase such stock under the provisions of the articles, by-laws
or written agreements, provided the same or similar restrictions are applicable
to substantially all of the outstanding Qualifying Employer Securities and are
uniformly and consistently complied with.

                 (c)      The price or prices of the stocks of other similar
companies which are publicly traded in an established market where such company
or companies are comparable in size, growth, characteristics, product line,
market area, profit and financial condition.

                 (d)      The capitalization of earnings method of valuation
applied to the earning power of the Company as related to the rates of return
available in the money market for alternative investments, with consideration
given to expected rates of growth and potential risk.

                 (e)      Adjusted book value approach which takes into
consideration balance sheet items which require a substitution of appraised
values to make a determination of fair market value.

                 (f)      Such other information concerning the Company and its
condition and prospects, financial and otherwise, generally used in the
determination of the fair market value of corporation stock of comparable
public or private companies engaged in the same or similar industries, by
independent investment analysts nationally recognized as having expertise in
rendering such evaluations.

                 (g)      Such other evaluation techniques, such as use of
capitalization ratios, deemed appropriate by the Committee and





                                       90
<PAGE>   93
executed by an independent appraiser having expertise in rendering such
evaluations.

         19.07  All purchases of Qualifying Employer Securities shall be made
at a price, or prices, which, in the judgment of the Plan Administrator, do not
exceed the fair market value of such Qualifying Employer Securities.

         19.08  In the event that the Trustee acquires shares of Qualifying
Employer Securities by purchase from a "disqualified person" as defined in Code
section 4975(e)(2), in exchange for cash or other assets of the Trust, the
terms of such purchase shall contain the provision that in the event that there
is a final determination by the Internal Revenue Service or court of competent
jurisdiction that the fair market value of such shares of Company Stock as of
the date of purchase was less than the purchase price paid by the Trustee, then
the seller shall pay or transfer, as the case may be, to the Trustee an amount
of cash, shares of Company Stock, or any combination thereof equal in value to
the difference between the purchase price and said fair market value for all
such shares.  In the event that cash and/or shares of Company Stock are paid
and/or transferred to the Trustee under this provision, share of Company Stock
shall be valued at their fair market value as of the date of said purchase, and
interest at a reasonable rate from the date of purchase to the date of payment
shall be paid by the seller on the amount of cash paid.

         19.09  The Plan Administrator may direct the Trustee to sell, resell
or otherwise dispose of Qualifying Employer Securities to any person, including
the Employer, provided that any such sales to any disqualified person,
including the Employer, will be made at not less than the fair market value and
no commission is charged.  Any such sales shall be made in conformance with
section 408(e) of ERISA.  All sales of company stock by the Trustee will be
charged pro rata to the Company Stock Accounts of the Participants.

         19.10  In the event the Plan Administrator directs the Trustee to
dispose of any Qualifying Employer Securities held as Trust Assets under
circumstances which require registration and/or qualification of the securities
under applicable Federal or State securities laws, then the Employer, at its
own expense, will take or cause to be taken any and all such action as may be
necessary or appropriate to effect such registration and/or qualification.

                                   ARTICLE XX
                                 MISCELLANEOUS

         20.01  If the Company and each other Employer shall at any time become
insolvent or in the event of a dissolution, merger,





                                       91
<PAGE>   94
or consolidation without any provision being made for the continuance of this
Trust, the Trust hereby created shall terminate and the Trust shall be operated
by the person authorized to act for the Company.  If it is determined to
terminate the Trust, the Trustee shall proceed in the manner herein provided in
the event of termination of the Trust.

         20.02  This Agreement shall be binding upon the beneficiaries, heirs,
executors, administrators, distributees, and assigns of the Participants
hereunder and upon the successors and assigns of the Employer and of the
Trustee, under this Trust.

         20.03  The Employer agrees to furnish the Trustee such information in
the Employer's possession as the Trustee shall require from time to time to
perform the duties under the Trust.

         20.04  In the event of a dissolution, merger or consolidation of the
Employer, provisions may be made by the successor for the continuation of this
Trust, and said successor shall in such event be substituted in place of the
present Employer by an instrument authorizing such substitution executed by the
Employer and his successor, a copy of which shall be delivered to the Trustee.

         20.05  The Trustee and the Employer may enter into an extra agreement
of Trust solely with regard to the provisions of Article XII for the purpose of
modifying the powers, duties, or administration of the Trustee or for
allocating specific duties among the Trustees (or other fiduciaries) or for
allocating specific duties to an investment adviser or an investment manager.
Any such agreement, shall be in writing executed with the same formality as the
Trust, and shall be deemed a part of the Trust as if the same were herein
incorporated.  A copy of any such agreement shall be delivered to any insurer.

         20.06  This Trust may be executed in any number of counterparts, each
of which shall be deemed to be an original, and the counterparts shall
constitute one and the same instrument, which shall be sufficiently evidenced
by any one thereof.

         20.07  The adoption and maintenance of the Plan shall not be deemed to
constitute a contract between the Employer and Participant or to be a
consideration for an inducement or condition of the employment of any person.
Nothing herein contained shall be deemed to give to any employee the right to
be retained in the employ of the Employer or to interfere with the right of the
Employer to discharge or terminate the employment of any employee at any time,
nor shall it be deemed to give to the Employer the right to require an employee
to remain in its employ nor shall it interfere with the employee's right to
terminate his employment at any time.





                                       92
<PAGE>   95
         20.08  In any action or proceeding involving the Trust, or any
property constituting part or all thereof, or the administration thereof,
Employees or former Employees of the Company or an Affiliate or the
Beneficiaries or any other person having or claiming to have an interest in the
Trust Assets or under the Plan shall not be necessary parties nor entitled to
any notice of process.

         20.09  Any final judgment which is not appealed or appealable that may
be entered in any legal action or proceeding shall be binding and conclusive on
the parties hereto, the Plan Administrator, and all persons having or claiming
to have an interest in the Trust Assets or under this Plan.

         20.10  This agreement shall be construed and interpreted under the
laws of Louisiana to the extent not in conflict with applicable Federal laws.

         The Trustee hereby accepts this amended and restated Plan and Trust.

         IN WITNESS WHEREOF, the Employer has caused this agreement to be
signed by its duly authorized officer, and the Trustee has signed this
agreement indicating his acceptance of the Trust, in the presence of the
competent undersigned witnesses, on the date indicated above, at Baton Rouge,
Louisiana.

WITNESSES:                              UNITED COMPANIES FINANCIAL CORPORATION, 
                                          EMPLOYER:



                                        BY:      
---------------------------------           ---------------------------------
                                                   Authorized Officer

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


                                        HIBERNIA NATIONAL BANK, TRUSTEE:




                                        BY: 
---------------------------------            ---------------------------------
                                                    Authorized Officer

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





                                       93
<PAGE>   96
                           ACKNOWLEDGMENT BY WITNESS



STATE OF LOUISIANA

PARISH OF EAST BATON ROUGE

         BEFORE ME, the undersigned Notary Public, in and for the Parish and
State aforementioned, on this day personally appeared
___________________________, to me known to be the person described in the
foregoing ____________________________________________ as a witness thereto,
who, after being by me first duly sworn, did acknowledge and swear that she
executed the same as such witness; that said instrument was executed by the
parties thereto in the presence of affiant and of the other subscribing
witness, and by all of the parties thereto as their own free act and deed.

         THUS DONE AND SIGNED on this _____ day of _____________, 1993, in the
presence of the undersigned competent witnesses, at Baton Rouge, Louisiana.

WITNESSES:


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


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


                      ---------------------------------
                                 NOTARY PUBLIC





                                       94
<PAGE>   97
                           ACKNOWLEDGMENT BY EMPLOYER



STATE OF LOUISIANA

PARISH OF EAST BATON ROUGE


         BEFORE ME, the undersigned Notary Public, in and for the Parish and
State aforementioned, on this day personally appeared
_____________________________, known to me personally, who, being by me first
duly sworn, did say that he is the President of United Companies Financial
Corporation and that he executed the foregoing instrument on behalf of the
corporation as the act of such corporation (or entity) for the purposes and
considerations therein expressed and in the capacity therein stated.

         THUS DONE AND SIGNED on this _____ day of _____________, 1994, in the
presence of the undersigned competent witnesses, at Baton Rouge, Louisiana.

WITNESSES:                              UNITED COMPANIES FINANCIAL CORPORATION
                                        EMPLOYER:



                                        By: 
---------------------------------           ---------------------------------  
                                                     Authorized Officer

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



                      ---------------------------------
                                 NOTARY PUBLIC





                                       95
<PAGE>   98
                         ACKNOWLEDGMENT BY BANK TRUSTEE



STATE OF LOUISIANA

PARISH OF EAST BATON ROUGE

         BEFORE ME, the undersigned Notary Public, in and for the Parish and
State aforementioned, on this day personally appeared ______________________,
personally known to me who, after being by me first duly sworn, did say that he
is the trust officer of Hibernia National Bank whose name is subscribed to the
foregoing instrument and that he executed same as an act in his capacity as
officer of the Trustee for the purposes and considerations therein stated and
that he is authorized to act for the Bank in this capacity.

         THUS DONE AND SIGNED on this _____ day of _____________, 1994, in the
presence of the undersigned competent witnesses, at Baton Rouge, Louisiana.

WITNESSES:                              HIBERNIA NATIONAL BANK TRUSTEE:



                                        By:
---------------------------------          ---------------------------------
                                                    Authorized Officer


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




                      ---------------------------------
                                 NOTARY PUBLIC





                                       96
<PAGE>   99

                    FIRST AMENDMENT TO THE 1994 RESTATEMENT
                                     OF THE
                     UNITED COMPANIES FINANCIAL CORPORATION

                    EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST

          _________________________________________________________


STATE OF LOUISIANA

PARISH OF EAST BATON ROUGE


         BE IT KNOWN, that on the _____ day of February, 1995, at the place
hereinafter written, in the presence of the witnesses hereinafter named and
undersigned, personally came and appeared:

         UNITED COMPANIES FINANCIAL CORPORATION, a corporation organized under
         the laws of the State of Louisiana, with its principal place of
         business at 4041 Essen Lane, Baton Rouge, Louisiana 70809, represented
         herein by Dale E. Redman, its authorized officer, duly authorized to
         act by virtue of a corporate resolution attached hereto and made a
         part hereof (hereinafter referred to as "Employer" or "Company")

                                      AND

         HIBERNIA NATIONAL BANK, a national banking association having an
         office and place of business in Baton Rouge, Louisiana, represented by
         its undersigned Trust Officer, duly authorized to represent the Bank
         (hereinafter referred to as "Trustee").


                                  WITNESSETH:

         WHEREAS, the Employer did establish the United Companies Financial
Corporation Profit Sharing Plan and Trust on December 31, 1960, and amended,
restated and converted said Profit Sharing Plan and Trust to a stock bonus plan
with ESOP features to be known as the United Companies Financial Corporation
Employee Stock Ownership Plan and Trust ("Plan & Trust") on September 1, 1975,
which Plan & Trust was restated on July 11, 1984, and again restated the Plan
and Trust effective January 1, 1987, and most recently amended and restated
said Plan and Trust September 1, 1994, and wishes to further amend said Plan &
Trust; and

         WHEREAS, the Employer now desires to amend the Plan to clarify that
the Trustee is a directed Trustee as to the acquisition or
<PAGE>   100
disposition of Qualifying Employer Securities and as to any Loan made pursuant
to Article XVII of the Plan (an "Exempt Loan"); and

         WHEREAS, Hibernia National Bank is the Trustee of the Plan and Trust,
whose consent is necessary to effectuate any amendment to the Trust provisions
of the Plan and Trust by the Employer; and

         WHEREAS, the Trustee does consent to the following amendments to the
Plan and Trust; and

         NOW THEREFORE, the Employer does hereby amend the Plan and Trust, and
the Trustee concurs in and accepts such amendment, effective January 1, 1995,
except as otherwise provided herein, as follows:

         Article XVII is hereby amended by adding Section 17.13 to read as
follows:

                 "7.13  (a)  Purpose.  The provisions of this section 17.13 are
         intended to provide to the Trustee with direction as to the
         acquisition or disposition of Qualifying Employer Securities hereunder
         and as to the consummation of an Exempt Loan in connection therewith.

                 (b)      Contributions.  In no event shall the Trustee have
         any responsibility or liability for the computation or collection of
         any Contribution to be made by the Employer under the terms of the
         Plan, including whether any Contribution is sufficient to pay any
         principal or interest then due with respect to an outstanding Exempt
         Loan.  The Trustee shall apply any such contribution to the payment of
         an Exempt Loan solely in accordance with the written instructions of
         the Plan Administrator.  To the extent the amount due under the terms
         of any such loan exceeds the amount of any contribution, the Trustee
         shall have no liability for any such short fall and shall act with
         respect to any such short fall solely in accordance with the
         instructions of the Plan Administrator.

                 (c)      Exempt Loan.  The Trustee shall enter into an Exempt
         Loan and/or any extension of credit pursuant to an agreement providing
         for an Exempt Loan or one or more Exempt Loans solely in accordance
         with the written instructions of the Plan Administrator.  The Plan
         Administrator and/or the Employer shall possess the sole power and
         authority to negotiate the terms and conditions of any such Loan, to
         determine whether the provisions of any such Loan constitute an Exempt
         Loan (within the meaning of the Plan and the provisions of the Code
         and ERISA), and whether any such Loan (and its related





                                       2
<PAGE>   101
         acquisition of Qualifying Employer Securities) satisfies the fiduciary
         obligations imposed under ERISA.
 
                 (d)      Purchase of Securities.  The Trustee shall purchase,
         from time to time, Qualifying Employer Securities in accordance with
         the instructions of the Plan Administrator on the open market or by
         private purchase, including purchase from the Employer of authorized
         and unissued shares and shares held as treasury stock.  Purchases
         shall be made at the purchase price(s) directed by the Plan
         Administrator which shall constitute no more than adequate
         consideration within the meaning of Code Section 4975.  With respect
         to the acquisition of Qualifying Employer Securities through private
         purchase, the Employer shall pay the actual expenses of such
         transaction; no form of commission shall be paid by the Trustee from
         the Trust fund established hereunder.

                 The Trustee shall not be liable for the acquisition, retention
         or disposition of Qualifying Employer Securities in accordance with
         the instructions of the Plan Administrator.  The Trustee shall have no
         obligation to anticipate market conditions or otherwise time the
         purchase or sale of shares of Qualifying Employer Securities.

                 (e)      Default.  If a default occurs with respect to an
         Exempt Loan, the Trustee shall act or refrain from acting solely in
         accordance with the instructions of the Plan Administrator; the
         Trustee shall not sell or otherwise dispose of Qualifying Employer
         Securities, except in accordance with such instructions.

                 (f)      Instructions.  All communications from the Employer
         or the Plan Administrator shall be made, in writing, signed by an
         officer of the Employer or an individual authorized to act on behalf
         of the Plan Administrator.  The Plan Administrator shall provide the
         Trustee with the names and specimen signatures of all individuals
         authorized to sign or act on behalf of the Plan Administrator and the
         Employer.  The Trustee shall be fully protected in relying on any such
         communication, and the Trustee shall not be required to verify the
         accuracy or validity of any such communication, unless it has
         reasonable grounds to doubt the authenticity of any signature.

                 If the Employer or Plan Administrator communicates or
         instructs the Trustee orally, such communication shall be confirmed,
         in writing, as soon as practicable thereafter, and the Trustee shall
         be fully protected in





                                       3
<PAGE>   102
         acting or failing to act in accordance with such oral communication.

                 Instructions hereunder may be given separately or as standing
         instruction in the discretion of the Employer or the Plan
         Administrator as the case may be.

                 (g)      Indemnity.  The Employer agrees to indemnify and hold
         harmless the Trustee from any claim, liability, fee, expense or other
         charge (including attorneys' fees) arising from or in connection with
         the performance of its duties in accordance with the terms of the Plan
         and this amendment, unless such claim, liability, fee, expense or
         other charge results from a grossly negligent act or omission, an act
         or omission performed in bad faith (including a fraudulent act) or an
         act or omission taken in contravention of the terms of the Plan or the
         directions of the Employer or the Administrator.

                 Indemnification under this subparagraph (g) shall be made only
         from the assets of the Employer, and no person entitled to indemnity
         hereunder shall receive payment, whether directly or indirectly, from
         the Trust."




         The amendments made hereunder are intended to clarify that the Trustee
is to be a directed trustee with respect to the matters described herein,
effective as of January 1, 1995.  Furthermore, these amendments are intended to
be interpreted and construed in accordance with ERISA, the Code, and
regulations promulgated thereunder.  Any provision of this Amendment shall be
separable from the remaining amendments and shall not cause them to be rendered
invalid, so that all the amendments will have as much force and effect as
allowed by law.  In the case of any ambiguity, the language shall be
interpreted to effectuate the stated purposes of those amendments and in such a
way as to cause the Plan to continue to be a qualified plan under the statutes.





                                       4
<PAGE>   103
         IN WITNESS WHEREOF, the Employer has cause this Amendment to be signed
by its duly authorized officer, and the Trustee has accepted this amendment,
before the undersigned, competent witnesses, on the date indicated above, at
Baton Rouge, Louisiana.

WITNESSES:                              UNITED COMPANIES FINANCIAL
                                           CORPORATION, as EMPLOYER


                                        By:
--------------------------------            --------------------------------
                                                 Dale E. Redman
                                                 Authorized Officer
--------------------------------



WITNESSES:                              HIBERNIA NATIONAL BANK, as TRUSTEE


                                        By:
--------------------------------            --------------------------------
                                                  Authorized Officer

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





                                       5
<PAGE>   104

                           ACKNOWLEDGMENT BY EMPLOYER



STATE OF LOUISIANA

PARISH OF EAST BATON ROUGE


         BEFORE ME, the undersigned Notary Public, in and for the Parish and
State aforementioned, on this day personally appeared   Dale E. Redman, known
to me personally, who, being by me first duly sworn, did say that he is the
Authorized Officer of United Companies Financial Corporation, a Louisiana
corporation, and that as such duly authorized officer of the Board of Directors
of said Corporation, he signed and executed the foregoing instrument on behalf
of the corporation and as the act of such corporation (or entity) for the
purposes and consideration therein expresses, and in the capacity therein
stated.

         IN WITNESS WHEREOF, I have hereunto set my hand and official seal and
the said appearer and the said witnesses have hereunto affixed their signatures
this the _______ day of February, 1995.

WITNESSES:                              UNITED COMPANIES FINANCIAL
                                          CORPORATION, as EMPLOYER


                                        By:
--------------------------------            --------------------------------
                                              Dale E. Redman 
                                              Authorized Officer
--------------------------------



                      --------------------------------
                                 NOTARY PUBLIC





                                       6
<PAGE>   105
                         ACKNOWLEDGMENT BY BANK TRUSTEE



STATE OF LOUISIANA

PARISH OF EAST BATON ROUGE


         BEFORE ME, the undersigned Notary Public, in and for the County/Parish
and State aforementioned, on this day personally appeared
__________________________________, known to me personally, who, after being by
me first duly sworn, did say that he is the trust officer of Hibernia National
Bank whose name is subscribed to the foregoing instrument and that he executed
same as an act in his capacity as officer of the Trustee for the purposes and
considerations therein stated.

         THUS DONE AND SIGNED on this _____ day of February, 1995, and in the
presence of the undersigned competent witnesses, at Baton Rouge, Louisiana.

WITNESSES:                              HIBERNIA NATIONAL BANK, as TRUSTEE


                                        By:
--------------------------------           -------------------------------- 
                                                 Authorized Officer


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



                      --------------------------------
                                 NOTARY PUBLIC





                                       7
<PAGE>   106

                    SECOND AMENDMENT TO THE 1994 RESTATEMENT
                                     OF THE
                     UNITED COMPANIES FINANCIAL CORPORATION

                    EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST

          _________________________________________________________

                                      
STATE OF LOUISIANA

PARISH OF EAST BATON ROUGE


         BE IT KNOWN, that on the _____ day of ______________, 1995, at the
place hereinafter written, in the presence of the witnesses hereinafter named
and undersigned, personally came and appeared:

         UNITED COMPANIES FINANCIAL CORPORATION, a corporation organized under
         the laws of the State of Louisiana, with its principal place of
         business at 4041 Essen Lane, Baton Rouge, Louisiana 70809, represented
         herein by Dale E. Redman, its authorized officer, duly authorized to
         act by virtue of a corporate resolution attached hereto and made a
         part hereof (hereinafter referred to as "Employer" or "Company")

                                      AND

         HIBERNIA NATIONAL BANK, a national banking association having an
         office and place of business in Baton Rouge, Louisiana, represented by
         its undersigned Trust Officer, duly authorized to represent the Bank
         (hereinafter referred to as "Trustee").


                                  WITNESSETH:

         WHEREAS, the Employer did establish the United Companies Financial
Corporation Profit Sharing Plan and Trust on December 31, 1960, and amended,
restated and converted said Profit Sharing Plan and Trust to a stock bonus plan
with ESOP features to be known as the United Companies Financial Corporation
Employee Stock Ownership Plan and Trust ("Plan & Trust") on September 1, 1975,
which Plan & Trust was restated on July 11, 1984, and again restated the Plan
and Trust effective January 1, 1987, and most recently amended and restated
said Plan and Trust September 1, 1994, and wishes to further amend said Plan &
Trust; and

         WHEREAS, the Employer now desires to amend the Plan to provide for
clarification under Article VII of the Plan and Trust of
<PAGE>   107
procedures relating to a distribution of benefits to a Participant who has
terminated employment with the Employer; and

         WHEREAS, Hibernia National Bank is the Trustee of the Plan and Trust,
whose consent is necessary to effectuate any amendment to the Trust provisions
of the Plan and Trust by the Employer; and

         WHEREAS, the Trustee does consent to the following amendments to the
Plan and Trust; and

         NOW THEREFORE, the Employer does hereby amend the Plan and Trust, and
the Trustee concurs in and accepts such amendment, effective January 1, 1995,
except as otherwise provided herein, as follows:

         Article VII, section 7.01 is hereby amended by adding a paragraph at
the end of said section 7.01 to read as follows:

                 A Participant who has terminated employment with the Employer
         shall be entitled to elect to receive a distribution of his Accrued
         Benefit in any form permitted under the Plan, provided that he has
         satisfied the following requirements as of the close of the Plan Year
         preceding the date of distribution:

                          (a)     he shall have completed at least ten (10
                 Years of Service with the Employer or with an Affiliated
                 Employer during the period of affiliation; and

                          (b)     the sum of the number of years of his Age and
                 the number of his Years of Service is at least sixty (60).

         The Plan Administrator shall require that such election be made on a
         form designed to comply with the requirements for an election of
         distributions under the Plan.  A reasonable period of time after the
         close of the Plan Year shall be allowed for accounting and allocation
         for the Plan Year, crediting of dividends and earnings for the Plan
         Year, and time for directing the transfer of stock certificates.

         The amendments made hereunder are intended to qualify the Plan and
Trust for the period beginning January 1, 1995, except as otherwise provided
herein, as a qualified Employee Stock Ownership Plan under the Internal Revenue
Code and ERISA.  Therefore, any





                                       2
<PAGE>   108
provisions which cause the Plan not to be in compliance with either statute, or
with regulations promulgated thereunder, shall be separable from the remaining
amendments and shall not cause them to be rendered invalid, so that all the
amendments will have as much force and effect as allowed by law.  In the case
of any ambiguity, the language shall be interpreted to effectuate the stated
purposes of those amendments and in such a wa as to cause the Plan to continue
to be a qualified plan under the statutes.

         IN WITNESS WHEREOF, the Employer has cause this Amendment to be signed
by its duly authorized officer, and the Trustee has accepted this amendment,
before the undersigned, competent witnesses, on the date indicated above, at
Baton Rouge, Louisiana.

WITNESSES:                              UNITED COMPANIES FINANCIAL
                                          CORPORATION, as EMPLOYER


                                        By:
--------------------------------            --------------------------------
                                                Dale E. Redman 
                                                Authorized Officer
--------------------------------




WITNESSES:                              HIBERNIA NATIONAL BANK, as TRUSTEE


                                        By:
--------------------------------            --------------------------------
                                                  Authorized Officer


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





                                       3
<PAGE>   109

                           ACKNOWLEDGMENT BY EMPLOYER



STATE OF LOUISIANA

PARISH OF EAST BATON ROUGE


         BEFORE ME, the undersigned Notary Public, in and for the Parish and
State aforementioned, on this day personally appeared   Dale E. Redman, known
to me personally, who, being by me first duly sworn, did say that he is the
Authorized Officer of United Companies Financial Corporation, a Louisiana
corporation, and that as such duly authorized officer of the Board of Directors
of said Corporation, he signed and executed the foregoing instrument on behalf
of the corporation and as the act of such corporation (or entity) for the
purposes and consideration therein expresses, and in the capacity therein
stated.

         IN WITNESS WHEREOF, I have hereunto set my hand and official seal and
the said appearer and the said witnesses have hereunto affixed their signatures
this the _______ day of _______________, 1995.

WITNESSES:                              UNITED COMPANIES FINANCIAL
                                          CORPORATION, as EMPLOYER


                                        By:
--------------------------------            --------------------------------
                                                Dale E. Redman 
                                                Authorized Officer


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



                      --------------------------------
                                 NOTARY PUBLIC





                                       4
<PAGE>   110
                         ACKNOWLEDGMENT BY BANK TRUSTEE



STATE OF LOUISIANA

PARISH OF EAST BATON ROUGE


         BEFORE ME, the undersigned Notary Public, in and for the County/Parish
and State aforementioned, on this day personally appeared
__________________________________, known to me personally, who, after being by
me first duly sworn, did say that he is the trust officer of Hibernia National
Bank whose name is subscribed to the foregoing instrument and that he executed
same as an act in his capacity as officer of the Trustee for the purposes and
considerations therein stated.

         THUS DONE AND SIGNED on this ______ day of _____________, 1995, and in
the presence of the undersigned competent witnesses, at Baton Rouge, Louisiana.

WITNESSES:                              HIBERNIA NATIONAL BANK, as TRUSTEE


                                        By:
--------------------------------            --------------------------------
                                                  Authorized Officer

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



                      --------------------------------
                                 NOTARY PUBLIC





                                       5
<PAGE>   111

                    THIRD AMENDMENT TO THE 1994 RESTATEMENT
                                     OF THE
                     UNITED COMPANIES FINANCIAL CORPORATION

                    EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST

          _________________________________________________________

                                      
STATE OF LOUISIANA

PARISH OF EAST BATON ROUGE


         BE IT KNOWN, that on the _____ day of ______________, 1995, at the
place hereinafter written, in the presence of the witnesses hereinafter named
and undersigned, personally came and appeared:

         UNITED COMPANIES FINANCIAL CORPORATION, a corporation organized under
         the laws of the State of Louisiana, with its principal place of
         business at 4041 Essen Lane, Baton Rouge, Louisiana 70809, represented
         herein by Dale E. Redman, its authorized officer, duly authorized to
         act by virtue of a corporate resolution attached hereto and made a
         part hereof (hereinafter referred to as "Employer" or "Company")

                                      AND

         HIBERNIA NATIONAL BANK, a national banking association having an
         office and place of business in Baton Rouge, Louisiana, represented by
         its undersigned Trust Officer, duly authorized to represent the Bank
         (hereinafter referred to as "Trustee").


                                  WITNESSETH:

         WHEREAS, the Employer did establish the United Companies Financial
Corporation Profit Sharing Plan and Trust on December 31, 1960, and amended,
restated and converted said Profit Sharing Plan and Trust to a stock bonus plan
with ESOP features to be known as the United Companies Financial Corporation
Employee Stock Ownership Plan and Trust ("Plan & Trust") on September 1, 1975,
which Plan & Trust was restated on July 11, 1984, and again restated the Plan
and Trust effective January 1, 1987, and most recently amended and restated
said Plan and Trust September 1, 1994, and wishes to further amend said Plan &
Trust; and
<PAGE>   112
         WHEREAS, the Employer now desires to amend the Plan to provide for
clarification under Article VIII of the Plan and Trust of procedures relating
to a distribution of benefits to a Participant who has terminated employment
with the Employer; and

         WHEREAS, Hibernia National Bank is the Trustee of the Plan and Trust,
whose consent is necessary to effectuate any amendment to the Trust provisions
of the Plan and Trust by the Employer; and

         WHEREAS, the Trustee does consent to the following amendments to the
Plan and Trust; and

         NOW THEREFORE, the Employer does hereby amend the Plan and Trust, and
the Trustee concurs in and accepts such amendment, effective January 1, 1994,
except as otherwise provided herein, as follows:

         Article V is hereby amended by substituting the attached pages 38 and
39 for pages 38 and 39 of the Plan to clarify the provisions of Sections 5.01
and 5.02 thereof.

         Article VIII is hereby amended by substituting the attached pages 57,
58, and 59 for pages 57 through 59, inclusive, of the Plan to clarify the
provisions of Sections 8.01 and 8.02 thereof.

         The amendments made hereunder are intended to qualify the Plan and
Trust for the period beginning January 1, 1994, except as otherwise provided
herein, as a qualified Employee Stock Ownership Plan under the Internal Revenue
Code and ERISA.  Therefore, any provisions which cause the Plan not to be in
compliance with either statute, or with regulations promulgated thereunder,
shall be separable from the remaining amendments and shall not cause them to be
rendered invalid, so that all the amendments will have as much force and effect
as allowed by law.  In the case of any ambiguity, the language shall be
interpreted to effectuate the stated purposes of those amendments and in such a
way as to cause the Plan to continue to be a qualified plan under the statutes.





                                       2
<PAGE>   113

         IN WITNESS WHEREOF, the Employer has cause this Amendment to be signed
by its duly authorized officer, and the Trustee has accepted this amendment,
before the undersigned, competent witnesses, on the date indicated above, at
Baton Rouge, Louisiana.


WITNESSES:                              UNITED COMPANIES FINANCIAL
                                          CORPORATION, as EMPLOYER


                                        By:
--------------------------------           --------------------------------
                                                  Dale E. Redman 
                                                  Authorized Officer

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



WITNESSES:                              HIBERNIA NATIONAL BANK, as TRUSTEE


                                        By:
--------------------------------            --------------------------------
                                                  Authorized Officer

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





                                       3
<PAGE>   114

                           ACKNOWLEDGMENT BY EMPLOYER



STATE OF LOUISIANA

PARISH OF EAST BATON ROUGE


         BEFORE ME, the undersigned Notary Public, in and for the Parish and
State aforementioned, on this day personally appeared   Dale E. Redman, known
to me personally, who, being by me first duly sworn, did say that he is the
Authorized Officer of United Companies Financial Corporation, a Louisiana
corporation, and that as such duly authorized officer of the Board of Directors
of said Corporation, he signed and executed the foregoing instrument on behalf
of the corporation and as the act of such corporation (or entity) for the
purposes and consideration therein expresses, and in the capacity therein
stated.

         IN WITNESS WHEREOF, I have hereunto set my hand and official seal and
the said appearer and the said witnesses have hereunto affixed their signatures
this the _______ day of _______________, 1995.

WITNESSES:                              UNITED COMPANIES FINANCIAL
                                          CORPORATION, as EMPLOYER


                                        By:
--------------------------------            --------------------------------
                                                   Dale E. Redman 
                                                   Authorized Officer

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





                      --------------------------------
                                 NOTARY PUBLIC





                                       4
<PAGE>   115
                         ACKNOWLEDGMENT BY BANK TRUSTEE



STATE OF LOUISIANA

PARISH OF EAST BATON ROUGE


         BEFORE ME, the undersigned Notary Public, in and for the County/Parish
and State aforementioned, on this day personally appeared
__________________________________, known to me personally, who, after being by
me first duly sworn, did say that he is the trust officer of Hibernia National
Bank whose name is subscribed to the foregoing instrument and that he executed
same as an act in his capacity as officer of the Trustee for the purposes and
considerations therein stated.

         THUS DONE AND SIGNED on this ______ day of _____________, 1995, and in
the presence of the undersigned competent witnesses, at Baton Rouge, Louisiana.

WITNESSES:                              HIBERNIA NATIONAL BANK, as TRUSTEE

 
                                        By:
--------------------------------             --------------------------------
                                                   Authorized Officer


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




                      --------------------------------
                                 NOTARY PUBLIC





                                       5
<PAGE>   116
                REVISED FIFTH AMENDMENT TO THE 1994 RESTATEMENT
                                     OF THE
                     UNITED COMPANIES FINANCIAL CORPORATION

                    EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST

          _________________________________________________________


STATE OF LOUISIANA

PARISH OF EAST BATON ROUGE


         BE IT KNOWN, that on the dates and at the places hereinafter written,
in the presence of the undersigned witnesses, personally came and appeared:

         UNITED COMPANIES FINANCIAL CORPORATION, a corporation organized under
         the laws of the State of Louisiana, with its principal place of
         business at 4041 Essen Lane, Baton Rouge, Louisiana 70809, represented
         herein by Dale E. Redman, its authorized officer, duly authorized to
         act by virtue of a corporate resolution attached hereto and made a
         part hereof (hereinafter referred to as "Employer" or "Company")

                                      AND

         HIBERNIA NATIONAL BANK, a national banking association having an
         office and place of business in Baton Rouge, Louisiana, represented by
         its undersigned Trust Officer, duly authorized to represent the Bank
         (hereinafter referred to as "Resigning Trustee")

                                      AND

         U. S. TRUST COMPANY OF CALIFORNIA, N.A., a national banking
         association having an office and place of business 555 South Flower
         Street, Suite 2700, Los Angeles, California 90007-2429, herein
         represented by its undersigned Trust Officer, duly authorized to
         represent the Bank (hereinafter referred to as "Trustee" or "Successor
         Trustee")

                              W I T N E S S E T H:

         WHEREAS, the Employer did establish the United Companies Financial
Corporation Profit Sharing Plan and Trust on December 31, 1960, and amended,
restated and converted said Profit Sharing Plan and Trust to a stock bonus plan
with ESOP features to be known as the United Companies Financial Corporation
Employee Stock Ownership Plan and Trust ("Plan & Trust") on September 1, 1975,
which Plan & Trust was restated on July 11, 1984, and most recently restated
<PAGE>   117
September 1, 1994, amended February 6, 1995, March 6, 1995 and August 4, 1995,
and wishes to further amend said Plan & Trust; and

         WHEREAS, the Employer now desires to amend the Plan to designate the
Successor Trustee of the Plan as set forth below; and

         WHEREAS, the Resigning Trustee hereby resigns and the Successor
Trustee agrees to serve as the Trustee of the Plan; and

         WHEREAS, the Successor Trustee is domiciled in the State of
California, the Employer desires to amend the Plan and Trust to reflect that
the Trust is governed by the laws of the State of California; and

         WHEREAS, pursuant to the terms of the Plan and Trust, it is necessary
for the Trustee of the Plan and Trust to give consent to effectuate any
amendment to the Trust provisions of the Plan and Trust by the Employer; and

         WHEREAS, the Trustee does consent to the following amendments to the
Plan and Trust; and

         NOW THEREFORE, the Fifth Amendment is hereby revised and corrected to
read as set forth herein, the Successor Trustee shall be designated as the
Trustee of the Plan and Trust, effective September 1, 1995; the Resigning
Trustee is hereby removed and/or agrees to resign; the Resigning Trustee is
directed to transfer the assets of the Trust to the Successor Trustee as soon
as practicable after the effective date hereof; and the following additional
amendments are made to the Plan and Trust.  The Fourth Amendment to the Plan
and Trust does not exist.

         FURTHER, the Employer does hereby amend the Plan and Trust, and the
Trustee concurs in and accepts such amendment, effective September 1, 1995,
except as otherwise provided herein, as follows:

         Article X is hereby amended by deleting the word "Louisiana" in every
place it appears in section 10.01 and substituting the word "California"
therefor.
         Article XII is hereby amended by deleting the word "Louisiana" in
every place it appears in section 12.01 and substituting the word "California"
therefor.
         Article XII is further amended by adding the following language at the
end of section 12.03 thereof:





                                       2
<PAGE>   118
                 Funds of the Plan may be invested in deposit accounts,
         certificates of deposit or similar accounts with U.S. Trust Fiduciary
         Service, Ltd., 1300 Eye Street, NW, Suite 1080 E, Washington, D.C.
         20005, or its affiliates.

         Article XII is hereby further amended, effective on the date of
execution, by adding the following language at the end of section 12.19
thereof:

                 "During the period of transfer of assets from the Resigning
         Trustee to the Successor Trustee, both Resigning Trustee and Successor
         Trustee shall have responsibility for the assets held by each,
         respectively; however, after the effective date only the Successor
         Trustee shall have authority and power to make investments."

         Article XII is hereby further amended by adding the following language
at the end of section 12.21 thereof:

                 "Investment may be made in collective investment funds,
         maintained by U.S. Trust Company of California, N.A., or its
         affiliates, the terms of which are incorporated herein by reference,
         or in mutual funds managed by U.S. Trust Company of California, N.A.,
         or its affiliates."

         Article XX is hereby amended by deleting the word "Louisiana" in
section 20.10 and substituting the word "California" therefor.

                 The amendments made hereunder are intended to qualify the Plan
and Trust for the period beginning September 1, 1995, except as otherwise
provided herein, as a qualified Employee Stock Ownership Plan under the
Internal Revenue Code and ERISA.  Therefore, any provisions which cause the
Plan not to be in compliance with either statute, or with regulations
promulgated thereunder, shall be separable from the remaining amendments and
shall not cause them to be rendered invalid, so that all the amendments will
have as much force and effect as allowed by law.





                                       3
<PAGE>   119
In the case of any ambiguity, the language shall be interpreted to effectuate
the stated purposes of those amendments and in such a way as to cause the Plan
to continue to be a qualified plan under the statutes.

         IN WITNESS WHEREOF, the Employer has cause this Amendment to be signed
by its duly authorized officer, the Resigning Trustee has evidenced its
resignation through its duly authorized Trust Officer, and the Trustee has
accepted its designation as Successor Trustee and has further accepted this
amendment, before the undersigned, competent witnesses, on the date indicated
above.

WITNESSES:                              UNITED COMPANIES FINANCIAL
                                           CORPORATION, as EMPLOYER


                                        By:
--------------------------------            --------------------------------
                                                    Authorized Officer

--------------------------------        At Baton Rouge, Louisiana, this
                                        _____ day of _____________, 1995.


WITNESSES:                              HIBERNIA NATIONAL BANK,
                                            as RESIGNING TRUSTEE



                                        By:
--------------------------------            --------------------------------
                                                  Authorized Officer

--------------------------------        At Baton Rouge, Louisiana, this
                                        _____ day of _____________, 1995.


WITNESSES:                              U.S. TRUST COMPANY OF CALIFORNIA,
                                           N.A., as TRUSTEE



                                        By:
--------------------------------              --------------------------------
                                                   Authorized Officer

--------------------------------        At Los Angeles, California, this
                                        _____ day of _____________, 1995.





                                       4
<PAGE>   120
                           ACKNOWLEDGMENT BY EMPLOYER



STATE OF LOUISIANA

PARISH OF EAST BATON ROUGE


         BEFORE ME, the undersigned Notary Public, in and for the Parish and
State aforementioned, on this day personally appeared   Dale E. Redman, known
to me personally, who, being by me first duly sworn, did say that he is the
Authorized Officer of United Companies Financial Corporation, a Louisiana
corporation, and that as such duly authorized officer of the Board of Directors
of said Corporation, he signed and executed the foregoing instrument on behalf
of the corporation and as the act of such corporation (or entity) for the
purposes and consideration therein expresses, and in the capacity therein
stated.

         IN WITNESS WHEREOF, I have hereunto set my hand and official seal and
the said appearer and the said witnesses have hereunto affixed their signatures
this the _______ day of _______________, 1995.

WITNESSES:                              UNITED COMPANIES FINANCIAL
                                            CORPORATION, as EMPLOYER



                                        By:
--------------------------------            --------------------------------
                                                 Dale E. Redman 
                                                 Authorized Officer

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




                      --------------------------------
                                 NOTARY PUBLIC





                                       5
<PAGE>   121
                      ACKNOWLEDGMENT BY RESIGNING TRUSTEE



STATE OF LOUISIANA

PARISH OF EAST BATON ROUGE


         BEFORE ME, the undersigned Notary Public, in and for the County/Parish
and State aforementioned, on this day personally appeared
__________________________________, known to me personally, who, after being by
me first duly sworn, did say that he is the trust officer of Hibernia National
Bank whose name is subscribed to the foregoing instrument and that he executed
same as an act in his capacity as officer of the Resigning Trustee for the
purposes and considerations therein stated.

         THUS DONE AND SIGNED on this ______ day of _____________, 1995, and in
the presence of the undersigned competent witnesses, at Baton Rouge, Louisiana.

WITNESSES:                              HIBERNIA NATIONAL BANK,
                                           as RESIGNING TRUSTEE
 

                                        By:
--------------------------------            --------------------------------
                                                 Authorized Officer


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



                      --------------------------------
                                 NOTARY PUBLIC
<PAGE>   122
                      ACKNOWLEDGMENT BY SUCCESSOR TRUSTEE



STATE OF CALIFORNIA

COUNTY/PARISH OF __________________


         BEFORE ME, the undersigned Notary Public, in and for the County and
State aforementioned, on this day personally appeared

______________________________________, known to me personally, who, after
being by me first duly sworn, did say that he is the trust officer of U.S.
TRUST COMPANY OF CALIFORNIA, N.A., whose name is subscribed to the foregoing
instrument and that he executed same as an act in his capacity as officer for
the purposes and considerations therein stated.

         THUS DONE AND SIGNED on this _____ day of _____________, 1995 in the
presence of the undersigned competent witnesses, at Los Angeles, California.

WITNESSES:                              U.S. TRUST COMPANY OF CALIFORNIA,
                                          N.A., AS SUCCESSOR TRUSTEE


                                        BY:
--------------------------------            --------------------------------
                                                   Authorized Officer




                      --------------------------------
                                 NOTARY PUBLIC

                     My Commission Expires: _______________