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                                                                   Exhibit 10.24

                FPA MEDICAL MANAGEMENT, INC. 401(K) SAVINGS PLAN


                                   BACKGROUND


                  WHEREAS, FPA Medical Management, Inc. (the "Company") adopted
the FPA Medical Management, Inc. 401(k) Salary Savings Plan, effective January
1, 1994, for certain of its employees; and

                  WHEREAS, beginning in 1995 the Company has acquired and will
be acquiring in the future corporations which are maintaining section 401(k)
plans for their eligible employees; and

                  WHEREAS, the Company desires to consolidate its various
section 401(k) plans with the FPA Medical Management, Inc. 401(k) Salary Savings
Plan so that a single section 401(k) plan will cover its eligible employees and
certain of the eligible employees of its affiliates; and

                  WHEREAS, the Company desires to amend and restate the FPA
Medical Management, Inc. 401(k) Salary Savings Plan to accomplish its goal of
having a single company-wide section 401(k) plan which covers a substantial
portion of its employees and that such amended and restated plan shall be known
as the FPA Medical Management, Inc. 401(k) Savings Plan to; and

                  NOW, THEREFORE, effective January 1, 1997, the FPA Medical
Management, Inc. 401(k) Savings Plan is continued, amended and restated as
hereinafter set forth:
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                                    ARTICLE I

                                   DEFINITIONS


                  Except where otherwise clearly indicated by context, the
masculine shall include the feminine and the singular shall include the plural,
and vice-versa. Any term used herein without an initial capital letter that is
used in a provision of the Code with which this Plan must comply to meet the
requirements of section 401(a) of the Code shall be interpreted as having the
meaning used in such provision of the Code, if necessary for the Plan to comply
with such provision.

                  "Account" means the entries maintained in the records of the
Committee which represent Participant's interest in the Fund. The term "Account"
shall refer, as the context indicates, to any or all of the following:

                           "Matching Contribution Account" -- the Account to
which are credited Matching Contributions, if any, allocated to a Participant,
adjustments for withdrawals and distributions, and the earnings, losses and
expenses attributable thereto.

                           "Profit Sharing Account" -- the Account to which
are credited Profit Sharing Contributions, if any, allocated to a Participant,
adjustments for withdrawals and distributions, and the earnings, losses and
expenses attributable thereto.

                           "Rollover Account" -- the Account to which are
credited a Participant's Rollover Contributions, if any, that are not subject to
the joint and survivor annuity requirements of sections 401(a)(11) and 417 of
the Code, adjustments for withdrawals and distributions, and the earnings,
losses and expenses attributable thereto.

                           "Salary Reduction Account" -- the Account to which
are credited a Participant's Salary Reduction Contributions, adjustments for
withdrawals and distributions, and the earnings, losses and expenses
attributable thereto.

                           "Transfer Account" -- the Account to which are
credited a Participant's Rollover Contributions, if any, that are subject to the
joint and survivor annuity requirements of

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sections 401(a)(11) and 417 of the Code, adjustments for withdrawals and
distributions, and the earnings, losses and expenses attributable thereto.

                  "Actual Deferral Percentage" means, for any Eligible Employee
for a given Plan Year, the ratio of:

                           (a) the sum of:

                                    (1) such Eligible Employee's Salary
Reduction Contributions for the Plan Year, plus

                                    (2) in the case of any Highly Compensated
Eligible Employee, his elective deferrals for the year under any other qualified
retirement plan, other than an employee stock ownership plan as defined in
section 4975(e)(7) of the Code or a tax credit employee stock ownership plan as
defined in section 409(a) of the Code, maintained by a Participating Company or
any Affiliated Company, plus

                                    (3) at the election of the Committee, any
portion of the Eligible Employee's Matching Contributions contributed pursuant
to Section 3.4 hereof required or permitted to be taken into account under
section 401(k) of the Code and the regulations issued thereunder, plus

                                    (4) at the election of the Committee, any
portion of the Eligible Employee's Profit Sharing Contributions contributed
pursuant to Section 3.5 hereof required or permitted to be taken into account
under section 401(k) of the Code and the regulations issued thereunder; to

                           (b) the Eligible Employee's Compensation for the Plan
Year.

                  "Affiliated Company" means, with respect to any Participating
Company, (a) any corporation that is a member of a controlled group of
corporations, as determined under section 414(b) of the Code, which includes
such Participating Company; (b) any member of an affiliated service group, as
determined under section 414(m) of the Code, of which such Participating Company
is a member; (c) any trade or business (whether or not incorporated) that is
under common control with such Participating Company, as determined under
section 414(c) of the

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Code; and (d) any other organization or entity which is required to be
aggregated with the Participating Company under section 414(o) of the Code. "50%
Affiliated Company" means an Affiliated Company, but determined with "more than
50%" substituted for the phrase "at least 80%" in section 1563(a) of the Code,
when applying sections 414(b) and (c) of the Code.

                  "Age" means, for any individual, his age on his last birthday,
except that an individual attains Age 59-1/2 or Age 70-1/2 on the corresponding
date in the sixth calendar month following the month in which his 59th or 70th
(respectively) birthday falls (or the last day of such sixth month if there is
no such corresponding date therein).

                  "Alternate Payee" means any Spouse, former Spouse, child or
other dependent of a Participant who is recognized by a domestic relations order
(within the meaning of section 414(p)(1)(B) of the Code) as having a right to
receive all, or a portion of, the benefits payable under the Plan with respect
to such Participant.

                  "Average Actual Deferral Percentage" means, for a specified
group of Eligible Employees for a Plan Year, the average of the Actual Deferral
Percentages for such Eligible Employees for the Plan Year.

                  "Average Contribution Percentage" means, for a specified group
of Eligible Employees for a Plan Year, the average of the Contribution
Percentages for such Eligible Employees for the Plan Year.

                  "Benefit Commencement Date" means, for any Participant or
beneficiary, the date as of which the first benefit payment, including a single
sum, from the Participant's Account is due, other than pursuant to a withdrawal
under Article VIII hereof.

                  "Board of Directors" means, unless otherwise specified, the
board of directors of the Company or a committee of the Board of Directors to
which the Board of Directors has delegated some or all of its responsibilities
hereunder.

                  "Code" means the Internal Revenue Code of 1986, as it is
presently constituted, as it may be amended or any successor statute of similar
purpose and any regulations issued thereunder.

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                  "Committee" or "Savings Plan Committee" means the individuals
appointed by the Board of Directors to supervise the administration of the Plan,
as provided in Article X hereof, or, if no such Committee is appointed, it shall
mean the Company.

                  "Company" means FPA Medical Management, Inc. and its
successors.

                  "Compensation" means, for any Eligible Employee, for any Plan
Year or Limitation Year, as the case may be:

                           (a) For purposes of Sections 3.1, 3.4, and 3.5
hereof, subject to the limitations set forth in Subsection (e) of this
definition, an Eligible Employee's total wages as reported in the box titled
"Wages, tips, other compensation" of Form W-2 (i.e., wages as defined in section
3401(a) of the Code and all other payments of compensation for which the
Participating Company is required to furnish the employee a written statement
under sections 6041(d) and 6051(a)(3) of the Code) from a Participating Company
for such Plan Year, reduced by any reimbursements or other expense allowances,
fringe benefits (cash and noncash), moving expenses, deferred compensation, and
welfare benefits, but including Salary Reduction Contributions and elective
contributions that are not includible in gross income under section 125,
402(e)(3), 402(h) or 403(b) of the Code.

                           (b) For the purposes of Article XIII and Section 3.10
hereof, subject to the limitations set forth in Subsection (e) of this
definition, total wages as reported in the box titled "Wages, tips, other
compensation" of Form W-2 (i.e., wages as defined in section 3401(a) of the Code
and all other payments of compensation for which the Participating Company is
required to furnish the employee a written statement under sections 6041(d) and
6051(a)(3) of the Code).

                           (c) For the purposes of the definitions of "Actual
Deferral Percentage" and "Contribution Percentage" in this Article (except as
otherwise provided in such definitions), and subject to the limitations set
forth in Subsection (e) of this definition, total wages as reported in the box
titled "Wages, tips, other compensation" of Form W-2 (i.e., wages as defined in
section 3401(a) of the Code and all other payments of compensation for which the
Participating Company is required to

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furnish the employee a written statement under sections 6041(d) and 6051(a)(3)
of the Code).

                  For the purpose of this Subsection (c), the Company may elect
to consider only compensation as defined above for that portion of the Plan Year
during which the Employee was an Eligible Employee, provided that this election
is applied uniformly to all Eligible Employees for the Plan Year.

                           (d)      For the purpose of the definition of "Highly
Compensated Employee" in this Article (except as otherwise provided in such
definition), the Employee's total wages as reported in the box titled "Wages,
tips, other compensation" of Form W-2 (i.e., wages as defined in section 3401(a)
of the Code and all other payments of compensation for which the Participating
Company is required to furnish the employee a written statement under sections
6041(d) and 6051(a)(3) of the Code), but including amounts that are excluded
from gross income under section 125 (relating to cafeteria plans), 402(e)(3)
(relating to section 401(k) cash or deferred plans), 402(h)(1)(B) (relating to
simplified employee pensions) or 403(b) (relating to tax-deferred annuities) of
the Code, or a reasonable approximation thereof.

                           (e) With respect to any Plan Year, only compensation
not in excess of the amount to which the $200,000 (for Plan Years beginning
before January 1, 1994) or the $150,000 (for Plan Years beginning on or after
January 1, 1994) limit of Code section 401(a)(17) has been indexed shall be
taken into account for purposes of Subsections (a), (b) and (c) of this
definition, except that this Subsection (e) shall not apply for purposes of
Sections 3.10 and 13.2(c) hereof.

                  "Contribution Percentage" means for any Eligible Employee for
a given Plan Year, the ratio of:

                           (a) the sum of

                                    (1) such Eligible Employee's Matching
Contributions for the Plan Year (to the extent not included in such Eligible
Employee's Actual Deferral Percentage for such Plan Year), plus

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                                    (2) in the case of any Highly Compensated
Eligible Employee, any employee contributions and employer matching
contributions, including any elective deferrals recharacterized as employee
contributions, under any other qualified retirement plan, other than an employee
stock ownership plan as defined in section 4975(e)(7) of the Code or a tax
credit employee stock ownership plan, as defined in section 409(a) of the Code,
maintained by a Participating Company or any Affiliated Company.

                                    (3) at the election of the Committee, any
portion of the Eligible Employee's Salary Reduction Contributions for the Plan
Year or elective deferrals under any other qualified retirement plan maintained
by a Participating Company or any Affiliated Company that may be disregarded
without causing this Plan or such other qualified retirement plan to fail to
satisfy the requirements of section 401(k)(3) of the Code; to

                           (b) the Eligible Employee's Compensation for the Plan
Year.

                  "Covered Employee" means any Employee who (a) is employed by a
Participating Company, (b) is not covered by a collective bargaining agreement,
unless such agreement specifically provides for participation hereunder, (c) is
not a nonresident alien who receives no compensation from sources within the
United States (within the meaning of section 861(a)(3) of the Code), (d) is not
covered by another tax-qualified profit sharing plan maintained by a
Participating Company, and (e) is not an independent contractor. An Employee who
is such solely by reason of being a leased employee shall not be a Covered
Employee.

                  "Effective Date" means for the Plan in effect prior to this
amendment and restatement January 1, 1994, and for this amended and restated
Plan "Effective Date" means January 1, 1997.

                  "Eligible Employee" means an Employee who has become an
Eligible Employee as set forth in Section 2.2 hereof, and who has remained a
Covered Employee at all times thereafter.

                  "Employee" means an individual who is employed by a
Participating Company or an Affiliated Company, except that any individual who
is classified by a Participating Company or an

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Affiliated Company as an independent contractor shall not be an Employee,
regardless of whether such individual qualifies as an "employee" under
employment tax laws, common-law or any other law; provided that in the event an
individual is recharacterized as qualifying as a common-law "employee," such
individual will have no entitlement to any accrued benefits under this Plan, but
shall be eligible to be credited with a Period of Service for vesting purposes
to the extent that such individual has been employed as a common-law "employee."
An individual who is not otherwise employed by a Participating Company or
Affiliated Company shall be deemed to be employed by such company if he is a
leased employee with respect to whose services such Participating Company or
Affiliated Company is the recipient within the meaning of section 414(n) or
414(o) of the Code, but to whom section 414(n)(5) of the Code does not apply.

                  "Employment Commencement Date" means, for any Employee, the
date on which he is first entitled to be credited with an "Hour of Service"
described in Paragraph (a)(1) of the definition of Hour of Service in this
Article.

                  "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any regulations issued thereunder.

                  "FPA Common Stock" means the common stock, $.002 par value per
share, of the Company or such other stock of the Company, which is "employer
securities" as defined in section 409(l) of the Code.

                  "Fund" means the fund established for this Plan, administered
under the Trust Agreement, out of which benefits payable under this Plan shall
be paid.

                  "Highly Compensated Eligible Employee" means an Eligible
Employee who is (or is treated as) a Highly Compensated Employee.

                  "Highly Compensated Employee" means an Employee who:

                                    (a) is a 5-percent owner, as defined in
section 416(i) of the Code, at any time during the current or preceding Plan
Year; or

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                                    (b) received more than $80,000 (as indexed)
in Compensation from a Participating Company or an Affiliated Company during the
preceding Plan Year. If elected by the Committee, a Highly Compensated Employee,
as determined pursuant to this Subsection (b), must also be among the top 20% of
Employees of all Participating Companies and Affiliated Companies ranked by
Compensation in the preceding Plan Year (excluding Employees described in
section 414(q)(8) of the Code to the extent (1) permitted under the Code and (2)
elected by the Committee, for purposes of identifying the number of Employees in
the top 20%).

                  "Hour of Service" means, for any Employee, a credit awarded
with respect to:

                           (a) except as provided in Subsection (b) or (c),

                                    (1) each hour for which he is directly or
indirectly paid or entitled to payment by a Participating Company or an
Affiliated Company for the performance of employment duties; or

                                    (2) each hour for which he is entitled,
either by award or agreement, to back pay from a Participating Company or an
Affiliated Company, irrespective of mitigation of damages; or

                                    (3) each hour for which he is directly or
indirectly paid or entitled to payment by a Participating Company or an
Affiliated Company on account of a period of time during which no duties are
performed due to vacation, holiday, illness, incapacity (including disability),
jury duty, layoff, leave of absence, or military duty.

                           (b) For any period that includes any hours for which
an Hour of Service would otherwise be credited to an Employee under Subsection
(a), above, the Committee may, in accordance with rules applied in a uniform and
nondiscriminatory manner, elect instead to credit Hours of Service using one or
more of the following equivalencies:

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<TABLE>
<CAPTION>
Basis Upon Which Records                                      Credit Granted to Individual
     Are Maintained                                                  For Period
     --------------                                                  ----------
<S>      <C>                                                  <C>
         shift                                                actual hours for full shift
         day                                                   10 Hours of Service
         week                                                  45 Hours of Service
         semi-monthly period                                   95 Hours of Service
         month                                                190 Hours of Service
</TABLE>

                           (c) Anything to the contrary in Subsection (a) or (b)
notwithstanding:

                                    (1) No Hours of Service shall be credited to
an Employee for any period merely because, during such period, payments are made
or due him under a plan maintained solely for the purpose of complying with
applicable workers' compensation, unemployment compensation, or disability
insurance laws.

                                    (2) No more than 501 Hours of Service shall
be credited to an Employee under Paragraph (a)(3) of this definition on account
of any single continuous period during which no duties are performed by him,
except to the extent otherwise provided in the Plan.

                                    (3) No Hours of Service shall be credited to
an Employee with respect to payments solely to reimburse for medical or
medically related expenses.

                                    (4) No Hours of Service shall be credited
twice.

                                    (5) Hours of Service shall be credited at
least as liberally as required by the rules set forth in U.S. Department of
Labor Reg. Section 2530.200b-2(b) and (c).

                                    (6) In the case of an Employee who is such
solely by reason of service as a leased employee within the meaning of section
414(n) or 414(o) of the Code, Hours of Service shall be credited as if such
Employee were employed and paid with respect to such service (or with respect to
any related absences or entitlements) by the Participating Company or Affiliated
Company that is the recipient thereof.

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                  "Investment Medium" means any fund, contract, obligation, or
other mode of investment, including FPA Common Stock, to which a Participant may
direct the investment of the assets in his Account.

                  "Limitation Year" means the Plan Year.

                  "Matching Contributions" means the amounts, if any,
contributed by the Company pursuant to Section 3.4 hereof.

                  "Normal Retirement Age" means, for any Participant, the date
on which he attains Age 65.

                  "Normal Retirement Date" means, for any Participant, the first
day of the month coincident with or next following his attainment of Normal
Retirement Age.

                  "One-Year Period of Severance" means a 12-consecutive-month
period beginning on the date of the Employee's Separation from Service during
which the former Employee is credited with no Hours of Service.

                  "Participant" means an individual for whom one or more
Accounts are maintained under the Plan.

                  "Participating Company" means the Company and each other
organization which is authorized by the Board of Directors to adopt this Plan by
action of its board of directors or other governing body and any successor by
merger or any business organization that acquires a Participating Company's
business and adopts this Plan with the approval of the Board of Directors. Each
reference to the singular shall be deemed a reference to each such Participating
Company individually.

                  "Payroll Period" means a weekly, bi-weekly, semi-monthly, or
monthly pay period or such other standard pay period of the Participating
Company applicable to the class of Employees of which the Eligible Employee is a
part.

                  "Period of Service" means, with respect to any Employee, the
period of time commencing on the Employee's Employment Commencement Date and
ending on the date of the Employee's Separation from Service and, if applicable,
the period of time commencing on an Employee's Reemployment Commencement

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Date and ending on the date of the Employee's subsequent Separation from
Service.

                  "Period of Severance" means the period of time commencing on
the date of an Employee's Separation from Service and ending on the date on
which the Employee is again entitled to be credited with an Hour of Service.

                  "Plan" means the amended and restated FPA Medical Management,
Inc. 401(k) Savings Plan, a profit sharing plan with a cash or deferred
arrangement, as set forth herein and as it may be further amended from time to
time.

                  "Plan Year" means each 12-consecutive month period that begins
on each January 1st and ends on the next following December 31st.

                  "Predecessor Plan" means each of the tax-qualified defined
contribution plans identified on Appendix A, attached at the end hereof, which
have had their assets transferred to this Plan. Appendix A also contains special
provisions applicable to Participants who participated in such Predecessor
Plans.

                  "Profit Sharing Contributions" means the amounts, if any,
contributed by the Company pursuant to Section 3.5 hereof.

                  "Profit Sharing Participant" means an individual who has
become a Profit Sharing Participant as provided in Article II hereof and
remained a Covered Employee at all times thereafter.

                  "Qualified Domestic Relations Order" means a domestic
relations order (within the meaning of section 414(p)(1)(B) of the Code) which
creates or recognizes the existence of an Alternate Payee's rights to, or
assigns to an Alternate Payee the right to, receive all or a portion of the
benefits payable with respect to a Participant under the Plan, and is determined
by the Committee to satisfy the requirements of section 414(p) of the Code.

                  "Reemployment Commencement Date" means the first day following
a One-Year Period of Severance on which an Employee is entitled to be credited
with an Hour of Service described in Paragraph (a)(1) of the definition of "Hour
of Service" in this Article.

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                  "Required Beginning Date" means, for any Participant:

                           (a) if he is not a 5-percent owner (within the
meaning of section 416 of the Code) of a Participating Company at any time
during the five-Plan-Year period ending in the calendar year in which he
attained Age 70-1/2, or thereafter, April 1 of the calendar year following the
later of the calendar year in which he has a Separation from Service or the
calendar year in which he attained Age 70-1/2; or

                           (b) if he is a 5-percent owner (within the meaning of
section 416 of the Code) of a Participating Company at any time during the
five-Plan-Year period ending in the calendar year in which he attained Age
70-1/2, or thereafter, the later of (1) April 1 of the calendar year following
the calendar year in which he attained Age 70-1/2 or (2) April 1 of the calendar
year in which he becomes a 5-percent owner.

                  "Rollover Contributions" means, for any Participant, his
rollover contributions as provided in Section 7.1 hereof.

                  "Salary Reduction Contributions" means, for any Participant,
contributions on his behalf as provided in Section 3.1(a) hereof.

                  "Separation from Service" means, for any Employee, his death,
retirement, resignation, discharge or any absence that causes him to cease to be
an Employee.

                  "Severance from Service Date" means the date, as recorded on
the records of a Participating Company or an Affiliated Company, on which an
Employee of such company quits, retires, is discharged, or dies, or, if earlier,
the first anniversary of the first day of a period during which the Employee
remains absent from service with all Participating Companies and Affiliated
Companies (with or without pay) for any other reason, except:

                           (a)  Solely for purposes of determining whether a
One-Year Period of Severance has occurred, if the Employee is absent from work
beyond the first anniversary of the first day on which he is absent by reason of
pregnancy, childbirth, or placement in connection with adoption, or for purposes
of the

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care of such Employee's child immediately after birth or placement in connection
with adoption, such Employee's Severance from Service Date shall be the second
anniversary of the first day of such absence; or

                           (b) If the Employee is absent for military service
under leave granted by the Participating Company or Affiliated Company or
required by law, the Employee shall not be considered to have a Separation from
Service, provided the absent Employee returns to service with the Participating
Company or Affiliated Company within 90 days of his release from active military
duty or any longer period during which his right to reemployment is protected by
law.

                  "Spouse" means the person to whom a Participant is legally
married on any date of reference.

                  "Total Disability" means, with respect to any Participant, a
disability with respect to which he is eligible for and receiving benefits under
a long-term disability program sponsored by a Participating Company or an
Affiliated Company. If no such program is in effect for any Participant, then as
to him "Total Disability" means a disability of a potentially permanent
character that prevents a Participant from engaging in the occupation or
fulfilling the duties which he performed at the time of the occurrence of such
disability, excluding, in either case, disability resulting from:

                           (a) service in the Armed Forces or Merchant Marine of
the United States or any other country;

                           (b) warfare;

                           (c) willful participation in any criminal act;

                           (d) intentionally self-inflicted or self-incurred
injury; or

                           (e) use of drugs or narcotics contrary to law.

                  "Trust Agreement" means any agreement and declaration of trust
executed under this Plan.

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<PAGE>   15
                  "Trustee" means the corporate trustee or one or more
individuals collectively appointed and acting under the Trust Agreement.

                  "Valuation Date" means the date investments are valued and
shall occur on each business day on which the New York Stock Exchange is open
for business.

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                                   ARTICLE II

                    TRANSITION AND ELIGIBILITY TO PARTICIPATE


                  2.1 Rights Affected and Preservation of Accrued Benefit.
Except as provided to the contrary herein, the provisions of this amended and
restated Plan shall apply only to Employees who complete an Hour of Service on
or after the Effective Date. The rights of any former Employee on the Effective
Date shall be governed by the Plan or any Predecessor Plan as in effect upon his
Severance from Service Date.

                  2.2 Eligibility to Participate - Salary Reduction
Contributions.

                           (a) Each Covered Employee as of the Effective Date
who was eligible to participate in the Plan or in one of the Predecessor Plans
immediately prior to the Effective Date shall continue to be an Eligible
Employee as of the Effective Date.

                           (b) Each Covered Employee who was not eligible to
participate immediately prior to the Effective Date shall become an Eligible
Employee upon the first day of the Payroll Period coincident with or next
following the date he has completed thirty (30) days of service or the date he
would have become eligible to participate in a Predecessor Plan, if earlier.

                           (c) If an individual is not a Covered Employee on the
date he would otherwise become an Eligible Employee pursuant to Subsection (b)
of this Section, he shall become an Eligible Employee as of the first date
thereafter on which he is a Covered Employee.

                           (d) An Eligible Employee who ceases to be a Covered
Employee, by Separation from Service or otherwise, and who later becomes a
Covered Employee, shall become an Eligible Employee as of the date on which he
first again completes an Hour of Service as a Covered Employee.

                  2.3 Election to Make Salary Reduction Contributions. Each
Eligible Employee may elect to make Salary Reduction Contributions and become an
active Participant by providing notice of such election with the Committee in
the form and manner

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<PAGE>   17
which the Committee determines to be appropriate for that purpose. Such notice
shall authorize the Participating Company to reduce such Eligible Employee's
Compensation by an amount determined in accordance with Section 3.1 and to make
Salary Reduction Contributions on such Eligible Employee's behalf in the amount
of such reduction. Such election shall be effective as soon as practicable
following receipt of his election by the Committee.

                  2.4 Participation in Matching Contributions.

                           (a) An Eligible Employee shall share in Matching
Contributions, if any, provided for under Section 3.4(a) hereof for any Plan
Year if Salary Reduction Contributions are made on his behalf in such Plan Year.

                           (b) An Eligible Employee shall share in Matching
Contributions, if any, provided for under Section 3.4(b) hereof for any Plan
Year if Salary Reduction Contributions are made on his behalf in such Plan Year
and he has completed 1,000 Hours of Service during the Plan Year and is a
Covered Employee on the last day of such Plan Year; provided, however, that no
Matching Contributions made pursuant to Section 3.4(b) hereof shall be allocated
to any Eligible Employee who (1) has had a Separation from Service during the
Plan Year, (2) has completed not more than 500 Hours of Service during such Plan
Year, and (3) is not an Employee on the last day of such Plan Year.
Notwithstanding the foregoing, an Eligible Employee who has had Salary Reduction
Contributions made on his behalf in any Plan Year shall share in Matching
Contributions, if any, under Section 3.4(b) hereof for such Plan Year, if,
during such Plan Year, he retires under Article V hereof, or dies, or suffers a
Total Disability.

                  2.5 Eligibility to Participate - Profit Sharing Contributions.
Each Covered Employee shall become a Profit Sharing Participant if and when he
becomes an Eligible Employee.

                  2.6 Participation in Profit Sharing Contributions. A Profit
Sharing Participant shall share in Profit Sharing Contributions, if any, under
Section 3.5 hereof for any Plan Year during which he (a) completes at least
1,000 Hours of Service, and (b) is a Covered Employee actively employed by a
Participating Company on the last day of the Plan Year. Notwithstanding the
foregoing, a Profit Sharing Participant shall

                                       17
<PAGE>   18
share in Profit Sharing Contributions under Section 3.5 hereof for any Plan Year
in which he receives Compensation if, during such Plan Year, he retires under
Article V hereof, or dies, or suffers a Total Disability.

                  2.7 Data. Each Eligible Employee shall furnish to the
Committee such data as the Committee may consider necessary for the
determination of the Eligible Employee's rights and benefits under the Plan and
shall otherwise cooperate fully with the Committee in the administration of the
Plan.

                                       18
<PAGE>   19
                                   ARTICLE III

                            CONTRIBUTIONS TO THE PLAN


                  3.1 Salary Reduction Contributions.

                           (a) When an Eligible Employee files an election under
Section 2.4 hereof to have Salary Reduction Contributions made on his behalf, he
shall elect the percentage by which his Compensation shall be reduced on account
of such Salary Reduction Contributions. Subject to Section 3.8 hereof, this
percentage may be between one percent (1%) and fifteen percent (15%) of such
Compensation, rounded to the nearer whole percent. In addition, the Eligible
Employee may elect to reduce by one hundred percent (100%) his Compensation that
is attributable to "excess flex dollars" as described under the FPA Medical
Management, Inc. FlexCare Plan. The Participating Company shall contribute an
amount equal to such percentage of the Eligible Employee's Compensation to the
Fund for credit to the Eligible Employee's Salary Reduction Account provided
that such contributions may be prospectively limited as provided in Section 3.9
hereof.

                           (b) Salary Reduction Contributions made on behalf of
an Eligible Employee under this Plan together with elective deferrals under any
other plan or arrangement maintained by any Participating Company or Affiliated
Company shall not exceed $9,500 (as adjusted in accordance with section 402(g)
of the Code) for any calendar year. To the extent necessary to satisfy this
limitation for any year:

                                    (1) elections under Subsection (a) of this
Section shall be prospectively restricted; and,

                                    (2) after application of Subparagraph (1),
the excess Salary Reduction Contributions and excess elective deferrals under
any other plan or arrangement maintained by any Participating Company or
Affiliated Company (with earnings thereon, but reduced by any amounts previously
distributed under Section 3.9 hereof for the year) shall be paid to the
Participant on or before the April 15 first following the calendar year in which
such contributions were made.

                                       19
<PAGE>   20
If the Salary Reduction Contributions plus elective deferrals described above do
not exceed such limitation, but Salary Reduction Contributions, plus the
elective deferrals, as defined in section 402(g)(3) of the Code, under any other
plan for any Participant exceed such limitation for any calendar year, upon the
written request of the Participant made on or before the March 1 first following
such calendar year, the excess, including any earnings attributable thereto,
designated by the Participant to be distributed from the Plan shall be paid to
the Participant on or before the April 15 first following such calendar year.

                  3.2 Change of Percentage Rate. A Participant may without
penalty change the percentage of Compensation designated by him as his
contribution rate under Section 3.1(a) hereof, to any percentage permitted by
that Section, and such percentage shall remain in effect until so changed. Any
such change shall become effective as of the first day of the Payroll Period
next following receipt of the change by the Committee.

                  3.3 Discontinuance of Salary Reduction Contributions. A
Participant may discontinue his Salary Reduction Contributions at any time. Such
discontinuance shall become effective as of the first day of the Payroll Period
next following receipt of the discontinuance by the Committee. A Participant who
discontinues his Salary Reduction Contributions may resume his Salary Reduction
Contributions as of the first day of the Payroll Period next following receipt
by the Committee of a new election pursuant to Section 3.1 hereof.

                  3.4 Matching Contribution.

                           (a) Subject to Sections 3.8 and 3.10 hereof and
within thirty (30) days prior to the beginning of a Plan Year, the Company may
contribute to the Fund for such Plan Year a percentage from 0% to 100% of each
Participant's Salary Deferral Contributions as the Company shall determine in
its sole discretion, as a Matching Contribution, provided that such
contributions may be prospectively limited as provided in Section 3.9 hereof and
provided further that the Matching Contribution under this Subsection for any
Plan Year shall not cause the total contributions by the Company to exceed the
maximum allowable current deduction under the applicable provisions of the Code.
Matching Contributions made pursuant to this Subsection shall be credited to the
Matching Contribution Accounts of Participants

                                       20
<PAGE>   21
determined in accordance with Section 2.4(a) hereof in proportion to their
Salary Reduction Contributions for the Plan Year not in excess five percent (5%)
of each such Participant's Compensation.

                           (b) Within no more than thirty (30) days after the
end of a Plan Year and subject to Sections 3.8 and 3.10 hereof, the Company may
contribute to the Fund for such Plan Year such amount as the Company shall
determine, in its sole discretion, as a Matching Contribution, provided that
such Matching Contribution under this Subsection for any Plan Year shall not
cause the total contribution by the Company to exceed the maximum allowable
current deduction under the applicable provisions of the Code. Matching
Contributions made pursuant to this Subsection shall be credited to the Matching
Contribution Accounts of the Participants determined in accordance with Section
2.4(b) hereof in proportion to their Salary Reduction Contributions for the Plan
Year.

                  3.5 Profit Sharing Contribution.

                           (a) Each Participating Company shall contribute to
the Fund for each Plan Year such amount as it shall determine in its sole
discretion as of the close of the Participating Company's fiscal year, provided
that the contribution under this Subsection for any Plan Year shall not cause
the total contributions by the Company to exceed the maximum allowable current
deduction under the applicable provisions of the Code. Such contributions shall
be allocated to the Profit Sharing Accounts of Profit Sharing Participants
eligible to share in Profit Sharing Contributions in accordance with Section 2.6
hereof in proportion to their Compensation for the Plan Year.

                           (b) Except with respect to tax deductibility, the
Profit Sharing Contribution for any Plan Year shall include both the amount
contributed by the Company for such Plan Year and the amount of Profit Sharing
Contributions forfeited during such Plan Year.

                  3.6 Timing and Deductibility of Contributions. Profit Sharing
and Matching Contributions for any Plan Year under this Article shall be made no
later than the last date on which amounts so paid may be deducted for Federal
income tax purposes for the taxable year of the employer in which the Plan Year
ends. All contributions to the Plan are expressly conditioned upon

                                       21
<PAGE>   22
their deductibility for Federal income tax purposes. Amounts contributed as
Salary Reduction Contributions, or Rollover Contributions, will be remitted to
the Trustee as soon as practicable, but no later than the 15th business day
following the end of the month in which such contributions were received or
withheld from the Participant's Compensation.

                  3.7 Fund. The contributions deposited by the Company in the
Fund in accordance with this Article shall constitute a fund held for the
benefit of Participants and their eligible beneficiaries under and in accordance
with this Plan. No part of the principal or income of the Fund shall be used
for, or diverted to, purposes other than for the exclusive benefit of
Participants and their eligible beneficiaries (including necessary
administrative costs); provided, that (a) in the case of a contribution made by
the Company as a mistake of fact, or for which a tax deduction is disallowed, in
whole or in part, by the Internal Revenue Service, the Company shall be entitled
to a refund of said contributions, which must be made within one year after
payment of a contribution made as a mistake of fact, or within one year after
disallowance of the tax deduction, to the extent of such disallowance, and (b)
in the case of contributions made by the Company which are conditioned on the
initial qualification of the Plan under section 401 of the Code, if the Plan is
the subject of an adverse determination with respect to its initial
qualification, then the Company shall be entitled to a refund of said
contributions, but only if the application for the determination is made by the
time prescribed by law for filing the Company's federal income tax return for
the taxable year in which the Plan is adopted or such later date as may be
permitted by applicable Treasury regulation or other applicable administrative
pronouncements.

                  3.8 Limitation on Salary Reduction Contributions and Matching
Contributions.

                           (a) For any Plan Year, the Average Actual Deferral
Percentage for the Highly Compensated Eligible Employees shall not exceed the
greater of:

                                    (1) one hundred twenty-five percent (125%)
of the Average Actual Deferral Percentage for all other Eligible Employees in
the immediately prior Plan Year; or

                                       22
<PAGE>   23
                                    (2) the lesser of:

                                            (A) two hundred percent (200%) of
the Average Actual Deferral Percentage for all other Eligible Employees in the
immediately prior Plan Year; or

                                            (B) two percent (2%) plus the
Average Actual Deferral Percentage for all other Eligible Employees for the
immediately prior Plan Year.

                                    (3) At the election of the Company, the
Average Actual Deferral Percentage for Eligible Employees other than Highly
Compensated Eligible can be determined for the current Plan Year rather than the
immediately prior Plan Year. Once this election is made, it can be changed only
with the approval of the Internal Revenue Service.

                           (b) For any Plan Year, the Average Contribution
Percentage for the Highly Compensated Eligible Employees shall not exceed the
greater of:

                                    (1) one hundred twenty-five (125%) of the
Average Contribution Percentage for all other Eligible Employees for the
immediately prior Plan Year; or

                                    (2) the lesser of:

                                            (A) two hundred percent (200%) of
the Average Contribution Percentage for all other Eligible Employees the
immediately prior Plan Year; or

                                            (B) two percent (2%) plus the
Average Contribution Percentage for all other Eligible Employees the immediately
prior Plan Year.

                                    (3) At the election of the Company, the
Average Contribution Percentage for Eligible Employees other than Highly
Compensated Eligible can be determined for the current Plan Year rather than the
immediately prior Plan Year. Once this election is made, it can be changed only
with the approval of the Internal Revenue Service.

                           (c) For any Plan Year, the sum of the Average Actual
Deferral Percentage and the Average Contribution

                                       23
<PAGE>   24
Percentage for the Highly Compensated Eligible Employees shall not exceed the
greater of:

                                    (1) the sum of:

                                            (A) one hundred twenty-five percent
(125%) of the greater of the Average Actual Deferral Percentage or the Average
Contribution Percentage for all other Eligible Employees for the immediately
prior Plan Year; plus

                                            (B) the lesser of:

                                                     (i) two hundred percent
(200%) of the lesser of the Average Actual Deferral Percentage or the Average
Contribution Percentage for all other Eligible Employees for the immediately
prior Plan Year; or

                                                     (ii) two percent (2%) plus
the lesser of the Average Actual Deferral Percentage or the Average Contribution
Percentage for all other Eligible Employees for the immediately prior Plan Year;
or

                                    (2) the sum of:

                                            (A) one hundred twenty-five percent
(125%) of the lesser of the Average Actual Deferral Percentage or the Average
Contribution Percentage for all other Eligible Employees for the immediately
prior Plan Year; plus

                                            (B) the lesser of:

                                                     (i) two hundred percent
(200%) of the greater of the Average Actual Deferral Percentage or the Average
Contribution Percentage for all other Eligible Employees for the immediately
prior Plan Year; or

                                                     (ii) two percent (2%) plus
the greater of the Average Actual Deferral Percentage or the Average
Contribution Percentage for all other Eligible Employees for the immediately
prior Plan Year.

                           (d) If the Plan and any other plan(s) maintained by a
Participating Company or an Affiliated Company are treated as a single plan for
purposes of section 401(a)(4) or section

                                       24
<PAGE>   25
410(b) of the Code, the limitations in Subsections (a) through (d) of this
Section shall be applied by treating the Plan and such other plan(s) as a single
plan.

                           (e) The application of this Section shall satisfy
sections 401(k) and 401(m) of the Code and such other requirements as may be
prescribed by the Secretary of the Treasury.

                  3.9 Prevention of Violation of Limitation on Salary Reduction
Contributions and Matching Contributions. The Committee shall monitor the level
of Participants' Salary Reduction Contributions and Matching Contributions and
elective deferrals, employee contributions, and employer matching contributions
under any other qualified retirement plan maintained by a Participating Company
or any Affiliated Company to insure against exceeding the limits of Section 3.8
hereof. To the extent practicable, the Committee may prospectively limit (i)
some or all of the Highly Compensated Eligible Employees' Salary Reduction
Contributions to reduce the Average Actual Deferral Percentage of the Highly
Compensated Eligible Employees to the extent necessary to satisfy Section 3.8(a)
hereof, and/or (ii) some or all of the Highly Compensated Eligible Employees'
Matching Contributions to reduce the Average Contribution Percentage of the
Highly Compensated Eligible Employees to the extent necessary to satisfy Section
3.8(b) hereof, and/or (iii) some or all of the Highly Compensated Eligible
Employees' Salary Reduction Contributions, and Matching Contributions to the
extent necessary to satisfy Section 3.8(c) hereof. If the Committee determines
after the end of the Plan Year that the limits of Section 3.8 hereof may be or
have been exceeded, it shall take the appropriate following action for such Plan
Year:

                           (a) (1) (A) The Average Actual Deferral Percentage
for the Highly Compensated Eligible Employees shall be reduced to the extent
necessary to satisfy Section 3.8(a) hereof.

                                   (B) The reduction shall be accomplished by
reducing the maximum Salary Reduction Contribution for any Highly Compensated
Eligible Employee to an adjusted maximum Salary Reduction Contribution, which
shall be the highest Salary Reduction Contribution that would cause one of the
tests in section 3.8(a) hereof to be satisfied, if each Highly Compensated
Eligible Employee with a higher Salary Reduction Contribution had

                                       25
<PAGE>   26
instead made the adjusted maximum Salary Reduction Contribution, reducing the
Highly Compensated Eligible Employee's Salary Reduction Contributions and
elective deferrals under any other qualified retirement plan maintained by a
Participating Company or any Affiliated Company (less any amounts previously
distributed under Section 3.1 hereof for the year) in order, beginning with the
Highly Compensated Eligible Employee(s) with the greatest Salary Reduction
Contributions.

                                            (C) Not later than the end of the
Plan Year following the close of the Plan Year for which the Salary Reduction
Contributions were made, the difference between a Highly Compensated Eligible
Employee's actual Salary Reduction Contribution and the Highly Compensated
Eligible Employee's adjusted maximum Salary Reduction Contribution shall be paid
to the Highly Compensated Eligible Employee, with earnings attributable thereto
(as determined in accordance with applicable Treasury Regulations);

provided, however, that for any Participant who is also a participant in any
other qualified retirement plan maintained by a Participating Company or any
Affiliated Company under which the Participant makes elective deferrals for such
year, the Committee shall coordinate corrective actions under this Plan and such
other plan for the year.

                                    (2) In lieu of or in addition to the action
described in Section 3.9(a)(1) hereof, the Company may, in its sole discretion,
make:

                                            (A) a Profit Sharing Contribution
under Section 3.8 hereof, which contribution shall be allocated pro rata based
on Compensation among the Profit Sharing Accounts of only those Profit Sharing
Participants who are not Highly Compensated Eligible Employees; and/or

                                            (B) a Matching Contribution under
Section 3.4 hereof, which contribution shall be allocated pro rata based on
Salary Reduction Contributions among the Matching Contribution Accounts of only
those Eligible Employees who are not Highly Compensated Eligible Employees, in
an amount necessary to satisfy at least one of the tests in Section 3.8(a)
hereof. Profit Sharing and Matching Contributions made pursuant to this
Subsection (a)(2) shall be accounted for separately, shall be

                                       26
<PAGE>   27
100% nonforfeitable and shall not be eligible for withdrawal under Article VIII
hereof prior to the Participant's attainment of Age 59-1/2.

                           (b) (1) (A) The Average Contribution Percentage for
the Highly Compensated Eligible Employees shall be reduced to the extent
necessary to satisfy at least one of the tests in Section 3.8(b) hereof.

                                   (B) The reduction shall be accomplished by
reducing the maximum Matching Contribution for any Highly Compensated Eligible
Employee to an adjusted maximum Matching Contribution, which shall be the
highest Matching Contribution that would cause one of the tests in Section
3.8(b) hereof to be satisfied, if each Highly Compensated Eligible Employee with
a higher Matching Contribution had instead the adjusted maximum Matching
Contribution, reducing, in the following order of priority, the Highly
Compensated Eligible Employees' Matching Contributions and employee
contributions and employer matching contributions under any other qualified
retirement plan maintained by a Participating Company or an Affiliated Company,
in order beginning with the Highly Compensated Eligible Employee(s) with the
highest Matching Contribution.

                                   (C) Not later than the end of the Plan
Year following the close of the Plan Year for which such contributions were
made, the difference between a Highly Compensated Eligible Employee's Matching
Contribution and the Highly Compensated Eligible Employee's adjusted maximum
Matching Contribution, with earnings attributable thereto (as determined in
accordance with applicable Treasury Regulations), at the Committee's direction,
shall be treated as a forfeiture of the Highly Compensated Eligible Employee's
Matching Contribution for the Plan Year to the extent such contributions are
forfeitable (which forfeiture shall be used to reduce future Matching
Contributions), or paid to the Highly Compensated Eligible Employee to the
extent such contributions are nonforfeitable; provided, however, that, for any
Participant who is also a participant in any other qualified retirement plan
maintained by a Participating Company or any Affiliated Company under which the
Participant makes employee contributions or is credited with employer matching
contributions for the year, the Committee shall coordinate corrective actions
under this Plan and such other plan for the year.

                                       27
<PAGE>   28
                                    (2) In lieu of or in addition to the action
described in this Section 3.9(b)(1), the Company may, in its sole discretion,
make:

                                            (A) a Profit Sharing Contribution
under Section 3.5 hereof which contribution shall be allocated pro rata based on
Compensation among the Profit Sharing Accounts of only those Profit Sharing
Participants who are not Highly Compensated Eligible Employees; and/or

                                            (B) a Matching Contribution under
Section 3.4 hereof, which contribution shall be allocated pro rata based on
Salary Reduction Contributions among the Matching Contribution Accounts of only
those Eligible Employees who are not Highly Compensated Eligible Employees,

in an amount necessary to satisfy at least one of the tests in Section 3.8(b)
hereof. Profit Sharing and Matching Contributions made pursuant to this
Subsection (b)(2) shall be accounted for separately, shall be 100%
nonforfeitable, and shall not be eligible for withdrawal under Article VIII
hereof prior to the Participant's attainment of Age 59-1/2.

                           (c)      (1) The Average Contribution Percentage
and/or the Average Actual Deferral Percentage (as determined under Subsection
(2) below) for the Highly Compensated Eligible Employees shall be reduced to
satisfy the test in Section 3.8(c), in a manner and to the extent determined by
the Committee.

                                    (2) The reduction(s) shall be accomplished
in the same manner as is set forth in Subsections (a) and (b) of Section 3.8,
whichever is appropriate. A reduction to the Average Actual Deferral Percentage
shall be charged against the appropriate Highly Compensated Eligible Employees'
Salary Reduction Accounts. A reduction to the Average Contribution Percentage
shall be charged against the appropriate Highly Compensated Eligible Employees'
Matching Contribution Accounts. Notwithstanding the foregoing, for any
Participant who is also a participant in any other qualified retirement plan
maintained by a Participating Company or any Affiliated Company under which the
Participant makes employee contributions or elective deferrals or is credited
with employer matching contributions for such year,

                                       28
<PAGE>   29
the Committee shall coordinate corrective actions under this Plan and such other
plan for the year.

                           (d) If the corrective payment to a Highly Compensated
Eligible Employee of his Salary Reduction Contributions pursuant to Subparagraph
(a)(1)(C) or Subsection (c) of this Section causes Matching Contributions made
on his behalf for the Plan Year (excluding such Matching Contributions that were
forfeited or paid to the Participant pursuant to Subsection (b)(2) or Subsection
(c) of this Section) to exceed one hundred percent (100%) of his remaining
Salary Reduction Contributions for the Plan Year, the Matching Contributions in
excess of one hundred percent (100%) of his Salary Reduction Contributions for
the Plan Year that were not distributed to him shall be forfeited, and used to
offset future Matching Contributions.

                           (e) If the Plan and any other plan maintained by a
Participating Company or an Affiliated Company are treated as a single plan
pursuant to Section 3.8 hereof, the Committee shall coordinate corrective
actions under the Plan and such other plan for the year.

                  3.10 Maximum Allocation. The provisions of this Section 3.10
shall be construed to comply with section 415 of the Code.

                           (a) Notwithstanding anything in this Plan to the
contrary, in no event shall the sum of:

                                    (1) any Matching Contributions, Profit
Sharing Contributions, Salary Reduction Contributions and other employer
contributions; any forfeitures, and any employee contributions allocated for any
Limitation Year to any Participant (including any such amounts distributed
pursuant to Section 3.9 hereof, but not amounts distributed pursuant to Section
3.1(b) hereof under this and any other defined contribution plan maintained by
the Participating Company or any 50% Affiliated Company; and

                                    (2) all amounts allocated to any Participant
after March 31, 1984, to an individual medical account (within the meaning of
Code section 415(l)(2)) which is part of a pension

                                       29
<PAGE>   30
or annuity plan maintained by a Participating Company or any 50% Affiliated
Company; and

                                    (3) all amounts derived from contributions
paid or accrued after December 31, 1985, in taxable years ending after such date
which are attributable to post-retirement medical benefits allocated to a
separate account of a Participant who is a key employee, as defined in section
419A(d)(3) of the Code, under a welfare benefit fund maintained by a
Participating Company or any 50% Affiliated Company;

exceed the lesser of $30,000, (or such other dollar limitation in effect for the
Limitation Year under section 415(c)(1)(A) of the Code) or twenty-five percent
(25%) of such Participant's Compensation for the Limitation Year. The 25%
Compensation limitation shall not apply to any contribution for medical benefits
(within the meaning of section 401(h) or 419A(f)(2) of the Code) which is
otherwise treated as an annual addition under section 415(l)(1) or 419A(d)(2) of
the Code.

                           (b) If the amount otherwise allocable to the Account
of a Participant would exceed the amount described in Subsection (a) of this
Section as a result of the reallocation of forfeitures, a reasonable error in
estimating the Participant's Compensation, a reasonable error in determining the
amount of Salary Reduction Contributions that may be made with respect to a
Participant under the limits of this Section, or such other circumstances as
permitted by law, the Committee shall determine which portion, if any, of such
excess amount is attributable to the Participant's Salary Reduction
Contributions, Matching Contributions, if any, and/or Profit Sharing
Contributions, if any, until such amount has been exhausted, and shall take the
following appropriate steps to correct such violation:

                                    (1) Excess Salary Reduction Contributions
and earnings thereon shall be paid to the Participant as soon as is
administratively feasible.

                                    (2) (A) While the Participant remains a
Covered Employee, his excess Matching Contributions and Profit Sharing
Contributions shall be held in a suspense account (which shall share in
investment gains and losses of the Fund) by the Trustee until the following Plan
Year (or any succeeding Plan Years), at which time such amounts shall be
allocated to the

                                       30
<PAGE>   31
Participant's Account before any Matching Contributions or Profit Sharing
Contributions, as appropriate, are made on his behalf for such Plan Year; and

                                            (B) When the Participant ceases to
be a Covered Employee, his excess Matching Contributions and Profit Sharing
Contributions, along with earnings thereon, held in the suspense account shall
be allocated in the following Plan Year (or any succeeding Plan Years) to the
Accounts of other Participants in the Plan.

                           (c) If, in any Limitation Year, a Participant in this
Plan is also a participant in one or more defined benefit plans maintained by
the Participating Company or any 50% Affiliated Company, the projected annual
benefit referred to in Subsection (c)(1) shall be reduced, if necessary, so that
the sum of the fractions described in (1) and (2) does not exceed 1.0 for such
Limitation Year.

                                    (1) Defined Benefit Fraction - a fraction,
the numerator of which is the Participant's projected annual benefit under all
such defined benefit pension plans determined as of the close of the limitation
years of such plans, and the denominator of which is the lesser of:

                                            (A) 1.25 x $90,000 (or such other
dollar limitation determined for the Limitation Year under section 415(b)(1)(A)
of the Code); or

                                            (B) one hundred forty percent (140%)
of the Participant's highest average Compensation over any three consecutive
calendar years;

provided, however, that the denominator of the defined benefit fraction shall be
determined after taking into account any adjustments to the dollar limit
described in Subparagraph (A) or to the compensation limit described in
Subparagraph (B) prescribed by section 415(b) or 415(d) of the Code, as
appropriate. For the purpose of this Subsection (c)(1), "projected annual
benefit" means the annual benefit to which a Participant would be entitled under
the terms of a defined benefit plan if he had continued employment until his
normal retirement date under such plan and if his compensation counted for the
purpose of such plan had continued at the same rate.

                                       31
<PAGE>   32
                                    (2) Defined Contribution Fraction - a
fraction, the numerator of which is the sum of the annual additions to the
Participant's accounts under all defined contribution plans sponsored by the
Participating Company or any 50% Affiliated Company for all limitation years,
and the denominator of which is the sum of the lesser of the following amounts,
determined for each of such limitation years and for each prior limitation year
of service with the Participating Company or 50% Affiliated Company:

                                            (A) 1.25 x $30,000 (or such other
dollar limitation in effect for the Limitation Year under section 415(c)(1)(A)
of the Code); or

                                            (B) thirty-five percent (35%) of the
Participant's Compensation for such limitation year.

                                       32
<PAGE>   33
                                   ARTICLE IV

                             PARTICIPANTS' ACCOUNTS


                  4.1 Accounts. All contributions and earnings thereon may be
invested in one commingled Fund for the benefit of all Participants. However, in
order that the interest of each Participant may be accurately determined and
computed, separate Accounts shall be maintained for each Participant and each
Participant's Accounts shall be made up of subaccounts reflecting his investment
elections pursuant to Section 11.5 hereof. These Accounts shall represent the
Participant's individual interest in the Fund. All contributions shall be
credited to Participants' Accounts as set forth in Article III hereof.

                  4.2 Valuation. The value of each Investment Medium in the Fund
shall be computed by the Trustee as of the close of business on each Valuation
Date on the basis of the fair market value of the assets of the Fund.

                  4.3 Apportionment of Gain or Loss. The value of each
Investment Medium in the Fund, as computed pursuant to Section 4.2 hereof, shall
be compared with the value of such Investment Medium in the Fund as of the
preceding Valuation Date. Any difference in the value, not including
contributions or distributions made since the preceding Valuation Date, shall be
the net increase or decrease of such Investment Medium in the Fund, and such
amount shall be ratably apportioned by the Trustee on its books, among the
Participants' Accounts which are invested in such Investment Medium at the
current Valuation Date.

                  4.4 Accounting for Allocations. The Committee shall establish
or provide for the establishment of accounting procedures for the purpose of
making the allocations, valuations and adjustments to Participants' Accounts
provided for in this Article. From time to time such procedures may be modified
for the purpose of achieving equitable and nondiscriminatory allocations among
the Accounts of Participants in accordance with the general concepts of the Plan
and the provisions of this Article.

                                       33
<PAGE>   34
                                    ARTICLE V

                                  DISTRIBUTION


                  5.1 General. The interest of each Participant in the Fund
shall be distributed in the manner, in the amount, and at the time provided in
this Article, except as provided in Article VIII hereof and except in the event
of the termination of the Plan. The provisions of this Article shall be
construed in accordance with section 401(a)(9) of the Code, including the
incidental death benefit requirements of section 401(a)(9)(G) of the Code.

                  5.2 Separation from Service. A Participant who attains a
Severance from Service Date for reasons other than death or Total Disability
shall have his nonforfeitable interest in his Account paid to him or applied for
his benefit in accordance with the provisions of this Article.

                  5.3 Death. If a Participant dies before his entire
nonforfeitable interest in his Account has been paid to him, his remaining
nonforfeitable interest shall be paid to, or applied for the benefit of, his
beneficiary in accordance with the provisions of this Article.

                  5.4 Total Disability.

                           (a) If a Participant who is an Employee suffers a
Total Disability and attains a Severance from Service Date due to his Total
Disability, his Account shall be paid to him or applied for his benefit in
accordance with the provisions of this Article following the determination of
his Total Disability and his Separation from Service.

                           (b) Total Disability shall be determined by the
Committee, which may consult with a medical examiner selected by it. The medical
examiner shall have the right to make such physical examinations and other
investigations as may be reasonably required to determine Total Disability.

                  5.5 Valuation for Distribution. For the purposes of paying the
amounts to be distributed to a Participant or his beneficiaries under the
provisions of this Article, the value of

                                       34
<PAGE>   35
the Fund and the amount of the Participant's nonforfeitable interest shall be
determined in accordance with the provisions of Article IV hereof as of the
Valuation Date immediately preceding the date of any payment under this Article.
Such amount shall be adjusted to take into account any additional contributions
and forfeitures, if any, which have been or are to be allocated to the
Participant's Account since that Valuation Date, and any distributions or
withdrawals made since that date. Notwithstanding the above, the Participant's
Account shall be reduced by the amount necessary to repay any outstanding loan
from the Plan and interest thereon to the date the Committee declares such loan
satisfied, unless such loan is repaid as provided in Section 9.4(e) hereof.

                  5.6 Timing of Distribution.

                           (a) Any Participant who attains a Severance from
Service Date for any reason other than death shall be entitled to receive his
nonforfeitable interest in his Account, pursuant to the following rules:

                                    (1) Except as provided in Subsection (a)(2)
hereof, if the Participant's nonforfeitable interest in his Account is $3,500 or
less, or the Participant has attained Normal Retirement Age, the Participant's
Benefit Commencement Date shall be the earliest practicable Valuation Date
following his Severance from Service Date.

                                    (2) If the Participant has not attained
Normal Retirement Age and his nonforfeitable interest exceeds, or has ever
exceeded at the time of any prior distribution, $3,500, his Benefit Commencement
Date shall be the earliest practicable Valuation Date following his Severance
from Service Date, except that, if the Participant does not consent to such
distribution, distribution of his benefits shall commence on any later date
elected by the Participant, that is not later than his Normal Retirement Date,
at which time his nonforfeitable interest shall be automatically paid to him. A
Participant's election to receive payment prior to his Normal Retirement Date
may be made no earlier than 90 days prior to the Benefit Commencement Date
elected by the Participant.

                                    (3) The Committee shall inform each
Participant who is subject to Subsection (a)(2) of his right to

                                       35
<PAGE>   36
defer distribution. Such notice shall be furnished not less than 30 days nor
more than 90 days prior to the date of any distribution that occurs prior to his
Normal Retirement Date, except that such notice may be furnished less than 30
days prior to the date of distribution if (A) the Committee informs the
Participant that the Participant has the right to a period of at least 30 days
after receiving such notice to consider the decision whether to elect a
distribution and if applicable, the mode in which he desires such distribution
to be made, and (B) the Participant, after receiving such notice, affirmatively
elects a distribution.

                                    (4) Notwithstanding the foregoing, the
Participant's Benefit Commencement Date shall be no later than the 60th day
following the close of the Plan Year in which the Participant attains his Normal
Retirement Age or has a Separation from Service, whichever occurs last. In no
event, however, shall a Participant's Benefit Commencement Date be later than
his Required Beginning Date. In the event the Participant defaults on an
outstanding loan such that the unpaid balance becomes due and payable pursuant
to Article IX hereof and the Participant fails to repay the loan in accordance
with Section 9.4(e) hereof, that portion of the Participant's Account pledged as
security for the loan shall be applied to repay the loan and shall be deemed
distributed to the Participant within 60 days of the default; in which case, the
Participant may defer commencement of the balance of his Account as described
above.

                           (b) If a Participant dies before his entire
nonforfeitable interest in his Account has been paid to him, his remaining
nonforfeitable interest shall be distributed to his beneficiary commencing as
soon as practicable following the Participant's death, unless the beneficiary is
the Participant's spouse, in which case not beyond December 31 of the later of
(1) the calendar year containing the fifth anniversary of the Participant's
death or (2) the calendar year in which the Participant would have attained Age
70-1/2.

                  5.7 Mode of Distribution.

                           (a) Except as provided to the contrary in Section
5.11 hereof, a Participant shall have his Account paid to him, and benefits
payable under Section 5.3 hereof upon the death of a

                                       36
<PAGE>   37
Participant shall be distributed, in a single sum payment in cash or in kind, or
part in cash and part in kind.

                           (b) If a Participant has not attained a Severance
from Service Date as of his Required Beginning Date, he may elect to receive
distribution of his Account while he remains employed, commencing not later than
his Required Beginning Date, over a period certain not extending beyond the life
expectancy of the Participant or the life expectancy of the Participant and his
spouse. Notwithstanding the Participant's election to receive distribution as
described above, the portion of the Participant's nonforfeitable interest
remaining upon his actual Severance from Service Date will be distributed to him
in a single sum on the earliest practicable date following the Valuation Date
coincident with or next following his Severance from Service Date, but not later
than the 60th day after the close of the Plan Year in which his Severance from
Service Date occurs.

                           (c) Benefits payable under Section 5.3 hereof upon
the death of a Participant shall be distributed in a single sum payment.
Notwithstanding the foregoing, in the event that the Participant's death
constitutes a default on an outstanding loan such that the unpaid balance
becomes due and payable pursuant to Article IX hereof and the beneficiary fails
to repay the loan in accordance with Section 9.4(e) hereof, that portion of the
Participant's Account pledged as security for the loan shall be applied to repay
the loan; in which case, the beneficiary may elect to receive the balance of the
Participant's Account in accordance with this Subsection.

                  5.8 Beneficiary Designation.

                           (a) Except as provided in this Section and in Section
5.11 hereof, a Participant may designate the beneficiary or beneficiaries who
shall receive, on or after his death, his interest in the Fund. Such designation
shall be made by executing and filing with the Committee a written instrument in
such form as may be prescribed by the Committee for that purpose. Except as
provided in this Section and Section 5.11 hereof, the Participant may also
revoke or change, at any time and from time to time, any beneficiary
designations previously made. Such revocations and/or changes shall be made by
executing and filing with the Committee a written instrument in such form as may
be prescribed by the Committee for that purpose. If a Participant

                                       37
<PAGE>   38
names a trust as beneficiary, a change in the identity of the trustees or in the
instrument governing such trust shall not be deemed a change in beneficiary.

                           (b) No designation, revocation, or change of
beneficiaries shall be valid and effective unless and until filed with the
Committee.

                           (c) A Participant who does not establish to the
satisfaction of the Committee that he has no spouse may not designate someone
other than his spouse to be his beneficiary unless:

                                    (1) (A) such spouse (or the spouse's legal
guardian if the spouse is legally incompetent) executes a written instrument
whereby such spouse consents not to receive such benefit and consents either:

                                                     (i) to the specific
beneficiary or beneficiaries designated by the Participant; or

                                                     (ii) to the Participant's
right to designate any beneficiary without further consent by the spouse;

                                        (B) such instrument acknowledges the
effect of the election to which the spouse's consent is being given; and

                                        (C) such instrument is witnessed by
a Plan representative or notary public;

                                    (2) the Participant:

                                        (A) establishes to the satisfaction
of the Committee that his spouse cannot be located; or

                                        (B) furnishes a court order to the
Committee establishing that the Participant is legally separated or has been
abandoned (within the meaning of local law), unless a qualified domestic
relations order pertaining to such Participant provides that the spouse's
consent must be obtained; or

                                    (3) the spouse has previously given consent
in accordance with this Subsection and consented to the

                                       38
<PAGE>   39
Participant's right to designate any beneficiary without further consent by the
spouse.

The consent of a spouse in accordance with this Subsection (c) shall not be
effective with respect to other spouses of the Participant prior to the
Participant's Benefit Commencement Date, and an election to which Subsection
(c)(2) applies shall become void if the circumstances causing the consent of the
spouse not to be required no longer exist prior to the Participant's Benefit
Commencement Date.

                           (d) If a Participant has no beneficiary under
Subsection (a) of this Section, if the Participant's beneficiary(ies) predecease
the Participant, or if the beneficiary(ies) cannot be located by the Committee,
the interest of the deceased Participant shall be paid to the Participant's
estate.

                  5.9 Recalculation of Life Expectancy. If pursuant to Section
5.11 hereof, a Participant's Account is payable over the life expectancy of the
Participant and/or his spouse and/or another beneficiary, the applicable life
expectancy shall not be recalculated after the Benefit Commencement Date.

                  5.10 Transfer of Account to Other Plan.

                           (a) If (i) a Participant entitled to receive a
distribution from the Plan, either pursuant to this Article or pursuant to
Article VIII hereof, or (ii) the spouse or former spouse of a Participant who is
entitled to receive a distribution from the Plan pursuant to a qualified
domestic relations order, directs the Committee to have the Trustee transfer all
or a portion (not less than $500) of the amount to be distributed directly to:

                                    (1) an individual retirement account
described in section 408(a) of the Code,

                                    (2) an individual retirement annuity
described in section 408(b) of the Code (other than an endowment contract),

                                       39
<PAGE>   40
                                    (3) a qualified defined contribution
retirement plan described in section 401(a) of the Code the terms of which
permit the acceptance of rollover contributions, or

                                    (4) an annuity plan described in section
403(a), all or a portion (not less than $500) of the amount to be distributed
shall be so transferred.

                           (b) In addition, if a Participant's surviving spouse
is entitled to receive a distribution from the Plan under Section 5.3 hereof,
and such surviving spouse directs the Committee to have the Trustee transfer all
or a portion (not less than $500) of the amount to be distributed directly to:

                                    (1) an individual retirement account
described in section 408(a) of the Code, or

                                    (2) an individual retirement annuity
described in section 408(b) of the Code (other than an endowment contract), all
or a portion (not less than $500) of the amount to be distributed shall be so
transferred.

                           (c)  The Participant, spouse or former spouse must
specify the name of the plan to which the Participant, spouse or former spouse
wishes to have the amount transferred, plus such other information as may be
requested by the Committee, on a form and in a manner prescribed by the
Committee.

                           (d) Subsections (a) and (b) hereof shall not apply to
the following distributions:

                                    (1)  any distribution which is one of a
series of substantially equal payments (not less frequently than annually) over
either (A) a period of 10 years or more, or (B) a period equal to the life or
life expectancy of the Participant or the joint lives or joint life expectancy
of the Participant and his beneficiary, or

                                    (2) any distribution if the total
distributions paid or payable from the Plan to the same

                                       40
<PAGE>   41
individual during the same calendar year are reasonably expected by the
Committee to be less than $200,

                                    (3) that portion of any distribution after
the Participant's Required Beginning Date that is required to be distributed to
the Participant by the minimum distribution rules of section 401(a)(9) of the
Code, or

                                    (4) such other distributions as may be
exempted by applicable statute or regulation from the requirements of section
401(a)(31) of the Code.

                  5.11 Transfers from Certain Plans. With respect to the
Transfer Account of any Participant to whom the Plan is a transferee from a
defined benefit or defined contribution plan, other than a Predecessor Plan,
with modes of distribution other than a single sum payment, the provisions of
this Section shall supersede the prior provisions of this Article.

                           (a)      (1) The normal mode of payment for a
Participant whose nonforfeitable interest in his Account exceeds (or has
exceeded at the time of any prior distribution) $3,500 and who does not
establish to the satisfaction of the Committee that he has no spouse as of his
Benefit Commencement Date shall be a joint and survivor annuity that is the
actuarial equivalent of the Participant's Transfer Account, with monthly
installments payable after the death of the retired Participant to his surviving
spouse, if he leaves one, for the life of such surviving spouse in an amount
equal to fifty percent (50%) of the benefit paid to the retired Participant
during his life.

                                    (2) The normal mode of payment for a
Participant whose nonforfeitable interest in his Account exceeds (or has
exceeded at the time of any prior distribution) $3,500 and who establishes to
the satisfaction of the Committee that he has no spouse as of his Benefit
Commencement Date shall be a single life annuity that is the actuarial
equivalent of his Transfer Account with equal monthly installments payable to
the retired Participant for his lifetime.

                                    (3) Except as provided in Subsections (1)
and (2) above, the normal mode of payment to a Participant whose nonforfeitable
interest in his Account does not exceed $3,500 as

                                       41
<PAGE>   42
of his Benefit Commencement Date shall be a single sum payment of his entire
interest in his Transfer Account.

                           (b) A Participant whose nonforfeitable interest in
his Account exceeds (or has exceeded at the time of any prior distribution)
$3,500 and who does not establish to the satisfaction of the Committee that he
has no spouse on his Benefit Commencement Date may elect to receive an optional
mode of payment under Section 5.7 hereof:

                                    (1)     (A) his spouse (or the spouse's
legal guardian if the spouse is legally incompetent) executes a written
instrument whereby such spouse:

                                                     (i) consents not to receive
the normal mode of payment described in Section 5.11(a)(1) hereof;

                                                     (ii) consents to the
specific optional mode elected by the Participant or to the Participant's right
to choose any optional mode without any further consent by the spouse; and

                                                     (iii) if applicable,
consents either:

                                                            (I) to the specific
beneficiary or beneficiaries designated by the Participant pursuant to his
election; or

                                                            (II) to the
Participant's right to designate any beneficiary or beneficiaries without
further consent by the spouse; and

                                            (B) such instrument acknowledges the
effect of the election to which the spouse's consent is being given and is
witnessed by a Plan representative or a notary public;

                                    (2) the Participant:

                                            (A) establishes to the satisfaction
of the Committee that his spouse cannot be located; or

                                       42
<PAGE>   43
                                            (B) furnishes a court order to the
Committee establishing that the Participant is legally separated or has been
abandoned (within the meaning of local law), unless a qualified domestic
relations order pertaining to such Participant provides that the spouse's
consent must be obtained; or

                                    (3) the spouse has previously given consent
in accordance with this Subsection and consented to the Participant's right to
choose any optional mode and to designate any beneficiary without further
consent by the spouse.

The consent of a spouse in accordance with this Subsection (b) shall not be
effective with respect to other spouses of the Participant prior to the
Participant's Benefit Commencement Date and an election to which this Subsection
(b) applies shall become void if the circumstances causing the consent of the
spouse not to be required no longer exist prior to the Participant's Benefit
Commencement Date.

                           (c) A Participant may revoke an election under
Subsection (b) hereof. Such revocation may be made at any time during the
election period in which such election can be made. Such revocation shall not
void any prospectively effective consent given by his spouse in connection with
the revoked election.

                           (d) The Committee shall provide to each Participant
no less than 30 days and no more than 90 days before his Benefit Commencement
Date a written explanation of:

                                    (1) the terms and conditions of the normal
mode of payment under Subsection 5.11(a) and of each optional mode of payment,
including information explaining the relative values of each mode of payment, in
accordance with applicable governmental regulations under section 401(a)(11) of
the Code;

                                    (2) the Participant's right to waive the
normal mode of payment and to elect an optional mode of payment and the effect
of such waiver and election;

                                    (3) the rights of the Participant's spouse
with respect to such waiver and election; and

                                       43
<PAGE>   44
                                    (4) the Participant's right to revoke an
election to receive an optional mode of payment and the effect of such
revocation.

                                (e) (1) If such a Participant dies before his
Benefit Commencement Date and has a surviving spouse, the Participant's spouse
shall receive an annuity for the life of the spouse that is the Actuarial
Equivalent of the Participant's nonforfeitable interest in his Account as of
the date of his death. Such annuity may commence at any time following the date
of the Participant's death, as elected in writing by the spouse, but not later
than December 31 of the calendar year in which the Participant would have
attained Age 70-1/2.

                                    (2) A Participant may elect to waive the
spouse's annuity described in Paragraph (1) of this Subsection and have his
Transfer Account be payable in a single sum to his spouse or to have his
Transfer Account be payable in a single sum to a beneficiary other than his
spouse, in the event of his death prior to his Benefit Commencement Date.

                                    (3) Such election shall not be valid if the
Participant's nonforfeitable interest in his Account exceeds (or has exceeded at
the time of any prior distribution) $3,500 unless:

                                            (A) (i) his spouse (or the spouse's
legal guardian if the spouse is legally incompetent) executes a written
instrument whereby such spouse:

                                                 (I) consents not to receive the
spouse's annuity described in Paragraph (1) of this Subsection; and

                                                 (II) if applicable, consents
                                                      either:

                                                        (a) to the specific
                                                            beneficiary or
beneficiaries designated by the Participant pursuant to his waiver of the
spouse's annuity; or

                                                        (b) to the
                                                            Participant's right
                                                            to
designate any beneficiary or beneficiaries without further consent by the
spouse; and

                                       44
<PAGE>   45
                                                  (ii) such instrument
                                                       acknowledges
the effect of the election to which the spouse's consent is being given and is
witnessed by a notary public; or

                                            (B) the Participant:

                                                  (i) establishes to the
                                                      satisfaction
of the Committee that his spouse cannot be located; or

                                                  (ii) furnishes a court order
                                                       to the
Committee establishing that the Participant is legally separated or has been
abandoned (within the meaning of local law), unless a qualified domestic
relations order pertaining to such Participant provides that the spouse's
consent must be obtained; or

                                            (C) the spouse has previously given
consent in accordance with this Subsection and consented to the Participant's
right to choose any optional mode of payment and to designate any beneficiary
without further consent by the spouse.

The consent of a spouse in accordance with this Paragraph (3) shall not be
effective with respect to other spouses of the Participant prior to the
Participant's Benefit Commencement Date, and an election to which Subparagraph
(B) of this Paragraph (3) applies shall become void if the circumstances causing
the consent of the spouse not to be required no longer exist prior to the
Participant's Benefit Commencement Date.

                                    (4) Such election may be made at any time
during the period beginning on the first day of the Plan Year in which the
Participant attains Age 35 and ending on the earlier of the date of his death or
his Benefit Commencement Date. In the case of a Participant who has a Separation
from Service prior to his attainment of Age 35, the period during which such
election may be made with respect to benefits accrued as of his Separation from
Service shall begin no later than the date of his Separation from Service.

                                    (5) The spouse of a deceased Participant who
did not make the election described in Paragraph (2) of this Subsection who is
eligible to receive the annuity described in Paragraph (1) of this Subsection
may elect to receive the

                                       45
<PAGE>   46
Participant's nonforfeitable interest in his Account in a single sum in lieu of
such annuity.

                                    (6) The Committee shall provide to each
Participant a written explanation of:

                                            (A) the terms and conditions of the
spouse's annuity under Subsection (1) of this Subsection;

                                            (B) the Participant's and the
spouse's rights to waive the spouse's annuity and the effect of such waiver;

                                            (C) the rights of the Participant's
spouse with respect to the Participant's waiver of such annuity; and

                                            (D) the Participant's right to
revoke a waiver of the spouse's annuity and the effect of such revocation.

                                    (7) The written explanation described in
Subsection (6) hereof shall be provided once during the three-year period that
begins on the first day of the Plan Year in which the Participant attains Age
32. In the case of an Employee who first becomes a Participant after he has
attained Age 35, such written notice shall be provided no later than one year
after the date the Employee first becomes a Participant. With regard to a
Participant who has a Separation from Service before attaining Age 35, such
written notice shall be provided no earlier than one year before and no later
than one year after the Participant's Separation from Service.

                           (f) Annuity forms of payment shall be provided
through the purchase of annuity contracts from an insurance company.

                           (g) A Participant whose nonforfeitable interest in
his Account exceeds (or has exceeded at the time of any prior distribution)
$3,500 and who does not establish to the satisfaction of the Committee that he
has no spouse may use his Transfer Account as security for a loan under Article
IX hereof only if:

                                       46
<PAGE>   47
                                    (1)     (A) his spouse (or the spouse's
legal guardian if the spouse is legally incompetent) executes a written
instrument whereby such spouse consents to the use of the Participant's
Transfer Account as security for the loan within the 90 day period ending on
the date the Participant receives the loan; and

                                            (B) such instrument acknowledges the
effect of the election to which the spouse's consent is being given and is
witnessed by a notary public; or

                                    (2) the Participant:

                                            (A) establishes to the satisfaction
of the Committee that his spouse cannot be located; or

                                            (B) furnishes a court order to the
Committee establishing that the Participant is legally separated or has been
abandoned (within the meaning of local law), unless a qualified domestic
relations order pertaining to such Participant provides that the spouse's
consent must be obtained.

The consent of a spouse to a loan in accordance with this section 5.11(g) shall
remain effective with respect to other spouses of the Participant.

                  5.12 Other Distributions.

                           (a) Upon the sale to an entity, that is not an
Affiliated Company, of substantially all the assets used by a Participating
Company in the trade or business of such Participating Company, a Participant
who continues employment with the corporation acquiring such assets shall be
entitled to have his Account paid to him.

                           (b) Upon the sale by a Participating Company to an
entity, that is not an Affiliated Company, of such Participating Company's
interest in a subsidiary, a Participant who continues employment with such
subsidiary shall be entitled to have his Account paid to him.

Distributions to Participants described in sections 5.12(a) and (b) hereof shall
be made pursuant to the provisions of this Article as if the Participant's
Separation from Service had

                                       47
<PAGE>   48
occurred on the closing date of the sale; provided, however that no distribution
shall be made under this Section unless:

                                    (1) it is a lump sum distribution as defined
by section 402(d)(4) of the Code, without regard to clauses (i), (ii), (iii) and
(iv) of subparagraph (A), subparagraph (B), or subparagraph (H); and

                                    (2) the Participating Company continues to
maintain the Plan.

                                       48
<PAGE>   49
                                   ARTICLE VI

                                     VESTING


                  6.1 Nonforfeitable Amounts.

                           (a) A Participant shall have a 100% nonforfeitable
interest at all times in his Salary Reduction, Rollover, and, except as
otherwise may be provided in Appendix A, his Transfer Accounts.

                           (b) (1) A Participant who is credited with one or
more Hours of Service as an Employee on or after the Effective Date shall have a
nonforfeitable interest in his Matching Contribution and Profit Sharing Accounts
determined in accordance with the following schedule:

<TABLE>
<CAPTION>
                  Years of Service                                     Nonforfeitable Interest
                  ----------------                                     -----------------------
<S>                                                                        <C>
                  less than 1 year                                               0 percent
                  1 year                                                        20 percent
                  2 years                                                       40 percent
                  3 years                                                       60 percent
                  4 years                                                       80 percent
                  5 years or more                                          100 percent
</TABLE>

                               (2) Notwithstanding the foregoing, a
Participant shall have a 100% nonforfeitable interest in his Matching
Contribution and Profit Sharing Accounts upon his attainment of Normal
Retirement Age while an Employee, his death while an Employee, or his suffering
a Total Disability while an Employee.

                  6.2 Years of Service for Vesting.

                           (a) For the purposes of this Article, an Employee
shall be credited with Years of Service equal to the number of whole years in
all of the Employee's Periods of Service. To determine the number of whole years
in all of an Employee's Periods of Service, non-contiguous periods shall be
aggregated.

                                       49
<PAGE>   50
                           (b) Years of Service shall be calculated on the basis
that 30 days equals a completed month or one-twelfth (1/12) of a year and twelve
completed months equal one year.

                           (c) If a former Employee is reemployed by a
Participating Company or an Affiliated Company before he incurs a One-Year
Period of Severance and if such Employee's Period of Severance commenced with a
quit, discharge or retirement, the Employee shall be credited with Years of
Service for the Period of Severance.

                           (d) If an Employee severs from service by reason of a
quit, discharge, or retirement during an absence from service for 12 months or
less for any reason other than a quit, discharge or retirement, and if he then
performs an Hour of Service within 12 months of the date on which he was first
absent from service, he shall be credited with Years of Service for his Period
of Severance.

                           (e) Notwithstanding any provision of the Plan to the
contrary, an Employee shall not be credited with Years of Service for the same
period twice.

                  6.3 Breaks in Service and Loss of Service. An Employee's Years
of Service shall be cancelled if he incurs a One-Year Period of Severance before
his Normal Retirement Date and at a time when (a) he has no nonforfeitable
interest in any of his Accounts other than his Rollover or Transfer Account(s)
or (b) he has no Accounts under the Plan.

                  6.4 Restoration of Service. The Years of Service of an
Employee whose Years of Service have been cancelled pursuant to Section 6.3
hereof shall be restored to his credit if he thereafter completes an Hour of
Service at a time when the number of his consecutive One-Year Periods of
Severance is less than the greater of (a) the number of Years of Service to his
credit when the first such One-Year Period of Severance occurred, or (b) five.

                                       50
<PAGE>   51
                  6.5 Forfeitures and Restoration of Forfeited Amounts upon
Reemployment.

                           (a) If a Participant who has had a Separation from
Service does not thereafter complete an Hour of Service before the end of the
Plan Year in which occurs the earlier of:

                                    (1) the date on which he receives or is
deemed to receive a distribution of his entire nonforfeitable interest in his
Account, which is less than 100%; or

                                    (2) the date on which he incurs his fifth
consecutive One-Year Period of Severance, his Profit Sharing Account and
Matching Contribution Account, if any, shall be closed, and the forfeitable
amount held therein shall be forfeited.

For purposes of this Subsection (a), a Participant who has a Separation from
Service at a time when his nonforfeitable interest in the Plan is zero shall be
deemed to have received a distribution described in Paragraph (1) of this
Subsection on the date of such Separation from Service.

                           (b) Amounts forfeited from a Participant's Profit
Sharing Account under Section 6.5(a) hereof shall be reallocated to the Profit
Sharing Accounts of Profit Sharing Participants as of the end of the Plan Year
during which the forfeiture occurs pursuant to Section 3.5 hereof. Amounts
forfeited from a Participant's Matching Contribution Account under Section
6.5(a) hereof shall be used to reduce future Matching Contributions.

                           (c) If a Participant who has received (or is deemed
to have received) a distribution described in Section 6.5(a)(1) hereof, whereby
any part of his Account has been forfeited, again becomes a Covered Employee
prior to incurring five consecutive One-Year Periods of Severance, the amount so
forfeited shall be restored to his new Profit Sharing Account and Matching
Contribution Account, if, and only if, he repays the full amount of such
distribution (if any) prior to the earlier of (1) the fifth anniversary of the
date on which he subsequently becomes a Covered Employee or (2) the first date
the Participant incurs five consecutive One-Year Periods of Severance following
the date of the distribution; provided, however, that a

                                       51
<PAGE>   52
Participant described in the preceding Subsection who is deemed to receive a
distribution of his entire nonforfeitable interest shall be deemed to repay such
distribution on the date he again becomes a Covered Employee. Amounts restored
under this Subsection shall be charged against the following amounts in the
following order of priority: (A) forfeitures for the Plan Year, (B) income or
gains to the Plan, and (C) Company contributions for the Plan Year. If the
foregoing amounts are insufficient, the Participating Company by whom such
Participant is reemployed shall make any additional contribution necessary to
accomplish the restoration.

                           (d) If a Participant has received a distribution
under the Plan, other than a distribution of his entire nonforfeitable interest
in his Account upon his Separation from Service, at a time when he has less than
a 100% nonforfeitable interest in his entire Account and prior to the date on
which he incurs his fifth consecutive One-Year Period of Severance, his
nonforfeitable interest in his Account at all times prior to the date on which
he incurs his fifth consecutive One-Year Period of Severance, shall be the
difference between:

                                    (1) the amount his nonforfeitable interest
would have been if he had not received the distribution; and

                                    (2) the amount to which the distribution
would have increased or decreased if it had remained in the Fund. Immediately
after the Participant has five consecutive One-Year Periods of Severance, his
nonforfeitable interest determined under this Subsection, if in excess of zero,
shall be established as a separate account, and he shall at all times have a
nonforfeitable interest therein. If the Participant is later reemployed as a
Covered Employee, any allocations to him shall be credited to a new account, and
his nonforfeitable interest therein shall be determined under Section 6.1
hereof.

                           (e) If a Participant has had five consecutive
One-Year Periods of Severance and again becomes a Covered Employee, the amount
forfeited under Section 6.5(a) hereof shall not be restored to his new Profit
Sharing Account and Matching Contribution Account under any circumstances.

                                       52
<PAGE>   53
                                   ARTICLE VII

                             ROLLOVER CONTRIBUTIONS


                  7.1 Rollover Contributions.

                           (a) Subject to the restrictions set forth in
Subsection (b), a Covered Employee may transfer or have transferred directly to
the Fund, from any qualified retirement plan of a former employer, all or a
portion of his interest in the distributing plan. In addition, a Covered
Employee who has established an individual retirement account to hold
distributions received from qualified retirement plans of former employers may
transfer all of the assets of such individual retirement account to the Fund.
Such individual retirement account shall not contain nondeductible contributions
made by the Employee while he was a participant in such plans.

                           (b) The Trustee shall not accept a distribution from
any other qualified retirement plan or from an individual retirement account
unless the following conditions are met:

                                    (1) (A) the distribution being transferred
must come directly from the fiduciary of the plan of the former employer, or

                                        (B) it must come from the Employee
within 60 days after the Employee receives a distribution from such other
qualified retirement plan or individual retirement account and must comply with
the provisions of section 402(c), 403(a)(4), or 408(d)(3) of the Code, whichever
applies;

                                    (2) distributions from a plan for a
self-employed person shall not be transferred to this Plan, unless the transfer
is directly to the Fund from the funding agent of the distributing plan;

                                    (3) the interest being transferred shall not
include assets from any plan to the extent that the Committee determines that
the transfer of such interest (A) would impose upon this Plan requirements as to
form of distribution that would not otherwise apply hereunder, or (B) would
otherwise result in the elimination of Code section 411(d)(6) protected
benefits; and

                                       53
<PAGE>   54
                                    (4) the interest being transferred shall not
contain nondeductible contributions made to the distributing plan by the
Employee unless the transfer to the Fund is directly from the funding agent of
the distributing plan.

                  7.2 Vesting and Distribution of Rollover and Transfer
Accounts.

                           (a) The distributions transferred by or for a Covered
Employee from another qualified retirement plan or from an individual retirement
account shall be credited to the Employee's Rollover Account, unless it is
credited to his Transfer Account, in accordance with Subsection (b). An Employee
shall be fully vested at all times in his Rollover Account and, except as
otherwise may be provided in Appendix A, his Transfer Account.

                           (b) Any distribution, transferred by or for an
Employee that will cause the plan to be a direct or indirect transferee of a
plan to which the joint and survivor annuity requirements of sections 401(a)(11)
and 417 of the Code apply, will be credited to the Employee's Transfer Account.

                           (c) An Employee's Rollover Account and Transfer
Account shall be distributed as otherwise provided under the Plan.

                                       54
<PAGE>   55
                                  ARTICLE VIII

                                   WITHDRAWALS


                  8.1 Withdrawals Not Subject to Section 401(k) Restrictions.

                           (a) A Participant may withdraw, not more than once
during any Plan Year, up to the total value of the amount in the following
Accounts:

                                    (1) his Rollover Account; and

                                    (2) his Transfer Account, to the extent not
attributable to elective deferrals, qualified nonelective contributions and/or
qualified matching contributions received from the transferor plan; and

                           (b) Withdrawals under this Section 8.1 shall be
charged against a Participant's Accounts in the following order of priority:

                                    (1) the portion of the Participant's
Rollover and Transfer Account, if any, that consists of the Participant's
employee contributions made before January 1, 1987, if any, less any amounts
previously withdrawn therefrom; and

                                    (2) the balance of the Participant's
Rollover and Transfer Account after the application of Subsection (b)(1), if
any, less any amounts previously withdrawn therefrom.

                  8.2 Withdrawals Subject to Section 401(k) Restrictions.

                           (a) In addition to the withdrawals permitted under
Section 8.1 hereof, a Participant may withdraw, under the rules set forth in
Sections 8.2(b) through 8.2(e) hereof, the following amounts:

                                    (1) the sum of his Salary Reduction
Contributions made after the Effective Date;

                                       55
<PAGE>   56
                                    (2) the portion of his Transfer Account that
is not eligible for withdrawal under Section 8.1 hereof and is attributable to
elective deferrals and investment earnings thereon credited to the Participant
on or before December 31, 1988, less amounts previously withdrawn therefrom, by
submitting his written request to the Committee.

                           (b) A withdrawal under Section 8.2(a) hereof shall be
permitted only if the Committee finds that:

                                    (1) it is made on account of immediate and
heavy financial need (as defined in Section 8.2(c) hereof) of the Participant;
and

                                    (2) it is necessary (as defined in
Subsection (d) of this Section) to satisfy such immediate and heavy financial
need.

                           (c) A withdrawal under Subsection 8.2(a) hereof will
be deemed to be on account of an immediate and heavy financial need if the
Participant requests such withdrawal on account of:

                                    (1) expenses for medical care described in
section 213(d) of the Code and previously incurred by the Participant, his
spouse, or any of the Participant's dependents (as defined in section 152 of the
Code) or necessary for such individuals to obtain such medical care;

                                    (2) costs directly related to the purchase
(excluding mortgage payments) of a principal residence of the Participant;

                                    (3) the payment of tuition, related
educational fees, and room and board expenses, for the next 12 months of
post-secondary education for the Participant, his spouse, children, or
dependents (as defined in section 152 of the Code);

                                    (4) the need to prevent the eviction of the
Participant from his principal residence or foreclosure on the mortgage of his
principal residence; or

                                       56
<PAGE>   57
                                    (5) such other circumstances or events as
may be prescribed by the Secretary of the Treasury or his delegate.

                           (d) A withdrawal under Subsection (a) shall be deemed
to be necessary if:

                                    (1) the amount of the withdrawal does not
exceed the amount of the Participant's immediate and heavy financial need,
including any amounts necessary to pay any federal, state or local income taxes
or penalties reasonably anticipated to result from the withdrawal;

                                    (2) the Participant has obtained all
currently permissible distributions (other than hardship distributions) and
non-taxable loans, if any, under this and all other plans maintained by the
Participating Company and all Affiliated Companies; and

                                    (3) the Participant agrees in writing to be
bound by the rules of Subsection (e).

                           (e) If a Participant withdraws any amount from his
Salary Reduction Account pursuant to Subsection (a), or withdraws any elective
deferrals under any other qualified retirement plan maintained by the
Participating Company or any Affiliated Company, which other plan conditions
such withdrawal upon the Participant's being subject to rules similar to those
stated in this Subsection and Subsection (d), such Participant:

                                    (1) may not make Salary Reduction
Contributions under this Plan or employee contributions (other than mandatory
contributions under a defined benefit plan) or elective deferrals under any
other qualified or non-qualified plan of deferred compensation (which does not
include any health or welfare plan, including a health or welfare plan that is
part of a cafeteria plan described in section 125 of the Code) maintained by the
Participating Company or an Affiliated Company for a period of 12 months
commencing on the date of his receipt of the withdrawal; and

                                    (2) in the calendar year next following the
calendar year of such withdrawal, may not make Salary Reduction Contributions or
elective deferrals under any other qualified

                                       57
<PAGE>   58
retirement plan maintained by the Participating Company or an Affiliated Company
in excess of:

                                            (A) the dollar amount described in
Section 3.1(b) hereof for such year, minus

                                            (B) the total Salary Reduction
Contributions under this Plan and elective deferrals under any other qualified
plan made by the Participant during the calendar year of the withdrawal.

                  8.3 Withdrawals On and After Attainment of Age 59-1/2. Upon
his attainment of Age 59-1/2, a Participant who has a nonforfeitable interest in
his Account may withdraw, not more than once during any Plan Year, up to the
vested portion in his Account, less amounts previously withdrawn therefrom, by
submitting his written request to the Committee.

                  8.4 Amount and Payment of Withdrawals. The amount of any
withdrawal will be determined on the basis of the value of the Participant's
Account and the sum of the Participant's Salary Reduction Contributions valued
as of the Valuation Date coincident with or immediately preceding the date of
the withdrawal. Payment will be made in a single sum; provided, however, that if
the value of the nonforfeitable portion of the Participant's Account exceeds (or
has exceeded at the time of any prior distribution) $3,500, a withdrawal of all
or any portion of the Participant's Transfer Account under this Article VIII
shall be paid in the normal mode of payment described in Section 5.11(a) hereof,
as applicable, unless the Participant elects to receive a single sum payment. No
election to receive a single sum payment of any amount from the Participant's
Transfer Account shall be valid (if the value of the nonforfeitable portion of
the Participant's Account exceeds (or has exceeded at the time of any prior
distribution) $3,500), if it would not constitute a valid election under Section
5.11(b) hereof. Any withdrawal requested under this Section shall be paid as
soon as practicable following the Committee's determination that the requested
withdrawal complies with the terms and conditions set forth in this Section.

                  8.5 Withdrawals Not Subject to Replacement. A Participant may
not replace any portion of his Accounts withdrawn under this Plan.

                                       58
<PAGE>   59
                  8.6 Pledged Amounts. No amount that has been pledged as
security for a loan under Article IX hereof may be withdrawn under this Article.

                  8.7 Investment Medium to be Charged with Withdrawal. A
Participant may specify to which Investment Medium or Investment Media any
withdrawal under this Article is to be charged. Unless so specified,
distribution will be made out of the Participant's interest in the various
Investment Media in proportion to the Participant's share in such Investment
Media.

                                       59
<PAGE>   60
                                   ARTICLE IX

                              LOANS TO PARTICIPANTS


                  9.1 Loan Application. Each Participant who is an Employee of a
Participating Company and any other Participant or beneficiary who is a party in
interest as defined in ERISA may apply for a loan from the Plan. All
applications shall be made to the Committee on forms which it prescribes, and
the Committee shall rule upon such applications in a uniform and
nondiscriminatory manner in accordance with the rules and guidelines established
in this Article IX.

                  9.2 Loan Rejection. The Committee shall have the right to
reject a loan application if the Participant has the present intention to take a
personal leave of absence during the period of loan repayment or on the basis of
a Participant's credit worthiness and financial need or such other factors as
would be considered in a normal commercial setting by an entity in the business
of making loans and as the Committee determines necessary to safeguard the Fund.

                  9.3 Amount of Loan.

                           (a) In no event shall a Participant be permitted to
have more than one loan outstanding at any time from this Plan.

                           (b) The amount of any loan, when added to the amount
of a Participant's outstanding loans under the Plan and all other plans
qualified under section 401(a) of the Code which are sponsored by a
Participating Company or any Affiliated Company shall not exceed the lesser of:

                                    (1) $50,000, reduced by the excess (if any)
of:

                                            (A) the Participant's highest
outstanding balance of loans during the one-year period ending on the day before
the date on which such loan is made to the Participant, over

                                       60
<PAGE>   61
                                            (B) the outstanding balance of any
loan made to the Participant on the date such loan is made to the Participant;
or

                                    (2) fifty percent (50%) of the value of the
Participant's nonforfeitable Account, provided that the application of this
Section 9.3(b)(2) shall not reduce the amount that may be borrowed below
$10,000.

                  9.4 Terms of Loan.

                           (a) The interest rate on loans shall be one percent
(1%) over the prime rate that is in effect on the last of the month before the
loan is approved, as such prime rate is reported in the Wall Street Journal.
Security for each loan granted pursuant to this Article IX shall be, to the
extent necessary, the currently unpledged portion of the Participant's Rollover
Account, next, the Participant's Transfer Account, next, the vested portion of
the Participant's Matching Contribution Account and Profit Sharing Account, and
finally the Participant's Salary Reduction Account. In no event shall more than
fifty percent (50%) of the Participant's vested Account as of the date the loan
is made be used as security for the loan. In its sole discretion, the Committee
may require such additional security as it deems necessary. If the Participant's
Transfer Account contains amounts that are subject to the joint and survivor
annuity requirements of sections 401(a)(11) and 417 of the Code, the
Participant's Transfer Account may not be used as security for a loan unless:

                                    (1)     (A) the Participant's spouse
consents in writing to the use of the Participant's Transfer Account as
security for the loan within the 90 day period ending on the date the
Participant receives the loan;

                                            (B) such consent acknowledges its
own effect; and

                                            (C) such consent is witnessed by a
notary public; or

                                    (2) the Participant establishes to the
satisfaction of the Committee that he has no spouse or that his

                                       61
<PAGE>   62
spouse's consent is not required because of such circumstances as are prescribed
in applicable governmental regulations.

                           (b) Each loan shall be evidenced by the Participant's
execution of a personal installment note on such form as shall be supplied by
the Committee. Each such note shall specify that, to the extent repayment is not
required sooner by the terms of Section 9.4(d) hereof of this Section, repayment
shall be included in installments not to exceed 60 months from the date on which
the loan is distributed; however, if the purpose of the loan is to acquire any
dwelling unit which is to be used within a reasonable period of time as the
principal residence of the Participant, the period of repayment may be as long
as, but shall not exceed 180 months. All loans from the Plan shall be
non-renewable. Each note shall also specify the interest rate as determined by
the Committee at the time the loan is approved.

                           (c) All loans shall be repaid in approximately equal
installments (not less frequently than quarterly) through payroll deductions or
in such other manner as the Committee may determine. A Participant may repay the
outstanding balance of any loan in one lump sum at any time by notifying the
Committee of his intent to do so and by forwarding to the Committee payment in
full of the then outstanding balance, plus interest accrued to the date of
payment. The amount of principal and interest repaid by a Participant shall be
credited to a Participant's Account as each repayment is made.

                           (d) Notwithstanding the above, in the event a
Participant who has an outstanding loan takes a personal leave of absence for a
period of not more than one year or any periodic loan repayment is not made in
full due to a temporary reduction in the Participant's Compensation that is not
expected to continue for a period of more than one year, the Committee shall
waive payment on the loan during the leave of absence or the period during which
the Participant's Compensation is reduced. In such case, (1) if the loan is for
a period of less than 60 months, the period of repayments shall be extended for
the period necessary to permit repayment, or (2) otherwise, the loan shall be
reamortized over its remaining term; provided, however, that the period of
repayment for any loan shall not exceed a total of 60 months.

                                       62
<PAGE>   63
                           (e) If, and only if:

                                    (1) the Participant dies;

                                    (2) the Participant (other than a
Participant who continues to be a party in interest) has a Separation from
Service;

                                    (3) the Compensation of a Participant who is
an Employee of a Participating Company is discontinued or decreased below the
amount necessary to amortize the loan and such status continues for more than
one year;

                                    (4) the loan is not repaid by the time the
note matures including any extensions pursuant to Subsection (d);

                                    (5) the Participant attempts to revoke any
payroll deduction authorization for repayment of the loan without the consent of
the Committee;

                                    (6) the Participant fails to pay any
installment of the loan when due and the Committee elects to treat such failure
as default; or

                                    (7) any other event occurs which the
Committee, in its sole discretion, believes may jeopardize the repayment of the
loan;

before a loan is repaid in full, the unpaid balance thereof, with interest due
thereon, shall become immediately due and payable. The Participant (or his
beneficiary, in the event of the Participant's death) may satisfy the loan by
paying the outstanding balance of the loan within 30 days. If the loan and
interest are not repaid within the time specified, the Committee shall satisfy
the indebtedness from the amount of the Participant's vested interest in his
Account as provided in Section 9.5 hereof before making any payments otherwise
due hereunder to the Participant or his beneficiary.

                  9.5 Enforcement. The Committee shall give written notice to
the Participant (or his beneficiary in the event of the Participant's death) of
an event of default described in Section 9.4 (d) hereof. If the loan and
interest are not paid within thirty (30) days of the date of the notice, the
amount of the

                                       63
<PAGE>   64
Participant's vested interest in his Account, excluding his Salary Reduction
Account, shall be reduced by the amount of the unpaid balance of the loan, with
interest due thereon, and the Participant's indebtedness shall thereupon be
discharged to the extent of the reduction. In addition, if the value of the
Participant's total vested interest in his Account (exclusive of his Salary
Reduction Account) pledged as security for the loan is insufficient to discharge
fully the Participant's indebtedness, the Participant's Salary Reduction Account
shall be used to reduce the Participant's indebtedness at such time as the
Participant is entitled to a distribution under Article V hereof or a withdrawal
under Article VIII hereof from his Salary Reduction Account, and any remaining
amounts in his Matching Contribution Account and/or Profit Sharing Account shall
be used to reduce the Participant's indebtedness. Such action shall not operate
as a waiver of the rights of the Company, the Committee, the Trustee, or the
Plan under applicable law. The Committee also shall be entitled to take any and
all other actions necessary and appropriate to foreclose upon any property other
than the Participant's Account pledged as security for the loan or to otherwise
enforce collection of the outstanding balance of the loan.

                  9.6 Additional Rules. The Committee may establish additional
rules relating to Participant loans under the Plan, which rules shall be applied
on a uniform and nondiscriminatory basis.

                                       64
<PAGE>   65
                                    ARTICLE X

                                 ADMINISTRATION


                  10.1 Committee. If the Company designates one or more
individuals as a Savings Plan Committee, the powers and duties of the Committee
under the Plan shall be exercised by the Savings Plan Committee; otherwise all
such powers and duties shall be exercised by the Company. The Savings Plan
Committee shall be the named fiduciary which shall control and manage the
operation of the Plan and shall administer the Plan. The Savings Plan Committee
members may, but need not, be Employees, and they shall serve at the pleasure of
the Company. They shall be entitled to reimbursement of expenses, but those
members of the Savings Plan Committee who are also Employees of a Participating
Company shall receive no compensation for their service on the Savings Plan
Committee. Any reimbursement of expenses of the Committee members shall be paid
directly by the Company. The Savings Plan Committee shall be responsible for the
general administration of the Plan under the policy guidance of the Company.

                  10.2 Duties and Powers of Committee. In addition to the duties
and powers described elsewhere hereunder, the Committee shall have the following
specific duties and powers:

                           (a) to retain such consultants, accountants and
attorneys as may be deemed necessary or desirable to render statements, reports,
and advice with respect to the Plan and to assist the Committee in complying
with all applicable rules and regulations affecting the Plan; any consultants,
accountants and attorneys may be the same as those retained by the Company;

                           (b) to decide appeals under this Article;

                           (c) to enact uniform and nondiscriminatory rules and
regulations to carry out the provisions of the Plan;

                           (d) to resolve questions or disputes relating to
eligibility for benefits or the amount of benefits under the Plan;

                           (e) to construe and interpret and supply omissions
with respect to the provisions of the Plan;

                                       65
<PAGE>   66
                           (f) to determine whether any domestic relations order
received by the Plan is a qualified domestic relations order as provided in
section 414(p) of the Code;

                           (g) to evaluate administrative procedures; and

                           (h) to delegate such duties and powers as the
Committee shall determine from time to time to any person or persons. To the
extent of any such delegation, the delegate shall have the duties, powers,
authority and discretion of the Committee.

Any decisions and determinations made by the Committee pursuant to its duties
and powers described in the Plan shall be conclusive and binding upon all
parties. The Committee shall have sole discretion in carrying out its
responsibilities. The expenses incurred by the Committee in connection with the
operation of the Plan, including, but not limited to, the expenses incurred by
reason of the engagement of professional assistants and consultants, shall be
expenses of the Plan and shall be payable from the Fund at the direction of the
Committee. The Participating Companies shall have the option, but not the
obligation, to pay any such expenses, in whole or in part, and, by so doing, to
relieve the Fund from the obligation of bearing such expenses. Payment of any
such expenses by a Participating Company on one occasion shall not bind that
Participating Company to pay any similar expenses on any subsequent occasion.

                  10.3 Functioning of Committee. The Committee and those persons
or entities to whom the Committee has delegated responsibilities shall keep
accurate records and minutes of meetings, interpretations, and decisions. The
Committee shall act by majority vote of the members, and such action shall be
evidenced by a written document.

                  10.4 Disputes.

                           (a) If the Committee denies, in whole or in part, a
claim for benefits by a Participant or his beneficiary, the Committee shall
furnish notice of the denial to the claimant, setting forth:

                                    (1) the specific reasons for the denial;

                                       66
<PAGE>   67
                                    (2) specific reference to the pertinent Plan
provisions on which the denial is based;

                                    (3) a description of any additional
information necessary for the claimant to perfect the claim and an explanation
of why such information is necessary; and

                                    (4) appropriate information as to the steps
to be taken if the claimant wishes to submit his claim for review.

Such notice shall be forwarded to the claimant within 90 days of the Committee's
receipt of the claim; provided, however, that in special circumstances the
Committee may extend the response period for up to an additional 90 days, in
which event it shall notify the claimant in writing of the extension, and shall
specify the reason or reasons for the extension.

                           (b) Within 60 days of receipt of a notice of claim
denial, a claimant or his duly authorized representative may petition the
Committee in writing for a full and fair review of the denial. The claimant or
his duly authorized representative shall have the opportunity to review
pertinent documents and to submit issues and comments in writing to the
Committee. The Committee shall review the denial and shall communicate its
decision and the reasons therefor to the claimant in writing within 60 days of
receipt of the petition; provided, however, that in special circumstances the
Committee may extend the response period for up to an additional 60 days, in
which event it shall notify the claimant in writing prior to the commencement of
the extension. The appeals procedure set forth in this Subsection (b) shall be
the exclusive means for contesting a decision denying benefits under the Plan.

                  10.5 Indemnification. Each member of the Committee, and any
other person who is an Employee or director of a Participating Company or an
Affiliated Company shall be indemnified and held harmless by the Company against
and with respect to all damages, losses, obligations, liabilities, liens,
deficiencies, costs and expenses, including without limitation, reasonable
attorney's fees and other costs incident to any suit, action, investigation,
claim or proceedings to which he may be a party by reason of his performance of
administrative functions

                                       67
<PAGE>   68
and duties under the Plan, except in relation to matters as to which he shall be
held liable for an act of willful misconduct in the performance of his duties.
The foregoing right to indemnification shall be in addition to such other rights
as the Committee member or other person may enjoy as a matter of law or by
reason of insurance coverage of any kind. Rights granted hereunder shall be in
addition to and not in lieu of any rights to indemnification to which the
Committee member or other person may be entitled pursuant to the by-laws of the
Participating Company.

                                       68
<PAGE>   69
                                   ARTICLE XI

                                    THE FUND


                  11.1 Designation of Trustee. The Company on behalf of itself
and each other Participating Company, by appropriate resolution of its Board of
Directors, shall name and designate a Trustee and shall enter into a Trust
Agreement. The Company shall have the power, by appropriate resolution of its
Board of Directors, to amend the Trust Agreement, remove the Trustee, and
designate a successor Trustee, as provided in the Trust Agreement. All of the
assets of the Plan shall be held by the Trustee for use in accordance with the
Plan.

                  11.2 Exclusive Benefit. Prior to the satisfaction of all
liabilities under the Plan in the event of termination of the Plan, no part of
the corpus or income of the Fund shall be used for or diverted to purposes other
than for the exclusive benefit of Participants and their beneficiaries except as
expressly provided in this Plan and in the Trust Agreement.

                  11.3 No Interest in Fund. No person shall have any interest in
or right to any part of the assets or income of the Fund, except to the extent
expressly provided in this Plan and in the Trust Agreement.

                  11.4 Trustee. The Trustee shall be the named fiduciary with
respect to management and control of Plan assets held by it and, except as
provided in Section 11.5 hereof, shall have exclusive and sole responsibility
for the custody and investment thereof in accordance with the Trust Agreement.

                  11.5 Investments and Voting FPA Common Stock.

                           (a) Except as provided in Section 11.5(e) hereof, the
Trustee shall invest Salary Reduction Contributions, Rollover Contributions,
Matching Contributions and Profit Sharing Contributions paid to it and income
thereon in such Investment Media as each Participant may select in accordance
with this Section 11.5. Such investments acquired in the manner prescribed by
the Plan shall be held by or for the Trustee.

                                       69
<PAGE>   70
                           (b) Except as provided in Section 5.11(e), a
Participant shall select one or more of the Investment Media in which his
Accounts shall be invested, and the percentage thereof that shall be invested in
each Investment Medium selected. In the event a Participant fails to make an
election pursuant to this Section, amounts allocated to his Account shall be
invested in the most conservative of the Investment Media as determined by the
Committee. A Participant may amend such selection by prior notice to the
Committee, effective as of such dates determined by the Committee, by giving
prior notice to the Committee. Such amendments will be subject to the other
requirements of this Section.

                           (c) A Participant may transfer, effective as of such
dates determined by the Committee, such portion of the value of his interest in
any Investment Medium to another Investment Medium, as may be permitted by the
Committee.

                           (d) The Trustee shall vote shares of FPA Common Stock
pursuant to instructions from Participants, for which purpose the Trustee shall
aggregate fractional shares and vote them in proportion to instructions from
Participants with respect to whole shares. Shares for which no instructions are
received shall not be voted.

                           (e) At the time of the mailing to stockholders of the
notice of any stockholders' meeting of the Company, the Company, in conjunction
with the Trustee, shall use its reasonable best efforts to cause to be delivered
to each such Participant, who has shares of FPA Common Stock allocated to his
Account, such notices and informational statements as are furnished to the
Company's stockholders in respect of the exercise of voting rights, together
with forms by which the Participant may confidentially instruct the Trustee, or
revoke such instruction, with respect to the voting of the shares of FPA Common
Stock allocated to his Account. Upon timely receipt of directions, the Trustee
shall vote the FPA Common Stock allocated to a Participant's Account on each
matter as directed by the Participant.

                           (f) If there is a tender offer for, or a request or
invitation for tenders of, the shares of FPA Common Stock held by the Trustee
for Participants, then

                                       70
<PAGE>   71
                                    (1) the Committee shall furnish to the
Trustee, who shall then furnish to each Participant, prompt notice of any such
tender offer for, or request or invitation for tenders of, the shares of FPA
Common Stock; and

                                    (2) the Trustee shall request from each
Participant instructions as to the tendering of the shares of FPA Common Stock,
if any, allocated to the Participant's Account. The Trustee shall tender only
such shares of FPA Common Stock for which the Trustee has received (within the
time specified in the notification) tender instructions.

                           (g) All instructions received by the Trustee from
Participants pursuant to this Section 11.5 shall be held by the Trustee in
strict confidence and shall not be divulged to any person, including employees,
officers and directors of the Company or any Affiliated Company; provided,
however, that to the extent necessary for the operation of the Plan, such
instructions may be relayed by the Trustee to a recordkeeper, auditor or other
person providing services to the Plan if such person (1) is not the Company, an
affiliate or any employee, officer or director thereof, and (2) agrees not to
divulge such directions to any other person, including employees, officers and
directors of the Company and any Affiliated Company.

                           (h) The amounts contributed by all Participants to
each Investment Medium shall be commingled for investment purposes.

                           (i) The Trustee may hold assets of the Fund and make
distributions therefrom in the form of cash without liability for interest, if
for administrative purposes it becomes necessary or practical to do so.

                                       71
<PAGE>   72
                                   ARTICLE XII

                      AMENDMENT OR TERMINATION OF THE PLAN


                  12.1 Power of Amendment and Termination.

                           (a) It is the intention of each Participating Company
that its participation in this Plan will be permanent. However, subject to any
applicable collective bargaining agreement, each Participating Company, other
than the Company, reserves the right to terminate its participation in this Plan
at any time by or pursuant to action of its board of directors or other
governing body. Furthermore, subject to any applicable collective bargaining
agreement, the Company reserves the power to amend or terminate the Plan at any
time by or pursuant to action of the Board of Directors.

                           (b) Each amendment to the Plan shall be binding on
each Participating Company if such Participating Company, by or pursuant to
action by its board of directors or other governing body, (1) consents to such
amendment at any time; or (2) fails to object thereto within thirty days after
receiving notice thereof.

                           (c) Any amendment or termination of the Plan shall
become effective as of the date designated by the Board of Directors or its
delegate. Except as expressly provided elsewhere in the Plan, prior to the
satisfaction of all liabilities with respect to the benefits provided under this
Plan, no amendment or termination shall cause any part of the monies contributed
hereunder to revert to the Participating Companies or to be diverted to any
purpose other than for the exclusive benefit of Participants and their
beneficiaries. Upon termination or partial termination of the Plan, or upon
complete discontinuance of contributions, the rights of all affected persons to
benefits accrued to the date of such termination shall be nonforfeitable. Upon
termination of the plan without establishment or maintenance of another defined
contribution plan (other than an employee stock ownership plan as defined in
section 4975(e)(7) of the Code or a simplified employee pension plan as defined
in section 408(k) of the Code), Accounts shall be distributed in accordance with
applicable law.

                                       72
<PAGE>   73
                  12.2 Merger. The Plan shall not be merged with or consolidated
with, nor shall its assets be transferred to, any other qualified retirement
plan unless each Participant would receive a benefit after such merger,
consolidation, or transfer (assuming the Plan then terminated) which is of
actuarial value equal to or greater than the benefit he would have received from
his Account if the Plan had been terminated on the day before such merger,
consolidation, or transfer.

                                       73
<PAGE>   74
                                  ARTICLE XIII

                              TOP-HEAVY PROVISIONS


                  13.1 General. The following provisions shall apply
automatically to the Plan and shall supersede any contrary provisions for each
Plan Year in which the Plan is a Top-Heavy Plan (as defined below). It is
intended that this Article shall be construed in accordance with the provisions
of section 416 of the Code.

                  13.2 Definitions. The following definitions shall supplement
those set forth in Article I hereof of the Plan:

                           (a) "Aggregation Group" means this plan and each
other qualified retirement plan (including a frozen plan or a plan which has
been terminated during the 60-month period ending on the Determination Date) of
a Participating Company or an Affiliated Company:

                                    (1) in which a Key Employee is a
participant; or

                                    (2) which enables any plan in which a Key
Employee participates to meet the requirements of sections 401(a)(4) or 410 of
the Code; or

                                    (3) without the inclusion of which, the
plans in the Aggregation Group would be Top-Heavy Plans, but, with the inclusion
of which, the plans in the Aggregation Group are not Top-Heavy Plans and, taken
together, meet the requirements of sections 401(a)(4) and 410 of the Code.

                           (b) "Determination Date" means, for any Plan Year,
the last day of the preceding Plan Year, except that for the first Plan Year it
means the last day thereof.

                           (c)      "Key Employee" means, with respect to any
Plan Year:

                                    (1) any Employee or former Employee who at
any time during the 60-month period ending on the Determination Date was:

                                       74
<PAGE>   75
                                            (A) an officer of a Participating
Company having Compensation for a Plan Year during such period greater than
fifty percent (50%) of the amount in effect under section 415(b)(1)(A) of the
Code for the calendar year in which such Plan Year ends; provided, that no more
than 50 Employees (or, if less, the greater of three Employees or ten percent
(10%) of the greatest number of Employees employed by all Participating
Companies and all Affiliated Companies during such 60-month period, but
excluding employees described in section 414(q)(8) of the Code) shall be treated
as officers; or

                                            (B) one of the 10 Employees having
Compensation greater than the amount described in section 415(c)(1)(A) of the
Code and owning (or are considered as owning, within the meaning of section 318
of the Code) the largest interests in any Participating Company or Affiliated
Company, provided that such interest exceeds one-half of one percent (0.5%) of
the total share ownership of the Participating Company or Affiliated Company,
the total number of individuals described in this Subparagraph (B) being limited
to 10 for the entire 60-month period; or

                                            (C) a 5-percent owner of a
Participating Company; or

                                            (D) a one-percent owner of a
Participating Company having Compensation in excess of $150,000; or

                                    (2) a beneficiary of an individual described
in Paragraph (1) of this Subsection.

For purposes of this Subsection, Compensation shall include elective deferrals
under sections 125, 402(a)(8), 402(h) and 403(b) of the Code. Determinations
under this Subsection shall be made in accordance with section 416(i) of the
Code.

                           (d) "Key Employee Ratio" means, for any Determination
Date, the ratio of the amount described in Paragraph (1) of this Subsection to
the amount described in Paragraph (2) of this Subsection, after deducting from
each such amount any portion thereof described in Paragraph (3) of this
Subsection, where:

                                       75
<PAGE>   76
                                    (1) the amount described in this Paragraph
is the sum of:

                                            (A) the present value of all accrued
benefits of Key Employees under all qualified defined benefit plans included in
the Aggregation Group;

                                            (B) the balances in all of the
accounts of Key Employees under all qualified defined contribution plans
included in the Aggregation Group; and

                                            (C) the amounts distributed from all
plans in such Aggregation Group to or on behalf of any Key Employee during the
period of five Plan Years ending on the Determination Date, except any benefit
paid on account of death to the extent it exceeds the accrued benefits or
account balances immediately prior to death;

                                    (2) the amount described in this Paragraph
is the sum of:

                                            (A) the present value of all accrued
benefits of all participants under all qualified defined benefit plans included
in the Aggregation Group;

                                            (B) the balances in all of the
accounts of all participants under all qualified defined contribution plans
included in the Aggregation Group; and

                                            (C) the amounts distributed from all
plans in such Aggregation Group to or on behalf of any participant during the
period of five Plan Years ending on the Determination Date; and

                                    (3) the amount described in this Paragraph
is the sum of:

                                            (A) all rollover contributions (or
fund to fund transfers) to the Plan by an Employee after December 31, 1983 from
a plan sponsored by an employer which is not a Participating Company or an
Affiliated Company;

                                       76
<PAGE>   77
                                            (B) any amount that is included in
Paragraphs (1) and (2) of this Subsection for a person who is a Non-Key Employee
as to the Plan Year of reference but who was a Key Employee as to any earlier
Plan Year; and

                                            (C) for Plan Years beginning after
December 31, 1984, any amount that is included in Paragraphs (1) and (2) of this
Subsection for a person who has not performed any services for any Participating
Company during the five-year period ending on the Determination Date.

The present value of accrued benefits under any defined benefit plan shall be
determined on the basis of the actuarial assumptions used by such defined
benefit plan under the method used for accrual purposes for all plans maintained
by all Participating Companies and Affiliated Companies if a single method is
used by all such plans, or, otherwise, the slowest accrual method permitted
under section 411(b)(1)(C) of the Code.

                           (e) "Non-Key Employee" means, for any Plan Year:

                                    (1) an Employee or former Employee who is
not a Key Employee with respect to such Plan Year; or

                                    (2) a beneficiary of an individual described
in Paragraph (1) of this Subsection.

                           (f) "Super Top-Heavy Plan" means, for any Plan Year,
each plan in the Aggregation Group for such Plan Year if, as of the applicable
Determination Date, the Key Employee Ratio exceeds ninety percent (90%).

                           (g) "Top-Heavy Compensation" means, for any
Participant for any Plan Year, the average of his annual Compensation over the
period of five consecutive Plan Years (or, if shorter, the longest period of
consecutive Plan Years during which the Participant was in the employ of any
Participating Company) yielding the highest average, disregarding:

                                    (1) Compensation for Plan Years ending prior
to January 1, 1984; and

                                       77
<PAGE>   78
                                    (2) Compensation for Plan Years after the
close of the last Plan Year in which the Plan was a Top-Heavy Plan.

                           (h) "Top-Heavy Plan" means, for any Plan Year, each
plan in the Aggregation Group for such Plan Year if, as of the applicable
Determination Date, the Key Employee Ratio exceeds sixty percent (60%).

                           (i) "Year of Top-Heavy Service" means, for any
Participant, a Plan Year in which he completes 1,000 or more Hours of Service,
excluding:

                                    (1) Plan Years commencing prior to January
1, 1984; and

                                    (2) Plan Years in which the Plan is not a
Top-Heavy Plan.

                  13.3 Minimum Contribution for Non-Key Employees.

                           (a) In each Plan Year in which the Plan is a
Top-Heavy Plan, each Eligible Employee who is a Non-Key Employee (except an
Eligible Employee who is a Non-Key Employee as to the Plan Year of reference but
who was a Key Employee as to any earlier Plan Year) and who is an Employee on
the last day of such Plan Year will receive a total minimum Participating
Company or Affiliated Company contribution (including forfeitures) under all
plans described in Paragraphs (a)(1) and (a)(2) of Section 13.2 of not less than
three percent (3%) of the Eligible Employee's Compensation for the Plan Year.
Elective deferrals to such plans made on behalf of a Participant in plan years
beginning after December 31, 1984 but before January 1, 1989 shall be deemed to
be Company contributions for the purpose of this Subsection. Elective deferrals
and employer matching contributions to such plans in plan years beginning on or
after January 1, 1989 shall not be used to meet the minimum contribution
requirements of this Subsection.

                           (b) The percentage set forth in Subsection (a) shall
be reduced to the percentage at which contributions, including forfeitures, are
made (or are required to be made) for a Plan Year for the Key Employee for whom
such percentage is the highest for that Plan Year. This percentage shall be
determined

                                       78
<PAGE>   79
for each Key Employee by dividing the contribution for such Key Employee by his
Compensation for the Plan Year. All defined contribution plans required to be
included in an Aggregation Group shall be treated as one plan for the purpose of
this Section; however, this Section shall not apply to any plan which is
required to be included in the Aggregation Group if such plan enables a defined
benefit plan in the group to meet the requirements of section 401(a)(4) or
section 410 of the Code.

                           (c) If a Non-Key Employee described in Subsection (a)
participates in both a defined benefit plan and a defined contribution plan
described in Paragraphs (a)(1) and (a)(2) of Section 13.2, the Participating
Company is not required to provide such Employee with both the minimum benefit
under the defined benefit plan and the minimum contribution. In such event, the
Non-Key Employee shall receive a total minimum Company contribution (including
forfeitures) under all plans in the Aggregation Group of not less than five
percent (5%) of the Non-Key Employee's Compensation, unless he is entitled to
the contribution described in Subsection 13.6(c).

                  13.4 Vesting. The vested interest in his Profit Sharing
Account and Matching Contribution Account of each Participant with one or more
Hours of Service in a Plan Year in which the Plan is a Top-Heavy Plan shall
continue to be determined in accordance with the schedule provided in Section
6.1.

                  13.5 Social Security. The Plan, for each Plan Year in which it
is a Top-Heavy Plan, must meet the requirements of this Article without regard
to any Social Security or similar contributions or benefits.

                  13.6 Adjustment to Maximum Benefit Limitation.

                           (a) For each Plan Year in which the Plan is (1) a
Super Top-Heavy Plan or (2) a Top-Heavy Plan and the Board of Directors does not
make the election to amend the Plan to provide the minimum contribution
described in Subsection (c), the 1.25 factor in the defined benefit and defined
contribution fractions described in section 415(e) of the Code shall be reduced
to 1.0. The adjustment described in this Subsection shall not apply to a
Participant during any period in which the Participant earns no additional
accrued benefit under any defined benefit plan and has

                                       79
<PAGE>   80
no employer contributions, forfeitures, or voluntary nondeductible contributions
allocated to his accounts under any defined contribution plan.

                           (b) In the case of any Top-Heavy Plan to which
section 415(e)(6) of the Code applies, "$41,500" shall be substituted for
"$51,875" in the calculation of the numerator of the transition fraction.

                           (c) If, in any Plan Year in which the Plan is a
Top-Heavy Plan but not a Super Top-Heavy Plan, the Aggregation Group also
includes a defined benefit plan, the Board of Directors may elect to use a
factor of 1.25 in computing the denominator of the defined benefit and defined
contribution fractions described in section 415(e)(3) of the Code. In the event
of such election, the minimum contribution described in Section 13.3(a) for each
Non-Key Employee who is not covered under a defined benefit plan shall be
increased to four percent (4%), and the minimum Company contribution described
in Section 14.3(c) hereof for each Non-Key Employee who is covered under a
defined benefit plan (but who does not have a minimum benefit under the defined
benefit plan equal to the lesser of (1) three percent (3%) of his Top-Heavy
Compensation multiplied by his Years of Top-Heavy Service or (2) thirty-percent
(30%) of his Top-Heavy Compensation) shall be increased to seven and one-half
percent (7-1/2%).

                                       80
<PAGE>   81
                                   ARTICLE XIV

                               GENERAL PROVISIONS


                  14.1 No Employment Rights. Neither the action of the Company
in establishing the Plan, nor of any Participating Company in adopting the Plan,
nor any provisions of the Plan, nor any action taken by the Company, any
Participating Company or the Committee shall be construed as giving to any
Employee the right to be retained in the employ of the Company or any
Participating Company, or any right to payment except to the extent of the
benefits provided in the Plan to be paid from the Fund.

                  14.2 Governing Law. Except to the extent superseded by ERISA,
all questions pertaining to the validity, construction, and operation of the
Plan shall be determined in accordance with the laws of the state in which the
principal place of business of the Company is located.

                  14.3 Severability of Provisions. If any provision of this Plan
is determined to be void by any court of competent jurisdiction, the Plan shall
continue to operate and, for the purposes of the jurisdiction of that court
only, shall be deemed not to include the provisions determined to be void.

                  14.4 No Interest in Fund. No person shall have any interest
in, or right to, any part of the principal or income of the Fund, except as and
to the extent expressly provided in this Plan and in the Trust Agreement.

                  14.5 Spendthrift Clause. No benefit payable at any time under
this Plan and no interest or expectancy herein shall be anticipated, assigned,
or alienated by any Participant or beneficiary, or subject to attachment,
garnishment, levy, execution, or other legal or equitable process, except for
(1) a Federal tax levy made pursuant to section 6331 of the Code and (2) any
benefit payable pursuant to a qualified domestic relations order. Any attempt to
alienate or assign a benefit hereunder, whether currently or hereafter payable,
shall be void.

                  14.6 Incapacity. If the Committee deems any Participant who is
entitled to receive payments hereunder incapable of receiving or disbursing the
same by reason of Age,

                                       81
<PAGE>   82
illness, infirmity, or incapacity of any kind, the Committee may direct the
Trustee to apply such payments directly for the comfort, support, and
maintenance of such Participant, or to pay the same to any responsible person
caring for the Participant who is determined by the Committee to be qualified to
receive and disburse such payments for the Participant's benefit; and the
receipt of such person shall be a complete acquittance for the payment of the
benefit. Payments pursuant to this Section shall be complete discharge to the
extent thereof of any and all liability of the Participating Companies, the
Committee, the Trustee, and the Fund.

                  14.7 Withholding. The Committee and the Trustee shall have the
right to withhold any and all state, local, and Federal taxes which may be
withheld in accordance with applicable law.

                  14.8 Missing Persons. Neither the Trustee nor any
Participating Company shall be obliged to search for or ascertain the
whereabouts of any individual entitled to benefits under the Plan. Any
individual entitled to benefits under the Plan who does not file a timely claim
for his benefits will be allowed to file a claim at any later date, and payment
of his benefits will commence after that later date, except that, in the event
the Participating Company is satisfied that a Participant has no spouse or that
a Participant's spouse cannot be located (as described in Section 5.8, and the
Participant is in fact married or the spouse is later located, whichever is
applicable, such spouse shall not be deemed an individual entitled to benefits
under the Plan.

                                       82
<PAGE>   83
                                   ARTICLE XV
                           RIGHTS OF ALTERNATE PAYEES


                  15.1 General. Except as otherwise provided in this Article, an
Alternate Payee shall have no rights to a Participant's benefit and shall have
no rights under this Plan other than those rights specifically granted to the
Alternate Payee pursuant to a Qualified Domestic Relations Order.
Notwithstanding the foregoing, an Alternate Payee shall have the right to appeal
the denial of a claim for any benefits awarded to the Alternate Payee pursuant
to a Qualified Domestic Relations Order, as provided in Section 10.4. Any
interest of an Alternate Payee in the Accounts of a Participant, other than an
interest payable solely upon the Participant's death pursuant to a Qualified
Domestic Relations Order which provides that the Alternate Payee shall be
treated as the Participant's surviving spouse, shall be separately accounted for
by the Trustee in the name and for the benefit of the Alternate Payee.

                  15.2 Distribution.

                           (a) Notwithstanding anything in this Plan to the
contrary, a Qualified Domestic Relations Order may provide that any benefits of
a Participant payable to an Alternate Payee shall be distributed immediately or
at any other time specified in the order. If the order does not specify the time
at which benefits shall be payable to the Alternate Payee, the benefits shall be
distributed to the Alternate Payee immediately.

                           (b) If a Qualified Domestic Relations Order does not
provide the form of distribution of benefits payable to an Alternate Payee, the
Alternate Payee shall have the right to elect distribution in any form provided
under Article V, except that benefits to be paid in installments may not be paid
over a period exceeding the life expectancy of the Alternate Payee, determined
as of the date of the first distribution.

                           (c) If the Qualified Domestic Relations Order does
not specify the Investment Media from which amounts shall be paid to an
Alternate Payee, such amounts shall be distributed from the Investment Media in
which such Accounts are invested on a pro rata basis.

                                       83
<PAGE>   84
                  15.3 Withdrawals. Unless a Qualified Domestic Relations Order
provides to the contrary, an Alternate Payee shall not be permitted to make any
withdrawals under Article VIII.

                  15.4 Death Benefits. Unless a Qualified Domestic Relations
Order provides to the contrary, an Alternate Payee shall have the right to
designate a beneficiary, in the same manner as provided in Section 5.8 with
respect to a Participant (except that no spousal consent shall be required), who
shall receive benefits payable to the Alternate Payee which have not been
distributed at the time of the Alternate Payee's death. If the Alternate Payee
does not designate a beneficiary, or if the beneficiary predeceases the
Alternate Payee, benefits payable to the Alternate Payee which have not been
distributed shall be paid to the Alternate Payee's estate.

                  15.5 Investment Direction. Unless a Qualified Domestic
Relations Order provides to the contrary, an Alternate Payee shall have the
right to direct the investment of any portion of a Participant's Accounts
payable to the Alternate Payee under such order in the same manner as provided
in Article XI with respect to a Participant, which amounts shall be separately
accounted for by the Trustee in the Alternate Payee's name.

                  Executed by the duly authorized officers of the Company on
behalf of the Company and each other Participating Company this 20th day of
December, 1996.


                                      FPA MEDICAL MANAGEMENT, INC.


                                      By: /s/Cheryl A. Moore
                                         --------------------------------
                                               Title:

Attest: /s/J. A. Lebovitz
      -------------------------------
             Secretary

[SEAL]

                                       84
<PAGE>   85
                                   SCHEDULE A

                  MINIMUM DISTRIBUTION INCIDENTAL BENEFIT TABLE


                                     TABLE I

<TABLE>
<CAPTION>
         Excess of Age of Participant              Applicable
         over Age of beneficiary                   percentage
         -----------------------                   ----------
<S>                                                   <C>
                  10 years or less.....................100%
                  11................................... 96%
                  12................................... 93%
                  13................................... 90%
                  14................................... 87%
                  15................................... 84%
                  16................................... 82%
                  17................................... 79%
                  18................................... 77%
                  19................................... 75%
                  20................................... 73%
                  21................................... 72%
                  22................................... 70%
                  23................................... 68%
                  24................................... 67%
                  25................................... 66%
                  26................................... 64%
                  27................................... 63%
                  28................................... 62%
                  29................................... 61%
                  30................................... 60%
                  31................................... 59%
                  32................................... 59%
                  33................................... 58%
                  34................................... 57%
                  35................................... 56%
                  36................................... 56%
                  37................................... 55%
                  38................................... 55%
                  39................................... 54%
                  40................................... 54%
                  41................................... 53%
                  42................................... 53%
                  43................................... 53%
</TABLE>

                                       85
<PAGE>   86
<TABLE>
<CAPTION>
<S>                                                     <C>
                  44 and greater....................... 52%
</TABLE>

                                       86
<PAGE>   87
                                   APPENDIX A

                                PREDECESSOR PLANS


         A.1 Predecessor Plans. The following plans have been merged into the
Plan effective January 1, 1997, and have had their assets transferred to the
Plan as soon as practicable thereafter:

                  (a)      Arizona Managed Care Providers, Ltd. 401(k) Profit
                           Sharing Plan (the "Arizona Plan")

                  (b)      FPA Medical Group of California, An Osteopathic
                           Medical Corporation, 401(k) Salary Savings Plan
                           (the "California Plan")

                  (c)      Family Practice Associates of San Diego, Inc.
                           401(k) Salary Savings Plan (the "San Diego Plan")

                  (d)      Gonzaba Medical Group 401(k) Plan (the "Gonzaba
                           Plan")

         A.2 Special Provisions Applicable to Participants with Transfer
Accounts. The following provisions shall apply only to the Participants who had
participated in a specified Predecessor Plan and have Transfer Accounts
hereunder. Additionally, the following provisions supplement the provisions of
the Plan, and to the extend there is any discrepancy, the terms of this Appendix
shall control.

                  (a) Arizona Plan.

                           (1) Distribution of Transfer Accounts. With respect
to a Participant who has a Transfer Account from the Arizona Plan:

                                    (A) The provisions of Section 5.11 shall
apply with respect to such Transfer Account.

                                    (B) In addition to the modes of distribution
provided under Sections 5.7 and 5.11 of the Plan, the Participant may elect in
writing to have his interest in his Transfer Account paid to him or applied for
his benefit in approximately equal

                                      A-1
<PAGE>   88
monthly, quarterly, or annual installments over a period not to exceed the
lesser of:

                                            (i) the life expectancy of the
Participant or the joint and survivor life expectancy of the Participant and his
beneficiary (with such life expectancy to be determined in accordance with
applicable regulations under the Code); or

                                            (ii) unless the sole beneficiary is
the Participant's spouse, the maximum number of years determined under Table I
of this Appendix A.

                                    (C) Notwithstanding any Plan provision to
the contrary, each Transfer Account shall be distributed in a manner that
permits the Plan to satisfy the requirements of section 401(a)(9) of the Code
and regulations thereunder, including the incidental death benefit requirements
of section 401(a)(9)(G) of the Code.

                  (b) California Plan.

                           (1) Distribution of Transfer Account.

                                    (A) A Participant may elect to have the
distribution of his Transfer Account paid in cash, in securities, or other
assets in-kind, or in any combination thereof.

                                    (B)     In addition to the normal mode of
distribution provided under Section 5.7 of the Plan, a Participant who has a
Transfer Account from the San Diego Plan may elect in writing to have his
interest in his Transfer Account paid to him or applied for his benefit in
approximately equal installments that are made at least annually over a period
not to exceed the lesser of:

                                            (i) the life expectancy of the
Participant or the joint and survivor life expectancy of the Participant and his
beneficiary (with such life expectancy to be determined in accordance with
applicable regulations under the Code); or

                                      A-2
<PAGE>   89
                                            (ii) unless the sole beneficiary is
the Participant's spouse, the maximum number of years determined under Table I
of this Appendix A.

                                    (C) Notwithstanding any Plan provision to
the contrary, each Transfer Account shall be distributed in a manner that
permits the Plan to satisfy the requirements of section 401(a)(9) of the Code
and regulations thereunder, including the incidental death benefit requirements
of section 401(a)(9)(G) of the Code.

                  (c) San Diego Plan.

                           (1) Normal Retirement Age. For a Participant who
participated in the San Diego Plan prior to January 1, 1997, Normal Retirement
Age shall mean the attainment of Age 55 or, if later, the 10th anniversary of
the date of participation in the Plan; but in no event later than Age 65.

                           (2) Distribution of Transfer Account.

                                    (A) A Participant may elect to have the
distribution of his Transfer Account paid in cash, in securities, or other
assets in-kind, or in any combination thereof.

                                    (B) In addition to the normal mode of
distribution provided under Section 5.7 of the Plan, a Participant who has a
Transfer Account from the San Diego Plan may elect in writing to have his
interest in his Transfer Account paid to him or applied for his benefit in

                                            (i) approximately equal monthly,
quarterly, or annual installments over a period not to exceed the lesser of:

                                                (I) the life expectancy of the
Participant or the joint and survivor life expectancy of the Participant and his
beneficiary (with such life expectancy to be determined in accordance with
applicable regulations under the Code); or

                                                (II) unless the sole
beneficiary is the Participant's spouse, the maximum number of years
determined under Table I of this Appendix A; or

                                      A-3
<PAGE>   90
                                            (ii) a single sum payment; or

                                            (iii) a combination of the above.

                                    (C) Notwithstanding any Plan provision to
the contrary, each Transfer Account shall be distributed in a manner that
permits the Plan to satisfy the requirements of section 401(a)(9) of the Code
and regulations thereunder, including the incidental death benefit requirements
of section 401(a)(9)(G) of the Code.

                  (d) Gonzaba Plan.

                           (1) Normal Retirement Date. For a Participant who
participated in the Gonzaba Plan prior to January 1, 1997, Normal Retirement
Date shall mean the first of the month in which the Participant attains Normal
Retirement Age.

                           (2) Distribution of Transfer Account. In addition to
the normal mode of distribution provided under Section 5.7 of the Plan, a
Participant who has a Transfer Account from the Gonzaba Plan may elect in
writing to have his interest in his Transfer Account paid to him or applied for
his benefit in approximately equal monthly installments over a period not to
exceed the lesser of:

                                    (A) the life expectancy of the Participant
or the joint and survivor life expectancy of the Participant and his beneficiary
(with such life expectancy to be determined in accordance with applicable
regulations under the Code); or

                                    (B) unless the sole beneficiary is the
Participant's spouse, the maximum number of years determined under Table I of
this Appendix A.

                           (3) Notwithstanding any Plan provision to the
contrary, each Transfer Account shall be distributed in a manner that permits
the Plan to satisfy the requirements of section 401(a)(9) of the Code and
regulations thereunder, including the incidental death benefit requirements of
section 401(a)(9)(G) of the Code.

                                      A-4
<PAGE>   91
<TABLE>
<CAPTION>
                              TABLE I TO APPENDIX A

               Age of Participant
               in calendar year
               preceding Required
               Beginning Date                                                           Maximum Years
               --------------                                                           -------------
    Remaining
    ---------
<S>                                                                                        <C>
                     70................................................................... 26.2
                     71................................................................... 25.3
                     72................................................................... 24.4
                     73................................................................... 23.5
                     74................................................................... 22.7
                     75................................................................... 21.8
                     76................................................................... 20.9
                     77................................................................... 20.1
                     78................................................................... 19.2
                     79................................................................... 18.4
                     80................................................................... 17.6
                     81................................................................... 16.8
                     82................................................................... 16.0
                     83................................................................... 15.3
                     84................................................................... 14.5
                     85................................................................... 13.8
                     86................................................................... 13.1
                     87................................................................... 12.4
                     88................................................................... 11.8
                     89................................................................... 11.1
                     90................................................................... 10.5
                     91...................................................................  9.9
                     92...................................................................  9.4
                     93...................................................................  8.8
                     94...................................................................  8.3
                     95...................................................................  7.8
                     96...................................................................  7.3
                     97...................................................................  6.9
                     98...................................................................  6.5
                     99...................................................................  6.1
                    100...................................................................  5.7
                    101...................................................................  5.3
                    102...................................................................  5.0
                    103...................................................................  4.7
                    104...................................................................  4.4
                    105...................................................................  4.1
</TABLE>

                                      A-5
<PAGE>   92
<TABLE>
<CAPTION>
<S>                                                                                         <C>
                    106...................................................................  3.8
                    107...................................................................  3.6
                    108...................................................................  3.4
                    109...................................................................  3.2
                    110...................................................................  2.8
                    111...................................................................  2.6
                    112...................................................................  2.4
                    113...................................................................  2.2
                    114...................................................................  2.0
                    115 and older.........................................................  1.8
</TABLE>

                                      A-6