PSC INC. 401(k) PLAN

                                THIRD RESTATEMENT
                             EFFECTIVE JULY 1, 1997





         Prepared By: BOYLAN, BROWN, CODE, FOWLER, VIGDOR & WILSON, LLP



<PAGE>


TABLE OF CONTENTS


-------------------------------------------------------------------------------
Article 1. - PRELIMINARY MATTERS    1
         1.1      Establishment of Plan
         1.2      Purpose of Plan
         1.3      Mistake of Fact
         1.4      Mistake of Law
         1.5      Return of Employer Contribution

-------------------------------------------------------------------------------
Article 2. - DEFINITIONS   3
         2.1      Accrued Benefit
         2.2      Actual Contribution Percentage
         2.3      Actual Deferral Percentage
         2.4      Anniversary Date
         2.5      Annual Additions
         2.6      Annuity Starting Date
         2.7      Beneficiary
         2.8      Board
         2.9      Calendar Year
         2.10     Compensation
         2.11     Determination Date
         2.12     Effective Date
         2.13     Eligibility Computation Period
         2.14     Employee
         2.15     Employer
         2.16     ERISA
         2.17     Fiscal Year
         2.18     Five Percent Owner
         2.19     Former Key Employee
         2.20     Fund
         2.21     Highly Compensated Participant
         2.22     Hour of Service
         2.23     Internal Revenue Code
         2.24     Key Employee
         2.25     Key Officer
         2.26     Key Owner
         2.27     Labor Agreement
         2.28     Leased Employee
         2.29     Limitation Year
         2.30     Minimum Allocation
         2.31     Non-Key Employee
         2.32     Normal Retirement Date
         2.33     One Percent Owner
         2.34     Participant
         2.35     Participating Employer
         2.36     Permissive Aggregation Group
         2.37     Plan
         2.38     Plan Year
         2.39     Qualified Matching Contribution
         2.40     Qualified Non-Elective Contribution
         2.41     Required Aggregation Group
         2.42     Retirement Committee
         2.43     Salary Reduction Agreement
         2.44     Spouse
         2.45     Super Top Heavy
         2.46     Top Heavy
         2.47     Top Heavy Ratio
         2.48     Trust Agreement

<PAGE>

         2.49     Trustee
         2.50     Valuation Date
         2.51     Valuation Period
         2.52     Vesting Computation Period
         2.53     Year of Service

-------------------------------------------------------------------------------
Article 3. - PARTICIPATION 18
         3.1      Eligibility Requirements
         3.2      Entry Date
         3.3      Exclusion for Collective Bargaining Employees
         3.4      Other Exclusions
         3.5      Special Participation Provisions
         3.6      Continued Participation

-------------------------------------------------------------------------------
Article 4. - CONTRIBUTIONS 20
         4.1      Employee Contributions
         4.2      Employer Contributions
         4.3      Time of Contribution
         4.4      Deferral Percentage Test
         4.5      Contribution Percentage Test
         4.6      Dollar Limit on Elective Deferrals
         4.7      Rollover Contributions
         4.8      Irrevocability of Contributions
         4.9      Contribution Records
         4.10     Administrative Expenses

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

Article 5. - CREDITS TO PARTICIPANTS        25
         5.1      Maintenance of Accounts
         5.2      Allocation of Employer Contributions
         5.3      Annual Additions
         5.4      Allocation of Excess Contributions
         5.5      Valuation of Accounts
         5.6      Limitation

-------------------------------------------------------------------------------
Article 6. - VESTING OF BENEFITS    27
         6.1      Employee Contributions
         6.2      Employer Contributions

-------------------------------------------------------------------------------
Article 7. - DISTRIBUTION OF BENEFITS       28
         7.1      Application
         7.2      Normal and Late Retirement
         7.3      Death Benefit
         7.4      Other Termination of Employment
         7.5      After-Tax and Rollover Contributions
         7.6      In-Service Distributions
         7.7      Hardship Withdrawals
         7.8      Consent to Distribution
         7.9      Facility of Payment
         7.10     Limitation

-------------------------------------------------------------------------------
Article 8. - REQUIRED DISTRIBUTIONS 32
         8.1      Delay of Distributions By Employer
         8.2      Delay of Distributions By Participants
         8.3      Minimum Distributions
         8.4      Distributions Upon Death

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

<PAGE>

Article 9. - FORM OF DISTRIBUTION   34
         9.1      Optional Forms of Distribution
         9.2      Designation of Beneficiaries
         9.3      Notice of Requirements
         9.4      Eligible Rollover Distribution

-------------------------------------------------------------------------------
Article 10. - TOP HEAVY REQUIREMENTS        36
         10.1     Minimum Allocations

-------------------------------------------------------------------------------
Article 11. - ADMINISTRATION OF THE PLAN    37
         11.1     Appointment of Retirement Committee
         11.2     Named Fiduciaries
         11.3     Responsibilities of Retirement Committee
         11.4     Delegation of Responsibilities
         11.5     Third Party Contracts
         11.6     Meetings
         11.7     Expenses
         11.8     Reports
         11.9     Plan Administrator
         11.10    Indemnification

-------------------------------------------------------------------------------
Article 12. - AMENDMENT AND TERMINATION OF THE PLAN  40
         12.1     Amendment
         12.2     Termination
         12.3     Satisfaction of Liabilities

-------------------------------------------------------------------------------
Article 13. - ESTABLISHMENT OF THE TRUST    42
         13.1     Trust Agreement
         13.2     Duties of the Trustee
         13.3     Direction of Investment by Participants
         13.4     Loans to Participants

-------------------------------------------------------------------------------
Article 14. - GENERAL PROVISIONS    44
         14.1     Employment Status
         14.2     Nonalienation of Benefits
         14.3     Impossibility of Performance
         14.4     Construction
         14.5     Termination of Trust
         14.6     Governing Law
         14.7     Mergers and Transfers
         14.8     Participating Employers
         14.9     Claims Procedure
         14.10    Appeal Procedure
         14.11    Counterparts


<PAGE>


1.    PRELIMINARY MATTERS

1.1.     Establishment of Plan
The Plan  evidenced  by this  instrument  shall be known as the PSC Inc.  401(k)
Plan.  The Plan was adopted by the Employer  effective July 1, 1985 and has been
amended as follows:

        AMENDMENT                                                 EFFECTIVE DATE

        Amendment 1   (amended and restated)                     January 1, 1989
        Amendment 2   (amended and restated)                     October 1, 1995
        Amendment 3   (this amendment and restatement)              July 1, 1997

1.2.     Purpose of Plan
The Plan is  established  for the purpose of providing  retirement  benefits for
eligible  Employees  of the  Employer.  Except as  provided  in this Plan and as
permitted by law, under no circumstances  shall any part of the corpus or income
of the Fund be used for or diverted to purposes other than the exclusive benefit
of the Employees of the Employer and their Beneficiaries.

1.3.     Mistake of Fact
If all or part of a  contribution  is made by the Employer as a result of a good
faith mistake of fact,  an amount equal to the excess of the amount  contributed
over the amount which would have been  contributed  had the mistake not occurred
may be  returned  to the  Employer  within  one  year  after  it was paid to the
Trustees.

1.4.     Mistake of Law
If a contribution is conditioned  upon its  deductibility  by the Employer under
Section  404  of the  Internal  Revenue  Code  and if  the  Employer  makes  the
contribution   as  a  result  of  a  good  faith  mistake  in  determining   its
deductibility,  upon  disallowance  of the  deduction  by the  Internal  Revenue
Service,  the  contribution  may be  returned  to the  Employer  to the extent a
deduction was not allowed, within one year after the disallowance becomes final.

1.5.     Return of Employer Contribution
In  determining  the amount to be  returned  to the  Employer  in the event of a
mistaken contribution the following rules shall apply.
(1) Earnings  attributable to the excess  contribution  shall not be returned to
the Employer.
(2) Losses attributable to the excess contribution shall reduce the amount to be
returned to the Employer.
(3) If the withdrawal of the amount  attributable  to the mistaken  contribution
would  cause the  balance of the  individual  account of any  Participant  to be
reduced to less than the  balance  which  would have been in the account had the
mistaken amount not been  contributed,  then the amount returned to the Employer
shall be limited to the extent necessary to avoid the reduction.
<PAGE>

DEFINITIONS

1.6.     Accrued Benefit
"Accrued  Benefit"  means the value of a  Participant's  Accounts  determined in
accordance with Article 5.

1.7.     Actual Contribution Percentage
"Actual  Contribution  Percentage"  means the average of the ratios,  calculated
separately for each Participant in the group, of the matching contributions made
to this  Plan on  behalf  of each  Participant  (including  any  forfeitures  of
matching  contributions  and  forfeitures  of  contributions  in  excess  of the
contribution  percentage  limits  specified  in Section  4.5 of the Plan) to the
Compensation of the Participant.

(1) At the discretion of the Employer,  the  calculation of Actual  Contribution
Percentages   also  may  include  the  amount  of  any   elective  or  Qualified
Non-Elective  Contributions made to the Plan on behalf of each Participant.  The
amount of any elective contributions,  matching  contributions,  or non-elective
contributions used to satisfy the Deferral Percentage Test of Section 4.4 of the
Plan shall not be used in the calculation of Actual Contribution Percentages. In
addition,  the calculation of Actual Contribution  Percentages shall not include
the amount of any matching  contributions  that are  forfeited  because (i) they
exceed the  contribution  limits stated in Section 4.5 of the Plan, or (ii) they
relate to contributions in excess of the deferral limit stated in Section 4.4 of
the Plan or the dollar limit stated in Section 4.6 of the Plan.

(2) The Actual  Contribution  Percentage for any Highly Compensated  Participant
for the Plan Year who is eligible to participate in two or more qualified  plans
maintained by the Employer shall be determined as if all matching  contributions
were made to a single plan. If a Highly Compensated Participant  participates in
two or more qualified  plans that have  different  Plan Years,  all plans ending
with or within the same Calendar Year shall be treated as a single plan.
<PAGE>

(3) In the event that the Plan satisfies the  requirements  of Sections  401(k),
401(a)(4), or 410(b) of the Internal Revenue Code only if aggregated with one or
more other plans, or if one or more other plans satisfy those  requirements only
if aggregated  with this Plan,  then the Actual  Contribution  Percentage of all
Participants  shall be  determined  as if all of these plans were a single plan.
For Plan Years  beginning  after  December 31, 1989,  plans may be aggregated in
order to satisfy  Section 401(m) of the Internal  Revenue Code only if they have
the same Plan Year.  (4) The  Employer  shall  maintain  records  sufficient  to
demonstrate  satisfaction  of the Actual  Contribution  Percentage  test and the
amount of any matching or non-elective contributions used in the test.

1.8.     Actual Deferral Percentage
"Actual  Deferral  Percentage"  means  the  average  of the  ratios,  calculated
separately for each Participant in the group, of the elective  contribution made
to  this  Plan  on  behalf  of  each  Participant  to the  Compensation  of that
Participant.  For  purposes  of this  calculation,  an  Employee  who would be a
Participant but for the failure to make elective contributions to the Plan shall
be treated as a Participant who makes no elective  contribution to the Plan. (1)
At  the  discretion  of  the  Employer,   the  calculation  of  Actual  Deferral
Percentages also may include the amount of any Qualified Matching  Contributions
or  Qualified  Non-Elective  Contributions  made to the Plan on  behalf  of each
Participant.  The amount of any excess  elective  contributions  distributed  to
Participants  on or before April 15 of the following  Calendar Year shall not be
used in the calculation of Actual Deferral Percentages.  (2) The Actual Deferral
Percentage  for any  Highly  Compensated  Participant  for the Plan  Year who is
eligible to participate  in two or more Section  401(k) plans  maintained by the
Employer  shall  be  determined  as  if  all  elective  contributions  (and,  if
applicable,  any matching contributions or non-elective  contributions described
in  Section  (1)  above)  were made to a single  plan.  If a Highly  Compensated
Participant  participates  in two or more 401(k) plans that have  different Plan
Years,  all plans ending with or within the same  Calendar Year shall be treated
as a single plan. (3) In the event that the Plan satisfies the  requirements  of
Sections  401(k),  401(a)(4),  or 410(b) of the  Internal  Revenue  Code only if
aggregated  with one or more other plans,  or if one or more other plans satisfy
those  requirements  only if aggregated with this Plan, then the Actual Deferral
Percentage of all Participants shall be determined as if all of these plans were
a single plan. For Plan Years  beginning  after December 31, 1989,  plans may be
aggregated in order to satisfy Section 401(k) of the Internal  Revenue Code only
if they  have the same  Plan  Year.  (4) The  Employer  shall  maintain  records
sufficient to demonstrate  satisfaction of the Actual  Deferral  Percentage test
and the amount of any matching or non-elective contributions used in the test.

1.9.    Anniversary Date
"Anniversary  Date"  means the last day falling  within any Plan Year.  When the
context  requires that a computation be made on an Anniversary Date which is not
a  business  day,  the  computation  shall be made as of the last  business  day
preceding the Anniversary Date.
<PAGE>

1.9.1    Annual Additions
"Annual  Additions" means amounts credited to the accounts of Participants under
the Plan, any other defined  contribution  plan maintained by the Employer,  and
certain  welfare  funds  maintained  by the  Employer as follows:  (i)  Employer
contributions; (ii) Participant contributions; (iii) allocations of forfeitures;
(iv)  contributions in excess of the deferral  percentage limits or contribution
percentage  limits  specified in Sections  4.4 and 4.5 of the Plan;  (v) amounts
allocated, after March 31, 1984, to an individual medical account, as defined in
Section  415(l)(2) of the Internal  Revenue Code,  which is part of a pension or
annuity  plan  maintained  by  the  Employer;  and  (vi)  amounts  derived  from
contributions  paid or accrued  prior to December  31,  1985,  in taxable  years
ending  after that  date,  which are  attributable  to  post-retirement  medical
benefits  allocated  to the separate  account of a Key Employee  under a welfare
benefit  fund,  as defined  in  Section  419(e) of the  Internal  Revenue  Code,
maintained  by the  Employer.  Rollover  contributions  shall not be  treated as
Annual  Additions.  Elective  contributions in excess of the limits specified in
Section 4.6 shall be treated as Annual  Additions  unless the excess amounts are
distributed  to the  Participants  no later than April 15 of the  Calendar  Year
following the end of the taxable year in which the excess contribution occurred.
For purposes of this definition,  Employer includes any organization required to
be  aggregated  with the  Employer  under  Section  414(b),  (c),  or (m) of the
Internal Revenue Code.

1.10.    Annuity Starting Date
"Annuity  Starting  Date"  means the first day of the first  period for which an
amount is payable as an annuity, or any other form.

1.11.    Beneficiary
"Beneficiary"  means a person who is so designated  by a Participant  to receive
any death benefits payable under this Plan.

1.12.    Board
"Board" means the Board of Directors of the Employer.
<PAGE>

1.13.    Calendar Year
"Calendar Year" means the calendar year ending with or within the Plan Year.

1.14.    Compensation
"Compensation" is determined in different ways for different purposes under the
Plan.
(1) For purposes of determining  contributions  and allocations under Articles 4
and 5, Compensation means regular wages, overtime, premium pay, and commissions,
and excludes bonuses,  profit-sharing payouts, car allowances, and other special
benefits  paid to  Participants  during the Plan Year.  Compensation  also shall
include  elective  contributions  made by the Employer on behalf of Participants
that are not includable in gross income under Section 125 and Section  402(e)(3)
of the  Internal  Revenue  Code.  Compensation  shall be measured on a Plan Year
basis for all  Participants  regardless of their entry date.
(2) For purposes of calculating  annual additions under Section 5.4 of the Plan,
Compensation  means a  Participant's  wages,  salary,  earned  income,  fees for
professional  services,  and any other  amounts  received for personal  services
actually rendered in the course of employment with the Employer (including,  but
not limited to, commissions, premiums, tips, bonuses, fringe benefits includable
in the gross income of the Participant, and the value of any non-qualified stock
option includable in gross income of the Participant for the year of the grant).
For purposes of this definition, Compensation shall exclude the following:

          (i)   Contributions to a plan of deferred  compensation  which are not
                includable in the  Employee's  gross income for the taxable year
                in which contributed,  contributions under a simplified employee
                pensions plan to the extent such contributions are deductible by
                the  Employer,  or any  distributions  from a plan  of  deferred
                compensation;


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


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


          (iv)  Other  fringe  benefits  excludable  from  gross  income  of the
                Participant,  or  contributions  made by the  Employer,  under a
                salary reduction agreement or otherwise, towards the purchase of
                an annuity  described in Section 403(b) of the Internal  Revenue
                Code  (whether or not the amounts are actually  excludable  from
                the gross income of the employee).
<PAGE>

For purposes of applying the restrictions of this subsection, Compensation for a
Limitation  Year is the  Compensation  actually paid or included in gross income
during  the  Limitation  Year.  (3) For  purposes  of the  definition  of Highly
Compensated   Participant,   Compensation  means  the  amount  determined  under
subsection  (2) above,  but adjusted to include the amount of any  contributions
made by the Employer on behalf of Participants  that are not includable in gross
income under Section 125 or Section  402(e)(3) of the Internal Revenue Code. (4)
For  purposes  of the  definition  of  Actual  Deferral  Percentage  and  Actual
Contribution   Percentage,   Compensation  means  the  amount  determined  under
subsection (3) above  calculated from the date the Participant  enters the Plan.
(5) For purposes of the definitions of Key Officer,  Key Owner,  and One Percent
Owner,  Compensation  has the same meaning as set forth in subsection (3) above.
For purposes of determining  the minimum Top Heavy benefit under Section 10.1 of
the Plan,  Compensation  has the same  meaning  as set forth in  subsection  (2)
above.  Alternatively,  the Employer  may elect to use the income  stated on the
Participant's  Form W-2 for the Calendar  Year that ends with or within the Plan
Year to determine the minimum top heavy benefit.  (6) For all purposes under the
Plan, the Compensation  taken into account for each Participant  during any Plan
Year beginning prior to January 1, 1994 shall not exceed $200,000.00 (subject to
annual  cost-of-living  adjustments  under  Section  401(a)(17)  of the Internal
Revenue  Code),  and the  Compensation  taken into account for each  Participant
during  any Plan Year  beginning  on or after  January  1, 1994 shall not exceed
$150,000 (subject to adjustments in $10,000 increments).

1.15.    Determination Date
"Determination  Date"  means the last day of the Plan Year with  respect  to the
first Plan Year of the Plan,  and the last day of the  preceding  Plan Year with
respect to any Plan Year after the first.

1.16.    Effective Date
"Effective  Date" with respect to the  Employer  means July 1, 1985,  and,  with
respect to any  Participating  Employer that adopts the Plan, the date set forth
in Appendix A opposite the Participating Employer's name.

1.17.    Eligibility Computation Period
"Eligibility  Computation Period" means the twelve month period beginning on the
date the  Employee  first  performs  an Hour of  Service  for the  Employer  and
succeeding   consecutive   twelve-month   periods   commencing  with  the  first
anniversary of the Employee's commencement date.
<PAGE>

1.18.    Employee
"Employee"  means  any  person  (but not  including  a person  acting  only as a
director)  who  performs an Hour of Service for the  Employer,  and who receives
Compensation  for  his  Service  other  than a  pension,  retirement  allowance,
retainer,  or fee under contract.  The term "Employee"  shall not include Leased
Employees, nor shall it include individuals who provide services to the Employer
but receive compensation for their services from other sources.

1.19.    Employer
"Employer" means PSC Inc.

1.20.    ERISA
"ERISA"  means the Employee  Retirement  Income  Security Act of 1974, as it has
been and may be amended, and corresponding provisions of future laws.

1.21.    Fiscal Year
"Fiscal Year" means the fiscal year of the Employer.

1.22.    Five Percent Owner
"Five  Percent  Owner"  means any  person who during the Plan Year or any of the
preceding four Plan Years owned or  constructively  owned more than five percent
of the outstanding stock,  capital, or profit interest of the Employer, or stock
possessing  more than five  percent of the total  combined  voting  power of all
stock of the Employer.

1.23.    Former Key Employee
"Former Key  Employee"  means an Employee who is not a Key Employee for the Plan
Year or any of the four  preceding  Plan Years but who was a Key Employee at any
time  preceding this period.  The  Beneficiary of a Former Key Employee shall be
considered a Former Key Employee.

1.25.    Fund
"Fund" means all moneys and property  paid or delivered to, and accepted by, the
Trustees  pursuant to the Trust Agreement and the Plan, and all investments made
therewith and proceeds  thereof and all earnings and profits  thereon,  less the
payments made by the Trustees as authorized in the Trust Agreement.

1.26.    Highly Compensated Participant
"Highly  Compensated  Participant"  means,  for Plan Years beginning on or after
January 1, 1997, any  Participant  who: (1) Owned or  constructively  owned more
than a five  percent  interest in the Employer at any time during the current or
preceding Plan Year, or (2) Received Compensation from the Employer in excess of
$80,000 (or any other  amount  prescribed  by Treasury  Regulations)  during the
preceding Plan Year. The Retirement  Committee may, in its discretion,  elect to
limit the number of Participants  that must be recognized as Highly  Compensated
under this  Subsection  (2) to those  Participants  in the top twenty percent of
Employees ranked by Compensation in the prior Plan Year, provided that the group
of  Employees  constituting  the top twenty  percent by pay shall be  determined
without regard to those Employees who:

          (i)     Have not completed six months of Service;

          (ii)    Normally work less than 17 1/2 hours per week;

          (iii)   Normally work during not more than six months in any Plan Year

          (iv)    Have not attained age 21;

          (v)     Are  included in a unit of  Employees  covered by a collective
                  bargaining  agreement  between the Employer and a union (if at
                  least  ninety  percent  of all  Employees  are  covered  under
                  collective   bargaining   agreements  and  the  Plan  excludes
                  collective bargaining employees); or

          (vi) Are non-resident aliens with no earned income from sources within
the United States.
For Plan  Years  prior to January  1,  1997,  the  status of Highly  Compensated
Participants  shall be  determined  under the  provisions  of the Plan in effect
during the applicable Plan Year.
<PAGE>

1.26.    Hour of Service
"Hour of Service" means:
(1) Each hour for which an  Employee  is  directly  or  indirectly  paid,  or is
entitled  to be paid,  by the  Employer  for the  performance  of duties for the
Employer.

(2) Each hour for which an  Employee  is paid or is  entitled  to be paid by the
Employer  on account of a period of time  during  which no duties are  performed
(irrespective  of whether the employment  relationship  has  terminated)  due to
vacation,  holiday,  illness,  incapacity (including  Disability),  layoff, jury
duty,  military  duty,  or  leave  of  absence.  Notwithstanding  the  preceding
sentence:


          (i)   No more than 501 Hours of Service  shall be credited  under this
                paragraph (2) to an Employee on account of any single continuous
                period during which the Employee  performs no duties (whether or
                not such  period  occurs in a single  computation  period).  For
                purposes  of this  subsection,  the  number of Hours of  Service
                credited  and the  computation  periods  to which  they  will be
                credited will be determined  in  accordance  with  Department of
                Labor Regulations 2530.200b-2(b) and (c).


          (ii)  An hour for which an Employee is directly or indirectly paid, or
                is entitled to payment,  on account of a period  during which no
                duties are  performed  shall not be credited to the  Employee if
                such payment is made or due under a plan  maintained  solely for
                the purpose of complying with applicable workers'  compensation,
                unemployment compensation or disability insurance laws.


          (iii) Hours of  Service  shall not be  credited  for a  payment  which
                solely  reimburses an Employee for medical or medically  related
                expenses incurred by the Employee. These hours shall be credited
                to the Employee for the  computation  period or periods in which
                the period during which no duties were performed occurs.


(3) Each hour for which back pay,  irrespective  of mitigation  of damages,  has
been  either  awarded  or agreed to by the  Employer.  The same Hours of Service
shall not be credited both under  paragraphs  (1) or (2) of this  subsection and
under this paragraph. These hours will be credited for the computation period or
periods to which the award or  agreement  pertains  rather than the  computation
period in which the award, agreement, or payment is made.


(4) Each hour for which an Employee is absent due to pregnancy of the  Employee,
birth or adoption  of the  Employee's  child,  or care of the  Employee's  child
immediately following birth or adoption. No more than eight Hours of Service per
day up to 501 Hours of Service during the relevant  computation  period shall be
credited  under  this  paragraph  (4) to an  Employee  on  account of any single
continuous  period during which the Employee  performs no duties (whether or not
such period occurs in a single  computation  period).  Hours of Service shall be
credited  under this paragraph to the Plan Year in which the absence begins only
if credit is needed to prevent the Participant from incurring a Break in Service
for that year; in any other case,  the Hours of Service shall be credited to the
following Plan Year.

Hours of Service  will be  credited  for  employment  with other  members of the
Employer's  (i)  affiliated  service group under  Internal  Revenue Code Section
414(m);  (ii)  controlled  group of  corporations  under  Internal  Revenue Code
Section 414(b);  (iii) group of trades or businesses  under common control under
Internal  Revenue Code Section  414(c);  or (iv) any other entity required to be
aggregated  with the Employer  pursuant to Internal  Revenue Code Section 414(o)
and the regulations thereunder.

1.27.    Internal Revenue Code
"Internal  Revenue Code" means the Internal Revenue Code of 1986, as amended and
corresponding provisions of future laws, as amended.

1.27.1   Key Employee
"Key Employee" means a Key Officer,  Key Owner,  Five Percent Owner, One Percent
Owner, or Beneficiary of a Key Employee,  as defined in this Plan and as further
described in Section  416(i)(1) of the Internal  Revenue Code and  corresponding
Treasury Regulations.
<PAGE>

1.28.    Key Officer
"Key  Officer"  means an officer  whose  Compensation  from the Employer and all
aggregated  organizations during the Plan Year or any of the four preceding Plan
Years exceeded  fifty percent of the dollar  limitation in effect under Internal
Revenue  Code Section  415(b)(1)(A)  for any such Plan Year,  provided  that for
purposes of this  definition,  no more than fifty  Employees,  or, if less,  the
greater of (i) three,  or (ii) ten percent of the  Employees of the Employer (or
any  organization  required to be aggregated  with the Employer  under  Sections
414(b) (c) or (m) of the Internal  Revenue Code) shall be  considered  officers.
For purposes of this definition, "officer" means an administrative executive who
was employed by the Employer (or by any  organization  required to be aggregated
with the Employer under  Sections  414(b),  (c), or (m) of the Internal  Revenue
Code) regularly and  continuously for any period of time during the Plan Year or
the four preceding Plan Years. The term includes  individuals who are designated
officers  of a  corporation  under  state law unless  their  offices  are merely
titular or are held solely for  convenience.  For  purposes of this  definition,
Compensation shall have the meaning described in Section 2.12(5) of the Plan.

1.29.    Key Owner
"Key Owner" means an Employee  who during the Plan Year or any of the  preceding
four Plan Years owned (or constructively owned under Section 318 of the Internal
Revenue  Code)  one  of the  ten  largest  interests  in the  Employer  and  all
organizations required to be aggregated with the Employer under Sections 414(b),
(c),  or (m) of the  Internal  Revenue  Code,  and whose  Compensation  from the
Employer and all aggregated  organizations exceeded $30,000 or such other amount
prescribed  under  Section  415(c)(1)(A)  of the Internal  Revenue  Code. If two
Employees  have the same  interest  in the  Employer,  the  Employee  having the
greater Compensation shall be treated as having a larger interest.  For purposes
of this  definition,  Compensation  shall have the meaning  described in Section
2.12(5) of the Plan.

1.30.    Labor Agreement
"Labor Agreement" means a collective  bargaining  agreement between the Employer
and a collective  bargaining  agent  representing  a class of employees  covered
under this Plan.

1.30.1   Leased Employee
"Leased  Employee"  means an individual  who is not employed by the Employer but
who provides  service to the Employer (or any related persons  determined  under
Internal Revenue Code Section 414(n)(6)):
         (i)  Pursuant  to an  agreement  between  the  Employer  and a  leasing
         organization,  (ii) On a substantially  full-time basis for a period of
         at least one year, and (iii) Under the primary  direction or control of
         the Employer.
For  purposes  of this  definition,  an  individual  will be deemed  to  perform
services  on a  substantially  full-time  basis  for one  year  if,  during  any
consecutive twelve-month period, (i) the individual performs at least 1500 Hours
of  Service  for the  Employer,  or (ii) the Hours of Service  performed  by the
individual equal or exceed  seventy-five  percent of the average number of hours
customarily performed by Employees in that position.

1.31.    Limitation Year
"Limitation Year" means the Plan Year.

1.32.    Minimum Allocation
"Minimum  Allocation"  means the lesser of (i) three percent of a  Participant's
Compensation,  or (ii) the largest  percentage  of  Compensation  (as limited by
Section  2.12 of the  Plan)  allocated  under  the Plan to any Key  Employee  on
account of the Plan Year,  including  the amount of any  elective  contributions
made by Key Employees.  The amount of any elective contributions made by Non-Key
Employees  and matching  contributions  made by the Employer  shall not count in
determining  their  Minimum  Allocations,  but the  amount  of any  non-elective
contributions  made by the  Employer  on behalf of  Non-Key  Employees  shall be
counted in this determination.

1.33.    Non-Key Employee
"Non-Key Employee" is an Employee who does not meet the definition of Key
Employee.

1.34.    Normal Retirement Date
"Normal Retirement Date" means the attainment of age 59 1/2.

1.35.    One Percent Owner
"One  Percent  Owner" means a person who during the Plan Year or any of the four
preceding Plan Years owned or constructively  owned more than one percent of the
outstanding  stock,  capital,  or  profit  interest  of the  Employer,  or stock
possessing more than one percent of the total combined voting power of all stock
of the Employer,  and who had annual Compensation in excess of $150,000 from the
Employer and any organization  required to be aggregated with the Employer under
Sections 414(b), (c), and (m) of the Internal Revenue Code. For purposes of this
definition,  Compensation shall have the meaning described in Section 2.12(5) of
the Plan.
<PAGE>

1.36.    Participant
"Participant" means any person included in the Plan as provided in this
instrument.

1.37.    Participating Employer
"Participating  Employer" means any corporation who, along with the Employer, is
a member of an affiliated  group of  corporations  as defined in Section 1504 of
the Code and a member of a commonly  controlled group of corporations as defined
in Section 414(b) of the Code, and who, with the consent of the Employer, adopts
this  Plan  for  the  benefit  of its  employees.  A list  of all  Participating
Employers and the Effective Date of their participation is set forth in Schedule
A to the Plan.

1.38.    Permissive Aggregation Group
"Permissive  Aggregation Group" means the Required Aggregation Group plus one or
more plans of the  Employer  which are not members of the  Required  Aggregation
Group but which satisfy the minimum participation  standards of Sections 410 and
401(a)(1)  (4) of the Internal  Revenue Code when  considered  together with the
Required Aggregation Group.

1.39.    Plan
"Plan" means PSC Inc. 401(k) Plan as set forth in this document or as amended
 from time to time.

1.40.    Plan Year
"Plan Year" means any 12 consecutive calendar months commencing on January 1.

1.41.    Qualified Matching Contributions
"Qualified Matching  Contributions"  means matching  contributions  described in
Section 4.2 of the Plan which are (i) fully and immediately vested; (ii) subject
to the distribution  limitations of Section 401(k) of the Internal Revenue Code;
(iii) not contingent on the performance of Service after the Plan Year; and (iv)
paid to the Trust within twelve months following the end of the Plan Year.

1.42.    Qualified Non-Elective Contributions
"Qualified Non-Elective Contributions" means non-elective Employer contributions
described in Section 4.2 of the Plan which are (i) fully and immediately vested;
(ii) not  available  to  Participants  until  distributed  from the Plan;  (iii)
subject  to the  distribution  limitations  of  Section  401(k) of the  Internal
Revenue Code;  (iv) not contingent on the  performance of Service after the Plan
Year;  and (v) paid to the Trust within twelve  months  following the end of the
Plan Year.

1.43.    Required Aggregation Group
"Required  Aggregation  Group" means a group of plans maintained by the Employer
or any organization  aggregated with the Employer under Sections 414(b), (c), or
(m) of the  Internal  Revenue  Code that  includes  each plan (i) in which a Key
Employee  participates  or  participated  at any time  during the  determination
period, and (ii) which enables any plan in which a Key Employee  participates to
meet the minimum  participation  standards  of Sections  401(a)(1) or 410 of the
Internal Revenue Code.  Plans  terminated  within the five-year period ending on
the Determination Date must be included in determining the Required  Aggregation
Group.

1.44.    Retirement Committee
"Retirement  Committee"  means the committee  appointed by the Board pursuant to
Article 11 of the Plan to control and manage its operation.

1.45.    Salary Reduction Agreement
"Salary  Reduction  Agreement"  means an  agreement  entered  into  between  the
Employer and a Participant under which the Participant agrees to forego a salary
increase or to reduce his  Compensation  to enable the Employer to contribute on
his behalf to the Plan.

1.46.    Spouse
"Spouse" means a wife or husband who has been  continually and lawfully  married
to a Participant on the Annuity  Starting Date, or, if the  Participant  did not
begin  receiving  distributions  prior to death,  who has been  continually  and
lawfully  married to the  Participant  on the date of the  Participant's  death.
Notwithstanding the foregoing provision,  a former Spouse will be treated as the
Spouse  and a current  Spouse  will not be  treated  as the Spouse to the extent
provided  under a qualified  domestic  relations  order as  described in Section
414(p) of the Internal Revenue Code.
<PAGE>


1.47.    Super Top Heavy
The Plan will be  considered  "Super Top Heavy" for a Plan Year if the Top Heavy
Ratio for the Plan (or if  applicable,  for the Required  Aggregation  Group) is
more than ninety percent.  Notwithstanding the preceding sentence, the Plan will
not be considered Super Top Heavy if, after  aggregation of the Plan with one or
more plans of the  Permissive  Aggregation  Group,  the Top Heavy Ratio does not
exceed ninety percent.

1.48.    Top Heavy
The Plan will be  considered  "Top Heavy" for a Plan Year if the Top Heavy Ratio
for the Plan (or, if  applicable,  for the Required  Aggregation  Group) is more
than sixty percent. Notwithstanding the preceding sentence, the Plan will not be
considered Top Heavy if, after aggregation of the Plan with one or more plans of
the  Permissive  Aggregation  Group,  the Top Heavy Ratio does not exceed  sixty
percent.

1.49.    Top Heavy Ratio
(1) For Employers  maintaining one or more defined contribution plans (including
any  simplified  employee  pension  plan) who have not  maintained  any  defined
benefit plan which during the five-year period ending on the Determination  Date
has or has had accrued benefits, Top Heavy Ratio, for this plan alone or for the
Required or Permissive  Aggregation Group as appropriate,  means a fraction, the
numerator of which is the sum of the Accrued Benefits of all Key Employees as of
the Determination Date (including any part of any Accrued Benefit distributed in
the five-year period ending on the  Determination  Date), and the denominator of
which is the sum of all  Accrued  Benefits  (including  any part of any  Accrued
Benefit  distributed in the five-year period ending on the Determination  Date),
both  computed in accordance  with Section 416 of the Internal  Revenue Code and
corresponding  regulations.  Both the numerator and denominator of the Top Heavy
Ratio are  increased to reflect any  contribution  not  actually  made as of the
Determination  Date, but which is required to be taken into account on that date
under  Section  416  of  the  Internal   Revenue  Code  and  the   corresponding
regulations.  (2) For  Employers  maintaining  one or more defined  contribution
plans  (including  any  simplified  employee  pension plan) who maintain or have
maintained one or more defined  benefit plans which during the five-year  period
ending on the Determination  Date has or has had any Accrued  Benefits,  the Top
Heavy Ratio for any  Required or  Permissive  Aggregation  Group as  appropriate
means a fraction,  the numerator of which is the sum of Accrued  Benefits  under
the  aggregated  defined  contribution  plan or  plans  for  all Key  Employees,
determined  in  accordance  with (a)  above,  and the  present  value of Accrued
Benefits  under  the  aggregated  defined  benefit  plan  or  plans  for all Key
Employees as of the Determination  Date, and the denominator of which is the sum
of the Accrued Benefits under the aggregated defined  contribution plan or plans
for all  participants,  determined in accordance with (a) above, and the present
value of  Accrued  Benefits  under  the  defined  benefit  plan or plans for all
participants  as of the  Determination  Date, all determined in accordance  with
Section 416 of the Internal Revenue Code and the corresponding regulations.  The
Accrued  Benefits  under a defined  Determination  Date.  Present value shall be
based only on the interest and mortality  rates specified in the defined benefit
plan.  (3) For purposes of Subsections  (1) and (2) above,  the value of Accrued
Benefits and the present value of Accrued Benefits shall be determined as of the
most recent Valuation Date ending on or before the Determination Date, except as
provided  in  Section  416  of  the  Internal  Revenue  Code  and  corresponding
regulations for the first two Plan Years of a defined benefit plan. In addition,
the following rules shall apply in calculating the Top Heavy Ratio.
         (i)    Distributions  made  after the  Valuation  Date but  before  the
                Determination  Date  shall  not be  counted  if the value of the
                distribution is reflected in the  Participant's  Accrued Benefit
                as of the Valuation Date.
         (ii)   The  Accrued  Benefits  of any  Former  Key  Employees  and  any
                Participants  who have not  performed  services for the Employer
                during the  five-year  period ending on the  Determination  Date
                shall be disregarded.

         (iii)  Rollovers  initiated by the  Participant and received from plans
                of  employers  not required to be  aggregated  with the Employer
                under Sections 414(b),  (c), or (m) of the Internal Revenue Code
                shall not be counted; all other rollovers and transfers shall be
                included in the calculation.

         (iv) Deductible employee contributions shall not be counted.
         (v)    When  aggregating  plans,  the value of Accrued  Benefit and the
                present  value of  Accrued  Benefits  shall be  calculated  with
                reference to the  Determination  Dates that fall within the same
                Calendar Year.
         (vi)   The Accrued  Benefit of a Participant  other than a Key Employee
                shall be determined  under the method,  if any,  that  uniformly
                applies for accrual  purposes  under all defined  benefit  plans
                maintained by the Employer,  or, if there is no uniform  method,
                as if the  benefit  accrued  not more  rapidly  than the slowest
                accrual  rate  permitted  under the  fractional  rule of Section
                411(b)(1)(C) of the Internal Revenue Code.
<PAGE>

1.50.    Trust Agreement
"Trust Agreement" means the document  evidencing  agreement between the Employer
and the Trustee for the administration of the Fund and any and all amendments to
that agreement. If the Employer maintains more than one employee pension benefit
plan  within  the  definition  of  ERISA,  the  assets  of this Plan may be held
together  under one Trust  Agreement  with the  assets of any other  plan of the
Employer  which  meets the  requirements  of  Sections  401(a) and 501(a) of the
Internal Revenue Code.

1.51.    Trustee
"Trustee" means the trustee or trustees of the Fund.

1.52.    Valuation Date
"Valuation  Date"  means  the date on which  the Fund  was  valued  or  revalued
pursuant to the Plan.  Valuation  Dates  shall  occur at least  annually on each
Anniversary  Date and at any other  time  determined  in the  discretion  of the
Retirement Committee.

1.53.    Valuation Period
"Valuation  Period" means any period ending on a Valuation Date and beginning on
the first day after the preceding Valuation Date.

1.54.    Vesting Computation Period
"Vesting Computation Period" means the Plan Year.

1.55.    Year of Service
"Service"  shall be measured in years. An Employee shall be credited with a Year
of Service for each Vesting  Computation Period during which he is credited with
1,000 Hours of Service.

2.       PARTICIPATION

2.1.     Eligibility Requirements
Effective July 1, 1997,  Employees  shall be eligible to become  Participants in
the Plan after  attainment  of age 21 and  completion of at least 1,000 Hours of
Service during an Eligibility Computation Period.

2.2.     Entry Date
Effective July 1, 1997,  Employees shall become  Participants in the Plan on the
first day of the month following the date they meet eligibility  requirements of
Section 3.1. Each  Participant  must sign a Salary  Reduction  Agreement to make
elective  deferral  contributions  to the Plan.  Once  made,  the  Participant's
Agreement shall remain in effect until modified or terminated.  Participants may
modify,  suspend or terminate  their  elections on a monthly  basis,  and on any
additional dates determined in the Retirement Committee's sole discretion.

2.3.     Exclusion for Collective Bargaining Employees
No Employee shall be eligible to participate in the Plan while he is a member of
a unit of employees  covered by a collective  bargaining  agreement  between the
Employer  (or the  Employer  and  one or  more  other  employers)  and a  union,
association, or other employee representative group if:
         (i)    The employee  representative  group has  established an employee
                pension benefit plan to which the Employer contributes on behalf
                of the individual, or
         (ii)   The  Employer  does not  contribute  to such a plan and there is
                other  evidence  that  retirement  benefits  were proposed to be
                funded by the Employer on behalf of the  individual and were the
                subject  of  good  faith   bargaining   between   the   employee
                representative group and the Employer or other employers.
This Section shall not be construed to limit  participation by an individual who
is not an  "employee"  within the meaning of the National  Labor  Relations  Act
solely because the individual maintains membership in a union.

2.4.     Other Exclusions
In the event that an Employee  who is excluded  from the  category of  Employees
eligible  to  participate  in the Plan  satisfies  the  minimum  age and service
requirements  and later  becomes an eligible  Employee,  he shall be entitled to
immediate participation in the Plan.


2.5.     Special Participation Provisions
Any  participant in the PSC Scanning,  Inc.  Savings Plus 401(k) Plan on July 1,
1997 will automatically be eligible to participate in this Plan as of that date.
Any employee of PSC Scanning,  Inc. who is not a participant in the PSC Scanning
Plan on that date will be eligible to enter this Plan after  meeting the age and
service  requirements  outlined in Section 3.1 above. Hours of Service completed
with PSC Scanning,  Inc. prior to July 1, 1997, will be counted toward the 1,000
Hour of Service requirement.

2.6.     Continued Participation
An Employee shall continue as a Participant in the Plan so long as he remains an
eligible  Employee.  A  Participant  who  becomes  ineligible  to  continue as a
Participant in the Plan shall be entitled to immediate participation in the Plan
if  he  again  becomes  an  eligible  Employee.  A  Participant  who  terminates
employment and is subsequently rehired by the Employer also shall be entitled to
immediate participation in the Plan.


<PAGE>


3.       CONTRIBUTIONS

3.1.     Employee Contributions
Each  year  the  Employer  shall  contribute  to the  Plan  on  behalf  of  each
Participant the amount of the reduced or foregone salary set forth in the Salary
Reduction  Agreement with that Participant.  Each Participant may elect to defer
between  one and  fifteen  percent  of his  Compensation  to the Plan.  Elective
contributions must be made in whole percentages.

3.2.     Employer Contributions
The Employer shall make a discretionary  matching  contribution to the Plan each
year in an amount  determined by the Board.  The Employer shall make no matching
contributions   for  elective   contributions   in  excess  of  six  percent  of
Compensation.  In addition,  the Employer  may make  discretionary  non-elective
contributions,  Qualified  Matching  Contributions,  and Qualified  Non-Elective
Contributions to the Plan.

3.3.     Time of Contribution
(1) Elective  contributions shall be paid to the Plan on a current basis, and in
no event later than the fifteenth  business day of the month following the month
in which these amounts  otherwise  would have been payable to the Participant in
cash. (2) Matching and  non-elective  Employer  contributions,  if any, shall be
made in cash not later than the time prescribed by law,  including any extension
of time,  for filing the  Employer's  United  States  income tax or  information
return for the year with respect to which the contributions are made.

3.4.     Deferral Percentage Test
(1) For any Plan Year the elective  contributions  made on behalf of each Highly
Compensated  Participant must satisfy one of the following tests,  provided that
the test  described in subsection  (ii) below shall not be used to meet both the
Deferral  Percentage Test and the Contribution  Percentage Test in the same Plan
Year.
         (i)    The  Actual   Deferral   Percentage   for   Highly   Compensated
                Participants  must not exceed  1.25  times the  Actual  Deferral
                Percentage of the remaining  Participants  determined at the end
                of the prior Plan Year; or
         (ii)   The  Actual   Deferral   Percentage   for   Highly   Compensated
                Participants  must not  exceed  2.0  times the  Actual  Deferral
                Percentage of the remaining  Participants  determined at the end
                of the prior Plan Year,  and the Actual  Deferral  Percentage of
                the Highly  Compensated  Participants must not exceed the Actual
                Deferral  Percentage of all other  Participants by more than two
                percentage points.
(2) For any  Plan  Year in which  the  Actual  Deferral  Percentage  for  Highly
Compensated  Participants exceeds the foregoing limits, the Retirement Committee
shall  return  the  salary  reduction  contributions  made on  behalf  of Highly
Compensated Participants in descending order of their deferral amounts until one
of the foregoing tests has been met.

(3) The return of excess  contributions  shall include the amounts of any income
allocable to the contributions  through the date of distribution,  calculated as
the  sum  of  (i)  income  or  loss  allocable  to  the  Participant's  Elective
Contribution  Account (and, if  applicable,  Matching  Contribution  Account and
Employer Contribution  Account) for the Plan Year multiplied by a fraction,  the
numerator of which is the Participant's  excess contributions for the Plan Year,
and the  denominator  of  which is the  balance  of the  Participant's  Accounts
attributable  to  elective   contributions  and  any  matching  or  non-elective
contributions used in the Deferral  Percentage Test without regard to any income
or loss  during the Plan Year,  plus (ii) ten  percent of the amount  determined
under (i) above  multiplied by the number of whole  calendar  months between the
end of the  Plan  Year  and the  date of  distribution,  counting  the  month of
distribution  if  distribution  occurs  after the  fifteenth  day of the  month.
Alternatively,  (i) the calculation of income allocable to excess  contributions
may be based  upon any  reasonable  method  used to  allocate  income or loss to
Participants'   accounts  if  this  method  is   consistently   applied  to  all
Participants and to all corrective distributions for the Plan Year, and (ii) the
period  between  the end of the Plan  Year and the date of  distribution  may be
disregarded in determining income or loss.

(4) The  return  of excess  contributions  and  income  shall be  completed,  if
possible,  within 2 1/2  months  after  the end of the Plan  Year for  which the
excess amount was  contributed to the Plan in order to avoid the imposition of a
ten percent  excise tax on the Employer.  In no event shall the return of excess
contributions be completed more than 12 months after the end of the Plan Year.

(5) Excess  Contributions  shall be distributed from the Participant's  Elective
Contribution  Account  and  Matching  Contribution  Account (if  applicable)  in
proportion   to  the   Participant's   elective   contributions   and   matching
contributions  used in the Deferral  Percentage  test for the Plan Year.  Excess
contributions shall be distributed from the Participant's  Employer Contribution
Account only to the extent that the excess  contributions  exceed the balance in
the  Participant's  Elective  Contribution  Account  and  Matching  Contribution
Account.
<PAGE>

3.5.     Contribution Percentage Test

(1) For any Plan Year the matching  contributions  made on behalf of each Highly
Compensated  Participant must satisfy one of the following tests,  provided that
the test  described in  subsection  (ii) below shall not be used to satisfy both
the  Contribution  Percentage Test and the Deferral  Percentage Test in the same
Plan Year.
         (i)    The  Actual  Contribution   Percentage  for  Highly  Compensated
                Participants must not exceed 1.25 times the Actual  Contribution
                Percentage of the remaining  Participants  determined at the end
                of the prior Plan Year; or
         (ii)   The  Actual  Contribution   Percentage  for  Highly  Compensated
                Participants  must not exceed 2.0 times the Actual  Contribution
                Percentage of the remaining  Participants  determined at the end
                of the prior Plan Year, and the Actual  Contribution  Percentage
                of the  Highly  Compensated  Participants  must not  exceed  the
                Actual Contribution Percentage of all other Participants by more
                than two percentage points.

(2) For any Plan Year in which the  Actual  Contribution  Percentage  for Highly
Compensated  Participants exceeds the foregoing limits, the Retirement Committee
shall forfeit the  non-vested  portion of any matching  contributions  and shall
return the vested  portion of any matching  contributions  (including  Qualified
Matching  Contributions)  made on behalf of Highly  Compensated  Participants in
descending order of their contribution  amounts until one of the foregoing tests
has been met. (3) The return of  contributions  shall include the amounts of any
income  allocable  to  the  contributions  through  the  date  of  distribution,
calculated  as the sum of (i)  income  or loss  allocable  to the  Participant's
Matching Contribution Account (and, if applicable, Elective Contribution Account
and Employer  Contribution  Account) for the Plan Year multiplied by a fraction,
the numerator of which is the  Participant's  excess  contributions for the Plan
Year, and the denominator of which is the balance of the Participant's  Accounts
attributable  to  matching   contributions  and  any  elective  or  non-elective
contributions used in the Deferral  Percentage Test without regard to any income
or loss  during the Plan Year,  plus (ii) ten  percent of the amount  determined
under (i) above  multiplied by the number of whole  calendar  months between the
end of the  Plan  Year  and the  date of  distribution,  counting  the  month of
distribution  if  distribution  occurs  after the  fifteenth  day of the  month.
Alternatively,  (i) the calculation of income allocable to excess  contributions
may be based  upon any  reasonable  method  used to  allocate  income or loss to
Participants'   accounts  if  this  method  is   consistently   applied  to  all
Participants and to all corrective distributions for the Plan Year, and (ii) the
period  between  the end of the Plan  Year and the date of  distribution  may be
disregarded   in   determining   income  or  loss.  (4)  The  return  of  excess
contributions  and income shall be completed,  if possible,  within 2 1/2 months
after the end of the Plan Year for which the excess  amount was  contributed  to
the Plan in order to avoid the  imposition  of a ten  percent  excise tax on the
Employer. In no event shall the return of excess contributions be completed more
than 12 months  after the end of the Plan  Year.  (5)  After  forfeiture  of any
non-vested  amounts,   excess   contributions  shall  be  distributed  from  the
Participant's  Matching  Contribution  Account,  and,  if  applicable,  Elective
Contribution  Account,  and Employer  Contribution  Account in proportion to the
respective  contributions used in the contribution  percentage test for the Plan
Year.

3.6.     Dollar Limit on Elective Deferrals
(1) Elective  contributions  made on behalf of any Participant  shall not exceed
$9,500 per Calendar  Year or any other amount  prescribed by  regulations  under
Section  402(g)(1) (5) of the Internal Revenue Code.  Elective  contributions in
excess of this amount shall be returned to the  Participant  no later than April
15 of the following Calendar Year, provided that the Participant files a written
notice with the  Retirement  Committee on or before March 1 of that year. If the
excess elective  contributions arise solely from elective  contributions made by
the Participant to this Plan or any other plan  maintained by the Employer,  the
Retirement  Committee  may  return  the excess  elective  contributions  without
written notice from the Participant.  (2) The notice described in Subsection (1)
shall be in the form prescribed by the Retirement  Committee,  shall specify the
amount of salary reduction contributions to be returned to the Participant,  and
shall  certify that return of these  amounts is needed to comply with the limits
on deferral  contributions  imposed by the Internal  Revenue Code. The return of
excess elective  contributions  shall include the amount of any income allocable
to the contributions through the date of distribution,  calculated as the sum of
(i) income or loss allocable to the Participant's  Elective Contribution Account
for the taxable year  multiplied  by a fraction,  the  numerator of which is the
Participant's  excess  elective  contributions  for the  taxable  year,  and the
denominator of which is the balance of the Participant's  Elective  Contribution
Account  without regard to any income or loss during the taxable year, plus (ii)
ten percent of the amount determined under (i) above multiplied by the number of
whole calendar months between the end of the Participant's  taxable year and the
date of distribution,  counting the month of distribution if distribution occurs
after the  fifteenth day of the month.  Alternatively,  (i) the  calculation  of
income  allocable  to  excess  elective  contributions  may be  based  upon  any
reasonable  method used to allocate income or loss to Participants'  accounts if
this method is consistently  applied to all  Participants  and to all corrective
distributions for the Plan Year, and (ii) the period between the end of the Plan
Year and the date of  distribution  may be disregarded in determining  income or
loss.  (3)  With  respect  to  any  taxable  year,  the  Participant's  elective
contributions  shall mean the sum of Employer  contributions made under a salary
reduction  agreement to the following  plans:  (i) a qualified  cash or deferred
arrangement under Section 401(k) of the Internal Revenue Code; (ii) a simplified
employee pension plan described in Section  402(h)(1)(B) of the Internal Revenue
Code;  (iii) an eligible  deferred  compensation  plan under  Section 457 of the
Internal  Revenue Code; (iv) any plan described under Section  501(c)(18) of the
Internal  Revenue Code; and (v) a plan for the purchase of an annuity  described
in Section 403(b) of the Internal Revenue Code.

<PAGE>


3.6.1     Rollover Contributions
With the consent of the Retirement Committee,  an Employee may contribute to the
Plan any amount  received by him from another  qualified  plan provided that the
contribution must qualify as a rollover  contribution under the Internal Revenue
Code. The  Retirement  Committee may make rules for the  administration  of this
Section and may require  Participants to certify material facts before accepting
the rollover contribution. In addition to accepting rollover contributions,  the
Retirement  Committee may, in its sole  discretion,  accept a direct transfer of
assets from the trustee of another qualified plan.

3.7.     Irrevocability of Contributions
All  contributions  by the Employer shall be  irrevocable  except as provided in
Article 1.

3.8.     Contribution Records
The  Employer's  records  shall be  determinative  on all  matters  relating  to
contributions.

3.9.    Administrative Expenses
(1) The administrative expenses of the Plan and Fund shall be paid either by the
Employer or from the Fund.  The Employer  shall notify the Trustee in writing if
the entity  paying the  administrative  expenses  is  changed.  In the event the
Employer is responsible  for payment of expenses but does not make full payment,
they  shall be paid  from  the  Fund to the  extent  permitted  by law.  (2) All
transactional  costs or charges  imposed or  incurred  (if any) for  Participant
directed assets shall be charged to the
     Account of the directing  Participant or Beneficiary.  Transactional  costs
     and charges  shall  include,  but shall not be limited to,  charges for the
     acquisition or sale or exchange of Participant  directed assets,  brokerage
     commissions, service charges, and professional fees.

3.9.1.CREDITS TO PARTICIPANTS

3.10.    Maintenance of Accounts
(1) The Retirement  Committee shall keep individual accounts in the name of each
Participant  showing his interest in the Fund.  Each  Participant  shall have an
Elective  Contribution  Account  showing  the amount  attributable  to  elective
contributions  made on his behalf.  If applicable,  each  Participant also shall
have a Matching Contribution Account showing the amount attributable to matching
contributions made on his behalf, and an Employer  Contribution  Account showing
the amount  attributable  to  non-elective  Employer  contributions  made on his
behalf.  (2) Rollovers  from other  qualified  plans  accepted by the Retirement
Committee shall be segregated in a separate Rollover  Account.  Direct transfers
from  other  qualified  plans  accepted  by the  Retirement  Committee  shall be
segregated in a separate Transfer Account. After-tax contributions made prior to
July 1, 1997 shall be segregated in a separate After-Tax Account.

3.11.    Allocation of Employer Contributions
(1) Any matching  contributions  made by the Employer for the Plan Year shall be
allocated  Participants'  Matching  Contribution Accounts in accordance with the
terms and conditions under Section 4.2 of the Plan. The foregoing  contributions
shall be allocated to  Participants'  Accounts  regardless  of their  employment
status on the Anniversary Date or the Hours of Service completed during the Plan
Year. (2) Any non-elective  contributions made by the Employer for the Plan Year
shall be allocated among the Employer  Contribution Accounts of all Participants
who, as of the Anniversary Date, are employed by the Employer and have completed
1,000 Hours of Service during the Plan Year. The allocation shall be made in the
proportion that each Participant's  Compensation bears to the total Compensation
of all Participants.

3.12.    Annual Additions
Annual  Additions shall not during any Limitation Year exceed the lesser of: (i)
the defined  contribution dollar limitation;  or (ii) twenty-five percent of the
Participant's  Compensation  for the Plan Year. For the purpose of this Section,
the  defined   contribution   dollar  limitation  is  $30,000  or,  if  greater,
twenty-five  percent  of the  defined  benefit  dollar  limitation  set forth in
Section  415(b)(1) of the Internal  Revenue Code as in effect for the Limitation
Year. If a short Limitation Year is created because of an amendment changing the
Limitation  Year to a different  consecutive  twelve-month  period,  the maximum
permissible  amount will not exceed the defined  contribution  dollar limitation
multiplied by a fraction,  the numerator of which is the number of months in the
short Limitation Year, and the denominator of which is twelve.
<PAGE>

3.13.    Allocation of Excess Contributions
If the contribution for any Participant  exceeds the limits specified in Section
5.3 for any Plan Year by reason of the allocation of  forfeitures,  a reasonable
error in estimating the  Participant's  Compensation,  or a reasonable  error in
estimating  the  Participant's  elective  deferrals,  the portion  exceeding the
limits shall, at the discretion of the Retirement  Committee,  be reallocated in
accordance  with one of the  four  methods  specified  in  Treasury  Regulations
Section 1.415-6(b)(6).

3.14.    Valuation of Accounts
A Participant's  Accounts shall be valued at fair market value on each Valuation
Date. With respect to Participant directed  investments,  the earnings,  losses,
and expenses (including  transactional expenses pursuant to Section 4.10) of the
Participant's  directed  investments  shall be  allocated  to the Account of the
Participant  or  Beneficiary  having  authority to direct the  investment of the
assets in the Account. The Valuation Date with respect to any distributions from
any Account shall be the date as of which the distribution is made.

3.15.    Limitation
No allocation or credit to any  Participant's  Account shall operate to vest any
right,  title or interest in the Trust Fund in a Participant  except at the time
or times, and upon the terms and conditions, set forth in this Plan.

4.    VESTING OF BENEFITS

4.1.     Employee Contributions
Participants  shall be fully  vested in their  Elective  Contribution  Accounts,
After-Tax  Contribution  Accounts,  and  Rollover  Contribution  Accounts at all
times.

4.2.     Employer Contributions
(1)  Participants  who are credited with an Hour of Service on or after December
31,  1996 shall be fully  vested in their  Matching  Contribution  Accounts  and
Employer  Contribution  Accounts  at all times.  Vesting  for  Participants  who
terminated  employment  prior to January 1, 1997 shall be  determined  under the
vesting schedule in effect at that time. (2) Participants  who, prior to July 1,
1997, were participants in the PSC Scanning, Inc. Savings Plus 401(k) Plan shall
be  fully  vested  in  their   Matching   Contribution   Accounts  and  Employer
Contribution Account whether or not they are credited with an Hour of Service on
or after December 31, 1996.

5. DISTRIBUTION OF BENEFITS

5.1.     Application
The  value  of a  Participant's  Accrued  Benefit  shall  be  paid to him or his
Beneficiaries  only at the time,  to the extent,  and in the manner  provided in
this Article and in Article 8 and Article 9.

5.2.     Normal and Late Retirement
A Participant who separates from Service on or after his Normal  Retirement Date
shall be eligible to receive a  distribution  from the Plan.  The  Participant's
Accrued  Benefit  as  of  the  next  quarterly   Valuation  Date  following  his
termination of employment  shall be paid to him or commence to be paid to him as
soon as practical after that date.

5.3.     Death Benefit
If a Participant  dies prior to the Annuity  Starting  Date, his Spouse or other
Beneficiary  shall be  eligible  to receive a  distribution  from the Plan.  The
Participant's  Accrued Benefit as of the next quarterly Valuation Date following
the date of death  shall be paid or  commence  to be paid to his Spouse or other
Beneficiary  as soon as  practical  after  that  date.  If there is no Spouse or
designated  Beneficiary,  the  benefits  payable  under  this  Article  shall be
distributed to the executor or administrator of the Participant's  estate. If no
executor  or  administrator  is  appointed  within six  months  after his death,
distribution  shall be made to one or more of his relatives by blood or marriage
as the Retirement Committee in its sole discretion shall direct.

5.4.     Other Termination of Employment
A Participant who separates from Service for any reason other than retirement or
death  shall  be  eligible  to  receive  a  distribution   from  the  Plan.  The
Participant's  Accrued Benefit as of the next quarterly Valuation Date following
his termination of employment shall be paid to him or commence to be paid to him
as soon as practical after that date.

5.5.     After-Tax and Rollover Contributions
A  Participant  may  withdraw all or part of his  After-Tax  Account or Rollover
Account  at any  time.  The  Retirement  Committee  shall  establish  rules  and
procedures with respect to these withdrawals, including the timing and the order
of Accounts from which Participants may request distributions.



<PAGE>



5.6.     In-Service Distributions
A  Participant  who has  attained age 59 1/2 may withdraw all or part of his (i)
Elective  Contribution  Account;  (ii) Matching  Contribution Account; and (iii)
Employer  Contribution  Account.  The Retirement Committee shall establish rules
and procedures with respect to these  withdrawals,  including the timing and the
order of Accounts from which Participants may request distributions.

5.7.     Hardship Withdrawals
A Participant  who incurs a hardship shall be eligible to receive a distribution
from the Plan of up to 100 percent of his  elective  contributions  and matching
contributions to the Plan (other than earnings accrued after December 31, 1988).
All hardship distributions shall comply with the following terms and conditions.
(1) A Participant who desires to receive a hardship  distribution  from the Plan
must  provide  evidence  to the  Retirement  Committee  of an event  creating an
immediate  and  heavy  financial  need.   These  events  may  include,   without
limitation:
         (i)    Amounts  incurred or necessary  for medical  care, as defined in
                Section   213(d)  of  the  Internal   Revenue   Code,   for  the
                Participant, the Participant's spouse, or any of his dependents;
         (ii)   Purchase of a principal residence for the Participant;
         (iii)  Payment of tuition  and  related  educational  fees for the next
                twelve months of  post-secondary  education for the Participant,
                his Spouse, or any dependents; and
         (iv)   Payments  needed to prevent  eviction of a Participant  from his
                principal   residence  or  foreclosure  of  a  mortgage  on  his
                principal residence.
(2) In order to  certify  that  the  financial  need  cannot  be met from  other
resources reasonably available to the Participant, the Retirement Committee must
base hardship distributions in accordance with the following conditions:
         (i)    The  distribution  must not exceed the amount of  immediate  and
                heavy financial need, which may include any amounts necessary to
                pay any  federal,  state,  or local  income  taxes or  penalties
                reasonably anticipated to result from the distribution;
         (ii)   The  Participant  must  obtain  all  distributions,  other  than
                hardship  distributions,  and all  non-taxable  loans  currently
                available under all plans maintained by the Employer;
         (iii)  The Participant must suspend elective  contributions to the Plan
                (and any other plans  maintained  by the  Employer) for at least
                twelve months after receipt of the distribution; and
         (iv)   For the Calendar Year immediately following the Calendar Year of
                the  distribution,  the  amount  of the  Participant's  elective
                contributions  to the Plan must not  exceed  the  dollar  amount
                determined  under  Section 4.6 of the Plan reduced by the amount
                of the Participant's  elective contributions during the Calendar
                Year of the distribution.


5.8.     Consent to Distribution
The following  provisions shall control the consents  required for distributions
from the Plan.
(1) If the value of a  Participant's  Accrued  Benefit derived from Employer and
Employee  contributions  exceeds  (or at the  time  of  any  prior  distribution
exceeded)  $3,500,  and the Accrued  Benefit is immediately  distributable,  the
Participant  must  consent  to any  distribution  of the  Accrued  Benefit.  The
Retirement  Committee  shall  notify the  Participant  of the right to defer any
distribution  until the Participant's  Accrued Benefit is no longer  immediately
distributable,   and  shall  obtain  the  consent  of  the  Participant  to  the
distribution in writing within the 90-day period ending on the Annuity  Starting
Date.  Notwithstanding the foregoing provisions,  the consent of the Participant
shall not be required to the extent that a  distribution  is required to satisfy
Section  401(a)(9) or Section 415 of the Internal Revenue Code. (2) If the value
of  a   Participant's   Accrued  Benefit  derived  from  Employer  and  Employee
contributions  does  not  exceed  (nor  at any  time of any  prior  distribution
exceeded)  $3,500,  and the Accrued  Benefit is immediately  distributable,  the
Retirement  Committee  shall  distribute  the  Accrued  Benefit  in one lump sum
payment  without  the  Participant's  consent at any time after the  Participant
terminates  employment.  (3) For purposes of Subsections  (1) and (2) above,  an
Accrued Benefit is immediately  distributable if any part of the Accrued Benefit
could  be  distributed  to  the  Participant  or  surviving  Spouse  before  the
Participant attains (or would have attained) age 62.

5.9.     Facility of Payment
If the Retirement  Committee receives evidence  satisfactory to it that a person
entitled  to  payments  under the Plan is  incompetent  by reason of physical or
mental Disability, the Retirement Committee shall have the power, subject to the
requirements  for  spousal  consent  set  forth in this  document,  to cause the
payments becoming due under the Plan to such person to be made to another person
for his  benefit  without  responsibility  of the  Retirement  Committee  or the
Trustees to see to the application of such funds.  Payments made pursuant to the
power herein conferred upon the Retirement Committee shall operate as a complete
discharge of the Trustees and the Retirement Committee.
<PAGE>

5.10.    Limitation
Benefits  under this Plan shall be payable only out of the Fund. No person shall
have any rights under the Plan with respect to the Fund,  or against the Trustee
or the Employer, except as specifically provided for in this instrument.

5.10.1   REQUIRED DISTRIBUTIONS

5.11.    Delay of Distributions By Employer
Unless  otherwise  elected by the  Participant,  no distribution  shall commence
later than sixty days after the end of the Plan Year in which  occurs the latest
of the following  events:  (i) the attainment of age 65 by the  Participant  (or
Normal  Retirement Date, if earlier);  (ii) the tenth anniversary of the year in
which the Participant  commenced  participation  pursuant to Article 3; or (iii)
termination  of the  Participant's  Service with the Employer.  The failure of a
Participant  or Spouse to  consent  to a  distribution  shall be deemed to be an
election to defer  commencement of payment of any benefit  sufficient to satisfy
the requirements of this Section.

5.12.    Delay of Distributions By Participants
Distributions to Participants shall be paid or commence to be paid by April 1 of
the Calendar Year following the Calendar Year in which the  Participant  attains
age 70 1/2 regardless of his continued employment. Distributions to Participants
in subsequent Calendar Years, including the Calendar Year containing the April 1
commencement  date,  must  be  made  on or  before  December  31 of  each  year.
Notwithstanding the foregoing requirement, a Participant who attained age 70 1/2
prior to January 1, 1988 and who is not a Five Percent  Owner may defer  payment
of any  distribution  to April 1 of the Calendar Year  following his  separation
from Service.  A  Participant  who is not a Five Percent Owner at age 70 1/2 but
who becomes a Five Percent Owner in a subsequent  year shall commence  receiving
distributions  on April 1 of the Calendar  Year  following  the Calendar Year in
which he becomes a Five Percent Owner.

5.13.    Minimum Distributions
Distributions  in any form  other  than a lump sum must be paid over a period no
longer  than  the  life  expectancies  of the  Participant  and  any  designated
Beneficiary.  The amount  distributed each year must be equal to or greater than
the quotient  obtained by dividing the  Participant's  vested Accrued Benefit by
the  life  expectancy  of  the  Participant,  or the  joint  and  last  survivor
expectancy of the Participant and the designated Beneficiary, as computed by use
of the return  multiples  in Section  1.72-9 of the  Treasury  Regulations.  For
purposes of this  calculation,  the life expectancy of a Beneficiary  other than
the Participant's  Spouse shall be calculated only once, but the life expectancy
of  the  Participant  and  Spouse  shall  be  recalculated   annually.   If  the
Participant's  Spouse  is  not  the  designated   Beneficiary,   the  method  of
distribution  selected  must assure  that at least fifty  percent of the Accrued
Benefit is paid within the life expectancy of the Participant.

5.14.    Distributions Upon Death
Upon the death of a  Participant,  the  following  provisions  shall control the
payment of benefits from the Plan. (1) If  distributions to the Participant have
commenced prior to death,  but the Participant  dies before the  distribution is
complete, any remaining balance must be distributed under a method no less rapid
than the  method in effect at the time of  death.  (2) If  distributions  to the
Participant   have  not  commenced  prior  to  death  and  any  portion  of  the
Participant's Accrued Benefit is payable to a designated  Beneficiary other than
the Participant's Spouse, all benefits must be distributed by December 31 of the
fifth  Calendar  Year  following  the  Participant's  death unless the following
conditions  are met: (i) payments  are made for the life of the  Beneficiary  or
over a period not extending beyond the Beneficiary's  life expectancy,  and (ii)
payments  commence on or before  December 31 of the  Calendar  Year  immediately
following the Calendar Year in which the Participant died. If the Beneficiary is
the Participant's Spouse, all benefits must be distributed by December 31 of the
fifth  Calendar Year following the  Participant's  death unless (i) payments are
made for the  life of the  Spouse  or over a period  not  extending  beyond  the
Spouse's life expectancy, and (ii) payments need not commence until the later of
(a) December 31 of the Calendar Year immediately  following the Calendar Year in
which the Participant died, or (b) December 31 of the Calendar Year in which the
Participant  would  have  attained  age 70 1/2.  If the Spouse  dies  before the
payments  begin,  the  provisions of this Section 8.4 shall be applied as if the
Spouse  had  been  the  Participant.  For  purposes  of  this  Subsection,  life
expectancies  shall be  calculated  by use of the  return  multiples  of Section

<PAGE>

1.72-9 of the Treasury  Regulations.  The life expectancy of a Beneficiary other
than  the  Participant's  Spouse  may be  calculated  only  once,  and the  life
expectancy of the  Participant and Spouse may be recalculated no more frequently
than annually.  (3) If the Participant has not made an election pursuant to this
Section by the time of his death, the Participant's  designated Beneficiary must
elect the  method of  distribution  by the  earlier  of (i)  December  31 of the
Calendar  Year in which the  distribution  would be required  to begin,  or (ii)
December 31 of the fifth Calendar Year following the Participant's death. If the
Participant has no designated Beneficiary,  or if the Beneficiary does not elect
a method of distribution, distribution of the Participant's entire interest must
be  completed  by  December  31  of  the  fifth   Calendar  Year  following  the
Participant's  death.  (4) For purposes of Subsection  (2) above,  if the Spouse
dies  after the  Participant  but  before  payments  to the  Spouse  begin,  the
provisions  of  Subsection  (2)  shall  apply  as if the  Spouse  had  been  the
Participant,   except  that  the  Spouse's   Beneficiary  must  begin  receiving
distributions  on  or  before  December  31 of  the  Calendar  Year  immediately
following the Calendar Year in which the Spouse died. 6. FORM OF DISTRIBUTION

6.1.     Optional Forms of Distribution
A Participant may elect to receive payment of his distribution in the form of:
         (i)      A lump sum; or
         (ii)     Periodic  installments  of at least one hundred  dollars for a
                  period  certain,  not extending  beyond the life expectancy of
                  the  Participant,  or,  if  he  designates  a  Beneficiary  to
                  continue  receiving the installments after his death, the life
                  expectancy of the Participant and his Beneficiary.

6.2.     Designation of Beneficiaries
Designation  of  Beneficiaries  shall be in a  written  form  prescribed  by the
Retirement  Committee,  which shall include the name, address,  sex, and date of
birth of the Beneficiary.  No designation  shall be effective unless it is filed
with  the  Retirement  Committee  prior  to  the  death  of the  Participant.  A
Participant may change Beneficiary  designations at any time, and the consent of
the Beneficiary shall not be required in the event of any change. Designation of
a Beneficiary other than the Participant's  Spouse shall not be effective unless
made in accordance with the following provisions. (1) A married Participant may,
with the consent of his Spouse, designate a Beneficiary other than his Spouse to
receive payment of the pre-retirement death benefit provided in Section 7.4. The
waiver shall be made in the form prescribed by the Retirement  Committee,  shall
contain the  written  consent of the  Participant  and Spouse  together  with an
acknowledgment of its effect,  and shall be witnessed by a notary public. If the
Participant has no Spouse or the Spouse cannot be located,  the Participant must
certify these facts in the waiver.  (2) Any waiver made pursuant to this Section
may be revoked by filing a written  revocation with the Retirement  Committee at
least 15 days prior to the Participant's  Annuity Starting Date. (3) Any consent
required  by this  Section  shall be valid  only with  respect to the Spouse who
signs the  consent.  A  participant  who  obtains the consent of his Spouse to a
waiver  under  this  Section  must  obtain  spousal  consent  to any  subsequent
election.

6.3.     Notice Requirements
The  Retirement   Committee  shall  provide  each  Participant  with  a  written
explanation  of the forms of  distribution  available  under  Section 9.1.  Each
Participant  shall  receive  the notice no more than 90 days and no less than 30
days before the Annuity  Starting  Date.  Distributions  may commence  less than
thirty days after this notice has been given to the  Participant,  provided that
(i)  the  Retirement   Committee   clearly  informs  the  Participant  that  the
Participant  has the right to a period of at least 30 days after  receiving  the
notice to decide whether or not to elect a distribution  (and, if applicable,  a
particular  option),  and (ii) the  Participant,  after  receiving  the  notice,
affirmatively elects a distribution.

6.4.     Eligible Rollover Distribution
This  Section  applies  to  distributions  made on or  after  January  1,  1993.
Notwithstanding  any provision of the Plan to the contrary that would  otherwise
limit a Distributee's  election under this Section,  a Distributee may elect, at
the time and in the manner prescribed by the Retirement  Committee,  to have any
portion  of an  Eligible  Rollover  Distribution  paid in the  form of a  direct
rollover  to an Eligible  Retirement  Plan  specified  by the  Distributee.  The
Retirement Committee may, in its sole and absolute discretion, prescribe uniform
and  nondiscrimination  standards  for payouts of Direct  Rollovers,  including,
without  limitation,  a requirement that Direct Rollovers be made in amounts not
less than five hundred dollars. (1) Eligible Rollover Distribution:  An Eligible
Rollover  Distribution is any  distribution of all or any portion of the balance
to the credit of the Distributee,  except that an Eligible Rollover Distribution
does not include:  (i) any distribution that is one of a series of substantially
equal periodic  payments (not less  frequently  than annually) made for the life
(or life  expectancy)  of the  Distributee  or the joint  lives  (or joint  life
expectancies) of the Distributee and Distributee's  designated  beneficiary,  or
for a specified period of ten years or more; (ii) any distribution to the extent
such distribution is required under Section 401(a)(9) of the Code; and (iii) the
portion of any distribution  that is not includable in gross income  (determined
without regard to the exclusion for net unrealized  appreciation with respect to
employer securities).  (2) Eligible Retirement Plan: An Eligible Retirement Plan
is an individual  retirement account described in Section 408(a) of the Code, an
individual  retirement  annuity  described  in  Section  408(b) of the Code,  an
annuity  plan  described  in Section  403(a) of the Code,  or a qualified  trust
described in Section 401(a) of the Code, that accepts the Distributee's Eligible
Rollover  Distribution.  In the case of an Eligible Rollover Distribution to the
surviving  spouse,  however,  an  Eligible  Retirement  Plan  is  an  individual
retirement  account  or  individual  retirement  annuity.  (3)  Distributee:   A
Distributee includes an Employee or former Employee. In addition, the Employee's
or former  Employee's  surviving Spouse and the Employee's or former  Employee's
Spouse or former  Spouse who is the alternate  payee under a qualified  domestic
relations order, as defined in Section 414(p) of the Code, are Distributees with
regard to the interest of the Spouse or former Spouse.  (4) Direct  Rollover:  A
Direct  Rollover  is a  payment  by the  Plan to the  Eligible  Retirement  Plan
specified by the Distributee.


<PAGE>


7.  TOP HEAVY REQUIREMENTS

7.1.     Minimum Allocations
Notwithstanding the allocation formula contained in Article 5, for any Plan Year
in which the Plan is Top  Heavy  the  Employer  contributions  allocated  to the
Employer  Contribution Account of any Participant who is not a Key Employee must
not be less than the Minimum  Allocation.  In the event that Minimum Allocations
would  not   otherwise   be  provided  to  these   Participants,   the  Employer
contributions shall be allocated first to the Employer  Contribution Accounts of
these  Participants in amounts sufficient to fund the Minimum  Allocations,  and
the balance shall be allocated to all other  Participants  under the  allocation
formula set forth in Article 5. A Non-Key  Employee who meets the  participation
requirements  of the Plan and who is  employed  on the last day of the Plan Year
shall receive his Minimum Allocation without regard to his level of Compensation
or to his  failure  to  complete  the  Hours of  Service  needed to  receive  an
allocation of Employer Contributions for the Plan Year. Minimum Allocations also
shall be provided to any Key Employees who would not otherwise receive them. The
provisions  of this Section 10.1 shall not apply to  Participants  covered under
any other  qualified  retirement plan maintained by the Employer if the Employer
has elected to provide minimum contributions or benefits under another plan.

8.ADMINISTRATION OF THE PLAN

8.1.     Appointment of Retirement Committee
The Employer  shall  appoint a Retirement  Committee  consisting  of one or more
persons as determined by the Employer.  Each person appointed as a member of the
Retirement   Committee   shall  signify  his  acceptance  by  filing  a  written
acknowledgment  with the Employer.  Any member of the  Retirement  Committee may
resign by delivering his written resignation to the Employer.

8.2.     Named Fiduciaries
The  Retirement  Committee and its members are the named  fiduciaries  with full
authority   and   responsibility   to  control  and  manage  the  operation  and
administration of the Plan.

8.3.     Responsibilities of Retirement Committee
The Retirement  Committee  shall have the exclusive  right to interpret the Plan
(but not to  modify or amend  the  Plan)  and to  decide  any and all  questions
arising in the administration,  interpretation, and application of the Plan. The
Retirement  Committee shall establish  whatever rules it finds necessary for the
operation and administration of the Plan and shall endeavor to apply these rules
in its decisions so as not to discriminate in favor of any person. The decisions
of the  Retirement  Committee  or its action  with  respect to the Plan shall be
conclusive  and binding upon the Employer and all persons  having or claiming to
have any right or interest in or under the Plan.

8.4.     Delegation of Responsibilities
The members of the Retirement  Committee may elect from their number a chairman,
who need not be a  Participant,  and may appoint a secretary,  who need not be a
Participant  nor a member of the  Retirement  Committee.  They may appoint  from
their number such committees with such powers as they shall determine.  They may
allocate  fiduciary  responsibility  among  themselves  or delegate any of their
duties or  responsibilities  to other persons,  including the Employer or any of
its  officers or  employees.  Any such  allocation  or  delegation  of fiduciary
responsibilities   shall  be  by  an  instrument   in  writing,   setting  forth
specifically  the  delegated  duties,  signed by or on behalf of the  Retirement
Committee  and the  delegated  fiduciary  and shall be exercised in a reasonable
manner  taking  into  account the  discretionary  or  ministerial  nature of the
responsibility  allocated or delegated  and the  capabilities  of such person or
persons to whom the responsibility is allocated or delegated.


8.5.     Third Party Contracts
The  Retirement  Committee  or any  person  or  persons  to whom the  Retirement
Committee has delegated fiduciary responsibilities may employ, with the approval
of the Retirement Committee, one or more accountants,  actuaries,  legal counsel
or other  persons as shall be deemed  necessary  for the  effective  control and
management of the operation and  administration  of the Plan. The members of the
Retirement  Committee,  the Employer and its  officers  and  directors,  and any
person to whom any duty or  responsibility  has been delegated by the Retirement
Committee shall be entitled to rely upon all tables,  valuations,  certificates,
opinions and reports furnished by any duly appointed accountant,  actuary, legal
counsel or other  person and shall be fully  protected  in respect of any action
taken or  permitted  by them in good  faith in  reliance  upon any such  tables,
valuations, certificates, reports or opinions.
<PAGE>

8.6.     Meetings
The Retirement  Committee shall hold meetings upon such notice, at such place or
places,  and at such  time or times as they may  determine.  A  majority  of the
members  of  the  Retirement   Committee  shall  constitute  a  quorum  for  the
transaction  of  business.  All  resolutions  or  other  actions  taken  by  the
Retirement  Committee  shall  be by vote of a  majority  of those  present  at a
meeting of the  Retirement  Committee  at which a quorum shall be present or, if
they act  without a meeting,  in writing  by all the  members of the  Retirement
Committee.  The Retirement Committee may designate one or more of its members to
sign  and to send  and  receive  communications  and  documents  to and from the
Trustees or any person.

8.7.     Expenses
No member of the Retirement  Committee  shall receive any  compensation  for his
services,  but the Employer may reimburse any member for any necessary  expenses
incurred.

8.8.     Reports
The Retirement Committee shall maintain accounts showing the fiscal transactions
of the Plan, and shall keep in convenient form such data as may be necessary for
actuarial  valuations,  if required,  of the assets and liabilities of the Plan.
The  Retirement  Committee  shall  have a report  prepared  annually  showing in
reasonable  detail  the assets  and  liabilities  of the Plan and giving a brief
account of the  operation of the Plan for the past year.  Such reports  shall be
submitted to the Employer.

8.9.     Plan Administrator
The Employer may appoint a person or persons to act as Plan Administrator within
the  meaning of Section  3(16)(A)  of ERISA.  The  Employer  may remove the Plan
Administrator  from office at any time. Any such appointment or removal shall be
in writing. If more than one Plan Administrator is appointed, the duties of Plan
Administrator may be allocated among them in the instruments of appointment;  if
this is done, no Plan  Administrator  shall be responsible for performing duties
that have been allocated to another Plan  Administrator.  If no such appointment
is made, the Employer shall be the Plan  Administrator.  The Plan  Administrator
shall file such documents as are required of him and shall have such  additional
duties as are required by ERISA and  applicable  law, and as may be delegated to
him in the instrument of appointment or in an instrument of delegation  executed
by the Retirement Committee pursuant to Section 11.4.

8.10.    Indemnification
Each person who is or has been a member of the Retirement  Committee or the Plan
Administrator  shall be indemnified by the Employer against expenses  (including
amounts  paid in  settlement  with  the  approval  of the  Employer)  reasonably
incurred by him in  connection  with any action,  suit or proceeding to which he
may be a party or with which he shall be threatened  by reason of his being,  or
having been, a member of the Retirement Committee or Plan Administrator,  except
in relation to matters as to which he shall be adjudged in such action,  suit or
proceeding to be liable for a breach of fiduciary  responsibility due to willful
misconduct  in  the   performance  of  his  duties.   The  foregoing   right  of
indemnification  shall be in addition to any other rights to which any member of
the Retirement  Committee or Plan  Administrator  may be entitled as a matter of
law.

9.AMENDMENT AND TERMINATION OF THE PLAN

9.1.     Amendment
(1) The  Employer,  by action of the Board,  may  authorize the amendment of the
Plan at any time or from time to time by an instrument in writing, provided that
no amendment shall:
         (i)    Deprive any Participant or Beneficiary of any Accrued Benefit;
         (ii)   Reduce  the  vested  percentage  of the  Accrued  Benefit of any
                Employee who is a  Participant  as of the later of the date such
                amendment is adopted or the date it becomes effective;
         (iii)  Eliminate  an optional  form of benefit with respect to benefits
         attributable  to service before the amendment;  or (iv) Provide for the
         use of funds or assets held under the Plan other than for the exclusive
         benefit of Participants and
                their Beneficiaries.
(2) If any amendment  modifies the vesting schedule of the Plan each Participant
who has at least three Years of Service on the latter of the date such amendment
is adopted or is effective may elect to have the existing vesting schedule apply
to him rather than the new vesting schedule, provided that such election is made
within 60 days after the later of the date the  amendment  is adopted,  the date
the amendment becomes effective, or the date the Participant is issued notice of
the plan amendment by the Employer or the Retirement Committee. For Participants
who do not have at least one Hour of  Service in any Plan Year  beginning  after
December 31, 1988,  five Years of Service should be substituted  for three Years
of Service in the preceding sentence.

9.2.     Termination
The Plan is intended by the Employer to be a long-term program for the provision
of retirement benefits for its Employees. The Employer nevertheless reserves the
right to  terminate  the Plan at any time and for any  reason.  The  termination
shall be authorized by the Board and effected by a written instrument.  (1) Upon
termination  or  partial  termination  of the Plan by formal  written  notice or
actual operation or upon a complete  discontinuance  of contributions  under the
Plan,  the rights of all affected  Participants  to the amounts  credited to the
Employees'   Accounts   shall  become  fully  vested  and   nonforfeitable   and
distribution  shall  commence  forthwith in accordance  with the Plan. The Trust
shall remain in existence until all funds held thereunder are distributed.

(2) 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) or a simplified  employee plan as defined in Section
408(h) of the Internal Revenue Code), the Retirement  Committee shall distribute
all benefits to Participants in the form of a lump sum.

9.3.     Satisfaction of Liabilities
The Plan  may be  discontinued  by the  Employer  at any  time,  subject  to the
applicable  restrictions of the Employee  Retirement Income Security Act of 1974
or any similar law and upon the condition  that it shall be  impossible,  at any
time prior to the  satisfaction of all liabilities  with respect to Participants
and  Beneficiaries,  for any part of the corpus of the Fund or income thereon to
be used for or diverted to purposes other than for the  administrative  expenses
of  the  Plan  and  Fund  and  the  exclusive   benefit  of   Participants   and
Beneficiaries.

10.ESTABLISHMENT OF THE TRUST

10.1.    Trust Agreement
(1) The Board shall establish a trust to hold the Fund. Within a reasonable time
after each Valuation Date, the Trustee shall deliver to the Committee a detailed
accounting  of its  administration  of the Fund  during  the  period  since  the
preceding  Valuation  Date,  including an inventory of the assets of the Fund at
their fair market value as of the Valuation Date. The rights and other duties of
the Trustee shall be set forth in a Trust Agreement to be adopted by the Trustee
and the Board.  More than one Trustee may serve  concurrently,  and there may be
more than one Trust  Agreement  and more than one Fund,  in which case the words
"Trustee,"  "Trust  Agreement," and "Fund" in this instrument shall be deemed to
refer  to all  Trustees,  Trust  Agreements,  and  Funds  collectively.  (2) The
adoption  and  amendment  of the Trust  Agreement,  the review of the  Trustee's
performance,  and the  appointment  and  removal  of the  Trustee  shall  be the
responsibility  of the Board and not that of the  Committee or any other person,
and the  Board  shall be a "named  fiduciary"  within  the  meaning  of  Section
402(a)(2)  of ERISA with  respect to these  activities.  (3) If permitted by the
Trust  Agreement,  the Board may  appoint  an  investment  manager  other than a
Trustee to manage the  investment  of all or part of the Fund.  Such  investment
manager shall  acknowledge in writing that it is a fiduciary with respect to the
Plan and shall be and  continue  to be (a)  registered  in good  standing  as an
investment  advisor under the  Investment  Advisors Act of 1940,  (b) a bank, as
defined in that Act, or (c) an insurance company qualified to perform investment
management  services under the laws of more than one state of the United States.
The terms of such  appointment  shall permit the Board to remove the  investment
manager at any time and without cause.

10.2.    Duties of the Trustee
It shall be the duty of the Trustee (i) to hold,  invest and  reinvest the Fund,
(ii) to pay moneys  from the Fund to persons  entitled  thereto  pursuant to the
written orders of the Retirement Committee,  and (iii) to perform any other acts
or duties required of it by the terms of the Trust Agreement.

10.3.    Direction of Investment by Participants
Each  Participant  shall be permitted to exercise control over the assets in his
Elective  Contribution  Account,   After-Tax   Contribution  Account,   Matching
Contribution   Account,   Rollover  Account,   Transfer  Account,  and  Employer
Contribution  Account.  The  Employer  shall  provide  a variety  of  investment
alternatives to  Participants  in accordance with its funding policy,  and shall
select one or more dates during the Plan Year when  Participants  can direct the
investment of their Accounts or change a prior investment election. The Employer
may,  in  its  discretion,   delegate   responsibility   for  administration  of
Participant-directed investments to the Trustee or an affiliate of the Trustee.

10.4.    Loans to Participants
Any Participant  may file a written  application  with the Retirement  Committee
requesting a loan from the Fund. The Retirement  Committee shall investigate the
application and approve or disapprove the loan in its sole discretion. All loans
shall  comply  with the rules and  requirements  outlined  in the Summary of the
Participant  Loan  Program  attached  to this  document,  which  the  Retirement
Committee may amend from time to time in its sole discretion.
<PAGE>

10.4.1   GENERAL PROVISIONS

10.5.    Employment Status
The adoption  and  maintenance  of the Plan shall not be deemed to  constitute a
contract between the Employer and any Employee or to be a consideration  for, or
an inducement to or condition of, the  employment of any person.  Nothing herein
contained  shall be deemed to: (i) give to any Employee the right to be retained
in the employ of the Employer,  (ii) interfere with the right of the Employer to
discharge  any  Employee at any time,  (iii) give to the  Employer  the right to
require  any  Employee  to  remain in its  employ,  or (iv)  interfere  with any
Employee's right to terminate his employment with the Employer at any time.

10.6.    Nonalienation of Benefits

Except to the extent that this  provision  may be contrary to law, the rights of
Participants  and  Beneficiaries   under  the  Plan  shall  not  be  subject  to
assignment,  attachment,  garnishment,  or alienation in any form, provided that
nothing in this Article  shall  preclude  the payment of benefits  pursuant to a
Qualified  Domestic Relations Order as defined in Section 414(p) of the Internal
Revenue Code, or any domestic relations order entered before January 1, 1985. If
a Qualified  Domestic  Relations Order provides for distribution to an alternate
payee (within the meaning of Section 414(e) of the Internal Revenue Code) of the
total benefit payable to the alternate payee from the Plan in a single sum, then
the  distribution  shall  be  made  pursuant  to the  order  whether  or not the
Participant  would otherwise be entitled to receive a distribution from the Plan
at the time of the distribution to the alternate payee.

10.7.    Impossibility of Performance
In the event that it becomes  impossible  for the  Employer  to perform  any act
under  the  Plan,  that act  shall be  performed  which in the  judgment  of the
Employer will most nearly carry out the intent and purposes of the Plan.

10.8.    Construction
In the  event  that  there  should  be any  question  as to the  meaning  of any
provision of the Plan,  the  interpretation  that governs  shall,  to the extent
allowable by law, be the one which complies with the Employee  Retirement Income
Security Act of 1974 and which  maintains  the status of the Plan as a qualified
employee pension benefit plan under Section 401(a) of the Internal Revenue Code.


10.9.   Termination of Trust
If the continued  existence of the Trust beyond a certain  period would cause it
to fail by operation of law, it shall continue for the maximum period  permitted
and shall then terminate with distribution of assets as provided in the Plan.

10.10.   Governing Law
All legal  questions  pertaining  to the Plan shall be  determined in accordance
with the laws of the State of New York except when those laws are  preempted  by
the laws of the United States.

10.11.   Mergers and Transfers
In the case of any  merger  or  consolidation  with or  transfer  of  assets  or
liabilities of this Plan to any other plan,  each  Participant in the Plan shall
be  entitled to receive a benefit  which he would have been  entitled to receive
had this plan been terminated  immediately after the merger,  consolidation,  or
transfer at least  equal to the  benefit he would have been  eligible to receive
prior to the merger, consolidation, or transfer.

10.12.   Participating Employers
(1) With the consent of the Employer,  any corporation which, with the Employer,
is a member of an affiliated group of corporations as defined in Section 1504 of
the Code and a member of a commonly  controlled group of corporations as defined
in  Section  414(b) of the  Code,  may adopt  this Plan for the  benefit  of its
employees and  participate  herein by resolution of its board of directors.  Any
corporation that adopts this Plan shall be known as a "Participating  Employer."
A  list  of  all  Participating  Employers  and  the  Effective  Date  for  each
Participating  Employer  is set forth in  Appendix  A, which is attached to this
Plan. Unless the context indicates to the contrary,  the term "Employer" as used
throughout the other Articles of this Plan and the term "Participating Employer"
as used in  Subsections  (3),  (4), (5) and (6) of this  Section  shall mean the
Employer and each Participating Employer.

     (2)  The Trustee, Retirement Committee members, and other Plan fiduciaries,
          agents, and employees  appointed or hired by the Employer shall act in
          their  respective  capacities  with  respect  to the Plan and Trust as
          adopted by any Participating  Employer.  Each  Participating  Employer
          shall be deemed to have  granted  the  Employer  the power of appoint,
          hire,  retain,  direct,  deal with, remove or discharge any fiduciary,
          agent  or  employee  of the  Plan,  and,  when the  Employer  deems it
          advisable,  to amend or terminate the Plan. The  Retirement  Committee
          shall have  authority to make any and all  policies and rules  binding
          upon the Employer,  all Participating  Employers and all Participants,
          to effectuate the purposes of this Article.
<PAGE>

     (3)  The  Trustee  shall  commingle,  hold  and  invest  in a  single  Fund
          contributions made by all Participating  Employers,  together with the
          income and profits thereon. Any expenses of the trust not borne by the
          Fund shall be paid by the Participating Employers.

     (4)  If an Employee is transferred between  Participating  Employers (or an
          Employee's  service with one Participating  Employer is terminated and
          he later commences  service with another  Participating  Employer) all
          service with the transferor (or the previous  Participating  Employer)
          shall  be  considered  service  with  the  transferee  (or  subsequent
          Participating  Employer) for all purposes under this Plan and shall be
          taken into account in accordance  with the provisions of this Plan. No
          direct  transfer by an  Employee  from one  Participating  Employer to
          another shall be  considered a termination  of employment or by itself
          result in a Break in Service.  (5) All contributions  made pursuant to
          Section  4.2,  as  agreed  to among  the  Employer  and  Participating
          Employers,  shall be allocated among the Accounts of all  Participants
          of all Participating  Employers,  in accordance with the provisions of
          the Plan. Any forfeiture from the Account of any Participants shall be
          allocated among the Accounts of all Participants of all  Participating
          Employers,  in accordance  with the  provisions  of the Plan.  (6) Any
          Participating  Employer may discontinue its  participation in the Plan
          at any time by properly executing a document  evidencing its intent to
          do so and delivering the same to the Trustee and Retirement  Committee
          with  notification  and  evidence  satisfactory  to  the  Trustee  and
          Retirement  Committee of the  establishment  of any new plan and trust
          and appointment of, and acceptance by, a successor trustee. As soon as
          practicable  after the receipt of such  documents  and  evidence,  the
          Trustee shall  transfer and deliver all assets and  liabilities of the
          Fund allocable to the Participants (or their beneficiaries)  currently
          or most  recently  employed  by  such  Participating  Employer  to the
          successor trustee. If no separate plan and trust is established by the
          Participating  Employer,  or no person or  entity is  appointed  to or
          accepts the position of  successor  trustee,  then the  discontinuance
          shall be considered a partial  termination of the Plan with respect to
          the  Participating  Employer,  and each  Participant  affected thereby
          shall  immediately  become fully  vested in his Matching  Contribution
          Account and Employer  Contribution Account. In this event, the Trustee
          shall retain all assets and  liabilities  allocable to the Accounts of
          the affected Participants (or their beneficiaries).  In no event shall
          the  assets  of  the  Fund  (including  profits  and  income  thereon)
          allocable  to  the  Participants  (or  their   beneficiaries)  of  the
          Participating Employer be used or diverted for purposes other than the
          exclusive benefit of these persons.
<PAGE>

10.13.   Claims Procedure
Any person whose claim for benefits under this Plan is denied will be advised of
the denial  and the  specific  reasons  therefor  in  writing by the  Retirement
Committee and afforded an opportunity to meet with the Retirement  Committee for
a full and fair review of both the claim and the  decision  rendered.  Any claim
for a  benefit  shall  be  made  by  submitting  a  written  application  to the
Retirement  Committee at least 60 days before the intended  retirement  date. In
the case of a disability retirement or upon the death of a Participant,  a claim
shall be made within 90 days following the separation from service. Upon receipt
of a claim,  the  Retirement  Committee  shall  notify the  claimant of the time
periods within which a decision will be made by the Retirement Committee and the
time within which he must appeal a decision of the Retirement Committee.  Within
90 days after  receipt  of the  claim,  the  Retirement  Committee  will reach a
decision and notify the claimant.  Any person whose claim for benefits under the
Plan is denied  will be advised in writing by the  Retirement  Committee  of the
denial  and  the  reasons  therefore  including   references  to  specific  Plan
provisions.  If any additional  information or material is required to perfect a
claim, the claimant will be so advised. The time for processing the claim may be
extended for an additional 90 days by the Retirement Committee providing written
notice of such extension to the claimant. If the claimant is not notified of the
decision  of the  Retirement  Committee  within  90  days  (or  180  days if the
determination period is extended) the claim shall be deemed denied. In the event
that a claim is denied in whole or in part,  the  claimant  shall be informed of
the procedures to be followed to appeal the decision.

10.14.  Appeal  Procedure
Any person whose claim for  benefits  has been denied may file a written  appeal
with the  Retirement  Committee  within 90 days after receipt by the claimant of
written  notification  of the denial or within 90 days after the claim is deemed
denied.  The claimant or his authorized  representative may review any pertinent
documents  and submit any issues or comments to the  Retirement  Committee.  The
claimant and/or his authorized  representative  shall be afforded an opportunity
to meet with the  Retirement  Committee  for a full and fair review of the claim
and  the  Retirement  Committee's  decision.  The  decision  of  the  Retirement
Committee  on appeal  will  normally  be made within 60 days of its receipt of a
written  appeal.  The time for  rendering  a  decision  may be  extended  for an
additional 60 days because of special circumstances, by the Retirement Committee
providing  written notice of such extension to the claimant.  The claimant shall
be  notified  in writing of the  decision of the  Retirement  Committee  and the
reasons  therefore  including  references  to specific Plan  provisions.  If the
claimant is not notified of the decisions within 60 days (120 days under special
circumstances)  then  the  claim  shall  be  deemed  denied  on  appeal.

10.15.
Counterparts  The Plan may be  executed in any number of  counterparts,  each of
which shall be  considered an original.  IN WITNESS  WHEREOF PSC Inc. has caused
this instrument to be executed this ____ day of ___________, 19___.


                             By: _____________________________




<PAGE>


                                   SCHEDULE A
                             PARTICIPATING EMPLOYERS

Participating Employer                                         Effective Date
PSC Scanning, Inc.                                              July 1, 1997
PSC Automation, Inc.                                            July 1, 1997