<PAGE>
EXHIBIT 10.77







                                HANOVER DIRECT

                         SAVINGS AND RETIREMENT PLAN

                             AMENDED AND RESTATED

                              AS OF JULY 1, 1999



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                                TABLE OF CONTENTS

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ARTICLE I         DEFINITIONS...............................................................1

ARTICLE II        PARTICIPATION AND ENTRY DATE..............................................8

        2.01.  Initial Eligibility..........................................................8

        2.02.  Plan Participation...........................................................8

        2.03.  Re-employment................................................................8

        2.04.  Change in Status.............................................................8

ARTICLE III       CONTRIBUTIONS.............................................................9

        3.01.  Salary Deferral Contributions................................................9

        3.02.  After-Tax Contributions......................................................9

        3.03.  Method of Contribution.......................................................9

        3.04.  Matching Employer Contributions.............................................10

        3.05.  Discretionary Employer Contributions........................................10

        3.06.  Non-Discrimination Test.....................................................11

        3.07.  Forfeitures.................................................................16

        3.08.  Maximum Contributions.......................................................17

        3.09.  Time of Payment.............................................................17

        3.10.  Annual Additions Limitation.................................................17

        3.11.  Return of Contribution......................................................19

        3.12.  Rollover Contributions......................................................19

ARTICLE IV        ADMINISTRATION OF FUNDS..................................................22

        4.01.  Investment of Funds.........................................................22

        4.02.  Investment Elections........................................................23

        4.03.  Change of Elections.........................................................23

        4.04.  Restrictions on Changes.....................................................23

        4.05.  Valuation of Assets.........................................................23

        4.06.  Voting of Shares............................................................23

        4.07.  Tender Offer Procedure......................................................23

        4.08.  ERISA Section 404(c) Plan...................................................24

        4.09.  Confidentiality.............................................................24

        4.10.  Fiduciary Designation.......................................................24

ARTICLE V         RETIREMENT BENEFITS......................................................26
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                                TABLE OF CONTENTS


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        5.01.  Normal Retirement Benefit...................................................26

        5.02.  Deferred Retirement Benefit.................................................26

        5.03.  Disability Retirement Benefit...............................................26

        5.04.  Payment of Benefits.........................................................26

        5.05.  Additional Allocations on Retirement........................................27

        5.06.  Crediting of Investment Earnings............................................27

        5.07.  Company Stock...............................................................27

ARTICLE VI        DEATH BENEFITS...........................................................28

        6.01.  Death Benefits..............................................................28

        6.02.  Additional Allocations on Death.............................................28

        6.03.  Beneficiary Designation.....................................................28

ARTICLE VII       VESTING AND SEPARATION FROM SERVICE......................................30

        7.01.  Vesting of Accounts.........................................................30

        7.02.  Payment of Benefits.........................................................30

        7.03.  Reemployment After Distribution and Restoration Contributions...............31

ARTICLE VIII      WITHDRAWALS AND LOANS....................................................32

        8.01.  Withdrawals While Employed..................................................32

        8.02.  Loans.......................................................................33

ARTICLE IX        ADMINISTRATION...........................................................35

        9.01.  Plan Administrator..........................................................35

        9.02.  Administrative Procedures...................................................35

        9.03.  Other Plan Administrator....................................................35

        9.04.  Special Administrative Matters .............................................35

        9.05.  Claims Procedures...........................................................36

        9.06.  Expenses....................................................................36

ARTICLE X         AMENDMENT, TERMINATION AND MERGERS.......................................38

        10.01. Amendment...................................................................38

        10.02. Plan Termination............................................................39

        10.03. Permanent Discontinuance of Employer Contributions..........................39

        10.04. Suspension of Employer Contributions........................................39

        10.05. Mergers and Consolidations of Plans.........................................40
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                                TABLE OF CONTENTS


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ARTICLE XI        MISCELLANEOUS PROVISIONS.................................................41

        11.01. Non-Alienation of Benefits..................................................41

        11.02. No Contract of Employment...................................................42

        11.03. Severability of Provisions..................................................42

        11.04. Heirs, Assigns and Personal Representatives.................................42

        11.05. Headings and Captions.......................................................42

        11.06. Gender and Number...........................................................42

        11.07. Funding Policy..............................................................42

        11.08. Title to Assets.............................................................42

        11.09. Payment to Minors, etc......................................................43

        11.10. Military Service............................................................43

        11.11. Forms.......................................................................43

        11.12  Situs.......................................................................43

ARTICLE XII       TOP-HEAVY PROVISIONS.....................................................44

        12.01. Top-Heavy Plan..............................................................44

        12.02. Minimum Contributions or Benefits...........................................47

        12.03. Adjustment to Maximum Benefits..............................................48

        12.04. Minimum Vesting.............................................................48

        12.05. Discontinuance of Article...................................................49

 SCHEDULE A:  EFFECTIVE DATES..............................................................48

APPENDIX A:  ADOPTING EMPLOYERS............................................................49
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                                     -iii-

<PAGE>



                  HANOVER DIRECT SAVINGS AND RETIREMENT PLAN

                             AMENDED AND RESTATED

                              AS OF JULY 1, 1999

         WHEREAS, Hanover Direct, Inc. (hereinafter sometimes referred to as
the "Company") has previously adopted the Hanover Direct Savings and
Retirement Plan, as amended and restated as of July 1, 1999; and

         WHEREAS, the Company desires to amend the Plan to reflect tax law
changes that became effective since the last restatement of the Plan and to
reflect various plan design changes adopted by the Company's Board of
Directors;

         NOW, THEREFORE, the Company hereby amends and restates the Plan,
effective July 1, 1999 except as otherwise provided herein, as follows:



                                  ARTICLE I

                                 DEFINITIONS

         1.01.    "Account" shall mean with respect to a Participant all of
the various accounts maintained to define such Participant's proportionate
interest in the Trust Fund as follows:

         (a)      A "Salary Deferral Contribution Account" shall be maintained
for each Participant which includes the Salary Deferral Contributions made on
behalf of the Participant, and the appreciation or depreciation of the
investments allocated to that Account and the income earned on such
investments.

         (b)      An "After-Tax Contribution Account" shall be maintained for
each Participant who has made After-Tax Contributions to the Plan. The
After-Tax Contribution Account includes the Participant's After-Tax
Contributions, and the appreciation or depreciation of the investments
allocated to that Account and the income earned on such investments.

         (c)      A "Matching Employer Contribution Account" shall be
maintained for each Participant which reflects the Matching Employer
Contributions allocated to the Participant and the appreciation or
depreciation of the investments allocated to that Account and the income
earned on such investments.

         (d)      A "Discretionary Employer Contribution Account" shall be
maintained for each Participant which reflects the Discretionary Employer
Contributions allocated to the Participant and the appreciation or
depreciation of the investments allocated to that Account and the income
earned on such investments.


<PAGE>

         (e)      A "Rollover Contribution Account" shall be maintained for
each Participant which reflects any rollover contribution made in accordance
with Section 3.15 and the appreciation or depreciation of the investments
allocated to that Account and the income earned on such investments.

         1.02.    "Affiliated Organization" shall mean (i) any corporation on
or after the date it becomes a member of a controlled group of corporations
which includes the Company, as determined under the provisions of Section
414(b) of the Code, (ii) any trade or business, whether or not incorporated,
on or after it comes under common control with the Company, as determined
under Section 414(c) of the Code, (iii) any organization which is an
affiliated service organization within the meaning of Section 414(m) of the
Code, and (iv) any other entity required to be aggregated pursuant to
regulations under Section 414(o) of the Code.

         1.03.    "Age" or "age" shall mean the chronological age attained by
the Participant at his most recent birthday or as of such other date of
reference as set forth in this Plan.

         1.04.    "Board of Directors" shall mean the board of directors of
the Company.

         1.05.    "Break-in-Service" shall mean a plan Year during which an
Employee has not completed more than five hundred (500) Hours of Service. For
purposes of determining whether there has been a Break-in-Service an Employee
shall be credited with Hours of Service for the period during which he or she
is on a leave of absence pursuant to the Family and Medical Leave Act of 1993
as follows: (a) the Employee shall be credited with the number of Hours of
Service he would normally be credited with but for the absence (or if the
Employee's normal Hours of Service cannot be determined, eight Hours of
Service for each day of the absence), (b) the total number of Hours of Service
credited for the absence shall not exceed 501, and (c) the Hours of Service
credited for the absence shall be credited to the Plan Year in which the
absence begins if the Employee would be prevented from incurring a
Break-in-Service in that Plan Year solely because of the crediting of Hours of
Service in accordance with clauses (a) and (b) of this definition, or in any
other case, the immediately following Plan Year.

         1.06.    "Code" means the Internal Revenue Code of 1986 as the same
presently exists, and as it may hereafter be amended or clarified by
regulations, rulings, notices or other publications of the Internal Revenue
Service having legal effect.

         1.07.    "Compensation" shall mean, for any applicable period, the
W-2 earnings of a Participant including bonuses, overtime, commissions and any
Salary Deferral Contribution made on behalf of the Participant under this
Plan, and any contributions made by salary reduction to a plan established in
accordance with Section 125, 129 or 132(f) of the Code. Compensation shall
exclude premiums paid to a life insurance plan of the Company for additional
coverage above $50,000, the value of Company car or commutation allowances,
reimbursements for expenses and any other fringe benefits. For any Plan Year
commencing after December 31, 1988, Compensation shall not exceed $200,000, or
such other maximum amount as set forth under Section 401(a)(17) of the Code,
adjusted at the same time and in the same manner as under Section 415(d) of
the Code, except that the dollar increase in effect on January 1 of any
calendar year is effective for Plan Years beginning in such calendar year and
the first adjustment to the $200,000 limitation is effected on January 1,
1990. If Compensation is determined over a Plan Year that contains fewer than
12 calendar months,


                                       2

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the annual compensation limit is an amount equal to the annual compensation
limit for the calendar year in which the compensation period begins multiplied
by the ratio obtained by dividing the number of full months in the period by 12.

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

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

         If Compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current Plan
Year, the Compensation for that prior determination period is subject to the
OBRA '93 annual Compensation limit in effect for that prior determination
period. For this purpose, for determination periods beginning before the first
day of the first Plan Year beginning on or after January 1, 1994, the OBRA '93
annual Compensation limit is $150,000.

         1.08.    "Contribution" shall mean any or all of the various types of
contributions made under the Plan by Participants or the Employer, as
described below:

         (a)      "Salary Deferral Contribution" shall mean that portion of
the Contribution made to the Plan on behalf of a Participant by his Employer
through a salary reduction agreement, as described under Section 3.01.

         (b)      "After-Tax Contribution" shall mean that portion of a
Participant's Contribution to the Plan which he elects to make independent of
a salary reduction agreement, as described under Section 3.02. Effective April
1, 1996, no further After-Tax Contributions may be made to the Plan.

         (c)      "Matching Employer Contribution" shall mean a Contribution
made by an Employer as described under Section 3.04, based on a Participant's
Salary Deferral Contribution.

         (d)      "Discretionary Employer Contribution" shall mean a
Contribution made by an Employer which is unrelated to any Participant
Contributions, as described under Section 3.05.

         1.09.    "Contribution Percentage" shall mean the percentage
determined by dividing (i) the Salary Deferral Contribution made by or on
behalf of a Participant for the applicable period by (ii) his compensation as
defined under Code Section 414(s). "ADP" shall sometimes be used herein to
refer to the average Contribution Percentage with respect to Salary Deferral
Contributions or


                                      3

<PAGE>
amounts treated as Salary Deferral Contributions. "ACP" shall sometimes be used
herein to refer to the average Contribution Percentage with respect to Matching
Employer Contributions.

         1.10.    "Date of Employment" shall mean the first date on which an
Employee is credited with an Hour of Service for the Employer.

         1.11.    "Disability" shall mean a physical or mental condition of
such severity and probable prolonged duration as to cause the Participant to
be unable to continue his duties as an Employee. The existence of any
Disability shall be determined by a physician chosen by the Plan
Administrator, based on medical evidence of a physical or mental impairment
that can be expected to last more than 12 months or result in death, or on
other uniform and non-discriminatory criteria as established by the Plan
Administrator. Notwithstanding the foregoing, eligibility for Social Security
Disability benefits or for long term disability benefits under an insured plan
sponsored by the Employer shall be deemed conclusive proof of disability.

         1.12.    "Effective Date" of this Plan shall mean April 1, 1983. The
effective date of this amended and restated Plan is July 1, 1999, except as
otherwise indicated on Schedule A or otherwise provided in the Plan. The
benefits, if any, of any Employee who ceased employment by retirement,
termination, death, or otherwise before such date shall, except as otherwise
provided in the Plan or otherwise required by law, be determined in accordance
with the provisions of the Plan as in effect at the time his employment
ceased.

         1.13.    "Eligible Employee" shall mean an Employee who has attained
age twenty-one (21) and has completed either a Qualifying Period of Service or
one Year of Service. For purposes of this section, a "Qualifying Period of
Service" means a period of at least six months and less than one year
commencing on an Employee's Date of Employment during which period the
Employee has performed at least one thousand (1,000) Hours of Service.
Notwithstanding the foregoing, the term "Eligible Employee" shall not include
any person whose terms and conditions of employment are determined by
collective bargaining with a third party and with respect to whom inclusion in
this Plan has not been provided for in the collective bargaining agreement
setting forth those terms and conditions of employment, nor shall the term
"Eligible Employee" include any independent contractor or a leased employee.
An Eligible Employee shall not include an individual not on the Employer's
payroll (including any individual classified at the time as an independent
contractor, even if such individual's relationship to the Employer is
subsequently determined by an agency, a court, or the Employer to have been
that of a common law employee).

         1.14.    "Employee" shall mean any employee of the Employer or an
Affiliated Organization, including a leased employee as defined under Section
414(n) of the Code.

         The term "leased employee" means any person (other than an employee
of the recipient organization) who pursuant to an agreement between the
recipient organization and any other person ("leasing organization") has
performed services for the recipient organization (including related persons
determined in accordance with Section 414(n)(6) of the Code) on a
substantially full-time basis for at least one (1) year, and such services are
performed under the primary direction or control of the recipient.
Contributions or benefits provided a leased employee by the leasing
organization which are attributable to services performed for the recipient
employer shall be treated as provided by the recipient employer.


                                      4

<PAGE>
         A leased employee shall not be considered an employee of the
recipient organization if: (i) such employee is covered by a money purchase
pension plan providing immediate participation, full and immediate vesting and
a nonintegrated employer contribution rate of at least ten (10%) percent
of compensation (as defined in Section 415(c)(3) of the Code, but including
amounts contributed by the employer pursuant to a salary reduction agreement
which are excludable from the employee's gross income under Section 125,
Section 402(a)(8), Section 401(h) or Section 403(b) of the Code). Also, the
leased employees must not constitute more than twenty percent (20%) of the
recipient organization's Non-Highly Paid workforce.

         1.15.    "Employer" shall mean Hanover Direct, Inc. (hereinafter
sometimes referred to as the "Company"), its predecessor, The Horn & Hardart
Company, and the Company's subsidiaries and affiliates and any successor
entities thereto which adopt this Plan. Such adopting Employers shall be set
forth in Appendix A attached at the end of this document.

         1.16.    "Entry Date" shall mean the first day of any calendar month.

         1.17.    "ERISA" means the Employee Retirement Income Security Act of
1974 (P.L. 93-406), including all amendments thereto.

         1.18.    "Fund" or "Trust Fund" shall mean all of the assets of the
Plan held by the Trustees (or any nominees thereof) at any time under the
Trust Agreement.

         1.19.    "Highly-Paid Employee" shall mean, with respect to any Plan
Year, any Employee who (i) was a 5% owner (as defined in Section
416(i)(1)(B)(i) of the Code) at any time during the Plan Year or the preceding
Plan Year, or (ii) for the preceding Plan Year had Compensation in excess of
$80,000 (as adjusted at the same time and in the same manner as under Section
415(d) of the Code to reflect increases in the cost of living).

                  For purposes of this definition, Compensation shall mean
compensation as defined in Section 414(q)(7) of the Code from the Employer or
an Affiliated Organization. The provisions of this Section 1.19 shall be
subject to such additional requirements as may be described in Section 414(q)
of the Code and the regulations thereunder, which shall override any aspects
of this Section 1.19 inconsistent therewith.

         1.20.    "Hour of Service" shall mean the following:

         (a)      An Hour of Service is each hour for which an Employee is
paid, or entitled to payment, for the performance of duties for the Employer
or an Affiliated Organization during the Plan Year.

         (b)      An Hour of Service is each hour for which an Employee is
paid, or entitled to payment (either directly or indirectly), by the Employer
or an Affiliated Organization on account of a period of time during which no
duties are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), lay-off, jury duty, military duty or leave of absence.
Notwithstanding the preceding sentence:

                  (i)      No more than 501 Hours of Service shall be credited
under this paragraph (b) to an Employee on account of any single continuous
period during which the Employee performs no

                                      5

<PAGE>
duties (whether or not such period occurs in a single Plan Year) except as the
following provisions may result in a credit of more than 501 Hours of Service:

                            (1)      If an Employee receives full pay during any
authorized leave of absence, and he returns to work after such absence, he shall
be credited with an Hour of Service for each hour for which he was paid.

                           (2)      If an Employee is on a paid sick leave, he
shall receive an Hour of Service for each hour that he would have normally
worked during such leave.

                           (3)      If an Employee is absent in military
service, and he retained re-employment rights under the law, and he completed
requirements under the law as to re-employment and was re-employed, he shall
be credited with an Hour of Service for each hour that he would have normally
worked had he not entered military service solely for purposes of determining
his vested rights; and

                           (4)      If an Employee transfers to an employment
status which is ineligible to participate in this Plan, he will continue to be
credited with Hours of Service as described above, for purposes of determining
his vested rights. However, he will receive no Hours of Service for purposes
of determining his right to receive a Contribution to his Account after the
date of his change in employment status.

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

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

         (c)      An hour worked at overtime or premium pay will count as only
one Hour of Service under the Plan.

         (d)      An Hour of Service is each hour for which back pay,
irrespective of mitigation of damages, is either awarded to or agreed to by
the Employer. The same Hours of Service shall not be credited both under
paragraph (a) or paragraph (b), as the case may be, and under this paragraph
(d). Crediting of Hours of Service for each pay awarded shall be subject to
the limitations set forth in paragraphs (a), (b) and (c).

         (e)      An Hour of Service shall also be credited for reasons other
than the performance of duties in accordance with Department of Labor
Regulations, Section 2530.200b-2(b). Further, the computation periods used for
purposes of crediting Hours of Service shall be in accordance with Department
of Labor Regulations, Section 2530.200b-2(c). If an Employer does not maintain
hourly records with respect to any Employee, such Employee shall be credited
with forty-five (45) Hours of Service for each week in which he is entitled to
be credited with an Hour of Service.


                                      6

<PAGE>
         1.21.    "Named Fiduciary" shall mean the Employer, the Trustees and
the Plan Administrator. Each named Fiduciary shall have only those particular
powers, duties, responsibilities and obligations as are specifically given him
under the Plan and/or the Trust Agreement.

         1.22.    "Normal Retirement Date" shall mean the date on which the
Participant has attained age 65.

         1.23.    "Participant" shall mean any person who is eligible to
receive benefits under the Plan. The term "Participant" shall include an
Active Participant (each Eligible Employee who has satisfied the participation
requirements of Section 2.01 as of an applicable Entry Date or who has made a
Rollover Contribution), Terminated Vested Participants (former Employees who
are entitled at some future date to the distribution of benefits from this
Plan), and Inactive Participants (former Participants who are not Terminated
Vested Participants and who continue to be employed in a non-covered class by
an Employer or by an Affiliated Organization).

         1.24.    "Plan" shall mean the Hanover Direct Savings and Retirement
Plan as set forth herein, and as the same may from time to time hereafter be
amended.

         1.25.    "Plan Administrator" or "Administrator" shall mean the
Employer, or the persons or committee named as such pursuant to the provisions
of Article IX hereof.

         1.26.    "Plan Year" shall mean a twelve (12) month period beginning
on January 1st and ending on each December 31st.

         1.27.    "Reduced Compensation" shall mean Compensation reduced by
any Salary Deferral Contributions made by the Participant and also reduced by
any contributions made by salary reduction to a plan established in accordance
with Section 125 or 129 of the Code.

         1.28.    "Trust Agreement" shall mean the Hanover Direct Savings and
Retirement Trust Agreement as the same presently exists and as it may from
time to time hereafter be amended.

         1.29.    "Trustees" shall mean the party or parties so designated
pursuant to the Trust Agreement.

         1.30.    "Valuation Date" shall mean each business day on which the
New York Stock Exchange is open for business and any other day of the Plan
Year as determined by the Plan Administrator.

         1.31.    "Wage Base" shall mean the amount of compensation with
respect to which old age and survivors' insurance benefits would be provided
for a Participant under the Social Security Act, as in effect for the calendar
year in which the Plan Year commences.

         1.32.    "Year of Service" shall mean a Plan Year in which an
Employee has at least one thousand (1,000) Hours of Service. In addition,
solely for purposes of determining whether an Employee is eligible to become a
Participant after his initial year of employment under Section 2.01, a Year of
Service shall be credited to an Employee who has at least one thousand (1,000)
Hours of Service during the initial twelve (12) month period commencing with
such Employee's Date of Employment.


                                      7

<PAGE>
         All Years of Service shall be counted regardless of whether or not
such years are continuous, subject to Appendix A attached at the end of this
document.

                                  ARTICLE II

                         PARTICIPATION AND ENTRY DATE

         2.01.    Initial Eligibility.

         Each Eligible Employee who is a Participant immediately prior to the
effective date of this amended and restated Plan shall continue to participate
as of such effective date. Each other Employee shall be eligible to become a
Participant on the Entry Date coincident with or next following the date he
first becomes an Eligible Employee.

         2.02.    Plan Participation.

         Each Employee who is eligible to participate in accordance with
Section 2.01 shall complete such forms and provide such data as are reasonably
required by the Plan Administrator as a precondition to Plan participation. In
order to receive a Salary Deferral Contribution, a Participant must enter into
a salary reduction agreement to be effective as of an Entry Date, electing to
reduce his salary by an amount equal to his Salary Deferral Contribution. A
Participant's Salary Deferral Contribution for any Plan Year shall not exceed
$10,000 or such higher maximum contribution for a taxable year as may be
permitted under Section 402(g) of the Code. The Plan Administrator shall
determine the minimum and/or maximum permitted rate of salary reduction. Any
maximum permitted salary reduction may apply to all Participants or solely to
those Participants who are Highly-Paid Employees. The election of a Salary
Deferral Contribution shall not, in any way, be contingent upon any other
election made under the Plan. By becoming a Participant, an Employee shall for
all purposes be deemed conclusively to have assented to the provisions of the
Plan, the corresponding Trust Agreement and to all amendments to such
instruments.

         2.03.    Re-employment.

         In the event an Employee terminates employment, and is re-employed, he
shall be eligible to be admitted or readmitted as an Active Participant on the
date of his re-employment or, if later, the Entry Date coincident with or next
following the date he becomes an Eligible Employee.

         2.04.    Change in Status.

         In the event that a person who has been an Employee in an employment
status not eligible for participation in this Plan subsequently becomes
eligible by reason of a change in status, he shall be eligible to become a
Participant on the Entry Date coincident with or next following the date on
which he becomes an Eligible Employee.

                                      8


<PAGE>




                                 ARTICLE III

                                CONTRIBUTIONS

         3.01.    Salary Deferral Contributions.

         The Employer will make a Salary Deferral Contribution to the Plan for
each Active Participant who has entered into a salary reduction agreement, in
accordance with Section 2.02, as determined by such salary reduction
agreement.

         "Excess Elective Deferrals" shall mean any Salary Deferral
Contributions which exceed the dollar limitation under Code Section 402(g).
Such Excess Elective Deferrals shall be treated as annual additions under the
Plan unless they are distributed in accordance with this Article.

         A Participant may assign to this Plan any Excess Elective Deferrals
made during a taxable year of the Participant by providing fifteen (15) days'
written notification to the Administrator of the amount of the Excess Elective
Deferrals to be assigned to this Plan. Such notice shall be provided no later
than the first March 1st following the close of the individual's tax year.
Excess Elective Deferrals with respect to the combination of Excess Elective
Deferrals and deferrals under another plan of deferred compensation of an
Employer or an Affiliated Organization may automatically be returned to the
Participant.

         Notwithstanding any other provision of the Plan, Excess Elective
Deferrals, plus any income and minus any loss allocable thereto, shall be
distributed no later than April 15th to any Participant to whose Account
Excess Elective Deferrals were assigned for the preceding year and who claims
Excess Elective Deferrals for such taxable year.

         Excess Elective Deferrals shall be adjusted for any income or loss.
The income or loss allocable to Excess Elective Deferrals is the income or
loss allocable to the Participant's Account for the taxable year multiplied by
a fraction, the numerator of which is such Participant's Excess Elective
Deferrals for the year and the denominator of which is the Participant's
Salary Deferral Contribution Account without regard to any income or loss
occurring during such taxable year.

         3.02.    After-Tax Contributions.

         Prior to April 1, 1996 Participants were permitted to elect to make
After-Tax Contributions to the Trust for each Plan Year in amounts not less
than one percent (1%) of Compensation, nor more than ten percent (10%) of
Compensation for such Plan Year. Effective April 1, 1996, no further After-Tax
Contributions may be made to the Plan.

         3.03.    Method of Contribution.

         Salary Deferral Contributions may be made by periodic payroll
deductions or on such other basis as shall be determined from time to time by
the Plan Administrator. Nothing contained herein shall preclude the Plan
Administrator from not allowing Salary Deferral Contributions to be made by
any Participant to enable the nondiscrimination test of Section 3.06 to be met
or from limiting the
                                      9

<PAGE>
number of payroll periods in a Plan Year during which such Contributions are
permitted. A Participant may file with the Plan Administrator at any time an
election to increase or decrease his Salary Deferral Contribution, or to
discontinue his Salary Deferral Contribution, which election shall be effective
as soon as practicable following the receipt thereof.

         No contributions may be made by or on behalf of any Participant
during any period that he is receiving long term disability benefits, worker's
compensation benefits or while the Participant is on a leave of absence for
which no Compensation is being paid from the Employer.

         3.04.    Matching Employer Contributions.

         An Employer may elect, in its sole discretion, to make Matching
Employer Contributions for a Plan Year for each Active Participant on whose
behalf Salary Deferral Contributions have been made during the Plan Year.

         For any Plan Year, the Matching Employer Contributions (including any
forfeitures reallocated in accordance with Section 3.10) shall be allocated to
the Accounts of such Active Participants for the Plan Year in the same
proportion as the amount of Salary Deferral Contributions (not in excess of
six percent (6.0%) of the Participant's Compensation) for each such Active
Participant for such Plan Year bears to the total Salary Deferral Contribution
(as so limited) for all such Active Participants for such Plan Year.

         3.05.    Discretionary Employer Contributions.

         For any Plan Year, an Employer may elect, in its sole discretion, to
make an additional Discretionary Employer Contribution to the Plan. If a
Discretionary Employer Contribution is made, then it shall be allocated as of
the last day of the Plan Year to the Account of each Active Participant who
(i) retired at or after age 65, retired due to a Disability or died during
such Plan Year or (ii) (a) had at least 1,000 Hours of Service during such
Plan Year and (b) is actively employed as of the last day of such Plan Year,
including any such Participant who did not make Salary Deferral Contributions
for such Plan Year. An individual who is terminated prior to the last day of a
Plan Year, but who is receiving severance pay as of such date, shall not be
deemed to be actively employed as of the last day of a Plan Year.

         The amount allocated to each such Participant shall be an amount
chosen by the Company to be allocated under (a) below. If any Discretionary
Employer Contribution remains, such amount shall be allocated in accordance
with (b) below.

         (a)      An amount shall be allocated equal to a percentage of each
such Participant's Compensation earned while a Participant for such Plan Year,
plus the same percentage of the excess of (i) such Participant's Compensation
earned while a Participant for the Plan Year above (ii) the Wage Base for such
Plan Year. However, the percentage of Compensation used for allocations above
the Wage Base shall not exceed 5.7% (or such other percentage which equals the
maximum percentage permitted under Code Section 401(l)).

         (b)      Any remaining Discretionary Employer Contribution shall be
allocated to each such Participant in proportion to the ratio that each such
Participant's Compensation earned while a Participant bears to such eligible
Compensation of all eligible Participants for the Plan Year.

                                      10

<PAGE>

         3.06.    Non-Discrimination Tests Regarding Salary Deferrals.

         (a)      Nondiscrimination Tests.  For each Plan Year, at least one
of the following nondiscrimination tests shall be satisfied:

                  (i)      The ADP of eligible Highly-Paid Employees for such
Plan Year shall not be more than 125% of the ADP of all eligible Non-Highly
Paid Employees for the prior Plan Year; and

                  (ii)     The ADP of eligible Highly-Paid Employees for the
Plan Year shall not be more than two percentage points higher than, nor more
than 200% of, the ADP of all eligible Non-Highly Paid Employees for the prior
Plan Year.

For purposes of the nondiscrimination tests, an Employee is "eligible" if he
is eligible for Salary Deferral Contributions for all or part of the Plan Year
being tested.

         (b)      Definition of ADP.

                  (i)      General Rule. For each group being tested, "ADP"
means the average of the following percentages (calculated separately for each
group member): Salary Deferral Contributions on behalf of a group member
divided by the Compensation of that group member ("Actual Deferral Ratio").
The ADP for each group and the Actual Deferral Ratio for each Employee shall
be calculated to the nearest one-hundredth of one percent. The Actual Deferral
Ratio of an Eligible Employee who does not have any Salary Deferral
Contributions is zero. If the Participant is a Highly-Paid Employee, his
Salary Deferral contributions under any other Section 401(k) plan of the
Employer shall be included in determining his ADP for the Plan. The ADP shall
reflect any adjustments required by Notice 98-1 and any superseding guidance
issued by the Internal Revenue Service.

                  (ii)     Definition of Compensation.  For purposes of
determining a Participant's Actual Deferral Ratio, his Compensation shall be
as defined in Section 1.07.

                  (iii)    Excess Salary Deferrals. Excess Elective Deferrals
shall be counted in determining the Participant's Actual Deferral Ratio.
However, Salary Deferral Contributions by a Non-Highly Paid Employee that
exceed the dollar limit of Code Section 402(g) shall not be counted to the
extent the Salary Deferral Contributions are made under plans sponsored by the
Employer.

         (c)      Salary Deferrals Which Must Be Counted.   All Salary
Deferral Contributions which satisfy both of the following requirements for a
Plan Year must be counted for purposes of determining the ADP for that Plan
Year:

                  (i)      The Salary Deferral Contributions are allocated to
a Participant's Account as of a date within the Plan Year; and

                  (ii)     The Salary Deferral Contributions (A) relate to
Compensation which would have been received by the Participant in the Plan
Year if the Participant had not elected to have the Salary Deferral
Contributions made on his behalf; or (B) are attributable to services rendered
during the Plan Year and for which the Participant would have been paid within
2 1/2 months after the end of the Plan Year.

                                      11

<PAGE>

However, to the extent Salary Deferral Contributions are counted as Matching
Employer Contributions for purposes of satisfying the nondiscrimination tests
described in Section 3.07, the Salary Deferral Contributions shall not be
counted under this subsection for purposes of the nondiscrimination tests
described in subsection (a). Also, any Salary Deferral Contributions which are
returned to the Participant under Section 3.13 shall not be counted.

         (d)      Aggregation. Two or more qualified plans which are treated
as a single plan for purposes of Section 401(a)(4) or Section 410(b) of the
Code shall be treated as a single plan for purposes of this Section. In
addition, any other qualified plans (other than an employee stock ownership
plan) which are maintained by Employer or an Affiliated Organization may be
treated as a single plan for purposes of this Section. Any plans aggregated
under this section must have the same Plan Year.

         (e)      Special Rules for Early Participation. If the Employer
elects to apply Section 410(b)(4)(B) of the Code in determining whether the
Plan meets the requirements of Section 410(b) of the Code, the Employer may
exclude from consideration for purposes of this Section all Eligible Employees
(other than Highly-Paid Employees) who have not performed a Year of Service.

         (f)      Corrective Action. If necessary to satisfy the
nondiscrimination tests described in subsection (a), the Employer may
distribute the excess contributions to Highly-Paid Employees using the
procedure described in Section 3.08. If such corrective action is taken within
2-1/2 months after the end of the Plan Year in which the excess contributions
are made, no penalty shall be assessed. If the corrective action is not taken
within the 2-1/2 month period, an excise tax equal to 10% of the excess
contributions may be imposed on the Employer.

         (g)      Records.  The Employer shall maintain records demonstrating
compliance with the nondiscrimination tests set forth in this Section.

         3.07.    Nondiscrimination Tests Regarding Matching Employer
Contributions.

         (a)      Nondiscrimination Tests.  For each Plan Year, at least one
of the following nondiscrimination tests shall be satisfied.

                  (i)      The ACP of eligible Highly Compensated Employees
for such Plan Year shall not be more than 125% of the ACP of all eligible
Non-Highly Paid Employees for such prior Plan Year; or

                  (ii)     The ACP of eligible Highly-Paid Employees for such
Plan Year shall not be more than two percentage points higher than, nor more
than 200% of, the ACP of all eligible Non-Highly Paid Employees for the prior
Plan Year.

For purposes of the nondiscrimination tests, an Employee is "eligible" for a
Plan Year if he is eligible to receive a Matching Employer Contribution for
the Plan Year.

         (b)      Definition of ACP.

                  (i)      General Rule. For each group being tested, "ACP"
means the average of the following percentages (calculated separately for each
group member): Matching Employer
                                      12

<PAGE>
Contributions on behalf of a group member, divided by the Compensation of that
group member ("Actual Contribution Ratio"). The Actual Contribution Ratio for
each Employee and the ACP for each group shall be calculated to the nearest
one-hundredth of one percent. If a Participant is a Highly Compensated Employee,
any matching contributions made on his behalf in any other qualified plan
maintained by the Employer shall be included in determining his Actual
Contribution Ratio for the Plan. The ACP shall reflect any adjustments required
by Notice 98-1 and any superseding guidance issued by the Internal Revenue
Service.

                  (ii)     Definition of Compensation. For purposes of
determining a Participant's Actual Contribution Ratio, his Compensation shall
be determined in the same manner as described in Section 1.07.

         (c)      Matching Employer Contributions Which Must Be Counted.
Matching Employer Contributions that satisfy the following conditions are
counted for purposes of satisfying the nondiscrimination tests for the Plan
Year being tested:

                  (i)      The Matching Employer Contributions are allocated
to a Participant's Account as of a date within the Plan Year;

                  (ii)     The Matching Employer Contributions are made on
account of Pay Deferral Contributions for the Plan Year; and

                  (iii)    The Matching Employer Contributions are not used to
satisfy the minimum contribution requirement of Section 12.02.

         (d)      Aggregation. Two or more qualified plans which are treated
as a single plan for purposes of Section 401(a)(4) or Section 410(b) of the
Code shall be treated as a single plan for purposes of this Section. In
addition, any other qualified plans (other than an employee stock ownership
plan) which are maintained by the Employer or an Affiliated Organization may
be treated as a single plan for purposes of this Section. Any plans aggregated
under this section must have the same Plan Year.

         (e)      Special Rule for Early Participation. If Employer elects to
apply Section 410(b)(4)(B) of the Code in determining whether the Plan meets
the requirements of Section 410(b) of the Code, the Employer may exclude from
consideration for purposes of this section all Eligible Employees (other than
Highly-Paid Employees) who have not performed a Year of Service.

         (f)      Corrective Action. If necessary to satisfy the
nondiscrimination tests described in subsection (a), the Employer shall
forfeit the nonvested portion and distribute the vested portion of the excess
Matching Employer Contributions to Highly Compensated Employees using the
procedure described in Section 3.08. If a corrective distribution described in
this subsection (f) is made within 2-1/2 months after the end of the Plan Year
for which the excess contributions are made, no penalty shall be assessed. If
the corrective distribution is not made within the 2-1/2 month period, an
excise tax equal to 10% of the excess Matching Employer Contributions may be
imposed on the Employer. If corrective action is not taken by the end of the
Plan Year following the Plan Year in which the excess contributions are made,
the Plan may violate Section 401(a)(4) of the Code.


                                      13

<PAGE>
         (g)      Records.  Employer shall maintain records demonstrating
compliance with the nondiscrimination tests set forth in this Section.

         3.08.    Procedure for Corrective Distributions to Satisfy the
Nondiscrimination Tests. If for any Plan Year the ADP, the ACP, or the sum of
the ADP and the ACP for Participants who are Highly-Paid Employees exceeds the
maximum percentages determined under Sections 3.06, 3.07 and 3.09, amounts
shall be returned or distributed not later than the last day of the following
Plan Year as follows:

         (a)      First, if the ADP of Participants who are Highly-Paid
Employees exceeds the maximum under Section 3.06 for a Plan Year, the excess
contributions shall be distributed to the Participants to whom such excess
contributions are allocated in accordance with this Section 3.08(a). Excess
contributions shall be allocated to the Highly-Paid Employees with the largest
amounts of Employer contributions taken into account in calculating the ADP
test for the Plan Year, beginning with the Highly-Paid Employee with the
largest amount of such Employer contributions and continuing in descending
order until all the excess contributions have been allocated. For purposes of
the preceding sentence, the "largest amount" shall be determined after
distribution of any excess Salary Deferral Contributions. A Participant's
Actual Deferral Ratio shall be reduced by returning to him a portion (or all)
of his Salary Deferral Contributions for that Plan Year. The amount of Salary
Deferral Contributions to be returned to the Participant shall be reduced by
the amount of any Salary Deferral Contributions previously returned to him
with respect to that Plan Year under Section 3.01.

         (b)      Second, in the case of a Participant to whom Salary Deferral
Contributions are returned under clause (a), the amount of his Matching
Employer Contributions attributable to those Salary Deferral Contributions
shall be forfeited and shall reduce the amount of contributions of the
Employer. For this purpose, any Salary Deferral Contributions returned shall
be deemed to consist first of unmatched Salary Deferral Contributions to the
extent thereof.

         (c)      Third, if the ACP of Participants who are Highly Compensated
Employees exceeds the maximum under Section 3.07 for a Plan Year, the excess
aggregate contributions shall be allocated to the Highly-Paid Employees with
the largest amounts of Employer contributions taken into account in
calculating the ACP test for the Plan Year, beginning with the Highly
Compensated Employee with the largest amount of such Employer contributions
and continuing in descending order until all the excess aggregate
contributions have been allocated. For purposes of the preceding sentence, the
"largest amount" shall be determined after distribution of any excess Matching
Employer Contributions. The portion of the excess aggregate contribution
allocated to a Highly-Paid Employee in this manner shall be first be reduced
by the amount of any Matching Employer Contributions previously forfeited by
him with respect to that Plan Year pursuant to Section 3.08(b). Any remaining
amount of such excess Matching Employer Contribution shall be (i) forfeited to
the extent such contribution would not have been vested as of the end of the
Plan Year with respect to which such Matching Employer Contribution was made,
and (ii) distributed to such Highly-Paid Employee to the extent such
contribution would not have been vested as of the end of such Plan Year.

         (d)      Fourth, if the ADP and ACP of Participants who are
Highly-Paid Employees (each determined after reduction, if any, under Section
3.08(a) or (c), respectively) would result in a


                                      14

<PAGE>
violation of the rule preventing the multiple use of the alternative limitation
under Section 3.09, the ADP of Highly-Paid Employees shall be reduced in the
same manner as in Section 3.08(a) until the rule in Section 3.09 is no longer
violated. As used in this Plan, "excess contributions" means the excess of the
aggregate amount of Employer contributions actually taken into account in
determining the ADP of Highly-Paid Employees for the Plan Year over the maximum
amount of such contributions permitted by the nondiscrimination test in Section
3.06 (determined by hypothetically reducing contributions made on behalf of
Highly-Paid Employees in order of the Actual Deferral Ratios, beginning with the
highest of such percentages). "Excess aggregate contributions" means the excess
of the aggregate amount of Employer contributions actually taken into account in
determining the ACP of Highly-Paid Employees for the Plan Year over the maximum
amount of such contributions permitted by the nondiscrimination test in Section
3.07 (determined by hypothetically reducing contributions made on behalf of
Highly-Paid Employees in order of the Actual Contribution Ratios, beginning with
the highest of such percentages).

         The amount of a Participant's Salary Deferral Contributions and
Matching Employer Contributions which are returned or forfeited under
paragraph (a), (b), (c), or (d) of this Section 3.08 shall be adjusted as
determined by the Plan Administrator for allocable gains and losses (in
accordance with Income Tax Regulations under Sections 401(k) and 401(m) of the
Code) for the Plan Year with respect to which the contributions were made.

         3.09.    Restriction on Multiple Use of Alternative Nondiscrimination
Test.

         (a)      Purpose of Section. This Section contains rules limiting the
multiple use of the alternative test for complying with the nondiscrimination
rules applying to Salary Deferral Contributions and Matching Employer
Contributions. The alternative test is described in Section 3.06.4(a)(ii) and
Section 3.07(a)(ii).

         (b)      Application of Section.   The limit contained in this
Section applies if all of the following conditions are satisfied with regard
to a Plan Year.

                  (i)      One or more Highly Compensated Employees of
Employer or an Affiliated Organization are eligible for both Salary Deferral
Contributions and Matching Employer Contributions.

                  (ii)     The nondiscrimination test described in Section
3.06(a)(i) is not satisfied;

                  (iii)    The nondiscrimination test described in Section
3.07(a)(i) is not satisfied;

                  (iv)     The sum of the ADP and the ACP for eligible
Highly-Paid Employees exceeds the "aggregate limit" described in subsection
(c).

All plans which are aggregated for purposes of Section 3.06 or 3.07 shall be
treated as a single plan for purposes of this Section.


                                      15
<PAGE>
         (c)      Aggregate Limit.  The "aggregate limit" shall be calculated
as follows:

                  (i)      Calculate the ADP described in Section 3.06(b) for
Non-Highly Paid Employees who were eligible to participate in the Plan during
the Plan Year.

                  (ii)     Calculate the ACP described in Section 3.07(b) for
Non-Highly Paid Employees who were eligible to participate in the Plan during
the Plan Year.

                  (iii)    Determine the sum of the following amounts:

                           (A)      Multiply the larger of the percentages in
subsection (c)(i) or subsection (c)(ii) by 125%.

                           (B)      Add 2% to the smaller of the percentages
in subsection (c)(i) or subsection (c)(ii). However, if the smaller percentage
is less than 2%, multiply it by two rather than adding 2%.

                  (iv)     Determine the sum of the following amounts:

                           (A)      Multiply the smaller of the percentages in
subsection (c)(i) or subsection (c)(ii) by 125%.

                           (B)      Add 2% to the larger of the percentages in
subsection (c)(i) or subsection (c)(ii). However, if the smaller percentage is
less than 2%, multiply it by two rather than adding 2%.

                  (v)      The "aggregate limit" is the larger of the amounts
                  calculated in subsections (c)(iii) and (c)(iv).

         (d)      Corrective Action. If the limit in this Section would not
otherwise be satisfied, Employer shall reduce the Salary Deferral
Contributions of the Highly-Paid Employees until the limit is satisfied. The
reduction shall be made using the procedure described in Section 3.08.

         3.10.    Forfeitures.

         As of the end of each Plan Year, any forfeitures occurring during
such Plan Year resulting from an Employee's termination of employment and
election to receive a distribution prior to being one hundred percent (100%)
vested in accordance with Section 7.01 shall first be applied to restore the
previously forfeited accounts, if applicable, of former Terminated Vested
Participants who have been reemployed. If a Participant elects to defer his
distribution the resulting forfeiture (subject to Section 7.03) shall occur
after a Participant incurs five consecutive one year Breaks-in-Service.

         Any remaining portion of the total forfeiture not applied in
accordance with the preceding paragraph shall be used to reduce a Matching
Employer Contribution and shall be allocated to remaining Active Participants
in the same manner as provided under Section 3.04.

         Should a Participant who is 0% vested in his Matching Employer
Contribution and Discretionary Employer Contribution Accounts under Section
7.01 terminate employment, he shall

                                      16

<PAGE>
cease to be a Participant (unless reemployed) and the resulting forfeiture of
his Matching and Discretionary Employer Contribution Accounts shall be deemed a
full distribution of such Accounts.

         If a terminated Participant who was 0% vested in his Matching Employer
Contribution and Discretionary Employer Contribution Accounts and was deemed to
have received a distribution is subsequently reemployed by the Employer prior to
the occurrence of five consecutive one year Breaks-in-Service after the date of
his termination of employment, any amount forfeited shall be reinstated to his
Account.

         3.11.    Maximum Contributions.

         Notwithstanding the above, the total amount of Salary Deferral
Contributions, Matching Employer Contributions and Discretionary Employer
Contributions for any Plan Year shall not exceed an amount equal to fifteen
percent (15%) of the total Reduced Compensation of all Participants for such
Plan Year. The excess, if any, of fifteen (15%) percent of the total
Compensation of all Participants earned in any year commencing before January
1, 1987 above the actual aggregate Employer Contributions for such years may
be added to the total contribution provided the Plan was then in effect.

         3.12.    Time of Payment.

         Matching Employer Contributions and Discretionary Employer
Contributions may be made at any time on or before the date required for
deduction of such Contributions on the Employer's Federal income tax return.

         3.13.    Annual Additions Limitation.

         (a)      Notwithstanding the above provisions of this Article, in no
event shall the annual additions to a Participant's Account exceed the maximum
amount permitted under Section 415 of the Code, and all provisions of such
Section are hereby incorporated in the Plan by reference. The term "limitation
year", as defined under the Code, shall mean the Plan Year.

         As soon as administratively feasible after the end of the limitation
year, the maximum permissible amount for the limitation year will be
determined on the basis of the Participant's Compensation for the limitation
year.

         If due to the maximum permitted above or as a result of the
allocation of forfeitures there is an excess amount, the excess will be
disposed of in the following order:

                           (1)      If the Participant is covered by the Plan
at the end of the limitation year, the excess amount in the Participant's
Account will be used to reduce Employer Contributions (including any
allocation of forfeitures) for such Participant in the next limitation year,
and each succeeding limitation year if necessary; or

                           (2)      If the Participant is not covered by the
Plan at the end of a limitation year, the excess amount will be held
unallocated in a suspense account.


                                      17

<PAGE>
The suspense account will be applied to reduce future Employer Contributions
for all remaining Participants in the next limitation year, and each
succeeding limitation year if necessary.

        If a suspense account is in existence at any time during a limitation
year pursuant to this Section, such account will not receive an allocation of
the trust's investment gains and losses. If a suspense account is in existence
at any time during a particular limitation year, all amounts in the suspense
account, must be allocated and reallocated to Participant's Accounts before any
Employer or any employee contributions may be made to the Plan for that
limitation year. Excess amounts may not be distributed to Participants or former
Participants, except as provided below.

         Notwithstanding the method for disposing of excess amounts as
indicated above, in the case where a reasonable error is made so that the
limitations of Section 415 are violated, the Plan may distribute Salary
Deferral Contributions (within the meaning of Section 402(g)(3) of the Code)
to the extent that the distribution would reduce the excess amounts in the
Participant's Account. These amounts are disregarded for purposes of the ADP
and ACP tests.

         (b)      This Section 3.13(b) shall apply for Plan Years commencing
prior to January 1, 2000. The term Defined Contribution Fraction shall mean a
fraction, the numerator of which is the sum of the annual additions to the
Participant's Account under all the defined contribution plans (whether or not
terminated) maintained by the Employer for the current and all prior
limitation years (including the annual additions attributable to the
Participant's nondeductible employee contributions to all defined benefit
plans maintained by the Employer, whether or not terminated, and the annual
additions attributable to all welfare benefits funds, as defined in Section
419(e) of the Code, and individual medical accounts, as defined in Section
415(l)(2) of the Code, maintained by the Employer), and the denominator of
which is the sum of the maximum aggregate amounts for the current and all
prior limitation years of service with the Employer (regardless of whether a
defined contribution plan was maintained by the Employer). The maximum
aggregate amount in any limitation year is the lesser of 125 percent of the
dollar limitation determined under Sections 415(b) and (d) of the Code in
effect under Section 415(c)(1)(A) of the Code or 35 percent of the
Participant's compensation for such year.

         If the Employee was a participant, as of the end of the first day of
the first limitation year beginning after December 31, 1986, in one or more
defined contribution plans maintained by the Employer which were in existence
on May 5, 1986, the numerator of this fraction will be adjusted if the sum of
this fraction and the defined benefit fraction would otherwise exceed 1.0
under the terms of this Plan. Under the adjustment, an amount equal to the
product of (1) the excess of the sum of the fractions over 1.0 times (2) the
denominator of this fraction, will be permanently subtracted from the
numerator of this fraction. The adjustment is calculated using the fractions
as they would be computed as of the end of the last limitation year beginning
before January 1, 1987, and disregarding any changes in the terms and
conditions of the plan made after May 5, 1986, but using the Code Section 415
limitation applicable to the first limitation year beginning on or after
January 1, 1987.

         The annual addition for any limitation year beginning before January
1, 1987 shall not be recomputed to treat all employee contributions as annual
additions.

         The term "Defined Benefit Fraction" shall mean a fraction, the
numerator of which is the sum of the Participant's projected annual benefits
under all the defined benefit plans (whether or not


                                      18

<PAGE>
terminated) maintained by the Employer, and the denominator of which is the
lesser of 125 percent of the dollar limitation determined for the limitation
year under Sections 415(b) and (d) of the Code or 140 percent of the highest
average compensation, including any adjustments under Section 415(b) of the
Code.

         Notwithstanding the above, if the Participant was a participant, as
of the first day of the first limitation year beginning after December 31,
1986, in one or more defined benefit plans maintained by the Employer which
were in existence on May 5, 1986, the denominator of this fraction will not
be less than 125 percent of the sum of the annual benefits under such plans
which the participant had accrued as of the close of the last limitation year
beginning before January 1, 1987, disregarding any changes in the terms and
conditions of the plan after May 5, 1986. The preceding sentence applies only
if the defined benefit plans individually and in the aggregate satisfied the
requirements of section 415 for all limitation years beginning before January
1, 1987.

         3.14.    Return of Contribution.

         Except as provided in Section 3.13 and paragraphs (a), (b), (c), (d),
(e) and (f) of this Section, and notwithstanding any other provision of this
Plan or of the Trust Agreement, the Employer irrevocably divests itself of any
interest or reversion whatsoever in any sums contributed by it to the Trust
Fund, and it shall be impossible for any portion of the Trust Fund to be used
for, or diverted to, any purpose other than for the exclusive benefit of
Participants or their Beneficiaries.

         (a)      If a contribution by the Employer is conditioned upon
initial qualification of the Plan or any amendment thereto under Section 401
of the Code, and the Plan or any amendment thereto under Section 401 of the
Code, and the Plan or amendment does not so qualify, the contribution shall be
returned to the Employer within one year of the date of denial of such
qualification or of the failure to qualify.

         (b)      If a contribution made by the Employer is based upon a good
faith mistake of fact, the contribution shall be returned to the Employer
within one year after the payment of the contribution.

         (c)      If a contribution which is intended to be deductible for
Federal income tax purposes is determined to not be deductible and part or all
of the deduction is disallowed, the contribution, to the extent disallowed,
shall be returned to the Employer within one year after the disallowance of
the deduction.

         (d)      Earnings attributable to any mistaken or non-deductible
contribution may not be returned to the Employer, but losses attributable
thereto must reduce the amount to be so returned.

         (e)      If the withdrawal of the amount attributable to the mistaken
or nondeductible 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 or nondeductible amount not been
contributed, then the amount to be returned to the Employer must be limited so
as to avoid such reduction. In the case of a reversion due to initial
disqualification of the Plan, the entire assets of the Plan attributable to
Employer contributions may be returned to the Employer.


                                      19

<PAGE>
         (f)      A contribution may be returned to the Employer or an
Employee, whichever is applicable, in order to satisfy the requirements of
Section 3.06.

         3.15.    Rollover Contributions.

         (a)      Direct Inter-Plan Transfers. Any Employee (including
Employees who are not yet Eligible Employees) may, no less than 15 days
following notification to the Plan Administrator of such action, direct the
appropriate funding agency of any qualified retirement plan of the Employer, a
former employer, or of an Individual Retirement Account (IRA) which was
established solely as a repository for a distribution from a qualified plan of a
former employer (provided the Employee certifies that he made no contributions
to such IRA) to distribute directly to the Trustee such Participant's entire
interest in the distributing plan or IRA, exclusive of any after-tax
contributions made by the Participant as an employee or participant thereunder,
provided that the transferor plan or IRA is not subject to the requirements of
Section 401(a)(11) of the Code. Any amount presented by a Participant to the
Trustees within sixty (60) days of the receipt shall be treated, upon receipt by
the Trustee, as having been received directly from the appropriate officer or
fiduciary of the distributing plan or IRA.

         (b)      Cash Transfers.  Only cash may be transferred in accordance
with paragraph (a) of this Section.  Property other than cash cannot be
transferred.

         (c)      Investment of Rollover Contribution Accounts.  Rollover
Contribution Accounts shall be invested as provided under Section 4.01 of the
Plan.

         (d)      Direct Rollovers. This paragraph applies to distributions
made on or after January 1, 1993. Notwithstanding any provision of the Plan to
the contrary that would otherwise limit a distributee's election under this
paragraph, a distributee may elect, at the time and in the manner prescribed
by the Plan Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover. Such distribution may commence less than 30
days after the notice required under section 1.411(a)-1(k) of the Income Tax
Regulations is given, provided that (i) the Plan Administrator clearly informs
the Participant that the Participant has a right to a period of at least 30
days after receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution option),
and (ii) the Participant, after receiving the notice, affirmatively elects a
distribution.

         For purposes of this Section, the following definitions shall apply:

         Eligible rollover distribution: An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include:
any distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life expectancies)
of the distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under section 401(a)(9) of the Code; any hardship
withdrawal; and the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities). Solely for purposes of the
preceding sentence, a
                                      20

<PAGE>
withdrawal shall be considered a hardship withdrawal only to the extent it
represents amounts withdrawn from a Participant's Salary Deferral Contribution
Account, and only to the extent the withdrawal would not be available to the
Participant at such time under any provision of the Plan other than Section
8.01(c).

         Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code, that accepts the distributee's
eligible rollover distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement annuity.

         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.

         Direct rollover: A direct rollover is a payment by the plan to the
eligible retirement plan specified by the distributee.



                                      21

<PAGE>




                                  ARTICLE IV

                           ADMINISTRATION OF FUNDS


         4.01.    Investment of Funds.

         Participant Accounts will be invested by the Plan Trustee, in
accordance with Participant directions as described below and in Section 4.02
and 4.03, in such investment funds as may be offered under the Plan from time
to time. The available investment alternatives may include any or all of the
alternatives described below:

         (a)      Common or capital stocks, bonds, convertible debentures or
preferred stocks, money market investments and other short term corporate and
government investments and fixed debt obligations of corporations and of the
Federal, state and local government, or any pooled or mutual fund invested in
such instruments.

         (b)      One or more guaranteed interest funds which shall be
invested under a contract (or contracts) with a bank, or an insurance company
licensed in the state in which an office of the Employer is domiciled and
whereby terms of such contract guarantee both the repayment of principal and
the payment of interest at a predetermined minimum rate for a fixed period of
time. Any such contract is subject to approval of the Plan Administrator and
may be renewed or discontinued in its discretion. Should such contract be
discontinued and should the Plan Administrator not enter into or instruct the
Trustee to enter into a successor contract providing similar guarantees as to
principal and interest, then any Participant whose Account was invested under
the contract shall be given the opportunity to make a new investment election.

         (c)      Any other managed fund which the Plan Administrator deems
appropriate for investment of plan assets.

         (d)      A fund invested in shares of common stock of the Company.
Any dividends received on such shares shall be reinvested in this fund.
Contributions designated for the fund, or dividends paid on shares held in the
fund, shall be temporarily invested in a short-term investment fund while the
Trustee awaits the opportunity to purchase additional shares. The shares of
common stock of the Company from time to time required to be acquired for the
purposes of this Plan shall be acquired by the Trustees by purchase in the
open market at prevailing prices, or, if directed by the Company, by
contribution in kind or by purchase privately from the Company or any other
person at a price per share equal to the closing market price per share at
which the shares of common stock of the Company were sold on the last business
day preceding the day of the purchase; it being understood that shares
purchased from the Company may be either treasury shares or authorized but
unissued shares, if the Company shall make such shares available for that
purpose.

         The Plan Administrator may, in its discretion, discontinue the use of
any investment alternatives maintained under the Plan, without obligation to
substitute new alternatives, provided that Participants with Accounts invested
in a discontinued investment alternative are given an opportunity to make an
election to transfer the affected portion of their Accounts to another
investment alternative permitted under the Plan.


                                      22

<PAGE>

         4.02.    Investment Elections.

         Each Participant shall designate, in such manner as the Plan
Administrator shall specify, in which investment alternative or combination of
alternatives his Contributions shall be invested; provided, however, that the
portion invested in any alternative which he elects shall be 5% or any
multiple thereof, or such other percentage as designated by the Plan
Administrator, subject to the maximum of 100%. Each Participant shall, upon
request, be furnished with written confirmation of such instructions.

         4.03.    Change of Elections.

         Each Participant may (Subject to Section 4.04), by following such
procedure as the Plan Administrator shall prescribe, make either of the
following types of investment election changes at any time: (i) alter his
election with respect to the investment of his future contributions, or (ii)
alter his election with respect to the investment alternatives in which his
prior contributions have been invested and direct the Trustee to transfer all
or any portion of the balance in his Account to any investment alternative or
combination of alternatives. Any such election changes shall be effective as
soon as practicable after receipt by the Plan Administrator.

         4.04.    Restrictions on Changes.

         The Plan Administrator may, in its sole discretion, establish
restrictions, limitations or prohibitions with respect to changes in
investment elections, or transfers, permitted under the Plan. Any such
restrictions, limitations or prohibitions which may apply to elections related
to, or transfers among, any or all investment funds maintained under the Plan,
shall be communicated in advance of their applicability to Plan Participants,
and shall apply in a non-discriminatory manner to all Participants in similar
circumstances.

         4.05.    Valuation of Assets.

         As of each Valuation Date, the assets of the Trust shall be valued at
fair market value and any gains or losses shall be allocated to the same
investment alternatives in which they arose.

         4.06.    Voting of Shares.

         Before each annual or special meeting of shareholders of the Company,
the Company shall cause the Trustee to send to each Participant whose Account
is invested in common stock of the Company, a copy of the proxy solicitation
material therefor, together with a form providing confidential instructions to
the Trustee on how to vote the shares of Company stock held within the
Participant's Account. Upon receipt of such instructions in conformance with
said proxy solicitation material, the Trustee shall vote the shares of Company
stock as instructed. Instructions received from individual Participants by the
Trustee shall be held in strictest confidence and shall not be divulged or
released to any person, including officers or Employees of an Employer. The
Trustees shall vote the shares of the Company stock for which no instructions
have been received in the same proportion as the shares for which instructions
have been received.

         4.07.    Tender Offer Procedure.


                                      23

<PAGE>

         In the event an offer is received by the Trustee (including, but not
limited to, a tender offer or exchange offer) to purchase any shares of
Company stock held by the Trustee in the Trust, the Company shall cause the
Trustee to send to each Participant whose Account is invested in Company stock
such information as will be distributed to shareholders of the Company in
connection with such offer, and to notify each Participant in writing of the
number of shares of Company stock which are then credited to such
Participant's Account. The Trustee shall provide to each Participant a form
requesting confidential directions as to the manner in which the Trustee is to
respond to the offer with respect to shares of Company stock allocated to such
Participant's Account. Upon timely receipt of such directions, the Trustee
shall respond as directed with respect to the tender or exchange of such
shares. Instructions received from individual Participants by the Trustee
shall be held in the strictest confidence and shall not be divulged or
released to any person, including officers or Employees of an Employer. The
Trustee shall not tender or exchange shares of Company stock allocated to a
Participant's Account for which the Trustee has not received directions from
the Participant.

         A Participant who has directed the Trustee to tender or exchange
shares of Company stock allocated to such Participant's Account may, at any
time prior to the offer withdrawal date, direct the Trustee to withdraw such
shares from the offer prior to the withdrawal deadline, in which case the
Trustee shall carry out such directive.

         In the event that shares of Company stock held in a Participant's
Account are tendered or exchanged pursuant to this Section 4.08, the proceeds
received upon the acceptance of such tender or exchange shall be credited to
such Participant's Account, and shall be invested in the manner determined by
the Company or as otherwise provided in the Plan.

         4.08.    ERISA Section 404(c) Plan.

         The Plan is intended to constitute a plan described in Section 404(c)
of ERISA and shall be administered in accordance with such intent. Beginning
with the Plan Year commencing January 1, 1994, the Plan shall be administered
in compliance with Department of Labor Regulations Section 2550.440c-1.

         4.09.    Confidentiality.

         Information relating to the purchase, holding, and sale of Company
stock in a Participant's Account and the exercise of voting, tender, and
similar rights with respect to such stock by Participants and their
beneficiaries shall be maintained in accordance with such procedures as the
Administrator shall establish designed to safeguard the confidentiality of
such information, except to the extent necessary to comply with Federal laws
or state laws not preempted by ERISA.

         4.10.    Fiduciary Designation.

         Effective for Plan Years commencing on or after January 1, 1994, the
Administrator is designated as the Plan fiduciary responsible for ensuring
that the procedures implemented pursuant to Section 4.10 are sufficient to
safeguard the confidentiality of information described in that Section, that
such procedures are being followed, and that an independent fiduciary is
appointed to carry out activities which the Administrator determines involve a
potential for undue influence by

                                      24

<PAGE>

any Employer upon Participants and beneficiaries with regard to the direct or
indirect exercise of shareholder rights with respect to Company stock.


                                      25

<PAGE>

                                   ARTICLE V

                               RETIREMENT BENEFITS

        5.01.   Normal Retirement Benefit.

        A Normal Retirement Benefit shall be payable with respect to any
Participant retiring at his Normal Retirement Date. The Normal Retirement
Benefit shall be equal to the Participant's Account determined as of the
Valuation Date coincident with or following the Participant's Normal Retirement
Date as of which the distribution is processed, which shall be as soon as
administratively practicable after the distribution is requested or required to
be distributed, as applicable. Payment shall commence no later than sixty (60)
days following the last day of the Plan Year in which the Participant's Normal
Retirement Date occurs.

        5.02.   Deferred Retirement Benefit.

        A Deferred Retirement Benefit shall be payable with respect to any
Participant retiring after his Normal Retirement Date and shall be equal to the
Participant's Account determined as of the Valuation Date following the
Participant's actual retirement as of which the distribution is processed.

        5.03.   Disability Retirement Benefit.

        A Disability Retirement Benefit shall be payable with respect to any
Participant who has suffered a Disability and who retires from service of the
Employer by reason of such Disability. The Disability Retirement Benefit shall
be equal to the Participant's Account determined as of the Valuation Date
coincident with or following the date of the Participant's termination due to
Disability as of which the distribution is processed. Such a Participant may
also elect to be paid in accordance with the provisions of Section 7.02.

        5.04.   Payment of Benefits.

        Any benefit under this Article shall be made in a lump sum payment no
later than sixty days following the close of the Plan Year in which the
Participant's retirement occurs.

        If, after a Participant terminates employment, the total value of his
vested Account is less than $5,000, the Administrator may direct the Trustee to
cash-out the Participant's benefit in a single lump sum after any Valuation Date
coincident with or following the date of his or her termination of employment,
without any requirement for such Participant's consent.

        For Active Participants, benefit payments as mandated by Code Section
401(a)(9) shall not commence later than:

                (i)     in the case of a Participant who (a) attains age 70-1/2
after 1999 or before 1988 and is not a 5% owner or (b) made a designation under
Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act of 1982, April
1 of the calendar year following the later of the calendar



                                       26

<PAGE>
year in which the Participant attains age 70-1/2 or the calendar year in which
the Participant retires; and

                (ii)    in the case of any other Participant, April 1 of the
calendar year following the calendar year in which the Participant attains age
70-1/2; provided, however, that a Participant (other than a 5 percent owner) who
attains age 70-1/2 after 1995 and before 2000 may elect by April 1 (or by
December 31, 1997 in the case of a Participant attaining age 70-1/2 in 1996) of
the calendar year following the year in which the Participant attains age 70-1/2
to defer the commencement of distributions until the calendar year following the
calendar year in which such Participant retires.

For purposes of this Section 5.04, a Participant shall be deemed to be a 5
percent owner if he was a 5 percent owner (as defined in Section 416(i)(1)(B)(i)
of the Code) at any time during the five Plan Year period ending in the calendar
year in which he attains age 70-1/2.

        All distributions required under this Section shall be determined and
made in accordance with the Proposed or, if applicable, Final Regulations under
Code Section 401(a)(9), including the minimum distribution incidental benefit
requirement of Section 1.401(a)(9)-2 of the Proposed or Final Regulations.

        With respect to distributions under the Plan made in calendar years
beginning on or after January 1, 2002, the Plan will apply the minimum
distribution requirements of Section 401(a)(9) of the Code that were proposed in
January 2001, notwithstanding any provision of the Plan to the contrary. This
amendment shall continue in effect until the end of the last calendar year
beginning before the effective date of final regulations under Section 401(a)(9)
of the Code or such other date specified in guidance published by the Internal
Revenue Service.

        5.05.   Additional Allocations on Retirement.

        Any allocation for a Participant, made as of a Valuation Date subsequent
to the date of his retirement, shall be paid to such Participant, or his
beneficiary, as soon after such Valuation Date as is practical.

        5.06.   Crediting of Investment Earnings.

        Investment earnings shall be credited to a Participant's Account through
the Valuation Date coincident with or preceding the date that distribution of
the Account is made. No earnings shall be credited after such Valuation Date.

        5.07.   Company Stock.

        A Participant may elect to have the portion, if any, of his vested
Account attributable to a fund invested in common stock of the Company
distributed all in cash or all in kind. In the case of an in-kind distribution,
the value of fractional shares shall be paid in cash.

                                       27

<PAGE>




                                   ARTICLE VI

                                 DEATH BENEFITS

        6.01.   Death Benefits.

        In the event of the death of an Active Participant or of a Terminated
Vested Participant who has not yet received payment of his Account, the Account
shall be paid to his Beneficiary in a single lump sum. Any payment under this
Section shall be paid as soon as practicable at the Beneficiary's election and
no later than five (5) years after the Participant's death. The distribution
shall be equal to the Participant's Account as of the Valuation Date as of which
the distribution is processed.

        6.02.   Additional Allocations on Death.

        Any allocation for a Participant, made as of a Valuation Date subsequent
to the date of his death, shall be paid to such Participant's Beneficiary as
soon after such Valuation Date as is practical.

        6.03.   Beneficiary Designation.

        "Beneficiary" shall mean the person or persons, trust or estate named to
receive any death benefits which may become payable under the Plan, and shall
include any contingent beneficiary.

        If a Participant has a qualified spouse, then such spouse shall
automatically be the Beneficiary eligible to receive the Account of the
Participant pursuant to the Participant's death, unless the Participant names an
alternate Beneficiary, and the qualified spouse consents in writing to the
Participant's naming of an alternate Beneficiary, which consent must acknowledge
the effect of such designation and be witnessed by a representative of the Plan
Administrator, or attested to by a notary public. For purposes of this
paragraph, a qualified spouse is a spouse to whom the Participant is married at
the date of death and to whom the Participant has been married for at least one
year. Each Participant shall have the right by written notice to the Plan
Administrator, in the form prescribed by the Plan Administrator, to designate,
and from time to time to change the designation of, one or more Beneficiaries
and contingent beneficiaries to receive any benefit which may become payable
under the Plan pursuant to his death, provided his qualified spouse, if any,
consents to the designation of an alternate Beneficiary as set forth in the
preceding sentence. A qualified spouse may also expressly permit a Participant
subsequently to change an alternative beneficiary designation without any
further spousal consent.

        If it is established to the satisfaction of a Plan representative that
there is no qualified spouse or that such spouse cannot be located, an
alternative beneficiary designation will be deemed a proper election without any
spousal consent.

        Any consent by a qualified spouse obtained under this provision (or
establishment that the consent of a qualified spouse may not be obtained) shall
be effective only with respect to such spouse. A consent that permits
designations by the Participant without any requirement of further consent by
the qualified spouse must acknowledge that such spouse has the right to limit
consent to a

                                       28

<PAGE>

specific beneficiary, and a specific form of benefit where
applicable, and that the spouse voluntarily elects to relinquish either or both
of such rights. A revocation of a prior beneficiary designation may be made by a
Participant without the consent of the qualified spouse at any time before the
commencement of benefits. The number of revocations shall not be limited.

        In the event that a Participant who does not have a qualified spouse as
described above fails to designate a Beneficiary to receive a benefit under the
Plan that becomes payable pursuant to his death, or in the event that the
Participant is predeceased by all automatic or designated primary and contingent
beneficiaries, the death benefit shall be payable to the Participant's estate.


                                       29
<PAGE>
                                 ARTICLE VII

                       VESTING AND SEPARATION FROM SERVICE

        7.01.   Vesting of Accounts.

        A Participant shall at all times be fully (100%) vested in his Salary
Deferral Contribution Account, After-Tax Contribution Account, Rollover
Contribution Account and in any restoration contributions made pursuant to
Section 7.03.

        Except as otherwise provided in this Section 7.01, a Participant shall
be vested in his Matching Employer Contribution Account and his Discretionary
Employer Contribution Account based on his Years of Service in accordance with
the following table:

<TABLE>
<CAPTION>
                           Years of Service        Vesting Percentage
                           ----------------        ------------------
                       <S>                    <C>
                       Less than 1                         0%
                       1 but less than 2                  33%
                       2 but less than 3                  67%
                       3 or more                         100%

</TABLE>

        A Participant who ceased employment by retirement, termination, death,
or otherwise before July 1, 1999 shall be vested in his Matching Employer
Contribution Account and his Discretionary Employer Contribution Account based
on his Years of Service in accordance with the following table:

<TABLE>
<CAPTION>
                           Years of Service        Vesting Percentage
                           ----------------        ------------------
                       <S>                         <C>
                       Less than 2                         0%
                       2 but less than 3                  20%
                       3 but less than 4                  40%
                       4 but less than 5                  60%
                       5 but less than 6                  80%
                       6 or more                         100%
</TABLE>


        Notwithstanding the foregoing, an Active Participant shall be 100%
vested in his Account at his Normal Retirement Date, the date of his retirement
due to Disability or the date of his death.

        7.02.   Payment of Benefits.

        An Active Participant who is vested in his Account and terminates
employment prior to his Normal Retirement Date shall be deemed a Terminated
Vested Participant. Payment of his vested Account shall be made in a single lump
sum no later than sixty (60) days following the end of the Plan Year in which
Participant's Normal Retirement Date occurs. However, any such Participant may
elect to receive payment of his vested Account as soon as practicable after he
submits an election. A Terminated Vested Participant's Account shall continue to
be credited with investment

                                       30

<PAGE>

earnings through the Valuation Date on which the distribution is processed. No
earnings shall be credited after such Valuation Date.

        The failure of a Participant to make such an election shall be deemed to
be an election to defer commencement of benefits.

        If, after a Participant terminates employment, the total value of his
vested Account is less than $5,000, the Administrator may direct the Trustee to
cash-out the Participant's benefit in a single lump sum as of any Valuation Date
coincident with or following the date of his or her termination of employment,
without any requirement for such Participant's consent.

        7.03.   Re-employment After Distribution and Restoration Contributions.

        Any former Participant who once again qualifies as an Active Participant
and who has received a distribution of any portion of his vested Account
attributable to his prior participation in this Plan may restore to the Trustee
the full amount of the distribution he previously received which was derived
from Employer Contributions. In order to reinstate his full Matching or
Discretionary Employer Contribution Account, a reemployed Participant must repay
the full amount of the distribution from such Accounts prior to the earlier of
(i) the fifth anniversary of the date such participant is reemployed or (ii)
five consecutive one year Breaks-in-Service after the date of distribution. Any
Participant who fails to make his restoration contribution within such time
period shall waive his right to the portion of his Account which was not vested
when he received his distribution.

                                       31

<PAGE>




                                  ARTICLE VIII

                              WITHDRAWALS AND LOANS

        8.01.   Withdrawals While Employed.

        In-service withdrawals shall be made upon 15 days' notice in the
following order:

        (a)     A Participant may withdraw all or any portion of his After-Tax
Contribution Account. Such withdrawal shall come first from After-Tax
Contributions made prior to January 1, 1987. Next, such withdrawal shall be
allocated proportionately between the Participant's After-Tax Contributions made
after December 31, 1986 and the investment earnings on such contributions. A
Participant may then withdraw the investment earnings on his After-Tax
Contributions made prior to January 1, 1987.

        (b)     A Participant may withdraw any portion of his Rollover
Contribution Account upon attainment of age 59 1/2 or in the event of a
financial hardship as described below.

        (c)     A Participant may withdraw his Salary Deferral Contribution
Account for any reason after he has attained Age 59 1/2 and prior to Age 59 1/2
solely in the event of a financial hardship, and solely to the extent required
to satisfy the hardship. The amount that may be distributed due to a hardship
may include the amount necessary to pay income taxes or penalties resulting from
the distribution. Such hardship must be an immediate and heavy financial need of
the Participant where such Participant lacks other available resources. Expenses
in connection with a death in a Participant's immediate family would constitute
such an immediate and heavy financial need and the following conditions would
automatically be deemed an immediate and heavy financial need:

                (i)     expenses for medical care as described under Code
Section 213(d) incurred by the Participant, his spouse or his dependents or
expenses necessary to obtain such medical care;

                (ii)    costs directly related to the purchase of a primary
residence (excluding mortgage payments);

                (iii)   payment of tuition, related educational fees, and room
and board expenses for the next twelve months of post-secondary education for
the Employee or his spouse, children or dependents;

                (iv)    payment to prevent eviction of the Participant from a
primary residence or foreclosure of mortgage on his primary residence; and

                (v)     any other occurrence as authorized by the IRS through
Regulations, Rulings, Notices and other documents of general applicability.

        A Participant must submit a written certification on the form prescribed
by the Plan Administrator that the hardship distribution is necessary to satisfy
an immediate and heavy financial need. The written certification must indicate
that the need cannot reasonably be relieved through


                                       32

<PAGE>
reimbursement or compensation by insurance or otherwise, by liquidation of the
employee's assets, by cessation of Salary Deferral Contributions or After Tax
Contributions (if applicable) under the Plan or by other distributions or
nontaxable loans from plans maintained by the Employer or any other employer, or
by borrowing from commercial sources on reasonable commercial terms in an amount
sufficient to satisfy the need. The Employer must not have actual knowledge to
the contrary that the need cannot reasonably be relieved as described above.

        A Participant may not withdraw any investment earnings included in his
Salary Deferral Contribution Account which were accumulated after December 31,
1988.

        A Participant may not withdraw any portion of his Matching Employer
Contribution Account or Discretionary Employer Contribution Account for any
reason prior to his retirement or other termination of employment.

        In no event will any hardship withdrawal of Salary Deferral
Contributions be granted until any applicable distributions and loans have been
taken from this Plan and from all other qualified retirement plans of the
Employer.

        8.02.   Loans.

        (a)     Loans to Active Participants from their Accounts in amounts of
not less than $500 shall be allowed upon 15 days' notice. No more than one Plan
loan may be outstanding to each Participant at any time.

        (b)     No Participant shall, under any circumstances, be entitled to
loans in excess of the lesser of (i) 50% of his vested Account as of the
Valuation Date coincident with or immediately preceding the date on which the
loan is made, and (ii) $50,000 less the highest outstanding loan balance over
the 12-month period immediately preceding the issuance of the loan. For purposes
of this paragraph, all outstanding loans to a Participant under this Plan or any
other qualified retirement plan of the Employer shall be aggregated.

        (c)     Any loan to a Participant shall be evidenced by the
Participant's promissory note and secured by the pledge of the Participant's
Account in the Trust Fund and by the pledge of such further collateral as the
Trustee deems necessary or desirable to assure repayment of the borrowed amount
and all interest payable thereon in accordance with the terms of the loan.

        (d)     Interest shall be charged at an annual rate equal to the prime
interest rate in effect as of the date the loan is processed, plus one percent
(1%). The rate may be revised from time to time, but no more frequently than
quarterly. The Administrator shall have sole discretion in determining the
interest rate, and its decision shall be final and binding. Principal repayments
and interest payments shall be credited to the Account of the Participant to
whom the loan was made.

        (e)     Loans shall be for such term as the Participant elects, except
that loans shall not be for a period in excess of five (5) years unless they are
made for the purposes of purchasing the primary residence of the Participant. In
no event shall a loan be for a period in excess of thirty (30) years or such
longer period of time as established by the Administrator to be used on a
uniform and nondiscriminatory basis.


                                       33

<PAGE>

        (f)     Loans shall be repaid in approximately level installments made
no less frequently than quarterly. The Plan Administrator may require that loans
be repaid by payroll deduction or any other convenient manner. The manner and
frequency of payment shall be determined by the Plan Administrator.

        (g)     If not repaid in full, the unpaid portion of any outstanding
loans (including interest thereon) shall be deducted at retirement, death,
disability or other termination of employment from any benefit to which a
Participant (or his beneficiary) is entitled under this Plan, and any other
security pledge shall be sold as soon as is practicable after such default by
the Trustee at private or public sale. The proceeds of such sale shall be
applied first to pay the expenses of conducting the sale, including reasonable
attorney's fees, and then to pay any sums due from the borrower to the Trust
Fund, with such payment to be applied first to accrued interest and then to
principal. The Participant shall remain liable for any deficiency, and any
surplus remaining shall be paid to the Participant.

        (h)     If a required periodic payment is not made within 90 days of the
date it was due, this shall be deemed a default and foreclosure on the note and
attachment of security will not occur until a distributable event occurs in the
Plan.

                                       34

<PAGE>




                                   ARTICLE IX

                                 ADMINISTRATION

        9.01.   Plan Administrator.

        The Plan shall be administered by the Employer in accordance with its
provisions and for purposes of such Plan administration the Employer is hereby
deemed to be Plan Administrator within the meaning of ERISA. All aspects of Plan
administration shall be the responsibility of the Plan Administrator except
those specifically delegated to the Trustees or other parties in accordance with
provisions of the Plan or Trust Agreement.

        9.02.   Administrative Procedures.

        The Administrator shall have discretionary authority based on a
reasonable interpretation of the Plan to determine the eligibility for benefits
and the benefits payable under the Plan, and shall have discretionary authority
to construe all terms of the Plan, including uncertain terms, to determine
questions of fact and law arising under the Plan and make such rules as may be
necessary for the administration of the Plan. Any determination by the Plan
Administrator shall be given deference in the event it is subject to judicial
review, and shall be overturned only if it is arbitrary and capricious or an
abuse of discretion. The Administrator may require Participants to apply in
writing for benefits hereunder and to furnish satisfactory evidence of their
date of birth and such other information as may from time to time be deemed
necessary.

        The Plan Administrator shall appoint the Trustees, Investment Managers,
or any other professional advisors as the Administrator, in is sole discretion,
deems necessary or appropriate.

        9.03.   Other Plan Administrator.

        Anything to the contrary notwithstanding, the Employer may appoint a
committee or an individual or individuals, whether or not employed by the
Employer, to carry out any of the duties of the Plan Administrator. Such duties
may include, but are not limited to, determining the eligibility of any Employee
for any benefits and the amount of such benefits under the Plan, maintaining
custody of all documents and elections made by an Employee, directing the
investment of any payment made by an Employer within any limits which may be
imposed by the Employer, and retaining suitable agents and advisors. Any
committee or individual shall be considered an agent of the Employer with
respect to the Plan and shall be indemnified by the Employer against any and all
claims, losses, damages, expenses and liabilities arising from any action or
failure to act, except when the same is determined to be due to the gross
negligence or willful misconduct of such individual or a member of a committee.

        9.04.   Special Administrative Matters.

        In the event of any error in the administration of the Plan that would
be correctable under the Administrative Policy Regarding Self-Correction, or any
successor program thereto, the Employer may take such action as may be necessary
to correct the error and retain the tax-qualified status of

                                       35

<PAGE>

the Plan. If such action involves the addition of assets to the Plan, such
assets shall be allocated in such manner as is necessary to correct the error.

        9.05.   Claims Procedures.

        (a)     If any claim of a Participant or Beneficiary (hereinafter
referred to as "Claimant") is partially or totally denied, the Plan
Administrator shall advise the Claimant in writing of the method of computation
of his benefit, if any, and the specific reason for the denial. This written
notice will be provided to the Claimant within a reasonable period of time
(generally within 90 days) after the Administrator's receipt of the claim. The
Administrator shall also furnish the Claimant at that time with:

                (i)     a specific reference to pertinent Plan provisions,

                (ii)    a description of any additional material or information
necessary for the Claimant to perfect his claim, if possible, and an explanation
of why such material or information is needed, and

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

        If a notice of denial of the claim, or a request for additional time to
process the claim due to special circumstances, is not furnished to the Claimant
within the 90-day period, the claim shall be deemed denied. The Claimant may
then proceed to the review stage described in the following paragraphs.

        (b)     The Claimant shall, if he desires further review, file a written
request for reconsideration with the Administrator. This written request must be
filed no later than 60 days after receipt of the information stated in (a)
above.

        (c)     So long as the Claimant's request for review is pending
(including the 60 day period in (b) above), the Claimant or his duly authorized
representative may review pertinent Plan documents and may submit issues and
comments in writing to the Administrator.

        (d)     A final and binding decision shall be made by the Administrator
within 60 days of the filing by the Claimant of his request for reconsideration,
provided, however, that if the Administrator, in its discretion, determines that
a hearing with the Claimant or his representative present is necessary or
desirable, this period shall be extended an additional 60 days.

        (e)     The Administrator's decision shall be conveyed to the Claimant
in writing and shall include specific reasons for the decision, written in a
manner calculated to be understood by the Claimant, with specific references to
the pertinent Plan provisions on which the decision is based.

        9.06.   Expenses.

        Expenses of the Plan shall be paid from the Trust Fund unless the
Employer elects to pay such expenses. Notwithstanding the foregoing, (i) the
per-Participant quarterly administrative fee charged by the Plan's outside
recordkeeper, to the extent attributable to Active Participants and Inactive
Participants, shall be paid by the Employer, and to the extent attributable to
Terminated

                                       36

<PAGE>
Vested Participants shall be paid by the Trust Fund and charged against the
Accounts of such Participants; and (ii) any loan fees shall be paid by the Trust
Fund and charged against the respective Accounts to which such fees relate.


                                       37
<PAGE>




                                   ARTICLE X

                       AMENDMENT, TERMINATION AND MERGERS

        10.01.  Amendment.

        The provisions of this Plan may be amended at any time and from time to
time by the Employer, provided, however, that:

        (a)     no amendment shall increase the duties or liabilities of the
Plan Administrator or of the Trustee without the consent of such party;

        (b)     no amendment shall deprive any Participant or beneficiary of a
deceased Participant of any of the benefits to which he is entitled under this
Plan with respect to contributions previously made, nor shall any amendment
decrease the balance in any Participant's Account. For purposes of this
paragraph, a plan amendment which has the effect of decreasing the balance of a
Participant's Account or eliminating an optional form of benefit with respect to
benefits attributable to service before the amendment shall be treated as
reducing an accrued benefit;

        (c)     no amendment shall provide for the use of funds or assets held
to provide benefits under this Plan other than for the benefit of Employees and
their beneficiaries or provide that funds may revert to the Employer except as
permitted by law; and

        (d)     no amendment may change the vesting schedule with respect to any
Participant, unless each Participant with three or more Years of Service is
permitted to elect to have the vesting schedule which was in effect before the
amendment used to determine his vested benefit. The period during which the
election may be made shall commence with the date the amendment is adopted or
deemed to be made and shall end on the latest of:

                (1)     60 days after the amendment is adopted;

                (2)     60 days after the amendment becomes effective; or

                (3)     60 days after the Participant is issued written notice
of the amendment by the Employer or Plan Administrator.

        In the case of an Employee who is a Participant as of the later of the
date such amendment is adopted or the date it becomes effective, the
nonforfeitable percentage (determined as of such date) of such Employee's right
to his Employer-derived accrued benefit will not be less than his percentage
computed under the Plan without regard to such amendment.

        Each amendment shall be approved by the Board of Directors by resolution
and shall be filed with the Trustee.

                                       38

<PAGE>

        10.02.  Plan Termination.

        (a)     Right Reserved. While it is the Employer's intention to continue
the Plan indefinitely the right is, nevertheless, reserved to terminate the Plan
in whole or in part. Termination or partial termination of the Plan shall result
in full and immediate vesting of each affected Participant in his entire
Account, and there shall not thereafter be any forfeitures with respect to any
Participant for any reason. Notwithstanding any other provision of this Plan,
complete or partial termination of the Plan shall not be conditioned solely upon
any resolution or other action of the Company, the Board of Directors or any
other party.

        (b)     Effect on Retired Persons, etc. Termination of the Plan shall
have no effect upon payment of benefits due to former Participants, their
beneficiaries and their estates. The Trustee shall retain sufficient assets to
complete any such payments due and shall have the right, upon direction by the
Employer, to make such payments as of the effective date of the Plan
termination.

        (c)     Effect on Remaining Participants, etc. The Employer shall
instruct the Trustees either (i) to continue to manage and administer the assets
of the Trust for the benefit of the Participants and their beneficiaries
pursuant to the terms and provisions of the Trust Agreement, or (ii) to pay over
to each Participant (and vested former Participant) the value of his vested
account, and thereupon to dissolve the Trust.

        Upon termination of this Plan, if the Employer or any Affiliated
Organization does not maintain a successor plan, the Participant's Account may,
without the Participant's consent, be distributed to the Participant. However,
if any entity within the same controlled group as the Employer maintains a
successor plan then the Participant's Account will be transferred, without the
Participant's consent, to the other plan. For purposes of this Section 10.02(c),
a successor plan is any other defined contribution plan (other than an employee
stock ownership plan as defined in Section 4975(e)(7) of the Code or a
simplified employee pension as defined in Section 408(k) of the Code) maintained
by the Employer or any Affiliated Organization unless fewer than two percent of
the Active Participants as of the time of the Plan's termination are or were
eligible under such defined contribution plan at any time during the 24-month
period beginning 12 months before the time of the termination.

        10.03.  Permanent Discontinuance of Employer Contributions.

               While it is the Employer's intention to make substantial and
recurrent contributions to the Trust Fund pursuant to the provisions of this
Plan, the right is, nevertheless, reserved at any time permanently to
discontinue Employer contributions. Such permanent discontinuance shall be
established by resolution of the Board of Directors and shall have the effect of
a termination of the Plan, except that the Trustee shall not have authority to
dissolve the Trust Fund except upon adoption of a further resolution by the
Board of Directors to the effect that the Plan is terminated and upon receipt
from the Employer of instructions to dissolve the Trust Fund pursuant to Section
10.02(c) hereof.

        10.04.  Suspension of Employer Contributions.

        The Employer shall have the right at any time, and from time to time, to
suspend Employer contributions to the Trust Fund pursuant to this Plan. Such
suspension shall have no effect on the

                                       39

<PAGE>

operation of the Plan unless the Board of Directors determines by resolution
that such suspension shall be permanent. A permanent discontinuance of
contributions will be deemed to have occurred as of the date of such resolution
or such earlier date as is therein specified.

        10.05.  Mergers and Consolidations of Plans.

        In the event of any merger or consolidation with, or transfer of assets
or liabilities to, any other plan, each Participant shall have a benefit in the
surviving or transferee plan (determined as if such plan were then terminated
immediately after such merger, etc.) that is equal to or greater than the
benefit he would have been entitled to receive immediately before such merger,
etc. in the Plan in which he was then a Participant (had such Plan been
terminated at that time). For the purposes hereof, former Participants and
beneficiaries shall be considered Participants.

                                       40

<PAGE>




                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

        11.01.  Non-Alienation of Benefits.

        None of the payments, benefits or rights of any Participant or
beneficiary shall be subject to any claim of any creditor, and in particular, to
the fullest extent permitted by law, all such payments, benefits and rights
shall be free from attachment, garnishment, trustee's process, or any other
legal or equitable process available to any creditor of such Participant or
beneficiary. Notwithstanding the foregoing, the Plan Administrator shall assign
or recognize an alternate payee with respect to all or a portion of a
Participant's benefit, as may be required in accordance with a Qualified
Domestic Relations Order, as such term is defined and as such action by the Plan
Administrator may be required under Section 414 of the Code and regulations
issued pursuant thereto. The Administrator shall develop such guidelines and
procedures as it deems appropriate to determine, in accordance with Section 414
of the Code, and regulations issued pursuant thereto, whether, and in what
manner, to comply with any document it receives which is intended to be a
Qualified Domestic Relations Order. No Participant or beneficiary shall have the
right to alienate, anticipate, commute, pledge, encumber or assign any of the
benefits or payments which he may expect to receive, contingently or otherwise,
under this Plan, except the right to designate a beneficiary or beneficiaries as
hereinbefore provided.

        The first sentence of this Section 11.01 shall not apply to the offset
of a Participant's benefits hereunder against an amount that the Participant is
required to pay to the Plan; if

                (a)     the order or requirement to pay arises:

                        (i)     under a judgment of conviction for a crime
involving such plan;

                        (ii)    under a civil judgment (including a consent
order or decree) entered by a Court in an action brought in connection with a
violation (or alleged violation) of Part 4 of Title I of ERISA;

                        (iii)   pursuant to a settlement agreement between the
Secretary of Labor and the participant, or a settlement between the PBGC (and
the participant, in connection with a violation (or alleged violation) of Part 4
of Title I of ERISA by a fiduciary, or any other persons; or

                        (iv)    the judgment, order, decree or settlement
agreement expressly provides for the offset of all or a part of the amount
ordered or required to be paid to the Plan against a participant's benefits
hereunder; and

                (b)     if the Participant has a spouse at the time at which
the offset is to be made:

                        (i)     Either such spouse has consented in writing to
such offset and such consent is witnessed by a notary public or a representative
of the Plan (or it is established to the


                                       41

<PAGE>

satisfaction of the Plan representative that such consent may not be obtained by
reason of circumstance described in Code ss.417(a)(2)(B)); or

                        (ii)    such spouse is ordered or required in such
judgment, order, decree or settlement to pay an amount to the plan in connection
with a violation of Part 4 of Title I or ERISA.

        11.02.  No Contract of Employment.

        Neither the establishment of the Plan, nor any modification thereof, nor
the creation of any fund, trust or account, nor the payment of any benefits
shall be construed as giving any Participant or Employee, or any person
whomsoever, the right to be retained in the service of the Employer, and all
Participants and other Employees shall remain subject to discharge to the same
extent as if the Plan had never been adopted.

        11.03.  Severability of Provisions.

        If any provision of this Plan shall be held invalid or unenforceable,
such invalidity or unenforceability shall not affect any other provisions
hereof, and this Plan shall be construed and enforced as if such provisions had
not been included.

        11.04.  Heirs, Assigns and Personal Representatives.


        This Plan shall be binding upon the heirs, executors, administrators,
successors and assigns of the parties, including each Participant and
beneficiary, present and future.

        11.05.  Headings and Captions.

        The headings and captions herein are provided for reference and
convenience only, shall not be considered part of the Plan, and shall not be
employed in the construction of the Plan.

        11.06.  Gender and Number.

        Except where otherwise clearly indicated by context, the masculine and
the neuter shall include the feminine and the neuter, the singular shall include
the plural, and vice-versa.

        11.07.  Funding Policy.

        The Plan Administrator, in consultation with the Employer, shall
establish and communicate to the Trustees a funding policy consistent with the
objectives of this Plan and of the corresponding Trust. Such policy shall
reflect due regard for the emerging liquidity needs of the Trust. Such funding
policy shall also state the general investment objectives of the Trust and the
philosophy upon which maintenance of the Plan is based.

        11.08.  Title to Assets.

        No Participant or beneficiary shall have any right to, or interest in,
any assets of the Trust Fund upon termination of his employment or otherwise,
except as provided from time to time under this Plan, and then only to the
extent of the benefits payable under the Plan to such Participant out of


                                       42

<PAGE>
the assets of the Trust Fund. All payments of benefits as provided for in this
Plan shall be made from the assets of the Trust Fund, and neither the Employer
nor any other person shall be liable therefor in any manner.

        11.09.  Payment to Minors, etc.

        Any benefit payable to or for the benefit of a minor, an incompetent
person or other person incapable of receipting therefor shall be deemed paid
when paid to such person's guardian or to the party providing or reasonably
appearing to provide for the care of such person, and such payment shall fully
discharge the Trustees, the Plan Administrator, the Employer and all other
parties with respect thereto.

        11.10.  Military Service.

        Notwithstanding any provision of the Plan to the contrary,
contributions, benefits, and service credit with respect to qualified military
service will be provided in accordance with Section 414(u) of the Code. Loan
repayments will be suspended under the Plan as permitted by Section 414(u)(4) of
the Code.

        11.11.  Forms.

        Notwithstanding any provision in the Plan to the contrary, salary
reduction agreements, cancellations or amendments thereto, loans, investment
elections, and any other elections by a Participant may, to the extent not
otherwise prohibited by law, be accomplished by electronic or telephonic means
pursuant to procedures and systems approved by the Plan Administrator.

        11.12.  Situs.

        This Plan shall, to the extent not preempted by ERISA or other Federal
law, be construed according to the laws of the state where the principal office
of the Company is domiciled (without regard to its conflict of laws principles
unless the context requires otherwise), where such state statutes may be
applicable to an employee benefit plan.

                                       43

<PAGE>




                                  ARTICLE XII

                              TOP-HEAVY PROVISIONS

        12.01.  Top-Heavy Plan.

        For any Plan Year commencing in 1984 or thereafter, the Plan shall be a
Top-Heavy Plan, as such term is defined under Section 416 of the Internal
Revenue Code, if the Value of Accumulated Benefits for Key Employees under all
Aggregated Plans exceeds 60% of the Value of Accumulated Benefits for all Group
Participants under all Aggregated Plans, determined as of the Determination Date
immediately preceding such Plan Year. If the Plan is a Top-Heavy Plan for a Plan
Year and, as of the Determination Date immediately preceding such Plan Year, the
Value of Accumulated Benefits for Key Employees under all Aggregated Plans
exceeds 90% of the Value of Accumulated Benefits for all Group Participants
under all Aggregated Plans, then the Plan shall be a Super Top-Heavy Plan for
such Plan Year. For such purposes, the terms "Key Employees" and "Group
Participants" shall include all persons who are or were Key Employees or Group
Participants during the Plan Year ending on such Determination Date or during
any of the four (4) immediately preceding Plan Years.

        The value of Accounts and the present value of accrued benefits will be
determined as of the most recent Valuation Date that falls within or ends with
the 12-month period ending on the Determination Date, except as provided in
Section 416 of the Code for the first and second plan years of a defined benefit
plan. The Accounts and accrued benefits of a Participant (1) who is not a Key
Employee but who was a Key Employee in a prior year, or (2) who has not been
credited with at least one Hour of Service with any Employer maintaining the
Plan at any time during the 5-year period ending on the Determination Date will
be disregarded. The calculation of the top-heavy ratio, and the extent to which
distributions, rollovers, and transfers are taken into account will be made in
accordance with Section 416 of the Code. Deductible employee contributions will
not be taken into account for purposes of computing the top-heavy ratio. When
aggregating plans the value of Accounts and accrued benefits will be calculated
with reference to the determination dates that fall within the same calendar
year.

        The accrued benefit of a participant other than a Key Employee shall be
determined under (a) the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by the Employer, or (b) if
there is no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of Section 411
(b)(1)(c) of the Code.

        For purposes of this Article, the following definitions shall apply in
addition to those set forth in Article I:

        "Affiliated Employer Group" shall mean the Employer and each other
employer which must be aggregated with the Employer for purposes of Section
414(b), 414(c) or 414(m) of the Code.

        "Aggregated Plans" shall mean (i) all plans of the Employer or an
Affiliated Employer Group which are required to be aggregated with the Plan, and
(ii) all plans of the Employer or an

                                       44

<PAGE>
Affiliated Employer Group which are permitted to be aggregated with the Plan and
which the Plan Administrator elects to aggregate with the Plan, for purposes of
determining whether the Plan is a Top-Heavy Plan. A plan shall be required to be
aggregated with the Plan if such plan includes as a participant a Key Employee
(and the beneficiary of such employee) or if such plan enables any plan of the
Employer or of a member of the Affiliated Employer Group in which a Key Employee
participates to qualify under Section 401(a)(4) or Section 410 of the Code. A
plan of the Employer or the Affiliated Employer Group shall be permitted to be
aggregated with the Plan if such plan satisfies the requirements of Sections
401(a)(4) and 410 of the Code, when considered together with the Plan and all
plans which are required to be aggregated with the Plan. No plan shall be
aggregated with the Plan unless it is a qualified plan under Section 401 of the
Code. The required aggregation group shall include plans terminated within the
five year period ending on the Determination Date.

        "Annual compensation" shall mean compensation as defined in Section
415(c)(3) of the Code but including amounts contributed by the Employer pursuant
to a salary reduction agreement which are excludable from the Employee's gross
income under Section 125, Section 402(a)(8), Section 402(h) or Section 403(b) of
the Code.

        "Determination Date" shall mean the date as of which it is determined
whether a plan is a Top-Heavy Plan or Super Top-Heavy Plan for the Plan Year
immediately following such Determination Date. The Determination Date for the
Plan shall be:

        (a)     in the case of a defined benefit plan, the date as of which the
actuarial valuation of the Plan, as used for determination of minimum funding
standards under Section 412 of the Code, is performed; and

        (b)     in the case of a defined contribution plan, the last day of the
Plan Year.

        "Group Participant" shall mean anyone who is or was a participant in any
plan included in the Aggregated Plans during the Plan Year which includes the
Determination Date or any of the four (4) immediately preceding Plan Years, and
who received compensation from an Employer during the five (5) year period
ending on the Determination Date. Any beneficiary of a Group Participant who has
received, or is expected to receive, a benefit from a plan included in the
Aggregated Plans shall be considered a Group Participant solely for purposes of
determining whether the Plan is a Top-Heavy Plan or Super Top-Heavy Plan.

        "Key Employee" shall mean any employee or former employee of the
Employer or of an Affiliated Employer Group who during the Plan Year which
includes the Determination Date, or during any of the four (4) Plan Years
immediately preceding such Plan Year, was:

        (a)     an officer of the Employer whose compensation is at least
$45,000 (or such higher amount as is permitted in accordance with the Code); or

        (b)     a five percent (5%) owner of the Employer; or

        (c)     a one percent (1%) owner of the Employer whose total annual
compensation from the Affiliated Employer Group exceeds $150,000; or

                                       45

<PAGE>

        (d)     an employee whose compensation equals or exceeds $30,000 (or
such higher amount as may be defined under Section 415(c)(1)(A) of the Code),
and whose ownership interest in the Affiliated Employer Group is among the ten
largest.

        In no event shall a partner of an unincorporated employer be considered
an officer under paragraph (a) above. Further, the number of officers counted
under (a) above as of any Determination Date shall not exceed the lesser of:

                        (1)     the greater of (i) ten percent (10%) of the
total number of employees of the Affiliated Employer Group, and (ii) three (3);
and

                        (2)     fifty (50).

        If the application of the preceding paragraph results in a reduction in
the number of officers to be included as Key Employees, then individuals who are
officers shall be eliminated from the group of Key Employees beginning with the
individual who had the lowest one-year compensation in the five (5) year period
including the Plan Year which includes the Determination Date, and the four (4)
immediately preceding Plan Years, and eliminating each individual with the next
higher one-year compensation in such period, until the maximum number of
officers remain in the Key Employee group.

        In addition, the beneficiary of a Key Employee shall be deemed to be a
Key Employee.

        "Non-Key Employee" shall mean an Employee who is not a Key Employee. An
Employee who was a Key Employee in a previous Plan Year but who is no longer a
Key Employee in the current Plan Year shall not be considered a Non-Key Employee
for the current Plan Year.

        "Value of Accumulated Benefits" shall mean

        (a)     in the case of a Group Participant or beneficiary covered under
a defined benefit plan, the sum of

                        (i)     the present value of the accrued pension benefit
(as such term is defined under the applicable plan) of the Group Participant or
beneficiary determined as of the Determination Date using reasonable actuarial
assumptions as to interest and mortality, and taking into account any
non-proportional subsidies in accordance with regulations issued by the
Secretary of the Treasury; plus

                        (ii)    the sum of any amounts distributed to the Group
Participant and his beneficiary during the plan year ending on the Determination
Date and during the four (4) immediately preceding plan years.

        (b) in the case of a Group Participant or beneficiary covered under a
defined contribution plan, the sum of the accounts of the Group Participant or
beneficiary under the plan as of the plan's Determination Date derived from:

                        (1)     employee contributions credited to such accounts
and investment earnings thereon; and

                                       46

<PAGE>

                        (2)     employer contributions credited to such accounts
and investment earnings thereon; and

                        (3)     rollover contributions made prior to
January 1, 1984, and investment earnings thereon; and

                        (4)     any contributions which would have been credited
to such accounts on or before the Determination Date, but which were waived as
provided under the Code and resulted in a funding deficiency; and

                        (5)     any amount distributed from the accounts
described in (1) through (4) above during the Plan Year ending on the
Determination Date, and the four (4) immediately preceding Plan Years.

        If the Plan is determined to be a Top-Heavy Plan or Super Top-Heavy Plan
as of any Determination Date, then it shall be subject to the rules set forth in
the remainder of this Article for the Plan Year next following such
Determination Date. If, as of a subsequent Determination Date, the Plan is
determined to no longer be a Top-Heavy Plan or Super Top-Heavy Plan, then the
rules set forth in the remainder of this Article shall no longer apply, except
where expressly indicated otherwise. Notwithstanding the foregoing, if the Plan
changes from being a Super Top-Heavy Plan to a Top-Heavy Plan, the rules
applicable to a Top-Heavy Plan shall apply.

        "Year of Super Top-Heavy Service" shall mean a Year of Service of a
Participant which commenced in a Plan Year during which the Plan was a Super
Top-Heavy Plan.

        "Year of Top-Heavy Service" shall mean a Year of Service of a
Participant which commenced in a Plan Year during which the Plan was a Top-Heavy
Plan.

        12.02.  Minimum Contributions or Benefits.

        For any Plan Year in which the Plan is a Top-Heavy Plan the minimum rate
of contributions and forfeitures allocated to the account of any Participant
shall be the lesser of:

        (i)     The highest rate of employer contributions and forfeitures
(determined as a percentage of compensation as defined under Section 415 of the
Code) allocated to the account of any Key Employee; and

        (ii)    3% of such compensation.

        Notwithstanding the above paragraph, if a Participant is also a
participant in another defined contribution plan of the Affiliated Employer
Group, all or a portion of the allocation described above may be provided under
such other plan and the allocation provided under this Plan shall be eliminated
or reduced accordingly. If the Employee is a Participant in one or more defined
benefit plans of the Affiliated Employer Group, all or a portion of the minimum
required benefits or allocations under Section 416 of the Code may be provided
under such plans as set forth in regulations issued by the Secretary of the
Treasury, and the minimum allocation provided in the preceding paragraph shall
be eliminated or reduced accordingly. Employer contributions resulting from a
salary reduction election by an Employee shall not be counted toward meeting the
minimum

                                       47

<PAGE>
required allocations under this Section. Matching Employer Contributions may be
used to satisfy the minimum required allocations under this Section, if such
contributions are not counted under the ACP test described in Section 3.06.

        Participants who are Non-Key Employees and who are not separated from
service as of the last day of the Plan Year, and who have (1) failed to complete
1000 Hours of Service (or the equivalent), (2) declined to make mandatory
contributions to the Plan, or (3) been excluded from the Plan because such
individual's compensation is less than a stated amount, are considered
Participants solely for purposes of this Section.

        The minimum allocation required to the extent required to be
nonforfeitable under Section 416(b) may not be forfeited under Section
411(a)(3)(B) or 411(a)(3)(D).

        12.03.  Adjustment to Maximum Benefits.

        For Plan Years commencing prior to January 1, 2000, if the Plan is a
Top-Heavy Plan for any Plan Year, then the maximum benefit which can be provided
under Section 3.13 shall be determined by substituting " 1.00" for "1.25" in the
applicable fractions. However, if the Plan is not a Super Top-Heavy Plan for
such Plan Year, then the preceding sentence shall not apply provided that "4%"
(or such higher rate as is required by Internal Revenue Service Regulations) is
substituted for "3%" in the first paragraph of Section 12.02.

        12.04.  Minimum Vesting.

        If the Plan is determined to be a Top-Heavy Plan for any Plan Year, then
an Active Participant's vested interest in his Account determined as of the
first day of such Plan Year, and determined as of any future date while the Plan
continues to be a Top-Heavy Plan, shall be no less than as determined under the
following Table:

<TABLE>
<CAPTION>
               Years of Service                    Vesting Percentage
               ----------------                    ------------------
<S>                                                <C>
               Less than 2 years                        None
               2 but less than 3                        20%
               3 but less than 4                        40%
               4 but less than 5                        60%
               5 but less than 6                        80%
               6 years or more                          100%
</TABLE>


        If the Plan subsequently is determined no longer to be a Top-Heavy Plan,
then the above minimum vesting schedule shall not apply to any portion of a
Participant's Account which is accrued after the first day of the first Plan
Year in which the Plan is no longer a Top-Heavy Plan, provided that the Account
for any Participant with three (3) or more Years of Service as the first date as
of which the Plan is no longer a Top-Heavy Plan shall continue to be vested in
accordance with a schedule not less than the minimum vesting schedule applicable
during the period that the Plan was a Top-Heavy Plan.

                                       48

<PAGE>

        The minimum vesting schedule applies to all benefits within the meaning
of Section 411(a)(7) of the Code except those attributable to employee
contributions, including benefits accrued before the effective date of Section
416 and benefits accrued before the Plan became top-heavy.

        12.05.  Discontinuance of Article.

        In the event that the provisions of this Article are no longer required
to qualify the Plan under the Code, then this Article XII shall thereupon be
void without the necessity of further amendment of the Plan.

                                       49

<PAGE>


        IN WITNESS WHEREOF, and as evidence of the adoption of the foregoing,
the Company has caused this instrument to be executed by a duly authorized
officer as of this 16th day of February, 2001.



                                    HANOVER DIRECT, INC.



                                    By:    /s/ Edward M. Lambert     02-16-2002

                                           Title:  EVP/COO



                                       50
<PAGE>


                                   SCHEDULE A

                                 EFFECTIVE DATES

The provisions of this amended and restated Plan are effective July 1, 1999,
except as otherwise provided in the Plan or below:

1.      The following provision is effective December 12, 1994:

        a.      Section 11.10 (military service).

2.      The following provision is effective January 1, 1996:

        a.      Section 5.04 (required minimum distributions).

3.      The following provisions are effective January 1, 1997:

        a.      Section 1.07 (elimination of family attribution rules from
                Compensation definition).

        b.      Section 1.14 (definition of leased employee).

        c.      Section 1.19 (definition of Highly-Paid Employee).

        d.      Sections 3.06-3.09 (non-discrimination testing).

4.      The following provision is effective January 1, 2000:

        a.      Section 3.12(d) (direct rollovers).

5.      The following provision is effective January 1, 2001:

        a.      Section 1.07 (Compensation definition modified to include
                amounts described in Section 132(f) of the Code).



                                       51

<PAGE>


                   HANOVER DIRECT SAVINGS AND RETIREMENT PLAN

                         APPENDIX A: ADOPTING EMPLOYERS

1.      The Company's subsidiary, Gump's Holdings, Inc., adopts this Plan as a
        participating Employer effective July 12, 1993. For purposes of
        determining Hours of Service and Years of Service, an Employee shall be
        credited with all service commencing July 12, 1993.

2.      The Company's subsidiary, Gump's, Inc., adopts this Plan as a
        participating Employer effective July 12, 1993. For purposes of
        determining Hours of Service and Years of Service, an Employee shall be
        credited with all service commencing July 12, 1993.

3.      The Company's subsidiary, Gumps By Mail, Inc., adopts this Plan as a
        participating Employer effective July 12, 1993. For purposes of
        determining Hours of Service and Years of Service, an Employee shall be
        credited with all service commencing July 12, 1993.

4.      The Company's subsidiary, Tweeds Inc., adopts this Plan as a
        participating Employer effective January 1, 1994. For purposes of
        determining Hours of Service and Years of Service, an Employee shall be
        credited with all service with Tweeds Inc. rendered prior to the date of
        its acquisition by the Company.

5.      The Company's subsidiary, The Company Manufacturing, Inc., which has
        succeeded to the business formerly carried on by The Company Store,
        adopts this Plan as a participating Employer effective January 1, 1994.
        For purposes of determining Hours of Service and Years of Service, an
        Employee shall be credited with all service with The Company Store
        rendered prior to the date of its acquisition by the Company.



                                       52
<PAGE>


                        APPENDIX B: SPECIAL VESTING RULES

                       FOR EMPLOYEES OF LWI HOLDINGS, INC.

        Notwithstanding anything to the contrary contained in Section 7.01 of
        the Plan, the vested percentage of each Participant who is a "Continuing
        Employee" (as such term is defined in Section 3.12(a) of the Asset
        Purchase Agreement among the Company, LWI Holdings, Inc., HSN LP, HSN
        Improvements, LLC and HSN Catalogue Services, Inc., dated as of June 13,
        2001, as amended (the "Asset Purchase Agreement")) in such Participant's
        Matching Employer Contribution Account and Discretionary Employer
        Contribution Account under this Plan shall be 100%, effective as of the
        "Closing Date" (as such term is defined in Section 1.4 of the Asset
        Purchase Agreement).


                                       53