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                                                                    EXHIBIT 10.3

                                     FORM OF
                               FLOWERS FOODS, INC.
                              RETIREMENT PLAN NO. 1

            AS AMENDED AND RESTATED EFFECTIVE AS OF _________, 2001.


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                               FLOWERS FOODS, INC.
                              RETIREMENT PLAN NO. 1

                                TABLE OF CONTENTS

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PREAMBLE              ............................................................................................1

ARTICLE I.            DEFINITIONS.................................................................................2

   1.01         Accrual Computation Period........................................................................2
   1.02         Accrued Benefit...................................................................................2
   1.03         Actuarial Equivalent or Actuarially Equivalent....................................................3
   1.04         Age...............................................................................................3
   1.05         Annuity Starting Date.............................................................................3
   1.06         Applicable Interest Rate..........................................................................4
   1.07         Beneficiary.......................................................................................4
   1.08         Board.............................................................................................4
   1.09         Break in Service or One Year Break in Service.....................................................4
   1.10         Code..............................................................................................4
   1.11         Committee.........................................................................................4
   1.12         Company...........................................................................................4
   1.13         Compensation......................................................................................4
   1.14         Controlled Group..................................................................................6
   1.15         Death Benefit.....................................................................................6
   1.16         Delayed Retirement Benefit........................................................................6
   1.17         Delayed Retirement Benefit Amount.................................................................6
   1.18         Delayed Retirement Date...........................................................................6
   1.19         Disability Retirement Benefit.....................................................................6
   1.20         Earliest Retirement Age...........................................................................6
   1.21         Early Retirement Benefit..........................................................................6
   1.22         Early Retirement Benefit Amount...................................................................6
   1.23         Early Retirement Date.............................................................................7
   1.24         Effective Date....................................................................................7
   1.25         Eligibility Computation Period....................................................................7
   1.26         Eligible Employee.................................................................................7
   1.27         Employee..........................................................................................7
   1.28         Employer..........................................................................................7
   1.29         Employment Commencement Date......................................................................7
   1.30         Enrolled Actuary..................................................................................8
   1.31         ERISA.............................................................................................8
   1.32         Highly Compensated Employee.......................................................................8
   1.33         Hour of Service...................................................................................9
   1.34         Leased Employee..................................................................................11
   1.35         Normal Retirement Age means Age 65...............................................................11
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   1.36         Normal Retirement Benefit........................................................................11
   1.37         Normal Retirement Benefit Amount.................................................................11
   1.38         Normal Retirement Date...........................................................................16
   1.39         Participant......................................................................................16
   1.40         Plan.............................................................................................16
   1.41         Plan Administrator...............................................................................16
   1.42         Plan Year........................................................................................16
   1.43         Predecessor Company..............................................................................16
   1.44         Predecessor Plan.................................................................................16
   1.45         Qualified Joint and Survivor Annuity.............................................................17
   1.46         Qualified Spousal Waiver.........................................................................17
   1.47         Repayment Rate...................................................................................17
   1.48         Required Beginning Date..........................................................................17
   1.49         Spouse...........................................................................................17
   1.50         Standard Form....................................................................................17
   1.51         Super Highly Compensated Employee................................................................17
   1.52         Surviving Spouse.................................................................................17
   1.53         Termination Benefit..............................................................................17
   1.54         Totally and Permanently Disabled.................................................................18
   1.55         Trust Agreement..................................................................................18
   1.56         Trust Fund or Trust..............................................................................18
   1.57         Trustee..........................................................................................18
   1.58         Vesting Computation Period.......................................................................18
   1.59         Year of Benefit Service..........................................................................18
   1.60         Year of Eligibility Service......................................................................20
   1.61         Year of Vesting Service..........................................................................21
   1.62         Use of Terms.....................................................................................22

ARTICLE II.           ELIGIBILITY................................................................................23

   2.01         Attainment of Participant Status.................................................................23
   2.02         Reemployment of Former Employees.................................................................24
   2.03         Transfers from/to Eligible Class.................................................................25
   2.04         Transfer of Participants.........................................................................25

ARTICLE III.          VESTING IN ACCRUED BENEFITS................................................................27

   3.01         Vesting in Accrued Benefits......................................................................27
   3.02         Amendments to Vesting Schedule...................................................................27
   3.03         Vesting Upon Termination.........................................................................28
   3.04         Forfeitures......................................................................................28
   3.05         Recrediting Certain Forfeitures upon Return to Service...........................................28
   3.06         Vesting of Employees of Rio Grande Foods Manpower, Inc...........................................29
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ARTICLE IV.           BENEFITS PAYABLE...........................................................................30

   4.01         Application for Commencement of Benefits.........................................................30
   4.02         Normal Retirement Benefits.......................................................................30
   4.03         Delayed Retirement Benefits......................................................................30
   4.04         Early Retirement Benefits........................................................................31
   4.05         Disability Benefits..............................................................................31
   4.06         Termination Benefits.............................................................................32
   4.07         Death Benefits...................................................................................32
   4.08         Maximum Benefit Limitations......................................................................34
   4.09         Special Provisions Regarding Benefits Payable....................................................38

ARTICLE V.            STANDARD AND OPTIONAL FORMS OF RETIREMENT INCOME...........................................39

   5.01         Standard Form of Retirement Income...............................................................39
   5.02         Automatic Forms of Retirement Income.............................................................39
   5.03         Optional Forms of Retirement Income..............................................................40
   5.04         Conditions Relative to all Standard and Optional Forms...........................................42
   5.05         Automatic and Optional Forms for Termination Benefits............................................43
   5.06         Automatic and Optional Forms for Death Benefits..................................................44
   5.07         Suspension upon Delayed Retirement or Reemployment After Annuity
                Starting Date....................................................................................45
   5.08         Required Distributions...........................................................................46
   5.09         Code ss. 401(a)(31) Requirement..................................................................51

ARTICLE VI.           CONTRIBUTIONS AND TRUST FUND...............................................................54

   6.01         Required Participant Contributions...............................................................54
   6.02         Contributions by the Employer....................................................................54
   6.03         Return of Contributions..........................................................................54

ARTICLE VII.          ADMINISTRATION.............................................................................56

   7.01         Committee........................................................................................56
   7.02         Plan Administrator...............................................................................56
   7.03         Delegation of Duties.............................................................................56
   7.04         Plan Records.....................................................................................56
   7.05         Committee Liability..............................................................................56
   7.06         Committee Indemnification........................................................................56
   7.07         Committee Expenses...............................................................................57
   7.08         Interpretation of the Plan and Findings of Facts.................................................57

ARTICLE VIII.         THE TRUST FUND AND TRUSTEE.................................................................58

   8.01         Existence of Trust...............................................................................58
   8.02         Exclusive Benefit Rule...........................................................................58
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   8.03         Removal of Trustee...............................................................................58
   8.04         Powers of Trustee................................................................................58
   8.05         Integration of Trust.............................................................................58
   8.06         Liability for Payments...........................................................................58

ARTICLE IX.           MISCELLANEOUS PROVISIONS...................................................................59

   9.01         Exclusive Benefit Rule...........................................................................59
   9.02         Merger or Consolidation of Company...............................................................59
   9.03         Nonalienation or Assignment......................................................................59
   9.04         Plan Continuance Voluntary.......................................................................61
   9.05         Plan not an Employment Contract..................................................................61
   9.06         Payments to Minors and Others....................................................................61
   9.07         Governing Law....................................................................................61
   9.08         Indemnification..................................................................................61
   9.09         Gender and Number................................................................................62
   9.10         Headings.........................................................................................62
   9.11         Claims Procedure.................................................................................62
   9.12         Misstatement in Application for Retirement Income................................................63
   9.13         Liability Limited................................................................................63
   9.14         Location of Participant or Beneficiary Unknown...................................................63
   9.15         Forfeitures and Investment Income................................................................64
   9.16         Prohibited Discrimination........................................................................64
   9.17         Correction of Participants' Benefits.............................................................64
   9.18         Action of Employer, Committee and Plan Administrator.............................................64
   9.19         Employer Records.................................................................................64

ARTICLE X.            AMENDMENT, TERMINATION AND ADOPTION........................................................65

   10.01        Permanency of Plan and Trust.....................................................................65
   10.02        Right to Amend Plan..............................................................................65
   10.03        Right to Terminate Plan and Trust................................................................66
   10.04        Merger, Consolidation, or Transfer of Assets.....................................................66
   10.05        Distribution of Assets of Trust Fund.............................................................66
   10.06        Adoption of the Plan by Members of Controlled Group..............................................67
   10.07        Early Plan Termination Provision.................................................................68
   10.08        Military Service.................................................................................69
   10.09        Electronic Means of Communication................................................................69

ARTICLE XI.           TOP HEAVY PROVISIONS.......................................................................70

   11.01        Applicability....................................................................................70
   11.02        Definitions......................................................................................70
   11.03        Minimum Accrued Benefit..........................................................................72
   11.04        Minimum Vesting..................................................................................73
   11.05        Impact on Code ss. 415 Limitations...............................................................73
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   11.06        Compensation Limitation..........................................................................73
   11.07        No Duplication of Benefits.......................................................................73

ARTICLE XII.          SPECIAL PROVISIONS REGARDING THE MERGER OF THE
                      STORCK BAKING COMPANY PENSION PLAN WITH AND
                      INTO THE PLAN..............................................................................74

   12.01        General Provisions...............................................................................74
   12.02        Transfer of Plan Assets..........................................................................74
   12.03        Conditions for Merger and Transfer...............................................................74
   12.04        Additional Optional Form of Benefit..............................................................74
   12.05        Actuarial Equivalent Amounts.....................................................................74
   12.06        Vesting..........................................................................................75
   12.07        Vested Cash Values...............................................................................75
   12.08        Special Rule on Termination......................................................................76

ARTICLE XIII.         SPECIAL PROVISIONS REGARDING THE MERGER OF THE
                      SHIPLEY BAKING COMPANY DEFINED BENEFIT PENSION
                      PLAN AND TRUST WITH AND INTO THE PLAN......................................................77

   13.01        General Provisions...............................................................................77
   13.02        Transfer of Plan Assets..........................................................................77
   13.03        Conditions for Merger and Transfer...............................................................77
   13.04        Additional Optional Form of Benefit..............................................................77
   13.05        Actuarial Equivalent Amounts.....................................................................77
   13.06        Vesting..........................................................................................78
   13.07        Special Rule on Termination......................................................................78
   13.08        Employee Contribution Accounts...................................................................78

APPENDIX B            ADDITIONAL RETIREMENT BENEFITS.............................................................81
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                               FLOWERS FOODS, INC.
                              RETIREMENT PLAN NO. 1

                                    PREAMBLE

         Flowers Industries, Inc., a Georgia corporation, adopted by resolution
of its Board of Directors on February 28, 1971, the Retirement Plan for
Non-Bargaining Employees of Flowers Industries, Inc. (the "Plan"). The Plan was
amended in its entirety, effective March 1, 1974, and designated the Flowers
Industries, Inc. Retirement Plan for Non-Bargaining Employees. The Plan was
again amended in its entirety effective March 1, 1976, January 1, 1978, January
1, 1982, and redesignated the Flowers Industries, Inc. Retirement Plan.
Subsequently, several further amendments were made to the Plan, and the Plan was
designated the Flowers Industries, Inc. Retirement Plan No. 1, and the Plan was
amended and restated effective as of January 1, 1987. The Plan was again amended
and restated effective as of January 1, 1997.

         Effective as of _______, 2001, Flowers Foods, Inc., a Georgia
corporation has assumed the sponsorship of the Plan, and the name of the Plan
has been changed to the Flowers Foods, Inc. Retirement Plan No. 1. The Plan is
herein amended and restated in its entirety, effective as of _________, 2001.

         The Plan is intended to comply with the Tax Reform Act of 1986 and all
subsequent applicable rulings and legislation, including the Omnibus Budget
Reconciliation Act of 1986, the Omnibus Budget Reconciliation Act of 1987, the
Technical and Miscellaneous Revenue Act of 1988, the Omnibus Budget
Reconciliation Act of 1989, the Omnibus Budget Reconciliation Act of 1990, the
Unemployment Compensation Amendments of 1992, the Revenue Reconciliation Act of
1993, the Uruguay Round Agreements Act, the Uniformed Services Employment and
Reemployment Rights Act of 1994, the Small Business Job Protection Act of 1996,
the Taxpayer Relief Act of 1997, and the Internal Revenue Service Restructuring
and Reform Act of 1998. This Plan, and the Trust which forms a part of the Plan,
are intended to be and to remain qualified and exempt from taxation under
Sections 401 and 501 of the Internal Revenue Code of 1986, and shall be
interpreted and administered in such manner as shall be necessary to carry out
this intention.

         The effective date of the amendment and restatement of this Plan is
__________, 2001, except where certain provisions have other effective dates as
indicated, and this amendment and restatement shall apply only to a Participant
who is credited with an Hour of Service on or after that date except as
otherwise provided herein. The rights and benefits of a Participant who is not
credited with an Hour of Service on or after __________, 2001 shall be
determined in accordance with the terms of the Plan in effect on the date of the
Participant's termination of employment with the Employer. Certain provisions of
this amended and restated Plan are effective on other, stated dates, as
specifically provided herein.


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                                   ARTICLE I.

                                   DEFINITIONS

         The following words and phrases, whenever capitalized in this document
or the accompanying Trust Agreement, shall have the following meanings unless
the context clearly indicates otherwise:

         1.01     Accrual Computation Period.

                  (a)      For purposes of determining Years of Benefit Service
         and One-Year Breaks in Service for purposes of Benefit Accrual, the
         Accrual Computation Period shall be the 12 consecutive month period
         coincident with the Plan Year.

                  (b)      If the Company shall amend the Plan to change the
         Accrual Computation Period, such amendment shall comply with the
         provisions of DOL Reg. ss. 2530.204-2(e).

         1.02     Accrued Benefit.

                  (a)      In General. Accrued Benefit, with respect to a
         Participant, means the benefit determined in accordance with Section
         1.37 and Article IV (excluding Sections 4.05 and 4.07) which the
         Participant has accrued under this Plan (which may or may not be
         vested).

                  (b)      Transitional Rules. Notwithstanding any other
         contrary provision of the Plan, in order that benefit accruals arising
         during the Plan Years (and portions thereof) before December 31, 1991,
         will not cause this Plan to fail to meet the requirements of Code
         ss. ss. 401(a)(4) and 401(a)(26) for such Plan Years, the following
         provisions are added to the Plan effective as noted below:

                           (i)      A Plan Participant who is a Super Highly
                  Compensated Employee may not receive a distribution after
                  January 31, 1989, of a benefit that exceeds the benefit that
                  such Participant had accrued as of the last day of the Plan
                  Year beginning in 1988 until such time as the Accrued Benefit
                  for that Participant under the Plan as in existence after
                  December 31, 1991, exceeds such Participant's Accrued Benefit
                  as of the last day of the Plan Year beginning in 1988.

                           (ii)     Benefit accruals for Participants who are
                  not Highly Compensated Employees shall continue at more than a
                  de minimis level under this Plan after December 31, 1991.

                           (iii)    No amendment decreasing benefit accruals of
                  Participants who are not Highly Compensated Employees that do
                  not correspondingly affect Participants who are Highly
                  Compensated Employees or amendment increasing benefit accruals
                  shall be adopted during the period beginning December 13, 1988
                  and ending on December 31, 1991.


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         It is the intention of the provisions of this subsection (b) to reflect
         the adoption of Alternative IID, as promulgated by the Internal Revenue
         Service in Notice 88-131, for the period beginning January 1, 1989 and
         ending on December 31, 1991, in order to ensure that benefit accruals
         arising prior to January 1, 1992, will not cause the Plan to fail to
         meet the requirements of Code ss. ss. 401(a)(4) and 401(a)(26) for such
         period.

                  (c)      Transfer of Participants. The Accrued Benefit of any
         Participant who transfers from the employment of one Employer to that
         of a member of the Controlled Group who is not an Employer or any
         Participant who transfers from the employment of a member of the
         Controlled Group who is not an Employer to that of an Employer shall be
         determined using only Compensation received and Years of Benefit
         Service earned while the Participant was employed by an Employer,
         except that a Participant (i) who transfers from the employment of one
         Employer to that of a member of the Controlled Group who is not an
         Employer, and (ii) who is not eligible to participate in any other
         retirement plan qualified under Code ss. 401(a) to which the Company or
         any other Controlled Group member makes contributions on his behalf,
         shall have his Accrued Benefit determined taking into account his
         Compensation received and Years of Benefit Service earned while
         employed by such non-Employer Controlled Group member. See Sections
         1.59(b)(ii) and 2.04(b)(i).

         1.03     Actuarial Equivalent or Actuarially Equivalent means a benefit
of equivalent value as of the Participant's or Beneficiary's, as applicable,
Annuity Starting Date, computed on the basis of tables adopted by the Pension
Committee of the Board for purposes of calculating actuarially equivalent
benefits. For purposes of computing lump sum amounts under Sections 5.02(a),
5.03(d), 5.03(e)(iii), 5.05(a), 5.05(b)(iii), 5.06(a) and (b), 12.04, and 13.04,
such tables shall be based upon (a) a mortality table prescribed by the
Secretary of the Treasury, based on the prevailing commissioners' standard table
(described in Section 807(d)(5)(A) of the Code) used to determine reserves for
group annuity contracts issued on the date as of which present value is being
determined (without regard to any other subparagraph of Section 807(d)(5) of the
Code), and (b) the annual rate of interest on 30-year Treasury securities for
the month before the beginning of the Plan Year in which the lump sum
distribution occurs. Exhibit A to the Plan contains the current Actuarial
Equivalent tables which may be changed from time to time by the Pension
Committee of the Board with written documentation of such action by the Pension
Committee of the Board. In no event shall the Accrued Benefit of a Participant
as adjusted by the Actuarial Equivalent tables which are current at his Age when
benefits commence be less than his Accrued Benefit determined as of any earlier
date as adjusted by the Actuarial Equivalent tables in effect on such earlier
date but based upon his Age when benefits commence; provided, however, that the
preceding clause shall not apply to the extent permitted by Section 767(d)(2) of
the Retirement Protection Act of 1994.

         1.04     Age means the age, in years and completed months, of an
Employee as of the date of determination.

         1.05     Annuity Starting Date means, with respect to a Participant or
Beneficiary, (i) the first day of the first period for which an amount is paid
as an annuity or (ii) in the case of a benefit not payable in the form of an
annuity, the first day on which all events have occurred


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which entitle the Participant or Beneficiary to such benefit, in accordance with
Treas. Reg. ss. 1.401(a)-20(Q&A-10)(b).

         1.06     Applicable Interest Rate means the interest rate or rates
which would be used by the Pension Benefit Guaranty Corporation for purposes of
determining the present value of a lump sum distribution on termination of a
plan. For purposes of determining the present value of lump sum distributions
from this Plan, such interest rates shall be determined as of the first day of
the Plan Year during which the later of the Annuity Starting Date or the lump
sum distribution occurs.

         1.07     Beneficiary means the person or persons, including a trust for
the benefit of individuals, designated by the terms of this Plan or last
designated by a Participant, by written notice filed with the Committee, to
receive a survivor benefit (if applicable) upon his death. If, at any time, no
Beneficiary has been designated by a Participant, or the designated Beneficiary
is no longer living or no longer exists, whichever is applicable, then the
Participant's Beneficiary shall be deemed to be the Participant's Spouse or, if
no such Spouse is then living, the Participant's estate; provided, however,
nothing in this Section shall be interpreted so as to require a benefit for such
Beneficiary except as set forth elsewhere in this Plan. Once a benefit is in pay
status, the Beneficiary of a Participant hereunder may not be changed.

         1.08     Board means the Board of Directors of the Company.

         1.09     Break in Service or One Year Break in Service means any period
of time which would count as a Year of Eligibility Service, a Year of Vesting
Service or a Year of Benefit Service, as applicable, if a Participant had served
at least 1000 Hours of Service during such period, but for which the Participant
served 500 or fewer Hours of Service.

         1.10     Code means the Internal Revenue Code of 1986, as amended.

         1.11     Committee means the administrative Committee comprised of one
or more persons designated by the President of the Company in accordance with
Article VII hereof.

         1.12     Company means Flowers Foods, Inc., including any successor by
merger, purchase or otherwise which shall adopt the Plan with the approval of
its Board of Directors. With respect to periods of time prior to __________,
2001, this term means Flowers Industries, Inc.

         1.13     Compensation.

                  (a)      General Definition. Subject to subsections (b)
         through (e) below, Compensation for a Plan Year with respect to an
         Employee shall mean the Employee's "wages" as defined in Code ss.
         3401(a) for purposes of income tax withholding at the source paid by an
         Employer but determined without regard to any rules that limit the
         remuneration included in wages based on the nature or location of the
         employment or the services performed (such as the exception for
         agricultural labor in Code ss. 3401(a)(2)) and all other payments of
         compensation (in the course of the Employer's trade or business) for
         which the Employer is required to furnish the Employee a written
         statement under


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<PAGE>   11

         Code ss. ss. 6041(d), 6051(a)(3) and 6052 which are paid by the
         Employer to such Employee for such Plan Year.

                  (b)      Safe Harbor Exclusions. Notwithstanding the
         provisions of subsection (a) above, none of the following items shall
         be included in the definition of Compensation, whether or not
         includable in taxable gross income:

                           (i)      reimbursements or other expense allowances;

                           (ii)     fringe benefits (cash and noncash);

                           (iii)    moving expenses;

                           (iv)     deferred compensation;

                           (v)      welfare benefits;

         and, additionally, solely with respect to Highly Compensated Employees:

                           (vi)     amounts received from the exercise of any
                  nonqualified stock options issued by an Employer;

                           (vii)    amounts received from the sale or exchange
                  of stock transferred pursuant to the exercise of an incentive
                  stock option; and

                           (viii)   amounts required to be reported as income
                  pursuant to Code ss. 7872.

                  (c)      Salary Reduction Arrangements. Notwithstanding the
         preceding subsections of this Section, Compensation shall include any
         amount which is contributed by the Employer pursuant to a salary
         reduction agreement and which is not includable in the gross income of
         the Employee under Code ss. ss. 125, 402(e)(3), 402(h) or 403(b).

                  (d)      Limitation. The annual Compensation of an Employee
         taken into account in determining contributions or benefits under the
         Plan for any Plan Year beginning after December 31, 1988, shall not
         exceed $200,000 as adjusted by the Secretary of the Treasury at the
         same time and in the same manner as under Code ss. 415(d). If the Plan
         determines Compensation on a period of time that contains fewer than 12
         calendar months, the above limitation shall be proportionately reduced;
         provided, however, no proration is required for Employees who are
         covered under the Plan for less than 1 full year if the Plan formula
         for accruals is based on Compensation for a period of at least 12
         months.

                           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


                                       5
<PAGE>   12

         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.

                           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.

                  (e)      Special Provisions. The term Compensation may be
         specially defined for purposes of certain provisions of this Plan. See
         Section 4.08(f)(i).

         1.14     Controlled Group means the Company and any other entity which
is required to be aggregated with the Company pursuant to Code ss. ss. 414(b),
(c), (m) or (o). For purposes of Section 4.08 hereof and any other part of the
Plan referring to the Code ss. 415 limitations, the definition of Controlled
Group shall be modified pursuant to Code ss. 415(h).

         1.15     Death Benefit means the benefit to which the Surviving Spouse
of a Participant is entitled upon the death of the Participant prior to his
Annuity Starting Date as set forth in Section 4.07 herein.

         1.16     Delayed Retirement Benefit means the benefit to which a
Participant is entitled upon continuing in the employ of an Employer beyond his
Normal Retirement Date as set forth in Section 4.03 herein.

         1.17     Delayed Retirement Benefit Amount means the Participant's
Normal Retirement Benefit Amount, determined as of his date of severance from
employment with all members of the Controlled Group, unadjusted actuarially to
reflect a delay in the payment of benefits after the Participant's Normal
Retirement Date, and not offset by any earlier payments of benefits required by
Section 5.08 herein.

         1.18     Delayed Retirement Date. See Section 4.03 of this Plan.

         1.19     Disability Retirement Benefit means the benefit to which a
Participant is entitled upon severance from employment with all members of the
Controlled Group as a result of becoming Totally and Permanently Disabled as set
forth in Section 4.05 herein.

         1.20     Earliest Retirement Age means the earliest age at which a
Participant could sever from employment with all members of the Controlled Group
and receive a distribution, in accordance with Treas. Reg. ss.
1.401(a)-20(Q&A-17)(b).

         1.21     Early Retirement Benefit means the benefit to which a
Participant is entitled upon attainment of his Early Retirement Date while in
the service of an Employer as set forth in Section 4.04 herein.

         1.22     Early Retirement Benefit Amount means the amount payable each
month to a Participant as of the Participant's selected Annuity Starting Date,
which shall be equal to the Participant's Normal Retirement Benefit Amount
determined as of his date of severance from


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<PAGE>   13

employment with all members of the Controlled Group, multiplied by the
appropriate factor from Table 1 in Exhibit A as determined by the period of time
prior to the Participant's Normal Retirement Date that his Annuity Starting Date
occurs.

         1.23     Early Retirement Date means, with respect to a Participant,
the first day of any month prior to his attainment of Normal Retirement Age and
coincident with or immediately following the date the Participant has completed
all of the following requirements: (a) attainment of Age 55 ("Early Retirement
Age"), (b) completion of 5 Years of Vesting Service (10 Years of Vesting Service
for Employees who do not have at least one Hour of Service in a Plan Year
beginning after December 31, 1988), and (c) severance from employment with all
members of the Controlled Group. See Section 4.04 of this Plan.

         1.24     Effective Date means the Effective Date of this restated and
amended Plan, which is __________, 2001.

         1.25     Eligibility Computation Period means, with respect to an
Employee, the following for purposes of determining Years of Eligibility Service
and One Year Breaks in Service for purposes of eligibility:

                  (a)      The initial Eligibility Computation Period is the
         12-consecutive-month period beginning on the Employee's Employment
         Commencement Date.

                  (b)      Succeeding 12-consecutive-month periods which are the
         Plan Years that include each anniversary of the Employee's Employment
         Commencement Date shall constitute subsequent Eligibility Computation
         Periods for the Employee.

         1.26     Eligible Employee means an Employee who (i) is employed by an
Employer, and (ii) is eligible to participate in this Plan and become a
Participant for all or a portion of a Plan Year pursuant to Article II of this
Plan. Leased Employees and Employees described in Section 2.01(d) and (e) are
excluded from participating in this Plan; provided that Leased Employees who are
Highly Compensated Employees, Leased Employees who are not Highly Compensated
Employees and Employees described in Section 2.01(e), are included in the
coverage test performed for this Plan under Code Section 410(b).

         1.27     Employee means an individual currently performing services as
a common law employee of any member of the Controlled Group. The term "Employee"
shall also include any Highly Compensated Leased Employee and any Non-Highly
Compensated Leased Employee of an Employer or any member of the Controlled
Group. The term "Employee" shall not include an individual who provides services
to the Employer or another Controlled Group member pursuant to a contractual
arrangement with another entity, but who is not deemed to constitute a Leased
Employee.

         1.28     Employer means the Company and any other member of the
Controlled Group that adopts the Plan with the consent of the Board of the
Company pursuant to Section 10.06.

         1.29     Employment Commencement Date means the date on which an
Employee first performs an Hour of Service for the Employer or any other member
of the Controlled Group.


                                       7
<PAGE>   14

         1.30     Enrolled Actuary means an individual who has been approved and
enrolled by the Joint Board for the Enrollment of Actuaries to perform actuarial
services required by ERISA or the regulations thereunder.

         1.31     ERISA means the Employee Retirement Income Security Act of
1974, as amended.

         1.32     Highly Compensated Employee means the following:

                  (a)      An Employee shall be a Highly Compensated Employee,
         with respect to a Plan Year, if the Employee is described under either
         or both paragraph (b) or paragraph (c) below.

                  (b)      An Employee is described under this paragraph (b) if
         the Employee is performing services during the Determination Year for
         an Employer and: (1) the Employee received compensation from the
         Employer during the Look-Back Year in excess of $80,000 and was a
         member of the top-paid group (as defined in Treas. Reg. ss.
         1.414(q)-1T(Q&A-9)) for such Look-Back Year; or (2) the Employee was a
         "5-percent owner" (as defined in Treas. Reg. ss. 1.414(q)-1T(Q&A-8)) at
         any time during either or both the Look-Back Year or the Determination
         Year.

                  (c)      An Employee is described under this paragraph (c) if
         the individual was, at one time, an Employee of the Employer and the
         individual separated from service (or was deemed to have separated from
         service pursuant to Treas. Reg. ss. 1.414(q)-1T(Q&A5)) from the
         Employer prior to the Determination Year, such individual performs no
         service for the Employer during the Determination Year, and such
         individual is a "highly compensated employee" (as defined in Code ss.
         414(q) for either the Determination Year during which the individual
         separated from service with the Employer or any Determination Year
         ending on or after the individual's 55th birthday.

                  (d)      For purposes of this Section, the applicable dollar
         amount specified in subparagraph (1) of paragraph (b) shall be the
         applicable dollar amount prescribed in Code ss. ss. 414(q)(1)(B) as
         adjusted pursuant to the last sentence of Code ss. 414(q)(1).

                  (e)      For purposes of this Section, the term "Determination
         Year" shall mean the respective Plan Year specified in paragraph (a)
         above, and the term "Look-Back Year" shall mean the 12 month period
         immediately preceding the Determination Year.

                  (f)      The determination of who is a Highly Compensated
         Employee, including the determinations of the number and identity of
         the Employees in the top-paid group, and the compensation that is
         considered, will be made in accordance with Code ss. 414(q) and the
         regulations thereunder. For purposes of this Section, "compensation"
         shall be defined as set forth in Section 4.08(f)(i), except
         compensation for each year shall include any amount which is
         contributed by an Employer pursuant to a salary reduction arrangement
         and which is not includable in the gross income of the Employee under
         Code ss. ss. 125, 402(e)(3) or 403(b).


                                       8
<PAGE>   15

         1.33     Hour of Service means the following:

                  (a)      An Employee shall receive credit for an Hour of
         Service for each hour for which he is paid or entitled to payment by an
         Employer for the performance of duties.

                  (b)      An Employee shall also receive credit for an Hour of
         Service for each hour for which he is paid or entitled to payment by an
         Employer on account of a period of time during which no duties are
         performed (irrespective of whether the employment relationship has
         terminated) due to vacation, holiday, illness, incapacity (including
         disability), layoff, jury duty, military duty or leave of absence;
         provided, however, that:

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

                           (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 shall not be credited to
                  an Employee if said payment is made or due under a plan
                  maintained solely for the purpose of complying with applicable
                  worker's compensation, unemployment compensation, or
                  disability insurance laws; and

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

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

                  (c)      An Employee shall also receive credit for an Hour of
         Service for each hour for which back pay, irrespective of mitigation of
         damages, is either awarded or agreed to by an Employer provided that no
         Hour of Service shall be credited pursuant both to this subsection (c)
         and subsections (a) or (b) above. Crediting of Hours of Service for
         back pay awarded or agreed to with respect to periods described in
         subsection (b) above shall be subject to the limitations set forth in
         that subsection.

                  (d)      In addition to the Service for which an Hour of
         Service must be credited pursuant to subsections (a), (b) and (c)
         above, an Employee shall receive credit for an Hour of Service for:

                           (i)      Each hour, whether or not said Employee is
                  paid therefor, during which he would otherwise perform an Hour
                  of Service, except for the fact that he is on an approved
                  leave of absence (not to exceed 24 months). If he does not


                                       9
<PAGE>   16

                  return to work on or before the end of his leave, Service will
                  be deemed to have terminated as of the end of his leave
                  (unless the Employee terminated earlier); and

                           (ii)     Each hour for which an Employee performs no
                  duties due to absence during any military service to the
                  extent required by law.

                  (e)      Each Employee for whom the Employer does not keep
         records of actual Hours of Service shall be credited with 45 Hours of
         Service for each week for which said Employee would be required to be
         credited with at least one (1) Hour of Service, in accordance with this
         Section and applicable regulations promulgated by the Department of
         Labor. If, based on the preceding sentence, an Employee would not be
         credited with 1,000 Hours of Service in an eligibility computation
         period, a vesting computation period or an accrual computation period,
         Hours of Service shall be determined from the record of hours worked or
         hours for which payment is made or owing.

                  (f)      In determining the number of Hours of Service to be
         credited to an Employee, the provisions of DOL Reg. ss. 2530.200b-2(b)
         and (c) are incorporated herein by reference.

                  (g)      If an Employee is absent from service with the
         Employer as a result of a Maternity/Paternity Absence, then, solely for
         purposes of determining whether the Employee incurs a One Year Break in
         Service for purposes of eligibility to participate and vesting in
         benefits, the Employee will be credited with up to 501 Hours of Service
         with respect to the period of Maternity/Paternity Absence. Such 501
         Hours of Service shall be credited at the rate at which the Employee
         would have otherwise accrued Hours of Service but for the
         Maternity/Paternity Absence, provided that, if the Committee is unable
         to determine the Hours of Service that would have otherwise been
         credited, such Hours of Service shall be credited at the rate of eight
         hours for each day of the Maternity/Paternity Absence. Such 501 Hours
         of Service shall be credited only in the Computation Period in which
         the Employee's Maternity/Paternity Absence commences if the Employee
         would have incurred a One Year Break in Service in such Computation
         Period but for the crediting of the additional Hours of Service. If
         such 501 Hours of Service are not credited to the Computation Period in
         which the Maternity/Paternity Absence commences pursuant to the
         immediately preceding sentence, such Hours of Service shall be credited
         to the next Computation Period commencing after the Maternity/Paternity
         Absence commences. For purposes of this subsection, the term
         "Maternity/Paternity Absence" means an absence from service with the
         Employer by an Employee if the absence is caused:

                           (i)      By reason of the pregnancy of the Employee;

                           (ii)     By reason of the birth of a child of the
                  Employee;

                           (iii)    By reason of the placement of a child with
                  the Employee in connection with the adoption of such child by
                  the Employee; or

                           (iv)     For purposes of caring for such child for a
                  period beginning immediately following such birth or
                  placement.


                                       10
<PAGE>   17

         For purposes of this subsection (g), "Computation Period" shall mean
         the Eligibility Computation Period or Vesting Computation Period, as
         applicable.

                  (h)      For purposes of this Section, service with any member
         of the Controlled Group during the period that it is a member thereof
         shall be treated as service with the Employer except as indicated to
         the contrary in this Plan, and prior service shall also be included if
         so provided in this Plan.

                  (i)      Notwithstanding any other provision herein, effective
         as of __________, 2001, Hours of Service shall not be credited under
         the foregoing provisions of this Section 1.33 with respect to hours
         that are both (1) attributable to Flowers Industries, Inc. and (2)
         allocable to periods of time after __________, 2001.

         1.34     Leased Employee.

                  (a)      Leased Employee shall mean any person (other than an
         employee of the Employer) who pursuant to an agreement between the
         Employer and any other person ("leasing organization") has performed
         services for the Employer (or for the Employer and related persons
         determined in accordance with Code ss. 414(n)(6)) on a substantially
         full time basis for a period of at least one year, and such services
         are performed under the primary direction or control of the Employer.
         Contributions or benefits provided a Leased Employee by the leasing
         organization which are attributable to services performed for the
         Employer shall be treated as provided by the Employer.

                  (b)      A Leased Employee shall not, however, be considered
         an Employee of the Employer if: (i) such Employee is covered by a money
         purchase pension plan of his legal employer providing: (1) a
         nonintegrated employer contribution rate of at least 10% of
         compensation (as defined in Code ss. 415(c)(3), but excluding amounts
         contributed pursuant to a salary reduction agreement which are
         excludable from the employee's gross income under Code ss. ss. 125,
         402(e)(3), 402(h) or 403(b)), (2) immediate participation, and (3) full
         and immediate vesting; and (ii) Leased Employees do not constitute more
         than 20% of the Employer's nonhighly compensated workforce. For
         purposes of this subsection (b), the term "nonhighly compensated
         workforce" means the total number of individuals (other than Highly
         Compensated Employees) who are either Employees of the Employer or
         Leased Employees of the Employer.

         1.35     Normal Retirement Age means Age 65.

         1.36     Normal Retirement Benefit means the benefit to which a
Participant is entitled upon attainment of his Normal Retirement Age while in
the service of an Employer as set forth in Section 4.02 herein.

         1.37     Normal Retirement Benefit Amount means the amount payable each
month to a Participant as of the later of the Participant's attainment of his
Normal Retirement Age, or the Participant's date of actual severance from
employment with all members of the Controlled Group, unless the Participant
continues to work past his Required Beginning Date, in which event Normal
Retirement Benefit Amount shall mean the amount payable each month to the
Participant as of his Required Beginning Date, with subsequent accruals by the
Participant to be


                                       11
<PAGE>   18

taken into account in accordance with Section 5.08(f). A Participant's Normal
Retirement Benefit Amount shall be determined as of the earlier of (1) the
Participant's Annuity Starting Date, or (2) the Participant's date of death, in
the following manner:

                  (a)      General Rule. The Normal Retirement Benefit Amount
         for any Participant shall be equal to the sum of the Participant's Plan
         Year Accruals ("PYA's") for each Accrual Computation Period as
         calculated in paragraphs (i) through (v) below, but not less than the
         amount calculated in subsection (b) below.

                           (i)      Post 1988 PYA's. For each Accrual
                  Computation Period beginning on or after January 1, 1989, the
                  Participant's Plan Year Accrual with respect to such Accrual
                  Computation Period shall be equal to:

                           PYA = (1/12) x [(0.0135 x A) + (0.0065 x B)],

                  for each of the first 35 Years of Benefit Service of the
                  Participant, less any Years of Benefit Service which are taken
                  into consideration under paragraphs (ii), (iii) and (iv) of
                  this subsection (a), and shall be equal to:

                           PYA = (1/12) x (0.0180 x A)

                  for each Year of Benefit Service of the Participant
                  thereafter, where:

                           A   =   The Participant's Compensation during the
                                   Accrual Computation Period; and

                           B   =   The Participant's Compensation in excess of
                                   $10,000 during the Accrual Computation
                                   Period.

                           (ii)     1976 to 1988 PYA's. For each Year of Benefit
                  Service completed during an Accrual Computation Period
                  beginning on or after January 1, 1976, but prior to January 1,
                  1989, the Participant's Plan Year Accrual shall be equal to
                  the following amount:

                           PYA = (1/12) x [(0.0090 x C) + (0.0110 x D)]

                  where:

                           C  =  The Participant's Earnings during the Accrual
                                 Computation Period; and

                           D  =  The Participant's Earnings in excess of $7,800
                                 during the Accrual Computation Period.

                           (iii)    1971 to 1975 PYA's. For each Year of Benefit
                  Service completed during an Accrual Computation Period
                  beginning on or after March 1, 1971, but prior to January 1,
                  1976, the Participant's Plan Year Accrual shall be equal to
                  the following amount:


                                       12
<PAGE>   19

                           PYA = (1/12) x [(0.0090 x C) + (0.0060 x D)]

                  where C and D have the meanings given in paragraph (ii) above.

                           (iv)     Pre-1971 PYA's. For each Year of Benefit
                  Service completed during Accrual Computation Periods prior to
                  March 1, 1971, the Participant's Plan Year Accrual shall be
                  equal to the following amount:

                           PYA = (1/12) x [(0.0090 x E) + (0.0060 x F)] x G

                  where:

                           E  =  The Participant's Average Earnings as of March
                                 1, 1971; and

                           F  =  The Participant's Average Earnings as of March
                                 1, 1971, in excess of $7,800; and

                           G  =  The Participant's Years of Benefit Service
                                 prior to March 1, 1971;

                  provided, however, that a Participant's aggregate Plan Year
                  Accruals for Accrual Computation Periods prior to March 1,
                  1971, shall not be less than the monthly amount of payments
                  which could be provided by a benefit payable in the Standard
                  Form which is Actuarially Equivalent to (i) the total cash
                  surrender value of the individual policies or annuity
                  contracts which were being purchased for the Participant under
                  any pension or profit sharing plan which has been merged into
                  this Plan, or (ii) the fair market value of the assets
                  allocated to the Participant under any such plan on the day
                  before the date such plan was merged into this Plan.

                           (v)      Definitions and Rules. Solely for purposes
                  of this subsection (a), the following definitions and rules
                  shall apply:

                                    (A)      "Earnings" of an Employee for an
                           Accrual Computation Period shall mean the total
                           compensation actually paid to an Employee by an
                           Employer as reported on Form W-2 including overtime
                           pay, premium pay, incentive pay, bonuses, expense
                           allowances or any other special payments. Effective
                           as of July 1, 1987, for purposes of determining
                           Earnings, Earnings shall include any amount which is
                           contributed by the Employer pursuant to a salary
                           reduction agreement and which is not includable in
                           the gross income of the Employee under Code ss. 125.
                           (Note that for purposes of paragraph (i),
                           Compensation as defined in Section 1.13, and not
                           Earnings, is used to determine the Normal Retirement
                           Benefit Amount.)

                                    (B)      "Average Earnings" of an Employee
                           for an Accrual Computation Period as of a date shall
                           mean the average of the Employee's "Earnings" (as
                           defined in subparagraph (A) above) over the 5 year
                           period


                                       13
<PAGE>   20

                           (or the total period of service of the Employee if
                           less than 5 years) ending on such date.

                                    (C)      Should a record of Earnings not
                           exist for any year in which service is to be credited
                           for benefits, such Earnings shall be computed upon
                           the assumption that Earnings for any year prior to
                           the earliest year of known Earnings are lower than
                           the Earnings for the years following. The assumed
                           Earnings will be determined as if they have increased
                           at the rate of 5% per year to the earliest year of
                           known Earnings.

                                    (D)      For purposes of paragraphs (i),
                           (ii) and (iii) above, a Participant's Compensation or
                           Earnings during an Accrual Computation Period shall
                           only include amounts paid during such Accrual
                           Computation Period for service rendered which service
                           would be included and not excluded under paragraphs
                           (ii) through (ix) of Section 1.59(b).

                  (b)      Transitional Rule. The Accrued Benefit for the period
         beginning January 1, 1989, and ending on the December 31, 1991, of any
         Plan Participant who is not a Super Highly Compensated Employee shall
         be equal to the greater of (1) his Normal Retirement Benefit Amount
         calculated under subsection (a) above for the entire period, or (2) his
         Normal Retirement Benefit Amount calculated under subsection (a) above
         for the entire period with the following inserted in lieu of paragraph
         (i) of subsection (a):

                           (i)      Post 1988 PYA's. For each Accrual
                  Computation Period of a Participant beginning on or after
                  January 1, 1989, the Participant's Plan Year Accrual with
                  respect to such Accrual Computation Period shall be equal to
                  the following amount:

                           PYA = (1/12) x [(0.0090 x H) + (0.0110 x I)]

                  where:

                           H = The Participant's Maximum Earnings during the
                               Accrual Computation Period; and

                           I = The Participant's Maximum Earnings in excess of
                               $7,800  during the Accrual Computation Period;

                  and with the following added to paragraph (v) of subsection
                  (a):

                                    (E)      "Maximum Earnings" of an Employee
                           for a Plan Year shall mean the "Earnings" (as defined
                           in subparagraph (A) above) of the Employee subject to
                           the limitation provisions of Section 1.13(d).

                  (c)      Accruals Beyond Normal Retirement Date.
         Notwithstanding the provisions of Section 1.37, with respect to a
         Participant who continues to work beyond his Normal Retirement Date,
         such Participant shall accrue no further benefit after


                                       14
<PAGE>   21

         reaching his Normal Retirement Date for any Plan Year beginning before
         January 1, 1988, unless such Participant is credited with at least one
         Hour of Service in a Plan Year beginning on or after January 1, 1988,
         in which event, such Participant shall continue to accrue further
         benefits in accordance with the terms and provisions of this Plan. Such
         accruals shall include accruals for Years of Benefit Service completed
         during Plan Years beginning before January 1, 1988. The provisions of
         this subsection (c) shall be interpreted in accordance with Prop.
         Treas. Reg. ss. 1.411(b)-2(f) and any corresponding future regulations
         under Sections 9201 through 9204 of the Omnibus Budget Reconciliation
         Act of 1986.

                  (d)      In the event that either the annual overall permitted
         disparity limit, or the cumulative permitted disparity limit, under
         Treas. Reg. 1.40(l)-5 would be exceeded for any Participant for a given
         Plan year, the benefits under this Plan which would otherwise accrue
         pursuant to the provisions hereof shall be changed, depending on
         whether or not the Participant is a Highly Compensated Employee, as
         follows:

                           (i)      For Highly Compensated Employees, the excess
                  benefit percentage factor of 0.0065 described in section
                  1.37(a)(i) hereof shall be reduced to the extent required to
                  avoid said disparity.

                           (ii)     For Employees who are not Highly Compensated
                  Employees, the base benefit percentage factor of 0.0135
                  described in Section 1.37(a)(i) hereof shall be increased to
                  the extent required to avoid said disparity. In the case of a
                  Participant whose years of Benefit Service exceed 34, any such
                  adjustment required because of participation in another
                  retirement plan shall be effected in said other plan.

                  (e)      The Accrued Benefit determined under subsection (a)
         above on or after January 1, 1992, shall not be less than the Accrued
         Benefit determined under subsection (b) above as of December 31, 1991.

                  (f)      Accruals for Certain Highly Compensated Employees.
         Beginning in the 1995 Plan Year, no Participant who

                           (i)      is a Highly Compensated Employee in the
                  current Plan Year (but determined solely on the basis of
                  compensation, as defined in Section 1.32(g), received in the
                  Look-Back Year),

                           (ii)     is, or has at any time been, a participant
                  in the Flowers Industries, Inc. 1989 Executive Stock Incentive
                  Plan, and

                           (iii)    (with respect to Plan Years beginning on or
                  before January 1, 2001) is an Employee of Flowers Industries,
                  Inc., on January 1 of the Plan Year in question,

         will accrue any benefit for said Plan Year until after the end of said
         Plan Year. The benefit which will then accrue retroactively for each
         such Participant will be limited to the maximum benefit that said
         Participant can accrue for the Plan Year without causing


                                       15
<PAGE>   22

         the Plan to violate Code Section 410(b) as determined by the Plan's
         Actuary, as soon as practicable after the end of each Plan Year, using
         substantiation quality data as defined in relevant Internal Revenue
         Service publications. For each Plan Year when such Participants are
         prevented from accruing the benefit they would accrue without the
         application of Code Section 410(b) by virtue of this subparagraph, the
         Actuary will determine the accruals by reducing on a uniform basis the
         level of Compensation which can be taken into account under
         subparagraph 1.37(a) to the level required to satisfy Code Section
         410(b).

                  (g)      Subject to subsection (f) of this Section 1.37, in
         the case of a Participant whose Social Security Number is listed in
         Appendix B to the Plan, the Normal Retirement Benefit Amount and
         Accrued Benefit shall be equal to the sum of (i) the amount determined
         under the provisions of subsections (a) through (f) above, as if this
         subsection (g) had not been added to the Plan, plus (ii) the
         "Additional Retirement Benefit" applicable to such Participant, as set
         forth opposite such Participant's Social Security Number in said
         Appendix B. This subsection (g) shall be effective as of January 1,
         1996.

         1.38     Normal Retirement Date means the first day of the month
coincident with or next following the date on which the Participant attains his
Normal Retirement Age.

         1.39     Participant means an Employee who has satisfied the
requirements for participation pursuant to Article II. A Participant shall
continue to be a Participant (whether or not he continues to be credited with
Years of Vesting Service or Years of Benefit Service) until his benefits have
been fully distributed, although he may or may not accrue additional benefits
under this Plan.

         1.40     Plan means the Flowers Foods, Inc. Retirement Plan No. 1, as
set forth herein and as from time to time amended.

         1.41     Plan Administrator means the person or persons appointed by
the Committee pursuant to Article VII herein. If no such appointment is made,
the Committee shall be the Plan Administrator.

         1.42     Plan Year means the period for keeping the books and records
of the Plan, which shall be the calendar year.

         1.43     Predecessor Company means a company which has heretofore or
hereafter been merged, consolidated or otherwise absorbed by a member of the
Controlled Group or all or a substantial part of the assets or business of which
have been or shall be acquired by a member of the Controlled Group.

         1.44     Predecessor Plan means a plan which has heretofore or
hereafter been merged, consolidated or otherwise absorbed by this Plan or all or
a substantial part of the assets and liabilities of which have been or shall be
transferred to this Plan.


                                       16
<PAGE>   23

         1.45     Qualified Joint and Survivor Annuity means an annuity for the
life of the Participant with a survivor annuity for the life of the
Participant's Spouse, under which the Spouse's monthly benefit is 50% of the
amount of the Participant's monthly benefit.

         1.46     Qualified Spousal Waiver means a written election, delivered
to the Committee, signed by the Participant's Spouse, and witnessed by a notary
public or an authorized Plan representative, which consents to the payment of
all or a specified part of the Participant's benefit to a named Beneficiary
other than the Participant's Spouse, and/or in a specified form other than a
Qualified Joint and Survivor Annuity. Such election may not be changed without
Spousal consent (unless the consent expressly permits designations by the
Participant without further consent of the Spouse). A Participant may, however,
revoke a Qualified Spousal Waiver at any time prior to his Annuity Starting Date
by way of a written signed statement to the Committee, and a Qualified Spousal
Waiver shall not be effective at any time following delivery of such a
revocation to the Committee provided that such revocation is received by the
Committee prior to his Annuity Starting Date. If a Participant revokes a
Qualified Spousal Waiver, the Participant's benefits automatically shall become
payable in the form of a Qualified Joint and Survivor Annuity unless the Spouse
thereafter consents to the payment of benefits in a form other than a Qualified
Joint and Survivor Annuity pursuant to a Qualified Spousal Waiver.

         1.47     Repayment Rate means, with respect to a Participant, 120% of
the Federal mid-term rate as in effect under Code ss. 1274 for the first month
of the applicable Plan Year.

         1.48     Required Beginning Date. See Section 5.08(b)(i) of this Plan.

         1.49     Spouse means the legally recognized Spouse of a Participant
determined as of the Participant's Annuity Starting Date, or if earlier,
determined as of the Participant's date of death, under the laws of the state in
which the Participant is domiciled.

         1.50     Standard Form means a life annuity payable monthly on the
first day of each month during the lifetime of the applicable Participant or
Beneficiary and ending on the first day of the month coincident with or
immediately preceding the Participant's or Beneficiary's date of death.

         1.51     Super Highly Compensated Employee means an Employee who is a
Highly Compensated Employee as described in subsections (b)(1), (b)(4) or (b)(7)
of Section 1.32 of this Plan (as the Plan was amended and restated effective as
of January 1, 1987). For purposes of Sections 1.02 and 1.37, a Participant who
is a Super Highly Compensated Employee for a 1989 Plan Year shall also be
considered a Super Highly Compensated Employee for the 1990 and 1991 Plan Years.

         1.52     Surviving Spouse means the surviving Spouse, if any, of a
deceased Participant determined as of the Participant's date of death.

         1.53     Termination Benefit means the benefit to which a Participant
is entitled upon severance from employment with all members of the Controlled
Group as set forth in Section 4.06 herein.


                                       17
<PAGE>   24

         1.54     Totally and Permanently Disabled means any medically
determinable physical or mental impairment arising after an Employee has become
a Participant and while employed by an Employer resulting from demonstrable
injury or disease that can be expected to continue for an indefinite period of
greater than 12 months or to result in death and which prevents the Participant
from engaging in his occupation or performing any gainful occupation for which
he is qualified by reason of education, training or experience as determined by
a qualified physician selected by the Committee.

         1.55     Trust Agreement means the agreement entered into between the
Company and the Trustee, as it may subsequently be amended from time to time,
whereby the Trustee holds the assets of this Plan. The terms of the Trust
Agreement are hereby incorporated by reference herein.

         1.56     Trust Fund or Trust means all assets held by the Trustee
pursuant to the terms of the Trust Agreement.

         1.57     Trustee means the person(s), corporation, association, or a
combination thereof who shall accept the appointment by the President of the
Company to execute the duties of the Trustee as stated in this Plan and in the
Trust Agreement.

         1.58     Vesting Computation Period means, for purposes of determining
Years of Vesting Service and One-Year Breaks in Service for purposes of Vesting,
the following:

                  (a)      The Vesting Computation Period shall be the 12
         consecutive month period coincident with the Plan Year.

                  (b)      If the Company shall amend the Plan to change the
         Vesting Computation Period, such amendment shall comply with the
         requirements of DOL Reg. ss. 2530.203-2(c).

         1.59     Year of Benefit Service.

                  (a)      Pre-1976 Service. For Plan Years beginning before
         January 1, 1976, a Participant's Years of Benefit Service shall be the
         number of years or fractional parts thereof for which the Participant
         received credit in accordance with the applicable provisions of this
         Plan as in effect on December 31, 1975.

                  (b)      Post-1975 Service. For Plan Years beginning after
         December 31, 1975, the following rules shall apply in determining a
         Participant's Years of Benefit Service:

                           (i)      In General. Year of Benefit Service shall
                  mean an Accrual Computation Period during which the Employee
                  completes 1,000 Hours of Service.

                           (ii)     Other Controlled Group Service. For purposes
                  of determining Years of Benefit Service, service with any
                  member of the Controlled Group during the period that it is
                  (1) a member thereof, and (2) an Employer, shall be treated as
                  service with the Employer; provided, however, that for a
                  Participant


                                       18
<PAGE>   25

                  who transfers from the employment of an Employer to that of a
                  member of the Controlled Group who is not an Employer, such a
                  Participant shall be deemed to be employed by an Employer
                  while employed by such Controlled Group member if such
                  Participant is not eligible to participate in any other
                  retirement plan qualified under Code ss. 401(a) to which the
                  Company or any other Controlled Group member makes
                  contributions on his behalf. See Sections 1.02(c) and
                  2.04(b)(i). Notwithstanding any provision of this Plan to the
                  contrary including Section 1.33(h), service with any member of
                  the Controlled Group shall otherwise not be treated as service
                  with the Employer, except as provided in paragraph (ix) below.

                           (iii)    Service While Ineligible. For purposes of
                  determining Years of Benefit Service, notwithstanding any
                  provision of this Plan to the contrary including Section 1.33,
                  service with any member of the Controlled Group during the
                  period that an Employee is not an Eligible Employee shall not
                  be treated as service with the Employer, except as provided in
                  paragraph (ix) below.

                           (iv)     Imputed Service. For purposes of determining
                  Years of Benefit Service, notwithstanding any provision of
                  this Plan to the contrary including Section 1.33, Hours of
                  Service credited under Section 1.33(d)(i) shall not be
                  considered in determining a Participant's Years of Benefit
                  Service, but Hours of Service credited under Section
                  1.33(d)(ii) shall be considered in determining a Participant's
                  Years of Benefit Service.

                           (v)      Service While Contribution Required. Years
                  of Benefit Service of an Employee during a period for which
                  the Employee declined to make any required contribution to
                  this Plan, or a Predecessor Plan or any employee benefit
                  pension plan maintained by a Predecessor Company shall be
                  disregarded. If an Employee contributes any part of the
                  required contributions for a year, such year may not be
                  excluded under this paragraph.

                           (vi)     Service While no Plan in Existence. Years of
                  Benefit Service of an Employee during any period for which the
                  Employer did not maintain this Plan or a predecessor plan
                  shall be disregarded, except as provided in paragraph (ix)
                  below. For purposes of this paragraph, whether the Employer
                  maintained a "predecessor plan" shall be determined in
                  accordance with Treas. Reg. ss. 1.411(a)-5(b)(3).

                           (vii)    Rule of Parity. Any former Employee (1) who
                  does not have any vested right under the Plan to his Accrued
                  Benefit, and (2) for whom the number of consecutive One-Year
                  Breaks in Service prior to such Employee's reemployment equals
                  or exceeds the greater of 5 or the aggregate number of Years
                  of Benefit Service before such Breaks in Service shall not
                  receive credit for service prior to such Breaks in Service.

                           (viii)   Service Where Benefit has been Distributed.
                  For purposes of determining Years of Benefit Service, service
                  (which would otherwise constitute


                                       19
<PAGE>   26

                  Years of Benefit Service) performed by an Employee with
                  respect to which the Employee has received (or has been deemed
                  to receive) a distribution under this Plan of the present
                  value of his entire Accrued Benefit at the time of such
                  distribution due to the termination of such Employee's
                  participation in the Plan shall be excluded. However, such
                  Years of Benefit Service shall not be excluded under this
                  paragraph if the Employee, after returning to the employ of an
                  Employer, repays to the Trustee the entire amount of the
                  distribution he received (or was deemed to have received) from
                  the Plan (with interest compounded annually at the Repayment
                  Rate for the entire period of time beginning with the date
                  such distribution was made and ending with the date such
                  repayment occurs) before the earlier of (1) 5 years after the
                  first date on which the Employee is subsequently reemployed by
                  an Employer, or (2) the end of the first period of 5
                  consecutive One-Year Breaks in Service after the distribution.
                  A Participant who has been deemed to have received a
                  distribution under this Plan and who incurs a forfeiture and
                  returns to service with a member of the Controlled Group,
                  prior to incurring 5 consecutive One-Year Breaks-in-Service
                  shall be deemed to have repaid his deemed distribution upon
                  said return.

                           (ix)     Past Service Credit. An Employee shall,
                  subject to the foregoing provisions of this Section, receive
                  Years of Benefit Service in accordance with any applicable
                  document referred to in Section 10.06(a).

                           (x)      Fractional Years of Benefit Service. In
                  determining an Employee's Years of Benefit Service, an
                  Employee will be credited with fractional Years of Benefit
                  Service based on the percentage of the Accrual Computation
                  Period during which he was employed; provided, however, to
                  receive such credit, the Employee must complete during such
                  portion of the Accrual Computation Period a minimum number of
                  Hours of Service determined by multiplying 1,000 by the
                  percentage of the Accrual Computation Period during which he
                  was employed.

                           (xi)     Service with Flowers Industries, Inc. or
                  Flowers Foods, Inc. after __________, 2001. Notwithstanding
                  any other provision herein, effective as of __________, 2001,
                  a Participant shall not earn Years of Benefit Service based
                  upon service or Hours of Service that are both (1)
                  attributable to Flowers Industries, Inc. or Flowers Foods,
                  Inc. and (2) allocable to periods of time after __________,
                  2001.

         1.60     Year of Eligibility Service.

                  (a)      In General. Year of Eligibility Service shall mean an
         Eligibility Computation Period during which the Employee completes
         1,000 Hours of Service.

                  (b)      Other Controlled Group Service. For purposes of this
         Section, employment with any member of the Controlled Group shall be
         considered employment with an Employer. In addition, in the case of a
         Leased Employee of any member of the Controlled Group, employment with
         such member of the Controlled Group shall be considered employment with
         an Employer.


                                       20
<PAGE>   27

                  (c)      Service with Predecessor Employers. For purposes of
         this Section, in any case in which the Employer maintains a plan of a
         predecessor employer, service for such predecessor shall be treated as
         service for the Employer.

                  (d)      Service with Flowers Industries, Inc. after
         __________, 2001. Notwithstanding any other provision herein, effective
         as of __________, 2001, an Employee shall not earn Years of Eligibility
         Service based upon service or Hours of Service that are both (1)
         attributable to Flowers Industries, Inc. and (2) allocable to periods
         of time after __________, 2001.

         1.61     Year of Vesting Service.

                  (a)      Pre-1976 Service. For Plan Years beginning before
         January 1, 1976, an Employee's Years of Vesting Service shall be the
         number of years or fractional parts thereof as an Employee of an
         Employer.

                  (b)      Post-1975 Service. For Plan Years beginning after
         December 31, 1975, the following rules shall apply in determining a
         Participant's Years of Vesting Service:

                           (i)      In General. Year of Vesting Service shall
                  mean a Vesting Computation Period during which an Employee
                  completes 1,000 Hours of Service.

                           (ii)     Other Controlled Group Service. For purposes
                  of this Section, employment with any member of the Controlled
                  Group during the period that it is a member thereof shall be
                  considered employment with an Employer. In addition, in the
                  case of a Leased Employee of any member of the Controlled
                  Group, employment with such member of the Controlled Group
                  during the period that it is a member thereof shall be
                  considered employment with an Employer. However, service with
                  any member of the Controlled Group shall otherwise not be
                  treated as service with the Employer, except as provided in
                  paragraph (viii) below.

                           (iii)    Service with Predecessor Employers. For
                  purposes of this Section, in any case in which the Employer
                  maintains a plan of a predecessor employer, service for such
                  predecessor shall be treated as service for the Employer.

                           (iv)     Imputed Service. For purposes of determining
                  Years of Vesting Service, notwithstanding any provision of
                  this Plan to the contrary including Section 1.33, Hours of
                  Service credited under Section 1.33(d)(i) shall not be
                  considered in determining a Participant's Years of Vesting
                  Service, but Hours of Service credited under Section
                  1.33(d)(ii) shall be considered in determining a Participant's
                  Years of Vesting Service.

                           (v)      Service While Contributions Required. Years
                  of Vesting Service of an Employee during a period for which
                  the Employee declined to make any required contribution to
                  this Plan, or a Predecessor Plan or any employee benefit
                  pension plan maintained by a Predecessor Company shall be
                  disregarded. If an


                                       21
<PAGE>   28

                  Employee contributes any part of the required contributions
                  for a year, such year may not be excluded under this
                  paragraph.

                           (vi)     Service While no Plan in Existence. Years of
                  Vesting Service of an Employee during any period for which the
                  Employer did not maintain this Plan or a predecessor plan
                  shall be disregarded, except as provided in paragraph (viii)
                  below. For purposes of this paragraph, whether the Employer
                  maintained a "predecessor plan" shall be determined in
                  accordance with Treas. Reg. ss. 1.411(a)-5(b)(3).

                           (vii)    Rule of Parity. Any former Employee (1) who
                  does not have any vested right under the Plan to his Accrued
                  Benefit, and (2) for whom the number of consecutive One-Year
                  Breaks in Service prior to such Employee's reemployment equals
                  or exceeds the greater of 5 or the aggregate number of Years
                  of Vesting Service before such Breaks in Service shall not
                  receive credit for service prior to such Breaks in Service.

                           (viii)   Past Service Credit. An Employee shall,
                  subject to the foregoing provisions of this Section, receive
                  credit for Years of Vesting Service in accordance with any
                  applicable document referred to in Section 10.06(a).

                           (ix)     Fractional Years of Vesting Service. In
                  determining an Employee's Years of Vesting Service, an
                  Employee will be credited with fractional Years of Vesting
                  Service based on the percentage of the Vesting Computation
                  Period during which he was employed; provided, however, that
                  to receive such credit, the Employee must complete during such
                  portion of the Vesting Computation Period a minimum number of
                  Hours of Service determined by multiplying 1,000 by the
                  percentage of the Vesting Computation Period during which he
                  was employed.

                           (x)      Service with Flowers Industries, Inc. after
                  ______, 2001. Notwithstanding any other provision herein,
                  effective as of __________, 2001, an Employee shall not earn
                  Years of Vesting service based upon service or Hours of
                  Service that are both (1) attributable to Flowers Industries,
                  Inc. and (2) allocable to periods of time after __________,
                  2001.

         1.62     Use of Terms. Any words used in this Plan in the masculine
shall be read and construed in the feminine where they would so apply. Words in
the singular shall be read and construed in the plural in all cases where they
would so apply.


                                       22
<PAGE>   29

                                  ARTICLE II.

                                  ELIGIBILITY

         2.01     Attainment of Participant Status.

                  (a)      Participants as of the Effective Date. Subject to
         subsections (c), (d), (e) and (f) below, all Eligible Employees who
         were Participants in this Plan immediately prior to the Effective Date
         shall remain and continue as Participants hereunder as of the Effective
         Date.

                  (b)      Prerequisites for Participation. Subject to
         subsections (c), (d), (e) and (f) below, prior to January 1, 1990, each
         Eligible Employee who is not a Participant in accordance with
         subsection (a) shall become a Participant as of the later of (i) the
         date the Employee becomes an Eligible Employee, or (ii) the date on
         which this Plan becomes effective with respect to the Employer of the
         Employee. Subject to subsections (c), (d), (e), (f), (g), (h), (i) and
         (j) below, on and after January 1, 1990, each Eligible Employee who is
         not a Participant in accordance with subsection (a) or the preceding
         sentence shall become a Participant as of the later of (i) the date the
         Employee becomes an Eligible Employee, (ii) the date on which this Plan
         becomes effective with respect to the Employer of the Employee, or
         (iii) the date on which the Employee completes one Year of Eligibility
         Service.

                  (c)      Leased Employees. Leased Employees shall not be
         eligible to participate in this Plan unless they become the common law
         employees of an Employer.

                  (d)      Collectively Bargained Employees. Employees who are
         included in a unit of Employees covered by a collective bargaining
         agreement between their collective bargaining representative and their
         Employer shall not be eligible to participate in this Plan.

                  (e)      Employees Participating in Other Plans.

                           (i)      Prior to January 1, 1993. Prior to January
                  1, 1993, Employees who are actively participating in any other
                  retirement plan qualified under Code ss. 401(a) (other than
                  the Flowers Industries, Inc. Employee Stock Ownership Plan) to
                  which their Employer makes contributions on their behalf shall
                  not be eligible to participate in this Plan.

                           (ii)     After December 31, 1992. After December 31,
                  1992, Employees who are actively participating in any other
                  employee pension benefit plan (as defined in ERISA ss. 3(2))
                  to which Title IV of ERISA applies and to which any member of
                  the Controlled Group makes contributions on their behalf shall
                  not be eligible to participate in this Plan.

                  (f)      Distributors and Thrift Store Operators.
         Notwithstanding any provision of the Plan to the contrary, individuals
         who are distributors or thrift store operators and who have executed a
         written agreement with a member of the Controlled Group for the


                                       23
<PAGE>   30

         distribution or sale of goods or products (and any employees, agents or
         independent contractors of such distributors or thrift store operators)
         shall not be eligible to participate in this Plan.

                  (g)      Employees Hired After December 31, 1998.
         Notwithstanding any provision of the Plan to the contrary, an
         individual who is first credited with an Hour of Service with the
         Company or with another Controlled Group member on or after January 1,
         1999 shall not be an "Eligible Employee" and shall not be eligible to
         participate in this Plan.

                  (h)      Employees of Flowers Industries, Inc. after
         __________, 2001. Notwithstanding any other provision herein, effective
         as of __________, 2001 employees of Flowers Industries, Inc. shall not
         be eligible to participate in the Plan; provided, however, that
         individuals who were, prior to __________, 2001 employees of Flowers
         Industries, Inc. and Participants in this Plan shall be entitled to all
         benefits accrued under this Plan prior to that date.

                  (i)      Employee of Flowers Foods, Inc. Notwithstanding any
         other provision herein, employees of Flowers Foods, Inc. shall not be
         eligible to participate in this Plan; provided, however, that an
         individual who was a Participant in this Plan prior to becoming an
         employee of Flowers Foods, Inc. shall be entitled to all benefits
         accrued under this Plan prior to the individual's becoming an employee
         of Flowers Foods, Inc.

                  (j)      Certain Other Employees. Effective as of _______,
         2001, the persons who hold the positions of President and Chief
         Operating Officer of Mrs. Smith's Bakeries, Inc. and President and
         Chief Operating Officer of Flowers Bakeries, Inc. shall not be eligible
         to participate in this Plan; provided that such persons shall be
         entitled to all benefits accrued under this Plan prior to that date.

         2.02     Reemployment of Former Employees.

                  (a)      Prior to January 1, 1990, any former Employee who
         terminated employment with the Employer shall, upon being rehired by an
         Employer as an Eligible Employee, immediately become a Participant
         hereunder, subject to subsections (c), (d), (e), and (f) of Section
         2.01 above.

                  (b)      Effective on or after January 1, 1990, any former
         Employee who terminated employment with the Employer prior to having a
         vested Accrued Benefit hereunder shall:

                           (i)      if such Employee has not incurred five
                  consecutive One Year Breaks in Service, become a Participant
                  as of the later of (1) his reemployment commencement date or
                  (2) the anniversary of his original employment commencement
                  date first following his completion of one Year of Eligibility
                  Service; or


                                       24
<PAGE>   31

                           (ii)     if such Employee has incurred five
                  consecutive One Year Breaks in Service, become a Participant
                  in accordance with subsection (b) of Section 2.01 above.

         Any other former Employee shall, upon being rehired by an Employer as
         an Eligible Employee, immediately become a Participant hereunder,
         subject to subsections (c), (d), (e), (f), (g), (h), (i) and (j) of
         Section 2.01 above.

                  (c)      Notwithstanding any other provision herein, effective
         January 1, 1999, any former Employee who terminated employment with the
         Employer and who on or after January 1, 1999 is rehired by an Employer
         as an Eligible Employee shall not accrue any additional benefits under
         the Plan, but shall be entitled to benefits (if any) based upon Years
         of Benefit Service and Compensation prior to the termination of
         employment.

         2.03     Transfers from/to Eligible Class.

                  (a)      Exclusion after Participation. A Participant who
         ceases to be an Eligible Employee by reason of subsections (c), (d),
         (e), (f), (h), (i) or (j) of Section 2.01 above but who remains
         employed by a member of the Controlled Group shall continue to earn
         Years of Eligibility Service and Years of Vesting Service, but during
         the period the Participant is not an Eligible Employee by reason of
         subsections (c), (d), (e), (f), (h),(i) or (j) of Section 2.01 above,
         the Participant shall not be credited with Years of Benefit Service and
         the Participant's Compensation during such period shall not be taken
         into account for purposes of determining the Participant's Accrued
         Benefit under this Plan.

                  (b)      Participation after Exclusion. An individual who has
         been employed by a member of the Controlled Group and who is not an
         Eligible Employee by reason of subsections (c), (d), (e), or (f) of
         Section 2.01 above but who becomes an Eligible Employee because he is
         no longer in a status described in subsections (c), (d), (e), or (f) of
         Section 2.01 above shall be eligible to participate in this Plan and
         accrue benefits hereunder in accordance with Sections 2.01 through 2.02
         above. Notwithstanding the foregoing, effective January 1, 1999, an
         individual who has been employed by a member of the Controlled Group
         and who is not an Eligible Employee by reason of subsections (c), (d),
         (e), (f), (h), (i) or (j) of Section 2.01 above but who becomes an
         Eligible Employee on or after January 1, 1999 because he is no longer
         in a status described in subsections (c), (d), (e), (f), (h), (i) or
         (j) of Section 2.01 above shall not be eligible to participate in this
         Plan and shall not accrue additional benefits hereunder based upon
         service on or after January 1, 1999.

         2.04     Transfer of Participants.

                  (a)      Transfers among Employers. Any Participant who
         transfers from the employment of one Employer to that of another
         Employer shall continue to participate hereunder without interruption
         or adverse effect because of such transfer if such Participant remains
         an Eligible Employee, subject to subsections (c), (d), (e), (f), (h)
         and (i) of Section 2.01.


                                       25
<PAGE>   32

                  (b)      Transfers to/from Employer from/to Non-Employer
         Controlled Group Member.

                           (i)      Transfer to Non-Employer Controlled Group
                  Member. Any Participant who transfers from the employment of
                  an Employer to that of a member of the Controlled Group who is
                  not an Employer shall remain a Participant hereunder but shall
                  not accrue any further benefit hereunder until such time as
                  the Participant transfers back to employment as an Eligible
                  Employee of an Employer, if at all, subject to subsections
                  (c), (d), (e), (f), (h) or (i) of Section 2.01. However,
                  notwithstanding the foregoing, such a Participant shall be
                  deemed to be employed by an Employer and therefore an Eligible
                  Employee hereunder if such Participant is not eligible to
                  participate in any other retirement plan qualified under
                  Code ss. 401(a) to which the Company or any other Controlled
                  Group member makes contributions on his behalf. See Sections
                  1.02(c) and 1.59(b)(ii).

                           (ii)     Transfer to Employer. Any individual who
                  transfers from the employment of a member of the Controlled
                  Group to that of an Employer shall become a Participant
                  hereunder (or shall continue participation hereunder) in
                  accordance with the provisions of Sections 2.01 to 2.03 above.
                  Notwithstanding any other provision herein, effective January
                  1, 1999 with respect to an individual who transfers on or
                  after that date from the employment of a member of the
                  Controlled Group that is not an Employer to the employment of
                  an Employer shall not become a Participant hereunder (if the
                  individual was not previously a Participant hereunder) and
                  shall not accrue additional benefits hereunder based upon
                  service on or after January 1, 1999 (if the individual was
                  previously a Participant).

                  (c)      Transfer to Holsum Baking Company. Notwithstanding
         the provisions of subsection (b) above or any provision of this Plan to
         the contrary, any Participant who transfers from the employment of an
         Employer to the employment of Holsum Baking Company shall continue to
         participate hereunder without interruption or adverse effect because of
         such transfer, subject to subsections (c), (d) and (e) of Section 2.01
         above, until such time as Holsum Baking Company adopts the Flowers
         Industries, Inc. 401(k) Retirement Savings Plan in accordance with the
         provisions of Section 11.6 of such plan.


                                       26
<PAGE>   33

                                  ARTICLE III.

                          VESTING IN ACCRUED BENEFITS

         3.01     Vesting in Accrued Benefits.

                  (a)      Full Vesting Events. A Participant shall be 100%
         vested in his Accrued Benefit upon the occurrence of any of the
         following events:

                           (i)      The Participant attains Age 65 while still
                  in service as an Employee;

                           (ii)     The Participant becomes Totally and
                  Permanently Disabled while still in service as an Employee; or

                           (iii)    The Participant completes five (5) Years of
                  Vesting Service (10 Years of Vesting Service for Participants
                  who do not have at least one (1) Hour of Service in a Plan
                  Year beginning after December 31, 1988).

         A Participant whose Accrued Benefit is not 100% vested under the
         preceding provisions of this Section shall not be vested in any portion
         of his Accrued Benefit.

                  (b)      Nonforfeitability by Participant Conduct. No portion
         of a Participant's Accrued Benefit shall be forfeited as a result of
         conduct of the Participant (other than his severance from employment
         prior to an event described in subsection (a) above).

         3.02     Amendments to Vesting Schedule.

                  (a)      General Rule. Notwithstanding Section 3.01, no
         Participant shall have his vested interest in his Accrued Benefit
         decreased as a result of the merger of a plan with this Plan, or as a
         result of any amendment which alters the vesting provisions hereof. Any
         Participant who has a vested accrued benefit under a plan merged with
         this Plan will receive no less than that vested accrued benefit under
         this Plan and any Participant who has a vested Accrued Benefit under
         this Plan prior to an amendment which alters the vesting provisions
         hereof shall receive no less than that vested Accrued Benefit under
         this Plan, as so amended. In addition, no such amendment shall reduce a
         Participant's vested percentage as of the effective date of said
         amendment.

                  (b)      Application of Former Schedule. If the vesting
         schedule applicable to a Participant is amended, any Participant who
         has at least three (3) Years of Vesting Service (without regard to
         paragraphs (v) and (vi) of subsection (b) of Section 1.61) prior to the
         expiration of the election period described below may elect to have his
         vesting percentage computed without regard to the change in the vesting
         schedule. Such an election must be made within sixty (60) days after
         the later of (i) the date of issuance of a written notification by the
         Committee of the adoption of this Plan or of any subsequent amendment
         which alters the vesting provisions hereof; (ii) the date of the
         adoption of this Plan or of any subsequent amendment which alters the
         vesting provisions hereof; or (iii) the effective date of this Plan or
         of any subsequent amendment which alters the vesting


                                       27
<PAGE>   34

         provisions hereof. Notwithstanding the foregoing, no election shall be
         provided for any Participant whose vested percentage under the Plan, or
         under the Plan as amended, at any time cannot be less than such
         percentage determined without regard to the Plan or the amendment. For
         Participants who have not completed at least one Hour of Service in any
         Plan Year beginning after December 31, 1988, this subsection (b) shall
         be applied by substituting "five (5) Years of Vesting Service" for
         "three (3) Years of Vesting Service" where such language appears.

                  (c)      Automatic Amendments to Vesting Schedule. The rules
         of this Section shall apply to the automatic change in the vesting
         schedule in Section 3.01 above after the end of the Plan Year beginning
         on January 1, 1988. Furthermore, the rules of this Section shall apply
         to any automatic change in the vesting schedule caused by the operation
         of Article XI of this Plan.

                  (d)      Determination of Amendment. For purposes of this
         Section, an amendment of a vesting schedule is any plan amendment which
         directly or indirectly affects the computation of the vested percentage
         of a Participant's Accrued Benefit, as described in Treas.
         Reg. ss. 1.411(a)-8(c).

         3.03     Vesting Upon Termination. If, pursuant to Article X, this Plan
is wholly or partially terminated, the rights of each affected Participant to
his Accrued Benefit as of the date of such termination or partial termination,
to the extent funded, shall be fully vested notwithstanding any other provisions
of this Article III to the contrary. See Section 10.03(a) herein.

         3.04     Forfeitures. In the event a Participant severs from employment
with the Employer and receives (or, if applicable, begins receiving) or is
deemed to have received a distribution of his vested Accrued Benefit, the
non-vested portion of his Accrued Benefit shall be forfeited as of the date of
the distribution (or, if applicable, commencement of distribution) and shall be
used to reduce future contributions of the Employer. In the event a Participant
severs from employment with the Employer and incurs a period of One-Year
Breaks-in-Service (as defined in Section 1.09) such that the Participant's
service prior to his severance may be disregarded under Section 1.61(b)(vii),
the non-vested portion of his accrued benefits shall then be forfeited and shall
be used to reduce future contributions of the employer.

         3.05     Recrediting Certain Forfeitures upon Return to Service. If a
Participant incurs a forfeiture prior to incurring five consecutive One Year
Breaks in Service, the Participant shall have the previously forfeited Accrued
Benefit restored if and when the Participant, after returning to service with
the Employer, repays to the Trustee the entire amount of the distribution(s) he
received from the Plan, with interest at the Repayment Rate computed on the
amount of the distribution from the date of such distribution to the date of
repayment, before the earlier of (i) 5 years after the first date on which the
Participant is subsequently reemployed by the Employer, or (ii) the end of the
first period of five consecutive One Year Breaks in Service after the
distribution. A Participant who has been deemed to have received a distribution
under this Plan and who otherwise is described in the preceding sentence shall
be deemed to have repaid his deemed distribution and appropriate interest upon
his return to service with an Employer.


                                       28
<PAGE>   35

         3.06     Vesting of Employees of Rio Grande Foods Manpower, Inc.
Notwithstanding the provisions of this Article III or any provision of this Plan
to the contrary, effective April 1, 1995, each Employee of Rio Grande Foods
Manpower, Inc. shall be 100% vested in his Accrued Benefit as of April 1, 1995.


                                       29
<PAGE>   36

                                   ARTICLE IV.

                                BENEFITS PAYABLE

         4.01     Application for Commencement of Benefits.

                  (a)      Benefits to Participants. A Participant must apply to
         have any benefits paid from this Plan pursuant to Sections 4.02 through
         4.06 herein. The application for benefits must be made in the form
         prescribed by the Committee and must be filed with the Committee not
         less than 30 days prior to the Participant's Annuity Starting Date.
         Subject to Sections 5.02 and 5.08, no benefit will be payable to a
         Participant until proper application has been received by the
         Committee.

                  (b)      Benefits Payable to Beneficiaries. A Beneficiary must
         apply to have any benefits paid from this Plan pursuant to Section 4.07
         herein. The application for benefits must be made in the form
         prescribed by the Committee and must be filed with the Committee not
         less than 30 days prior to the Beneficiary's Annuity Starting Date.
         Subject to Sections 5.06 and 5.08, no benefit will be payable to a
         Beneficiary until proper application has been received by the
         Committee.

         4.02     Normal Retirement Benefits. A Participant shall be entitled to
sever from employment with all members of the Controlled Group as of his
attainment of his Normal Retirement Age and receive a Normal Retirement Benefit
as defined below. Subject to the limitations of Section 4.08 and the applicable
provisions of Article V, a Participant's Normal Retirement Benefit shall be a
monthly pension payable in the Standard Form commencing on the Participant's
Normal Retirement Date (or as soon as is administratively practicable
thereafter, with retroactive payments if applicable) with the amount of the
Participant's monthly payments equal to the Participant's Normal Retirement
Benefit Amount, or, if greater and if applicable, the largest Early Retirement
Benefit Amount that would have been payable to the Participant had he (1)
selected an Annuity Starting Date on or after his Early Retirement Date, but
prior to his Normal Retirement Age, and (2) severed from employment with all
members of the Controlled Group immediately prior to such Annuity Starting Date.
A Participant who continues his employment with an Employer beyond his Normal
Retirement Age shall be entitled to receive a Delayed Retirement Benefit under
Section 4.03 below. A Participant who severs from employment with all members of
the Controlled Group as of his Normal Retirement Age and who begins receiving
benefits may have his benefits suspended upon reemployment with a member of the
Controlled Group under the provisions of Section 5.07. The form of payment of a
Participant's Normal Retirement Benefit shall be determined in accordance with
Sections 5.01 through 5.04.

         4.03     Delayed Retirement Benefits. A Participant shall be entitled
to continue in employment with an Employer past his Normal Retirement Date and
receive a Delayed Retirement Benefit as defined below. Subject to the
limitations of Section 4.08 and the applicable provisions of Article V, a
Participant's Delayed Retirement Benefit shall be a monthly pension payable in
the Standard Form commencing as of the earlier of (1) the first day of the month
next following the date the Participant severs from employment with all members
of the Controlled Group subsequent to his Normal Retirement Date (the
Participant's "Delayed


                                       30
<PAGE>   37

Retirement Date") (or as soon as is administratively practicable thereafter,
with retroactive payments if applicable), or (2) the Participant's Required
Beginning Date, with the amount of the Participant's monthly payments equal to
the Participant's Delayed Retirement Benefit Amount. Delayed Retirement Benefits
shall take into account any Years of Benefit Service credited and any
Compensation earned after attainment of Normal Retirement Age (including any
such Years of Benefit Service completed or Compensation earned after the
Participant's Annuity Starting Date under this Section) subject to the
provisions of Section 1.37(c), but Delayed Retirement Benefits shall not be
actuarially adjusted to reflect the delay in the payment of benefits after the
Participant's Normal Retirement Date and the Participant shall be notified in
accordance with Section 5.07, and Delayed Retirement Benefits shall not be
offset by any earlier payments required under this Section in accordance with
Section 5.08. A Participant who severs from employment with all members of the
Controlled Group as of his Delayed Retirement Date and who has begun receiving
benefits may have his benefits suspended upon reemployment with a member of the
Controlled Group under the provisions of Section 5.07. The form of payment of a
Participant's Delayed Retirement Benefit shall be determined in accordance with
Sections 5.01 through 5.04 and 5.08.

         4.04     Early Retirement Benefits. A Participant (1) who is employed
by an Employer as of the date he has attained Age 55, and (2) who has completed
5 Years of Vesting Service (10 Years of Vesting Service for Participants who do
not have at least one Hour of Service in a Plan Year beginning after December
31, 1988), shall be entitled to sever from employment with all members of the
Controlled Group and receive an Early Retirement Benefit as defined below.
Subject to the limitations of Section 4.08 and the applicable provisions of
Article V, a Participant's Early Retirement Benefit shall be a deferred monthly
pension payable in the Standard Form commencing on the Participant's Normal
Retirement Date (or as soon as is administratively practicable thereafter, with
retroactive payments if applicable) with the amount of the Participant's monthly
payments equal to the Participant's Normal Retirement Benefit Amount.
Alternatively, the Participant may elect to commence payments earlier as of his
Early Retirement Date or on the first day of any month thereafter prior to his
Normal Retirement Date (or as soon as is administratively practicable
thereafter, with retroactive payments if applicable), with the amount of the
Participant's monthly payments equal to the Participant's Early Retirement
Benefit Amount. A Participant who severs from employment with all members of the
Controlled Group as of his Early Retirement Date and who has begun receiving
benefits may have his benefits suspended upon reemployment with a member of the
Controlled Group under the provisions of Section 5.07. The form of payment of a
Participant's Early Retirement Benefit shall be determined in accordance with
Sections 5.01 through 5.04.

         4.05     Disability Benefits. A Participant (1) who severs from
employment with all members of the Controlled Group as a result of his becoming
Totally and Permanently Disabled, (2) who is an Eligible Employee (or would be
an Eligible Employee but for Section 2.01(d)) at the time of such severance, and
(3) who survives until his applicable Annuity Starting Date, shall be entitled
to receive a Disability Retirement Benefit as defined below. Subject to the
limitations of Section 4.08 and the applicable provisions of Article V, a
Participant's Disability Retirement Benefit shall be a deferred monthly pension
payable in the Standard Form commencing on the Participant's Normal Retirement
Date (or as soon as is administratively practicable thereafter, with retroactive
payments if applicable) with the amount of the Participant's monthly payments
equal to the Participant's vested Normal Retirement Benefit Amount.
Alternatively, if applicable


                                       31
<PAGE>   38

(i.e., if it is possible for the Participant to have an Early Retirement Date
prior to his Normal Retirement Date), the Participant may elect to commence
payments as of the later of (1) his Early Retirement Date, or (2) his date of
severance from employment with all members of the Controlled Group as a result
of his becoming Totally and Permanently Disabled, or on the first day of any
month thereafter prior to his Normal Retirement Date (or as soon as is
administratively practicable thereafter, with retroactive payments if
applicable), with the amount of the Participant's monthly payments equal to the
Participant's vested Early Retirement Benefit Amount. A Participant who severs
from employment with all members of the Controlled Group as a result of becoming
Totally and Permanently Disabled and who has begun receiving benefits may have
his benefits suspended upon reemployment with a member of the Controlled Group
under the provisions of Section 5.07. The form of payment of a Participant's
Disability Retirement Benefit shall be determined in accordance with Sections
5.01 through 5.04.

         4.06     Termination Benefits. A Participant (1) who severs from
employment with all members of the Controlled Group prior to his Normal
Retirement Date or, if applicable, his Early Retirement Date (a "Severed
Participant"), and (2) who survives until his applicable Annuity Starting Date,
shall be entitled to receive a Termination Benefit as defined below. Subject to
the limitations of Section 4.08 and the applicable provisions of Article V, a
Participant's Termination Benefit shall be a deferred monthly pension payable in
the Standard Form commencing on the Participant's Normal Retirement Date (or as
soon as is administratively practicable thereafter, with retroactive payments if
applicable), with the amount of the Participant's monthly payments equal to the
Participant's vested Normal Retirement Benefit Amount. Alternatively, if
applicable (i.e., if it is possible for the Participant to have an Early
Retirement Date prior to his Normal Retirement Date), the Participant may elect
to commence payments as of his Early Retirement Date or on the first day of any
month thereafter prior to his Normal Retirement Date (or as soon as is
administratively practicable thereafter, with retroactive payments if
applicable), with the amount of the Participant's monthly payments equal to the
Participant's vested Early Retirement Benefit Amount. A Participant who severs
from employment with all members of the Controlled Group and who has begun
receiving benefits may have his benefits suspended upon reemployment with a
member of the Controlled Group under the provisions of Section 5.07. The form of
payment of a Participant's Termination Benefit shall be determined in accordance
with Section 5.05.

         4.07     Death Benefits.

                  (a)      Death Prior to Annuity Starting Date and On or Prior
         to Earliest Retirement Age. In the event a Participant dies (1) while
         he has a vested Accrued Benefit hereunder, (2) before his Annuity
         Starting Date, and (3) on or before his Earliest Retirement Age, the
         Surviving Spouse of the Participant, if any, shall, if such Spouse
         survives until such Spouse's applicable Annuity Starting Date, be
         entitled to receive a Death Benefit as defined below. Subject to the
         limitations of Section 4.08 and the applicable provisions of Article V,
         the Surviving Spouse's Death Benefit shall be a monthly pension payable
         in the Standard Form commencing on the first day of the month
         coincident with or immediately following the Participant's Earliest
         Retirement Age (or as soon as is administratively practicable
         thereafter, with retroactive payments if applicable) with the amount of
         the Spouse's monthly payments equal to the amount payable to such
         Spouse if the Participant had (1) severed from employment from all
         members of the


                                       32
<PAGE>   39

         Controlled Group on his date of death, or, if earlier, his actual date
         of such severance, (2) survived to his Earliest Retirement Age, (3)
         commenced receiving his vested Accrued Benefit in the form of a
         Qualified Joint and Survivor Annuity at his Earliest Retirement Age,
         and (4) died immediately thereafter. Payment of such Death Benefit
         shall commence as of the first day of the month coincident with or next
         following the date on which the Participant would have attained his
         Normal Retirement Age, unless the Surviving Spouse elects to commence
         payments earlier, in which event payments shall commence as of the
         first day of any month after the month during which the Participant
         died but prior to the Participant's Normal Retirement Date (or as soon
         as is administratively practicable thereafter, with retroactive
         payments if applicable), with the amount of the Spouse's monthly
         payments such that the benefit paid is calculated to be Actuarially
         Equivalent to the Spouse's Death Benefit as of the Spouse's Annuity
         Starting Date.

                  (b)      Death Prior to Annuity Starting Date And After
         Earliest Retirement Age. In the event a Participant dies (1) while he
         has a vested Accrued Benefit hereunder, (2) prior to his Annuity
         Starting Date, and (3) after his Earliest Retirement Age, the Surviving
         Spouse of the Participant, if any, shall, if such Spouse survives until
         such Spouse's applicable Annuity Starting Date, be entitled to receive
         a Death Benefit as defined below. Subject to the limitations of Section
         4.08 and the applicable provisions of Article V, the Surviving Spouse's
         Death Benefit shall be a monthly pension payable in the Standard Form
         commencing on the first day of the month coincident with or immediately
         following the Participant's date of death (or as soon as is
         administratively practicable thereafter, with retroactive payments if
         applicable) with the amount of the Spouse's monthly payments equal to
         the amount payable to such Spouse if the Participant had (1) severed
         from employment from all members of the Controlled Group on the day
         before his date of death, and (2) elected that his vested Accrued
         Benefit be paid in the form of a Qualified Joint and Survivor Annuity
         with his Annuity Starting Date to occur as of the first day of the
         month coincident with or immediately following the Participant's date
         of death. Payment of such Death Benefit shall commence as of the first
         day of the month coincident with or next following the date on which
         the Participant would have attained his Normal Retirement Age, unless
         the Surviving Spouse elects to commence payments earlier, in which
         event payments shall commence as of the first day of any month after
         the month during which the Participant died but prior to the
         Participant's Normal Retirement Date (or as soon as is administratively
         practicable thereafter, with retroactive payments if applicable), with
         the amount of the Spouse's monthly payments such that the benefit paid
         is calculated to be Actuarially Equivalent to the Spouse's Death
         Benefit as of the Spouse's Annuity Starting Date.

                  (c)      Death On or After Annuity Starting Date. In the event
         a Participant dies after his Annuity Starting Date, any further benefit
         payable shall be determined exclusively by the form of payment selected
         by the Participant under Article V and shall be determined using only
         the Beneficiary of the Participant as of the Participant's Annuity
         Starting Date.

                  (d)      No Additional Death Benefits. Except as provided
         above, no benefit shall be paid under this Plan on behalf of a deceased
         Participant.


                                       33
<PAGE>   40

                  (e)      Minimum Death Benefit. Notwithstanding any provision
         of this Section to the contrary, with respect to any Participant who
         has a total cash surrender value under any individual policies or
         annuity contracts being purchased for such Participant under a pension
         or profit-sharing plan which has been merged into this Plan or
         designated as a "Former Plan" by resolution of the Board, or who has
         assets allocated to him under such a plan on the day before such plan
         was so merged or designated, such cash value or assets, offset by any
         amounts required to be paid to the Participant's Surviving Spouse under
         the preceding subsections of this Section, shall be paid in the form of
         a single lump sum cash payment to the Participant's Beneficiary after
         all payments required under the preceding subsections of this Section
         have ended.

         4.08     Maximum Benefit Limitations.

                  (a)      General Rule. Except as otherwise provided in this
         Section, the benefits under the Plan with respect to a Participant for
         any Plan Year (which shall be the limitation year) shall not exceed,
         when expressed as an annual benefit in the form of a straight life
         annuity (with no ancillary benefits), the lesser of:

                           (i)      the dollar limitation in effect for such
                  year under Codess. 415(b)(1)(A), or

                           (ii)     one hundred percent (100%) of the
                  Participant's average Compensation for the period of three (3)
                  consecutive calendar years during which the Participant both
                  was an active Participant in the Plan and had the greatest
                  aggregate Compensation from the Controlled Group.

                  (b)      Adjustments. Notwithstanding the foregoing provisions
         of this Section:

                           (i)      If the benefit under the Plan is payable in
                  any form other than the life annuity form, or if the Employees
                  contribute to the Plan or make rollover contributions or plan
                  to plan transfers, for purposes of determining whether the
                  limitations described in Subsection (a) of this Section have
                  been satisfied, such benefit shall be adjusted, in accordance
                  with rules determined by the Commissioner of the Internal
                  Revenue under Treasury Regulation Section 1.415-3(c), so that
                  such benefit is equivalent to an annual benefit. For purposes
                  of this part (i), any ancillary benefit which is not directly
                  related to retirement income benefits shall not be taken into
                  account, and that portion of any joint and survivor annuity
                  which constitutes a qualified joint and survivor annuity (as
                  defined in Codess. 417(b)) shall not be taken into account.

                           (ii)     If the benefit under the Plan begins before
                  the Social Security Retirement Age, for purposes of
                  determining whether the limitation set forth in Paragraph (i)
                  of Subsection (a) has been satisfied, such benefit shall be
                  reduced, in accordance with regulations prescribed by the
                  Secretary of the Treasury, so that such limitation (as so
                  reduced) equals an annual benefit (beginning when such benefit
                  under the Plan begins) which is Actuarially Equivalent to an
                  annual benefit equal to the limitation beginning at the Social
                  Security Retirement Age


                                       34
<PAGE>   41

                  provided that such reduction shall be made in such manner as
                  the Secretary of the Treasury may prescribe which is
                  consistent with the reduction for old age insurance benefits
                  commencing before the Social Security Retirement Age under the
                  Social Security Act.

                           (iii)    If the benefit under the Plan begins after
                  the Social Security Retirement Age, for purposes of
                  determining whether the limitation set forth in Paragraph (i)
                  of Subsection (a) has been satisfied, such limitation shall be
                  increased, in accordance with regulations prescribed by the
                  Secretary of the Treasury, so that such limitation (as so
                  increased) equals an annual benefit (beginning when such
                  benefit under the Plan begins) which is Actuarially Equivalent
                  to an annual benefit equal to the limitation beginning at the
                  Social Security Retirement Age.

                           (iv)     For purposes of adjusting any benefit or
                  limitation under paragraph (i) or (ii) above, the factor to be
                  used shall be the smaller of the Plan factor from Exhibit A or
                  the factor based on the mortality table described in Section
                  1.03(a) and 5% interest; provided, however, that for purposes
                  of adjusting any benefit under paragraph (i) for any form of
                  benefit subject to Code ss. 417(e)(3), the factor shall be the
                  smaller of the Plan factor from Exhibit A or the factor based
                  on the mortality table and interest rate described in Sections
                  1.03(a) and 1.03(b) to determine the Actuarial Equivalent of
                  the particular form of benefit in which the pension is to be
                  paid. For purposes of adjusting any benefit or limitation
                  under paragraph (iii) above, the factor shall be the smaller
                  of the Plan factor from Exhibit A or the factor based upon the
                  mortality table described in Section 1.03(a) and 5% interest.

                  (c)      Multiple Defined Benefit Plan Limitation. The
         limitation of this Section with respect to any Participant who at any
         time has been a Participant in any other defined benefit plan
         maintained by the Employer or any other member of the Controlled Group
         which is qualified under Code ss. 401(a) shall apply as if the total
         benefits payable under all such defined benefit plans in which the
         Participant has participated were payable from one plan.

                  (d)      De Minimis Exception. In the event the annual benefit
         payable to a Participant under this Plan and all other defined benefit
         plans of the Employer or any other member of the Controlled Group does
         not exceed $10,000 for the Plan Year or any prior Plan Year, and the
         Participant has at no time participated in a defined contribution plan
         maintained by the Employer or any other member of the Controlled Group,
         the limitation otherwise imposed by this Section shall not apply.

                  (e)      Benefits Phased by Participation.

                           (i)      For purposes of subsections (b)(ii),
                  (b)(iii), and (c) above, the dollar limit specified in
                  subsection (a)(i) above for any Participant who has
                  participated for less than ten (10) years in a defined benefit
                  plan maintained by the Employer shall be reduced by
                  multiplying it by a fraction, the numerator of which


                                       35
<PAGE>   42

                  is the Participant's years (or part thereof) of participation
                  and the denominator of which is ten (10). For purposes of
                  determining a Participant's years of participation in a plan,
                  the provisions of Notice 87-21, 1987-1 C.B. 458, shall govern
                  until regulations under Code ss. 415(b)(5), as amended, are
                  issued.

                           (ii)     For purposes of the percentage limit under
                  subsection (a)(ii) above and for purposes of subsection (d)
                  above, the maximum retirement benefits to any Participant who
                  has completed less than ten (10) Years of Vesting Service,
                  shall be the amount determined in subsection (a)(ii) or (d) of
                  this Section, as applicable, multiplied by a fraction, the
                  numerator of which is the Participant's number of Years of
                  Vesting Service and the denominator of which is ten (10).

                           (iii)    In no event shall paragraphs (i) and (ii)
                  above reduce the limitations referred to in subsections (a)
                  and (d) above to an amount less than one-tenth (1/10) of such
                  limitation (as determined without regard to paragraphs (i) and
                  (ii) above). Furthermore, the limitations reduction referred
                  to in paragraphs (i) and (ii) above shall apply separately
                  with respect to each change in the benefit structure of a
                  plan, other than changes adopted and made effective prior to
                  May 17, 1989. For purposes of the preceding sentence, the
                  provisions of Notice 89-45 shall govern until regulations
                  under Code ss. 415(b)(5)(D), as amended, are issued.

                  (f)      Definitions. For purposes of this Section the
         following terms shall have the following meanings:

                           (i)      "Compensation" shall mean a Participant's
                  wages, salaries, fees for professional services and other
                  amounts received (without regard to whether or not an amount
                  is paid in cash) for personal services actually rendered in
                  the course of employment with an Employer maintaining the plan
                  to the extent that the amounts are includable in gross income
                  (including, but not limited to, commissions paid salesmen,
                  compensation for services on the basis of a percentage of
                  profits, commissions on insurance premiums, tips, bonuses,
                  fringe benefits, and reimbursements or other expense
                  allowances under a nonaccountable plan (as described in Treas.
                  Reg. ss. 1.62-2(c))), including foreign earned income (as
                  defined in Code ss. 911(b)) whether or not excludable from
                  gross income under Code ss. 911, and determined without regard
                  to the exclusions from gross income in Code ss. 931 and 933;
                  amounts described in Code ss. ss. 104(a)(3), 105(a) and
                  105(h), but only to the extent that these amounts are
                  includable in the gross income of the Participant; amounts
                  paid or reimbursed by the Employer for moving expenses
                  incurred by the Participant, but only to the extent that at
                  the time of the payment it is reasonable to believe that these
                  amounts are not deductible by the Participant under Code ss.
                  217; the value of a non-qualified stock option granted to the
                  Participant by the Employer, but only to the extent that the
                  value of the option is includable in the gross income of the
                  Participant for the taxable year in which granted; and the
                  amount includable in the gross income of the Participant upon
                  making a Code ss. 83(b) election; and excluding the following:


                                       36
<PAGE>   43

                                    (a)      Employer contributions to a plan of
                           deferred compensation which are not (before the
                           application of the Code ss. 415 limitations to the
                           plan) includable in the Participant's gross income
                           for the taxable year in which contributed, or
                           Employer contributions under a simplified employee
                           pension plan described in Code ss. 408(k), or any
                           distributions from a plan of deferred compensation
                           (whether or not includable in the Participant's gross
                           income when distributed), except that amounts
                           received by the Participant pursuant to an unfunded
                           non-qualified plan shall be included in the year such
                           amounts are includable in the gross income of the
                           Participant;

                                    (b)      amounts realized from the exercise
                           of a non-qualified stock option, or when restricted
                           stock (or property) held by the Participant becomes
                           freely transferable or is no longer subject to a
                           substantial risk of forfeiture under Code ss. 83;

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

                                    (d)      other amounts which received
                           special tax benefits such as premiums for group-term
                           life insurance (but only to the extent that the
                           premiums are not includable in the gross income of
                           the Participant), or contributions made by the
                           Employer (whether or not under a salary reduction
                           agreement) towards the purchase of an annuity
                           described in Code ss. 403(b) (whether or not the
                           amounts are actually excludable from the gross income
                           of the Participant).

                  Effective for Limitation Years beginning on and after January
                  1, 1998, Compensation shall also include any amount which is
                  contributed by any member of the Controlled Group pursuant to
                  a salary reduction agreement and which is not includable in
                  the gross income of the Employee under Code ss. ss. 125,
                  402(e)(3) or 403(b).

                  For purposes of applying the Limitations of this Section,
                  Compensation for a Limitation Year is the Compensation
                  actually paid, made available or includable in gross income
                  during such year. Notwithstanding the preceding sentence,
                  Compensation for a Participant in a defined contribution plan
                  who is "permanently and totally disabled" (as defined in Code
                  ss. 22(e)(3)) is the compensation such Participant would have
                  received for the Limitation Year if the Participant had been
                  paid at the rate of compensation paid immediately before
                  becoming permanently and totally disabled; such imputed
                  compensation for the disabled Participant may be taken into
                  account only if the Participant is not a Highly Compensated
                  Employee and contributions made on behalf of such Participant
                  are nonforfeitable when made. In interpreting this subsection
                  (b), the provisions of Treas. Reg. ss. 1.415-2(d)(1), (2) and
                  (3) or the corresponding provisions of any future Treasury
                  Regulations shall control.


                                       37
<PAGE>   44
                           (ii)     "Employer" shall mean, solely for purposes
                  of this Section 4.08, an employer which adopts this Plan and
                  all members of a controlled group of corporations (as defined
                  in Code ss. 414(b), as modified by Code ss. 415(h)), all
                  trades or businesses (whether or not incorporated) under
                  common control (as defined by Code ss. 414(c), as modified by
                  Code ss. 415(h)), or all members of an affiliated service
                  group (as defined in Code ss. 414(m)) of which the adopting
                  employer is a part.

                           (iii)    "Limitation Year" shall mean the Plan Year.

                           (iv)     "Social Security Retirement Age" shall mean
                  the age used as the retirement age under Section 216(l) of the
                  Social Security Act, except that such section shall be applied
                  without regard to the age increase factor, and as if the early
                  retirement age under section 216(l)(2) of such Act were 62.

         4.09     Special Provisions Regarding Benefits Payable.

                  (a)      Transferring Employees. See Sections 2.03 and 2.04
         for special provisions regarding transferring Employees.

                  (b)      QDRO Alternate Payees. See Section 9.03(b) for
         special provisions regarding alternate payees under a qualified
         domestic relations order.


                                       38
<PAGE>   45

                                   ARTICLE V.

                STANDARD AND OPTIONAL FORMS OF RETIREMENT INCOME

         5.01     Standard Form of Retirement Income. A Participant's vested
Accrued Benefit payable under Sections 4.02, 4.03, 4.04 or 4.05, as applicable,
shall be paid in the Standard Form with payments commencing as of a permissible
Annuity Starting Date under said Section subject to the provisions of Sections
5.02 and 5.03 below.

         5.02     Automatic Forms of Retirement Income. The following provisions
apply to any distribution of a Participant's Normal, Delayed, Early or
Disability Retirement Benefit.

                  (a)      Automatic Cash-Outs. In the event that the
         Actuarially Equivalent present value of a Participant's vested Accrued
         Benefit does not exceed $3,500 (or, effective with respect to
         distributions that are made in Plan Years beginning on or after January
         1, 1998, does not exceed $5,000 at any time after the Participant's
         termination of employment and prior to the Annuity Starting Date), the
         Participant's entire benefit shall be distributed in a lump sum payment
         as soon as possible after the date he severs from employment with all
         members of the Controlled Group, or, if earlier, his Required Beginning
         Date. If the Actuarially Equivalent present value of the Participant's
         vested Accrued Benefit at such time is zero, the Participant shall be
         deemed to have received a distribution of such Accrued Benefit.

                  (b)      Automatic Form for Married Participants.

                           (i)      Automatic QJSA. Unless otherwise elected as
                  provided below and except as provided in subsection (a) above,
                  if a Participant has a Spouse on his selected Annuity Starting
                  Date, his benefit shall be paid in the form of a Qualified
                  Joint and Survivor Annuity with the amount of the monthly
                  payments such that the benefit payable will be Actuarially
                  Equivalent to his vested benefit payable. (The amount of the
                  Survivor's annuity shall be 50% of the amount of the payments
                  made to the Participant.)

                           (ii)     Waiver of Automatic QJSA. Any election to
                  waive the Qualified Joint and Survivor Annuity provided for in
                  this subsection must be made by the Participant in writing
                  during the "election period" and must be consented to by the
                  Participant's Spouse by way of a Qualified Spousal Waiver as
                  defined in Section 1.46. However, such consent shall not be
                  required if it is established to the satisfaction of the
                  Committee that the required consent cannot be obtained because
                  there is no Spouse, the Spouse cannot be located, or other
                  circumstances that may be prescribed by regulations
                  promulgated by the Secretary of the Treasury. Any such
                  election may be revoked by the Participant in writing without
                  the consent of the Spouse at any time during the election
                  period. Any new election, however, must comply with the
                  requirements of this subsection and must be made during the
                  election period. In addition, a consent executed by a former
                  Spouse shall not be binding on a subsequent Spouse.


                                       39
<PAGE>   46

                           (iii)    Election Period for Waiver. The "election
                  period" to waive the Qualified Joint and Survivor Annuity
                  shall be the ninety (90) day period ending on the Annuity
                  Starting Date.

                           (iv)     Annuity Explanation. With respect to the
                  election described in paragraph (iii) above, the Committee
                  shall provide the Participant, no later than thirty (30) days
                  and no more than ninety (90) days before the Annuity Starting
                  Date, a written explanation of: (i) the terms and conditions
                  of the Qualified Joint and Survivor Annuity, (ii) the
                  Participant's right to make an election to waive the Qualified
                  Joint and Survivor Annuity, (iii) the requirement for the
                  Participant's Spouse to consent to any election to waive the
                  Qualified Joint and Survivor Annuity, and (iv) the right of
                  the Participant to revoke such election and the effect of such
                  revocation. A Participant who so requests in writing shall
                  have the right to receive a written, detailed explanation of
                  the financial effects of electing an optional form of
                  retirement income.

                           (v)      Default Form. If a married Participant makes
                  a valid election to waive the Qualified Joint and Survivor
                  Annuity but fails to elect an optional form of benefit, then
                  all of his benefit shall be payable in the Standard Form.

                           (vi)     Special Provisions On and After April 1,
                  1999. Notwithstanding any other provision herein, effective
                  with respect to Participants whose employment terminates on or
                  after April 1, 1999, the written explanation described in
                  paragraph (iv) above may be provided prior to or after the
                  Annuity Starting Date, and such explanation shall clearly
                  indicate that the Participant has a right to 30 days in which
                  to consider the decision of whether to waive the Qualified
                  Joint and Survivor Annuity and to choose another optional form
                  of distribution. A Participant may waive his right to the
                  30-day period for considering whether to waive the Qualified
                  Joint and Survivor Annuity and may elect an optional form of
                  benefits at any time after the written explanation described
                  in paragraph (iv) is provided to the Participant; provided,
                  however, that the Participant shall be permitted to revoke a
                  distribution election until the later of (A) the Annuity
                  Starting Date, or (B) the 8th day after the written
                  explanation described in paragraph (iv) is provided to the
                  Participant. In no event shall distribution of the
                  Participant's benefits actually begin in accordance with the
                  election before the 8th day after the written explanation
                  described in paragraph (iv) has been provided to the
                  Participant.

         5.03     Optional Forms of Retirement Income. In lieu of the Standard
Form described in Section 5.01, or the automatic Qualified Joint and Survivor
Annuity form payable to a married Participant as described in Section 5.02(b), a
Participant may elect, in accordance with paragraphs (ii) through (v) of Section
5.02(b), and subject to subsection (a) of Section 5.02, to receive all of his
vested Accrued Benefit payable under Sections 4.02, 4.03, 4.04 or 4.05, as
applicable, in any one of the following forms with payments commencing as of the
permissible Annuity Starting Date under Section 4.02, 4.03, 4.04 or 4.05, as
applicable, selected by the Participant (subject to subsection (e) below) in an
amount such that the form chosen will be Actuarially Equivalent to his vested
benefit payable as of his selected Annuity Starting Date:


                                       40
<PAGE>   47

                  (a)      Period Certain and Life Annuity Option. An income
         payable in the Standard Form, but guaranteed for at least 5 or 10 years
         (according to the election of the Participant) regardless of whether or
         not the Participant survives such 5 or 10 year period. The Participant
         shall designate the Beneficiary who will receive any guaranteed
         payments under this subsection (a), provided that if no such
         Beneficiary is designated or the Beneficiary designated fails to
         survive the Participant, the Actuarial Equivalent present value of the
         remaining guaranteed payments shall be paid in a lump sum to the
         Participant's estate. For purposes of this subsection (a), the
         Actuarially Equivalent present value shall be calculated by using the
         Applicable Interest Rate. If the designated Beneficiary of guaranteed
         payments dies after the Annuity Starting Date but before the guaranteed
         payments are paid in full, the Actuarial Equivalent of the remaining
         payments will be paid in a lump sum to the estate of said designated
         Beneficiary.

                  (b)      Joint and Survivor Annuity Option. An income payable
         in the Standard Form, but further continuing after the first day of the
         month next following the death of the Participant at the rate of 50%,
         75% or 100% (according to the election of the Participant) of the
         monthly amount which was paid to the Participant to his designated
         Beneficiary and ending on the first day of the month next following the
         Beneficiary's date of death. The designated Beneficiary may not
         subsequently be changed by the Participant after the Annuity Starting
         Date.

                  (c)      Life Annuity Option. An income payable in the
         Standard Form.

                  (d)      Level Income Annuity Option. An income payable in the
         Standard Form, but with the monthly payment amounts structured so as to
         provide larger monthly payments from commencement until the Participant
         would be eligible for primary Social Security benefits and smaller
         monthly payments thereafter, with the anticipated result being a level
         income to the Participant when primary Social Security benefits are
         taken into account.

                  (e)      Immediate Payment Options. In the event that the
         Actuarially Equivalent present value of a Participant's vested benefit
         under Section 4.02, 4.03, 4.04 or 4.05, as applicable (determined after
         reduction for an alternate payee's vested benefit, as described in
         Section 9.03(b)(iii), if any), exceeds $3,500 (or, effective with
         respect to distributions that are made in Plan Years beginning on or
         after January 1, 1998, exceeds $5,000) but does not exceed $7,500, the
         Participant shall have the following additional payment options with
         his Annuity Starting Date to be the first day of the month next
         following the date the Participant severs from employment with all
         members of the Controlled Group rather than a permissible Annuity
         Starting Date under Section 4.02, 4.03, 4.04 or 4.05, as applicable:

                           (i)      Annuity Option for Single Participants.
                  Subject to paragraph (iii) below, such a Participant who is
                  not married as of his Annuity Starting Date may elect to
                  receive his benefit in the Standard Form, with the amount of
                  the Participant's monthly payments such that the vested
                  benefit payable under this paragraph (i) shall be Actuarially
                  Equivalent to the Participant's vested benefit payable under
                  Section 4.02, 4.03, 4.04 or 4.05, as applicable.


                                       41
<PAGE>   48

                           (ii)     Annuity Option for Married Participants.
                  Subject to paragraph (iii) below, such a Participant who is
                  married as of his Annuity Starting Date may elect to receive
                  his benefit in the form of a Qualified Joint and Survivor
                  Annuity, with the amount of the Participant's and Surviving
                  Spouse's monthly payments such that the vested benefit payable
                  under this paragraph (ii) shall be Actuarially Equivalent to
                  the Participant's vested benefit payable under Section 4.02,
                  4.03, 4.04 or 4.05, as applicable.

                           (iii)    Lump Sum Option. Such a Participant whether
                  married or single may elect to receive his vested benefit in
                  the form of a single lump sum payment in an amount equal to
                  the Actuarially Equivalent present value of the Participant's
                  vested benefit payable under Section 4.02, 4.03, 4.04 or 4.05,
                  as applicable.

         5.04     Conditions Relative to all Standard and Optional Forms.

                  (a)      Election of Optional Forms. To become effective, an
         election by a married Participant of an optional form of payment must
         be made during the "election period" described in Section 5.02(b)(iii)
         and must satisfy the Spouse's consent requirements of Section
         5.02(b)(ii). An election by an unmarried Participant of an optional
         form of payment must be made during the "election period" described in
         Section 5.02(b)(iii) to become effective.

                  (b)      Revocation of Elections. A Participant may revoke his
         election of an optional form of retirement income at any time before
         his Annuity Starting Date.

                  (c)      Special Provisions for Joint and Survivor Annuities.
         If a Participant has elected or is entitled to a joint and survivor
         annuity, then,

                           (i)      if his joint annuitant under a joint and
                  survivor annuity election dies before the Participant's
                  Annuity Starting Date, the election shall thereupon become
                  void, and the Standard Form of retirement income under Section
                  5.01 (or a Qualified Joint and Survivor Annuity under Section
                  5.02(b) if the Participant is married) will be deemed to be
                  the Participant's election unless he elects otherwise; and

                           (ii)     if the Participant dies before his Annuity
                  Starting Date, the election shall thereupon become void and
                  the Beneficiary or the joint annuitant shall not be entitled
                  to benefits under such option; instead, a death benefit, if
                  any, shall be payable in accordance with the provisions of
                  Section 4.07; and

                           (iii)    if the joint annuitant under the joint and
                  survivor annuity dies after Participant's Annuity Starting
                  Date, but before the death of the Participant, the Participant
                  shall nevertheless receive the reduced income payable to him
                  in accordance with the form of benefit in effect.

                  (d)      Reemployed Participants in Pay Status. If the
         Participant is reemployed by a member of the Controlled Group after
         benefits have commenced, his election shall


                                       42
<PAGE>   49

         nevertheless continue to be effective, but payments under said election
         shall be suspended in accordance with Section 5.07.

                  (e)      Additional Accruals After Annuity Starting Date. Any
         accrual of benefits by a Participant after the Participant's Annuity
         Starting Date shall be paid under the optional form of payment
         previously applicable to the Participant, unless the Participant's
         Annuity Starting Date occurred prior to his Normal Retirement Age.

                  (f)      All Forms Subject to Code ss. 401(a)(9).
         Notwithstanding any provision of this Article V to the contrary, no
         optional form of payment otherwise available to a Participant shall be
         allowed to the extent such form fails to satisfy the provisions of
         Section 5.08 herein.

         5.05     Automatic and Optional Forms for Termination Benefits. The
form of payment of the Termination Benefit of a Participant who has severed from
employment with all members of the Controlled Group shall depend upon the amount
of the benefit as follows:

                  (a)      Automatic Cash-Out of Small Benefits. If the
         Actuarial Equivalent present value of a Participant's vested
         Termination Benefit does not exceed $3,500 (or, effective with respect
         to distributions that are made in Plan Years beginning on or after
         January 1, 1998, does not exceed $5,000), such Participant shall
         automatically receive his vested Termination Benefit in the form of a
         single lump sum payment in an amount equal to the Actuarially
         Equivalent present value of the Participant's vested Termination
         Benefit as soon as possible following his severance from employment
         with all members of the Controlled Group. For purposes of the preceding
         sentence, if the Actuarial Equivalent present value of the
         Participant's vested Termination Benefit is zero, the Participant shall
         be deemed to have received a distribution of such Termination Benefit
         under this subsection (a).

                  (b)      Immediate or Deferred Payment Options. If the
         Actuarial Equivalent present value of a Participant's vested
         Termination Benefit does exceed $3,500 (or, effective with respect to
         distributions that are made in Plan Years beginning on or after January
         1, 1998, exceeds $5,000) but does not exceed $7,500, such Participant's
         Termination Benefit shall be paid in the Standard Form subject to the
         provisions of Sections 5.02 and 5.03 above, with payments commencing as
         of a permissible Annuity Starting Date under Section 4.06 and elected
         by the Participant, unless the Participant elects that his Annuity
         Starting Date be the first day of the month next following the date the
         Participant severs from employment with all members of the Controlled
         Group or the first day of any month thereafter but prior to Normal
         Retirement Date rather than a permissible Annuity Starting Date under
         Section 4.06, in which event such Participant's Termination Benefit
         shall be paid in accordance with the following provisions:

                           (i)      Automatic Form for Single Participants.
                  Subject to paragraph (iii) below, such a Participant who is
                  not married as of his Annuity Starting Date shall
                  automatically receive his Termination Benefit in the Standard
                  Form with the amount of the Participant's monthly payments
                  such that the vested benefit payable


                                       43
<PAGE>   50

                  under this paragraph (i) shall be Actuarially Equivalent to
                  the Participant's vested Termination Benefit under Section
                  4.06.

                           (ii)     Automatic Form for Married Participants.
                  Subject to paragraph (iii) below, such a Participant who is
                  married as of his Annuity Starting Date shall automatically
                  receive his Termination Benefit in the form of a Qualified
                  Joint and Survivor Annuity, with the amount of the
                  Participant's monthly payments such that the vested benefit
                  payable under this paragraph (ii) shall be Actuarially
                  Equivalent to the Participant's vested Termination Benefit
                  under Section 4.06.

                           (iii)    Lump Sum Option. Such a Participant may
                  elect, but only in accordance with paragraphs (ii) through (v)
                  of Section 5.02(b), to receive his Termination Benefit in the
                  form of a single lump sum payment in an amount equal to the
                  Actuarially Equivalent present value of the Participant's
                  vested Termination Benefit under Section 4.06. For purposes of
                  this paragraph (iii), Actuarially Equivalent present value
                  shall be calculated by using the Applicable Interest Rate and
                  the UP-1984 Mortality Table.

                  (c)      Deferred Payment Options. If the Actuarially
         Equivalent present value of a Participant's vested Termination Benefit
         does exceed $7,500, such Participant's vested Termination Benefit shall
         be paid in the Standard Form subject to the provisions of Sections 5.02
         and 5.03 above, with payments commencing as of a permissible Annuity
         Starting Date under Section 4.06 selected by the Participant.

All forms of payment under this Section shall be Actuarially Equivalent, as of
the Participant's Annuity Starting Date, to the Participant's vested Termination
Benefit. Only the provisions of Sections 5.02(b)(i) (to the extent specified in
subsection (c) above) and (b)(ii) through (v), 5.03 (to the extent specified in
subsection (c) above), 5.04 and 5.07 of this Article V shall apply to any
distribution of a Participant's vested Termination Benefit under this Section.

         5.06     Automatic and Optional Forms for Death Benefits. The form of
payment of a Surviving Spouse's Death Benefit shall depend upon the amount of
the benefit as follows:

                  (a)      Automatic Cash-Out of Small Benefits. If the
         Actuarially Equivalent present value of a Surviving Spouse's Death
         Benefit does not exceed $3,500 (or, effective with respect to
         distributions that are made in Plan Years beginning on or after January
         1, 1998, does not exceed $5,000), such Surviving Spouse shall
         automatically receive his entire Death Benefit as soon as possible
         following the Participant's date of death in the form of a single lump
         sum payment in an amount equal to the Actuarially Equivalent present
         value of the Surviving Spouse's Death Benefit. For purposes of this
         subsection (a), Actuarially Equivalent present value shall be
         calculated by using the Applicable Interest Rate and the UP-1984
         Mortality Table.

                  (b)      Immediate Options. If the Actuarially Equivalent
         present value of a Surviving Spouse's Death Benefit exceeds $3,500 (or,
         effective with respect to distributions that are made in Plan Years
         beginning on or after January 1, 1998, exceeds $5,000), such Surviving
         Spouse's Death Benefit shall be paid in the Standard Form with


                                       44
<PAGE>   51

         payments commencing as of the applicable Annuity Starting Date
         specified in Section 4.07, unless the Actuarially Equivalent present
         value of a Surviving Spouse's Death Benefit does exceed $3,500 (or,
         effective with respect to distributions that are made in Plan Years
         beginning on or after January 1, 1998, exceeds $5,000) but does not
         exceed $7,500, in which event, the Surviving Spouse may elect that
         payment of such Death Benefit be made in the form of a single lump sum
         payment in an amount equal to the Actuarially Equivalent present value
         of the Surviving Spouse's Death Benefit.

                  (c)      Payment of Minimum Death Benefit. To the extent that
         any amount is payable to the Beneficiary of a deceased Participant
         under the provisions of subsection (e) of Section 4.07, such amount
         shall be paid in a single lump sum cash payment as soon as practicable
         following the death of the Participant or the death of the
         Participant's Surviving Spouse, as applicable.

All forms of payment under this Section shall be Actuarially Equivalent, as of
the Surviving Spouse's Annuity Starting Date, to the Surviving Spouse's Death
Benefit.

         5.07     Suspension upon Delayed Retirement or Reemployment After
Annuity Starting Date.

                  (a)      Suspension of Benefits. The benefits otherwise
         payable under the Plan to a Participant who has severed from employment
         and who has commenced receiving benefits shall be suspended if such
         Participant has become reemployed and has completed 40 or more hours of
         "section 203(a)(3)(B) service" (as defined in DOL Reg. ss.
         2530.203-3(c)) with any member of the Controlled Group in a four week
         payroll period ending in such calendar month. Such Participant's
         benefits shall resume as of the first day of the month following his
         subsequent severance from employment and, except as provided in (b)
         below, shall be the same amount and paid in the same form as the
         Participant was previously receiving. A Participant who continues in
         employment with the Employer past his Normal Retirement Date and who is
         eligible to receive a Delayed Retirement Benefit under Section 4.03
         shall, although not entitled to a benefit until his severance from
         employment, be deemed to have his benefits suspended under this Section
         5.07 until his severance from employment or until his Required
         Beginning Date, whichever first occurs. Such cessation or suspension of
         benefits shall not affect the payment of benefits after the death of a
         reemployed Participant under any form of benefit which shall at that
         time be in effect.

                  (b)      Resumption of Benefits. In the case where payment of
         benefits is suspended on account of reemployment, the amount of
         benefits to be paid upon subsequent severance from employment shall be
         based on a Participant's Years of Benefit Service rendered and
         Compensation earned during that period of his reemployment, as well as
         his Years of Benefit Service rendered and Compensation earned prior to
         the date of his previous severance from employment, to the extent that
         such Years of Benefit Service were completed and Compensation was
         earned prior to the Participant's Normal Retirement Date, and, if the
         Participant has completed at least one Hour of Service in a Plan Year
         beginning after December 31, 1988, to the extent that such Years of
         Benefit Service were completed and Compensation was earned after the
         Participant's Normal


                                       45
<PAGE>   52

         Retirement Date. In any case of reemployment, the benefit payments upon
         an Employee's subsequent severance from employment shall be reduced by
         the Actuarial Equivalent of any benefit payments he previously received
         from the Plan prior to his Required Beginning Date.

                  (c)      Notification Required. No payment of benefits shall
         be withheld by the Plan pursuant to this Section 5.07 unless the
         Committee notifies the Employee, by personal delivery or first class
         mail during the first calendar month in which the Plan withholds
         payments, that his benefits are suspended. Such notification shall
         contain a description of the specific reasons why benefit payments are
         being suspended, a description of the Plan provision relating to the
         suspension of payments, a copy of such provisions and a statement to
         the effect that the applicable Department of Labor regulations may be
         found in section 2530.203-3 of the Code of Federal Regulations. In
         addition, the notice shall inform the Employee of the Plan's procedures
         for affording a review of the suspension of benefits. Requests for such
         reviews may be considered in accordance with the claims procedure
         established by the Committee.

                  (d)      Accrual Required During Suspension. See Section
         11.03(e) herein for a special rule relating to the application of this
         Section if the Plan is a Top-Heavy Plan.

                  (e)      Suspension of Required Distributions. Notwithstanding
         the preceding provisions of this Section, retirement benefits shall not
         be suspended on and after the Required Beginning Date of a Participant.

         5.08     Required Distributions.

                  (a)      General Rules. The requirements of this Section 5.08
         shall apply to any distribution of a Participant's benefit payable
         under this Plan made on or after the Participant's first Distribution
         Calendar Year and will take precedence over any provisions of this Plan
         which are less restrictive. All distributions required under this
         Section 5.08 shall be determined and made in accordance with Code
         ss. 401(a)(9) and the regulations promulgated thereunder, including the
         minimum distribution incidental benefit requirement of Treas. Reg.
         ss. 1.401(a)(9)-2.

                  (b)      Definitions. For purposes of this Section 5.08, the
         following terms and phrases shall have the meanings indicated below:

                           (i)      Required Beginning Date -

                                    (A)      General Rule - The Required
                           Beginning Date of a Participant is the first day of
                           April of the calendar year following the calendar
                           year in which the Participant attains age 70-1/2,
                           subject to the transitional rule of subparagraph (B)
                           below.

                                    (B)      Transitional Rule - The Required
                           Beginning Date of a Participant who attains age
                           70-1/2 before January 1, 1988, shall be determined in
                           accordance with (1) or (2) below:


                                       46
<PAGE>   53

                                             (1)      Non-5-Percent Owners. The
                                    Required Beginning Date of a Participant who
                                    is not a 5-Percent Owner (as defined in
                                    subparagraph (C) below) during any Plan Year
                                    beginning after December 31, 1979, is the
                                    first day of April of the calendar year
                                    following the calendar year in which the
                                    later of retirement or attainment of age
                                    70-1/2 occurs.

                                             (2)      5-Percent Owners. The
                                    Required Beginning Date of a Participant who
                                    is a 5-Percent Owner (as defined in
                                    subparagraph (C) below) during any Plan Year
                                    beginning after December 31, 1979, is the
                                    first day of April following the later of
                                    the calendar year in which the Participant
                                    attains age 70-1/2, or the earlier of (1)
                                    the calendar year with or within which ends
                                    the Plan Year in which the Participant
                                    becomes a 5-Percent Owner or (2) the
                                    calendar year in which the Participant
                                    retires.

                                    (C)      5-Percent Owner - A Participant is
                           treated as a 5-Percent Owner for purposes of this
                           paragraph (i) if such Participant is a 5-Percent
                           Owner as defined in Code ss. 416(i) at any time
                           during the Plan Year ending with or within the
                           calendar year in which such Participant attains age
                           66-1/2 or any subsequent Plan Year.

                                    (D)      Once distributions have begun to a
                           5-Percent Owner under this Section, they must
                           continue to be distributed, even if the Participant
                           ceases to be a 5-Percent Owner in a subsequent year.

                           (ii)     Distribution Calendar Year - A calendar year
                  for which a minimum distribution is required. For
                  distributions beginning before the Participant's death, the
                  first Distribution Calendar Year is the calendar year
                  immediately preceding the calendar year which contains the
                  Participant's Required Beginning Date. For distributions
                  beginning after the Participant's death, the first
                  Distribution Calendar Year is the calendar year in which
                  distributions are required to begin pursuant to subsection (d)
                  below.

                           (iii)    Designated Beneficiary - The individual(s)
                  who is (are) designated as the Beneficiary under the Plan by
                  the terms of the Plan or by an affirmative election by the
                  Participant (and/or the Participant's Spouse) consistent with
                  the requirements of the Plan. Designated Beneficiaries must be
                  identifiable (within the meaning of Treas. Reg.
                  ss. 1.401(a)(9)-1(D-2)) as of the Participant's Required
                  Beginning Date, or as of the Participant's death, and at all
                  subsequent times.

                           (iv)     Applicable Life Expectancy - The life
                  expectancy (or joint and last survivor expectancy) calculated
                  using the attained age of the Participant (or Designated
                  Beneficiary) as of the Participant's (or Designated
                  Beneficiary's) birthday in the applicable calendar year
                  reduced by one for each calendar year which has elapsed since
                  the date life expectancy was first calculated. If life
                  expectancy is being recalculated, the applicable life
                  expectancy shall be the life


                                       47
<PAGE>   54

                  expectancy as so recalculated. The applicable calendar year
                  shall be the first Distribution Calendar Year, and if life
                  expectancy is being recalculated, such succeeding calendar
                  year. If annuity payments commence before the Required
                  Beginning Date, the applicable calendar year is the year such
                  payments commence. If distribution is in the form of an
                  immediate annuity purchased after the Participant's death with
                  the Participant's remaining interest, the applicable calendar
                  year is the year of purchase.

                           (v)      Life Expectancy - Life expectancy and joint
                  and last survivor expectancy are computed by use of the
                  expected return multiples in Tables V and VI of Treas. Reg.
                  ss. 1.72-9. Unless otherwise elected by the Participant (or
                  Spouse, in the case of distributions described in subsection
                  (d)(ii)(B) below) by the time distributions are required to
                  begin, life expectancies shall be recalculated annually. Such
                  election shall be irrevocable as to the Participant (or
                  Spouse) and shall apply to all subsequent years. The life
                  expectancy of a nonspouse Beneficiary may not be recalculated.

                  (c)      Required Distribution Rule. The entire interest of a
         Participant must be distributed or begin to be distributed no later
         than the Participant's Required Beginning Date.

                  (d)      Death Distribution Provisions.

                           (i)      Distribution Beginning Before Death - If the
                  Participant dies after distribution of his or her interest has
                  begun, the remaining portion of such interest will continue to
                  be distributed at least as rapidly as under the method of
                  distribution being used prior to the Participant's death.

                           (ii)     Distribution Beginning After Death - If the
                  Participant dies before distribution of his or her interest
                  begins, distributions of the Participant's entire interest
                  shall be completed by December 31 of the calendar year
                  containing the fifth anniversary of the Participant's death,
                  except to the extent that an election is made to receive
                  distributions in accordance with (A) or (B) below:

                                    (A)      If any portion of the Participant's
                           interest is payable to a Designated Beneficiary,
                           distributions may be made over the life of, or over a
                           period certain not greater than the life expectancy
                           of, the Designated Beneficiary commencing on or
                           before December 31 of the calendar year immediately
                           following the calendar year in which the Participant
                           died;

                                    (B)      If the Designated Beneficiary is
                           the Participant's surviving Spouse, the date
                           distributions are required to begin in accordance
                           with subparagraph (A) above shall not be earlier than
                           the later of (1) December 31 of the calendar year
                           immediately following the calendar year in which the
                           Participant died and (2) December 31 of the calendar
                           year in which the Participant would have attained age
                           70-1/2.


                                       48
<PAGE>   55

                  If the Participant has not made an election pursuant to this
                  subsection (d) by the time of his or her death, the
                  Participant's Designated Beneficiary must elect the method of
                  distribution no later than the earlier of (a) December 31 of
                  the calendar year in which distribution would be required to
                  begin under this subsection (d), or (b) December 31 of the
                  calendar year which contains the fifth anniversary of the date
                  of death of the Participant. If the Participant has no
                  Designated Beneficiary, or if the Designated Beneficiary does
                  not elect a method of distribution, distribution of the
                  Participant's entire interest must be completed by December 31
                  of the calendar year containing the fifth anniversary of the
                  Participant's death.

                           (iii)    For purposes of paragraph (ii) above, if the
                  surviving Spouse dies after the Participant, but before
                  payments to such Spouse begin, the provisions of paragraph
                  (ii), with the exception of subparagraph (B) therein, shall be
                  applied as if the surviving Spouse were the Participant.

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

                           (v)      For purposes of this subsection,
                  distribution of a Participant's interest is considered to
                  begin on the Participant's Required Beginning Date (or, if
                  paragraph (iii) above is applicable, the date distribution is
                  required to begin to the surviving Spouse pursuant to
                  paragraph (ii) above). If distribution in the form of an
                  annuity described in subsection (f)(i) below irrevocably
                  commences to the Participant before the Required Beginning
                  Date, the date distribution is considered to begin is the date
                  distribution actually commences.

                  (e)      Limits on Distribution Periods. As of the first
         Distribution Calendar Year, distributions, if not made in a single-sum,
         may only be made over one of the following periods (or a combination
         thereof):

                           (i)      The life of the Participant;

                           (ii)     The life of the Participant and a Designated
                  Beneficiary;

                           (iii)    A period certain not extending beyond the
                  life expectancy of the Participant; or

                           (iv)     A period certain not extending beyond the
                  joint and last survivor expectancy of the Participant and a
                  Designated Beneficiary;

                  (f)      Determination of Amount to be Distributed Each Year.

                           (i)      If the Participant's interest is to be paid
                  in the form of annuity distributions under the Plan, payments
                  under the annuity shall satisfy the following requirements:


                                       49
<PAGE>   56

                                    (A)      The distribution period must be
                           over a life (or lives) or over a period certain not
                           longer than a life expectancy (or joint life and last
                           survivor expectancy) described in Code
                           ss. ss. 401(a)(9)(A)(ii) or 401(a)(9)(B)(iii),
                           whichever is applicable;

                                    (B)      The life expectancy (or joint life
                           and last survivor expectancy) for purposes of
                           determining the period certain shall be determined
                           without recalculation of life expectancy;

                                    (C)      Once payments have begun over a
                           period certain, the period certain may not be
                           lengthened even if the period certain is shorter than
                           the maximum permitted.

                                    (D)      Payments must either be
                           nonincreasing or increase only as follows:

                                             (1)      With any percentage
                                    increase in a specified and generally
                                    recognized cost-of-living index;

                                             (2)      To the extent of the
                                    reduction to the amount of the Participant's
                                    payments to provide for a survivor benefit
                                    upon death, but only if the beneficiary
                                    whose life was being used to determine the
                                    distribution period described in subsection
                                    (e) above dies and the payments continue
                                    otherwise in accordance with that section
                                    over the life of the Participant;

                                             (3)      Because of an increase in
                                    benefits under the Plan.

                                    (E)      If the annuity is a life annuity
                           (or a life annuity with a period certain not
                           exceeding 20 years), the amount which must be
                           distributed on or before the Participant's Required
                           Beginning Date (or, in the case of distributions
                           after the death of the Participant, the date
                           distributions are required to begin pursuant to
                           subsection (d) above) shall be the payment which is
                           required for one payment interval. The second payment
                           need not be made until the end of the next payment
                           interval even if that payment interval ends in the
                           next calendar year. Payment intervals are the periods
                           for which payments are received, e.g., bimonthly,
                           monthly, semi-annually, or annually.

                                    (F)      If the annuity is a period certain
                           annuity without a life contingency (or is a life
                           annuity with a period certain exceeding 20 years)
                           period payments for each Distribution Calendar Year
                           shall be combined and treated as an annual amount.
                           The amount which must be distributed by the
                           Participant's Required Beginning Date (or, in the
                           case of distributions after the death of the
                           Participant, the date distributions are required to
                           begin pursuant to subsection (d) above) is the annual
                           amount for the first Distribution Calendar Year. The
                           annual amount for other Distribution Calendar Years,
                           including the annual amount for the calendar


                                       50
<PAGE>   57

                           year in which the Participant's Required Beginning
                           Date (or the date distributions are required to begin
                           pursuant to subsection (d) above) occurs, must be
                           distributed on or before December 31 of the calendar
                           year for which the distribution is required.

                           (ii)     Annuities purchased after December 31, 1988,
                  are subject to the following additional conditions:

                                    (A)      Unless the Participant's Spouse is
                           the Designated Beneficiary, if the Participant's
                           interest is being distributed in the form of a period
                           certain annuity without a life contingency, the
                           period certain as of the beginning of the first
                           distribution calendar year may not exceed the
                           applicable period determined using the table set
                           forth in Treas. Reg. ss. 1.401(a)(9)-2(Q&A-5).

                                    (B)      If the Participant's interest is
                           being distributed in the form of a joint and survivor
                           annuity for the joint lives of the Participant and a
                           nonspouse Beneficiary, annuity payments to be made on
                           or after the Participant's Required Beginning Date to
                           the Designated Beneficiary after the Participant's
                           death must not at any time exceed the applicable
                           percentage of the annuity payment for such period
                           that would have been payable to the Participant using
                           the table set forth in Treas. Reg.
                           ss. 1.401(a)(9)-2(Q&A-6).

                           (iii)    Transitional Rule. If payments under an
                  annuity which complies with paragraph (i) above begin prior to
                  January 1, 1989, the minimum distribution requirements in
                  effect as of July 27, 1987, shall apply to distributions from
                  this Plan, regardless of whether the annuity form of payment
                  is irrevocable. This transitional rule also applies to
                  deferred annuity contracts distributed to or owned by the
                  Participant prior to January 1, 1989, unless additional
                  contributions are made under the Plan by the Employer with
                  respect to such contract.

                           (iv)     If the form of distribution is an annuity
                  made in accordance with this subsection (f), any additional
                  benefits accruing to the Participant after his or her Required
                  Beginning Date shall be distributed as a separate and
                  identifiable component of the annuity beginning with the first
                  payment interval ending in the calendar year immediately
                  following the calendar year in which such amount accrues.

         5.09     Code ss. 401(a)(31) Requirement.

                  (a)      General Rule. If a Participant or Surviving Spouse
         (or alternate payee) of a Participant who is to receive a payment under
         this Article and Article IV which is an eligible rollover distribution
         (as defined below) elects (within the 90 day period ending on the
         Annuity Starting Date) to have such distribution (or a portion of such
         distribution) paid directly to an eligible retirement plan (as defined
         below) and specifies the eligible retirement plan to which such
         distribution is to be paid, such payment to be made to the


                                       51
<PAGE>   58

         Participant or Surviving Spouse (or alternate payee) of a Participant
         shall be made in the form of a direct lump sum cash transfer from the
         Trustee to the trustee of the eligible retirement plan so specified in
         lieu of the payment otherwise required by this Article and Article IV.
         The preceding sentence shall only apply to the extent that the eligible
         rollover distribution would be includable in the Participant's or
         Surviving Spouse's (or alternate payee's) gross income if not so
         transferred (determined without regard to Code ss. ss. 402(c) and
         403(a)(4)).

                  (b)      Definitions. For purposes of this Section, the
         following terms shall have the meanings indicated:

                           (i)      Eligible retirement plan shall mean:

                                    (A)      with respect to a Participant (or
                           alternate payee), an individual retirement account
                           described in Code ss. 408(a), an individual
                           retirement annuity described in Code ss. 408(b)
                           (other than an endowment contract), a qualified trust
                           which is a defined contribution plan and the terms of
                           which permit the acceptance of rollover
                           distributions, or an annuity plan described in Code
                           ss. 403(a); or

                                    (B)      with respect to a Surviving Spouse
                           of a Participant, an individual retirement account
                           described in Code ss. 408(a) or an individual
                           retirement annuity described in Code ss. 408(b)
                           (other than an endowment contract).

                           (ii)     Eligible rollover distribution shall mean
                  any distribution to a Participant or Surviving Spouse (or
                  alternate payee) of a Participant of all or any portion of the
                  balance to the credit of such individual in this Plan;
                  provided, however, such term shall not include:

                                    (A)      any distribution which is one of a
                           series of substantially equal periodic payments (not
                           less frequently than annually) made for the life (or
                           life expectancy) of the Participant or his designated
                           Beneficiary or the joint lives (or joint life
                           expectancies) of the Participant and his designated
                           Beneficiary, or for a specified period of 10 years or
                           more;

                                    (B)      any distribution to the extent such
                           distribution is required by Section 5.08;

                                    (C)      the portion of any distribution
                           that is not includable in gross income; and

                                    (D)      any other distribution or portion
                           of a distribution to the extent such distribution is
                           not considered an eligible rollover distribution
                           under Treasury regulations or other guidance issued
                           by the Internal Revenue Service.


                                       52
<PAGE>   59

                  (c)      Special Effective Date. The provisions of this
         Section shall be effective for any distributions or payments made after
         December 31, 1992.

                  (d)      Satisfaction of Requirements. For purposes of this
         Section, the Participant or Surviving Spouse (or alternate payee) of a
         Participant electing the transfer must present sufficient evidence in a
         timely manner to the Plan Administrator that the transferee plan
         satisfies the definition of an eligible retirement plan set forth
         above. At a minimum, the Participant or Surviving Spouse (or alternate
         payee) must state the name of the transferee plan and represent that
         the transferee plan is an eligible retirement plan (as defined in
         paragraph (i) of subsection (b) above). The Participant or Surviving
         Spouse (or alternate payee) must also present such additional
         documentation as the Plan Administrator may require which shall be used
         to verify that the requirements of this Section have been met. The
         Trustee, the Committee, the Plan Administrator, or any Plan fiduciary
         shall have no duty to verify the authenticity of any such evidence or
         documentation, and shall be entitled to rely on any such evidence
         submitted by a Participant or Surviving Spouse (or alternate payee),
         without questioning the authenticity thereof, unless it is unreasonable
         so to rely. Furthermore, in the event that the Trustee, the Committee,
         the Plan Administrator or any Plan fiduciary shall have actual
         knowledge of an issue relating to the transferee plan's ability to
         satisfy the definition of an eligible retirement plan, such issue must
         be expressly resolved in favor of the satisfaction of such definition
         by the transferee plan by a ruling from the Internal Revenue Service or
         by an opinion of legal counsel (chosen by the Participant or Surviving
         Spouse (or alternate payee), but acceptable to the Committee) directed
         to the Trustee, the Plan, the Committee, the Plan Administrator and any
         fiduciary of the Plan, before the transfer can occur.

                  (e)      Determination in the Committee's Discretion. The
         Committee shall have complete and absolute discretion to determine
         whether the proposed transferee plan selected by the distributee
         satisfies the requirements of this Section, and to determine whether
         the requirements of this Section have otherwise been satisfied by a
         proposed transfer.

                  (f)      Interpretation. The provisions of this Section shall
         be interpreted in accordance with Code ss. 401(a)(31), as added by the
         Unemployment Compensation Amendments of 1992, and any regulations or
         other guidance promulgated by the Internal Revenue Service thereunder,
         and shall not be construed or interpreted in a manner other than strict
         compliance with such requirements.

                  (g)      Application of Other Rules. For all purposes of this
         Plan, the election by a Participant or Surviving Spouse (or alternate
         payee) of a Participant of a transfer under this Section shall be
         considered a payment or distribution under this Article and Article IV
         as if the amount transferred were paid directly to the Participant or
         Beneficiary (or alternate payee).


                                       53
<PAGE>   60
                                  ARTICLE VI.

                          CONTRIBUTIONS AND TRUST FUND

         6.01     Required Participant Contributions. Participants under the
Plan are not required nor permitted to contribute to the Trust Fund.

         6.02     Contributions by the Employer. Annually, the Committee shall
cause an actuarial valuation of the liabilities under the Plan to be made by an
Enrolled Actuary on the basis of the service and mortality tables, rate of
interest, and method of funding approved by the Committee.

         The Enrolled Actuary shall report to the Committee as to:

                  (a)      The amount of the minimum funding requirement under
         Code ss. 412, which would be sufficient to provide for currently
         accruing benefit liabilities; and

                  (b)      The applicable limitations established by law as to
         the amount of the deposit in respect of both past and currently
         accruing benefit liabilities which could be deducted as a cost for tax
         purposes.

         The contributions of the Employer will be paid at such times and in
such amounts as the Company shall determine based on the Committee's
information, in accordance with the requirement for quarterly contributions
under Code ss. 412(m) and ERISA ss. 302(e).

         6.03     Return of Contributions. Notwithstanding the foregoing,
Contributions made by the Employer shall be returned to said Employer by the
Trustee in the following instances:

                  (a)      Mistake of Fact. If a Contribution is made by the
         Employer under a mistake of fact, the amount of the Contribution
         described in subsection (c) below shall be returned to the Employer
         within one year after the payment of said Contribution.

                  (b)      Deductibility Condition. All Contributions made to
         the Plan are specifically made contingent upon their deductibility by
         the Employer. If a Contribution is nondeductible under Code ss. 404 for
         the Plan Year for which it was contributed, then the amount described
         in subsection (c) below shall be returned to the Employer within one
         year after the disallowance of the deduction. The provisions of this
         subsection (b) shall be construed in accordance with Rev. Proc. 89-35,
         Rev. Proc. 90-49, and any corresponding future guidance issued by the
         Internal Revenue Service.

                  (c)      Amount Returned. For purposes of subsection (a) and
         (b) above, the amount which will be returned to the Employer is the
         excess of (i) the amount contributed, over, as relevant, (ii) (A) the
         amount that would have been contributed had no mistake of fact
         occurred, or (B) the amount that would have been contributed had the
         contribution been limited to the amount that is deductible after any
         disallowance of a deduction. Earnings attributable to the excess
         Contribution will not be returned to the Employer, but losses
         attributable thereto will reduce the amount so returned.


                                       54
<PAGE>   61

                  (d)      Construction. The provisions of this Section shall be
         construed in a manner consistent with Rev. Rul. 91-4 or any future
         guidance issued by the Internal Revenue Service regarding
         Code ss. 401(a)(2) and ERISA ss. 403(c)(2).


                                       55
<PAGE>   62

                                  ARTICLE VII.

                                 ADMINISTRATION

         7.01     Committee. Administration of the Plan, the exclusive power to
interpret it, and the responsibility for carrying out its provisions are vested
in an administrative Committee, which shall be comprised of one or more members.
The President of the Company shall appoint the Committee member(s) and shall
have the power of removal and substitution. Any Committee member may resign by
notifying the Company in writing. The Committee shall establish rules for
administration of the Plan and the transaction of its business. The Committee
shall constitute the "administrator" (as defined in ERISA ss. 3(16)(A)) and the
"plan administrator" (as defined in Code ss. 414(g)) of the Plan, and shall
perform the duties and responsibilities associated therewith unless otherwise
provided in this Plan.

         7.02     Plan Administrator. One or more persons, who may or may not be
members of the Committee, shall be appointed by the Committee to serve as the
Plan Administrator. If no such appointment is made, the Committee shall be the
Plan Administrator. The Plan Administrator shall perform those duties and
responsibilities allocated to it under the terms and provisions of this Plan and
any other duties and responsibilities delegated to it by the Committee.

         7.03     Delegation of Duties. The Committee may obtain clerical,
legal, accounting and actuarial assistance to carry out the provisions of the
Plan.

         7.04     Plan Records. The Committee shall maintain appropriate
accounts and records of the Plan and shall keep in convenient form the data
necessary for actuarial valuations.

         7.05     Committee Liability. Committee members shall use ordinary care
and diligence in performing their duties; however, to the extent permitted by
ERISA or other applicable law, no member shall be personally liable by virtue of
any contract, agreement, bond or other instrument made or executed by or for him
as a Committee member, nor for any loss unless due to his own willful
misconduct.

         7.06     Committee Indemnification. The Employer shall indemnify each
Committee member against costs, expenses and liabilities, including attorney's
fees, incurred in connection with any action, suit or proceeding instituted
against him because of any act of omission or commission performed by him as a
Committee member while acting in good faith and exercising his judgment for the
best interest of the Plan.

         Promptly upon receipt by an indemnified party under this Section, of
notice of the commencement of any such action, such indemnified party will, if a
claim in respect thereof is to be made against an Employer or all of the
Employers in the aggregate, notify the Company of the commencement thereof, but
the omission to so notify the Company will not relieve it from the liability
hereunder, nor from any other liability which it may have to such person. The
Employer shall be entitled to participate at its own expense in the defense or
to assume the defense of any action brought against any party indemnified
hereunder.


                                       56
<PAGE>   63

         In the event the Employer acting by and through the Company elects to
assume the defense of any such suit, such defense shall be conducted by counsel
chosen by the Company, and the indemnified party shall bear the fees and
expenses of any additional counsel retained by him.

         7.07     Committee Expenses. Subject to Section 9.01, any reasonable
expenses incurred by the Committee, with the prior approval of the Company, in
the performance of its duties shall be paid by the Plan. The members of the
Committee shall serve without compensation for the performance of their duties
hereunder, unless a member of the Committee is not a full-time Employee of an
Employer.

         7.08     Interpretation of the Plan and Findings of Facts. The
Committee shall have sole and absolute discretion to interpret the provisions of
the Plan (including, without limitation, by supplying omissions from, correcting
deficiencies in, or resolving inconsistencies or ambiguities in, the language of
the Plan), to make factual findings with respect to any issue arising under the
Plan, to determine the rights and status under the Plan of Participants and
other persons, to decide disputes arising under the Plan and to make any
determinations and findings (including factual findings) with respect to the
benefits payable thereunder and the persons entitled thereto as may be required
for the purposes of the Plan. In furtherance of, but without limiting, the
foregoing, the Committee is hereby granted the following specific authorities,
which it shall discharge in its sole and absolute discretion in accordance with
the terms of the Plan (as interpreted, to the extent necessary, by the
Committee):

                  (a)      To resolve all questions (including factual
         questions) arising under the provisions of the Plan as to any
         individual's entitlement to become a Participant; and

                  (b)      To determine the amount of benefits, if any, payable
         to any person under the Plan (including, to the extent necessary,
         making any factual findings with respect thereto);

All decisions of the Committee as to the facts of the case, as to the
interpretation of any provision of the Plan or its application to any case, and
as to any other interpretative matter or other determination or question under
the Plan shall be final and binding on all parties affected thereby, subject to
the claims and review procedures under this Plan. The Committee shall direct the
Trustee relative to benefits to be paid under the Plan and shall furnish the
Trustee with any information reasonably required by it for the purpose of paying
benefits under the Plan.


                                       57
<PAGE>   64

                                 ARTICLE VIII.

                           THE TRUST FUND AND TRUSTEE

         8.01     Existence of Trust. The Company has entered into a Trust
Agreement with the Trustee to hold the funds necessary to provide the benefits
set forth in this Plan.

         8.02     Exclusive Benefit Rule. The Trust Fund shall be received, held
in trust, and disbursed by the Trustee in accordance with the provisions of the
Trust Agreement and this Plan. No part of the Trust Fund shall be used for or
diverted to purposes other than for the exclusive benefit of Participants and
their Beneficiaries and the payment of reasonable expenses attributable to the
administration of the Plan in accordance with ERISA ss. 404(a)(1)(A)(ii). (See
Section 9.01.) No person shall have any interest in, or right to, the Trust Fund
or any part thereof, except as specifically provided for in this Plan or the
Trust Agreement.

         8.03     Removal of Trustee. The President of the Company may remove
the Trustee at any time upon the notice required by the terms of the Trust
Agreement, and upon such removal or upon the resignation of a Trustee, the
President shall appoint a successor Trustee.

         8.04     Powers of Trustee. The Trustee shall have the power to hold,
invest, reinvest, or to control and disburse the Trust Funds in accordance with
the provisions of the Trust Agreement and this Plan. Notwithstanding the
foregoing, the President of the Company may appoint one or more investment
managers to direct the investment of the Trust Fund. Furthermore, an investment
committee of the Company may manage all or a portion of the Trust Fund upon
appointment by the President of the Company.

         8.05     Integration of Trust. The Trust Agreement shall be deemed to
be a part of this Plan, and all rights of Participants or others under this Plan
shall be subject to the provisions of the Trust Agreement.

         8.06     Liability for Payments. Each Participant, Beneficiary, Spouse,
joint annuitant or other party that shall claim the right to any payment under
the Plan shall be entitled to look only to the Trust Fund for such payment. No
liability for the payment of benefits under the Plan shall be imposed upon the
Committee or the Employer except as may be required by ERISA ss. 4062(b)
pertaining to Employer liability imposed by the Pension Benefit Guaranty
Corporation in the event the Plan terminates with assets which are insufficient
to provide the Plan liabilities guaranteed by the Pension Benefit Guaranty
Corporation; or ERISA ss. 302(f) pertaining to Employer liability to the Plan
for failure to make a required contribution.


                                       58
<PAGE>   65

                                  ARTICLE IX.

                            MISCELLANEOUS PROVISIONS

         9.01     Exclusive Benefit Rule. The Trust Fund shall be received, held
in trust, and disbursed by the Trustee in accordance with the provisions of the
Trust Agreement and this Plan. No part of the Trust Fund shall be used for or
diverted to purposes other than for the exclusive benefit of Participants and
their Beneficiaries and the payment of reasonable expenses attributable to the
administration of the Plan in accordance with ERISA ss. 404(a)(1)(A)(ii).

         9.02     Merger or Consolidation of Company. If the Company is merged
or consolidated with another organization, or another organization acquires all
or substantially all of the Company's assets, such organization may assume the
role of the Company hereunder by action of its Board of Directors and by action
of the Board of the prior Company, if still existent. Such change in the Company
shall not be deemed a termination of the Plan by either the predecessor or
successor Company.

         9.03     Nonalienation or Assignment.

                  (a)      Spendthrift Clause. Except as provided in (b) below,
         none of the benefits under the Plan are subject to the claims of
         creditors of Participants or their Beneficiaries, and will not be
         subject to attachment, garnishment, or any other legal process
         whatsoever. Neither a Participant nor his Beneficiaries may assign,
         sell, borrow on, or otherwise encumber any of his beneficial interest
         in the Plan and Trust Fund, nor shall any such benefits be in any
         manner liable for or subject to the deeds, contracts, liabilities,
         engagements, or torts of any Participant or Beneficiary.
         Notwithstanding any provision of the Plan to the contrary, the Plan
         shall honor a judgment, order, decree or settlement providing for the
         offset of all or a part of a Participant's benefit under the Plan, to
         the extent permitted under Code ss. 401(a)(13)(C); provided that the
         requirements of Code ss. 401(a)(13)(C)(iii) relating to the protection
         of the Participant's spouse (if any) are satisfied.

                  (b)      Qualified Domestic Relations Orders.

                           (i)      General Rule. The provisions of subsection
                  (a) above shall not apply to a "qualified domestic relations
                  order," as defined in Code ss. 414(p), or any other domestic
                  relations order permitted to be treated as a "qualified
                  domestic relations order" by the Plan Administrator under the
                  provisions of the Retirement Equity Act of 1984. The Plan
                  Administrator shall establish a written procedure to determine
                  the qualified status of domestic relations orders and to
                  administer distributions under such qualified orders. To the
                  extent provided under a "qualified domestic relations order,"
                  a former Spouse of a Participant shall be treated as the
                  Spouse or Surviving Spouse for all purposes under the Plan.


                                       59
<PAGE>   66

                           (ii)     QDRO Procedures.

                                    (A)      Procedure Upon Receipt. Upon
                           receiving a domestic relations order, the Plan
                           Administrator shall notify all affected Participants
                           and any alternate payees (Spouse, former spouse,
                           child or other dependent of the Participant, named in
                           the order) that the order has been received. The Plan
                           Administrator shall also notify the affected
                           Participants and alternate payees of its procedure
                           for determining whether the domestic relations order
                           is qualified.

                                    (B)      Procedure During Determination.
                           During the period the Plan Administrator is
                           determining the qualified status of the order, the
                           Plan Administrator shall separately account for the
                           amounts (if any) that would be payable to an
                           alternate payee under this order (if it were a
                           qualified domestic relations order) during this
                           period. If the Plan Administrator determines the
                           order is a qualified domestic relations order during
                           the 18-month period commencing on the date the first
                           payment would be required under the qualified
                           domestic relations order, then the alternate payee
                           shall receive payment of the amounts determined in
                           accordance with the preceding sentence. If the Plan
                           Administrator cannot make a determination of the
                           order's qualified status during this 18-month period
                           (or determines the order is not a qualified domestic
                           relations order), then the separate accounting
                           required under the first sentence of this
                           subparagraph (B) shall no longer be required.

                           (iii)    QDRO Payouts. Notwithstanding any provision
                  of this Plan to the contrary, effective as of the first day of
                  the calendar month following the date which is 30 days from
                  the date a favorable determination letter is received for this
                  Plan with this provision included (the "QDRO Payout Effective
                  Date"), then if at any time, either before or after the QDRO
                  Payout Effective Date, this Plan receives a domestic relations
                  order which is determined to be a "qualified domestic
                  relations order" pursuant to subsection (b) above, and such
                  order requires that a portion of a Participant's accrued
                  Benefit become, in effect, an Accrued Benefit of an alternate
                  payee, then, if the Actuarially Equivalent present value of
                  the alternate payee's vested Accrued Benefit does not exceed
                  $7,500, the alternate payee's vested Accrued Benefit shall be
                  distributed to such alternate payee in the form of a single
                  lump sum payment (or such other form as may be required by
                  said qualified domestic relations order) as soon as possible
                  after (1) such order is determined to be a qualified domestic
                  relations order, if the order is received after the QDRO
                  Payout Effective Date, or (2) the QDRO Payout Effective Date,
                  if the order was received before the QDRO Payout Effective
                  Date, or (3) any later date specified in said qualified
                  domestic relations order. If the alternate payee should
                  thereafter vest in additional Accrued Benefits, this payout
                  rule shall be applied to such additional vested Accrued
                  Benefit as if such order were received as of the date the
                  additional vesting occurs. No consent of the alternate payee
                  shall be required for a distribution under this paragraph
                  (iii) pursuant to Treas. Reg. ss. 1.411(a)-11(c)(6).


                                       60
<PAGE>   67

                           (iv)     Status of Alternate Payee. An alternate
                  payee under a qualified domestic relations order shall be
                  entitled to all rights of a Beneficiary hereunder except as
                  otherwise specified herein.

         9.04     Plan Continuance Voluntary. Although it is the intention of
each Employer that this Plan shall be continued and that contributions shall be
made regularly, this Plan is entirely voluntary on the part of each
participating Employer, and the continuance of the Plan is not assumed as a
contractual obligation of any Employer.

         9.05     Plan not an Employment Contract. This Plan shall not be deemed
to constitute a contract between any participating Employer and any Participant
or to be consideration or an inducement for the employment of any Participant or
Employee. Nothing contained in this Plan shall be deemed to give any Participant
or Employee the right to be retained in the service of any Employer or to
interfere with the right of any Employer to discharge any Participant or
Employee at any time regardless of the effect which such discharge shall have
upon such individual as a Participant in the Plan.

         9.06     Payments to Minors and Others. In making any distribution to
or for the benefit of any minor or incompetent Participant or Beneficiary, or
any other Participant or Beneficiary who, in the opinion of the Committee, is
incapable of properly using, expending, investing, or otherwise disposing of
such distribution, the Committee, in its sole and complete discretion may, but
need not, order the Trustee to make such distribution to a legal or natural
guardian or other relative of such minor or court appointed committee of any
incompetent, or to any adult with whom such person temporarily or permanently
resides; and any such guardian, committee, relative, or other person shall have
full authority and discretion to expend such distribution for the use and
benefit of such person; and the receipt of such guardian, committee, relative,
or other person shall be a complete discharge to the Trustee, the Committee and
this Plan, without any responsibility on the part of the Committee or the
Trustee to see to the application of amounts so distributed.

         9.07     Governing Law. This Plan shall be administered in the United
States of America, and its validity, construction, and all rights hereunder
shall be governed by the laws of the United States under ERISA. To the extent
that ERISA shall not be held to have preempted local law, the Plan shall be
administered under the laws of the State of Georgia. If any provision of the
Plan shall be held invalid or unenforceable, the remaining provisions hereof
shall continue to be fully effective.

         9.08     Indemnification. The Employers hereby agree to indemnify any
current or former Employee or director to the full extent of any expenses,
penalties, damages, or other pecuniary loss which such current or former
Employee may suffer as a result of his responsibilities, obligations, or duties
in connection with the Plan or Trust or fiduciary activities actually performed
in connection with the Plan or Trust. Such indemnification shall be paid by the
Employers to the current or former Employee to the extent that fiduciary
liability insurance is not available for the payment of such items, but in no
event shall such items be paid out of Plan assets. This indemnification
agreement shall not apply to loss sustained as a result of willful wrongdoing,
as determined by the Company. Notwithstanding the foregoing, this
indemnification agreement shall not relieve any current or former Employee
serving in a


                                       61
<PAGE>   68

fiduciary capacity of his fiduciary responsibilities under ERISA, nor shall this
agreement violate any provision of ERISA as it may be interpreted from time to
time by the United States Department of Labor and any courts of competent
jurisdiction.

         9.09     Gender and Number. Wherever applicable, the masculine pronoun
shall include the feminine pronoun, and the singular shall include the plural.

         9.10     Headings. The titles in this Plan are inserted for convenience
of reference; they constitute no part of the Plan, and are not to be considered
in the construction hereof.

         9.11     Claims Procedure.

                  (a)      Filing a Claim. All claims and requests for benefits
         under the Plan shall be directed to the attention of the Plan
         Administrator in writing. The writing must be reasonably calculated to
         bring the claim to the attention of the Plan Administrator.

                  (b)      Notification of Denial. If the Plan Administrator
         determines that any individual who has claimed a right to receive
         benefits under the Plan (the "claimant") is not entitled to receive all
         or any part of the benefits claimed, the claimant shall be informed in
         writing of the specific reason or reasons for the denial, with specific
         reference to pertinent Plan provisions on which the denial is based, a
         description of any additional material or information necessary for the
         claimant to perfect the claim and an explanation of why said material
         or information is necessary and a description of the review procedures
         set forth in subsection (d) below.

                  (c)      Timing of Notification. The claimant shall be so
         notified of the Plan Administrator's decision within 90 days after the
         receipt of the claim, unless special circumstances require an extension
         of time for processing the claim. If such an extension of time for
         processing is required, the Plan Administrator shall furnish the
         claimant written notice of the extension prior to the termination of
         the initial 90-day period. In no event shall said extension exceed a
         period of 90 days from the end of said initial period. The extension
         notice shall indicate the special circumstances requiring an extension
         of time and the date by which the Plan Administrator expects to render
         a final decision. If for any reasons, the claimant is not notified
         within the period described above, the claim shall be deemed denied and
         the claimant may then request review of said denial, subject to the
         provisions of subsection (d) below.

                  (d)      Review Procedures. The claimant or his duly
         authorized representative may, within 60 days after notice of the Plan
         Administrator's decision, request a review of said decision by the
         administrative Committee, review pertinent documents and submit to the
         Committee such further information as will, in the claimant's opinion,
         establish his rights to such benefits. If upon receipt of this further
         information, the Committee determines that the claimant is not entitled
         to the benefits claimed, it shall afford the claimant or his
         representative reasonable opportunity to submit issues and comments in
         writing and to review pertinent documents. If the claimant wishes, he
         may request in writing that the Committee hold a hearing. The Committee
         may, in its discretion, schedule an opportunity for a full and fair
         hearing on the issue as soon as is reasonably


                                       62
<PAGE>   69

         possible under the circumstances. The Committee shall render its final
         decision with the specific reasons therefor in writing and in a manner
         calculated to be understood by the claimant.

                  (e)      Timing of Final Decision. The Committee's final
         decision shall include specific references to the pertinent Plan
         provisions on which the decision is based, and shall be transmitted to
         the claimant by certified mail within 60 days of receipt of claimant's
         request for such review, unless special circumstances require a further
         extension of time for processing, in which case a decision shall be
         rendered as soon as possible, but not later than 120 days after receipt
         of a request for review. If such an extension of time for review is
         required because of special circumstances, written notice of the
         extension shall be furnished to the claimant prior to the commencement
         of the extension. If the Committee holds regularly scheduled meetings
         at least quarterly, in lieu of the time period described above, the
         Committee's decision on review shall be made by no later than the date
         of the meeting of the Committee which immediately follows its receipt
         of the request for review, unless said request is filed within 30 days
         preceding the date of said meeting in which case a decision shall be
         made no later than the date of the second meeting following its receipt
         of said request for review. If special circumstances require a further
         extension of time for processing, a decision shall be rendered not
         later than the third meeting of the Committee following its receipt of
         the request for review. If a decision on review is not furnished within
         the time period described above, the claim shall be deemed denied on
         review.

                  (f)      Special Effective Date. The provisions of this
         Section 9.11 shall be effective as of June 1, 1999. Prior to that date,
         the provisions of Section 9.11 of the Plan, as it was amended and
         restated effective as of January 1, 1987, shall govern the handling of
         claims.

         9.12     Misstatement in Application for Retirement Income. If a
Participant in his application for retirement income, or in response to any
request of his Employer, the Company or the Committee for information, makes any
statement which is erroneous or omits any material fact or fails before
receiving his first retirement income payment to correct any information that he
previously incorrectly furnished to his Employer or the Committee for its
records, the amount of his retirement income shall be adjusted on the basis of
the correct facts, and the amount of any overpayment or underpayment thereto
made to such Participant shall be deducted from or added to his next succeeding
payments as the Committee shall direct.

         9.13     Liability Limited. To the extent permitted by ERISA and other
applicable law, neither the Committee, nor any member thereof, nor any Employer
shall be liable for any acts of omission or commission in administering the
Plan, except for his or its own individual, willful misconduct. The Company and
each member of the Committee shall be entitled to rely conclusively on all
tables, valuations, certificates, opinions and reports which shall be furnished
by an actuary, accountant, trustee, insurance company, counsel or other expert
who shall be employed or engaged by the Committee, Company or Board or any
Employer.

         9.14     Location of Participant or Beneficiary Unknown. In the event
that all, or any portion, of the distribution payable to a Participant or his
Beneficiary hereunder shall, at the


                                       63
<PAGE>   70

expiration of a reasonable time after it has become payable, remain unpaid
solely by reason of the inability of the Committee, after sending a registered
letter, return receipt requested, to the last known address, and after further
diligent effort (including requests to the Internal Revenue Service under Policy
Statement P-1-187), to ascertain the whereabouts of such Participant or his
Beneficiary, the amount so distributable shall be forfeited and shall be used to
reduce the contributions to the Plan. In the event a Participant or Beneficiary
is located subsequent to his benefit being forfeited, such benefit shall be
restored.

         9.15     Forfeitures and Investment Income. Forfeitures, if any, and
investment income shall be used to reduce the contributions of Employers and
shall not be used hereunder to increase the benefit of any person.

         9.16     Prohibited Discrimination. This Plan shall be operated and
administered in a uniform and consistent manner with respect to all Participants
and in a manner which does not discriminate in favor of Highly Compensated
Employees.

         9.17     Correction of Participants' Benefits. If an error or omission
is discovered in the Accrued Benefit of a Participant, or in the amount
distributed to a Participant, the Committee will make such equitable adjustments
in the records of the Plan and, if applicable, in the payments made to a
Participant, as may be necessary or appropriate to correct such error or
omission as of the Plan Year in which such error or omission is discovered.
Further, an Employer may, in its discretion, make a special contribution to the
Plan for the purpose of correcting any such error or omission.

         9.18     Action of Employer, Committee and Plan Administrator. Except
as may be specifically provided, any action required or permitted to be taken by
an Employer, Committee, or the Plan Administrator may be taken on behalf of such
person by any entity or individual who has been delegated the proper authority.

         9.19     Employer Records. Records of an Employer as to an Employee's
or Participant's period of employment, severance from employment and the reason
therefore, leaves of absence, reemployment, compensation, and elections or
designations under this Plan will be conclusive on all persons, unless
determined to be incorrect.


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<PAGE>   71

                                   ARTICLE X.

                       AMENDMENT, TERMINATION AND ADOPTION

         10.01    Permanency of Plan and Trust. It is contemplated by the
Company and each Employer that the Plan and Trust shall be maintained
permanently and that they shall constitute a qualified plan under Code ss. 401
and a tax-exempt trust under Code ss. 501, or any successor provisions.
Nevertheless, the Company and each Employer must necessarily reserve and does
hereby reserve the rights of amendment, termination and withdrawal as set forth
in this Article.

         10.02    Right to Amend Plan.

                  (a)      Amendment by the Company. The Company reserves the
         right, at any time, to modify or amend, in whole or in part, any or all
         of the provisions of the Plan, including specifically the right to make
         such amendments effective retroactively, if necessary or desirable, to
         bring the Plan into conformity with the Code, ERISA, and any applicable
         regulations promulgated so that the Plan may continue to remain
         qualified and the Trust may continue to remain tax-exempt, or for any
         other purpose, subject to subsection (b) below.

                  (b)      Restrictions on Amendments.

                           (i)      Exclusive Benefit Rule. No modification or
                  amendment shall make it possible for Trust assets to be used
                  for, or diverted to, purposes other than the exclusive benefit
                  of Participants and their Beneficiaries in accordance with
                  Section 9.01 (Exclusive Benefit Rule) herein, except as
                  provided in Section 6.03 (Return of Contributions).

                           (ii)     Code ss. 411(d)(6) Restrictions. No
                  amendment to the Plan shall be permitted that would have the
                  effect of decreasing the Accrued Benefit of any Participant.
                  Furthermore, no amendment shall be permitted that would have
                  the effect of eliminating or reducing an early retirement
                  benefit or a retirement-type subsidy (as defined in Treasury
                  regulations under Code ss. 411(d)(6)(B)(i)) or, except as
                  permitted under Treasury regulations, eliminating an "optional
                  form of benefit" as defined in Treas. Reg. ss.
                  1.411(d)-4(Q&A-1) with respect to a Participant's Accrued
                  Benefit. Notwithstanding the preceding sentences, a
                  Participant's Accrued Benefit may be reduced to the extent
                  permitted under Code ss. 412(c)(8).

                           (iii)    Code ss. 411(a)(10) Vesting Restrictions.
                  Any amendment changing the vesting schedule of this Plan shall
                  comply with the provisions of Section 3.02 (Changes in Vesting
                  Schedule). For purposes of this paragraph (iii), an "amendment
                  changing the vesting schedule" is any amendment which directly
                  or indirectly affects the computation of the vested percentage
                  of a Participant's Accrued Benefit as described in Treas. Reg.
                  ss. 1. 411(a)-8(c).


                                       65
<PAGE>   72

         10.03    Right to Terminate Plan and Trust.

                  (a)      Termination by the Company. The Company reserves the
         right, at any time, to wholly or partially terminate the Plan. If the
         Plan is terminated by the Company, all Accrued Benefits of "affected"
         Participants within the meaning of Code ss. 411(d)(3) as of the date of
         termination shall immediately become fully vested, to the extent
         funded. See Section 3.03 (Vesting Upon Termination). If the Plan is
         partially terminated by the Company or by an Employer, all Accrued
         Benefits of those "affected" Participants within the meaning of Code
         ss. 411(d)(3) shall, as of the date of partial termination, immediately
         become fully vested, to the extent funded.

                  (b)      Distributions Upon Termination. If the Plan is
         terminated, the Accrued Benefits of affected Participants shall be
         either held in the Trust pursuant to the provisions of the Plan or
         distributed as soon as administratively feasible pursuant to Rev. Rul.
         89-87, in the sole discretion of the Company.

         10.04    Merger, Consolidation, or Transfer of Assets.

                  (a)      Code ss. 401(a)(12) Restriction. The Plan shall not
         be merged or consolidated with any other plan, and its assets and
         liabilities may not be transferred to any other trust, unless each
         Participant, immediately after the merger, consolidation or transfer
         (if the Plan then is terminated), would receive a benefit which is
         equal to or greater than the benefit he would have been entitled to
         receive, and would be entitled to each benefit payment option which he
         would have been entitled to, immediately before the merger,
         consolidation or transfer (if the Plan is then terminated).

                  (b)      Transfers of Assets and Liabilities to/from Plan.
         This Plan may be the recipient of a transfer of assets and liabilities
         from, or may transfer liabilities and assets to, another plan qualified
         under Code ss. 401(a), subject to the approval of the Company, but only
         if such transfer satisfies the provisions of Treas.
         Reg. ss. 1.411(d)-4(Q&A-3).

                  (c)      Changes in Law. In the event that another qualified
         retirement plan is merged with this Plan and this Plan is the surviving
         plan following the merger, and if the date of the merger follows the
         effective date of a change in the qualification requirements of the
         Code but precedes the date by which the other plan is required to be
         amended to take into account those changes in the law, then the
         applicable provisions of this Plan (as amended) shall be deemed to
         relate back and to be included in the other plan as of the applicable
         effective date.

         10.05    Distribution of Assets of Trust Fund.

                  (a)      In the event that it becomes necessary to terminate
         the Plan, the assets in the Trust Fund held for the benefit of the
         affected Participants, Spouses, Beneficiaries, and joint annuitants
         shall be applied in the following order, all persons in each class
         being entitled to their respective proportionate shares based upon the
         present value of their benefits at the time of application.


                                       66
<PAGE>   73

         Firstly:

                           (i)      In the case of benefits which had been in
                  pay status three years prior to the date of discontinuance,
                  provision to all Participants, Spouses, Beneficiaries, and
                  joint annuitants of the lowest benefit in pay status during
                  such three-year period.

                           (ii)     In the case of benefits which would have
                  been in pay status for three years prior to the date of
                  discontinuance had the Participant retired, provision to all
                  Participants, Spouses, Beneficiaries, and joint annuitants of
                  the lowest benefit which would have been in pay status during
                  such three-year period but ignoring any increase in such
                  benefits as a result of amendments to the Plan during the
                  five-year period prior to the date of discontinuance.

         Secondly: Provision to all Participants, Spouses, Beneficiaries, and
         joint annuitants of benefits insured by the Pension Benefit Guaranty
         Corporation not previously provided for herein.

         Thirdly: Provision to all Participants, Spouses, Beneficiaries, and
         joint annuitants of any benefits to which they had a vested right just
         prior to the date of discontinuance not previously provided for herein.
         Any benefits which were vested as a result of the discontinuance shall
         be ignored for purposes of this paragraph.

         Fourthly: Provisions to all Participants, Spouses, Beneficiaries, and
         joint annuitants of all remaining benefits which accrued prior to the
         date of the discontinuance but are not previously provided for herein.

         If the assets available in the Trust Fund are insufficient to provide
         for all of the benefits included in one of the above priority
         categories, the benefits determined according to the Plan provisions in
         effect five years prior to the date of discontinuance shall be provided
         for first. If the assets are sufficient to provide for all of these
         benefits, then the assets shall be applied to the extent possible to
         provide for increased benefits due to Plan amendments during such
         five-year period with the amendments being considered in chronological
         order with the most recent amendment being considered last.

                  (b)      Any surplus remaining in the Trust Fund, after the
         satisfaction of all rights or contingent rights accrued under the Plan
         with respect to such benefits, shall, subject to the pertinent
         provisions of federal or state law, be returned to the Employer.

         10.06    Adoption of the Plan by Members of Controlled Group.

                  (a)      Procedure for Adoption. This Plan may be adopted by
         the Board of Directors of any member of the Controlled Group by a
         formal resolution to adopt this Plan, indicating the effective date of
         said adoption, delivered to and accepted in writing by the Plan
         Administrator or approved by resolution of the Board of Directors of
         Flowers Industries, Inc. The resolution(s) referred to in the preceding
         sentence of this Section shall be attached hereto and made a part of
         the Plan. Such resolution(s) may, in addition to specifying the
         effective date of the adoption, specify other provisions including, but


                                       67
<PAGE>   74

         not limited to, credit for service prior to the effective date for
         benefit accrual, eligibility and vesting purposes.

                  (b)      Procedure for Withdrawal. Each member of the
         Controlled Group may voluntarily withdraw from participating in the
         Plan, provided that notice of such intent to discontinue participation
         is furnished to the Company at least 90 days prior to the effective
         date of the withdrawal, unless waived by the Company. The Company
         unilaterally may terminate an Employer's participation in the Plan for
         failure: (1) to timely provide requested information; (2) to timely
         make contributions; or (3) to cooperate with the Company in
         administering the Plan. The Company may also unilaterally terminate an
         Employer's participation in the Plan for any other reason that it deems
         appropriate.

                  (c)      Transfer of Assets and Liabilities. Upon the
         voluntary withdrawal or involuntary termination of an Employer's
         participation in the Plan, the Company shall determine the amount of
         assets and liabilities of the Plan (if any) which shall be transferred
         to any successor plan established by the Employer. This determination
         shall be made based upon principles set forth in Code ss. ss.
         401(a)(12) and 414(l) and the regulations promulgated thereunder.

                  (d)      Apportionment of Costs. All Employers shall share in
         the cost of the Plan, including but not limited to, the contributions
         to the Plan, the costs of the Committee, the costs of the consultants
         (actuaries, accountants, attorneys, etc.) and various other direct and
         indirect costs of operating the Plan which may initially be borne by
         the Company or an Employer but which are determined by the Committee to
         be costs associated with the Plan. The Committee shall apportion these
         costs to each Employer as it deems to be equitable.

                  (e)      Cooperation. Each Employer shall cooperate fully with
         the Company and the Committee with regard to all matters pertaining to
         the Plan. Any failure to cooperate will be grounds for the involuntary
         termination of that Employer's participation in the Plan.

         10.07    Early Plan Termination Provision.

                  (a)      General Limitation. In the event of termination of
         the Plan, the benefit of any active or former Highly Compensated
         Employee is limited to a benefit that is non-discriminatory under
         Code ss. 401(a)(4).

                  (b)      Specific Limitation for Highly Compensated Employees.
         For Plan Years beginning on or after January 1, 1992, the benefits
         distributed to any of the 25 most highly compensated employees, whether
         active or former, are restricted such that the annual payments are no
         greater than an amount equal to the payment that would be made on
         behalf of the Employee under a single life annuity that is the
         Actuarial Equivalent of the sum of the Employee's Accrued Benefit and
         the Employee's other benefits under the Plan.


                                       68
<PAGE>   75

                  (c)      Exceptions. The preceding subsection shall not apply
         if:

                           (i)      After payment of the benefit to an Employee
                  described in the preceding subsection, the value of plan
                  assets equals or exceeds 110% of the value of current
                  liabilities, as defined in Code ss. 412(l)(7),

                           (ii)     The value of the benefits for an Employee
                  described in the preceding subsection is less than 1% of the
                  value of current liabilities, or

                           (iii)    The value of the benefits for an Employee
                  described in the preceding subsection must not exceed $5,000.

                  (d)      Benefit Definition. For purposes of this Section, the
         term "benefit" includes loans in excess of the amount set forth in Code
         ss. 72(p)(2)(A), any periodic income, any withdrawal values payable to
         a living Employee, and any death benefits not provided for by insurance
         on the Employee's life.

         10.08    Military Service. Notwithstanding any provisions of this Plan
to the contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with Code ss. 414(u)
of the Code. "Qualified military service" means any service in the uniformed
services (as defined in chapter 43 of title 38 of the United States Code) by any
individual if such individual is entitled to reemployment rights under such
chapter with respect to such service.

         10.09    Electronic Means of Communication. Whenever, under this Plan,
a Participant or Beneficiary is required or permitted to make an election,
provide a notice, give a consent, request a distribution, or otherwise
communicate with the Employer, the Plan Administrator, the Trustee or a delegate
of any of them, to the extent permitted by law, the election, notice, consent,
distribution request, or other communication may be transmitted by means of
telephonic or other electronic communication, if the administrative procedures
under the Plan provide for such means of communication.

                                       69

<PAGE>   76

                                  ARTICLE XI.

                              TOP HEAVY PROVISIONS

         11.01    Applicability. If the Plan is or becomes a Top-Heavy Plan in
any Plan Year, the provisions of this Article XI shall be controlling and shall
supersede any conflicting provisions in the Plan. This Article XI shall be
interpreted in accordance with Code ss. 416 and the regulations thereunder.

         11.02    Definitions. For the purposes of this Article XI, the
following terms shall have the following meanings:

                  (a)      "Benefit Amount" shall mean (i) the present value
         (determined by reference to the interest and mortality factors
         specified in Exhibit A) of an individual's Accrued Benefit determined
         on the Valuation Date, plus (ii) the aggregate amount of distributions
         made with respect to such individual within the five (5) year period
         ending on the Determination Date (except to the extent already included
         on the Valuation Date). For this purpose, the Accrued Benefit of a
         current Participant shall be determined as if the individual terminated
         service as of such Valuation Date. For purposes of this Article XI, the
         Accrued Benefit of a Non-key Employee shall be determined under the
         method which is used for accrual purposes for all plans of the members
         of the Controlled Group; or if there is no method described above, as
         if such benefit accrued not more rapidly than the slowest accrual rate
         permitted under Code ss. 411(b)(1)(C). With respect to a defined
         contribution plan, "Benefit Amount" shall mean (i) the sum of the
         amounts credited, as of the Determination Date, to an individual's
         account plus (ii) the aggregate amount of distributions within the five
         (5) year period ending on the Determination Date of such Plan.

                  (b)      "Determination Date" shall mean the last day of the
         preceding Plan Year and, in the case of the first Plan Year, the last
         day of such first Plan Year.

                  (c)      "Key Employee" shall mean any Employee or former
         Employee (and the beneficiaries of any such Employee) who at any time
         during the Plan Year containing the Determination Date or during the
         four preceding Plan Years was: (i) an officer of the Employer having an
         annual compensation greater than 50% of the dollar amount in effect
         under Code ss. 415(b)(1)(A), (ii) an owner (or considered an owner
         under Code ss. 318) of one of the 10 largest interests in the Employer
         if such individual's annual compensation from the Employer exceeds the
         dollar limitation in effect under Code ss. 415(c)(1)(A), (iii) a
         five-percent (5%) owner of the Employer or (iv) a one-percent (1%)
         owner of the Employer who has an annual compensation from the Employer
         of more than $150,000.

         For purposes of (i) above, no more than 50 Employees shall be treated
         as officers, and Employees described in Code ss. 414(q)(8) shall be
         excluded. For purposes of (ii) above, if two Employees have the same
         interest in the Employer, the Employee having the greater annual
         compensation from the Employer shall be treated as having a larger
         interest. The determination of who is a Key Employee will be made in
         accordance with Code ss. 416(i) and the regulations thereunder. For
         purposes of this subsection (c), "annual


                                       70
<PAGE>   77

         compensation" means "compensation" as defined in paragraph (i) of
         subsection (h) of Section 4.08, but including amounts contributed by
         any member of the Controlled Group pursuant to a salary reduction
         agreement which are excludable from gross income under Code ss. 125,
         402(a)(8), 402(h) or 403(b).

                  (d)      "Non-Key Employee" shall mean any Employee who is not
         a Key Employee.

                  (e)      "Permissive Aggregation Group" shall mean the
         Required Aggregation Group plus any other plan or plans of a member of
         the Controlled Group which, when considered as a group with the
         Required Aggregation Group, would continue to satisfy the requirements
         of Code ss. ss. 401(a)(4) and 410.

                  (f)      "Required Aggregation Group" shall mean a group of
         plans maintained by the Controlled Group comprised of (i) each
         qualified plan of the Controlled Group in which at least one Key
         Employee participates and (ii) any other qualified plan of the
         Controlled Group which enables a plan described in (i) above to meet
         the requirements of Code ss. ss. 401(a)(4) or 410.

                  (g)      "Super Top-Heavy Plan" shall mean a plan as to which
         any of the following conditions exists:

                           (i)      The Top-Heavy Ratio for the Plan exceeds
                  ninety percent (90%) and the Plan is not part of a Required
                  Aggregation Group or Permissive Aggregation Group;

                           (ii)     The Plan is part of a Required Aggregation
                  Group but not part of a Permissive Aggregation Group and the
                  Top-Heavy Ratio for the group of plans exceeds ninety percent
                  (90%); or

                           (iii)    The plan is part of a Required Aggregation
                  Group and a Permissive Aggregation Group and the Top-Heavy
                  Ratio for the Permissive Aggregation Group exceeds ninety
                  percent (90%).

                  (h)      "Top-Heavy Plan" shall mean a plan as to which any of
         the following conditions exists:

                           (i)      The Top-Heavy Ratio for the Plan exceeds
                  sixty percent (60%) and the plan is not part of a Required
                  Aggregation Group or Permissive Aggregation Group;

                           (ii)     The plan is part of a Required Aggregation
                  Group but not part of a Permissive Aggregation Group and the
                  Top-Heavy Ratio for the group of plans exceeds sixty percent
                  (60%); or

                           (iii)    The plan is part of a Required Aggregation
                  Group and a Permissive Aggregation Group and the Top-Heavy
                  Ratio for the Permissive Aggregation Group exceeds sixty
                  percent (60%).


                                       71
<PAGE>   78

                  (i)      "Top Heavy Ratio" shall mean the ratio, as of the
         Determination Date, of the sum of the Benefit Amounts of all Key
         Employees to the sum of the Benefit Amounts of all Participants. The
         calculation of this ratio, and the extent to which distributions,
         rollovers and transfers are taken into account will be made in
         accordance with Code ss. 416 and the regulations thereunder. When
         aggregating plans, the value of account balances and accrued benefits
         will be calculated with reference to the Determination Dates that fall
         within the same calendar year. For purposes of determining the
         Top-Heavy Ratio of a Required Aggregation Group, the Benefit Amount of
         any individual shall also include any distributions made within the
         five (5) year period ending on the Determination Date under a
         terminated plan which if it had not been terminated, would have been
         included in the Required Aggregation Group. The Benefit Amount of any
         individual who has not performed an Hour of Service for any Employer
         maintaining the Plan at any time during the five (5) year period ending
         on the Determination Date shall not be taken into account when
         computing this ratio.

                  (j)      "Valuation Date" shall mean the December 31, which
         falls within the 12-month period ending on the Determination Date.

         11.03    Minimum Accrued Benefit.

                  (a)      Minimum Benefit Amount. For any Plan Year in which
         this Plan is a Top-Heavy Plan, each Participant who is a Non-Key
         Employee and has completed one Hour of Service will accrue a benefit
         (to be provided solely by contributions by the Employer and expressed
         as a life annuity commencing at Normal Retirement Age) of not less than
         two percent (2%) of his or her highest average Compensation for the
         five consecutive years for which the Participant had the highest
         Compensation.

                  (b)      Coordination with Other Plan Provisions. The minimum
         accrued benefit shall be determined without regard to Social Security
         contributions. The minimum accrual applies even though under other Plan
         provisions the Participant would not otherwise be entitled to receive
         an accrual, or would have received a lesser accrual for the year
         because (i) the Non-Key Employee's Compensation is less than a stated
         amount, (ii) the Non-Key Employee is not employed on the last day of
         the accrual computation period, or (iii) the Plan is integrated with
         Social Security.

                  (c)      Limitation on Minimum Benefits. No additional benefit
         accruals shall be provided pursuant to (a) above to the extent that the
         total accruals on behalf of the Participant attributable to
         Contributions of the Employer will provide a benefit expressed as a
         life annuity commencing at Normal Retirement Age that equals or exceeds
         twenty percent (20%) of the Participant's highest average Compensation
         for the five consecutive years for which the Participant had the
         highest Compensation.

                  (d)      No Duplication of Benefits. The minimum accrued
         benefit required by this Section shall be reduced (but not below zero)
         by the Accrued Benefit to which the Participant is otherwise entitled
         under this Plan determined without regard to this Section.


                                       72
<PAGE>   79

                  (e)      Accrual Required During Suspension. The minimum
         benefit required under this Section shall not be subject to forfeiture
         on account of the reemployment of an Employee and suspension of his
         benefits in accordance with Code ss. 411(a)(3)(B) and ERISA
         ss. 203(a)(3)(B). If benefits are suspended during a period of
         reemployment, the benefit payable upon subsequent resumption of
         payments must be automatically increased to reflect the nonpayment of
         benefits during such period of reemployment.

         11.04    Minimum Vesting. The following vesting schedule shall apply to
all Accrued Benefits attributable to contributions of the Employer:

<TABLE>
<CAPTION>
             Years of                              Vested
          Vesting Service                        Percentage
          ---------------                        ----------
         <S>                                     <C>
                2                                    20%
                3                                    40%
                4                                    60%
            5 or more                               100%
</TABLE>

The above schedule applies to all accrued benefits within the meaning of Code
ss. 411(a)(7) including benefits accrued before the effective date of Code ss.
416 and benefits accrued before the Plan became a Top-Heavy Plan. However, this
schedule does not apply to the Accrued Benefits of any Employee who does not
complete an Hour of Service after the Plan has initially become Top-Heavy.

         11.05    Impact on Code ss. 415 Limitations. Sections 4.08(h)(ii) and
4.08(h)(iii) of the Plan shall be read by substituting "100%" for "125%"
wherever it appears therein. This substitution shall not have the effect of
reducing any benefit accrued under this Plan prior to the first day of the Plan
Year in which this provision becomes applicable. However, "100%" shall not be so
substituted for "125%" if the Plan is not a Super Top-Heavy Plan and if Section
11.03(a) is applied by substituting "three percent (3%)" for "two percent (2%)"
and Section 11.03(c) is applied by substituting "thirty percent (30%)" for
"twenty percent (20%)."

         11.06    Compensation Limitation. For any Plan Year beginning before
January 1, 1989, in which this Plan is a Top-Heavy Plan, the Compensation of any
Employee in excess of $200,000 (as adjusted pursuant to Code ss. 416(d)) shall
not be taken into account under this Plan, as required by Treas. Reg. ss.
1.416-1(T-41, 42). However, this Section shall not be construed to cause a
reduction or elimination of any Participant's Code ss. 411(d)(6) protected
benefits (as defined in Treas. Reg. ss. 1.411(d)-4).

         11.07    No Duplication of Benefits. If the Company or other member of
the Controlled Group also maintains a defined contribution plan and both plans
become Top-Heavy Plans, the minimum allocation provisions in this Article will
not be required to be made to both plans. Thus, if both plans are Top-Heavy
Plans, the requirements of this Article will be satisfied by providing the
minimum required benefit under this defined benefit plan.


                                       73
<PAGE>   80

                                  ARTICLE XII.

                     SPECIAL PROVISIONS REGARDING THE MERGER
                          OF THE STORCK BAKING COMPANY
                       PENSION PLAN WITH AND INTO THE PLAN

         12.01    General Provisions. Effective as of January 1, 1997 (the
"Storck Merger Effective Date"), the Storck Baking Company Pension Plan (the
"Storck Plan") is merged with and into the Plan. The Plan shall, as of the
Storck Merger Effective Date, assume all obligations of the Storck Plan under
the terms and provisions of the Storck Plan for (i) employees of Storck Baking
Company participating in the Storck Plan immediately prior to the Storck Merger
Effective Date and (ii) former employees of Storck Baking Company and
beneficiaries with vested accrued benefits under the Storck Plan immediately
prior to the Storck Merger Effective Date. Such Participants and Beneficiaries
shall, as of the Storck Merger Effective Date, automatically become Participants
in the Plan, with respect to such accrued benefits only, and shall be referred
to as "Storck Participants" herein. The Plan shall provide for payment of such
vested accrued benefits pursuant to the provisions of the Plan subsequent to the
Storck Merger Effective Date.

         12.02    Transfer of Plan Assets. Effective as of the Storck Merger
Effective Date, the assets of the Storck Plan shall become assets of the Plan,
and shall be held by the Trustee under the provisions of the Plan and its
accompanying Trust for the exclusive benefit of Participants and beneficiaries
under the Plan, as amended by this Article.

         12.03    Conditions for Merger and Transfer. The merger of plans and
transfer of assets as provided for in this Article is made on the condition (as
required by Code ss. ss. 401(a)(12) and 414(1), as amended) that each
Participant in the Plan will (if the Plan then terminated) be entitled to
receive a benefit immediately after the merger and transfer which is equal to or
greater than the benefit he would have been entitled to receive immediately
before the merger and transfer (if either plan had then terminated), in
accordance with Section 12.04. A Storck Participant's accrued benefit under the
Storck Plan immediately prior to the Storck Merger Effective Date shall be the
Participant's "Storck Accrued Benefit."

         12.04    Additional Optional Form of Benefit. Any Participant with a
Storck Accrued Benefit shall be entitled to elect, in addition to the optional
forms of benefit available under Article V, to have his Storck Accrued Benefit
distributed in one lump sum at the time he is otherwise entitled to payment
hereunder, if the Participant and the Participant's spouse consent in writing to
such distribution in accordance with paragraphs (ii) through (v) of Section
5.02(b), subject to the provisions of Section 5.04 and subsection (a) of Section
5.02. Such lump sum shall be an amount which is the Actuarial Equivalent of said
Storck Accrued Benefit determined as of the Participant's Annuity Starting Date.

         12.05    Actuarial Equivalent Amounts. In determining an amount which
is the Actuarial Equivalent of a Storck Accrued Benefit, for purposes of
computing the amount of a benefit in the form of a Period Certain and Life
Annuity with a 10 year period certain, a Joint and Survivor Annuity with
continuation payments equal to 50% or 100% of the initial monthly payments, a


                                       74
<PAGE>   81

Life Annuity, or a Level Income Annuity, the following mortality and interest
factors shall apply: the 1983 Group Annuity Mortality Table for males set back
one year and 5% interest.

         12.06    Vesting. Notwithstanding other provisions of Section 3.01(a)
to the contrary, the extent to which a Participant's Storck Accrued Benefit
shall be vested shall be determined in accordance with the provisions of the
Storck Plan in effect at the time of the Participant's termination of employment
if the Participant terminated from Storck Baking Company on or before December
31, 1988, and failed to complete at least one Hour of Service (as defined in
Section 1.33(a)) with Storck Baking Company, or an Employer on or after January
1, 1989.

         12.07    Vested Cash Values.

                  (a)      Benefits Derived From Vested Cash Values. With
         respect to each Storck Participant who has a Vested Cash Value, the
         following benefit shall be payable:

                           (i)      Disability Benefit. If a Storck Participant
                  becomes "totally and permanently disabled" as defined in
                  Section 12.07(d) below, he shall receive a pension benefit in
                  the Standard Form commencing on what otherwise would have been
                  his Normal Retirement Date equal to (i) an amount which can be
                  provided by his Vested Cash Value, and (ii) his Storck Accrued
                  Benefit reduced by the Actuarial Equivalent of the monthly
                  annuity in the Standard Form which could have been purchased
                  by the amount of his Vested Cash Value; provided, however,
                  that in lieu of any pension benefit described in (i) above,
                  any Storck Participant may elect at any time prior to his
                  Normal Retirement Date a lump sum cash payment equal to his
                  Vested Cash Value, in which event his monthly pension benefit
                  in the Standard Form shall be equal to the amount described in
                  (ii) above.

                           (ii)     Death Benefit. If a Storck Participant for
                  whom Sections 4.07(a) or 4.07(b) do not apply dies while in
                  active employment, prior to his Normal, Early or Delayed
                  Retirement Date, there shall be paid to the beneficiary last
                  designated by him an amount equal to his Vested Cash Value.
                  Upon the death of a Storck Participant prior to what would
                  otherwise have been his Normal Retirement Date hereunder who
                  has terminated his employment but has not elected a cash
                  payment as provided in Section 12.07(a)(iii) prior to his date
                  of death, there shall be paid to the "beneficiary" (as defined
                  in Section 12.07(c)) last designated by him an amount equal to
                  his Vested Cash Value.

                           (iii)    Termination Benefit. Any Storck Participant
                  who has completed 5 Years of Vesting Service on his
                  termination date shall be entitled to a pension benefit in the
                  Standard Form commencing on his Normal Retirement Date equal
                  to (i) an amount which can be provided by this Vested Cash
                  Value, if any, and (ii) his Storck Accrued Benefit reduced by
                  the Actuarial Equivalent of the monthly annuity in the
                  Standard Form which could have been purchased by the amount of
                  his Vested Cash Value; provided, however, that in lieu of any
                  pension benefit described in (i) above, any Storck Participant
                  may elect at any time prior to his Normal Retirement Date a
                  lump sum cash payment equal to his Vested Cash


                                       75
<PAGE>   82

                  Value in which event his monthly pension benefit in the Normal
                  Form shall be equal to the amount described in (ii) above.

                  (b)      "Vested Cash Value." "Vested Cash Value" shall mean
         the vested portion of the net cash value of certain individual policies
         held by the Trustees of the Storck Plan prior to January 31, 1973, for
         the benefit of certain Storck Participants, which values were
         transferred to New England Mutual Life Insurance Company for deposit
         under a group annuity policy, as described in Section 18.1 of the
         Storck Plan, as that plan was amended and restated effective as of
         January 1, 1989.

                  (c)      "Beneficiary." For purposes of this Article XII,
         "beneficiary" shall mean the person or persons determined in accordance
         with Section 1.07 of the Plan; provided, however, that if, at any time
         no Beneficiary has been designated by a Storck Participant, or the
         designated Beneficiary is no longer living or no longer exists,
         whichever is applicable, then the Storck Participant's "beneficiary"
         for purposes of this Article XII shall be deemed to be the person or
         persons described below, in the following order of priority:

                           (i)      the Participant's Spouse;

                           (ii)     the Participant's natural and adopted
                  children and children of deceased children, per stirpes;

                           (iii)    the Participant's parents in equal shares;

                           (iv)     the Participant's brothers and sisters, and
                  nephews and nieces who are children of deceased brothers and
                  sisters, per stirpes; and

                           (v)      the Participant's estate.

                  (d)      "Totally and permanently disabled." For purposes of
         Section 12.07(a), a Storck Participant shall be considered to be
         "totally and permanently disabled" if he is unable to engage in any
         occupation or employment for wages or profit for which he is reasonably
         qualified by training, education or experience.

         12.08    Special Rule on Termination. Notwithstanding any other
provision of this Plan, if the Plan is terminated within the 5-year period
beginning on the Storck Merger Effective Date, then those benefits that would
have been provided under the Storck Plan on a termination basis on December 31,
1996 shall be payable in a priority category higher than the highest priority
category described in Section 10.05(a) of the Plan, to the extent provided in
Treasury Regulations ss. ss. 1.414(l)-1(f) and (h).


                                       76
<PAGE>   83

                                 ARTICLE XIII.

                   SPECIAL PROVISIONS REGARDING THE MERGER OF
                   THE SHIPLEY BAKING COMPANY DEFINED BENEFIT
                  PENSION PLAN AND TRUST WITH AND INTO THE PLAN

         13.01    General Provisions. Effective as of December 31, 1998 (the
"Shipley Merger Effective Date"), the Shipley Baking Company Defined Benefit
Pension Plan and Trust (the "Shipley Plan") is merged with and into the Plan.
The Plan shall, as of the Shipley Merger Effective Date, assume all obligations
of the Shipley Plan under the terms and provisions of the Shipley Plan for (i)
employees of Shipley Baking Company participating in the Shipley Plan
immediately prior to the Shipley Merger Effective Date and (ii) former employees
of Shipley Baking Company and beneficiaries with vested accrued benefits under
the Shipley Plan immediately prior to the Shipley Merger Effective Date. Such
Participants and Beneficiaries shall, as of the Shipley Merger Effective Date,
automatically become Participants in the Plan, with respect to such accrued
benefits only, and shall be referred to as "Shipley Participants" herein. The
Plan shall provide for payment of such vested accrued benefits pursuant to the
provisions of the Plan subsequent to the Shipley Merger Effective Date.

         13.02    Transfer of Plan Assets. Effective as of the Shipley Merger
Effective Date, the assets of the Shipley Plan shall become assets of the Plan,
and shall be held by the Trustee under the provisions of the Plan and its
accompanying Trust for the exclusive benefit of Participants and beneficiaries
under the Plan, as amended by this Article.

         13.03    Conditions for Merger and Transfer. The merger of plans and
transfer of assets as provided for in this Article is made on the condition (as
required by Code ss. ss. 401(a)(12) and 414(1), as amended) that each
Participant in the Plan will (if the Plan then terminated) be entitled to
receive a benefit immediately after the merger and transfer which is equal to or
greater than the benefit he would have been entitled to receive immediately
before the merger and transfer (if either plan had then terminated), in
accordance with Section 13.04. A Shipley Participant's accrued benefit under the
Shipley Plan immediately prior to the Shipley Merger Effective Date shall be the
Participant's "Shipley Accrued Benefit."

         13.04    Additional Optional Form of Benefit. Any Participant with a
Shipley Accrued Benefit shall be entitled to elect, in addition to the optional
forms of benefit available under Article V, to have his Shipley Accrued Benefit
distributed in one lump sum at the time he is otherwise entitled to payment
hereunder, if the Participant and the Participant's spouse consent in writing to
such distribution in accordance with paragraphs (ii) through (v) of Section
5.02(b), subject to the provisions of Section 5.04 and subsection (a) of Section
5.02. Such lump sum shall be an amount which is the Actuarial Equivalent of said
Shipley Accrued Benefit determined as of the Participant's Annuity Starting
Date.

         13.05    Actuarial Equivalent Amounts. In determining an amount which
is the Actuarial Equivalent of a Shipley Accrued Benefit, for purposes of
computing the amount of a benefit in the form of a Joint and Survivor Annuity
with continuation payments equal to 50%, 75% or 100% of the initial monthly
payments, or a Life Annuity, the following mortality and interest factors shall
apply:


                                       77
<PAGE>   84

                  (a)      Mortality Table

                           (i)      Pre-retirement: none.

                           (ii)     Post-retirement: UP - 1984.

                  (b)      Interest Rate: 8%.

In determining an amount which is the Actuarial Equivalent of a Shipley Accrued
Benefit, for purposes of computing the amount of a benefit in the form of a lump
sum distribution, the mortality and interest factors that shall apply are either
the factors set forth above in this Section 13.05, or the factors described in
the second sentence of Section 1.03 of the Plan, whichever factors produce the
largest lump sum amount.

         13.06    Vesting. Notwithstanding other provisions of Section 3.01(a)
to the contrary, the extent to which a Participant's Shipley Accrued Benefit
shall be vested shall be determined in accordance with the provisions of the
Shipley Plan in effect at the time of the Participant's termination of
employment if the Participant terminated from Shipley Baking Company on or
before December 31, 1998, and failed to complete at least one Hour of Service
(as defined in Section 1.33(a)) with Shipley Baking Company, or an Employer on
or after January 1, 1999. In the case of a Shipley Participant who is credited
with at least one Hour of Service (as defined in Section 1.33(a)) with Shipley
Baking Company or an Employer on or after January 1, 1999, such a Participant
shall be vested in a percentage of his or her Shipley Accrued Benefit determined
in accordance with the following table:

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

For purposes of this section, the "Years of Vesting Service" of a Shipley
Participant as of December 31, 1998 shall be equal to the number of "Years of
Service" as of that date, determined in accordance with the terms of the Shipley
Plan.

         13.07    Special Rule on Termination. Notwithstanding any other
provision of this Plan, if the Plan is terminated within the 5-year period
beginning on the Shipley Merger Effective Date, then those benefits that would
have been provided under the Shipley Plan on a termination basis on December 31,
1998 shall be payable in a priority category higher than the highest priority
category described in Section 10.05(a) of the Plan, to the extent provided in
Treasury Regulations ss. ss. 1.414(l)-1(f) and (h).

         13.08    Employee Contribution Accounts.

                  (a)      Shipley Voluntary Contribution Accounts. Any Shipley
         Participant who had a "Voluntary Contribution Account" under the
         Shipley Plan as of the day prior to the Shipley Merger Effective Date
         shall have a Shipley Voluntary Contribution Account


                                       78

<PAGE>   85

         under this Plan as of the Shipley Merger Effective Date. The Shipley
         Voluntary Contribution Account shall be credited with interest at a
         rate of interest equal to 120% of the federal mid-term rate, as in
         effect under Code ss.1274 on the first month of a plan year. The
         balance in the Shipley Voluntary Contribution Account shall be fully
         (100%) vested at all times.

                  (b)      Shipley Required Contribution Accounts. Any Shipley
         Participant who had a Required Contribution Account under the Shipley
         Plan as of the day prior to the Shipley Merger Effective Date shall
         have a Shipley Required Contribution Account under this Plan as of the
         Shipley Merger Effective Date. The Shipley Required Contribution
         Account shall be credited with interest at a rate of interest equal to
         120% of the federal mid-term rate, as in effect under Code ss.1274 on
         the first month of a plan year. The balance in the Shipley Required
         Contribution Account shall be fully (100%) vested at all times.

                  (c)      Shipley Voluntary Contribution Account - Withdrawals.
         A Participant (or his or her beneficiary) may, on prior written notice
         to the Plan Administrator, on a form provided for that purpose by the
         Plan Administrator, withdraw all or any part of the balance of his or
         her Shipley Voluntary Contribution Account. Such a distribution shall
         be in one of the forms specified in Sections 5.02 and 5.03, and
         generally shall be subject to the provisions of Article V. Such
         withdrawal shall have no effect on a Participant's Shipley Accrued
         Benefit.

                  (d)      Shipley Required Contribution Account - Withdrawals.
         A Participant (or his or her Beneficiary) may, on 30 days' prior
         written notice to the Plan Administrator, withdraw all or part of the
         balance of his Shipley Required Contribution Account in the Trust Fund
         at any time. Such withdrawal shall have no effect on a Participant's
         Shipley Accrued Benefit. Any such distribution shall be in one of the
         forms specified in Sections 5.02 and 5.03, and generally shall be
         subject to the provisions of Article V.


                                       79
<PAGE>   86

         IN WITNESS WHEREOF, this Plan has been executed by the Company and its
corporate seal attached hereto this ________ day of
__________________________________, 2001.

                                    FLOWERS FOODS, INC.


                                    By:
                                       -----------------------------------------
                                    Title:
                                          --------------------------------------


                                       80
<PAGE>   87

                                   APPENDIX B

                         ADDITIONAL RETIREMENT BENEFITS

Pursuant to this Appendix B, the following list of Participants, identified by
Social Security Number, shall be entitled to receive the corresponding
Additional Retirement Benefits, in accordance with the terms and conditions set
forth in Section 1.37(g) of the Plan:

<TABLE>
<CAPTION>
                                               Annual Additional
     Social Security Number                    Retirement Benefit
     ----------------------                    ------------------
     <S>                                       <C>




</TABLE>


<PAGE>   88


<TABLE>
<CAPTION>
                                                      Annual Additional
     Social Security Number                           Retirement Benefit
     ----------------------                           ------------------
     <S>                                              <C>
</TABLE>

The criteria used to determine the group of Participants eligible for, and the
amount of, the Additional Retirement Benefits shall comply with all of the
provisions of the Code, including without limitation Code ss. ss. 401(a)(4),
410(b), and 415.