<PAGE>
                                                                   Exhibit 10.69

                     BROWN & WILLIAMSON TOBACCO CORPORATION
                                HEALTH CARE PLAN
                             FOR SALARIED EMPLOYEES

                       (As Amended Through July 29, 2004)

<PAGE>

                     BROWN & WILLIAMSON TOBACCO CORPORATION
                                HEALTH CARE PLAN
                             FOR SALARIED EMPLOYEES

                       (As Amended Through July 29, 2004)

                                Table of Contents

PREAMBLE 1

<TABLE>
<S>        <C>                                                                <C>
ARTICLE 1. Definitions....................................................     1
    1.01   Annual Out-of-Pocket Limit.....................................     1
    1.02   Ambulance......................................................     2
    1.03   Bed Patient....................................................     2
    1.04   Benefit Period.................................................     2
    1.05   Claims Administrator...........................................     2
    1.06   Code...........................................................     2
    1.07   Coinsurance....................................................     2
    1.08   Company........................................................     2
    1.09   Continuation Coverage..........................................     3
    1.10   Continued Stay Review..........................................     3
    1.11   Copayment......................................................     3
    1.12   Covered Charges................................................     3
    1.13   Covered Services...............................................     4
    1.14   Custodial Care.................................................     4
    1.15   Deductible.....................................................     4
    1.16   Dental Benefits................................................     5
    1.17   Dentist........................................................     5
    1.18   Dependent......................................................     5
    1.19   Dependent-Participant..........................................     6
    1.20   Effective Date.................................................     6
    1.21   Eligible Employee..............................................     6
    1.22   Emergency Care.................................................     7
    1.23   Employee.......................................................     7
    1.24   Experimental or Investigational................................     8
    1.25   Employee-Participant...........................................     8
    1.26   ERISA..........................................................     8
    1.27   Family.........................................................     8
    1.28   Flex Plan......................................................     8
    1.29   FMLA...........................................................     9
    1.30   Home Health Care Agency........................................     9
    1.31   Hospice Agency.................................................     9
    1.32   Hospice Facility...............................................     9
</TABLE>

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<TABLE>
<S>        <C>                                                                <C>
    1.33   Hospital or Health Care Facility...............................     9
    1.34   Illness........................................................     9
    1.35   Injury.........................................................    10
    1.36   Immunization...................................................    10
    1.37   Inpatient......................................................    10
    1.38   Maternity......................................................    10
    1.39   Medical Plan...................................................    10
    1.40   Medically Necessary............................................    10
    1.41   Mental Health Condition........................................    11
    1.42   Network........................................................    11
    1.43   Network Provider...............................................    11
    1.44   Non-Network Provider...........................................    12
    1.45   Normal Cost....................................................    12
    1.46   Office Visit...................................................    13
    1.47   Outpatient.....................................................    13
    1.48   Outpatient Facility............................................    13
    1.49   Participant....................................................    13
    1.50   Physician......................................................    13
    1.51   Plan...........................................................    14
    1.52   Plan Administrator or Administrator............................    14
    1.53   Pre-Admission Certification....................................    14
    1.54   Pre-Admission Review...........................................    14
    1.55   Primary Residence..............................................    14
    1.56   Provider.......................................................    14
    1.57   Psychiatric Facility...........................................    14
    1.58   Related Company................................................    14
    1.59   Retirement Plan................................................    15
    1.60   Retired Participant............................................    15
    1.61   Review Deductible..............................................    15
    1.62   Schedule of Benefits...........................................    15
    1.63   Schedule of Covered Dental Expenses............................    16
    1.64   Services.......................................................    16
    1.65   Skilled Nursing Care...........................................    16
    1.66   Skilled Nursing Facility.......................................    16
    1.67   Spouse or Surviving Spouse.....................................    16
    1.68   Substance Abuse................................................    17
    1.69   Substance Abuse Treatment Facility.............................    17
    1.70   Therapy Services...............................................    17
    1.71   Treatment Plan.................................................    17
    1.72   Urgent Care Facility...........................................    17
    1.73   Vision Plan....................................................    18
    1.74   Year of Service................................................    18
</TABLE>


                                       ii

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<TABLE>
<S>        <C>                                                                <C>
ARTICLE 2. Eligibility and Participation..................................    18
    2.01   Eligibility and Participation..................................    18
    2.02   Dependents.....................................................    19
    2.03   Cessation of Participation.....................................    20
    2.04   Right to Conversion Coverage...................................    21
    2.05   HMO Options....................................................    21
    2.06   Enrollment; Contributions......................................    22
    2.07   Employee Assistance Program....................................    22
    2.08   Effect of Retirement...........................................    22
    2.09   BATUS Retail Merger............................................    31
    2.10   Qualified Medical Child Support Orders.........................    31
    2.11   American Tobacco Plan..........................................    33
    2.12   Medical Rule of 70 Coverage....................................    34
    2.13   Medical Rule of 70 Coverage - (Post-September 30, 2003
              Restructuring)..............................................    35
    2.14   Medical  Rule of 70  Coverage  -  (Special  Severance
              Pay Plan --  B&W/RJR  Business Combination).................    36
    2.15   Medical Rule of 70 (Contingent Coverage for Certain
              Former B&W Employees).......................................    38
    2.16   Medical Rule of 70 Coverage (BATIC Employees)..................    40

ARTICLE 3. Medical Plan...................................................    41
    3.01   In General.....................................................    41
    3.02   Schedule of Benefits...........................................    42
    3.03   Ambulance Services.............................................    49
    3.04   Dental Services................................................    50
    3.05   Durable Medical Equipment......................................    50
    3.06   Home Health Care...............................................    51
    3.07   Hospice Care...................................................    52
    3.08   Hospital Confinement Limitations...............................    54
    3.09   Hospital Inpatient Care........................................    54
    3.10   Infertility Diagnosis..........................................    55
    3.11   Mental Health Conditions.......................................    55
    3.12   Obstetrical Care...............................................    56
    3.13   Organ and Tissue Transplants...................................    56
    3.14   Other Covered Services.........................................    58
    3.15   Physician Services.............................................    60
    3.16   Prosthetic Devices.............................................    61
    3.17   Skilled Nursing Facility.......................................    61
    3.18   Substance Abuse Conditions.....................................    61
    3.19   Temporomandibular or Craniomandibular Joint Dysfunction........    62
    3.20   Therapy Services...............................................    62
    3.21   Wellness Program...............................................    62
</TABLE>


                                       iii

<PAGE>

<TABLE>
<S>        <C>                                                                <C>
ARTICLE 4. Deductibles and Annual Out-of Pocket Limit.....................    64
    4.01   Deductibles....................................................    64
    4.02   Annual Out-of-Pocket Limit.....................................    64

ARTICLE 5. Exclusions.....................................................    65
    5.01   Exclusions.....................................................    65

ARTICLE 6. Pre-admission Review, Continued Stay Review and Medical
              Case Management.............................................    69
    6.01   Pre-Admission and Continued Stay Review........................    69
    6.02   Medical Case Management........................................    70

ARTICLE 7. Prescription Drug Plan.........................................    71
    7.01   Prescription Drugs.............................................    71
    7.02   Pre-Authorization..............................................    73
    7.03   Definitions....................................................    73
    7.04   Prescription Drug Limitations..................................    73

ARTICLE 8. Dental Plan....................................................    74
    8.01   Dental Plan Options; Eligibility...............................    74
    8.02   Deductible.....................................................    75
    8.03   Limitations....................................................    75
    8.04   Cessation of Participation.....................................    75
    8.05   Dental Expenses Not Subject to Deductible......................    75
    8.06   Dental Expenses Subject to Deductible..........................    76
    8.07   Orthodontics...................................................    78
    8.08   Schedule of Covered Dental Expenses............................    78
    8.09   Predetermination of Dental Benefit Coverage....................    78
    8.10   Dentally Necessary.............................................    79
    8.11   Exclusions.....................................................    79

ARTICLE 9. Vision Plan....................................................    81
    9.01   Vision Care Benefits...........................................    81
    9.02   Exclusions.....................................................    82

ARTICLE 10. Continuation Coverage.........................................    83
   10.01   In General.....................................................    83
   10.02   Qualifying Event...............................................    84
   10.03   Qualified Beneficiary..........................................    85
   10.04   Newborn and Adopted Children...................................    85
   10.05   Period of Coverage.............................................    86
   10.06   Premium Requirements...........................................    87
   10.07   Insurability and Conversion Option.............................    87
</TABLE>


                                       iv

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<TABLE>
<S>        <C>                                                               <C>
   10.08   Qualified Beneficiary's Election...............................    87
   10.09   Notices........................................................    88

ARTICLE 11. Coordination of Benefits and Subrogation......................    89
   11.01   Coordination of Benefits.......................................    89
   11.02   "Primary-Secondary" Payment Rule...............................    89
   11.03   Medicare Eligibility...........................................    91
   11.04   Other Insurance or Health Plans................................    91
   11.05   Amounts Reduced Due to Application of Rules....................    91
   11.06   Third-Party Liability..........................................    91
   11.07   Subrogation and Reimbursement..................................    91
   11.08   Excess Payments................................................    93

ARTICLE 12. General Provisions............................................    93
   12.01   Rights and Benefits Not Assignable.............................    93
   12.02   Care Rendered Outside the U.S..................................    94
   12.03   Filing Deadlines...............................................    94
   12.04   Forfeiture of Unclaimed Benefits...............................    94
   12.05   Family and Medical Leave Act...................................    94
   12.06   Independent Agents.............................................    95
   12.07   Military Service...............................................    95
   12.08   Privacy Standards..............................................    95

ARTICLE 13. Plan Administration...........................................    97
   13.01   Named Fiduciary................................................    97
   13.02   Allocation of Fiduciary and Other Responsibilities.............    97
   13.03   Quorum and Voting; Procedures..................................    97
   13.04   Service in Multiple Capacities.................................    98
   13.05   Powers and Authority...........................................    98
   13.06   Powers of Plan Administrator...................................    98
   13.07   Powers of Benefit Finance Committee............................    99
   13.08   Advisors......................................................     99
   13.09   Powers not Exclusive...........................................    99
   13.10   Limitation of Liability; Indemnity.............................    99

ARTICLE 14. Amendment and Termination.....................................   100
   14.01   Amendment and Termination......................................   100

ARTICLE 15. Funding.......................................................   100
   15.01   Trust Agreement and Other Funding..............................   100
</TABLE>


                                       v

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<TABLE>
<S>                                                                          <C>
EXHIBIT A  SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
              WHO INCUR A "RESTRUCTURING TERMINATION".....................   1

SCHEDULE A - EFFECTIVE JANUARY 1, 2004  SCHEDULE OF BASIC PLAN
                DENTAL BENEFITS BASED ON CODE OF DENTAL PROCEDURES
                AND NOMENCLATURE PREPARED BY COUNCIL ON DENTAL
                CARE PROGRAMS OF ADA......................................   1

SCHEDULE B SCHEDULE OF OPTIONAL PLAN DENTAL BENEFITS......................   1
</TABLE>

                                    * * * * *


                                       vi

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                     BROWN & WILLIAMSON TOBACCO CORPORATION
                                HEALTH CARE PLAN
                             FOR SALARIED EMPLOYEES

                       (As Amended Through July 29, 2004)

                                    PREAMBLE

     BROWN & WILLIAMSON TOBACCO CORPORATION (the "Company") adopted the Brown &
Williamson Tobacco Corporation Comprehensive Health Care Plan and Separate
Options for Salaried Employees (the "Prior Plan"), effective as of July 1, 1988,
to provide health care benefits to Eligible Employees of Brown & Williamson
Tobacco Corporation, BATUS Inc., Brown & Williamson Industries, Inc., and
effective as of December 1, 1988, B.A.T Capital Corporation, and their eligible
dependents. Effective the close of business, December 31, 1990, health care
plans of certain companies previously included within a controlled group of
corporations with the Company were merged into this Plan for administrative
purposes, as set forth herein.

     Effective January 1, 1992, the Company amended and restated in its entirety
the Prior Plan under the name of the Brown & Williamson Tobacco Corporation
Health Care Plan for Salaried Employees (the "Plan") which incorporated into a
single plan document all plans providing self-insured health care benefits to
salaried employees of the Company and their eligible dependents. In particular,
effective as of such date, the Brown & Williamson Tobacco Corporation Health
Care, Dental and Vision Plan for Salaried Employees, as then in effect, was
merged with this Plan. Effective August 6, 2002, the ATCO Plan (as defined in
Section 2.11) was merged into this Plan.

     The Plan, as restated January 1, 1992, and as amended through December 16,
2002, was again restated to consolidate all amendments previously adopted, and
to incorporate certain technical and compliance revisions not previously
incorporated into the Plan, with effect from January 1, 2002 (except and to the
extent otherwise specifically noted in the Plan), which restatement was approved
and executed by an officer of this Company thereunto duly authorized, under date
of September 11, 2003.

     The Plan, as restated effective January 1, 2002, and as amended through
March 8, 2004, was further amended by resolution of the Board of Directors of
the Company adopted July 29, 2004. As so amended the Plan reads as follows:

                                   ARTICLE 1.

                                   Definitions

1.01 Annual Out-of-Pocket Limit.  The term "Annual Out-of-Pocket Limit" means
     the specific amount of specified Covered Charges paid by a Participant in a
     Benefit Period that is set

<PAGE>

     forth in Section 4.02. The calculation of the Annual Out-of-Pocket Limit
     shall not include any of the following: Copayments; Review Deductibles; any
     charges resulting from a reduction in benefits due to a Participant's
     failure to comply with the requirements of Section 6.01; or other charges
     and expenses not covered by the Plan, such as charges in excess of
     reasonable and customary fees, charges in excess of Plan maximums, and
     charges for non-Covered Services.

1.02 Ambulance.  The term "Ambulance" means an air or ground vehicle designed
     and used only for transporting the sick and injured that contains all life
     saving equipment and staff required by state and local laws.

1.03 Bed Patient.  The term "Bed Patient" means a Participant who must be
     confined to a Hospital or other institutional Provider and for whom a room
     and board charge is made.

1.04 Benefit Period.  The term "Benefit Period" means the period of time against
     which certain benefit allowances are measured. Each Benefit Period begins
     on the first day of January of each year and ends on the last day of
     December of the same year.

1.05 Claims Administrator.  The term "Claims Administrator" means a person or
     organization designated in accordance with Section 13.06(a)(5) to receive
     and administer claims. The Claims Administrator shall have discretionary
     authority to determine eligibility for benefits, including the approval and
     denial of claims filed by or on behalf of Participants for benefits under
     the Plan.

1.06 Code.  The word "Code" means the Internal Revenue Code of 1986, as amended
     from time to time.

1.07 Coinsurance.  The word "Coinsurance" means that percentage of Covered
     Charges which is payable by the Plan or a Participant during a Benefit
     Period, after any Deductible is paid, as set forth in the Schedule of
     Benefits. The calculation of Coinsurance does not include charges and
     expenses not covered by the Plan, such as charges in excess of reasonable
     and customary fees and charges for non-Covered Services.

1.08 Company.

(a)  The word "Company" means:

     (1)  Effective the date of closing (the "Closing") of the transactions
          contemplated by the Business Combination Agreement dated October 27,
          2003, between Brown & Williamson Tobacco Corporation and R.J. Reynolds
          Tobacco Holdings, Inc. (the "Business Combination"), Reynolds American
          Inc., and any successor thereto, and any Related Company that adopts
          the Plan (collectively, "RAI"); and

     (2)  Prior to Closing (as defined in paragraph (1) above), Brown &
          Williamson Tobacco Corporation, any successor thereto, and any Related
          Company that adopts the Plan.


                                       2

<PAGE>

     Effective immediately prior to Closing, Brown & Williamson Tobacco
     Corporation and each Related Company that had adopted the Plan prior to
     Closing shall be deemed to have withdrawn from and shall no longer maintain
     the Plan for its employees.

(b)  [Reserved].

1.09 Continuation Coverage.  The term "Continuation Coverage" means the coverage
     which a Participant may elect, at such Participant's sole expense, as
     provided in Article 10.

1.10 Continued Stay Review.  The terms "Continued Stay Review" means a review in
     which the Participant, subsequent to admission to a Hospital and/or
     commencement of a course of treatment, receives an assessment by a health
     care coordinator and/or a physician-advisor of the Medical Necessity of
     such admission and/or course of treatment.

1.11 Copayment.  The word "Copayment" means the set dollar amount a Participant
     must pay at the time certain Covered Services are rendered by a Network
     Provider, which shall not be more than the actual price of the Service. A
     separate Copayment is payable for each Network Physician's Office Visit,
     each Hospital Emergency Room visit, each Urgent Care Facility visit and
     each prescription. Copayments for Prescription Drugs are specified in
     Article 7 and Copayments for other Covered Services are specified in the
     Schedule of Benefits. Copayments do not count toward the Deductible or the
     Annual Out-of Pocket Limit.

1.12 Covered Charges.

(a)  The term "Covered Charges" means, (1) with respect to Network Providers,
     the negotiated fees that Network Providers have agreed to charge
     Participants for Covered Services; (2) with respect to the Basic Dental
     Plan, the fees set forth in Schedule A for Covered Services, subject to
     Article 8; (3) with respect to the Vision Plan, the fees set forth in
     Section 9.01 for Covered Services, subject to Section 9.02; and (4) travel
     expenses to the extent covered in Section 3.13.

(b)  The term "Covered Charges" means reasonable and customary fees for Covered
     Services payable by the Plan (a) to Non-Network Providers in accordance
     with column (c) of Section 3.02; (b) to Network and Non-Network Providers
     in accordance with column (d) of Section 3.02; and (c) to Providers under
     the Optional Dental Plan. The Claims Administrator shall have the sole
     authority and discretion to determine the amounts which constitute
     reasonable and customary fees. For purposes of this Section 1.12(b), a
     reasonable and customary fee is an amount that is equal to the lesser of:

     (1)  The fee most often charged in the geographical area where the Service
          was performed;

     (2)  The fee most often charged by the Provider for identical Services;

     (3)  The fee which is recognized as reasonable by a prudent person;


                                       3

<PAGE>

     (4)  The fee determined by comparing charges for similar Services to a
          national database adjusted to the geographical area where the Services
          or procedures were performed; or

     (5)  The fee determined by using a national relative value scale. Relative
          value scale means a methodology that values medical procedures and
          Services relative to each other that includes, but is not limited to,
          a scale in terms of difficulty, work, risk, as well as the material
          and outside costs of providing the Service, as adjusted to the
          geographic area where the Services or procedures were performed.

(c)  Covered Charges are subject to all provisions of the Plan, including
     limitations and exclusions. The Plan shall treat a Covered Charge as
     incurred on the date the Covered Service was provided. No fee, expense or
     other charge shall be a Covered Charge unless it is incurred by a
     Participant for Covered Services.

1.13 Covered Services.

(a)  The term "Covered Services" means, the Services specifically described in
     the provisions setting forth the Plan's benefits, subject to subsection
     (b).

(b)  Except as expressly provided otherwise in Sections 3.07, 3.14(c), 3.14(j)
     and 3.21, a Service shall not be a "Covered Service" under the Plan unless
     (1) the Service is incurred by a Participant due to Injury or Illness; (2)
     the Service is expressly covered by the Plan; (3) the Claims Administrator
     determines that the Service is Medically Necessary (or dentally necessary
     as to the Dental Plan); (4) the Service is consistent with the condition
     for which the Participant is being treated; and (5) the Service is ordered
     or provided by a Physician. Covered Services are subject to Articles 5 and
     6 and the other limits, exclusions, terms and conditions set forth in the
     Plans.

1.14 Custodial Care.  The term "Custodial Care" means care which is not
     primarily provided for its therapeutic value in the treatment of an Illness
     or Injury, but which is minimal, ambulatory, or part-time care Services, or
     Services designed to assist in the activities of daily living. Custodial
     Care includes, but is not limited to, help with walking, dressing, bathing,
     eating, toileting, preparing special diets, taking medication and
     supervision over self administration of medications not requiring constant
     attention of trained medical personnel, without regard to whether a
     Physician has prescribed, recommended or performed such Services.

1.15 Deductible.  The word "Deductible" means, with respect to the Medical Plan,
     the dollar amount of Covered Charges specified in Section 4.01 that must be
     paid by a Participant before the Plan will pay any Covered Charge during a
     Benefit Period. The word "Deductible" means, with respect to the Dental
     Plan, the dollar amount of Covered Charges specified in Section 8.02 that
     must be paid by a Participant before the Plan will pay any Covered Charges
     listed in Sections 8.06 and 8.07. The calculation of a Participant's
     Deductible shall not include any Copayments, Review Deductibles, or other
     charges and expenses not covered by the Plan, such as charges in excess of
     reasonable


                                       4

<PAGE>

     and customary fees and charges for non-Covered Services. The calculation of
     a Participant's Medical Plan Deductible shall not include any Dental Plan
     Deductible paid by the Participant, and the calculation of a Participant's
     Dental Plan Deductible shall not include any Medical Plan Deductible paid
     by the Participant.

1.16 Dental Benefits.  The term "Dental Benefits" means those benefits
     specifically provided under the Dental Plan set forth at Article 8, subject
     to all terms and conditions contained herein.

1.17 Dentist.  The word "Dentist" means a Doctor of Dental Surgery (DDS), Doctor
     of Dental Medicine (DDM), or Doctor of Dental Science (DS) who is duly
     licensed by the applicable licensing authority.

1.18 Dependent.

(a)  The word "Dependent" means an Employee-Participant's, or a Retired
     Participant's (subject to Section 2.08), spouse, any unmarried child under
     age 21, any unmarried child under age 25 who attends school as a full-time
     student, and any eligible unmarried handicapped child. Notwithstanding any
     other provision of this Section 1.18, an individual shall be classified as
     a Dependent if and only if that individual is a dependent of the
     Employee-Participant within the meaning of section 152 of the Code, except
     that this sentence shall not apply to any child for whom the
     Employee-Participant or the spouse-Participant has a legal obligation,
     under a divorce decree or other court order, to provide health care
     expenses. The term "child" includes a natural child, a stepchild and a
     legally adopted child. Subject to the above age restrictions, the term
     "child" also includes a child for whom legal guardianship (which includes
     the obligation to provide health care expenses) has been awarded to the
     Employee-Participant, and any child for whom the Employee-Participant or
     the spouse-Participant has a legal obligation, under a divorce decree or
     other court order, to provide health care expenses. A child will be
     considered handicapped if, but only if, the Claims Administrator determines
     that he or she satisfies each of the following requirements: (1) the child
     is not able to earn his or her own living because of a mental or physical
     disability that is expected to continue indefinitely; (2) such disability
     commenced while the child was a Dependent-Participant and prior to the
     child's attaining age 21, or age 25 if he or she attends school as a
     full-time student; and (3) the child depends on the Employee-Participant
     for more than 50 percent of his or her support. A child shall not be
     eligible for Dependent coverage if the child is married. The Plan may
     require proof of a child's marital status and handicapped status from time
     to time.

(b)  "Dependent" excludes anyone covered as an Employee or Retired Employee.
     Effective prior to November 1, 2001, the term "Dependent" excluded anyone
     in active military service, subject to Section 12.07. No
     Employee-Participant shall be eligible for benefits as a
     Dependent-Participant, and no Dependent-Participant shall be eligible for
     benefits as an Employee-Participant. No person may be a Dependent of more
     than one Employee (except in case of divorce).


                                       5

<PAGE>

(c)  The term "adopted child" as used in subsection (a) above shall include
     dependent children placed with an Employee-Participant for adoption,
     irrespective of whether the adoption has become final. For this purpose the
     words "placed" or "placement" mean the assignment and retention by the
     Employee-Participant of a legal obligation for total or partial support of
     such child in anticipation of adoption of such child.

(d)  The Claims Administrator shall determine in its sole discretion whether a
     child is a full-time student. The determination of a child's status as a
     full-time student shall be based on such verification from the child's
     school as the Claims Administrator shall deem appropriate, based on the
     following guidelines:

     Verification shall be provided to the Claims Administrator twice each Plan
     Year, but not more than once with respect to the same semester or similar
     academic period ("verification period"). Verification will be satisfactory
     only if the student is enrolled as a full-time student as defined by the
     school (generally, for at least 12 hours of credit during the verification
     period), except as follows: If a student qualifies as a junior or a senior
     (as defined by the school), the Claims Administrator will take into account
     special circumstances resulting in enrollment in fewer than 12 hours in any
     verification period such as the unavailability of required courses.

1.19 Dependent-Participant.  The term "Dependent-Participant" means a Dependent
     who is a Participant.

1.20 Effective Date.  The term "Effective Date" means the day, month and year a
     given Participant's coverage begins.

1.21 Eligible Employee.

(a)  The term "Eligible Employee" means any Employee; provided, however, that an
     Employee shall not be eligible during any period in which such Employee is:

     (1)  employed on a temporary or seasonal basis;

     (2)  employed on a part-time basis (i.e., the Employee's normal and
          customary work week is less than 40 hours per week), except Prime-Time
          Employees as defined in Section 1.23(a);

     (3)  included in a unit subject to collective bargaining unless the
          applicable collective bargaining agreement provides otherwise;

     (4)  a non-resident alien who receives no earned income (within the meaning
          of Section 911(d)(2) of the Code) from the Company which constitutes
          earned income from a source within the United States (within the
          meaning of Section 861(a)(3) of the Code); or


                                       6

<PAGE>

     (5)  covered by another health care plan of the Company or a Related
          Company that provides similar health care coverage, unless and to the
          extent the Employee and the Company have agreed otherwise in writing.

(b)  The term "Eligible Employee" shall not, except with respect to the Optional
     Dental Plan described in Article 8, include any employee whose primary
     employment duties with the Company relate to a business operation which,
     prior to March 1, 1995, was part of the American Tobacco Company or Golden
     Belt Manufacturing Company.

1.22 Emergency Care.  The term "Emergency Care" means the first treatment given
     in a Hospital emergency room for the treatment of a sudden and, at that
     time, unexpected Illness or Injury manifesting itself by acute symptoms of
     sufficient severity that the absence of immediate medical attention could
     reasonably result in (a) permanently placing the Participant's life in
     jeopardy, (b) causing other serious medical consequences, (c) causing
     serious impairment to bodily functions, or (d) causing serious and
     permanent dysfunction of any body organ or part. The Claims Administrator
     shall determine in its sole discretion whether treatment constitutes
     Emergency Care, and its decision will be based on the symptoms at the time
     of treatment, as documented by the treating Physician. Emergency Care does
     not include Ambulance charges.

1.23 Employee.

(a)  Subject to subsections (b), (c) and (d) below, the term "Employee" means
     any individual who is classified by the Company as an employee of the
     Company for federal income tax withholding purposes and is either (1) a
     full-time salaried employee, or (2) a Prime-Time Employee. The term "full
     time salaried employee" means a salaried employee whose normal and
     customary work week is at least 40 hours per week. The term "Prime-Time
     Employee" means a part-time employee who works at least 20 hours per week
     and who has at least 5 years of prior continuous service with the Company
     as a full time salaried employee. The term "Employee" includes an
     hourly-paid employee if the Company has classified the employee as a
     salaried employee for purposes of eligibility under this Plan.

(b)  The term "Employee" excludes all employees of the Company employed within
     the State of Hawaii, except that full-time salaried employees within Hawaii
     shall be eligible for Dental Benefits.

(c)  Notwithstanding Section 1.23(a), the term "Employee" shall include any
     individual who is classified by the Company as a full-time salaried
     employee, who is a bona fide resident of Puerto Rico (within the meaning of
     Section 933 of the Code), and who is not domiciled in one of the fifty
     United States or the District of Columbia, if, but only if, such individual
     would be an employee of the Company for federal income tax purposes if he
     or she were a resident of the United States.

(d)  An individual who is determined by a governmental agency or court to be an
     employee of the Company for federal income tax withholding purposes, even
     though not previously so classified by the Company, shall be treated as
     such from the date of such final and


                                       7

<PAGE>

     nonappealable determination (even though the reclassification otherwise has
     an earlier effective date), but shall in all events be treated as an
     employee other than an "Employee."

1.24 Experimental or Investigational.

(a)  The word "Investigational" means any treatment, equipment, new technology,
     drug, device, supply, procedure, facility or Service that is not recognized
     as effective medical practice or that is being studied to determine if it
     should be used for patient care or whether it is effective. The Claims
     Administrator shall have the sole right to determine in its sole discretion
     what is Investigational.

(b)  In determining whether any treatment, equipment, new technology, drug,
     device, supply, procedure, facility or Service is Investigational, the view
     of the state or national medical communities shall be considered as well as
     whether:

     (1)  there has been final approval from the appropriate government
          regulatory bodies;

     (2)  scientific evidence permits conclusions concerning the effect on
          health outcome;

     (3)  the net health outcome for the patient is improved, as much or more
          than established alternatives; and

     (4)  improvement in the patient's condition would be attainable through the
          use of more conventional or widely recognized treatment alternatives.

     Treatment may be considered Investigational within this definition even if
     a Physician has previously prescribed, performed, ordered, recommended or
     approved such treatment. The Claims Administrator shall not be bound by any
     approval of the U.S. Food and Drug Administration (FDA), but any drugs or
     devices classified as investigational by the FDA shall be Investigational.
     Drugs or devices are Investigational if they not approved by the FDA for
     treatment of the condition for which they are prescribed.

1.25 Employee-Participant.  The term "Employee-Participant" means an Eligible
     Employee who is a Participant.

1.26 ERISA.  The acronym "ERISA" means the Employee Retirement Income Security
     Act of 1974, as amended from time to time.

1.27 Family.  The word "Family" means the Participant and one or more
     Dependents.

1.28 Flex Plan.  The term "Flex Plan" means the Brown & Williamson Tobacco
     Corporation Flexible Benefits Plan, a cafeteria plan within the meaning of
     Section 125 of the Code, as adopted effective as of July 1, 1988, and as
     amended from time to time thereafter. All terms of the Flex Plan, as
     amended from time to time, are incorporated fully by reference herein.


                                       8

<PAGE>

1.29 FMLA.  The term "FMLA" means the Family and Medical Leave Act of 1993, as
     amended from time to time.

1.30 Home Health Care Agency.  The term "Home Health Care Agency" means a
     Hospital or non-profit or public home health care agency that satisfies
     each of the following requirements: (1) it is licensed as a home health
     agency by the state where it operates, or is certified to participate in
     Medicare as a home health agency, (2) it primarily provides skilled nursing
     Services and other therapeutic Services supervised by a Physician or
     registered graduate nurse, (3) it maintains clinical records, and (4) it
     does not primarily provide Custodial Care or care for Mental Health
     Conditions.

1.31 Hospice Agency.  The term "Hospice Agency" means an organization which has
     the primary purpose of providing hospice Services and which either
     participates in the Network or satisfies the following requirements: (a)
     licensed and operated in accordance with the laws of the state in which it
     does business; (b) certified as a home health care agency under Titles XVII
     and XIX of the Social Security Act; (c) accredited by the joint Commission
     on Accreditation of Hospitals as a hospice; and (d) provides in-home health
     care Services which conform to the standards of a Hospice Program of Care
     as adopted by the Board of Directors of the National Hospice Organization.

1.32 Hospice Facility.  The term "Hospice Facility" means a facility or part
     of a facility the principal purpose of which is to provide Hospice Care,
     and which (a) is licensed and operated in accordance with the laws of the
     state in which it does business; (b) provides treatment by or under the
     care of Physicians whenever a Participant is in the facility; (c) keeps
     medical records of each patient; (d) has an ongoing quality assurance
     program; (e) provides 24-hour-a-day nursing Services under the direction of
     a registered nurse; (f) and has a full-time Administrator.

1.33 Hospital or Health Care Facility.

(a)  The terms "Hospital" or "Health Care Facility" mean a legally operated
     institution which is accredited by the Joint Commission on the
     Accreditation of Hospitals, and is supervised by a staff of Physicians, and
     provides 24-hour-a-day nursing Services by registered nurses and is
     primarily engaged in providing general or specialized medical/psychiatric
     care and treatment through medical, diagnostic and/or major surgical
     facilities on its premises or under its control.

(b)  In no event will the term "Hospital" include a nursing home or an
     institution or part of one which (1) is primarily a facility for
     convalescence, nursing, rest, or the aged; (2) furnishes primarily
     intermediate domiciliary or Custodial Care, including training in daily
     living routines; or (3) is operated as a school.

1.34 Illness.  The term "Illness" means a disorder or disease of the mind or
     body, including dental and vision conditions, which, if left untreated,
     will result in a deterioration of a Participant's state of health or body
     systems. For purposes of this Plan, the term "Illness" shall include
     pregnancy.


                                       9

<PAGE>

1.35 Injury.  The term "Injury" means an injury, including complications arising
     from that injury, to the body that is definite as to time and place and
     that is a sudden or unforeseen result of an external agent or trauma, and
     which is independent of Illness.

1.36 Immunization.  The term "Immunization" means any immunization or injection
     that is Medically Necessary, and the following without regard to Medical
     Necessity: diphtheria, pertussis, tetanus, polio, measles, chicken pox,
     mumps, rubella, hepatitis B, HIB, pneumonia, and influenza. The Plan
     Administrator may, based on generally accepted medical standards, add any
     other preventative injection treatment to the list of immunizations that
     will be provided without regard to Medical Necessity.

1.37 Inpatient.  A Participant who is a Bed Patient.

1.38 Maternity.  The term "Maternity" means normal pregnancy and delivery,
     ectopic pregnancy, miscarriage, cesarean section delivery and related
     medical complications.

1.39 Medical Plan.  The term Medical Plan" means the benefits specifically
     described in Articles 3 and 7 and Section 2.07, subject to the applicable
     Copayments, Deductibles, Coinsurance, Annual Out-of-Pocket Limits,
     Pre-admission Review, Continued Stay Review and Case Management rules and
     other limits, exclusions, terms and conditions set out in this Plan.

1.40 Medically Necessary.

(a)  The term "Medically Necessary" or "Medical Necessity" means a Service
     (including supplies, equipment and drugs) furnished by a Physician or
     Hospital or prescribed by a Physician, if, but only if, the Claims
     Administrator determines in its sole discretion that the Service is
     required for the diagnosis or treatment of the Participant's Illness or
     Injury. A Service shall be deemed "required" if, but only if,

     (1)  as to a diagnostic procedure, it is indicated by the health status of
          the Participant and is as likely to result in information that could
          affect the course of treatment as, and no more likely to produce a
          negative outcome than, any alternative Service, both as to the Illness
          or Injury involved and the Participant's overall health condition;

     (2)  as to treatment, it is as likely to produce a significant positive
          outcome as, and no more likely to produce a negative outcome than, any
          alternative Service, both as to the Illness or Injury involved and the
          Participant's overall health condition; and

     (3)  as to diagnosis and treatment, it is no more costly (taking into
          account all health expenses incurred in connection with the Service)
          than any alternative Service to meet the tests set forth in this
          definition.

(b)  To be "Medically Necessary" a Service must be consistent with the
     Participant's diagnosis and treatment, in accordance with standards of good
     medical practice, not solely for the convenience of the Participant or the
     Provider, and furnished in the least


                                       10

<PAGE>

     intensive type of medical care setting required by the Participant's
     medical condition. The fact that a Physician or another provider has
     furnished, prescribed, ordered, recommended or approved a Service does not
     of itself make the Service Medically Necessary. The determination of
     Medical Necessity shall be made by the Claims Administrator based on a
     review of the medical records describing the Participant's condition and
     treatment. When applied to the care of an Inpatient, Medical Necessity
     means that the Participant's medical condition or symptoms require that the
     Services cannot be safely provided as an Outpatient.

1.41 Mental Health Condition.  The term "Mental Health Condition" means a
     condition which manifest symptoms that are primarily mental or nervous,
     regardless of any underlying physical cause. A Mental Health Condition
     includes, but is not limited to, psychoses, neurotic and anxiety disorders,
     schizophrenic disorders, affective disorders, personality disorders, and
     psychological or behavioral abnormalities associated with transient or
     permanent dysfunction of the brain or related neurohormonal systems. In
     determining whether or not a particular condition is a Mental Health
     Condition, the Claims Administrator Plan may refer to the current edition
     of the Diagnostic and Statistical manual of Mental Conditions of the
     American Psychiatric Association, or the International Classification of
     Diseases (ICD) manual.

1.42 Network.

(a)  The term "Network" means certain Providers who have entered into agreements
     through which their fees and expenses for Covered Services are established,
     as follows:

     (1)  Prior to January 1, 2005, the Networks are: Secure Health Plan of
          Georgia (only for Participants employed at the Company's Macon,
          Georgia, facility); CIGNA (for Participants in Georgia, Tennessee,
          South Carolina and North Carolina, and, effective May 1, 2001, for
          Participants in Utah); Private Health Care System (for Participants in
          all states except Georgia, Tennessee, South Carolina, North Carolina
          and, prior to May 1, 2001, Utah); and the LifeSource Program for organ
          and tissue transplants.

     (2)  Effective beginning on January 1, 2005, the Networks are: (1) Secure
          Health Plan of Georgia only for Participants employed at the Company's
          Macon, Georgia facility; (2) CIGNA for all Participants in all states,
          and (3) the LifeSource Program for organ and tissue transplants.

(b)  If the Network applicable to a Participant is not a member of the
     LifeSource Program, then the above references to the LifeSource Program
     shall be deemed references to the transplant network, if any, in which the
     Participant's Network is a member. The CIGNA Network was formerly referred
     to as the PPN Network.

1.43 Network Provider.  The term "Network Provider" means a Provider that is a
     party to an agreement through which the Provider's fees, including the
     amount of any Copayment, for Covered Services are determined based on
     negotiated fee structures.


                                       11

<PAGE>

1.44 Non-Network Provider.  The term "Non-Network Provider" means a Provider
     that does not satisfy the definition of a Network Provider.

1.45 Normal Cost.

(a)  The term "Normal Cost" means, for each level of medical coverage provided
     under the Plan for Retired Participants, the total cost of such coverage
     (inclusive of claims cost and administrative expense), prior to the
     allocation of such cost between the Company and the Retired Participant (or
     Dependent, as applicable), determined as follows:

     (1)  for Retired Participants and Dependents under the age of 65 and not
          eligible for Medicare, Normal Cost is based on the "total
          active-Employee rate" for medical coverage in effect from time to time
          under the Plan, based upon the medical claims experience for all
          active Employee-Participants (and their Dependents) under age 65; and

     (2)  for Retired Participants and Dependents age 65 and above or eligible
          for Medicare, Normal Cost is the "Medicare supplement rate" in effect
          from time to time under the Plan, based upon the medical claims
          experience for all Retired Participants (and their Dependents) age 65
          and above.

(b)  Subject to subsection (c) below, the Normal Cost shall be adjusted from
     time to time in such amount as the Plan Administrator, in its sole
     discretion, deems necessary in accordance with sound actuarial practice.

(c)  Effective as of the closing date ("Closing Date") of the transactions
     contemplated by the Business Combination Agreement dated October 27, 2003,
     by and between Brown & Williamson Tobacco Corporation and R.J. Reynolds
     Holdings, Inc. ("Agreement"), the provisions set forth below shall apply.
     If the transactions contemplated by the Agreement do not occur, then this
     subsection (c) shall have no effect.

     (1)  The Normal Cost for Retired Participants and Dependents under the age
          of 65 and not eligible for Medicare (as described in subsection (a)(1)
          above) and the Normal Cost for Retired Participants and Dependents age
          65 and above or eligible for Medicare (as described in subsection
          (a)(2) above) shall be based on the 2004 Plan Year Normal Cost for
          each group, with future adjustments as described in paragraph (2)
          below.

     (2)  Commencing with Plan Year 2005, and for each subsequent Plan Year,
          annual increases in the Normal Cost shall be determined as follows:

          (A)  Normal Cost for Retired Participants and Dependents under the age
               of 65 and not eligible for Medicare (as described in subsection
               (a)(1) above) shall be limited to the annual increase applicable
               to the medical plan of Reynolds American Inc, or its affiliates,
               with the largest classification or group of active members that
               has credible experience (irrespective of actual increases in the
               total cost of coverage); provided that if experience


                                       12

<PAGE>

               for any such classification or group falls below the
               actuarially-determined threshold for credible experience, then
               future annual increases shall be limited to the percentage
               increase in the medical component of the CPI index applicable to
               the then current Plan Year, as published by the US Department of
               Labor (or other comparable index, if such index is discontinued
               or not available).

          (B)  Normal Cost for Retired Participants and Dependents age 65 and
               above or eligible for Medicare (as described in subsection (a)(2)
               above) shall be limited to the annual increase applicable to the
               medical plan of Reynolds American Inc, or its affiliates, with
               the largest classification or group of Medicare-eligible members
               that has credible experience (irrespective of actual increases in
               the total cost of coverage); provided that if experience for any
               such classification or group falls below the
               actuarially-determined threshold for credible experience, then
               future annual increases shall be limited to the percentage
               increase in the medical component of the CPI index applicable to
               the then current Plan Year, as published by the US Department of
               Labor (or other comparable index, if such index is discontinued
               or not available).

          For purposes of this paragraph (2), a medical plan with credible
          experience is defined as a plan having not fewer than 2,000 covered
          lives (i.e. employees, retirees and dependents) as of the beginning of
          any Plan Year

1.46 Office Visit.  The term "Office Visit" means medical care services rendered
     by a Physician in the Physician's office to a Participant for the
     examination, diagnosis or treatment of a covered Illness or Injury.

1.47 Outpatient.  The word "Outpatient" means a Participant who receives Covered
     Services while not a Bed Patient.

1.48 Outpatient Facility.  A permanent facility that is duly licensed by the
     appropriate governmental agencies to diagnose and treat Illnesses and
     Injuries and that is operating within the scope of its licenses, except
     that the term "Outpatient Facility" does not include (a) any facility that
     provides accommodations for patients to stay overnight, or (b) any
     independent lab or X-ray facility.

1.49 Participant.  The term "Participant" means any Eligible Employee or Retired
     Participant, and their Dependents, who participate in the Plan in
     accordance with Article 2 or Article 10.

1.50 Physician.  The term "Physician" means any Doctor of Medicine (MD) who is
     legally qualified and licensed to practice medicine and/or perform surgery.


                                       13

<PAGE>

1.51 Plan.  The term "Plan" means the Brown & Williamson Tobacco Corporation
     Health Care Plan for Salaried Employees, as set forth herein, and as
     amended from time to time thereafter.

1.52 Plan Administrator or Administrator.  The terms "Plan Administrator" or
     "Administrator" mean the Plan Administrator, as described in Section 13.01.

1.53 Pre-Admission Certification.  The term "Pre-Admission Certification" means
     a certification or decision arrived at through Pre-Admission Review in
     which a health care coordinator and/or a Physician advisor have determined
     that a Hospital admission and/or course of treatment is Medically
     Necessary.

1.54 Pre-Admission Review.  The term "Pre-Admission Review" means a review as
     provided under Section 6.01.

1.55 Primary Residence.  The place where a Participant resides for the majority
     of the Benefit Period with the intention of making his or her permanent
     home there and not for a temporary purpose.

1.56 Provider.

(a)  The term "Provider" means: (1) a practitioner who is licensed by the
     appropriate state agency to diagnose or treat Injuries and Illnesses and
     who provides Services within the scope of that license; (2) a facility,
     institution or clinic that is duly licensed by the appropriate state agency
     and is primarily established and operating within the scope of its license;
     and (3) an Ambulance Service.

(b)  Subject to subsection (a) above, the term "Provider" includes a Physician,
     Hospital, Dentist, Skilled Nursing Facility, podiatrist (DPM), anesthetist,
     nurse anesthetist, certified registered nurse, anesthetist, chiropractor,
     licensed clinical social worker, community home healthcare agency,
     independent clinical laboratory, independent radiology facility, licensed
     practical nurse, outpatient psychiatric facility, psychiatric hospital,
     registered nurse, rehabilitation facility, optometrist, pharmacy, midwife,
     doctor of osteopathy (DO), physical therapist, occupational therapist,
     speech pathologist (PO), Outpatient Facility, Urgent Care Facility,
     freestanding dialysis facility, or clinical psychologist (Ph.D.). The term
     Provider does not include a Participant or the Participant's spouse,
     parent, child, grandparent, grandchild, or any sibling by blood, marriage
     or adoption.

1.57 Psychiatric Facility.  The term "Psychiatric Facility" means a Provider
     primarily engaged in providing diagnostic and therapeutic Services for the
     treatment of Mental Health Conditions. The facility must be operated in
     accordance with the laws of the jurisdiction in which it is located and
     provide treatment by or under the care of Physicians whenever the patient
     is in the facility.

1.58 Related Company.  The term "Related Company" means any trade or business,
     whether or not incorporated, which, at the time of reference, is either a
     member of a controlled group of corporations within the meaning of section
     414(b) of the Code which includes


                                       14

<PAGE>

     Reynolds American Inc. (or prior to Closing (as defined in Section
     1.08(a)(1)) Brown & Williamson Tobacco Corporation), or is under common
     control with Reynolds American Inc. (or prior to Closing (as defined in
     Section 1.08(a)(1)) Brown & Williamson Tobacco Corporation) within the
     meaning of section 414(c) of the Code.

1.59 Retirement Plan.  The term "Retirement Plan" means a plan maintained by the
     Company and qualified under Section 401 of the Code, and shall include any
     other retirement plan designated by the Company.

1.60 Retired Participant.

(a)  The term "Retired Participant" means an Employee-Participant whose
     employment with the Company has terminated pursuant to the normal,
     disability or early retirement provisions of the Retirement Plan applicable
     to the Participant (except retirements under the "Rule of 60" or the "Rule
     of 65" as defined therein), or who is deemed to be a Retired Participant
     pursuant to Sections 2.08(c), 2.08(d), 2.12, 2.13, 2.14, 2.15 or 2.16 of
     this Plan; provided that such person is an eligible Employee-Participant in
     this Plan at the time of employment termination (except as provided in
     Sections 2.15 and 2.16).

(b)  The term "Retired Participant" shall not include any Employee-Participant
     whose right to benefits under the Retirement Plan is based on Years of
     Service, but not on age or disability, nor shall it include any
     Employee-Participant whose right to benefits under the Retirement Plan is
     based on the "Rule of 60", the "Rule of 65", or a similar provision of the
     Retirement Plan, except to the extent such Employee-Participant is a deemed
     Retired Participant under Section 2.08(c) or (d).

(c)  An Employee who is a Prime-Time Employee on the date of termination of
     employment shall not be a "Retired Participant" unless he or she has
     completed ten (10) Years of Service as a full-time salaried employee.

(d)  Except as provided in Section 2.08(c)(2) or Section 2.15, effective as of
     the Closing, the term "Retired Participant" shall exclude former employees
     of Brown & Williamson Tobacco Corporation (or a Related Company) who had
     not met the eligibility requirements of subsection (a) above as of the
     first to occur of: (1) termination of employment for any reason after
     Closing, or (2) commencement of regular employment with RAI (as defined in
     Section 2.01(b)(3)).

1.61 Review Deductible.  The term "Review Deductible" means the amount the
     Participant is responsible to pay for otherwise covered charges incurred
     for each failure to obtain or comply with a Pre-Admission Review and/or a
     Continued Stay Review.

1.62 Schedule of Benefits.  The term "Schedule of Benefits" means the schedule
     at Section 3.02, which sets forth the Copayments, Coinsurance and
     Deductibles payable by Participants each Benefit Period for Covered
     Services, based on whether the Covered Services are performed by Network
     Providers or by Non-Network Providers. Section


                                       15

<PAGE>

     3.02 is subject to Sections 2.08 and 4.02, Article 6 and the other limits,
     exclusions, terms and conditions of the Plan.

1.63 Schedule of Covered Dental Expenses.  The term "Schedule of Covered Dental
     Expenses" means the maximum benefits payable for dental Services and
     supplies when performed or prescribed by a Dentist or Physician, according
     to Schedules A and B.

1.64 Services.  The term "Services" means procedures, surgeries, exams,
     consultations, advice, diagnosis, referrals, treatment, room and board,
     tests, supplies, drugs, devices, Ambulance transportation and technologies
     rendered, dispensed or administered by Providers.

1.65 Skilled Nursing Care.  The term" Skilled Nursing Care" means care needed
     for Illness or Injury, which (a) requires the Services of skilled
     professional medical personnel, such as registered nurses or professional
     therapists, (b) is ordered by a Physician, and (c) is provided in
     accordance with a treatment plan approved by a Physician.

1.66 Skilled Nursing Facility.  The term "Skilled Nursing Facility" means a
     voluntary or proprietary institution which is primarily engaged in
     providing Skilled Nursing Care and related Services to Inpatients requiring
     convalescent and rehabilitative care, and which is licensed and operated in
     accordance with the laws of the jurisdiction in which it is located and
     meets the standards established by the Joint Commission of Accreditation of
     Hospitals and Related Facilities. Such care is rendered by or under the
     supervision of a Physician and eligibility for coverage is based on care
     rendered in compliance with Medicare established guidelines. A Skilled
     Nursing Facility is not, other than incidentally, a place that provides (
     a) Custodial Care, or (b) care or treatment of Mental Health Conditions,
     alcoholism, drug abuse or pulmonary tuberculosis.

1.67 Spouse or Surviving Spouse.

(a)  The terms "Spouse" or "Surviving Spouse" mean the spouse or surviving
     spouse of the Participant or Retired Participant; provided, however, that
     such a person claiming benefit under the Plan who is unable to produce a
     certificate of marriage issued by an appropriate civil authority shall be
     entitled to such benefits only if the Participant or Retired Participant
     with respect to whom a marriage relationship is claimed notified the Plan
     Administrator, in writing, of such marriage relationship and presented
     acceptable proof thereof to the Plan Administrator prior to the time
     benefits under the Plan are provided to the Spouse. The term "Spouse" shall
     also include a spouse who is legally separated from a Participant or
     Retired Participant until such time as such Participant and Spouse are
     legally divorced.

(b)  Notwithstanding subsection (a) above, if a Participant has been abandoned
     (within the meaning of local law), no person claiming spousal benefits
     arising under such relationship shall be treated as a Spouse or Surviving
     Spouse for any purpose under this Plan.


                                       16

<PAGE>

1.68 Substance Abuse.  The term Substance Abuse" means alcoholism, or
     dependence, addiction or abuse of: alcohol, chemicals, or drugs.

1.69 Substance Abuse Treatment Facility.  The term "Substance Abuse Treatment
     Facility" means a Provider that is primarily engaged in providing
     detoxification and rehabilitation treatment for Substance Abuse. The
     facility must be operated and licensed in accordance with the laws of the
     jurisdiction in which it is located and provide treatment by or under the
     care of Physicians whenever the patient is in the facility.

1.70 Therapy Services.

(a)  The term "Therapy Services" means Services or supplies used for the
     treatment of an Illness or Injury to promote the recovery of the
     Participant. Therapy Services include, but are not limited to:

     (1)  "Physical Therapy," which is the treatment by physical means,
          hydrotherapy, heat or similar modalities, physical agents,
          biomechanical and neurophysiological principles, and devices to
          relieve pain, restore maximum function, and prevent disability
          following Illness, Injury, or loss of a body part.

     (2)  "Respiratory Therapy," which is the introduction of dry or moist gases
          into the lungs for treatment purposes.

     (3)  "Speech Therapy," which is treatment rendered to restore speech loss
          or impairment to a person who has lost existing speech functions due
          to an Illness or Injury.

     (4)  "Cardiac Rehabilitation," which is the treatment provided to
          individuals who have suffered a heart attack, have had heart surgery,
          or other cardiac problems.

     (5)  "Occupational Therapy," which is a treatment program of prescribed
          activities, emphasizing coordination, designed to assist a person to
          regain independence, particularly in the normal activities of daily
          living, including occupational therapy rendered with respect to
          confinement in a Hospital as a Bed Patient for nervous and mental
          disorders and/or alcohol or drug abuse treatment.

(b)  [Reserved].

1.71 Treatment Plan.  The term "Treatment Plan" means a written report prepared
     by a Dentist showing the recommended treatment for any dental disease,
     defect, or injury to be rendered for a Participant while coverage under the
     Plan is in effect. It shall include supporting oral examination findings,
     X-rays, and a statement of charges.

1.72 Urgent Care Facility.  A permanent facility that is licensed and provides
     treatment by and under the supervision of Physicians for Injuries and for
     Illnesses which are, at the time, unexpected and not chronic.


                                       17

<PAGE>

1.73 Vision Plan.  The term "Vision Plan" means the benefits specifically
     described in Article 9, subject to all limits, exclusions, terms and
     conditions set forth in this Plan.

1.74 Year of Service.  The term "Year of Service" means a year of Qualifying
     Service counted under any Retirement Plan for an Eligible Employee. If an
     Employee or the Employee's beneficiary becomes eligible for a disability or
     death benefit under the Retirement Plan for Salaried Employees of Brown &
     Williamson Tobacco Corporation, then for the purpose of determining the
     cost of coverage under Section 2.08(b), such Participant's Years of Service
     shall include the number of years and months (rounded up to the next whole
     year) from the date of disability, or death, to normal retirement date.

                                   ARTICLE 2.

                          Eligibility and Participation

2.01 Eligibility and Participation.

(a)  Subject to subsection (b) below, an Employee who is otherwise an Eligible
     Employee shall automatically begin participating in the Plan on the date
     the Employee becomes an Eligible Employee, subject to elections available
     under the Flex Plan and under Section 8.01. Participation in the Plan under
     this subsection (a) includes the Medical Plan, the Prescription Drug Plan,
     the Dental Plan, the Vision Plan and the Employee Assistance Program. If an
     Eligible Employee is covered by another health plan of the Company or a
     Related Company that does not include vision care, such Eligible Employee
     shall automatically participate in the Vision Plan.

(b)  Except as otherwise provided in Section 2.01, the following eligibility
     rules shall apply:

     (1)  any Eligible Employee who is transferred from a business operation
          which, prior to March 1, 1995, was part of The American Tobacco
          Company or Golden Belt Manufacturing Company shall commence
          participation in the Plan as provided in this Section 2.01 on the
          later of March 1, 1995 or transfer to employment as an Eligible
          Employee; and

     (2)  former employees of Brown & Williamson Tobacco Corporation (or a
          Related Company) who are employed by RAI pursuant to the "Business
          Combination" at and after "Closing" (as such terms are defined in
          Section 1.08(a)) for a "transition period" (as defined in paragraph
          (3) below), and who were Participants in the Plan immediately prior to
          Closing, or who first become eligible to participate while in
          "transitional employment" (as defined in paragraph (3) below) (taking
          into account service before and after Closing), shall continue to be
          (or, as applicable, shall become) eligible to participate in the Plan
          in all respects until the first to occur of (i) termination of
          employment for any reason, or (ii) commencement of "regular
          employment" with RAI (as defined in paragraph (3) below).


                                       18

<PAGE>

     (3)  For purposes of this Plan, the term "regular employment" means full-
          or part-time ongoing employment with RAI that is not classified by RAI
          as transitional employment. An employee is considered to be in
          "transitional employment" if his or her employment is transferred to
          RAI in connection with the Business Combination and the employee is
          employed within the B&W Division of RAI for a limited period of time
          (a "transition period").

(c)  Any other provision of the Plan to the contrary notwithstanding, the
     following classes of workers are excluded from eligibility to participate
     in the Plan:

     (1)  Individuals engaged by the Company pursuant to contracts that identify
          them as independent contractors,

     (2)  Individuals who are not paid directly by the Company (or an affiliate
          of the Company),

     (3)  Individuals who are not on the Company's U.S. payroll,

     (4)  Individuals who are "leased employees" within the meaning of Internal
          Revenue Code Section 414(n) or (o),

     (5)  Individuals engaged pursuant to contracts that specify that they are
          not entitled to participate in the Plan,

     (6)  Individuals whom the Company does not treat as its employees for
          federal income tax withholding or employment tax purposes, except
          individuals described in Section 1.23(c), and

     (7)  Individuals whom the Company does not classify as its employees,
          regardless of whether a court or administrative agency subsequently
          concludes that they are common-law employees (or salaried employees)
          of the Company or a Related Company.

     (8)  any individual who was not an Employee of the Company as defined in
          Section 1.08(a)(2) immediately prior to Closing; and

     (9)  salaried Employees who enter into "regular employment" (as defined in
          Section 2.01(b)(3)) with RAI at and after Closing, effective the date
          such regular employment commences.

(d)  For purposes of this Plan, the date of hire of a secondee shall be the
     Employee's date of hire by any Related Company. A secondee is an individual
     who has been temporarily assigned by a Related Company, by whom he or she
     was previously employed, to perform services as an Employee.

2.02 Dependents.  A Dependent of an Employee-Participant shall become a
     Participant on the date such Employee becomes a Participant, or the date
     such person becomes a Dependent,


                                       19

<PAGE>

     whichever is later, provided such person is otherwise eligible under this
     Plan and the Flex Plan, such person has been properly enrolled pursuant to
     the Flex Plan, and the Employee agrees or has agreed to make required
     contributions for such Dependent coverage, if any. If permitted under the
     Flex Plan, a Dependent may become a Participant on a later date upon
     compliance with the requirements for participation set forth in the Flex
     Plan. If a Dependent ceases to be a Participant for any reason after the
     Dependent's Employee-Participant has become a Retired Employee, that former
     Dependent-Participant shall not again be eligible to become a
     Dependent-Participant.

2.03 Cessation of Participation.

(a)  Any Employee-Participant and his Dependents, and any Retired-Participant
     and his Dependents, shall cease to be Participants under this Plan at the
     earliest of the following applicable events:

     (1)  An election to cease participation under the Flex Plan.

     (2)  Termination of employment of the Employee-Participant for any reason,
          other than (A) retirement under a Retirement Plan, or (B) separation
          under, and subject to the terms of, a Company severance pay plan
          providing for the continuation of coverage for a term certain, in
          which event coverage shall terminate in accordance with the severance
          pay plan.

     (3)  An Employee ceases to be an Eligible Employee or transfers to an
          ineligible employment status or to a Related Company, provided that if
          any such Participant shall by reason of such transfer be immediately
          covered by another health care plan, participation under this Plan
          shall cease immediately;

     (4)  Military leave (except that this paragraph (4) shall not be effective
          after October 30, 2001);

     (5)  Layoff;

     (6)  Death of an Employee-Participant or a Retired Participant; provided,
          however, that, in the case of an Employee-Participant who is married
          at the time of death, coverage for Dependent-Participants may continue
          as follows:

          (A)  Coverage for a Surviving Spouse shall continue until the earlier
               of death or termination of the Plan,

          (B)  Coverage for a surviving Dependent child shall continue until
               such child is no longer a Dependent as defined in Article 1.

     (7)  Termination of the Plan;

     (8)  Termination of the Flex Plan in such a manner that benefits hereunder
          are thereby terminated.


                                       20

<PAGE>

     (9)  For a Dependent, when he ceases to be a Dependent, or, subject to
          Section 2.08, the date on which the related Employee-Participant's
          coverage terminates for any reason, if earlier;

     (10) Failure to make any required payments when due: or

     (11) If the Employee-Participant is on an unpaid FMLA leave, the date the
          Company determines the unpaid FMLA leave is terminated and the
          Employee-Participant does not return to work for the Company.

     (12) If a Dependent ceases to be a Participant for any reason after the
          Dependent's Employee-Participant has become a Retired Employee, that
          former Dependent-Participant shall not again be eligible to become a
          Dependent-Participant.

(b)  [Reserved].

2.04 Right to Conversion Coverage.

(a)  Upon termination of employment or Continuation Coverage (if any), an
     Employee-Participant shall be notified of his or her option to purchase
     coverage from an insurance company selected by the Company on a direct-pay
     basis with accumulated time under this Plan applicable against waiting
     periods normally required by that insurance company. The
     Employee-Participant must apply for this coverage within 31 days of such
     termination and pay for the coverage by making timely payment of the
     appropriate premium.

(b)  Such conversion option shall also be afforded to a Dependent-Participant
     who loses their status as a Dependent because of their attained age or
     marriage or, in the case of a Spouse, because of divorce, annulment or the
     like, and to a Dependent-Participant upon termination of Continuation
     Coverage (if any), provided, however, that such Dependent-Participant
     applies for such coverage within 31 days of termination of their status as
     a Dependent.

(c)  The conversion option described in this Section 2.04 shall be subject to
     the following additional rules: (1) The conversion option does not include
     any right to obtain vision, dental or employee assistance coverage. (2) The
     conversion option, (including continuing coverage under the conversion
     policy) is not available to any individual who is (or becomes) eligible for
     Medicare. (3) An individual shall not be eligible for the conversion option
     unless he or she has been covered under the Medical Plan for at least three
     full consecutive months. (4) An individual shall not be eligible for
     coverage under a conversion policy if the conversion policy carrier
     determines that the individual would be over insured.

2.05 HMO Options.

(a)  As an alternative means of providing health care benefits, the Plan may
     offer certain Participants the option of membership in one or more health
     maintenance organizations


                                       21

<PAGE>

     (HMOs), provided such Participant resides within an applicable HMO service
     area. Upon request of any Participant, the Plan Administrator shall provide
     the names and limited information regarding available HMOs. Upon receipt of
     such information, it shall be the Participant's responsibility to request
     further, detailed information directly from any such HMO.

(b)  If a Participant does enroll in an HMO, his, and, if applicable, his
     dependent's eligibility for benefits shall be limited to benefits provided
     by the HMO, and he shall no longer be eligible to receive benefits under
     the provisions of the Plan (with the exception of the Dental Plan and the
     Vision Plan, as long as no dental or vision coverage is provided under the
     HMO).

2.06 Enrollment; Contributions.  The Plan Administrator shall prescribe
     applicable enrollment forms, and shall determine from time to time the
     amount of required contributions under the Plan, if any.

2.07 Employee Assistance Program.  The Plan may offer Participants the option of
     utilizing an employee assistance program (EAP) to provide benefits
     including, but not limited to, short-term counseling and referral services.
     The Company may adopt more than one EAP and designate the program in which
     certain Participants are eligible to participate. To the extent an EAP is
     available to Participants, it shall, for all purposes, be deemed to be a
     part of the Plan and its provisions are hereby incorporated into the Plan
     by this reference. Upon request of any Participant, the Plan Administrator
     shall provide information regarding EAP availability.

2.08 Effect of Retirement.

(a)  Retiree Coverage/Benefits.  Subject to this Section 2.08 and subject to
     applicable Pre-Admission Review, Continued Stay Review and Case Management
     rules and other limits, exclusions, terms, conditions and pre-authorization
     requirements set out in this Plan, the Plan shall pay all Covered Charges
     incurred by a Retired Participant and his Dependent-Participants, subject
     to the following:

     (1)  If a Retired Participant has not attained age 65, the Plan benefits of
          the Retired Participant and his or her Dependent-Participants shall be
          determined as if the Retired Participant were an Employee, and Covered
          Charges shall be payable by the Plan in accordance with Section 3.01
          and column (b) or (c) of Section 3.02, subject to Sections 4.01 and
          4.02. The Retired Participant shall be covered under the Prescription
          Drug Plan in accordance with Article 7.

     (2)  Beginning on the date a Retired Participant attains age 65, the
          Retired Participant's and his or her Dependents' (regardless of age)
          Covered Charges shall be payable by the Plan in accordance with
          Section 3.01 and column (d) of Section 3.02, subject to Section
          4.01(a) and to the Annual Out-of-Pocket Limits for Network Providers
          set forth in Section 4.02(a). The amount of Covered Charges shall be
          determined in accordance with Section 1.12(b), whether performed by


                                       22

<PAGE>

          Network Providers or by Non-Network Providers. The Retired Participant
          shall be covered by the Prescription Drug Plan in accordance with
          Article 7.

     (3)  If a Retired Participant dies and is survived by a Spouse who was a
          Dependent-Participant at the time of the Retired Participant's death,
          the Surviving Spouse shall be eligible for coverage under the Plan as
          follows (regardless of the Retired Participant's age at the time of
          death):

          (A)  If the Surviving Spouse has not attained aged 65, the Surviving
               Spouse's benefits under the Plan shall be determined as if he or
               she were a Dependent of an Employee and the Covered Charges shall
               be payable by the Plan in accordance with Section 3.01 and column
               (b) or (c) of Section 3.02, subject to Sections 4.01 and 4.02.
               The Surviving Spouse shall be covered under the Prescription Drug
               Plan in accordance with Article 7.

          (B)  On and after the later of the date a Surviving Spouse attains age
               65 or becomes a Surviving Spouse, the Surviving Spouse's Covered
               Charges shall be payable by the Plan in accordance with Section
               3.01 and column (d) of Section 3.02, subject to Section 4.01(a)
               and to the Annual Out-of-Pocket Limits for Network Providers set
               forth in Section 4.02(a). The amount of the Covered Charges with
               respect to the Surviving Spouse shall be determined in accordance
               with Section 1.12(b), whether performed by Network Providers or
               Non-Network Providers. The Surviving Spouse shall be covered
               under the Prescription Drug Plan in accordance with Article 7.

     (4)  The coverage of Dependents of a Retired Participant shall be
          determined as follows:

          (A)  During the lifetime of the Retired Participant, the benefits of
               his or her Dependent-Participants shall be determined under
               either Section 2.08(a)(1) or 2.08(a)(2), which ever applies to
               the Retired Participant.

          (B)  If a Retired Participant dies, the following provisions shall
               apply:

               [i]  If the Retired Participant is survived by a Spouse who is a
                    Dependent-Participant, the benefits of the Surviving Spouse
                    shall be determined under either Section 2.08(a)(3)(A) or
                    2.08(a)(3)(B) above and the benefits of the Retired
                    Participant's non-Spouse Dependents shall be determined
                    under either Section 2.08(a)(3)(A) or 2.08(a)(3)(B), which
                    ever applies to the Surviving Spouse.

               [ii] If the Retired Participant is survived by a Spouse who is a
                    Dependent-Participant, and if the Surviving Spouse then dies
                    and is survived by a non-Spouse Dependent, the benefits of
                    the non-Spouse Dependent shall be determined under either
                    Section


                                       23

<PAGE>

                    2.08(a)(3)(A) or 2.08(a)(3)(B), whichever applied to the
                    Surviving Spouse at the time of the Surviving Spouse's
                    death.

               [iii] If a Retired Participant dies and is not survived by a
                    Spouse who is a Dependent-Participant, but is survived by
                    other Dependents (other than a Spouse), the benefits of the
                    Surviving Dependents shall be determined under either
                    2.08(a)(1) or 2.08(a)(2), whichever applied to the Retired
                    Participant at the time of his or her death.

     (5)  In all cases, coverage under the Dental Plan, the Vision Plan and the
          Employee Assistance Program for a Retired Participant and his or her
          Dependents shall cease as of the date of retirement or the date of
          termination due to disability.

(b)  Cost of Retiree Coverage.  Coverage for a Retired Participant (and
     Dependents, as applicable), shall in each case be subject to the applicable
     paragraph below. The following definitions and conditions shall apply to
     this subsection (b): (1) The word "hire" (and its derivatives) shall in
     each case refer to the most recent date of hire of the Employee-Participant
     by the Company; (2) The percentage share of the Normal Cost of coverage
     allocable to a Retired Participant and Dependents shall be determined as of
     the date the Employee-Participant becomes a Retired Participant (or date of
     death, where applicable), and the percentage share may not thereafter be
     increased. However, increases to the Normal Cost shall apply to the same
     extent such increases apply to the active Employee rate as established by
     the Company from year to year; and (3) If an Employee-Participant ceases to
     participate in the Plan because he is no longer an Eligible Employee, and
     he subsequently becomes an Eligible Employee, then his "most recent date of
     hire" is the date on which he subsequently becomes an Eligible Employee,
     except as follows: If an Employee-Participant who is a Rule of 60
     Participant ceases to participate in the Plan because he or she is no
     longer an Eligible Employee and such Rule of 60 Participant subsequently
     becomes an Eligible Employee, his or her "most recent date of hire" status
     shall be determined based on his or her "most recent date of hire" status
     on December 31, 1994. A "Rule of 60 Participant" is any
     Employee-Participant who was an active employee of the Company on January
     1, 1994 and who satisfies, or who the Company designates as having
     satisfied, the conditions for a "Rule of 60" retirement under the
     Retirement Plan for Salaried Employees of Brown & Williamson Tobacco
     Corporation on or before December 31, 1994.

     (1)  Post January 1, 1992 Rules: Retired Participant.  An
          Employee-Participant hired on or after January 1, 1992 who becomes a
          Retired Participant must pay the required premium in order to continue
          either Employee or Dependent coverage hereunder. The Retired
          Participant's maximum required premium shall be fifty percent (50%) of
          the Normal Cost of coverage for the Retired Participant, if covered,
          and any Dependent-Participant who is covered. For each Year of Service
          greater than ten (10), the Retired Participant's maximum required
          premium shall be decreased by two percent (2%), provided that the
          Retired Participant's required premium shall not fall below ten
          percent (10%) of the Normal Cost of coverage


                                       24

<PAGE>

          for such Retired Participant and Dependent-Participant. The Company
          paid portion of the Normal Cost of such coverage shall increase in
          proportion to the decrease to the Retired Participant's maximum
          premium but in no instance be greater than ninety percent (90%) of the
          Normal Cost of coverage for such Retired Participant and
          Dependent-Participant.

     (2)  Post January 1, 1992 Rules: Survivor Continuation Coverage.  A
          Dependent-Participant shall be eligible to continue Dependent coverage
          hereunder if, but only if, (A) the Dependent-Participant pays the
          required premium, and (B) the Dependent-Participant's related
          Employee-Participant was hired on or after January 1, 1992 and that
          Employee-Participant either dies while actively employed after
          becoming a participant in the Retirement Plan or dies after becoming a
          Retired Participant. The Dependent-Participant's maximum required
          premium shall be fifty percent (50%) of the Normal Cost of coverage
          for each such Dependent-Participant. For each Year of Service, based
          on the deceased Employee-Participant's Years of Service, greater than
          ten (10), the Dependent-Participant's required premium shall be
          decreased by two percent (2%), provided that the
          Dependent-Participant's required premium shall not fall below ten
          percent (10%) of the Normal Cost of coverage for each such
          Dependent-Participant. The Company paid portion of the Normal Cost of
          such coverage shall increase in proportion to the decrease to the
          Dependent-Participant's required premium but in no instance be greater
          than ninety percent (90%) of the Normal Cost of coverage for each such
          Dependent-Participant.

     (3)  Post December 1, 1986 Rules: Retired Participant.  The total cost of
          coverage will be paid by the Company with respect to Retired
          Participants who were hired on or after December 1, 1986, but prior to
          January 1, 1992.

     (4)  Post December 1, 1986 Rules: Dependent-Participant.  An
          Employee-Participant who is hired on or after December 1, 1986, but
          prior to January 1, 1992, and who becomes a Retired Participant with
          less than twenty-five (25) Years of Service, may continue Dependent
          coverage hereunder by paying the required premium with respect to such
          Dependent(s). The required premium shall be five percent (5%) of the
          Normal Cost of coverage for each Year of Service less than twenty-five
          (25), up to a maximum of fifty percent (50%).

          The Dependent-Participant, of an Employee-Participant hired on or
          after December 1, 1986 but prior to January 1, 1992 and who dies while
          actively employed after becoming a participant in the Retirement Plan,
          or who dies after becoming a Retired-Participant, must pay the
          required premium in order to continue the Dependent coverage
          hereunder. The Dependent-Participant's premium shall be five percent
          (5%) of the Normal Cost of coverage for each such
          Dependent-Participant for each Employee-Participant Year of Service
          less than twenty-five (25), up to a maximum premium of fifty percent
          (50%) of Normal Cost. If an Employee-Participant has at least 25 Years
          of Service, he is not obligated to pay any Dependent-Participant
          premium.


                                       25

<PAGE>

     (5)  Pre December 1, 1986 Rules.  The total cost of Dependent coverage will
          be paid by the Company with respect to Retired Participants who were
          hired prior to December 1, 1986. The total cost of Dependent coverage
          will also be paid by the Company with respect to an
          Employee-Participant hired prior to December 1, 1986 who dies while
          actively employed after becoming a participant in the Retirement Plan
          or who dies after becoming a Retired Participant.

     (6)  Key Employees With Grantor Trusts.  This paragraph 6 shall apply to
          any Retired Participant (i) who is a key employee (within the meaning
          of Code Section 419A(d)(3)) with respect to whom an additional reserve
          for post-retirement medical benefits under Code Section 419A(c)(2) has
          not been established by the Company and (ii) who is the grantor
          ("Grantor") of a trust established with State Street Bank and Trust
          Company, its successor or successors in trust, as trustee ("Trust
          Agreement"), which Trust Agreement is maintained, in whole or in part,
          to obtain continuing health coverage under the Plan for the Retired
          Participant. Notwithstanding any other provision of the Plan to the
          contrary, the Grantor (and Dependents, as applicable) shall be
          entitled to coverage as a Retired Participant only upon payment of the
          Normal Cost of such coverage. Such payment shall be paid by funds held
          in the Trust Agreement; provided that if the balance of the Trust
          Agreement at any time is or becomes insufficient to pay the Normal
          Cost, the Grantor (and Dependents, as applicable) shall, beginning on
          or as of the date of such insufficiency, be obligated personally to
          pay to the Plan the Normal Cost to continue such coverage.

     (7)  Prime-Time Employee Cost.  The following rules shall apply to a
          Retired Participant who was a Prime-Time Employee on the date of his
          or her termination of employment, without regard to his or her date of
          hire or years of service:

          (A)  In order to continue either Employee or Dependent coverage, the
               Retired Participant must pay 50% of the total of the Normal Cost
               of Coverage for the retired participant, if covered, and any
               Dependent-Participant who is covered.

          (B)  In order to continue Dependent-Participant coverage after the
               Retired Participant's death, any Dependent-Participant who is
               covered must pay 50% of the total of the Normal Cost of Coverage.

     (8)  Rehire of Retired Participant: Coverage and Cost.  Coverage as a
          Retired Participant under this Section 2.08 shall be suspended during
          any period of employment after retirement from the Company during
          which the Retired Participant has been rehired by the Company as an
          Eligible Employee; provided that upon a subsequent termination of
          employment, such Retired Participant shall be entitled to reactivate
          such coverage as a Retired Participant on the same basis and at the
          same premium percentage (if applicable) that applied to the Retired
          Participant prior to such suspension of Section 2.08 coverage (subject
          to any adjustments to the Normal Cost applied to all similarly
          classified Retired


                                       26

<PAGE>

          Participants); provided that if the Participant's service during such
          period of reemployment, when added to the Participant's prior service,
          results in a lower premium percentage, the lower premium percentage
          shall be applied.

          Likewise, a Retired Participant whose employment with the Company was
          terminated after becoming eligible for coverage as a Retired
          Participant under subsection (d) hereof, but whose coverage has not
          yet commenced, who is later rehired, may, upon a subsequent
          termination of employment, elect to receive coverage based on his or
          her original hire date (i.e. the Employee's hire date as defined in
          this subsection (b), determined prior to such rehire date), or rehire
          date if such date provides more valuable coverage. This paragraph (8)
          shall supercede any provision to the contrary contained in subsection
          (b) hereof.

(c)  Special Eligibility Provisions.  An Employee-Participant who terminates
     employment with the Company and is not a Retired Participant shall not be
     eligible for coverage under this Section 2.08 in any event or for any
     purpose (including, without limitation, retirement under a Retirement Plan
     pursuant to the Rule of 65 or otherwise), except as provided in Exhibit
     A-Section 2.05, subsection (d) of this Section 2.08, Plan Sections 2.12,
     2.13, 2.14, 2.15, or 2.16, and as follows:

     (1)  1990 Restructure.  An Employee-Participant who was age 50 but not yet
          55 on December 31, 1990, and who terminated employment prior to
          September 1, 1991, pursuant to the early retirement program made
          available under Section 3.03 of the Retirement Plan for Salaried
          Employees of Brown & Williamson Tobacco Corporation, shall be deemed
          to be a Retired Participant who qualifies for coverage under this
          Section 2.08 as of the date of such Employee-Participant's termination
          of employment.

     (2)  2001 Restructure.  If not otherwise qualified as a Retired Participant
          under any other provision of this Plan, an Employee-Participant who is
          eligible for and elects (A) the Special Early Retirement Incentive
          Benefit made available under Part I Section 4.04, or Part IV, Article
          V(q), of the Retirement Plan for Salaried Employees of Brown &
          Williamson Tobacco Corporation, (B) the incremental Supplemental
          Benefit made available under Section 3.02(e) of the Supplemental
          Pension Plan for Executives of Brown & Williamson Tobacco Corporation
          (or, if applicable, a similar benefit under a separate written
          agreement between the Company and the Employee-Participant), or (C) an
          alternative benefit provided to an Employee-Participant in connection
          with the Special Early Retirement Incentive Benefit program referred
          to above, shall be deemed to be a "Retired Participant" who qualifies
          for coverage under this Section 2.08 as of the date of such
          Employee-Participant's termination of employment (provided that in no
          event shall coverage be available under this paragraph (2) for an
          Employee-Participant who terminates employment with the Company
          (including employment with Reynolds American Inc., or its affiliates,
          after Closing (as defined in Section 1.08(a)(1)) prior to age 50).


                                       27

<PAGE>

     (3)  Petersburg Restructure.  A Petersburg Retiree shall be deemed a
          Retired Participant under this Section 2.08, except to the extent
          otherwise provided in this paragraph (3). A Petersburg Retiree is a
          former Employee at the Petersburg Branch, (i) who at the time of
          termination of employment was eligible for the Deferred Early
          Retirement Plan under the Petersburg Branch Closure Salaried Reduction
          in Force Plan ("RIF Plan"), effective February 1984, and (ii) who, in
          accordance with the RIF Plan, completed thirty or more full years of
          pensionable service. The following rules shall apply to a Petersburg
          Retiree:

          (A)  If the Petersburg Retiree is less than age 65, the Company shall
               pay the total cost of his or her coverage, and the Company shall
               pay 50% of the total cost of coverage for each of his or her
               Dependent-Participants. If the Petersburg Retiree is age 65 or
               older, he or she shall pay 100 percent of the total cost of his
               or her coverage and 100 percent of the total cost of coverage for
               each of his or her Dependent-Participants.

          (B)  A Dependent-Participant of a Petersburg Retiree shall cease being
               a Dependent-Participant covered under the Plan upon the earlier
               of (i) death of the Petersburg Retiree, or (ii) an event
               described in Section 2.03(7), (8) or (9).

(d)  Rule of 60.  An Employee-Participant (i) who is an active employee of the
     Company on January 1, 1994, (ii) who satisfies, or who the Company
     designates as having satisfied, the conditions for a "Rule of 60"
     retirement under the Retirement Plan for Salaried Employees of Brown &
     Williamson Tobacco Corporation on or before December 31, 1994, and (iii)
     retires prior to age 55 shall be deemed to be a Retired Participant who
     qualifies for coverage under this Section 2.08 (except that in all events
     participation in and all rights to benefits under the Dental Plan, the
     Vision Plan and the Employee Assistance Program shall cease as of the date
     of retirement) in accordance with and subject to the following rules and
     conditions:

     (1)  Coverage provided hereunder shall commence on the later of (A) the
          Employee-Participant's 50th birthday (subject to such
          Employee-Participant's election, as described in paragraph (3) below)
          or (B) his termination of employment by the Company prior to age 55.

     (2)  An Employee-Participant who is entitled to coverage by reason of this
          subsection (d) who terminates employment prior to age 50 may elect to
          receive coverage hereunder upon attainment of age 50 (or at any time
          thereafter). Such election must (A) be initiated by the
          Employee-Participant, (B) be in writing on a form approved by the Plan
          Administrator, (C) specify the date upon which coverage is to
          commence, and (D) be filed with the Plan Administrator at least 60
          days prior to the later of attainment of age 50 or the time such
          Employee-Participant elects for benefits to commence.


                                       28

<PAGE>

     (3)  In the event of the death prior to age 50 of an Employee-Participant
          who is entitled to coverage by reason of this subsection (d), any
          Dependent of such Employee-Participant may elect the coverage provided
          hereunder at the time such Employee-Participant would have attained
          age 50, and upon the terms and conditions set forth in paragraph (2)
          above; provided, however, that such Dependent qualified as a Dependent
          at the time such Employee-Participant terminated employment and
          continued to be a Dependent at the time of election.

     (4)  An Employee-Participant who is entitled to coverage by reason of this
          subsection (d) who terminates employment prior to age 50 may, subject
          to subsection (f) below, elect Dependent coverage hereunder upon
          attainment of age 50 (or at any time thereafter) and upon satisfaction
          of the election requirements in paragraph (2) above.

     (5)  The cost of coverage under this subsection (d) shall be determined in
          accordance with Section 2.08(b).

(e)  Nonforfeitability of Coverage for Certain Retired Participants.

     (1)  The rights and entitlement of an Employee-Participant (and eligible
          Dependents) to coverage as a Retired Participant (or Dependent) under
          subsections (a), (c) and (d) of this Section 2.08 shall become and be
          fully vested and nonforfeitable as of the date the
          Employee-Participant first satisfies the conditions set forth in the
          applicable provisions of this Section 2.08 for such coverage. The
          coverage to which an Employee-Participant shall be entitled as a
          Retired Participant shall be the coverage provided under the Plan to
          Retired Participants at and as of the time coverage as a Retired
          Participant becomes fully vested and nonforfeitable hereunder,
          regardless of whether the Employee-Participant retires at such time
          with a right to the immediate commencement of coverage (or, if
          applicable, is eligible to defer commencement of coverage), or
          subsequently retires with a right to the immediate commencement of
          coverage (or, if applicable, is eligible to defer commencement of
          coverage), and, except as provided in paragraph (2) below, regardless
          of any changes made to the Plan after the date such coverage becomes
          fully vested and non-forfeitable.

     (2)  At and after the time an Employee-Participant's right and entitlement
          to coverage as a Retired Participant becomes fully vested and
          non-forfeitable as provided in paragraph (1) above, the Company shall
          have no right or authority to modify, amend or terminate coverage as a
          Retired Participant under the Plan with respect to such
          Employee-Participant (and Dependents, as applicable); it being the
          intent of the Company that each Employee-Participant be guaranteed
          coverage at and during retirement based on all plan provisions in
          effect at the time the right and entitlement to such coverage becomes
          fully vested and nonforfeitable; provided, however, that amendments
          may be adopted by the Company with respect to coverage available to
          each such Employee-Participant as a Retired Participant to the extent
          that:


                                       29

<PAGE>

          (A)  overall coverage, after amendment, is the same as or greater than
               the coverage provided prior to amendment, except that no
               amendment shall cause an increase in any direct or indirect cost
               factor applicable to the eligible Employee-Participant at the
               time of vesting, including without limitation, deductibles,
               co-insurance, co-payments, annual and total out-of-pocket
               maximums, the method for determining Normal Cost under the Plan
               (as defined in Section 1.45 at and as of the time coverage as a
               Retired Participant becomes fully vested and nonforfeitable
               hereunder), the percentage of the Normal Cost allocable to a
               Retired Participant under Sections 2.08(b)(1)-(8), 2.12, 2.13,
               2.14, 2.15 or 2.16, the definition of Year of Service set forth
               in Section 1.74 as it pertains to determining the percentage of
               Normal Cost allocable to a Retired Participant, and similar
               direct and indirect participant costs; or

          (B)  changes are mandated by law.

     (3)  This subsection (e) shall be effective April 1, 2001, with respect to:
          (i) all actively employed Employee-Participants (whether actively
          employed on April 1, 2001, or subsequently employed in an eligible
          position), and (ii) all Retired Participants (and eligible Dependents)
          who are then receiving coverage, or who are eligible for and have a
          right to defer commencement of coverage, as a Retired Participant as
          of such date. In no event shall this Section 2.08(e) apply to or
          benefit any individual who is covered under a merged Plan as described
          in Section 2.09, Section 2.11 or Exhibit B-1.

General Rules for all Retired Participants:

(f)  If an Employee-Participant who is eligible to continue coverage under this
     Section 2.08, elects, at retirement, disability or a later date, not to
     continue coverage, such former Employee-Participant shall not thereafter be
     eligible for any coverage under this Section 2.08. Notwithstanding the
     preceding sentence, if an Employee-Participant refuses coverage under this
     Section 2.08 because he or she is covered as a Dependent of another
     Employee-Participant, such individual shall be eligible to participate
     under this Section 2.08 at such time as his or her Dependent coverage
     terminates, or at any earlier date; provided that such right shall be
     irrevocably forfeited if he or she does not notify the Company within
     thirty (30) days of such event.

(g)  Notwithstanding any other provision of the Plan, for purposes of this
     Section 2.08, the term Dependent is limited to an individual who qualified
     as a Dependent at the time such individual's related Employee-Participant
     became a Retired Participant. A former Employee-Participant shall become a
     Retired Participant on the earliest date he or she satisfies the definition
     of a Retired Participant under Section 1.60. To be covered, an eligible
     Dependent meeting this criteria must be a Dependent for whom coverage is
     elected at the time the related Employee-Participant becomes a Retired
     Participant or the date coverage is elected under Section 2.08(d).
     Otherwise, with the exception of a child born to an Employee-Participant or
     their Spouse within nine (9) months after retirement


                                       30

<PAGE>

     or termination of employment under Section 2.08(d), no Dependents may be
     added for coverage.

(h)  A former Employee-Participant who is eligible for coverage under this
     Section 2.08 may reject individual coverage under the Plan and continue
     Dependent coverage only, or vice versa, without regard to the Continuation
     Coverage provisions of Article 10. If a former Employee-Participant rejects
     coverage, then Dependent coverage and costs shall be determined under
     Section 2.08 as if the Employee-Participant were a retired Participant,
     except that Section 2.08(a)(3) and (4) shall apply as if the Retired
     Participant were deceased at the date he or she rejected coverage. If
     coverage is rejected, or if a Dependent ceases to be a Participant for any
     other reason after the Dependent's Employee-Participant has become a
     Retired Participant, the individual shall not again be eligible to become a
     Participant under this Section 2.08, except as follows: If an individual
     rejects coverage under the Plan and enrolls in Medicare Plus Choice, he or
     she may re-elect coverage under the Plan one time during any calendar year
     if they demonstrate to the Claims Administrator that (1) they were
     continuously enrolled in Medicare Plus Choice from the time coverage was
     discontinued under the Plan until the re-enrollment, and (2) they have
     discontinued Medicare Plus Choice upon re-enrollment in the Plan.

(i)  The provisions of Section 11.03 respecting eligibility for Medicare are
     incorporated in this Section 2.08 and made applicable to each Participant
     and/or Dependent having post-retirement coverage hereunder.

2.09 BATUS Retail Merger.

(a)  Effective the close of business, December 31, 1990, certain health care
     plans of companies formerly included within a controlled group of
     corporations with the Company were merged with this Plan for administrative
     purposes. Participants and beneficiaries under such plans, shall not be
     entitled to coverage under this Plan in any event, but shall continue to be
     covered under the terms of the merged plans, as set forth therein. The
     terms and conditions of such merger are set forth in Exhibit B to this
     Plan.

(b)  Effective immediately prior to Closing (as defined in Section 1.08(a)(1)),
     the health care plans identified in subsection (a) above and listed in
     Exhibit B to this Plan (the "BATUS Retail Plans") were transferred to a
     separate health care plan of Brown & Williamson Tobacco Corporation,
     together with all liabilities and assets related thereto. As of the time of
     transfer, the Plan shall have no obligation or duty with respect to such
     transferred plans.

2.10 Qualified Medical Child Support Orders.

(a)  Purpose: Pursuant to the ERISA Section 609(a), the following procedures for
     determining whether medical child support orders are qualified shall apply
     to this Plan. These procedures also apply to the administration of payments
     and other provisions under Qualified Medical Child Support Orders (QMCSOs).
     The Company may alter, amend or


                                       31

<PAGE>

     terminate these procedures and substitute alternative procedures to satisfy
     legal requirements.

(b)  Definitions: For purposes of the QMCSO requirements, the following terms
     have these meanings:

     (1)  "Qualified Medical Child Support Order" means a medical child support
          order which creates or recognizes an Alternate Recipient's right to
          receive benefits for which a participant or beneficiary is eligible
          under a group health plan, and has been determined by the Plan
          Administrator to meet the qualification requirements of subsection (c)
          below:

     (2)  "Medical Child Support Order" means any court judgment, decree or
          order (including approval of settlement agreement) which:

          (A)  provides for child support for a child of a participant under the
               group health plan, or

          (B)  provides for health coverage to such a child under state domestic
               relations law or enforces a law relating to medical child support
               as described in Section 1908 of the Social Security Act; and

          (C)  relates to benefits under this Plan.

     (3)  "Alternate Recipient" means any child of a participant who is
          recognized under a Medical Child Support Order as having a right to
          enroll in a group health plan with respect to the participant.

     (4)  "Plan" means the Brown & Williamson Health Care Plan for Salaried
          Employees, including all supplements and amendments in effect. Any
          term used in these QMCSO procedures and defined in the Plan shall have
          the meaning assigned to such term under the Plan.

(c)  General Requirements of a QMCSO: A QMCSO is a Medical Child Support Order
     which (i) is entered into on or after August 10, 1993, (ii) creates or
     recognizes an Alternate Recipient's right to, or assigns to an Alternate
     Recipient the right to, receive benefits for which an Employee-Participant
     or beneficiary is eligible, and (iii) the Plan Administrator has determined
     meets the requirements of paragraphs (1) and (2) below.

     (1)  A Medical Child Support Order to be qualified must clearly:

          (A)  specify the name and the last known mailing address (if any) of
               the Employee-Participant and the name and mailing address of each
               Alternate Recipient covered by the order;


                                       32

<PAGE>

          (B)  include a reasonable description of the type of coverage to be
               provided by the Plan to each Alternate Recipient, or the manner
               in which such type of coverage is to be determined;

          (C)  specify each period to which such order applies; and

          (D)  specify each plan to which such order applies.

     (2)  A Medical Child Support Order to be qualified must not require the
          Plan to provide any type or form of benefits or any option not
          otherwise provided under the Plan, except to the extent necessary to
          meet the requirements described in Section 1908 of the Social Security
          Act (relating to enforcement of state laws regarding child support and
          reimbursement of Medicaid).

(d)  Procedures: Upon receipt of a Medical Child Support Order, the Plan
     Administrator shall:

     (1)  Promptly notify in writing the Employee-Participant, each Alternative
          Recipient covered by the order, and each representative for these
          parties of the receipt of the Medical Child Support Order. Such notice
          shall include a copy of the order and these QMCSO procedures for
          determining whether such order is a QMCSO.

     (2)  Permit the Alternate Recipient to designate a representative to
          receive copies of notices sent the Alternate Recipient regarding the
          medical child support order.

     (3)  Within a reasonable period after receiving a Medical Child Support
          Order, determine whether it is a qualified order and notify the
          parties indicated in paragraph (1) above of such determination.

     (4)  Ensure that the Alternate Recipient is treated by the Plan as a
          beneficiary for purposes of ERISA, and in particular that the
          Alternate Recipient is considered a participant under the Plan for
          purposes of the reporting and disclosure requirements of part 1 of
          ERISA.

2.11 American Tobacco Plan.  Effective as of August 6, 2002, The American
     Tobacco Company Group Medical Insurance Plan (a.k.a. the Comprehensive Plan
     of American Tobacco Company) (the "ATCO Plan") was merged into and became a
     part of this Plan. The terms and conditions of coverage for participants
     and beneficiaries under the ATCO Plan, as in effect immediately prior to
     such merger, shall be determined solely by and be strictly limited to
     coverage provided under the ATCO Plan immediately prior to merger, and as
     it may be amended thereafter. The ATCO Plan consists of several self-funded
     plans and the following insurance company contracts: (a) Connecticut
     General Life Insurance Company policies: 0270833-02, 0270833-03 and
     0270833-04 (effective as of February 17, 1988, such policies were combined
     under a single "Combined Policy Certificate," designated as account
     #0270833); (b) Blue Cross Blue Shield of North Carolina group medical
     expense contract for "American Tobacco Company -- Reidsville Retirees,"
     with effect from February 1, 1991, contract #A79285; and (c) Blue Cross
     Blue


                                       33

<PAGE>

     Shield of South Carolina contract #15-02158-00-6 and #15-02158-01-5.
     Participants and beneficiaries under the ATCO Plan shall not be entitled to
     any benefits or rights under this Plan, except to the extent they were
     otherwise covered under the ATCO Plan immediately prior to this merger. The
     ATCO Plan is identified for ERISA purposes as plan #61-0144470/520.

2.12 Medical Rule of 70 Coverage.

(a)  This Section 2.12 applies to Employee-Participants: (i) whose employment is
     terminated by the Company due to a restructuring (as defined by the
     Company) and elect coverage hereunder in lieu of fifty percent (50%) of an
     available severance benefit (if applicable), (ii) who, at the date of
     actual termination of employment, are at least forty-five (45) years of age
     and whose age (in full years) and qualifying service (as defined in the
     Brown & Williamson Tobacco Corporation Salaried Employees Retirement Plan)
     equal at least seventy (70), and (iii) who are not otherwise eligible for
     coverage as a Retired Participant under Section 2.08 hereof as of the date
     of actual employment termination (an "eligible restructured
     Employee-Participant"). This Section 2.12 shall be effective beginning
     January 1, 2003. An Employee-Participant shall not be eligible to become an
     "eligible restructured Employee-Participant" under this Section 2.12 if the
     Employee's employment by the Company terminates after September 30, 2003.

(b)  Coverage provided under this Section 2.12 is subject to the following terms
     and conditions:

     (1)  Coverage.  The coverage provided hereunder is described in and limited
          to coverage provided under Section 2.08 for Retired Participants, and
          an eligible restructured Employee-Participant shall be treated as a
          Retired Participant for all purposes effective with the commencement
          of coverage and ending at the expiration of its term.

     (2)  Cost of Coverage.  Notwithstanding any provision of the Plan to the
          contrary (and in particular, subsection 2.08(b) thereof), the total
          cost of coverage hereunder, whether for the Employee-Participant or a
          Dependent, shall be paid by the Company.

     (3)  Duration of coverage.  Coverage shall be available for a maximum
          period of ten (10) years, measured from the commencement thereof.

     (4)  Dependent Eligibility.  Dependents of an eligible restructured
          Employee-Participant are eligible for Dependent coverage, provided
          they (i) were Dependents as of the date of actual employment
          termination of the eligible restructured Employee-Participant, (ii)
          continue to be a Dependent through and after the date of commencement
          of coverage hereunder, and (iii) otherwise satisfy the requirements of
          Section 2.08(g).


                                       34

<PAGE>

     (5)  Commencement of Coverage:  An eligible restructured
          Employee-Participant may designate the date coverage provided under
          this Section 2.12 shall commence; provided that once begun coverage
          shall continue without interruption until the expiration of its term
          (or until otherwise terminated under the terms of the Plan). Coverage
          shall commence without regard to pre-existing conditions, irrespective
          of the actual date of commencement. To initiate coverage, an eligible
          restructured Employee-Participant (or, if applicable, an eligible
          Dependent of a deceased Employee-Participant) must provide written
          notice to the Company not later than sixty (60) days prior to the
          desired coverage effective date.

2.13 Medical Rule of 70 Coverage - (Post-September 30, 2003 Restructuring).

(a)  This Section 2.13 applies to an Employee-Participant who is located in the
     Supply Chain & Manufacturing Department at Macon, Ga., and (i) who receives
     written notice from the Company during the period October 1, 2003 through
     December 31, 2003 that his/her employment is being terminated by the
     Company under a plan of restructuring (as defined by the Company), (ii) who
     under such plan is entitled to and elects coverage hereunder in lieu of
     fifty percent (50%) of a severance benefit available thereunder (subject in
     all events to the execution of a valid and binding release of
     employment-related claims against the Company), (iii) who, at the date of
     actual termination of employment, is at least forty-five (45) years of age
     and has been credited with at least ten (10) years of qualifying service
     (as defined in the Brown & Williamson Tobacco Corporation Salaried
     Employees Retirement Plan), (iv) whose age (in full years) and qualifying
     service at the date of actual employment termination equal at least seventy
     (70), and (v) who is not otherwise eligible for coverage as a Retired
     Participant under Section 2.08 as of the date of actual employment
     termination (referred to herein as an "eligible Section 2.13
     Employee-Participant").

(b)  Coverage provided under this Section 2.13 is subject to the following terms
     and conditions:

     (1)  Coverage.  The coverage provided hereunder is described in and limited
          to coverage provided under Section 2.08 for Retired Participants, and
          an eligible Section 2.13 Employee-Participant shall be deemed to be a
          Retired Participant for all purposes effective with the commencement
          of coverage.

     (2)  Cost of Coverage.  The cost of such coverage for each eligible Section
          2.13 Employee-Participant (and Dependent, as applicable) shall be
          determined in accordance with the applicable provision of Section
          2.08(b).

     (3)  Dependent Eligibility.  A Dependent of a Section 2.13
          Employee-Participant shall be eligible for Dependent coverage,
          provided he/she (A) was a Dependent as of the date of actual
          employment termination of the Section 2.13 Employee-Participant, (B)
          continues to be a Dependent through and after the date of commencement
          of coverage hereunder, and (C) otherwise satisfies the requirements
          for Dependent coverage under Section 2.08.


                                       35

<PAGE>

     (4)  Commencement of Coverage:  Coverage provided hereunder shall commence
          on the later of (i) the eligible Section 2.13 Employee-Participant's
          50th birthday (subject to his/her election, as described in paragraphs
          (B) and (C) below) or (ii) his or her actual termination of employment
          by the Company.

          (A)  An eligible Section 2.13 Employee-Participant who is entitled to
               coverage by reason of this Section 2.13 who terminates employment
               prior to age 50 may elect to receive coverage hereunder upon
               attainment of age 50 (or at any time thereafter). Such election
               must (i) be initiated by the eligible Section 2.13
               Employee-Participant, (ii) be in writing on a form approved by
               the Plan Administrator, (iii) specify the date upon which
               coverage is to commence, and (iv) be filed with the Plan
               Administrator at least 60 days prior to the later of attainment
               of age 50 or the time such eligible Section 2.13
               Employee-Participant elects for benefits to commence.

          (B)  In the event of the death prior to age 50 of an eligible Section
               2.13 Employee-Participant, any Dependent of such eligible Section
               2.13 Employee-Participant may elect the coverage provided
               hereunder at the time the eligible Section 2.13
               Employee-Participant would have attained age 50, and upon the
               terms and conditions set forth in this subsection (b); provided,
               however, that such Dependent qualified as a Dependent at the time
               such eligible Section 2.13 Employee-Participant terminated
               employment and continued to be a Dependent at the time of
               election.

          (C)  An eligible Section 2.13 Employee-Participant who terminates
               employment prior to age 50 may, subject to subsection 2.08(f),
               elect Dependent coverage hereunder upon attainment of age 50 (or
               at any time thereafter) and upon satisfaction of the eligibility
               rules in paragraph (3) above.

2.14 Medical Rule of 70 Coverage - (Special Severance Pay Plan -- B&W/RJR
     Business Combination).

(a)  This Section 2.14 applies to an Employee-Participant: (i) who receives
     written notice from the Company that his/her employment is being terminated
     under the provisions of the "Special Severance Pay Plan - B&W/RJR Business
     Combination" ("SSP"), (ii) who under the SSP is eligible to and elects
     coverage as a Retired Participant under Plan Section 2.08, pursuant to the
     terms of "Option 1" or "Option 2" described below (subject in all events to
     the execution of a valid and binding release of employment-related claims
     against the Company and the continuation of employment until the
     Participant's Release Date), (iii) who, at the date of actual termination
     of employment, is at least fifty (50) years of age and has been credited
     with at least ten (10) years of qualifying service (as defined in the Brown
     & Williamson Tobacco Corporation Salaried Employees Retirement Plan), (iv)
     whose age (in full years) and qualifying service at the date of actual
     employment termination equal at least seventy (70), and (v) who is not
     otherwise eligible for coverage as a Retired Participant as of the date of
     actual employment termination (or


                                       36

<PAGE>

     who is otherwise eligible for coverage as a Retired Participant as of such
     date and elects, in writing on a form approved by the Plan Administrator,
     to be included as an eligible Employee-Participant under this Section 2.14)
     (referred to herein as a "Section 2.14 Employee-Participant").
     Notwithstanding any other provision of the Plan to the contrary, a Section
     2.14 Employee-Participant shall be deemed to be and treated as a Retired
     Participant for all purposes under the Plan.

     (1)  Option 1: Option 1 is provided upon its election by the
          Employee-Participant under the SSP (subject to a reduction of 50% of
          the cash severance payment otherwise payable thereunder). Such
          election shall in all events be irrevocable as of the date of actual
          employment termination. Coverage under this Option 1 is subject to the
          following terms and conditions:

          (A)  Cost of Coverage.  The cost of such coverage for each Section
               2.14 Employee-Participant (and Dependent, as applicable) shall be
               20% of the Normal Cost of coverage.

          (B)  Dependent Eligibility.  A Dependent of a Section 2.14
               Employee-Participant shall be eligible for coverage as a
               Dependent, provided he/she [i] was a Dependent as of the date of
               actual employment termination of the Section 2.14
               Employee-Participant, [ii] continues to be a Dependent after the
               date of commencement of coverage hereunder, and [iii] otherwise
               satisfies the requirements for Dependent coverage under Section
               2.08.

          (C)  Commencement of Coverage.  The right to coverage as a Retired
               Participant (and Dependent, as applicable) shall be effective as
               of the effective date of a Section 2.14 Employee-Participant's
               election hereunder, and shall commence upon expiration of the
               period of Company-paid health care continuation coverage provided
               through the SSP.

     (2)  Option 2: Option 2 is provided upon its election by the
          Employee-Participant under the SSP (not subject to a reduction in
          amount of cash severance payable thereunder). Such election shall in
          all events be irrevocable as of the date of actual employment
          termination. Coverage under this Option 2 is subject to the following
          terms and conditions:

          (A)  Cost of Coverage.  The cost of such coverage for each Section
               2.14 Employee-Participant and Dependent shall be determined as
               follows:

               [i]  The entire cost of coverage for the Section 2.14
                    Employee-Participant shall be paid by the Company prior to
                    the date the Section 2.14 Employee-Participant attains age
                    65.

               [ii] Prior to the date a Dependent of a Section 2.14
                    Employee-Participant attains age 65, the Company shall pay
                    fifty percent (50%) of the Normal Cost of coverage for such
                    Dependent and the


                                       37

<PAGE>

                    Section 2.14 Employee-Participant (or Dependent, as
                    applicable) shall pay fifty percent (50%) of the Normal Cost
                    thereof.

               [iii] On and after the date a Section 2.14 Employee-Participant
                    attains age 65, the Normal Cost of coverage for the Section
                    2.14 Employee-Participant shall be paid entirely by the
                    Section 2.14 Employee-Participant.

               [iv] On and after the date a Dependent of a Section 2.14
                    Employee-Participant attains age 65, the Normal Cost of
                    coverage for such Dependent shall be paid entirely by the
                    Section 2.14 Employee-Participant (or Dependent, as
                    applicable).

          (B)  Dependent Eligibility.  A Dependent of a Section 2.14
               Employee-Participant shall be eligible for coverage as a
               Dependent, provided he/she [i] was a Dependent as of the date of
               actual employment termination of the Section 2.14
               Employee-Participant, [ii] continues to be a Dependent after the
               date of commencement of coverage hereunder, and [iii] otherwise
               satisfies the requirements for Dependent coverage under Section
               2.08.

          (C)  Commencement of Coverage.  The right to coverage as a Retired
               Participant (and Dependent, as applicable) shall be effective as
               of the effective date of a Section 2.14 Employee-Participant's
               election hereunder, and shall commence upon expiration of the
               period of Company-paid health care continuation coverage provided
               through the SSP.

(b)  [Reserved].

2.15 Medical Rule of 70 (Contingent Coverage for Certain Former B&W Employees).

(a)  This Section 2.15 applies to Employee-Participants who satisfy the
     following conditions (referred to individually as a "Section 2.15
     Employee-Participant"):

     (1)  the Section 2.15 Employee-Participant accepts regular full-time
          employment with RAI, or its affiliates, to take effect on or after the
          date of Closing of the transactions contemplated by the Business
          Combination (as defined in Section 1.08(a)), and transfers to such
          employment without interruption of service with the Company;

     (2)  upon such transfer, such Employee-Participant is eligible for coverage
          as an active employee under a health care plan of RAI as of the date
          of transfer (for him- or herself and eligible Dependents);

     (3)  such Employee-Participant would have satisfied the requirements for
          retiree coverage under a Medical Rule of 70 for this Plan as of
          December 31, 2005, had the Employee-Participant continued to
          participate in the Plan as an active Employee-Participant through
          December 31, 2005 [i.e., as of December 31, 2005,


                                       38

<PAGE>

          the Employee-Participant would have satisfied the following
          requirements: (i) attainment of age fifty (50), (ii) credit for at
          least ten (10) years of qualifying service (as defined in the Brown &
          Williamson Tobacco Corporation Salaried Employees Retirement Plan),
          and (iii) combined age (in full years) and qualifying service equal at
          least seventy (70)]; and

     (4)  such Employee-Participant accepts coverage under a health care plan of
          RAI (for him- or herself and eligible Dependents) for retirees, to the
          extent available.

(b)  A Section 2.15 Employee-Participant shall be entitled to elect coverage
     under the Plan as a Retired Participant upon the occurrence of any of the
     following conditions:

     (1)  such Employee-Participant's employment is involuntarily terminated by
          the Company without cause prior to satisfying the retiree health care
          eligibility rules of RAI, or

     (2)  such Employee-Participant retires from RAI, or its affiliates, after
          having satisfied the minimum age and service requirements for RAI
          retiree health care coverage (age 55 and 20 regular full-time years of
          service), and there is:

          (A)  no retiree health care plan of RAI, or its affiliates, available
               to the Section 2.15 Employee-Participant (or eligible
               Dependents), or such coverage is eliminated; or

          (B)  a reduction in the RAI retiree health care company contribution
               cap that exists at the date of Closing; or

          (C)  any RAI retiree health care plan design change (excluding premium
               adjustments and legally-mandated changes including changes to
               integrate the plan with Medicare revisions) that results, or
               could result, in a total increase of greater than 25% from the
               date of Closing of the actuarially equivalent value of
               Employee-Participant out-of-pocket costs as a percent of total
               eligible charges in the RJR Med Choice Comprehensive Plan;

          provided that, for a Section 2.15 Employee-Participant with respect to
          whom Section 2.08(b)(6) applies (pertaining to coverage and premium
          payments for key employees with grantor trusts), this subsection (b)
          and subsections (c) and (d) below shall not apply, and such Section
          2.15 Employee-Participant may elect coverage as a Retired Employee
          upon termination of employment with RAI, or its affiliates, and upon
          satisfaction of the requirements of subsections (a)(1), (a)(2) and
          (a)(3) above.

(c)  Coverage as a Retired Participant under this Section 2.15 shall be subject
     to the following additional rules:


                                       39

<PAGE>

     (1)  Cost of Coverage. The cost of such coverage for each Section 2.15
          Employee-Participant (and Dependent, as applicable) shall be 20% of
          the Normal Cost of coverage.

     (2)  Dependent Eligibility. A Dependent of a Section 2.15
          Employee-Participant shall be eligible for coverage as a Dependent,
          provided he/she [i] was a Dependent as of the date of Closing (as
          defined in Section 1.08(a)(1)) and [ii] otherwise satisfies the
          requirements for Dependent coverage under Section 2.08.

     (3)  Commencement of Coverage. The right to coverage as a Retired
          Participant (and Dependent, as applicable) shall be effective as of
          the effective date of a Section 2.15 Employee-Participant's election
          hereunder. A Section 2.15 Employee-Participant who elects and obtains
          coverage hereunder may, in no event, thereafter elect or obtain
          coverage under a retiree health care plan of RAI, or its affiliates.

(d)  Notwithstanding the foregoing provisions of this Section 2.15, in the event
     a Section 2.15 Employee-Participant (1) terminates employment voluntarily
     prior to having satisfied the minimum age and service requirements (age 55
     and 20 regular full-time years of service) for RAI retiree health care
     coverage, or (2) is terminated for cause, such Employee-Participant shall
     in no event be eligible for coverage as a Retired Participant hereunder.

2.16 Medical Rule of 70 Coverage (BATIC Employees).

(a)  This Section 2.16 applies to an Employee-Participant: (i) who transfers to
     transitional employment with RAI at Closing (as defined in Section 1.08(a))
     and thereafter, but on or prior to December 31, 2005, immediately accepts a
     position with BATIC, Inc. or any of its affiliates (collectively "BATIC"),
     (ii) who, at the date of actual commencement of employment with BATIC, is
     at least fifty (50) years of age, has been credited with at least ten (10)
     years of qualifying service (as defined in the Brown & Williamson Tobacco
     Corporation Salaried Employees Retirement Plan), and whose age (in full
     years) and qualifying service equal at least seventy (70), and (iii) whose
     employment is terminated (1) under the provisions of a severance plan
     comparable to the "SSP" described in Section 2.14 (referred to herein as
     the "BATIC SSP") or (2) by reason of retirement at or after age 55
     (referred to herein as a "Section 2.16 Employee-Participant").

(b)  Coverage as a Retired Participant under this Section 2.16 shall be subject
     to the following additional rules:

     (1)  Cost of Coverage.  The cost of such coverage for each Section 2.16
          Employee-Participant (and Dependent, as applicable) shall be 20% of
          the Normal Cost of coverage.

     (2)  Dependent Eligibility.  A Dependent of a Section 2.16
          Employee-Participant shall be eligible for coverage as a Dependent,
          provided he/she [i] was a Dependent as of the date of Closing (as
          defined in Section 1.08(a)(1)) and [ii] otherwise satisfies the
          requirements for Dependent coverage under Section 2.08.


                                       40

<PAGE>

     (3)  Commencement of Coverage.  The right to coverage as a Retired
          Participant (and Dependent, as applicable) shall be effective as of
          the effective date of a Section 2.16 Employee-Participant's election
          hereunder.

     (4)  Contingent on Reimbursement.  Coverage of an Employee-Participant
          under this Section 2.16 is contingent on BATIC's payment to the
          Company of the amount provided in that certain Reimbursement Agreement
          entered into by the Company and BATIC as of the Closing (as defined in
          Section 1.08(a)(1)) and in the event BATIC fails to make such payment,
          no coverage shall be provided to an otherwise eligible Section 2.16
          Employee-Participant.

(c)  Notwithstanding the foregoing provisions of this Section 2.16, in the event
     a Section 2.16 Employee-Participant (1) terminates employment voluntarily
     prior to having satisfied the minimum age and service requirements for
     health care coverage as a Retired Participant under this Plan, or (2) is
     terminated for cause, such Employee-Participant shall in no event be
     eligible for coverage as a Retired Participant hereunder.

                                   ARTICLE 3.

                                  Medical Plan

3.01 In General.

(a)  Subject to the applicable Copayments, Deductibles, Coinsurance, Annual
     Out-of-Pocket Limits, Pre-admission Review, Continued Stay Review and Case
     Management rules and other limits, exclusions, terms and conditions set out
     in this Plan, the Plan shall pay all Covered Charges incurred by
     Participants. The Schedule of Benefits below sets forth the amounts each
     Participant must pay each Benefit Period for Covered Charges. The amounts
     payable by the Plan as Covered Charges depend in part on whether the
     Covered Services are performed by Network Providers or by Non-Network
     Providers as set forth in the Schedule of Benefits. The Plan shall not pay
     any portion of any fees or expenses of Non-Network Providers which are in
     excess of Covered Charges determined in accordance with Section 1.12(b).
     Any reference in the Plan to the payment of Covered Charges or the coverage
     of Services by the Plan shall be subject to this Section 3.01.

(b)  The service area of each Network shall consist of certain counties and
     geographical areas designated from time to time by the Network
     administrator. Each Participant shall be covered by the Network that
     comprises the service area in which the Participant's Primary Residence is
     located. Column (b) of Section 3.02 shall apply when Covered Services are
     provided to a Participant by a Network Provider that is a member of the
     Network that covers such Participant. Column (c) of Section 3.02 shall
     apply when Covered Services are provided to a Participant by a Provider
     that is not a member of the Network that covers such Participant.

(c)  If, at the time Covered Services are rendered, a Participant's Primary
     Residence is in not within a Network service area, determined under
     subsection (b) above, the Participant


                                       41

<PAGE>

     shall pay Covered Charges by Non-Network Providers in accordance with
     column (c) of Section 3.02, except that (1) the Participant's Coinsurance
     amount shall be 20% rather than 30%, (2) the Network Deductible described
     in Section 4.01(a) shall apply, and (3) the Annual Out-of-Pocket Limits for
     Network Providers described in Section 4.02(a) shall apply. If, at the time
     Covered Services are rendered, a Participant's Primary Residence is not
     within a Network service area, determined under subsection (b) above, the
     Participant shall pay Covered Charges by Network Providers in accordance
     with column (b) of Section 3.02.

(d)  If a Participant requires Covered Services that the Claims Administrator
     determines are not available through a Network Provider in the Network
     service area in which the Participant's Principal Residence is located, the
     Participant may obtain such Covered Services from a Non-Network Provider
     and the Plan will pay the Non-Network Provider's Covered Charges in
     accordance with column (c) of Section 3.02, except that (1) the
     Participant's Coinsurance amount shall be 20% rather than 30%, (2) the
     Network Deductible described in Section 4.01(a) shall apply, and (3) the
     Annual Out-of-Pocket Limits for Network Providers described in Section
     4.02(a) shall apply.

(e)  If a Network Provider, who is providing Services to a Participant in a
     Network facility, selects a Non-Network Provider to provide Services
     related to those being provided by the Network Provider, and the
     Participant does not have an opportunity to choose a Network Provider for
     the related Services (such as radiologist, pathologist or anesthesiologist
     Services), then the Services, to the extent they are Covered Services,
     shall be covered under column (b) of Section 3.02.

3.02 Schedule of Benefits.  The benefits described in this Section 3.02 are
     subject to the applicable Copayments, Deductibles, Coinsurance, Annual
     Out-of-Pocket Limits, Pre-admission Review, Continued Stay Review and Case
     Management rules and other limits, exclusions, terms and conditions set out
     in this Plan.

<TABLE>
<CAPTION>
                                                                                           (d)
                                                                                  RETIRED PARTICIPANTS,
                                       (b)                       (c)              AGE 65 AND OLDER, AND
           (a)                  NETWORK PROVIDER             NON-NETWORK            THEIR DEPENDENTS
     COVERED SERVICES          Cost to Participant       Cost to Participant       Cost to Participant
--------------------------   ----------------------   ------------------------   ----------------------
<S>                          <C>                      <C>                        <C>
AMBULANCE
Air or ground                10% of Covered Charges   20% of Covered Charges,    10% of Covered Charges
                             after Deductible         subject to Network         after Deductible
                                                      Deductible and Network
                                                      Annual Out-of-Pocket
                                                      Limit
</TABLE>


                                       42

<PAGE>

<TABLE>
<CAPTION>
                                                                                           (d)
                                                                                  RETIRED PARTICIPANTS,
                                       (b)                       (c)              AGE 65 AND OLDER, AND
           (a)                  NETWORK PROVIDER             NON-NETWORK            THEIR DEPENDENTS
     COVERED SERVICES          Cost to Participant       Cost to Participant       Cost to Participant
--------------------------   ----------------------   ------------------------   ----------------------
<S>                          <C>                      <C>                        <C>
CHIROPRACTIC THERAPY
   Up to a combined          $10 Copayment            20% of Covered Charges,    10% of Covered Charges
   maximum benefit of                                 subject to Network         after Deductible
   $500 per calendar year                             Deductible and Network
                                                      Annual Out-of-Pocket
                                                      Limit

DENTAL SERVICES
   DMD or Dentist's          $10 Copayment            30% of Covered Charges     10% of Covered Charges
   Office, including                                  after Deductible           after Deductible
   surgical procedures
   performed in the office

   Inpatient Facility;       10% of Covered Charges   30% of Covered Charges     10% of Covered Charges
   Outpatient Facility;      after Deductible         after Deductible           after Deductible
   or Physician's
   Services rendered
   outside office setting

DIABETIC SUPPLIES
                             10% of Covered Charges   20% of Covered Charges,    10% of Covered Charges
                             after Deductible         subject to Network         after Deductible
                                                      Deductible and Annual
                                                      Out-of-Pocket Limit

DOCTOR'S OFFICE VISITS
(excluding Mental Health
   and Substance Abuse)

   For Illness or Injury,    $10 Copayment            30% of Covered Charges     10% of Covered Charges
   including surgical                                 after Deductible           after Deductible
   procedures performed in
   office

   Allergy Treatment         $10 Copayment            30% of Covered Charges     10% of Covered Charges
                                                      after Deductible           after Deductible
</TABLE>


                                       43

<PAGE>

<TABLE>
<CAPTION>
                                                                                           (d)
                                                                                  RETIRED PARTICIPANTS,
                                       (b)                       (c)              AGE 65 AND OLDER, AND
           (a)                  NETWORK PROVIDER             NON-NETWORK            THEIR DEPENDENTS
     COVERED SERVICES          Cost to Participant       Cost to Participant       Cost to Participant
--------------------------   ----------------------   ------------------------   ----------------------
<S>                          <C>                      <C>                        <C>
DURABLE MEDICAL
EQUIPMENT                    10% of Covered Charges   20% of Covered Charges,    10% of Covered Charges
                             after Deductible         subject to Network         after Deductible
                                                      Deductible and Network
                                                      Annual Out-of-Pocket
                                                      Limit

FAMILY PLANNING
   Office Visits,            $10 Copayment            30% of Covered Charges     10% of Covered Charges
   including tests,                                   after Deductible           after Deductible
   counseling and office
   surgical sterilization
   procedures

   Voluntary surgical        10% of Covered Charges   30% of Covered Charges     10% of Covered Charges
   sterilization             after Deductible         after Deductible           after Deductible
   procedures performed
   out of Physician's
   office

HOME HEALTH CARE
   Up to a maximum of 120    10% of Covered Charges   20% of Covered Charges,    10% of Covered Charges
   visits per Benefit        after Deductible         subject to Network         after Deductible
   Period                                             Deductible and Network
                                                      Annual Out-of-Pocket
                                                      Limit

HOSPICE CARE
  Inpatient and              10% of Covered Charges   20% of Covered Charges,    10% of Covered Charges
  Outpatient                 after Deductible         subject to Network         after Deductible
  Bereavement                                         Deductible and Network
  Counseling is limited                               Annual Out-of-Pocket
  to three counseling                                 Limit
  sessions

HOSPITAL EMERGENCY ROOM
(including
doctor's charge)             $50 Copayment (Waived    30% of Covered Charges     10% of Covered Charges
                             if admitted)             after Deductible           after Deductible
</TABLE>


                                       44

<PAGE>

<TABLE>
<CAPTION>
                                                                                           (d)
                                                                                  RETIRED PARTICIPANTS,
                                       (b)                       (c)              AGE 65 AND OLDER, AND
           (a)                  NETWORK PROVIDER             NON-NETWORK            THEIR DEPENDENTS
     COVERED SERVICES          Cost to Participant       Cost to Participant       Cost to Participant
--------------------------   ----------------------   ------------------------   ----------------------
<S>                          <C>                      <C>                        <C>
INFERTILITY TREATMENT
   Surgical procedures       $10 Copayment            30% of Covered Charges     10% of Covered Charges
   for diagnosis of                                   after Deductible           after Deductible
   infertility performed
   out of Physician's
   office

   Office Visits,            10% of Covered Charges   30% of Covered Charges     10% of Covered Charges
   including tests and       after Deductible         after Deductible           after Deductible
   office surgical
   procedures for
   diagnosis of
   infertility

INPATIENT HOSPITAL
FACILITY SERVICES            10% of Covered Charges   30% of Covered Charges     10% of Covered Charges
                             after Deductible         after Deductible           after Deductible

INPATIENT HOSPITAL
PHYSICIAN'S
VISITS/CONSULTANTS           10% of Covered Charges   30% of Covered Charges     10% of Covered Charges
                             after Deductible         after Deductible           after Deductible

INPATIENT HOSPITAL
PROFESSIONAL SERVICES        10% of Covered Charges   30% of Covered Charges     10% of Covered Charges
                             after Deductible         after Deductible,          after Deductible
                                                      subject to reduction for
                                                      multiple surgeries
</TABLE>


                                       45

<PAGE>

<TABLE>
<CAPTION>
                                                                                         (d)
                                                                                 RETIRED PARTICIPANTS,
                                      (b)                        (c)             AGE 65 AND OLDER, AND
           (a)                  NETWORK PROVIDER             NON-NETWORK           THEIR DEPENDENTS
     COVERED SERVICES         Cost to Participant        Cost to Participant      Cost to Participant
--------------------------   -----------------------   -----------------------   ---------------------
<S>                          <C>                       <C>                       <C>
LAB AND X-RAY SERVICES
(Facility and
Professional Services)

   Independent Lab and       10% of Covered Charges    20% of Covered Charges,   10% of Covered
   X-ray Facility and        after Deductible          subject to Network        Charges after
   Professional Services     (Includes in-network      Deductible and Network    Deductible
                             coverage for specimens    Annual Out-of-Pocket
                             referred to               Limit.
                             non-participating lab
                             by participating
                             doctor).

   Doctor's Office           No charge. Included in    30% of Covered Charges    10% of Covered
                             $10 per visit Copayment   after Deductible          Charges after
                             if performed and billed                             Deductible
                             by treating physician

   Hospital                  10% of Covered Charges    30% of Covered Charges    10% of Covered
                             after Deductible          after Deductible          after Charges
                                                                                 Deductible
MATERNITY
   Initial Office Visit      $10 Copayment             30% of Covered Charges    10% of Covered
   to determine pregnancy                              after Deductible          Charges after
                                                                                 Deductible

   All subsequent            10% of Covered Charges    30% of Covered Charges    10% of Covered
   prenatal visits,          after Deductible          after Deductible          Charges after
   postnatal visits and                                                          Deductible
   delivery Inpatient
   Hospital Birthing
   Center

   Licensed nurse midwife    10% of Covered Charges    20% of Covered Charges,   10% of Covered
                             after Deductible          subject to Network        Charges after
                                                       Deductible and Network    Deductible
                                                       Annual Out-of-Pocket
                                                       Limit
</TABLE>


                                       46

<PAGE>

<TABLE>
<CAPTION>
                                                                                         (d)
                                                                                 RETIRED PARTICIPANTS,
                                      (b)                        (c)             AGE 65 AND OLDER, AND
           (a)                  NETWORK PROVIDER             NON-NETWORK           THEIR DEPENDENTS
     COVERED SERVICES         Cost to Participant        Cost to Participant      Cost to Participant
--------------------------   -----------------------   -----------------------   ---------------------
<S>                          <C>                       <C>                       <C>
MENTAL HEALTH AND
SUBSTANCE ABUSE
CONDITIONS

   Inpatient Limited to      $10 Copayment             30% of Covered Charges    10% of Covered
   45 days per Benefit                                 after Deductible          Charges after
   Period                                                                        Deductible

   Outpatient Limited to     10% of Covered Charges    30% of Covered Charges    10% of Covered
   30 visits per Benefit     after Deductible          after Deductible          Charges after
   Period                                                                        Deductible

   Licensed clinical         10% of Covered Charges    20% of Covered Charges,   10% of Covered
   social worker             after Deductible          subject to Network        Charges after
                                                       Deductible and Network    Deductible
                                                       Annual Out-of-Pocket
                                                       Limit

NON-ELECTIVE ABORTION
   Inpatient Hospital or     10% of Covered Charges    30% of Covered Charges    10% of Covered
   Outpatient Facility,      after Deductible          after Deductible          Charges after
   including Physician's                                                         Deductible
   services

ORGAN TRANSPLANTS
   Facility Care,            10% of Covered Charges    30% of Covered Charges,   10% of Covered
   Physician Services and    after Deductible          after Deductible          Charges after
   other related                                                                 Deductible
   Providers Donor
   expenses

OUTPATIENT FACILITY
                             10% of Covered Charges    30% of Covered Charges    10% of Covered
                             after Deductible          after Deductible          Charges after
                                                                                 Deductible
OUTPATIENT
PHYSICIAN'S SERVICES         10% of Covered Charges    30% of Covered Charges    10% of Covered
at an Outpatient Facility    after Deductible          after Deductible          Charges after
                                                                                 Deductible
</TABLE>


                                       47

<PAGE>

<TABLE>
<CAPTION>
                                                                                         (d)
                                                                                 RETIRED PARTICIPANTS,
                                      (b)                        (c)             AGE 65 AND OLDER, AND
           (a)                  NETWORK PROVIDER             NON-NETWORK           THEIR DEPENDENTS
     COVERED SERVICES         Cost to Participant        Cost to Participant      Cost to Participant
--------------------------   -----------------------   -----------------------   ---------------------
<S>                          <C>                       <C>                       <C>
OUTPATIENT PRE-ADMISSION
TESTING

   Office Visit              $10 Copayment             30% of Covered Charges    10% of Covered
                                                       after Deductible          Charges after
                                                                                 Deductible

   Outpatient Facility       10% of Covered Charges    30% of Covered Charges    10% of Covered
                             after Deductible          after Deductible          Charges after
                                                                                 Deductible
OUTPATIENT PRIVATE
DUTY NURSING                 10% of Covered Charges    20% of Covered Charges,   10% of Covered
                             after Deductible          subject to Network        Charges after
                                                       Deductible and Network    Deductible
                                                       Annual Out-of-Pocket
                                                       Limit

PODIATRIC SERVICES
   Office Visits,            $10 Copayment             20% of Covered Charges,   10% of Covered
   including surgical                                  subject to Network        Charges after
   procedures performed in                             Deductible and Network    Deductible
   the office                                          Annual Out-of-Pocket
                                                       Limit

   Physician's Services      10% of Covered Charges    20% of Covered Charges,   10% of Covered
   rendered outside an       after Deductible          subject to Network        Charges after
   office setting                                      Deductible and Network    Deductible
                                                       Annual Out-of-Pocket
                                                       Limit

PROSTHETIC DEVICES
                             10% of Covered Charges    20% of Covered Charges,   10% of Covered
                             after Deductible          subject to Network        Charges after
                                                       Deductible and Network    Deductible
                                                       Annual Out-of-Pocket
                                                       Limit
</TABLE>


                                       48

<PAGE>

<TABLE>
<CAPTION>
                                                                                         (d)
                                                                                 RETIRED PARTICIPANTS,
                                      (b)                        (c)             AGE 65 AND OLDER, AND
           (a)                  NETWORK PROVIDER             NON-NETWORK           THEIR DEPENDENTS
     COVERED SERVICES         Cost to Participant        Cost to Participant      Cost to Participant
--------------------------   -----------------------   -----------------------   ---------------------
<S>                          <C>                       <C>                       <C>
SECOND OPINIONS FOR
SURGERY
                             $10 Copayment             30% of Covered Charges    10% of Covered
                                                       after Deductible          Charges after
                                                                                 Deductible
SKILLED NURSING FACILITY
   Up to a maximum of 60     10% of Covered Charges    30% of Covered Charges    10% of Covered
   days per calendar year    after Deductible          after Deductible          Charges after
                                                                                 Deductible
TEMPOROMANDIBULAR
JOINT DYSFUNCTION (TMJ)
   Office Visits,            $10 Copayment             30% of Covered Charges    10% of Covered
   including office                                    after Deductible          Charges after
   surgery                                                                       Deductible

   Facility care and         10% of Covered Charges    30% of Covered Charges    10% of Covered
   Physician's Services      after Deductible          after Deductible          Charges after
   outside office                                                                Deductible

THERAPY SERVICES
                             10% of Covered Charges    30% of Covered Charges    10% of Covered
                             after Deductible          after Deductible          Charges after
                                                                                 Deductible
URGENT CARE FACILITY
                             $10 Copayment             20% of Covered Charges,   10% of Covered
                                                       subject to Network        Charges after
                                                       Deductible and Network    Deductible
                                                       Annual Out-of-Pocket
                                                       Limit

WELLNESS PROGRAM
   Doctor's Office Visit     $10 Copayment             30% of Covered Charges    10% of Covered
                                                       after Deductible          Charges after
                                                                                 Deductible
</TABLE>

3.03 Ambulance Services.  The Plan covers Ambulance Services for Emergency Care.
     The Plan covers Ambulance Services for non-Emergency Care if the Claims
     Administrator determines that an Ambulance is Medically Necessary.


                                       49

<PAGE>

3.04 Dental Services.

(a)  The Plan covers dental Services, except implants, rendered by a Physician
     or dentist which are required as a result of Accidental Injury to the jaws,
     sound natural teeth, mouth or face occurring on or after the Participant's
     Effective Date. Injury as a result of chewing or biting is not considered
     an Accidental Injury. The term "sound natural teeth" means teeth that are
     organic (not manufactured), have not been extensively restored, and have
     not become extensively decayed or involved in periodontal disease. The Plan
     also covers certain oral surgical procedures as described in Section
     3.04(b).

(b)  The Plan covers the following oral surgical procedures: (1) Extraction of
     impacted teeth. (2) Excisions of tumors or cysts (when not related to
     dental origin). (3) Exostosis (when not related to dental origin). (4)
     Treatment of Illnesses and Injuries of the jaw including fractures and
     dislocations. If a Participant is not covered under the Medical Plan, but
     is covered under the Dental Plan, the benefits described in this subsection
     (b) shall be provided under the Dental Plan.

3.05 Durable Medical Equipment.

(a)  The Plan covers durable medical equipment for a Participant as follows:

     (1)  Durable medical equipment is equipment that the Claims Administrator
          determines to be (A) primarily and customarily used for medical
          purposes, (B) designed and able to withstand repeated used, (C)
          prescribed a Physician and Medically Necessary for the Participant.
          Examples of durable medical equipment include apnea monitors,
          breathing equipment, hospital-type beds, walkers, crutches and wheel
          chairs. Equipment will not be covered by the Plan, even if prescribed
          by a Physician, simply because its use has an incidental health
          benefit.

     (2)  The Plan covers the rental of durable medical equipment. The Plan may,
          at the option of the Claims Administrator, purchase durable medical
          equipment in lieu of its rental if the rental price is projected to
          exceed the purchase price. The Plan shall own purchased durable
          medical equipment and shall be entitled to its return upon termination
          of proper use by the Participant. The Plan covers necessary fittings,
          adjustments, delivery and installation of durable medical equipment.
          Coverage is also provided for necessary repairs to keep such equipment
          serviceable. Replacement coverage for durable medical equipment is not
          available unless the Claims Administrator determines that the
          equipment to be replaced can no longer be made serviceable. No
          coverage is provided for replacement of durable medical equipment that
          is lost or stolen. The Plan does not cover the replacement or repair
          of durable medical equipment if the Claims Administrator determines
          that the equipment is broken as a result of abuse or lack of
          maintenance.

     (3)  Items that are not considered durable medical equipment include, but
          are not limited to: air conditioners, air purifiers, humidifiers,
          dehumidifiers, elevators,


                                       50

<PAGE>

          ramps, stair glides, emergency alert equipment, handrails, heat
          appliances, improvements made to the participant's home or place of
          business, waterbeds, whirlpool, baths, exercise and massage equipment,
          and adjustments to vehicles.

(b)  [Reserved].

3.06 Home Health Care.

(a)  Home Health Care means medical care administered, pursuant to a treatment
     plan, by a Home Health Care Agency or a Hospital to a Participant in his or
     her home. The Plan does not cover Home Health Care unless the Plan has
     received a letter from the Participant's attending Physician supporting
     that the Home Health Care is Medically Necessary. All payments for Home
     Health Care will be to the Home Health Care Agency or a Hospital.

     (1)  A Home Health Care treatment plan means a written plan for continued
          medical care, which includes an estimate of duration and which is
          approved in writing by the Physician under whose care the Participant
          is currently receiving treatment for the Illness or Injury which
          requires the Home Health Care. The treatment plan may include the
          following:

          (A)  Care by or under the supervision of a registered nurse (RN) or a
               licensed practical nurse (LPN). Private duty nursing Services are
               covered under the Plan only if ordered by the Participant's
               Physician and only if the Claims Administrator determines that
               the Participant's condition requires the skills of an RN or LPN.
               Benefits for private duty nursing Services will not exceed three
               (3) nurses per day.

          (B)  Therapy Services in accordance with Section 3.20 of the Plan.

          (C)  Other Services, such as laboratory Services, that are otherwise
               covered under the Plan.

     (2)  Home Health Care will not be covered under the Plan unless the Claims
          Administrator determines that:

          (A)  The treatment plan satisfies the requirements of this Section
               3.06;

          (B)  Necessary care and treatment are not available from a family
               member or other persons residing with the Participant; and

          (C)  The Home Health Care Services will be provided or coordinated by
               a Home Health Care Agency.

(b)  Limitations:


                                       51

<PAGE>

     (1)  The Plan will not cover more than 120 Home Health Care visits in a
          Benefit Period, unless such visits and related Services are
          coordinated through medical case management pursuant to section 6.02.

     (2)  A visit by a Home Health Care Provider of four hours or less during
          any period of four consecutive hours is treated as one Home Health
          Care visit; provided that, no hour of Home Health Care Service shall
          be counted in more than one period. Each visit by a Home Health Care
          Provider for evaluating the need for Home Health Care and developing a
          treatment plan will be considered one Home Health Care visit.

     (3)  Benefits under this Plan do not include: (A) Services or supplies not
          included in the treatment plan or not prescribed by a Physician, (B)
          Services or supplies which are not Medically Necessary, as determined
          by the Claims Administrator, (C) food, housing, homemaker services,
          home delivered meals or Custodial Care, (D) social worker services,
          (E) transportation, or (F) services of a person who ordinarily resides
          in the Participant's home or is a member of the Participant's or the
          Participant's spouse's family.

3.07 Hospice Care.

(a)  Benefits: Hospice Care coverage is as follows, subject to subsection (b):

     (1)  Hospice Care means a coordinated interdisciplinary program
          administered by a Hospice Agency in accordance with a plan of care to
          meet the physical, physiological, spiritual and social needs of
          Participants who are terminally ill, as well as their families.
          Terminally ill means life expectancy of 6 months or less. The
          diagnosis of terminal Illness must be certified by the Participant's
          Physician. Hospice Care may be furnished either in a Hospice Facility
          or in the Participant's home. Hospice Care is covered by the Plan when
          it is elected in lieu of continued attempts at cure. A plan of care is
          a written plan developed by the Hospice Agency and approved by the
          Participant's Physician to ease pain and provide supportive medical,
          nursing and other health Services in the Participant's home or in a
          Hospice Facility during the terminal Illness. The plan of care must
          include an assessment of the hospice Participant's medical and social
          needs and a detailed description of the care required to meet those
          needs. Hospice Care will not be covered under the Plan unless the
          Claims Administrator determines that the plan of care satisfies the
          requirements of this Section 3.07. All payments for Hospice Care will
          be to the Hospice Agency.

     (2)  The Plan covers Covered Charges for the following hospice Services:

          (A)  Covered Charges by a Hospice Facility.


                                       52

<PAGE>

          (B)  Part-time skilled nursing by a Registered Nurse; a Licensed
               Practical Nurse, or a Nurse's Aide working under the supervision
               of a Registered Nurse for up to eight (8) hours in any one day.

          (C)  Medical social Services and counseling provided to the
               Participant or the Participant's immediate family under the
               direction of a Physician, which include the following: (i)
               assessment of social, emotional and medical needs, and the home
               and family situation; (ii) identification of community resources
               available; (iii) assistance in obtaining those resources; and
               (iv) nutritional counseling.

          (D)  Medical supplies, drugs and medicines prescribed by a Physician
               for symptom management and pain relief.

          (E)  Part-time home health aide Services up to eight (8) hours in any
               one day. Home health aides provide personal care Services that
               are necessary for the maintenance of safe and sanitary conditions
               in the areas of the house used by the Participant.

          (F)  Physical therapy and inhalation therapy provided for the purposes
               of symptom control or to enable the patient to maintain
               activities of living at home and basic functional skills.

          (G)  Bereavement counseling consisting of Services provided to the
               Participant's immediate family after the Participant's death.
               Counseling is limited to three visits provided within three
               months after the Participant's death. For purposes of this
               Section 3.07, a Participant's immediate family is limited to the
               Participant's parents, spouse, children and step-children.

(b)  Limitations: Hospice Care does not include the following:

     (1)  Housekeeping services, transportation, delivered or prepared meals,
          and convenience and comfort items, including sitter and companion
          services, not necessary for the medical palliation or management of
          the Participant's terminal Illness.

     (2)  Confinement in a Hospice Facility unless required for pain control or
          other acute chronic symptom management.

     (3)  Supportive environmental items such as air conditioners, air
          fresheners, ramps, handrails, or intercom systems.

     (4)  Transportation, chemotherapy, radiation therapy, enteral and
          parenteral feeding, home hemodialysis, and other services supportive
          to research, diagnosis, and lengthening patterns of treatment.

     (5)  Visits made to the home by a Physician.


                                       53

<PAGE>

     (6)  Private duty nursing services when confined in a Hospice Facility;

     (7)  Funeral arrangements and financial or legal counseling, including
          estate planning or drafting of a will.

     (8)  Comfort items not directly related to relieving pain or managing the
          Participant's terminal Illness.

     (9)  Services provided by volunteer agencies or pastoral counseling
          services, and items, services or expenses not specifically and
          expressly covered under this Section 3.07.

3.08 Hospital Confinement Limitations.

(a)  Hospital benefits are subject to Article 6 and shall be paid only if, and
     to the extent that, the Plan Administrator determines that Hospital
     confinement is Medically Necessary. Notwithstanding anything else herein to
     the contrary, Hospital benefits shall be paid only for days of actual
     confinement, and shall not include any charges for holding or reserving
     space, or for pass or therapeutic leave days.

(b)  Hospital benefits with respect to Mental or Substance Abuse Conditions are
     subject to Sections 3.11 and 3.18.

3.09 Hospital Inpatient Care.

(a)  A Participant who is admitted to a Hospital as a Bed Patient shall, subject
     to Section 6.01, be entitled to the following benefits for Services when
     consistent with the diagnosis and treatment of the condition for which
     confinement is required:

     (1)  The Plan covers "semi-private accommodations," (two beds) including
          bed, meals, special diets, and general nursing Services in a Hospital.
          If the Participant receives bed and board in "private accommodations"
          (including meals, special diets, and general nursing Service), an
          allowance equal to the Covered Charges for "semi-private
          accommodations" will be covered, except that if no semi-private
          accommodations are available, the Plan covers private accommodations.
          The Plan covers stays in critical care units and intensive care units.

     (2)  Use of operating room and delivery room.

     (3)  Recovery room.

     (4)  Anesthetic materials.

     (5)  Administration of anesthetics when administered by an employee of such
          Hospital as a regular Hospital Service.

     (6)  Dressing and bandages, casts and splints.


                                       54

<PAGE>

     (7)  Laboratory examinations including tissue examinations.

     (8)  Basal metabolism tests.

     (9)  X-ray examinations.

     (10) Electrocardiograms.

     (11) Oxygen as provided by such Hospitals.

     (12) Administration of blood, blood plasma, and plasma substitutes.

     (13) All drugs and medicines which are officially accepted by the Food and
          Drug Administration for general use at the time of such confinement.

     (14) Electroencephalograms.

     (15) Admissions for diagnostic studies when the studies are directed toward
          the definite diagnosis of an Illness or Injury.

     (16) Any additional medical Services and supplies which are customarily
          provided by a Hospital, unless otherwise specifically excluded by
          provisions of the Plan.

(b)  [Reserved].

3.10 Infertility Diagnosis.  The Plan covers tests and surgical procedures,
     whether in or out of a Physician's office, for diagnosis of infertility.

3.11 Mental Health Conditions.  The Plan covers Services for the diagnosis and
     treatment of Mental Health Conditions when rendered by a Hospital,
     Physician, or other Provider as follows:

(a)  Inpatient Services.  Inpatient Hospital or Psychiatric Facility Services,
     subject to Section 6.01. Benefits are also provided for individual
     psychotherapy treatment, group psychotherapy treatment, psychological
     testing, convulsive therapy treatment, electroshock treatment and
     convulsive drug therapy, including anesthesia when administered
     concurrently with the treatment of the Mental Health Condition by the same
     Physician or other professional Provider. If anesthesia is administered by
     a different Physician or other licensed Provider, then the anesthesia is
     considered a Service that is separate from the treatment of the Mental
     Health Condition. The number of days of Inpatient treatment of Mental
     Health and Substance Abuse Conditions shall be combined, and the Plan's
     coverage for Inpatient Services is limited to 45 combined days per Benefit
     Period, without regard to whether the Services are Network or Non-Network.

(b)  Outpatient Services.  The diagnosis and treatment of a Mental Health
     Condition when rendered by a Hospital, Physician, or other applicable
     Provider for Services to an Outpatient, including individual and group
     psychotherapy treatment and psychological


                                       55

<PAGE>

     testing. The number of days of Outpatient visits for treatment of Mental
     Health and Substance Abuse Conditions shall be combined, and the Plan's
     coverage for Outpatient visits is limited to 30 combined visits per Benefit
     Period, without regard to whether the visits are to Network or Non-Network
     Providers.

3.12 Obstetrical Care.

(a)  The plan covers obstetrical care for the Employee-Participant, or the
     Spouse-Participant of the Employee, including Dependent children.
     Obstetrical care includes the Medically Necessary treatment of an Inpatient
     and Outpatient for prenatal, Maternity, routine newborn and postpartum care
     as provided in this Section 3.12, and includes Medically Necessary
     obstetrical care by a licensed nurse midwife. A newborn who satisfies the
     definition of "Dependent" shall be covered automatically under the Plan as
     a Dependent for 30 days after date of birth. Thereafter, a newborn will be
     covered under the Plan only from the date coverage is elected for the child
     in accordance with the Flex Plan.

(b)  No provision of this Plan shall be interpreted to restrict benefits for a
     Hospital stay in connection with childbirth for a mother or her newborn to
     less than 48 hours following a vaginal delivery or 96 hours following a
     delivery by cesarean section. If delivery occurs in a Hospital, the
     Hospital length of stay for the mother or newborn child begins at the time
     of delivery (or in the case of multiple births, at the time of the last
     delivery). If delivery occurs outside a Hospital, the Hospital length of
     stay begins at the time the mother or newborn is admitted as a hospital
     inpatient in connection with childbirth. The determination of whether an
     admission is in connection with childbirth is a medical decision to be made
     by the attending provider.

(c)  If a decision to discharge a mother earlier than the period specified in
     subsection (b) is made by an attending provider, in consultation with the
     mother, the requirements of subsection (b) do not apply for any period
     after the discharge. If a decision to discharge a newborn child earlier
     than the period specified in subsection (b) is made by an attending
     provider, in consultation with the mother (or the newborn's authorized
     representative), the requirements of subsection (b) do not apply for any
     period after the discharge. For purposes of this Section, attending
     provider means an individual who is licensed under applicable State law to
     provide maternity or pediatric care and who is directly responsible for
     providing maternity or pediatric care to a mother or newborn child.

3.13 Organ and Tissue Transplants.

(a)  Benefits: The Plan covers human organ and tissue transplants, subject to
     all provisions of the Plan applicable at the time the Services are
     rendered, including but not limited to, the limitations and exclusions in
     articles 5 and 6, and the following provisions:

     (1)  If both the recipient and the donor are Participants in the Plan, each
          is entitled to benefits under the Plan.


                                       56

<PAGE>

     (2)  If the recipient is a Participant, but the donor is not, the Plan
          covers donor expenses that are not covered by the donor's health plan
          or any other available resource.

     (3)  If the recipient is not a Participant, but the donor is, the Plan
          covers the donor's expenses, but only if the recipient is the donor's
          spouse, child, sibling or parent.

     (4)  The term "donor expenses" means, subject to subsection (5), the
          charges for acquiring and preserving the organ or tissue, including
          pre-diagnostic testing, Hospital and surgical Services, storage, and
          preservation and transportation of the donated organ or tissue. The
          Plan does not cover any travel expenses of a donor.

     (5)  All donor expenses for human organ and tissue transplants are subject
          to the following dollar limitations:

          (A)  The Plan shall cover Medically Necessary expenses up to $25,000
               per recipient for an organ transplant.

          (B)  The Plan shall cover Medically Necessary expenses up to $10,000
               per recipient for bone marrow and stem cell transplants if not
               provided through the National Marrow Donor Program. If a bone
               marrow or stem cell transplant is provided through the National
               Marrow Donor Program, the Plan shall cover Medically Necessary
               expenses up to $25,000 per recipient.

     (6)  The Plan shall cover 100 percent of travel expenses for the recipient
          and one companion in accordance with this subsection (6), except that
          the Plan shall not pay more than $10,000 in the aggregate for travel
          expenses with respect to a transplant. The Plan shall not cover any
          travel expenses unless (A) the transplant Services are provided at a
          facility that is a member of the LifeSource Program and the facility
          is more than 60 miles from the recipient's Principal Residence, and
          (B) the expenses are approved in advance by the Claims Administrator.
          The Plan covers travel expenses if, but only if, the Claims
          Administrator determines the expenses are reasonable for travel to and
          from the transplant site. Travel expenses include lodging and food,
          but only while at or traveling to and from the transplant site. The
          term "companion" means any individual other than the donor who is
          actively involved as the recipient's care giver, who may be a spouse,
          family member, guardian or other person. If the Network applicable to
          a Participant is not a member of the LifeSource Program, then the
          above reference to the LifeSource Program shall be deemed a reference
          to the transplant Network, if any, in which the Participant
          participates.

(b)  Non-Eligible Expenses:


                                       57

<PAGE>

     (1)  The Plan does not cover any expenses related to the transplant of any
          artificial or nonhuman organ or tissue, or expenses which are repaid
          under any private or public research fund.

     (2)  The Plan does not cover expenses for and related to autologous bone
          marrow or stem cell harvesting and storage when the transplant does
          not occur within six months of the harvesting.

     (3)  The Plan does not cover bone marrow or stem cell transplants if the
          human leukocyte antigen (HLA) is not an identical five out of six
          allogeneic match between donor and recipient. Charges for a procedure
          or expense which are denied under this Section 3.13 are not eligible
          for payment under any other provision of this Plan.

     (4)  Notwithstanding any other provision of this Plan, the Plan covers
          Services for and related to organ and tissue transplants only to the
          extent the Services are expressly covered by the Claims
          Administrator's claims standards for organ and tissue transplants in
          effect at the time the Services are rendered. Such claims standards
          may change at any time and from time to time after the date of the
          Plan, and such changes are hereby incorporated into the Plan by
          reference.

3.14 Other Covered Services.

(a)  Medical supplies and surgical dressings including:

     (1)  Colostomy bags and supplies required for their use.

     (2)  Catheters.

     (3)  Casts and splints.

     (4)  Dressings when Medically Necessary for such conditions as cancer,
          burns, or diabetic ulcers.

(b)  Private duty nursing Services in a Hospital which require the skills of a
     registered nurse (RN) or licensed practical nurse (LPN); or an RN outside
     the Hospital, provided:

     (1)  The Services are Medically Necessary as determined by the Claims
          Administrator and are of such an intensive skilled level that they
          cannot be provided by the Hospital's general nursing staff;

     (2)  The Services are prescribed by the patient's attending Physician and
          such prescription is documented in the medical record;

     (3)  The care being rendered is at the skilled level (Custodial Care,
          intermediate care and personal care are not covered); and


                                       58

<PAGE>

     (4)  The Hospital does not have an intensive care unit or similar
          accommodations or there is no space available in such facilities.

(c)  Regardless of Medical Necessity, the Plan covers Physician, Hospital and
     Outpatient Facility Covered Charges incurred for the sole purpose of
     voluntary tubal ligation and vasectomy sterilization procedures.

(d)  Drugs and medicines requiring a prescription if administered while the
     Participant is a Bed Patient or in a Physician's office.

(e)  Chiropractic Services for diathermy, subluxations and misplacement of
     vertebrae, or strains and sprains of soft tissue related to the spine when
     performed by a licensed chiropractor acting within the scope of the rules
     and regulations promulgated by the applicable licensing authority, subject
     to the dollar limitation of Section 5.01(a)(42).

(f)  The Plan covers Emergency Care. Benefits for Emergency Care include charges
     for facility costs, Physician Services, supplies and prescriptions. If
     Emergency Care is provided at a Hospital that is a Non-Network Provider,
     the Participant's share of Covered Charges shall be determined under column
     (b) of Section 3.02 if the Claims Administrator determines that the
     Participant's medical condition was life threatening and so severe that the
     Participant had no choice except to go to the nearest Hospital that is a
     Non-Network Provider.

(g)  If at the time of the occurrence of a sudden and unexpected Illness or
     Injury that requires Covered Services, a Participant is not physically
     located within the Network Service Area in which his or her Primary
     Residence is located, and if Covered Services are provided by a Non-Network
     Provider, then benefits for the Covered Services shall be determined under
     column (b) of Section 3.02 if, but only if, the Claims Administrator
     determines that at the time of the occurrence of the Illness or Injury, the
     Participant did not expect to be out of the Network Service Area for more
     than twenty-one consecutive days. In no event shall any Services be covered
     under this subsection (g) if the travel outside the Participant's Network
     Service Area is for the purpose of obtaining any Services.

(h)  Services provided by Urgent Care Facilities.

(i)  Services provided by Outpatient Facilities.

(j)  If a Participant is receiving benefits under the Plan in connection with a
     mastectomy and if the Participant elects breast reconstruction in
     connection with such mastectomy, the Plan shall provide coverage in a
     manner determined in consultation with the attending Physician and the
     Participant, for (1) reconstruction of the breast on which the mastectomy
     has been performed, (2) surgery and reconstruction of the other breast to
     produce a symmetrical appearance, and (3) prostheses and physical
     complications at all stages of the mastectomy, including lymphedemas.

(k)  The Plan covers the following diabetic supplies: insulin pump needles,
     glucose monitors and lancet devices.


                                       59

<PAGE>

3.15 Physician Services.

(a)  The Plan covers Physicians' Services as follows:

     (1)  Surgical Services: Surgical Services wherever performed, including
          treatment for fractures and dislocations and routine pre-operative and
          post-operative care. If multiple surgeries are performed during one
          operating session, the Plan will cover the most expensive procedure as
          otherwise determined under the Plan, and the Plan will cover 50
          percent of the charges for the remaining surgery or surgeries as
          otherwise determined under the Plan.

     (2)  Anesthesia Services: Administration of anesthesia by injection or
          inhalation, except by local infiltration.

     (3)  Radiation Therapy Services: Treatment for malignant/non-malignant
          growths by X-ray, radium, or radioactive isotopes.

     (4)  Consultation Services: Consultation requested by the attending
          Physician and rendered to a Participant in conjunction with surgical,
          obstetrical or medical Services during a confinement.

     (5)  In-Hospital Concurrent Medical Care with Surgery: Services rendered
          concurrently by other than the attending Physician when warranted by
          the need for supplemental skills of a different nature from that
          customarily rendered as surgical or obstetrical Services. The criteria
          for determining a patient's eligibility for concurrent medical care
          will be when a patient has a separate and complicated diagnosis,
          which, if left untreated, would adversely affect his prognosis and is
          a condition whose management requires skills not ordinarily possessed
          by the surgeon or obstetrician.

     (6)  Surgical Assistance: Surgical assistance rendered to the Physician in
          charge of the case, if the type and complexity of the procedure
          requires such assistance.

     (7)  In-Hospital Medical Services:

          (A)  Medical services rendered by the attending Physician to a
               Participant while confined in a Hospital. Benefits are also
               subject to the limitations on confinements in Sections 3.08 and
               6.01

          (B)  Medical services means services which do not involve: (i)
               surgical procedures, (ii) treatment of fractures, dislocations,
               and other accidental injuries, (iii) obstetrical procedures
               including prenatal and post-natal care, or (iv) radiation
               therapy.

          (C)  Hospital calls made by the operating Physician in rendering
               necessary pre-operative and postoperative care 10 or less days
               before and 30 or less days


                                       60

<PAGE>

               after surgical procedures shall be considered a part of such
               surgical procedures, and no allowance for medical services shall
               be made.

     (8)  Out-of-Hospital Diagnostic X-ray and Laboratory Services: X-ray or
          laboratory examinations which are required in the diagnosis of any
          condition, disease, or injury made or recommended by a Physician and
          performed outside of a Hospital or performed as an outpatient in a
          Hospital.

     (9)  Office Visits for Illness and Injury.

     (10) Office Visits for Services covered under Section 3.21.

(b)  [Reserved].

3.16 Prosthetic Devices.  The Plan covers the purchase, fitting, necessary
     adjustments and repairs of prosthetic and orthotic devices and supplies
     which replace all or part of an absent body part (including contiguous
     tissue), or replace all or part of the basic minimal function of a
     permanently inoperative or malfunctioning body part. The Plan covers
     replacements only if Medically Necessary due to pathological changes or if
     replacement is less costly than repair. Dental appliances are excluded,
     except to the extent covered under the Dental Plan. The replacement of
     cataract lenses is excluded, except when new cataract lenses are Medically
     Necessary because of prescription change.

3.17 Skilled Nursing Facility.  The Plan covers bed and board, including special
     diets and general nursing Services, in semi-private accommodations (two
     beds) in an approved Skilled Nursing Facility for Skilled Nursing Care.
     Coverage is limited to 60 days per Benefit Period. Admission to a Skilled
     Nursing Facility is covered only if prescribed by a Physician or if in lieu
     of Hospital confinement. The allowance toward private room accommodations
     shall be equal to the Covered Charges for semi-private accommodations.

3.18 Substance Abuse Conditions.  The Plan covers Services for the diagnosis and
     treatment of Substance Abuse Conditions when rendered by a Hospital,
     Physician, or other applicable Provider as follows:

(a)  Inpatient Services.  Inpatient Hospital or Psychiatric Facility Services
     only if the Claims Administrator determines that Inpatient treatment is the
     least restrictive mode of treatment. Benefits are also provided for
     individual treatment, group treatment, and testing. The number of days of
     Inpatient treatment of Mental Health and Substance Abuse Conditions shall
     be combined, and the Plan's coverage for Inpatient Services is limited to
     45 combined days per Benefit Period, without regard to whether the Services
     are Network or Non-Network.

(b)  Outpatient Services.  The diagnosis and treatment of a Substance Abuse
     Condition when rendered by a Hospital, Physician, or other applicable
     Provider for Services to an Outpatient, including individual and group
     treatment and testing. The number of days of Outpatient visits for
     treatment of Mental Health and Substance Abuse Conditions shall be


                                       61

<PAGE>

     combined, and the Plan's coverage for Outpatient visits is limited to 30
     combined visits per Benefit Period, without regard to whether the visits
     are to Network or Non-Network Providers.

3.19 Temporomandibular or Craniomandibular Joint Dysfunction.  The Plan covers
     Services incurred for surgical treatment of Temporomandibular Joint (TMJ)
     or Craniomandibular Joint (CMJ) dysfunction or orthognathic conditions. TMJ
     or CMJ dysfunction is a jaw/joint disorder which may cause pain, swelling
     clicking and difficulties in opening and closing the mouth, and
     complications include arthritis, dislocation and bite problems of the jaw.
     Covered Services incurred for nonsurgical treatment of TMJ or CMJ
     dysfunction or orthognathic conditions are limited to: (a) diagnostic
     examination; (b) diagnostic x-rays; (c) injection of muscle relaxants; (d)
     therapeutic drug injections; (e) Physical Therapy; (f) diathermy therapy;
     and (g) ultrasound therapy. This Section 3.19 does not provide for the
     coverage of Services not expressly listed in the preceding sentence,
     including but not limited to; (1) any appliance or the adjustment of any
     appliance including orthodontics; (2) any electronic diagnostic modalities;
     (3) occlusal analysis; and (4) muscle testing.

3.20 Therapy Services.  The Plan covers Therapy Services when performed by a
     Physician, or a licensed or certified therapist under the direction of a
     Physician, if, and only if, the Therapy Services are restorative, subject
     to the following: (1) The Plan covers Speech Therapy only if the therapy is
     expected to restore speech to a Participant who has lost existing speech
     function (the ability to express thoughts, speak words and form sentences)
     as the result of an Illness or Injury; (2) The Plan does not cover Speech
     Therapy if the speech loss or impairment is due to a mental, psychoneurotic
     or personality disorder of any type; and (3) If speech loss or impairment
     is due to a congenital anomaly, the Plan does not cover Speech Therapy
     unless surgery to correct the anomaly has been performed prior to the
     therapy.

3.21 Wellness Program.  The Plan covers the following Services, without regard
     to Medical Necessity, Illness or Injury, but subject to the Deductibles,
     Copayments and Coinsurance provisions set forth in the Schedule of Benefits
     with respect to the Wellness Program:

<TABLE>
<S>                   <C>
Birth through Age 1   Six well child exams in the first year
                      (including diagnostic testing)
                      Immunizations

Ages 1 up to 2        Two well child exams in the second year;
                      (including diagnostic testing)
                      Immunizations

Ages 2 up through 6   One well child exam per year
                      (including diagnostic testing)
                      Immunizations

Ages 7 through 12     One well child exam per two years (including
</TABLE>


                                       62

<PAGE>

<TABLE>
<S>                   <C>
                      diagnostic testing)
                      Immunizations

Ages 13 through 39    One routine physical exam per two years
                      (including diagnostic testing)
                      Immunizations
                      Annually: Clinical testicular exam
                                Gynecological exam (including pap smear)

Ages 35 through 39    One baseline Mammogram

Ages 40 through 49    One routine physical exam per two years
                      (including diagnostic testing)
                      One routine colonoscopy
                      Immunizations
                      Annually: Clinical testicular exam
                                Gynecological exam (including pap smear)
                                Mammogram
                                Digital rectal exam and fecal occult blood
                                testing (including prostrate exam)

Ages 50 and after     One routine physical exam per year
                      (including diagnostic testing)
                      Routine colonoscopy: Once every 5 years
                      Immunizations
                      Bone density testing: Once every 10 years
                      Sigmoidoscopy: Once every 3 years
                      Annually: Clinical testicular exam
                                Gynecological exam (including pap smear)
                                Mammogram
                                Prostate Specific Antigen (PSA)
                                Digital rectal exam and fecal occult blood
                                testing (including prostrate exam)
</TABLE>


                                       63

<PAGE>

                                   ARTICLE 4.

                   Deductibles and Annual Out-of Pocket Limit

4.01 Deductibles.

(a)  This subsection (a) shall apply with respect to Covered Charges incurred
     for Covered Services of Network Providers. In addition, references in
     column (d) of Section 3.02 to "Deductibles" shall mean Deductibles as
     determined under this Section 4.01(a), whether the Covered Services are
     provided by Network or Non-Network Providers. Each Participant shall be
     required to pay as a Deductible the first $100 of Covered Charges for such
     Participant in any Benefit Period. In general, each Participant shall be
     required to satisfy the Deductible once in each Benefit Period. However, if
     a Participant and one covered Dependent or any two or more covered
     Dependents incur a total of $200 or more of Covered Charges during a
     Benefit Period, no further Deductible shall be required on any such
     Participant or any of his Dependents for the remainder of the Benefit
     Period. In attaining the $200 Family Deductible, no one individual shall be
     given credit for more than $100 of Covered Charges in any Benefit Period.
     Amounts paid by a Participant for Network Covered Charges in a Benefit
     Period shall be included in the calculation of the Deductible for
     Non-Network Covered Charges for that Benefit Period. Amounts paid by a
     Participant for Non-Network Covered Charges in a Benefit Period shall be
     included in the calculation of the Deductible for Network Covered Charges
     for that Benefit Period. The above Deductible shall be in addition to any
     Review Deductible required under Article 6.

(b)  This subsection (b) shall apply with respect to Covered Charges that are
     incurred for Covered Services of Non-Network Providers. Unless otherwise
     stated in the Schedule of Benefits, references to column (c) of Section
     3.02(b) refer to the Deductibles in this subsection (b). Section 4.01(a)
     shall apply to Non-Network Covered Charges, except that the Deductibles
     shall be $400 and $800, rather than $100 and $200.

4.02 Annual Out-of-Pocket Limit.

(a)  The Annual Out-of-Pocket Limit for each Participant is as follows:

<TABLE>
<CAPTION>
        Network                Non-Network
----------------------   ----------------------
<S>                      <C>
$1,000 Single Coverage   $2,500 Single Coverage
$2,000 Family Coverage   $5,000 Family Coverage
</TABLE>

(b)  When the Covered Charges in a Benefit Period exceed the applicable Annual
     Out-of-Pocket Limit set forth above, the Participant's Coinsurance shall be
     zero for the balance of the Benefit Period, and the Plan shall, subject to
     the Participant's Copayment obligation, pay 100% of such Participant's
     Covered Charges for the balance of such period. In attaining the Family
     Coverage level, however, no one individual shall be given credit for
     payment of more than the Single Coverage amount in any Benefit Period.


                                       64

<PAGE>

     Amounts paid by a Participant for Network Covered Charges in a Benefit
     Period shall be included in the calculation of the Annual Out-of-Pocket
     Limit for Non-Network Covered Charges for that Benefit Period. Amounts paid
     by a Participant for Non-Network Covered Charges in a Benefit Period shall
     be included in the calculation of the Annual Out-of-Pocket Limit for
     Network Covered Charges for that Benefit Period. The above payment
     percentages are expressly subject to the requirements of Article 6 and
     payment of the Review Deductible, if applicable.

                                   ARTICLE 5.

                                   Exclusions

5.01 Exclusions.

(a)  Following is a list of Services, charges and other items that are not
     covered under the Plan, except as otherwise expressly provided. This list
     is not a limitation on, or a complete listing of, items that are not
     treated as Covered Services or Covered Charges.

     (1)  Any Service that the Claims Administrator determines is not Medically
          Necessary for the diagnosis or treatment of an Injury, Illness or
          symptomatic complaint, subject to Sections 3.08, 3.14(c), 3.14(h), and
          3.21 and any Service that is not prescribed or recommended by a
          Physician.

     (2)  Any Service when information necessary to evaluate the claim (e.g.,
          completed claim form, medical records, diagnostic test results,
          written reports, etc.) is not provided to the Claims Administrator or
          the Named Fiduciary. A Participant shall provide to the Claims
          Administrator and the Named Fiduciary such information and documents
          as may be required.

     (3)  Services for any condition, Illness or Injury (1) arising out of, or
          in the course of, the Participant's employment, unless it arises out
          of, or is in the course of, the Participant's activities as a
          self-employed individual, or (2) for which benefits are payable to the
          Participant under any workers' compensation law or similar
          legislation.

     (4)  Dental care and treatment (including examinations, research studies,
          screening routine physical examinations or checkups, fluoroscopy
          without films, or dental x-rays), dental surgery, or dental appliances
          unless such Services necessary to diagnose a symptomatic condition or
          Illness or Injury, and except as provided herein for oral surgery.
          Hospital expenses related to oral surgery are covered only when
          certified by a Physician other than a Dentist that confinement was
          necessary to safeguard the life or health of the patient from the
          effects of the dental procedure because of the existence of a specific
          non-dental organic impairment and when the dentistry was performed by
          a licensed Doctor of Medicine "MD" or a licensed Doctor of Dental
          Surgery "DDS".


                                       65

<PAGE>

     (5)  Treatment in a state or federal hospital, unless in the absence of
          insurance there is a legal obligation for the Participant to pay for
          such treatment; or treatment for which indemnification or hospital
          care is available under the laws of the United States, any state or
          political subdivision thereof, or the Veterans Administration.

     (6)  Any Services received as a result of Injury or Illness sustained as a
          result of war, declared or undeclared, or any act of war, or by an act
          of international armed conflict or conflict involving armed forces of
          any international authority, if such war or act occurs after the
          patient becomes a Participant in the Plan.

     (7)  Subject to Sections 11.06 and 11.07, any Services to the extent that
          benefits are available from or provided by any other coverage,
          including personal injury protection, homeowner's insurance, or
          related coverage. Also, benefits shall not be provided to the extent
          that Medicare benefits are available, except in cases where the Plan
          must be primary to Medicare as a matter of law.

     (8)  Services related to sex transformation or sexual dysfunctions or
          inadequacies. This limitation will not apply to a penile prosthesis
          (implant) necessitated by a functional defect caused by a congenital
          disease or following either an Injury or surgery resulting from
          Illness.

     (9)  Services or supplies deemed by the Claims Administrator not Medically
          Necessary for the diagnosis or treatment of an Injury, Illness or
          symptomatic complaint. The Plan shall have the right to submit
          disputed cases to a medical review committee. Charges for medical or
          surgical care deemed not Medically Necessary, in whole or in part,
          shall be borne by the Participant.

     (10) Except as otherwise specifically provided in Section 2.05, Services
          and supplies provided by or available from a health maintenance
          organization ("HMO"), preferred provider organization or
          association(PPO/PPA) or similar arrangement, including charges for
          Services and supplies that are available through another plan but
          which are not covered because of failure to comply with the provisions
          of that plan (such as pre-certification and second opinion
          requirements).

     (11) Services or supplies for cosmetic purposes, except for correction of
          defects incurred through Injury which occurred while the Participant
          was covered under the Plan. This limitation shall not apply to
          Services which are incidental to or follow surgery resulting from
          trauma, infection or disease of the involved part or is caused by a
          congenital disease or anomaly of a covered Dependent child which has
          resulted in a functional defect.

     (12) Hearing examinations and hearing aids; orthoptics; examinations to
          determine need for or adjustment of eyeglasses or lenses of any type:
          eyeglasses or lenses of any type except initial replacements for loss
          of a natural lens and as provided under the Vision Plan; eye surgery
          such as radial keratotomy and LASIK, when the primary purpose is to
          correct myopia, hyperopia or astigmatism.


                                       66

<PAGE>

     (13) Travel, whether or not recommended by Physician, except as provided in
          Section 3.13.

     (14) Treatment of corns, bunions (except capsular or bone surgery),
          callouses, nails of the feet (except surgery for ingrown nails), flat
          feet, fallen arches, weak feet, chronic foot strain or symptomatic
          complaints of the feet (except when surgery is performed).

     (15) Acupuncture, anesthesia by hypnosis or charges (whether or not related
          to the treatment of another medical condition) for anesthesia for
          non-covered Services.

     (16) Weight reduction or exercise programs or treatment for obesity,
          including any prescription or non-prescription drugs; Services at a
          health spa, gymnasium or similar facility.

     (17) Any confinement in a Skilled Nursing Facility not requiring daily
          planned medical and skilled professional nursing care and supervision
          for Illness or Injury, in accordance with regulations established by
          the Claims Administrator.

     (18) Any types of services, supplies or treatments not specified. Such
          items not covered include, but are not limited to, the following:

          (A)  Educational, vocational or self-help training and other forms of
               non-medical care.

          (B)  Routine physical examinations, including x-rays, laboratory tests
               and similar diagnostic Services, except as provided in the
               Wellness Program; examinations related to employment; and routine
               pre-marital examinations.

          (C)  Immunizations (except as specifically provided in the Wellness
               Program).

          (D)  Supplies and accessories that the Claims Administrator determines
               are not medical supplies or that could be used by family members
               for purposes other than medical care, such as adhesive tape,
               gauze, bandages, creams, support hose and pressure garments.

          (E)  Support or corrective shoes (unless they are a permanent part of
               a brace), shoe inserts or modifications.

          (F)  Dietary counseling.

     (19) Services or supplies for which the Participant is not legally
          obligated to pay. Services or supplies, paid, or which the Participant
          is entitled to have paid, or to obtain without cost under the laws or
          regulations of the federal, state, provincial or local government or
          any political subdivision thereof.


                                       67

<PAGE>

     (20) Charges in excess of either the reasonable and customary charge for,
          or the value of, the Service or item as determined by the Claims
          Administrator.

     (21) Experimental or Investigative treatment, equipment, new technology,
          drugs, procedures or supplies as defined in Article 1, and drugs not
          approved by the U.S. Food & Drug Administration.

     (22) All fertility testing (except diagnostic testing) and Services,
          including any artificial means to achieve pregnancy or ovulation and
          any surgical impregnation procedures, such as artificial insemination,
          in vitro fertilization, spermatogenesis, gamete intra fallopian
          transfer (GIFT), zygote intra fallopian transfer (ZIFT), tubal ovum
          transfer, embryo freezing or transfer and sperm banking.

     (23) Educational, recreational or family/collateral therapy.

     (24) Marriage, pastoral, or financial counseling or similar services.

     (25) Services for completion of claim forms or for providing other records
          or reports.

     (26) Any Illness or Injury arising from an intentional or accidental atomic
          explosion or other release of nuclear energy, whether in peacetime or
          wartime; participation in a civil revolution or a riot; service as a
          member of the armed forces of any state or country; war or any act of
          war, whether declared or not, including any conflict involving the
          armed forces of any authority.

     (27) Vocational or training services and supplies.

     (28) Expenses for broken appointments or telephone calls.

     (29) Hospital charges for take-home prescription drugs and personal comfort
          or service items while confined in a Hospital, such as, but not
          limited to, admission kits, radio, television, telephone, cots and
          guest meals.

     (30) Complications arising from any non-covered surgery.

     (31) Expenses for job training or care for learning disorders or behavioral
          problems, whether or not services are rendered in a facility that also
          provides medical and/or mental/nervous treatment.

     (32) Equipment such as air conditioners, air purifiers, dehumidifiers,
          heating pads, hot water bottles, water beds, swimming pools, hot tubs
          and any other clothing or equipment which could be used in the absence
          of an Illness or Injury.

     (33) Convalescent, intermediate, Custodial Care, sanatoria care, or rest
          cures, including Services and care rendered by or in a rest home,
          health resort, home for the aged or a place primarily for domiciliary
          or Custodial Care.


                                       68

<PAGE>

     (34) Charges for non-Covered Services.

     (35) Services for elective abortions unless the pregnancy is a
          life-threatening physical condition of the Participant.

     (36) Expenses incurred after coverage under the Plan ends.

     (37) Nursing care that does not require the education and training of a
          registered nurse or a CPN, such as transportation, meal preparation,
          charting vital signs and companion activities.

     (38) R.A.S.T. testing to determine allergies unless determined by the
          Claims Administrator to be Medically Necessary.

     (39) Prescription drugs that are subject to the Prescription Drug Plan.

     (40) Any Illness or Injury due to the commission or attempted commission of
          a civil assault or battery or any illegal act

     (41) Any reversal or any attempted reversal of a previously performed tubal
          ligation or vasectomy sterilization procedure.

     (42) Covered Charges for chiropractic Services for a Participant are
          subject to a combined benefit limit of $500 per Benefit Period. The
          combined limit includes, but is not limited to, (a) Charges for
          diagnostic Services and X-rays requested by a chiropractor, and (b)
          Network Covered Charges and Out-of-Network Covered Charges for
          chiropractic Services.

     (43) Nutritional supplements, unless the Claims Administrator determines
          that the Participant's only means of receiving nutrition is through a
          feeding tube.

     (44) The Plan is also subject to the exclusions set forth in other Sections
          of the Plan, including Sections 3.06, 3.07, 3.08, 3.11, 3.13, 3.17,
          3.18, 3.20, 3.21, 7.04, 8.11 and 9.02.

(b)  [Reserved].

                                   ARTICLE 6.

                 Pre-admission Review, Continued Stay Review and
                             Medical Case Management

6.01 Pre-Admission and Continued Stay Review.

(a)  Prior to any Hospital admission that is not for Emergency Care, including
     admission to a Psychiatric Facility, and/or course of treatment, the
     Participant or his Physician shall contact the medical review agency
     selected by the Plan Administrator for the purpose of


                                       69

<PAGE>

     obtaining a Pre-Admission Review. The Pre-Admission Review shall establish
     whether the Hospital Admission is Medically Necessary and the appropriate
     length of stay for an admission. A Continued Stay Review, which shall be
     initiated by the Participant, and certification shall be required for any
     additional days. Pre-Admission Review is not required if the admission is
     related to Maternity, or if Medicare is the primary payer.

(b)  In the case of a Participant's Hospital admission and/or course of
     treatment where there is an admission for Emergency Care (including
     Maternity and Maternity-related conditions), a Continued Stay Review shall
     be initiated by or on behalf of the Participant within 48 hours of such
     admission. The review shall be conducted by a medical review agency
     selected by the Plan Administrator. The purpose of the Continued Stay
     Review shall be to determine the Medical Necessity of such admission, as
     well as the Medical Necessity of any continued hospitalization. The
     Continued Stay Review shall establish the appropriate length of stay for
     the admission. Continued Stay Review shall be required for approval of days
     beyond those certified through Pre-Admission Review and Continued Stay
     Review. No Pre-Admission Review or Continued Stay Review shall be required
     for coverage of the mother's or newborn's Hospital stay of 48 hours or less
     following vaginal delivery or of 96 hours or less following a cesarean
     section delivery. Continued Stay Review and favorable certification shall
     be required for coverage of the mother's or newborn's Hospital stay of more
     than 48 hours following vaginal delivery or of more than 96 hours following
     a cesarean section delivery.

(c)  If a request for Pre-Admission Review or Continued Stay Review is not made
     within the period prescribed above, or the request is denied, and the
     Participant nevertheless obtains treatment on an Inpatient basis, the
     Participant shall be subject to the Review Deductible in each such case in
     the amount of $500 per Participant per occurrence. In addition, the Plan
     shall not pay charges for room and board to the extent that a Continued
     Stay Review indicates that the Hospital admission and/or course of
     treatment is not Medically Necessary.

(d)  To the extent that a hospitalization and/or course of treatment is not
     certified as Medically Necessary by the medical review agency, in either
     case described in Section 6.01(a) or 6.01(b) above, then the Participant's
     attending Physician shall be notified of such decision in writing. The
     medical review agency shall forward a copy of the decision to the
     Participant.

6.02 Medical Case Management.

(a)  A Participant who suffers a severe Injury or Illness may be eligible to
     participate in the Medical Case Management Program. The term "severe Injury
     or Illness" shall mean a condition with respect to which treatment in the
     Medical Case Management Program would be medically appropriate and a cost
     effective alternative, and may include: major head trauma, spinal cord
     injury, amputation, multiple fractures, severe burns, neonatal high-risk
     infancy, severe stroke, multiple sclerosis, amyotrophic lateral sclerosis,
     or acquired immune deficiency syndrome.


                                       70

<PAGE>

(b)  Participation in the Medical Case Management Program shall be voluntary on
     the part of the Participant. In addition, the Claims Administrator shall
     determine a Participant's eligibility for participation according to
     procedures that shall be applied by the Claims Administrator in a uniform
     fashion with respect to Participants who are similarly situated. In no
     event shall the application of such procedures cause the Plan to
     discriminate in favor of highly compensated individuals, as that term is
     defined in Section 414(q) of the Code.

(c)  Benefits provided hereunder shall be paid notwithstanding the fact that
     such payment may be inconsistent with other provisions of the Plan. The
     amount of any benefits to be paid under this section shall be determined by
     the Claims Administrator or his agent, based upon uniform standards. The
     Claims Administrator's determination of whether and to what extent benefits
     shall be paid hereunder shall be based upon his or his agent's review of
     the following specific factors:

     (1)  The Participant's current and anticipated medical status;

     (2)  The Participant's current treatment plan;

     (3)  The Participant's projected treatment plan;

     (4)  The anticipated long-term cost implications of the Participant's
          treatment; and

     (5)  The anticipated effectiveness of the care to be provided.

(d)  If such Participant is selected for and voluntarily participates in the
     Medical Case Management Program, then the Claims Administrator may direct:

     (1)  Payment of benefits for reasonable and customary charges (as defined
          in Section 1.12(b)) for rehabilitation Services and supplies furnished
          to such Participant; and

     (2)  Payment of benefits even though such payments may be in excess of
          total benefits otherwise payable for such charges under other
          provisions of the Plan.

                                   ARTICLE 7.

                             Prescription Drug Plan

7.01 Prescription Drugs.  The Plan covers Prescription Drugs as follows:

(a)  If the prescription is dispensed by a Network Pharmacy or the Mail Order
     Pharmacy, the Participant must pay the Copayment at the time the drug is
     dispensed and the Plan will pay the balance of the drug cost. If the
     prescription is not dispensed by a Network Pharmacy or the Mail Order
     Pharmacy, the Participant must pay the full cost of the drug at the time it
     is dispensed and file a claim with the Claims Administrator for
     reimbursement. If the Claims Administrator determines the drug is covered
     under the


                                       71

<PAGE>

     Prescription Drug Plan, the Plan will reimburse the Participant for the
     drug costs, less the applicable Copayment.

(b)  Following is a description, which is exclusive, of the Prescription Drugs
     and supplies covered by the Prescription Drug Plan:

     (1)  Any Legend Drug, or compound medication of which at least one
          ingredient is a Legend Drug.

     (2)  Vitamins and minerals (Legend Drugs only).

     (3)  Diabetic supplies: Syringes, needles, insulin, blood glucose test
          strips, lancets and urine glucose test strips.

     (4)  Acne treatments (excluding over the counter treatments).

     (5)  Injectable (IV, IMIJ) and Interferon injectables.

     (6)  A drug or class of drugs shall be subject to pre-authorization if it
          is included in the standard prior authorization program of the Network
          Pharmacy or Mail Order Pharmacy. A drug that is subject to
          pre-authorization shall be deemed a covered Prescription Drug only if
          it is pre-authorized in accordance with Section 7.02. Examples of
          drugs subject to pre-authorization are: injectable growth hormones,
          medication for acne if over age 25 and non-oral fertility drugs.

(c)  A Copayment shall be payable toward the cost of each separate prescription,
     each diabetic supply and each refill under the Prescription Drug Plan and
     shall be determined according to the following schedule, except that the
     Copayment for Retired Participants and their Dependents for a Brand Drug at
     a Network Pharmacy shall be $20.00 without regard to whether the Retired
     Participants or their Dependents are treated as Employees under Section
     2.08:

<TABLE>
<CAPTION>
If Dispensed By       Generic Drugs   Brand Drugs
---------------       -------------   -----------
<S>                   <C>             <C>
Network Pharmacy          $ 5.00         $15.00
Mail Order Pharmacy       $10.00         $30.00
</TABLE>

     Effective January 1, 2004, the following co-payments shall apply: (1) to
     the Mail Order Pharmacy Program (except Retired Participants): Generic -
     $20; Preferred Brand Drugs -$40; Non-Preferred Brand Drugs - $70. For
     Retired Participants, Mail Order Pharmacy Program co-payments shall be:
     Generic - $10; Brand Drugs - $30, and (2) to the Network Pharmacy Program
     (except Retired Participants): Generic - $10; Preferred Brand Drugs - $20;
     Non-Preferred Brand Drugs - $35. For Retired Participants, Network Pharmacy
     Program co-payments shall be: Generic - $5; Brand Drugs - $20.

(d)  Plan coverage for each prescription or refill by a Network Pharmacy is
     limited to the quantity that is Medically Necessary for use in 30 days.
     Plan coverage for each


                                       72

<PAGE>

     prescription or refill by the Mail Order Pharmacy is limited to medications
     for an on-going condition and to the quantity that is Medically Necessary
     for use within 90 days.

7.02 Pre-Authorization.  If coverage of a drug is subject to pre-authorization,
     the drug will not be covered as a Prescription Drug unless the prescription
     is approved by a medical review agency selected by the Plan Administrator.
     The drug will not be pre-authorized unless the medical review agency
     determines that the drug is both Medically Necessary and is covered under
     the Prescription Drug Plan.

7.03 Definitions.

(a)  The following terms used in this Article 7 shall have the meanings set
     forth below:

     (1)  "Brand Drug" means a Legend Drug manufactured by the company named on
          the application to the Food and Drug Administration (FDA) for new drug
          approval. For purposes of the Copayment, diabetic supplies shall be
          treated as Brand Drugs.

     (2)  "Generic Drug" means a Legend Drug that is not a Brand Drug, that
          contains exactly the same amount of the same active ingredients in the
          same dosage form as its Brand Drug equivalent, that meets the FDA
          standards of bioequivalence, strength, purity and identity and that is
          manufactured in compliance with current FDA good manufacturing
          practices regulations.

     (3)  Legend Drug" means any medicinal substance the label of which, under
          the Federal Food, Drug and Cosmetic Act, is required to bear the
          legend: "Caution: Federal law prohibits dispensing without
          prescription."

     (4)  "Mail Order Pharmacy" means a Network Pharmacy that dispenses
          Prescription Drugs through the mail.

     (5)  "Network Pharmacy" means a Network Provider that is a pharmacy.

     (6)  "Non-Preferred Brand Drug" means a Brand Drug that does not appear on
          Express Scripts' Preferred Formulary list. A "Preferred Brand Drug" is
          a Brand Drug that does appear on Express Scripts' Preferred Formulary
          list. A Non-Preferred Brand Drug has an alternative substitute
          available (i.e., Preferred Brand Drug or Generic Drug) that is
          therapeutically equivalent and available at a lower price.

(b)  [Reserved].

7.04 Prescription Drug Limitations.

(a)  The Prescription Drug Plan does not cover the following

     (1)  Non-Legend Drugs (except insulin for diabetics), Legend Drugs that are
          not Medically Necessary.


                                       73

<PAGE>

     (2)  Therapeutic devices or appliances, including hypodermic needles,
          syringes (except needles and syringes for diabetics), support garments
          and other non-medical substances.

     (3)  Nicotine-containing drugs or devices or any other drug or device used
          for the purpose of smoking cessation.

     (4)  Any drug used for cosmetic purposes.

     (5)  Any drug or medication which is eligible for payment under the Medical
          Plan.

     (6)  Any Experimental or Investigational drug or medicine.

     (7)  Any refill or a prescription which is in excess of what is prescribed,
          or any refill dispensed after one year from the initial prescription
          order.

     (8)  Drugs (A) dispensed by a Network Pharmacy, in a quantity which is in
          excess of a 30-day supply; (B) dispensed by the Mail Order Pharmacy in
          a quantity which is in excess of a 90-day supply; and (C) in a
          quantity which is in excess of the amount prescribed.

     (9)  Any drug for which the dispenser's charge is less than the Copayment
          amount.

     (10) Any drug dispensed when a person is not covered under the Prescription
          Drug Plan and any drug dispensed without pre-authorization, if
          pre-authorization is required.

     (11) Any drug prescribed in connection with Services that are not Covered
          Services.

     (12) All limitations and exclusions which would result in non-coverage
          according to the terms of Article 5, which is incorporated by
          reference into this Article 7.

     (13) Drugs prescribed for sexual dysfunction (such as Viagra).

     (14) Allergy serums.

     (15) Fluoride products.

(b)  [Reserved].

                                   ARTICLE 8.

                                  Dental Plan

8.01 Dental Plan Options; Eligibility.

(a)  Dental Benefits are available under two options, as follows:


                                       74

<PAGE>

     (1)  Basic Plan.  The Basic Plan pays a fixed dollar amount for dental
          Services, as set forth in Schedule A.

     (2)  Optional Plan.  The Optional Plan pays a fixed percentage of the
          Covered Charges for dental Services, as set forth in Schedule B.

(b)  Eligibility and Coverage: Coverage under the Dental Plan of an Eligible
     Employee shall begin as provided in Section 2.01 subject to the following:

     (1)  Eligible Employees hired before November 1, 1994 may elect Basic Plan
          coverage or Optional Plan coverage, or they may reject coverage
          entirely, pursuant to the Flex Plan.

     (2)  An Eligible Employee hired on or after November 1, 1994, may elect
          Optional Plan coverage or reject coverage entirely pursuant to the
          Flex Plan.

     (3)  Notwithstanding (1) and (2), a Prime-Time Employee may elect Optional
          Plan coverage or reject coverage entirely pursuant to the Flex Plan.

8.02 Deductible.  For purposes of Article 8, the Deductible shall be $25 per
     Participant per Benefit Period, and applies only to those Covered Charges
     listed in Sections 8.06 and 8.07.

8.03 Limitations.  Benefit payments under Sections 8.05 and 8.06 are limited to
     $1,000 per Participant per Benefit Period. Benefit payments under Section
     8.07 are limited to a separate lifetime maximum of $1,250 per Dependent
     Participant if the Participant is covered under the Basic Plan, or $1,500
     per Dependent Participant if the Participant is covered under the Optional
     Plan.

8.04 Cessation of Participation.  Participation for all Dental Coverage shall
     cease as provided in Section 2.03.

8.05 Dental Expenses Not Subject to Deductible.

(a)  Preventative and Diagnostic. The following dental expenses will be paid or
     reimbursed in accordance with the applicable "Schedule of Covered Dental
     Expenses" referred to in Section 8.08, without regard to the Deductible:

     (1)  Routine oral examinations: but not more than twice in any Benefit
          Period. Such category includes procedures performed by a Dentist that
          aid in making diagnostic conclusions about the oral health of a
          patient and the dental care required. Examinations include but are not
          limited to case history, charting of existing restorations and
          defects, pocket probing, and vitality tests. Also included are recall
          examinations for review and recording of changes occurring since the
          last examination.


                                       75

<PAGE>

     (2)  Prophylaxis, cleaning and scaling of teeth: but not more than twice in
          any Benefit Period. Charges for such treatment performed by a licensed
          dental hygienist are also included as a covered dental expense if such
          Service is rendered under the supervision and guidance of the Dentist.

     (3)  Topical Application of fluoride (for a Participant's child under age
          21 who is a Dependent-Participant) one per Benefit Period: topical
          application of fluoride performed by a Dentist or a licensed dental
          hygienist (if rendered under the supervision and guidance of the
          Dentist).

     (4)  Space Maintainers (for a Participant's child under age 21 who is a
          Dependent-Participant): a fixed or removable appliance designed to
          prevent adjacent and opposing teeth from moving and that replace
          prematurely lost or extracted teeth. Coverage is provided solely for
          charges incurred to maintain existing space including fixed unilateral
          band type, fixed lingual and palatal arch band type, fixed cast type,
          fixed stainless steel crown type, and movable acrylic space
          maintainers. In addition, adjustments of space maintainers are covered
          if such Services are required because of a relative change in the
          condition of the mouth. This Section 8.05 covers only non-orthodontic
          Services, and excludes any treatment described in Section 8.07.

     (5)  X-rays: dental X-rays (radiographs) including full mouth X-rays (but
          not more than one time in any three consecutive Benefit Periods),
          supplementary bitewing X-rays (but not more than twice in any Benefit
          Period), panoramic X-rays (but not more than once in any 3 consecutive
          Benefit Periods), and such other dental X-rays as are required in
          connection with the diagnosis of a specific condition requiring
          treatment.

     (6)  Palliative Treatment: includes emergency treatment required to ease
          pain or infection (Code 09110) (but not treatment to cure the pain or
          discomfort resulting from extractions or permanent fillings).

     (7)  Sealants (for a Participant's child under age 21 who is a
          Dependent-Participant): topical application of Sealants, but limited
          to posterior teeth and not more than one treatment in a Benefit
          Period.

(b)  [Reserved].

8.06 Dental Expenses Subject to Deductible.

(a)  The dental expenses described in subsections (b) and (c) below shall be
     paid or reimbursed in accordance with the Schedules referred to in Section
     8.08 after the applicable Deductible has been satisfied:

(b)  Restorative.


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<PAGE>

     (1)  Restoration of carious teeth to a state of functional acceptability.
          Benefits are provided for restorations with amalgam, silicate,
          synthetic porcelain, acrylic, composite resin, or other similar
          restorative materials.

     (2)  Oral surgery, including extractions and other dental-related surgery,
          except surgical removal of impacted teeth or tumors and cysts, which
          is covered under the Medical Plan.

     (3)  Endodontics, including necessary procedures used for the prevention
          and treatment of diseases of the dental pulp and the surrounding
          periapical structures. Coverage is provided for but not limited to
          root canal therapy, pulp capping, pulpotomy, and apicoectomy.

     (4)  Injection of antibiotic drugs by the attending dentist or Physician.

     (5)  Repair or recemeting of crowns, inlays, bridgework or dentures or
          relining of dentures.

     (6)  General anesthesia when Medically Necessary, such as for a current
          ongoing medical condition, including epilepsy, mental retardation and
          cardiac problems. The Claims Examiner shall determine in its sole
          discretion whether general anesthesia is Medically Necessary.

(c)  Major.

     (1)  Periodontics: includes necessary procedures for treatment of the
          tissues supporting the teeth.

     (2)  Prosthodontics: includes

          (A)  the necessary Services to replace one or more anterior teeth or
               posterior teeth (not including wisdom teeth) which are extracted
               while covered under the Plan, to include:

               [i]  Initial installation of fixed bridgework (including inlays
                    and crowns to form abutments).

               [ii] Initial installation of partial or full removable dentures
                    (including adjustments during the six month period following
                    installation) or a prosthetic Service (including crowns and
                    inlays which form abutments for fixed bridgework).

               [iii] The addition of teeth to an existing partial removable
                    denture or to bridgework.

               [iv] A permanent full denture that replaces an immediate
                    temporary denture within 12 months of installation.


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<PAGE>

          (B)  the replacement of an existing partial denture, full removable
               denture, or fixed bridgework is covered, provided that the
               existing denture or bridgework cannot be made serviceable and was
               installed at least five years prior to its replacement. However,
               should additional extractions or other changes as a result of a
               surgical procedure require the replacement of dentures or
               bridgework, the five year requirement is waived.

(d)  Dental expenses include the cost of precious metals only when used in
     connection with abutments for a unit of a bridge including crowns and
     inlays.

8.07 Orthodontics.  Orthodontic Services shall be reimbursed at 50% of the
     charge, after the applicable Deductible has been satisfied. Orthodontics
     Services include: the correction of malocclusion and abnormal tooth
     position. Coverage is provided for diagnostic procedures and treatment
     consisting of appliance therapy and functional therapy when deemed to be
     functionally necessary for severe dental dysplasia as determined by a
     dental consultant appointed by the Plan Administrator. Orthodontic Services
     are provided only for Dependent children whose course of treatment
     commenced prior to age 21.

8.08 Schedule of Covered Dental Expenses.  The Schedules attached hereto show
     the maximum benefit payable (either as a fixed dollar amount or as a
     percentage of the charge) for each dental procedure. Such schedules may be
     amended from time to time by action of the Plan Administrator. Schedule A
     benefits will be paid in accordance with the lesser of the scheduled amount
     or the Dentist's actual charge. The Plan shall not pay for any Service
     under either Schedule if the Claims Administrator determines that the
     Service is not dentally necessary.

8.09 Predetermination of Dental Benefit Coverage.

(a)  Whenever a Participant's dental treatment will incur charges in excess of
     $150, payment of the charges will be subject to the following at the
     Participant's election:

     (1)  A Participant may submit the Dentist's Treatment Plan to the Claims
          Administrator prior to commencement of the treatment.

     (2)  The Claims Administrator, or his agent, shall review the Treatment
          Plan and may request any additional diagnostic information deemed
          necessary to evaluate the prescribed course of treatment.

     (3)  The Claims Administrator shall provide the Participant an explanation
          of the amounts the Plan will pay, along with recommendations for any
          alternative treatment. Procedures, including alternate procedures,
          will be approved for payment only if the Claims Administrator in its
          sole discretion determines they are dentally necessary.

(b)  Even if the Claims Administrator recommends an alternative treatment, the
     Participant may proceed with the initially prescribed treatment. Payments
     from this Plan, however,


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<PAGE>

     shall be limited to treatments and procedures which the Claims
     Administrator determines are dentally necessary.

(c)  If after review of the predetermination report, the Participant's Dentist
     and the Claims Administrator agree that medically adequate results can only
     be achieved through treatment and procedures in excess of those set out in
     the predetermination report, after giving due consideration to services
     customarily employed by most Dentists, the Plan may cover the additional
     treatment and Services.

8.10 Dentally Necessary.

(a)  As used in this Plan, the term "dentally necessary" means a Service
     furnished by a Dentist if, but only if, the Claims Administrator determines
     in its sole discretion that the Service is required for the diagnosis or
     treatment of the Participant's dental condition, Illness or Injury. A
     Service shall be deemed "required" if, but only if,

     (1)  As to a diagnostic procedure, it is indicated by the health status of
          the Participant and is as likely to result in information that could
          affect the course of treatment as, and no more likely to produce a
          negative outcome than, any alternative Service, both as to the
          condition, Illness or Injury involved and the Participant's overall
          health condition;

     (2)  As to treatment, it is as likely to produce a significant positive
          outcome as, and no more likely to produce a negative outcome than, any
          alternative Service, both as to the condition, Illness or Injury
          involved and the Participant's overall health condition; and

     (3)  As to diagnosis and treatment, it is no more costly (taking into
          account all health expenses incurred in connection with the Service)
          than any alternative Service to meet the tests set forth in this
          definition.

(b)  To be dentally necessary a Service must be consistent with the
     Participant's condition, diagnosis and treatment, in accordance with
     standards of good dental practice, not solely for the convenience of the
     Participant or the Service provider, and furnished in the least intensive
     type of dental care setting required by the Participant's dental condition.
     The fact that a Dentist or another provider has furnished, prescribed,
     ordered, recommended or approved a Service does not of itself make the
     Service dentally necessary. The determination of dental necessity shall be
     made by the Claims Administrator based on a review of the dental records
     describing the Participant's condition and treatment.

8.11 Exclusions.

(a)  The Dental Plan does not cover the following:

     (1)  Services for cosmetic purposes, including charges for personalization
          or characterization of dentures.


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<PAGE>

     (2)  Treatment by other than a Dentist or a Physician, except for scaling
          or cleaning of teeth and topical application of fluoride may be
          performed by a licensed dental hygienist if the treatment is rendered
          under the supervision and guidance of the Dentist.

     (3)  Any Services incurred while not covered under the Dental Plan.

     (4)  Replacement of lost, missing, or stolen prosthetic or orthodontic
          devices.

     (5)  Hospital confinement resulting from a dental condition, subject to
          Section 3.04.

     (6)  Athletic mouthguards, duplicate, temporary, or transitional dentures,
          crowns or appliances.

     (7)  Charges that would not have been made if no Dental Care Plan existed
          or charges that the eligible individual is not legally required to
          pay.

     (8)  Services or supplies which are furnished or paid for by the armed
          forces.

     (9)  Expenses to the extent paid or which the covered individual is
          entitled to have paid, or Services and supplies secured without cost
          in accordance with the laws or regulations of any government.

     (10) Services and supplies which are not necessary for treatment of the
          Injury or Illness or are not recommended and approved by the attending
          Dentist.

     (11) Charges for failure to keep a scheduled visit with the Dentist for any
          reason.

     (12) Replacement of broken prosthetic devices including partial and full
          dentures and fixed bridgework which cannot be made serviceable and
          which have not satisfied the five (5) year waiting period requirement.

     (13) Services for completing claim forms or for providing other records or
          reports.

     (14) Oral hygiene, dietary instructions or plaque control programs.

     (15) Sealants, space maintainers and fluoride treatments after a Dependent
          child attains age 21, and Orthodontic Services for a Dependent child
          that commence after the child attains age 21.

     (16) Services for Illnesses contracted or Injuries sustained as a result of
          an insurrection, riot, or war, declared or undeclared, or of any act
          of war, or of any act of international armed conflict or conflict
          involving armed forces of any international authority, if such war or
          act occurs after the patient becomes a Participant in the Plan or
          after he was covered under a predecessor insured plan.

     (17) Treatment in connection with occupational Injuries or Illnesses
          covered by any workers' compensation law.


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<PAGE>

     (18) Dental expenses which are eligible for payment under the Medical Plan.

     (19) Charges in excess of the charges described in Schedules A and B.

     (20) Appliance insertion or restoration when used to increase vertical
          dimension, restore occlusion or for purposes of splinting, or for
          abutment purposes only.

     (21) Experimental or Investigative treatment, equipment, new technology,
          drugs, procedures or supplies as defined in Article 1, and drugs not
          approved by the U.S. Food & Drug Administration.

     (22) Orthodontic Services for any Participant, except Dependent children
          whose course of orthodontic treatment commenced prior to age 21.

     (23) Dental work to the extent it exceeds another procedure which is
          suitable for treating the condition, as determined by the Claims
          Administrator or his agent.

     (24) Anesthesia except general anesthesia when it is Medically Necessary
          and is administered in connection with oral surgery.

     (25) Services rendered prior to eligibility for Plan participation. For
          treatment in progress when participation commences, benefits will be
          determined on the basis of treatment actually rendered while covered
          under the Plan.

     (26) Services, supplies or treatments that do not meet the standards of
          dental practice accepted by the American Dental Association.

     (27) Myofunctional therapy.

     (28) Replacement of teeth removed before dental coverage began.

     (29) Replacement of third molars.

     (30) Drugs and their administration.

     (31) All conditions which would result in exclusion of a Service or item
          according to the terms of Article 5, which is incorporated by
          reference into this Article 8.

(b)  [Reserved].

                                   ARTICLE 9.

                                  Vision Plan

9.01 Vision Care Benefits.

(a)  The Plan shall pay the covered expenses of licensed ophthalmologists,
     licensed optometrists, and licensed opticians as follows:


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<PAGE>

     (1)  Eye Examinations: Complete eye examinations, whether or not eyeglasses
          are prescribed. Coverage shall be limited to one examination during
          any twenty-four consecutive month period. The maximum benefit shall be
          $70 per examination.

     (2)  Lenses: Lenses for eyeglasses ordered by a licensed ophthalmologist or
          licensed optometrist and supplied by an optician. Coverage shall be
          limited to one set (two lenses) during any twenty-four consecutive
          month period. Maximum benefits shall be as follows:

<TABLE>
<S>                               <C>
     Single Vision prescription   $ 60 (per pair)
     Bifocal prescription         $ 80
     Trifocal prescription        $110
     Aphakic prescription
        - Glass                   $ 30
        - Plastic                 $ 70
        - Aspheric                $ 90
        - Case hardening          $  2
</TABLE>

          Contact lenses (including fitting, training, and lifetime warranty)
          when visual acuity cannot be corrected to 20/70 or better, except by
          use of contact lenses. Benefits are $200 per pair ($100 per lens). If
          contact lenses are selected for any other reason, total benefits are
          limited to $120 per pair (the benefit for single vision lenses and
          frames). This contact lens benefit is in lieu of eyeglasses frames and
          lenses during any twenty-four (24) consecutive month period.

     (3)  Frames: Frames for glasses ordered by a licensed ophthalmologist or
          licensed optometrist. Coverage shall be limited to one set of frames
          during any twenty-four consecutive month period. The maximum benefit
          shall be $60 per set of frames.

(b)  [Reserved].

9.02 Exclusions.

(a)  Benefits are not provided under the Vision Plan for the following Services
     or items, or under the following conditions:

     (1)  Sunglasses, plain or prescription.

     (2)  Lenses which do not require a prescription.

     (3)  Services received because of Injury or Illness arising out of
          employment that is covered by workers' compensation or similar law.

     (4)  Eye examinations required by an employer as a condition of employment,
          or by a governmental body.


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<PAGE>

     (5)  Services and supplies for which the Participant is not legally
          obligated to pay, or for which no charge would be made absent the
          Plan.

     (6)  Services or supplies not prescribed as necessary by a licensed
          ophthalmologist, optometrist or optician.

     (7)  Services or supplies covered under the Medical Plan. In the case of
          Services or supplies provided in conjunction with a covered eye
          examination, this exclusion shall not affect payment for a covered eye
          examination according to Section 9.01.

     (8)  Services rendered or supplies delivered while not an eligible
          Participant.

     (9)  Training or educational instruction and materials.

     (10) Expenses for preparing medical reports, itemized bills, or benefit
          request forms.

     (11) Expenses for broken appointments or telephone calls.

     (12) Any treatment, equipment, new technology, drug, device, supply,
          procedure, facility or Service that is Experimental or
          Investigational.

     (13) Safety glasses or goggles.

     (14) Special procedures such as, but not limited to, orthoptics, vision
          training, or subnormal vision aids.

     (15) Charges for Services covered under another group health plan or no
          fault automobile insurance.

     (16) Benefits are not provided under the Vision Plan for the Dependent
          child of a Participant on or after the date the child attains age 21,
          except for a handicapped Dependent child as described in Section 1.18.

     (17) All conditions which would result in exclusion of a Service or item
          according to the terms of Article 5, which is incorporated by
          reference into this Article 9.

(b)  [Reserved].

                                   ARTICLE 10.

                              Continuation Coverage

10.01 In General.  Each Qualified Beneficiary who would lose coverage hereunder
     as a result of a Qualifying Event shall be entitled to elect, within the
     election period, to obtain and pay premiums for Continuation Coverage
     hereunder. Such Continuation Coverage shall consist of coverage which, as
     of the time such coverage is being provided, is identical to the coverage
     the Qualified Beneficiary had on the day before the Qualifying Event.
     Continuation Coverage is subject to all the rights, terms, conditions,
     limitations


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<PAGE>

     and exclusions which apply to the Plan offered to similarly situated
     Participants with respect to whom a Qualifying Event has not occurred. If
     coverage under the Plan is modified for any group of similarly situated
     Participants, such coverage shall also be modified in the same manner for
     all Participants who are Qualified Beneficiaries with respect to such
     group.

10.02 Qualifying Event.

(a)  For purposes of this Article, the term "Qualifying Event" means, with
     respect to any Employee-Participant, any of the following events which, but
     for the Continuation Coverage under this Article 10, would result in loss
     of coverage for a Qualified Beneficiary:

     (1)  The Employee-Participant's (or Retired Employee's) death.

     (2)  The termination (other than by reason of an Employee-Participant's
          gross misconduct), or reduction of hours, of the
          Employee-Participant's employment. The term "gross misconduct" shall
          mean conduct of an Employee-Participant which is (A) a willful
          disregard of standards of behavior which the Company has a right to
          expect, showing a gross indifference to the Company's interest; or (B)
          a series of repeated violations of employment rules proving that the
          Employee-Participant has regularly and willfully disregarded his
          obligations.

     (3)  The divorce or legal separation of the Employee-Participant (or
          Retired Employee) from the Employee-Participant's (or Retired
          Employee's) Spouse.

     (4)  The Employee-Participant becomes enrolled for Medicare benefits under
          Title XVIII of the Social Security Act.

     (5)  A Dependent child ceases to be a Dependent child under the Plan.

(b)  This subsection (b) shall apply if, in connection with termination of
     employment which is a Qualifying Event under Section 10.02(a)(2), a former
     employee is covered under a severance pay plan which: (1) provides for the
     continuation of coverage under a Plan for a term certain beginning on the
     date of the Qualifying Event, and (2) provides for coverage that is
     identical to the Employee-Participant's coverage on the day before the
     Qualifying Event. If this subsection (b) applies, then the period of
     coverage under the severance pay plan shall count as Continuation Coverage
     under this Article 10, so that coverage under the severance agreement, for
     the time it is in effect, shall run concurrently with the Continuation
     Coverage. The requirement in this Section 10.02(b) of identical coverage is
     subject to all the rights, terms, conditions, limitations and exclusions
     which apply to the Plan offered to similarly situated Participants with
     respect to whom a Qualifying Event has not occurred, and if coverage under
     the Plan is modified for any such group of similarly situated Participants,
     such coverage shall also be modified in the same manner for the Participant
     with respect to such group to whom this subsection 10.02(b) applies.


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<PAGE>

(c)  This subsection (c) applies to an Employee-Participant: (i) who receives
     written notice from the Company that his/her employment is being terminated
     by the Company under the provisions of the "Special Severance Pay Plan - -
     B&W/RJR Business Combination" ("SSP"), and (ii) who is eligible for
     coverage as a Retired Participant under Section 2.08 for any reason as of
     the date of actual employment termination (an "eligible Section 10.02(c)
     Employee-Participant"). Continuation Coverage under this subsection (c)
     shall be subject to the following:

     (1)  Notwithstanding any provision of the Plan to the contrary, an eligible
          Section 10.02(c) Employee-Participant shall be treated as having
          incurred an employment termination resulting in a "loss of coverage"
          and a "Qualifying Event" as contemplated by Section 10.02(a) as of
          such eligible Section 10.02(c) Employee-Participant's date of actual
          employment termination, whereupon he/she shall be eligible for
          Continuation Coverage hereunder.

     (2)  An eligible Section 10.02(c) Employee-Participant who elects
          Continuation Coverage under this Article 10 shall be provided the
          coverage for which he/she is eligible under Section 2.08 upon
          termination of continuation coverage under this Article 10
          (irrespective of the reason for such termination) in accordance with
          the applicable terms and conditions of Section 2.08.

10.03 Qualified Beneficiary.  The term "Qualified Beneficiary" means, with
     respect to an Employee-Participant (including a Retired Employee), an
     individual who, on the day before the Qualifying Event for such
     Employee-Participant, is a Participant on the basis of being (a) the Spouse
     of the Employee-Participant, (b) the Dependent child of the
     Employee-Participant, or (c) a child who is born to or placed for adoption
     with the Participant during the period of Continuation coverage under this
     Article 10. In addition, in the case of a Qualifying Event arising from
     termination of employment or reduction of hours, the term "Qualified
     Beneficiary" shall include the Employee-Participant. No
     Employee-Participant, Spouse, or Dependent child may be considered a
     Qualified Beneficiary if, on the day before to the Qualifying Event, such
     individual was not already a Participant in the Plan, except for any child
     born to or placed for adoption with the Employee-Participant during the
     period of Continuation Coverage. The term "Qualified Beneficiary" shall
     exclude nonresident aliens to the extent permitted by law. A Retired
     Participant who has not elected to receive Continuation Coverage shall not
     be treated as a Qualified Beneficiary for any purpose under the Plan.

10.04 Newborn and Adopted Children.  A child born to or placed for adoption with
     the Employee-Participant during a period of Continuation Coverage has the
     same open enrollment period rights as other Qualified Beneficiaries with
     respect to the same Qualifying Event and is entitled to a 36 month maximum
     coverage period if a second Qualifying Event occurs while the child is in a
     period of Continuation Coverage resulting from a termination-of-employment
     Qualifying Event. The maximum coverage period for such child shall be
     measured from the date of the Qualifying Event that gives rise to the
     period of Continuation Coverage during which the child is born or adopted
     and not from the date of birth or placement for adoption. "Placement, or
     being placed, for adoption"


                                       85

<PAGE>

     means the assumption and retention by the covered employee of a legal
     obligation for total or partial support of a child in anticipation of the
     adoption of the child. The child's placement for adoption with the
     Employee-Participant terminates upon the termination of the legal
     obligation for total or partial support. A child who is immediately adopted
     by the covered employee without a preceding placement for adoption is
     considered to be placed for adoption on the date of the adoption.

10.05 Period of Coverage.

(a)  The period of Continuation Coverage shall be measured from the date of the
     Qualifying Event and shall end upon the earliest of the following:

     (1)  In the case of a Qualifying Event which is a termination of employment
          or reduction of hours, the date which is 18 months after the date of
          such Qualifying Event; provided, however, that if another Qualifying
          Event occurs during such 18 month period, then in the case of an
          individual who was a Qualified Beneficiary as of the first Qualifying
          Event and was covered at the time of such second Qualifying Event, the
          termination date shall be no later than 36 months after the date of
          the initial Qualifying Event.

     (2)  In the case of any Qualifying Event which is not a termination of
          employment or reduction of hours, the date which is 36 months after
          the date of such Qualifying Event.

     (3)  The date which is 29 months after the date of such Qualifying Event,
          but only if (A) the Qualified Beneficiary is determined under Title II
          or XVI of the Social Security Act to have been disabled at any time
          within the first 60 days of Continuation Coverage under subsection (1)
          above, and (B) prior to the date which is 18 months after such
          Qualifying Event, the Qualified Beneficiary provides notice of such
          disability determination to the Claims Administrator in accordance
          with Section 10.09.

     (4)  The date on which the Company ceases to provide any group health plan
          to any Employee.

     (5)  The date on which the Qualified Beneficiary fails to make timely
          payment of the premium required under the Plan with respect to such
          Qualified Beneficiary. Payment of any premium (other than payment for
          the period preceding election of coverage) shall be considered timely
          if made within 30 days after the due date, subject to Section
          10.06(b).

     (6)  The date on which the Qualified Beneficiary first becomes, after the
          date of the election, (1) covered under any other group health plan
          (as an employee or otherwise), which does not contain any exclusion or
          limitation with respect to any preexisting condition of such Qualified
          Beneficiary (other than such an exclusion or limitation which does not
          apply to (or is satisfied by) such Qualified


                                       86

<PAGE>

          Beneficiary in accordance with applicable law as set forth in Code
          Section 4980B(f)(2)(B)(iv)(I)), or (2) enrolled for Medicare benefits
          under Title XVIII of the Social Security Act.

(b)  [Reserved].

10.06 Premium Requirements.

(a)  A Qualified Beneficiary shall be required to pay a premium for each
     determination period of Continuation Coverage. The determination period
     shall be the Benefit Period. Such premium shall not exceed 102 percent of
     the applicable premium for such period of coverage, except that if coverage
     is being continued for 29 months under Section 10.05(a)(3), the Plan may
     require the Qualified Beneficiary to pay a premium of 150% of the
     applicable premium for each month of Continuation Coverage after 18 months.
     The Qualified Beneficiary may elect to pay such premium in monthly
     installments.

(b)  If Continuation Coverage is elected after the Qualifying Event has
     occurred, the Qualified Beneficiary shall be permitted for a period of 45
     days after the date of his election to pay the premium for Continuation
     Coverage during the period preceding his election. If the Qualified
     Beneficiary fails to pay such premium within such 45 day period, the
     Qualified Beneficiary's Continuation Coverage shall be cancelled effective
     as of the date of his Qualifying Event and he shall not be entitled to any
     Continuation Coverage under this Article 10.

(c)  The Plan Administrator shall cause an actuary to determine the applicable
     premium for each determination period of Continuation Coverage, either on
     the basis of a reasonable estimate of the cost of providing such coverage
     for similarly situated beneficiaries, or, on the basis of actual past cost
     for similarly situated beneficiaries, in a manner which complies with the
     Code and ERISA.

10.07 Insurability and Conversion Option.  The availability of Continuation
     Coverage shall not be conditioned upon, or discriminate on the basis of a
     lack of evidence of insurability. In addition, where a Qualified
     Beneficiary's Continuation Coverage ends upon expiration of the applicable
     period under Section 10.05, the Plan shall, during the 180-day period
     ending upon such expiration date, provide to such Qualified Beneficiary the
     option of enrollment under a conversion health plan otherwise generally
     available under Article 2 of the Plan.

10.08 Qualified Beneficiary's Election.

(a)  Each Qualified Beneficiary who would otherwise lose coverage under the Plan
     because of a Qualifying Event shall be entitled to make an independent
     election, within the election period, to have Continuation Coverage under
     the Plan. Continuation Coverage which may be elected hereunder shall be
     limited to such medical benefit options as were in effect at the time of
     the Qualifying Event.

(b)  The election period shall be the period which:


                                       87

<PAGE>

     (1)  begins no later than the date on which coverage terminates by reason
          of a Qualifying Event;

     (2)  is 60 days in duration; and

     (3)  ends no earlier than 60 days after the later of:

          (A)  the date on which coverage would normally terminate; or

          (B)  the date of the notice given by the Plan Administrator to a
               Qualified Beneficiary with respect to a Qualifying Event.

(c)  Except as otherwise specified in an election, any election of Continuation
     Coverage by a Qualified Beneficiary who is either an Employee-Participant
     or the Spouse of an Employee-Participant shall be deemed to include an
     election of Continuation Coverage on behalf of any other Qualified
     Beneficiary who otherwise would lose coverage by reason of the Qualifying
     Event. A Qualified Beneficiary who waives Continuation Coverage may revoke
     such waiver at any time before the end of his election period, provided
     that no benefits shall be payable for charges incurred during the period
     commencing on the date that the Qualified Beneficiary's coverage under the
     Plan terminated and ending on the date the Qualified Beneficiary revokes
     such waiver.

10.09 Notices.

(a)  Company Notice to Plan Administrator.  The Company shall notify the Plan
     Administrator of a Qualifying Event by reason of death, termination of
     employment, reduction of hours, or entitlement to Medicare benefits, within
     30 days of the date of the Qualifying Event.

(b)  Participant Notice to Plan Administrator.  The Qualified Beneficiary shall
     notify the Plan Administrator of a Qualifying Event by reason of divorce,
     legal separation, or a Dependent child ceasing to be a Dependent under the
     terms of the Plan, within 60 days after the date of the Qualifying Event.
     Each Qualified Beneficiary who is determined under Title II or XVI of the
     Social Act to have been disabled at any time during the first 60 days of
     Continuation Coverage shall notify the COBRA Administrator of such
     determination within 60 days after the date of the determination and shall
     notify the plan Administrator within 30 days after the date of any final
     determination under such titles that the Qualified Beneficiary is no longer
     disabled. If notice is not given within the 60 day period, any right to
     elect Continuation Coverage shall be lost.

(c)  Plan Administrator Notice to Qualified Beneficiary.  In the case of a
     Qualifying Event by reason of death, termination of employment, reduction
     of hours, or entitlement to Medicare benefits, the Plan Administrator shall
     notify each Qualified Beneficiary with respect to such event of such
     beneficiary's right to elect Continuation Coverage. In the case of a
     Qualifying Event by reason of divorce, legal separation, or a Dependent
     child ceasing to be a Dependent under the terms of the Plan, where the
     Participant notifies the COBRA Administrator, the COBRA Administrator shall
     notify each Qualified


                                       88

<PAGE>

     Beneficiary with respect to such event of the right to elect Continuation
     Coverage. Notice to Qualified Beneficiaries shall be given within fourteen
     (14) days after the date the COBRA Administrator is notified of a
     Qualifying Event by reason of termination of employment, reduction of
     hours, divorce, or legal separation, provided that the COBRA Administrator
     receives notice within the time prescribed by applicable law or regulation.

(d)  Construction.  Sections 10.01 - 10.09 are intended to comply with the
     continuation coverage requirements of Code Section 4980B, and shall be
     administered and construed in a manner consistent with such requirements.

                                  ARTICLE 11.

                    Coordination of Benefits and Subrogation

11.01 Coordination of Benefits.

(a)  Benefits under the Plan shall be coordinated with all other health care
     coverage and shall be limited in all cases to a maximum of 100% of the
     Covered Charges to the Participant for Covered Services. Benefits shall be
     coordinated in the same manner with payments made or available under
     "no-fault" statutes to the maximum extent permitted by federal law and
     state law, to the extent not preempted by federal law.

(b)  This provision shall be applicable to all benefits available under the
     Plan, except that no coordination of benefits provisions shall apply to the
     Prescription Drug Plan.

(c)  Benefits shall be paid first from any plan that does not have a
     coordination of benefits provision.

11.02 "Primary-Secondary" Payment Rule.

(a)  In processing a claim where two or more health plans exist, the
     "primary-secondary" payment rule determines the provision of payment. It is
     applied in the following manner:

     (1)  The benefits of a health plan (which may include, without limitation,
          the Plan) which covers the patient as other than a dependent will be
          payable before the benefits of a health plan which covers the patient
          as a dependent.

     (2)  A Dependent child who is potentially subject to coverage under the
          health plans of both parents (where parents are neither separated nor
          divorced) shall be covered by the health plan of the parent whose
          birthday occurs earliest within the calendar year (the "birthday
          rule"). Such plan (which may include, without limitation, the Plan)
          shall be considered the primary plan for such a Dependent child. If
          both parents have the same birthday, the plan covering the parent for
          the longest period of time shall be considered the primary plan with
          regard to a Dependent child. If the other plan does not follow the
          birthday rule, the other plan's coordination of benefits rule shall
          apply.


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     (3)  The Plan will accept secondary responsibility on claims in which:

          (A)  another health care plan is primarily responsible because the
               patient is covered thereunder; or

          (B)  another health care plan is primarily responsible because of the
               application of the rule stated in Section 11.02(a)(2), above.

(b)  Notwithstanding the foregoing, the following rules apply to the coverage of
     Dependent-Participant children in the event that the Employee-Participant
     (or Retired Employee) is divorced or legally separated from his or her
     Spouse:

     (1)  If there is a court decree which establishes financial responsibility
          for medical, dental or other health care expenses for the
          Dependent-Participant child, the plan covering the parent who has that
          responsibility will be primary and the plan covering the other parent
          will be secondary. If the court decree provides that the parents share
          joint responsibility, without assigning primary responsibility for
          healthcare, the birthday rule shall apply.

     (2)  If there is no such court decree, and the parent with custody of the
          Dependent-Participant child has not remarried, the plan covering the
          parent who has custody of the Dependent-Participant child will be
          primary, and the plan covering the other parent will be secondary.

     (3)  If there is no such court decree, and the parent with custody of the
          Dependent-Participant child has remarried, the order of priority is:

          (A)  the plan covering the parent who has custody;

          (B)  the plan covering the Spouse of the parent who has custody (that
               is, the stepparent of the Dependent-Participant child): and

          (C)  the plan covering the parent without custody.

(c)  If a Participant is covered under more than one plan through two jobs,
     benefits of the plan that covers the Participant as an employee who is
     neither retired nor laid off, or as the Dependent of such employee, shall
     be determined before the benefits of the plan which covers the Participant
     as a retired or laid off employee, or as the dependent of such employee. If
     the other plan does not contain a coordination provision with respect to
     retired or laid off employees, resulting in each plan paying benefits after
     the other, then the preceding sentence shall not apply.

(d)  If the rules set forth above do not apply or cannot be determined, then the
     plan that covered the person for the longest period of time shall pay
     first.


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11.03 Medicare Eligibility.

(a)  With respect to a Participant who is eligible for Medicare coverage, the
     Plan shall provide primary coverage only to the extent required by law.
     With respect to any Retired Participant who is eligible for Medicare by
     virtue of his retirement or disability, the Plan shall not be primary, and
     shall in all cases offset the amount of its normal benefit payment by all
     amounts paid or payable by Medicare for the same covered claim. If a
     Participant would be eligible for Medicare benefits, except for his failure
     to enroll or apply for such benefits, the provisions of the Plan shall be
     applied as if the Participant did apply or enroll and did receive Medicare
     Parts A and B benefits with respect to the care, treatment or Services
     covered by the Plan.

(b)  Any benefits payable under both the Plan and Medicare shall be made
     pursuant to federal legislation, regulations and applicable guidelines,
     subject to all applicable federal court decisions.

11.04 Other Insurance or Health Plans.  Notwithstanding Section 11.02, or any
     other provision of this Plan, if benefits covered under this Plan are also
     provided in whole or in part by any insurance or health plan, whether or
     not insured, which does not contain provisions for coordination of
     benefits, payment will be made under this Plan only for those benefits not
     covered by such insurance or health plan.

11.05 Amounts Reduced Due to Application of Rules.  In any case where the Plan
     has secondary responsibility, and its payment is reduced in consideration
     of the primary plan's benefits, a record shall be kept of such reduction.
     The amount of reduction shall then be used to increase Plan payments on the
     affected Participant's claims in the same Benefit Period to the extent
     there are covered expenses that would not otherwise be fully paid by the
     Plan and any other plan providing coverage. This provision is inapplicable
     with respect to benefit reductions caused by Medicare payments to or for
     Retired Participants.

11.06 Third-Party Liability.

(a)  Benefits shall be modified when a third person, other than the person for
     whom a claim is made, is considered responsible or liable for payment due
     to an Illness or Injury. To the extent payment is made for such Illness or
     Injury, or may be made in the future, by or for that responsible third
     person (as a settlement, judgment or in any other way), charges arising
     from that Illness or Injury are not covered under the Plan.

(b)  When a claim is received, Plan benefits which would be payable except for
     the above modification will be paid, subject to Section 11.07, if payment
     by or for the responsible third person has not yet been made.

11.07 Subrogation and Reimbursement.

(a)  If the Plan pays, or is obligated to pay, any amount to or on behalf of a
     Participant, the Plan shall be subrogated as provided in this Section 11.07
     to all the Participant's rights of


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<PAGE>

     recovery with respect to the Illness or Injury for which the payment of
     benefits is made by the Plan. The right of recovery referred to in the
     preceding sentence shall include the right to make a claim, sue and recover
     against any person or entity from the first dollars of any funds which are
     paid or payable as a result of a personal injury claim or any reimbursement
     of medical expenses. If requested in writing by the Plan, the Participant
     shall take, through any representative designed by the Plan or the
     Employer, such action as may be necessary or appropriate to recover such
     payment from any person or entity, said action to be taken in the name of
     the Participant. In the event of a recovery or settlement, the Plan shall
     be reimbursed in full on a first priority basis out of such recovery or
     settlement for expenses, costs, and attorneys' fees incurred by it in
     connection therewith.

(b)  If the Plan pays, or is obligated to pay, any amount to or on behalf of a
     Participant for an Illness or Injury, the Plan shall be entitled to, and
     shall have a first priority and lien on, the proceeds of any recovery, by
     judgment, settlement or otherwise, with respect to the Illness or Injury,
     and if paid to the Participant, the Participant shall immediately pay any
     such proceeds to the Plan Administrator. If the Participant fails to pay
     such proceeds, or does not cause such proceeds be paid, to the Plan
     Administrator, the Plan Administrator may, in addition to any other remedy
     to which it may be entitled, recover the proceeds directly or by offset
     against claims for benefits under the Plan made with respect to the
     affected Participant or to Dependent(s) of such Participant.

(c)  The Plan shall have the right of subrogation and reimbursement set forth in
     this Section 11.07 regardless of whether the Participant is made whole and
     regardless of whether the recovery, or any part thereof, is designated as
     payment for medical expenses, pain and suffering, loss of income or any
     other specified or unspecified damages or reason, and without regard to
     whether recovery is designated as including or excluding the Plan's medical
     expenses. Any recovery by a Participant, an attorney or other third party
     shall be deemed to be for the benefit of the Plan and shall be held in
     constructive trust for the Plan until the Plan is reimbursed in full for
     all amounts paid by the Plan. The subrogation and reimbursement rights of
     the Plan described in this Section 11.07 include all rights against, and
     include all rights with respect to, proceeds from or held by, any attorney,
     third party, insurance carrier or payor of medical benefits, including an
     uninsured or under-insured motorist carrier, a no-fault carrier and a
     school insurance carrier, even if such coverage was purchased by the
     Participant, and without regard to whether the proceeds have been paid or
     are payable.

(d)  By participating in the Plan, each Participant agrees to cooperate fully
     with the Plan and to execute and deliver agreements, liens and other
     documents and do whatever else the Plan deems necessary to enable and
     assist the Plan in exercising its rights under this Section 11.07, but the
     Plan's rights under this Section 11.07 shall be effective regardless of
     whether the Participant actually signs any agreements, liens or other
     documents. By participating in the Plan, each Participant also agrees (1)
     that he or she will not make or maintain any make whole, common trust fund
     or apportionment action or claim in contravention of the subrogation and
     reimbursement provisions of this Section 11.07, (2) that the Plan has a
     right to pursue subrogation and reimbursement claims under ERISA,


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<PAGE>

     and (3) that he or she will not oppose any proceeding by the Plan to obtain
     reimbursement on procedural grounds. The Participant shall not do anything
     to impair the Plan's rights. If the Plan Administrator determines that any
     Plan recovery rights under Section 11.07 have been impaired by any action
     of the Participant or by the Participant's failure to comply with the
     Participant's obligations under Section 11.07, the Plan Administrator may,
     in addition to any other remedy to which it may be entitled, determine the
     amount by which the Plan's recovery rights have been impaired and recover
     such amount directly or by offset against claims for benefits under the
     Plan made with respect to the affected Participant or to Dependent(s) of
     such Participant.

(e)  This Section 11.07 entitles the Plan to subrogation and reimbursement equal
     to the entire amount paid by the Plan for the Illness or Injury to which
     the subrogation or reimbursement relates, including related expenses, costs
     and attorneys' fees, which shall be from the first dollars payable to or
     received by the Participant from any settlement, judgment or other payment,
     without reduction for attorneys' fees or for any other reason. The common
     fund and apportionment doctrines shall not apply to any amounts received.
     Any attorneys' fees shall be the responsibility solely of the Participant,
     and the Plan shall not pay any attorneys' fees or costs associated with a
     Participant's claim or lawsuit without the Plan Administrator's prior
     written authorization.

(f)  The intention of this Section 11.07 is to give the Plan the first right of
     subrogation and reimbursement in full with respect to the first dollars
     paid or payable, even though the Participant is not made whole. All
     references to a Participant in this Section 11.07 shall include Dependents
     of the Participant. Each Participant agrees that as a condition to
     receiving benefits under the Plan, the Participant shall comply with the
     requirements of this Section 11.07.

11.08 Excess Payments.  Any payment made by the Plan to any person or entity in
     excess of the amount which the Plan was obligated to pay to such person or
     entity shall be recoverable by the Plan from the payee or the covered
     individual in respect of whom the payment was made, or their successors or
     assigns, and all payments made by the Plan to any person or entity are
     expressly conditioned upon the Plan's right to recover excessive or
     erroneous payments. Recovery of excessive or erroneous payments may be
     obtained from a Participant either directly or by offset against claims for
     benefits under the Plan made with respect to the affected Participant or to
     Dependent(s) of such Participant. A Participant shall provide the Plan
     Administrator with such information and documents as may reasonably be
     required in order to give effect to the provisions of this paragraph.

                                  ARTICLE 12.

                               General Provisions

12.01 Rights and Benefits Not Assignable.  The rights of a Participant under the
     Plan and the benefits to which he is entitled are personal to the
     Participant and are not assignable. The Participant may authorize the Plan
     to make payment of benefits, otherwise payable under the Plan to the
     Participant, directly to the provider of the Service, and Participants
     using a


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     Network Provider are deemed to have authorized direct payments. The Plan in
     its discretion may make payment directly to a Service provider, but is not
     obligated to do so. If the Plan chooses to make direct payment, such
     payment shall not operate as an assignment of any right or option under the
     Plan.

12.02 Care Rendered Outside the U.S.  Benefits equivalent to those in the United
     States shall be provided for care rendered outside of the United States.
     Individuals receiving such care, whether they are Participants in the
     active employ of the Company or are Retired Participants, shall be subject
     to the policies developed by the Company to provide benefits hereunder on
     their behalf, which policies shall be administered uniformly with respect
     to affected individuals who are similarly situated.

12.03 Filing Deadlines.  The Plan shall not pay any benefit for claims filed
     more than two years from the date the Service was performed. By
     participating in the Plan, each Participant agrees that no legal or
     equitable action may commence against the Plan or any fiduciary of the Plan
     more than 90 days after exhaustion of the Participant's rights under the
     Plan's claims procedure (Section 13.06(a)(4)). All levels of the Plan's
     claims procedure must be exhausted before a Participant can bring an action
     at law or equity against the Plan or a fiduciary of the Plan.

12.04 Forfeiture of Unclaimed Benefits.

(a)  If the Plan Administrator is unable to locate any person to whom a payment
     is due under the Plan, or a benefit payment check is not presented for
     payment, such benefit payment shall be forfeited at the earlier of:

     (1)  the day preceding the date such payment would otherwise escheat
          pursuant to any applicable escheat law; or

     (2)  the later of:

          (A)  expiration of the time period for submission of the benefit claim
               pursuant to Section 12.03, or

          (B)  six months after issuance of any benefit payment check.

(b)  Forfeited payments shall be returned to the source of the payment (e.g., if
     benefits are paid from company general assets, the forfeited payment shall
     be returned to the Company; if benefits are paid from trust funds, the
     forfeited payment shall be returned to the trust from which the payment was
     made).

12.05 Family and Medical Leave Act.  Notwithstanding any Plan provision to the
     contrary, the Plan shall comply with the FMLA and any applicable state (to
     the extent not preempted by ERISA) family and medical leave laws. If the
     Company determines that a Participant will not return to work from an
     unpaid FMLA leave, the Company may recover its payments or credits to the
     maximum extent permitted under the FMLA.


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<PAGE>

12.06 Independent Agents.  The Plan does not furnish any medical or health
     Services, supplies or facilities, and the Plan does not recommend any
     Physician or Hospital. Certain Physicians and Hospitals have been
     designated to participate in the Network in an attempt to reduce health
     care costs, and Physicians and Hospitals may be added to and deleted from
     the Network in the discretion of the Plan or an organization designated by
     the Plan. All Physicians and Hospitals are independent agents with respect
     to the Plan. The Plan is not liable for any act or omission of any
     Physician or Hospital. Participants are responsible for determining a
     Hospital's or Physician's Network status prior to receiving services.

12.07 Military Service.  Notwithstanding any provision of this Plan to the
     contrary, the Plan shall provide coverage for Participants with respect to
     service in the uniformed services in accordance with chapter 43 of title 38
     of the United States Code, as amended. The term "service in the uniformed
     services" shall have the meaning set forth in 38 USC Section 4301(13).

12.08 Privacy Standards.  The purpose of this Section 12.08 is to comply with
     the Health Insurance Portability and Accountability Act of 1996 and the
     rules and regulations adopted thereunder (HIPAA). The use and disclosure of
     protected health information (PHI) by the Company shall be consistent with
     this Section 12.08. The Plan Administrator shall adopt, and may amend from
     time to time, a Privacy Policy to ensure the privacy of PHI in accordance
     with HIPAA (the "Privacy Policy"). Any terms that are defined in HIPAA or
     in the Privacy Policy shall have the same meanings when used in this Plan.
     This Section 12.08 shall be effective beginning April 14, 2003.

(a)  Disclosure of Summary and Enrollment Health Information.  The Plan may
     disclose summary health information to the Company if the Company requests
     the information for the purpose of (1) obtaining premium bids from health
     plans for providing health insurance coverage under the Plan, or (2)
     modifying, amending or terminating the Plan. The Plan may disclose to the
     Company information on whether an Employee is or is not participating in
     the Plan. The Plan may disclose de-identified health information to the
     Company, but the Plan may not disclose the key or other mechanism by which
     the information could be re-identified, except under circumstances that
     would permit disclosure of the underlying information.

(b)  Disclosure of PHI.  The Plan may disclose PHI to the Company only upon
     receipt of a certification by the Company that the Plan has been amended to
     incorporate the provisions of 45 CFR Section 164.504(f)(2)(ii), and that
     the Company agrees to the conditions of disclosure set forth below. By its
     adoption of this Plan, the Company agrees that with respect to any PHI
     (other than enrollment/disenrollment information and summary health
     information, which are not subject to these restrictions) disclosed to it
     by the Plan (or a health insurance issuer or HMO on behalf of the Plan) the
     Company shall:

     (1)  Not use or further disclose the PHI other than as permitted or
          required by the Plan and the Privacy Policy, or as required by law.


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<PAGE>

     (2)  Ensure that any agents, including a subcontractor, to whom it provides
          PHI received from the Plan agree to the same restrictions and
          conditions that apply to Company with respect to such PHI.

     (3)  Not use or disclose the PHI for employment-related actions and
          decisions or in connection with any other benefit or employee benefit
          plan of the Company.

     (4)  Report to the Plan any use or disclosure of PHI that is inconsistent
          with the uses or disclosures permitted under Section 12.08(b)(1), if
          and when the Company becomes aware of such inconsistent use or
          disclosure.

     (5)  Make PHI available to individuals in accordance with 45 CFR Section
          164.524 and consistent with the Plan's HIPAA Privacy Policy.

     (6)  Make PHI available to individuals for amendment and incorporate into
          PHI any such amendments in accordance with 45 CFR Section 164.526 and
          consistent with the Plan's HIPAA Privacy Policy.

     (7)  Make available the information required to provide an accounting of
          disclosures in accordance with 45 CFR Section 164.528 and consistent
          with the Plan's HIPAA Privacy Policy.

     (8)  Make the Company's internal practices, books, and records relating to
          the use and disclosure of PHI received from the Plan available to the
          Secretary of Health and Human Services for purposes of determining the
          Plan's compliance with HIPAA's privacy requirements.

     (9)  If feasible, return or destroy all PHI that the Company received from
          the Plan, and any copies, that the Company maintains in any form, when
          the Company no longer needs such PHI for the purpose for which
          disclosure was made, except that if such return or destruction is not
          feasible, the Company will limit further uses and disclosures of the
          PHI to those purposes that make the return or destruction of the PHI
          infeasible.

     (10) Ensure that the adequate separation between the Plan and the Company
          (i.e., the "firewall"), required in 45 CFR Section 504(f)(2)(iii) is
          established.

(c)  Adequate Separation.  The Privacy Policy shall designate the employees or
     classes of employees or other persons under the Company's control who shall
     have access to PHI (the "Privacy Group"), and the portion of the Privacy
     Policy that designates the Privacy Group is incorporated into this Plan by
     reference. No other persons shall have access to PHI. The Privacy Group
     shall only have access to and use PHI to the extent necessary to perform
     the Plan administrative functions that the Company performs for the Plan.
     Instances of noncompliance with this Section 12.08 by any member of the
     Privacy Group shall be resolved by applying the disciplinary measures
     described in the Plan's HIPAA Privacy Policy.


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                                   ARTICLE 13.

                               Plan Administration

13.01 Named Fiduciary.

(a)  The Named Fiduciaries under the Plan shall be:

     (1)  the Vice President of Human Resources of the Company, who shall be the
          Plan Administrator and shall have authority to control and manage the
          operation and administration of the Plan, except with respect to those
          matters which under the Plan or the Trust Agreement are the
          responsibility, or subject to the authority, of the Benefit Finance
          Committee, and

     (2)  the Benefit Finance Committee (the "Committee"), as appointed by the
          Board of Directors of the Company, which shall be the Named Fiduciary
          with respect to the financial management of the Plan and the control
          or management of the assets of the Plan, except with respect to those
          matters which under the Plan or the Trust Agreement are the
          responsibility, or subject to the authority, of the Plan
          Administrator.

(b)  [Reserved].

13.02 Allocation of Fiduciary and Other Responsibilities.

(a)  Each Named Fiduciary shall have the right:

     (1)  to allocate responsibilities (fiduciary or otherwise) among it and the
          other Named Fiduciary, and

     (2)  to designate other individuals to carry out its responsibilities
          (fiduciary or otherwise) under the Plan.

(b)  [Reserved].

13.03 Quorum and Voting; Procedures.

(a)  A majority of the members of the Committee at the time in office shall
     constitute a quorum for the transaction of business. The Committee shall
     select from among its members a Chairman, and shall appoint (from its
     members or otherwise) a Secretary.

(b)  The Committee may act by vote or written consent of the majority of its
     members then in office and may establish its own procedures. The Committee
     may authorize any one or more of its members or the Secretary of the
     Committee to sign and deliver any instrument, certificate or other paper or
     document on its behalf.


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<PAGE>

13.04 Service in Multiple Capacities.  Any person or group of persons may serve
     in more than one fiduciary capacity with respect to the Plan.

13.05 Powers and Authority.  Each Named Fiduciary shall have all powers
     necessary or helpful for the carrying out of its responsibilities, and the
     decisions or actions of such Named Fiduciary in good faith in respect of
     any matter hereunder shall be conclusive and binding upon all parties
     concerned.

13.06 Powers of Plan Administrator.

(a)  Without limiting the generality of the foregoing, the Plan Administrator
     shall have the discretionary authority and power:

     (1)  to make rules and regulations for the administration of the Plan which
          are not inconsistent with the terms and provisions of the Plan;

     (2)  to construe all terms, provisions, conditions and limitations of the
          Plan;

     (3)  to determine all questions, including eligibility to participate,
          arising out of or in connection with the Plan or its administration in
          any and all cases in which the Plan Administrator deems such a
          determination advisable;

     (4)  to establish and maintain reasonable procedures in accordance with
          applicable laws and regulations for the filing of benefit claims,
          notification of benefit determinations, and appeal of adverse benefit
          determinations (The Named Fiduciary's power and authority under the
          claims procedure shall be discretionary, including the right to deny
          any claim due to failure to comply, in either time or manner, with the
          claims procedure. The claims procedure shall apply to all denials of
          requests for Plan benefits and to any other construction or
          determination under this Section 13.06, including any determination of
          Medical Necessity, any determination pursuant to a Pre-Admission or
          Continued Stay Review, and any other predetermination,
          precertification or preapproval required under the Plan. The Plan's
          claims procedure shall consist of this Section 13.06(a) and the
          procedures set forth in the Summary Plan Description.); and

     (5)  to designate a Claims Administrator. The Plan Administrator may
          designate one or more Claims Administrators with respect to the
          various benefits under this Health Care Plan. The designation of a
          Claims Administrator shall constitute an express grant to the Claims
          Administrator of discretionary authority to determine eligibility for
          Plan benefits, based on information provided by the Company,
          Participants and Providers, including determinations of Medical
          Necessity, determinations pursuant to Pre-Admission and Continued Stay
          Reviews, and other predeterminations, precertifications and
          preapprovals required under the Plan. Any decision of the Claims
          Administrator shall be final and binding upon all persons claiming any
          benefit under or dealing with the Plan, subject to the claims
          procedure described in Section 13.06(a)(4).


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(b)  [Reserved].

13.07 Powers of Benefit Finance Committee.

(a)  Without limiting the generality of the foregoing, the Benefit Finance
     Committee shall have discretionary authority and power:

     (1)  to establish and carry out, or cause to be established and carried out
          by those persons (including without limitation, any investment manager
          or trustee) to whom responsibility or authority therefor has been
          allocated or delegated in accordance with this Plan or the Trust
          Agreement, funding and investment policies and methods consistent with
          the objectives of the Plan and the requirements of ERISA. For such
          purposes, such Committee shall, at a meeting duly called for the
          purpose, establish funding and investment policies and methods which
          satisfy the requirements of said Act, and shall meet at least annually
          to review such policies and methods. All actions taken with respect to
          such policies and methods and the reasons therefor shall be recorded
          in the minutes of the meetings of such Committee.

     (2)  To appoint a trustee or trustees to hold the assets of the Plan who
          shall have authority and discretion to manage and control the assets
          of the Plan upon acceptance of such appointment, except to the extent
          that: (A) the authority to manage, acquire or dispose of assets of the
          Plan is delegated to one or more investment managers pursuant to
          paragraph (3) below, or (B) such Committee appoints itself (or any
          member thereof) to direct the trustee or trustees with respect to the
          management or control of assets of the Plan.

     (3)  To appoint an investment manager or managers, as defined in ERISA, to
          manage (including the power to acquire, invest and dispose of) any
          assets of the Plan.

(b)  [Reserved].

13.08 Advisors.  Each Named Fiduciary, and any fiduciary designated by them
     pursuant to Section 13.02 above to whom such power is granted, may employ
     one or more persons to render advice with regard to any responsibility such
     fiduciary has under the Plan. The Named Fiduciary shall have no authority,
     discretion or responsibility with respect to those matters which under any
     applicable trust agreement, insurance contract or similar agreement are the
     responsibility or subject to the authority of the trustee, insurance
     company or any named fiduciary under such trust agreement.

13.09 Powers not Exclusive.  The foregoing list of powers is not intended to be
     either complete or exclusive, and each Named Fiduciary shall, in addition,
     have such powers as it may determine to be necessary for the performance of
     its duties under the Plan and the Trust Agreement.

13.10 Limitation of Liability; Indemnity.  Except to the extent otherwise
     provided by law, if any duty or responsibility of a Named Fiduciary has
     been allocated or delegated to any other


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     person in accordance with any provision of this Plan or of the Trust
     Agreement then such Named Fiduciary shall not be liable for any act or
     omission of such person in carrying out such duty or responsibility. The
     Company shall indemnify and save each person who is a member of the
     Committee and each employee or director of the Company or an affiliate who
     is a "fiduciary" under the Plan harmless against any and all loss,
     liability, claim, damage, cost and expense which may arise by reason of, or
     be based upon, any matter connected with or related to the Plan or the
     administration of the Plan (including, but not limited to, any and all
     expenses whatsoever reasonably incurred in investigating, preparing or
     defending against any litigation, commenced or threatened, or in settlement
     of any such claim whatsoever) to the fullest extent permitted under
     applicable law except when same is judicially determined to be due to the
     gross negligence or willful misconduct of such member, employee or
     director.

                                  ARTICLE 14.

                            Amendment and Termination

14.01 Amendment and Termination.  Except as provided in Section 2.08(e), the
     Company, through its Board of Directors (directly or though its delegate):
     (1) reserves the right at any time and from time to time to amend the Plan
     in whole or in part, (2) assumes no obligation to continue this Plan in
     effect, and (3) reserves the right at any time to terminate the Plan in
     whole or in part with respect to any or all Participants.

                                   ARTICLE 15.

                                     Funding

15.01 Trust Agreement and Other Funding.  Company contributions may be made from
     time to time to a Trust intended to qualify under Code Section 501(c)(9) in
     such amounts as deemed appropriate by the Company. The Company may also
     make payment of the benefits provided for by the Plan from its general
     assets. Any Participant contributions shall be held in Trust to the extent
     required by ERISA. It is intended that Company contributions to a Trust
     meet the requirements of any governmental regulations and policies.

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