<PAGE>

                                                                    Exhibit 10.7

                            RETIREMENT SAVINGS PLAN
                        FOR CERTAIN EMPLOYEES OF VENCOR
                              AND ITS AFFILIATES



                        Amended and Restated Effective

                                     as of

                                 March 1, 2000
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                        Page No.
                                                                        --------
<S>                                                                     <C>
INTRODUCTION.............................................................      1

DEFINITIONS..............................................................      2
Section 1.1   Adjustment.................................................      2
Section 1.2   Annual Additions...........................................      2
Section 1.3   Beneficiary................................................      2
Section 1.4   Board......................................................      2
Section 1.5   Break(s)...................................................      2
Section 1.6   Code.......................................................      3
Section 1.7   Committee..................................................      3
Section 1.8   Company....................................................      3
Section 1.9   Compensation...............................................      3
Section 1.10  Construction...............................................      3
Section 1.11  Defined Benefit Plan.......................................      3
Section 1.12  Defined Contribution Plan..................................      3
Section 1.13  Effective Date.............................................      4
Section 1.14  Employee...................................................      4
Section 1.15  Employer...................................................      4
Section 1.16  Employer Contributions.....................................      5
Section 1.17  Entry Date.................................................      5
Section 1.18  ERISA......................................................      5
Section 1.19  Fiduciary..................................................      5
Section 1.20  Former Participant.........................................      5
Section 1.21  Highly Compensated Employee................................      5
Section 1.22  Hour of Service............................................      5
Section 1.23  Individual Account.........................................      8
Section 1.24  Investment Fund............................................      8
Section 1.25  Key Employee...............................................      8
Section 1.26  Limitation Year............................................      8
Section 1.27  Matching Contribution Account..............................      8
Section 1.28  Matching Contributions.....................................      9
Section 1.30  Normal Retirement Date.....................................      9
Section 1.31  Participant................................................      9
Section 1.32  Permissive Aggregation Group...............................      9
Section 1.33  Plan.......................................................      9
Section 1.34  Plan Year..................................................      9
Section 1.35  Prior Plan.................................................      9
Section 1.36  Prior Plan Employer Contribution Account...................      9
Section 1.37  Prior Plan Salary Redirection Account......................      9
Section 1.38  Profit Sharing Contribution Account........................      9
Section 1.39  Profit Sharing Contributions...............................     10
Section 1.40  Required Aggregation Group.................................     10
Section 1.41  Salary Redirection.........................................     10
Section 1.42  Salary Redirection Account.................................     10
Section 1.43  Service....................................................     10
</TABLE>

                                       i
<PAGE>

<TABLE>
<S>                                                                           <C>
Section 1.44  Top Heavy Plan.............................................     11
Section 1.45  Total and Permanent Disability or Totally and Permanently
              Disabled...................................................     12
Section 1.46  Trust Agreement............................................     13
Section 1.47  Trust Fund.................................................     13
Section 1.48  Trustee....................................................     13
Section 1.49  Valuation Date.............................................     13

PARTICIPATION............................................................     14
Section 2.1   Eligibility Requirements...................................     14
Section 2.2   Plan Binding...............................................     15
Section 2.3   Reemployment and Transfers.................................     15
Section 2.4   Beneficiary Designation....................................     16
Section 2.5   Notification of Individual Account Balance.................     16

CONTRIBUTIONS............................................................     17
Section 3.1   Salary Redirection.........................................     17
Section 3.2   Matching Contributions.....................................     18
Section 3.3   Profit Sharing Contributions...............................     19
Section 3.4   Nondiscrimination Test for Salary Redirection..............     19
Section 3.5   Nondiscrimination Test for Other Contributions.............     22
Section 3.6   Maximum Individual Deferral................................     25
Section 3.7   Mistake of Fact............................................     25
Section 3.8   Qualified Nonelective Contributions........................     25
Section 3.9   Uniformed Services Employment and Reemployment Rights Act
              of 1994 ("USERRA").........................................     25

ACCOUNTS.................................................................     27
Section 4.1   Individual Accounts........................................     27
Section 4.2   Investment of Accounts.....................................     27
Section 4.3   Valuation of Accounts......................................     27
Section 4.4   Trustee and Committee Judgment Controls....................     29
Section 4.5   Maximum Additions..........................................     29
Section 4.6   Corrective Adjustments.....................................     29
Section 4.7   Defined Contribution and Defined Benefit Plan Fraction.....     30

DISTRIBUTIONS............................................................     31
Section 5.1   Normal Retirement..........................................     31
Section 5.2   Late Retirement............................................     31
Section 5.3   Death......................................................     31
Section 5.4   Disability.................................................     31
Section 5.5   Termination of Employment..................................     31
Section 5.6   Commencement of Benefits...................................     34
Section 5.7   Methods of Payment.........................................     35
Section 5.8   Benefits to Minors and Incompetents........................     36
Section 5.9   Unclaimed Benefits.........................................     36
Section 5.10  Participant Directed Rollovers.............................     37
Section 5.11  Joint and Survivor Options.................................     38
</TABLE>

                                      ii
<PAGE>

<TABLE>
<S>                                                                           <C>
WITHDRAWALS..............................................................     42
Section 6.1   Hardship Withdrawal........................................     42
Section 6.2   Prior Plan Employer Contribution Account Withdrawals.......     44

FUNDING..................................................................     45
Section 7.1   Contributions..............................................     45
Section 7.2   Trustee....................................................     45

FIDUCIARIES..............................................................     46
Section 8.1   General....................................................     46
Section 8.2   Employer...................................................     46
Section 8.3   Trustee....................................................     47
Section 8.4   Retirement Committee.......................................     47
Section 8.5   Claims Procedures..........................................     48
Section 8.6   Records....................................................     49

AMENDMENT AND TERMINATION OF THE PLAN....................................     51
Section 9.1   Amendment of the Plan......................................     51
Section 9.2   Termination of the Plan....................................     51
Section 9.3   Return of Contributions....................................     51

MISCELLANEOUS............................................................     53
Section 10.1  Governing Law..............................................     53
Section 10.2  Construction...............................................     53
Section 10.3  Administration Expenses....................................     53
Section 10.4  Participant's Rights.......................................     53
Section 10.5  Nonassignability...........................................     53
Section 10.6  Merger, Consolidation or Transfer..........................     54
Section 10.7  Counterparts...............................................     54

TOP HEAVY PLAN PROVISIONS................................................     55
Section 11.1  General....................................................     55
Section 11.2  Minimum Contribution.......................................     55
Section 11.3  Super Top Heavy Plan.......................................     55
Section 11.4  Minimum Vesting............................................     56
Section 11.5  Compensation...............................................     56

PROVISIONS RELATED TO EMPLOYERS INCLUDED IN THE PLAN.....................     57
Section 12.2  Single Plan................................................     57
Section 12.3  Sponsoring Employer as Agent...............................     57
Section 12.4  Withdrawal of Employer.....................................     58
Section 12.5  Termination of Participation...............................     58
</TABLE>

                                      iii
<PAGE>

                                 INTRODUCTION

     Effective January 1, 1997 except as otherwise provided herein, the Board of
Directors of Vencor, Inc., successor by merger to the Hillhaven Corporation (the
"Sponsoring Employer"), amended and restated in its entirety the Plan formerly
known as The Retirement Savings Plan of The Hillhaven Corporation and originally
effective as of January 1, 1991 to be called the Retirement Savings Plan for
Certain Employees of Vencor and Its Affiliates, as hereinafter set forth.

     In connection with the spinoff by Vencor, Inc. of Vencor Healthcare, Inc.
(a wholly-owned subsidiary of Vencor, Inc. to which Vencor, Inc. contributed
substantially all of its assets other than real estate holdings) effected by
means of a distribution by Vencor, Inc. as a dividend to the holders of the
issued and outstanding common shares of Vencor, Inc., all of the issued and
outstanding common shares of Vencor Healthcare, Inc. on the basis of one share
of Vencor Healthcare, Inc. common stock for each share of Vencor, Inc. common
stock (the "Distribution"), Vencor Inc. changed its name to Ventas, Inc. and
Vencor Healthcare, Inc. changed its name to Vencor, Inc. and assumed the role of
Sponsoring Employer under the Plan.  Effective May 1, 1998, all references to
"Vencor, Inc." and "Sponsoring Employer" refer to Vencor, Inc. (the entity
formerly named Vencor Healthcare, Inc.), and Ventas, Inc. became a Participating
Employer under the Plan.

     Effective March 1, 2000, the Employer desires to amend and restate the Plan
in its entirety, as herein set forth, in order to provide benefits for certain
of its eligible employees.

     It is intended that this Plan, together with the Trust Agreement, meet all
the pertinent requirements of the Internal Revenue Code of 1986, as amended
("Code") and the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and shall be interpreted, wherever possible, to comply with the terms
of said laws, as amended, and all formal regulations and rulings issued
thereunder.  It is also intended that this Plan shall be a profit sharing plan
under Code Section 401(a).
<PAGE>

                                   ARTICLE 1

                                  DEFINITIONS

Section 1.1    Adjustment means the net increases and decreases in the market
               value of the Trust Fund during a Plan Year or other period
               exclusive of any contribution or distribution during such year or
               other period. Such increases and decreases shall include such
               items as realized or unrealized investment gains and losses and
               investment income, and may include expenses of administering the
               Trust Fund and the Plan.

Section 1.2    Annual Additions means for any Employee in any Plan Year, the sum
               of Employer Contributions, Salary Redirection and forfeitures
               allocated to the Employee's Individual Account. Amounts allocated
               to an individual medical account, as defined in Section 415(1) of
               the Code, which is part of a pension or annuity plan maintained
               by the Company are treated as Annual Additions to a Defined
               Contribution Plan. Also, amounts derived from contributions paid
               or accrued which are attributable to post-retirement medical
               benefits allocated to the separate account of a Key Employee as
               required by Section 419(d) of the Code, maintained by the
               Company, are treated as Annual Additions to a Defined
               Contribution Plan.

Section 1.3    Beneficiary means any person designated by a Participant to
               receive such benefits as may become payable hereunder after the
               death of such Participant, provided, however, that a married
               Participant may not name as a Beneficiary someone other than the
               Participant's spouse unless the spouse consents in writing to
               such designation, which consent shall be acknowledged by a Plan
               representative or by a notary public.

Section 1.4    Board means the Board of Directors of the Sponsoring Employer,
               except as otherwise provided.

Section 1.5    Break(s) in Service means a Plan Year during which an Employee
               has been credited with fewer than 501 Hours of Service due to
               termination of employment. Solely to determine whether a Break in
               Service has occurred, an Employee who is absent from work for
               maternity or paternity reasons or on a military or Family and
               Medical Leave Act leave of absence shall receive credit for the
               Hours of Service which would otherwise have been credited to such
               Employee but for such absence, or in any case in which Hours of
               Service cannot be determined, eight Hours of Service per day of
               such absence. In no event will the number of Hours of Service
               credited to an Employee pursuant to the immediately preceding
               sentence exceed 501. For purposes of this Section, an absence
               from work for maternity or paternity reasons means an absence (1)
               by reason of the pregnancy of the Employee, (2) by reason of the
               birth of a child of the Employee, (3) by reason of the placement
               of a child with the Employee in connection with the adoption of
               such child by the Employee, or (4) for purposes of caring for
               such child for a period beginning immediately following such
               birth or placement. The Hours of Service credited under this
               paragraph shall be credited (1) in the Plan Year or

                                       2
<PAGE>

               other applicable computation period in which the absence begins
               if the crediting is necessary to prevent a Break in Service in
               that period, or (2) in all other cases, in the next following
               Plan Year or other applicable computation period.

Section 1.6    Code means the Internal Revenue Code of 1986, as amended.

Section 1.7    Committee means the Retirement Committee provided for in Article
               8.

Section 1.8    Company means Vencor, Inc. and all of the legal entities which
               are part of the controlled group or affiliated service group with
               Vencor, Inc. pursuant to the provisions of Code Sections 414(b),
               (c), (m) or (o).

Section 1.9    Compensation means, for any Plan Year or portion thereof during
               which an Employee is eligible to participate in this Plan (which
               shall not include compensation payable for periods after
               employment terminates, such as severance pay, but shall include
               vacation time earned but not yet paid as of that last date at
               work), total compensation paid to an Employee by the Employer
               that is includable in the Participant's gross income, including
               bonuses, commissions and overtime, but excluding (i)
               reimbursements or other expense allowances, (ii) fringe benefits
               (cash and noncash), (iii) moving expenses, (iv) deferred
               compensation, (v) welfare benefits, and (vi) amounts realized
               from the exercise of a nonqualified stock option (or the lifting
               of restrictions on restricted stock) or the sale or exchange of
               stock acquired under a qualified stock option. Despite the
               exclusions in the preceding sentence, Compensation shall include
               any amounts deducted pursuant to Code Sections 125 (flexible
               benefit plans), 402(a)(8) (salary redirection), 402(h)(1)(B)
               (simplified employee plans) and 403(b). Effective for Plan Years
               beginning on or after January 1, 1989, Compensation shall be
               limited to such amount as determined pursuant to Code Section
               401(a)(17). For Plan Years beginning on or after January 1, 1994,
               Compensation shall be limited to $150,000, or such higher amount
               determined by the Commissioner of Internal Revenue pursuant to
               Section 401(a)(17) of the Code.

Section 1.10   Construction. The words and phrases defined in this Article when
               used in this Plan with an initial capital letter shall have the
               meanings specified in this Article, unless a different meaning is
               clearly required by the context. Any words herein used in the
               masculine shall be read and construed in the feminine where they
               would so apply. Words in the singular shall be read and construed
               as though used in the plural in all cases where they would so
               apply.

Section 1.11   Defined Benefit Plan means a plan established and qualified under
               Section 401 of the Code, except to the extent it is, or is
               treated as, a Defined Contribution Plan.

Section 1.12   Defined Contribution Plan means a plan which is established and
               qualified under Section 401 of the Code, which provides for an
               individual account for each participant therein and for benefits
               based solely on the amount contributed to each participant's
               account and any income, expenses, gains or losses (both realized
               and unrealized) which may be allocated to such account.

                                       3
<PAGE>

Section 1.13   Effective Date means January 1, 1991, the original effective date
               of the Plan. The effective date of this amended and restated Plan
               is March 1, 2000, except as otherwise provided.

Section 1.14   Employee means any person whom the Employer classifies as a
               common law employee of the Employer and who is paid though the
               normal payroll system of the Employer, which person is also
               either:

               (a)  a member of a collective bargaining unit for which benefits
                    have been the subject of good faith negotiation, unless and
                    until the Company and the collective bargaining unit
                    representative for that unit through the process of good
                    faith bargaining agree in writing for coverage under the
                    VRSP;

               (b)  working in a facility managed by the Employer pursuant to a
                    management agreement, except to the extent that the
                    management agreement specifies that certain employees will
                    report to and be provided benefits by a member of the
                    Vencor, Inc. group of Companies, in which event the
                    specified employee(s) shall be eligible to participate in
                    the VRSP rather than this Plan.

               The term "Employee" shall exclude any person who is classified on
               the payroll records of the Employer as "on call" or as a per diem
               employee. The term "Employee" shall also exclude any person who
               is a leased Employee.

               For purposes of this Section the term "leased employee" shall
               mean any person who is not an employee of the Employer and who
               provides services to the Employer if (i) such services are
               provided pursuant to an agreement between the Employer and any
               other person ("leasing organization"); (ii) such person has
               performed such services for the Employer on a substantially full-
               time basis for a period of at least one year; and (iii) such
               services are performed under the primary direction and control of
               the Employer.

Section 1.15   Employer means (i) Vencor, Inc. (provided that effective May 1,
               1998, Employer means Vencor, Inc. (formerly Vencor Healthcare,
               Inc.); and (ii) each of the legal entities, or any successor
               thereto, which participates in the VRSP as of January 1, 1997 or
               which thereafter is a part of the Company and adopts the VRSP for
               its eligible Employees with the consent of the Sponsoring
               Employer; and (iii) any entity that is managed by the Company
               pursuant to a management agreement, provided that the entity
               which provides management services has adopted this Plan for the
               benefit of its employees (as evidenced as of January 1, 1999 by
               their name being listed on Appendix B); and which has adopted the
               Plan for its eligible Employees with the consent of the
               Sponsoring Employer (as evidenced as of January 1, 1999 by their
               name being listed on Appendix B); and (vi) the partnerships
               listed on Appendix B hereto or which thereafter become
               participating employers pursuant to the procedure in Article 12
               hereof. The Sponsoring Employer shall be Vencor, Inc. For
               application of various provisions of the Internal Revenue Code to
               this Plan, the rules apply to each entity included as an

                                       4
<PAGE>

               Employer which is a member of a controlled group or a group under
               common control within the meaning of Code Sections 414(b), (c),
               (m) or (o). Reference to "an Employer" herein shall refer
               separately to each such employer group. References to "the
               Employer" shall apply to all Employers set out above as a group.

Section 1.16   Employer Contributions means Matching Contributions and Profit
               Sharing Contributions made to the Trust Fund by the Employer.
               Salary Redirection shall not be included in the term Employer
               Contribution when used in this Plan.

Section 1.17   Entry Date means the first day of each calendar month.

Section 1.18   ERISA means the Employee Retirement Income Security Act of 1974,
               as amended.

Section 1.19   Fiduciary means the Employer, the Trustee, the Committee and any
               individual, corporation, firm or other entity which assumes, in
               accordance with Article 8, responsibilities of the Employer, the
               Trustee or the Committee respecting management of the Plan or the
               disposition of its assets.

Section 1.20   Former Participant means a Participant whose participation in the
               Plan has terminated but who has not received payment in full of
               the balance in his Individual Account to which he is entitled.

Section 1.21   Highly Compensated Employee means any Employee of an Employer who
               (i) was a five percent owner of the Employer during the current
               Plan Year or the preceding Plan Year, or (ii) during the
               preceding Plan Year, received Compensation from an Employer in
               excess of $80,000 (as such amount may be adjusted from time to
               time by the Secretary of the Treasury) and, if the Sponsoring
               Employer elects, was in the top-paid group of employees for such
               Plan Year.

               The determination of who is a Highly Compensated Employee,
               including the determination of the number and identity of
               employees in the top-paid group and the Compensation that is
               considered, shall be made in accordance with section 414(q) of
               the Code and the regulations thereunder, taking into account,
               when appropriate, Code Section 410(b)(6)(C)'s acquisition
               transition rule which allows exclusion of certain Employees from
               consideration. The determination of Highly Compensated Employees
               shall be determined on an aggregate basis for each Employer that
               is treated as a controlled group under Code Sections 414(b), (c),
               (m) and (o), except as otherwise provided in applicable Treasury
               Regulations.

Section 1.22   Hour of Service means any hour for which an Employee is paid or
               entitled to payment by an Employer during the Plan Year or other
               applicable computation period (1) for the performance of duties
               for an Employer; (2) on account of a period of time during which
               no duties are performed (irrespective of whether the employment
               relationship has terminated); and (3) as a result of a back pay
               award which has been agreed to or made by an Employer,
               irrespective of mitigation of

                                       5
<PAGE>

               damages, to the extent that such hour has not been previously
               credited under item (1) or item (2) preceding.

               (a)  The number of Hours of Service to be credited on account of
                    a period of time during which no duties are performed
                    (including hours resulting form a back pay award) shall be
                    determined as follows. If the payment which is made or due
                    is calculated on the basis of units of time, the number of
                    Hours of Service to be credited shall be the number of
                    regularly scheduled working hours included in the units of
                    time on the basis of which the payment is calculated; if an
                    Employee does not have a regular work schedule, the number
                    of Hours of Service to be credited shall be calculated on
                    the basis of an eight hour work day. If the payment which is
                    made or due is not calculated on the basis of units of time,
                    the number of Hours of Service to be credited shall be
                    calculated by dividing the amount of the payment by the
                    Employee's most recent hourly rate of compensation before
                    the period during which no duties were performed, determined
                    as follows:

                    (1)  If the Employee's compensation is determined on the
                         basis of an hourly rate, such hourly rate shall be the
                         Employee's most recent hourly rate of compensation.

                    (2)  If the Employee's compensation is determined on the
                         basis of a fixed rate for a specified period of time
                         other than hours, his hourly rate of compensation shall
                         be his most recent rate of compensation for the
                         specified period of time, divided by the number of
                         hours regularly scheduled for the performance of duties
                         during such period of time; if an Employee does not
                         have a regular work schedule, his hourly rate of
                         compensation shall be calculated on the basis of an
                         eight hour work day.

                    (3)  If the Employee's compensation is not determined on the
                         basis of a fixed rate for a specified period of time,
                         his hourly rate of compensation shall be the lowest
                         hourly rate of compensation paid to Employees in his
                         job classification, or, if no Employees in his job
                         classification have an hourly rate of compensation, the
                         minimum wage in effect under Section 6(a)(1) of the
                         Fair Labor Standard Act of 1938, as amended.

               (b)  In no event shall the application of the terms of Section
                    1.23(a) result in crediting an Employee with a number of
                    Hours of Service during the period which is greater than the
                    number of hours regularly scheduled for the performance of
                    duties. If an Employee has no regular work schedule, the
                    number of Hours of Service to be credited to him shall not
                    exceed the number which would be credited calculated on the
                    basis of an eight hour work day.

                                       6
<PAGE>

               (c)  No Employee shall be credited with more than 501 Hours of
                    Service as a result of the application of Section 1.22(a)
                    for any single continuous period during which he performs no
                    duties, regardless of whether such period extends beyond one
                    Plan Year or other applicable computation period.

               (d)  The Plan Year or other applicable computation period to
                    which Hours of Service shall be credited shall be determined
                    as follows:

                    (1)  Except as hereinafter provided, Hours of Service
                         credited in accordance with item (1) of the first
                         paragraph of this Section shall be credited in the Plan
                         Year or other applicable computation period in which
                         the duties were performed.

                    (2)  Except as hereinafter provided, Hours of Service
                         credited in accordance with item (2) of the first
                         paragraph of this Section shall be credited: if
                         calculated on the basis of units of time, to the Plan
                         Year or Plan Years or other applicable computation
                         periods in which the period during which no duties are
                         performed occurs, beginning with the first unit of time
                         to which the payment relates; otherwise to the Plan
                         Year or other applicable computation period in which
                         the period during which no duties are performed occurs,
                         provided that if the period during which no duties are
                         performed extends beyond one (1) Plan Year or other
                         applicable computation period, such Hours of Service
                         shall be allocated between not more than the first two
                         (2) Plan Years or other applicable computation periods
                         on any reasonable basis consistently applied.

                    (3)  Except as hereinafter provided, Hours of Service
                         credited in accordance with item (3) of the first
                         paragraph of this Section shall be credited to the Plan
                         Year or other applicable computation period to which
                         the award or agreement for back pay pertains rather
                         than to the Plan Year or other applicable computation
                         period in which the award, agreement, or payment is
                         made.

                    (4)  Hours of Service to be credited to an Employee in
                         connection with a period of no more than 31 days which
                         extends beyond one Plan Year or other applicable
                         computation period may be credited to the first or the
                         second Plan Year or other applicable computation
                         period, provided that such crediting is done on a
                         reasonable and nondiscriminatory basis.

               (e)  Nothing in this Section shall be construed to alter, amend,
                    modify, invalidate, impair or supersede any law of the
                    United States or any rule or regulation issued under any
                    such law, including but not limited to laws regarding
                    eligibility and benefit accrual during and after a military
                    leave of absence. The nature and extent of any credit for
                    Hours of Service

                                       7
<PAGE>

                    under this Section shall be determined under such law
                    including Department of Labor regulation Section 2530.200b-
                    2.

Section 1.23   Individual Account means the detailed record kept of the amounts
               credited or charged to each Participant in accordance with the
               terms hereof. Such Individual Account is comprised of the
               following accounts: a Profit Sharing Contribution Account, a
               Salary Redirection Account, a Matching Contribution Account, a
               Prior Plan Salary Redirection Account, if applicable, and a Prior
               Plan Employer Contribution Account, if applicable.

Section 1.24   Investment Fund means an investment fund established pursuant to
               Section 4.2.

Section 1.25   Key Employee shall mean any Employee, former Employee or
               beneficiary thereof in an Internal Revenue Service qualified plan
               adopted by an Employer who at any time during the Plan Year or
               any of the four preceding Plan Years is

               (a)  an officer of an Employer having an annual compensation from
                    an Employer during the Plan Year greater than 50% of the
                    amount in effect under Code Section 415(b)(1)(A) for the
                    calendar year in which such Plan Year ends;

               (b)  one of the 10 Employees having an annual compensation from
                    an Employer for a Plan Year of more than the limitation in
                    effect under Code Section 415(c)(1)(A) for the calendar year
                    in which such Plan Year ends and owning (or considered as
                    owning within the meaning of Code Section 318) both more
                    than a 1/2% interest, and the largest interest in an
                    Employer;

               (c)  a five percent owner of an Employer; or

               (d)  a one percent owner of an Employer having an annual
                    compensation from an Employer for a Plan Year of more than
                    $150,000.

               (e)  For purposes of this Section, compensation mean compensation
                    as defined in Code Section 415.

               (f)  This definition shall be interpreted consistent with Code
                    Section 415 and rules and regulations issued thereunder.
                    Further, such law and regulations shall be controlling in
                    all determinations under this definition, inclusive of any
                    provisions and requirements stated thereunder but
                    hereinabove absent.

Section 1.26   Limitation Year means the 12 month period beginning on January 1
               and ending on December 31.

Section 1.27   Matching Contribution Account means that portion of a
               Participant's Individual Account attributable to (i) Matching
               Contributions allocated to such Participant pursuant to Section
               3.2 and (ii) the Participant's proportionate share, attributable

                                       8
<PAGE>

               to his Matching Contribution Account, of the Adjustments, reduced
               by any distributions from such Account.

Section 1.28   Matching Contributions means contributions made to the Trust Fund
               by the Employer pursuant to Section 3.2

Section 1.29   Non-Highly Compensated Employee means, for any Plan Year, a
               Participant who is not a Highly Compensated Employee.

Section 1.30   Normal Retirement Date means the first day of the month
               coincident with or next following the Participant's 60th
               birthday.

Section 1.31   Participant means any Employee who becomes a Participant as
               provided in Article 2 hereof.

Section 1.32   Permissive Aggregation Group means the Required Aggregation Group
               and each other plan or plans of an Employer that are not required
               to be included in the Required Aggregation Group, and which, if
               treated as being part of such group, would not cause such group
               to fail to meet the requirements of Code Sections 401(a) and 410.

Section 1.33   Plan means this Retirement Savings Plan for Certain Employees of
               Vencor and Its Affiliates.

Section 1.34   Plan Year means the 12 month period beginning on January 1 and
               ending on December 31.

Section 1.35   Prior Plan means the plan of any Employer, the assets of which
               are merged, in whole or in part, with the Trust Fund.

Section 1.36   Prior Plan Employer Contribution Account means that portion of a
               Participant's Individual Account attributable to (i) any employer
               contributions and accumulated earnings allocated to such
               Participant under the terms of a plan which has been merged into
               this Plan, and (ii) the Participant's proportionate share
               attributable to his Prior Plan Employer Contribution Account, of
               the Adjustments, reduced by any distributions from such Account.

Section 1.37   Prior Plan Salary Redirection Account means that portion of a
               Participant's Individual Account attributable to (i) any pretax
               deferrals and accumulated earnings allocated to such Participant
               under the terms of a plan which has been merged into this Plan
               and (ii) the Participant's proportionate share attributable to
               his Prior Plan Salary Redirection Account, of the Adjustments,
               reduced by any distributions from such Account.

Section 1.38   Profit Sharing Contribution Account means that portion of a
               Participant's Individual Account attributable to (i) Profit
               Sharing Contributions allocated to such Participant pursuant to
               Section 3.3, and (ii) the Participant's proportionate

                                       9
<PAGE>

               share attributable to his Profit Sharing Contribution Account, of
               the Adjustments, reduced by any distributions from such account.

Section 1.39   Profit Sharing Contributions mean contributions made to the Trust
               Fund by the Employer pursuant to Section 3.3.

Section 1.40   Required Aggregation Group means

               (a)  each plan of an Employer in which a Key Employee is a
                    participant; and

               (b)  each other plan of an Employer which enables any plan in
                    subsection (1) to meet the requirements of Code Sections
                    401(a)(4) or 410, and

               (c)  each terminated plan maintained by an Employer within the
                    last five years ending on the determination date for the
                    Plan Year in question and which, but for the fact that it
                    terminated, would be part of a Required Aggregation Group
                    for such Plan Year.

Section 1.41   Salary Redirection means contributions made to the Trust Fund by
               the Employer pursuant to Section 3.1.

Section 1.42   Salary Redirection Account means that portion of a Participant's
               Individual Account attributable to (i) Salary Redirection amounts
               made on his behalf pursuant to Section 3.1, and (ii) the
               Participant's proportionate share, attributable to his Salary
               Redirection Account, of the Adjustments, reduced by any
               distributions or withdrawals from such Account.

Section 1.43   Service shall be accumulated as follows: (1) prior to January 1,
               1997, a year of Service shall be credited for each 12 month
               period of service from the Employee's date of hire, subject to
               the rules and limitations set forth in this Plan prior to this
               restatement, (2) for the service year of an Employee which ends
               in calendar year 1997, one year of Service shall be credited, and
               (3) after January 1, 1997, a year of Service shall be credited
               for each Plan Year during which a Participant has been credited
               with 1000 or more Hours of Service for the Company or an Employer
               (whether before or after participation begins) subject to the
               following:

               (a)  Years of Service for periods beginning after January 1, 1997
                    prior to the date an Employee attains age 18 shall not be
                    taken into account in determining that a Participant's
                    vesting percentage pursuant to Section 5.5.

               (b)  Service for periods beginning after January 1, 1997 shall
                    include periods of employment with any entity acquired by
                    the Company or an Employer, or any entity which operates a
                    facility acquired by the Company or an Employer, provided
                    that no Employee shall receive credit for more than seven
                    years of Service as a result of periods of employment with
                    said entity and provided that said entity is either listed
                    on Appendix "A" or maintained a plan that has been merged
                    with this Plan. If the entity's

                                      10
<PAGE>

                    records are inadequate to determine Hours of Service for
                    years of employment with the entity, Service will be
                    credited (subject to the seven year limitation) from the
                    Employee's most recent date of hire with the acquired
                    entity, rounded to the nearest whole year.

               (c)  Years of Service for periods beginning after January 1, 1997
                    prior to a Break in Service shall not be taken into account
                    until such time as the Employee has completed a year of
                    Service after he returns to the employ of the Employer.

               (d)  Effective January 1, 1997, if the Employee does not have a
                    nonforfeitable interest in his Employer-provided benefit,
                    and the Employee incurs consecutive Breaks in Service, the
                    Employee's Service prior to the Breaks in Service will be
                    disregarded if the consecutive Breaks in Service equal or
                    exceed the greater of (i) five, or (ii) the Employee's
                    Service prior to the Break in Service.

               (e)  Years of Service after five or more consecutive Breaks in
                    Service shall not be taken into account in determining the
                    vesting percentage of a Participant pursuant to Section 5.5
                    derived from Employer Contributions subject to said vesting
                    schedule made before such five consecutive Breaks in
                    Service.

               (f)  Service with a predecessor employer will be credited to an
                    employee as Service for the Employer as required pursuant to
                    Code Section 414(a). For purposes of this Subsection, a
                    predecessor employer is an employer who sponsored a plan
                    qualified under Code Section 401(a) which is maintained by
                    the Employer.

               (g)  An Employee shall be credited with a year of Service for
                    each 12 month period of service prior to December 31, 1997
                    from the Employee's most recent date of hire with
                    Convalescent Pharmaceutical Services, Inc. or any other
                    employer participating in the CKP Savings and Retirement
                    Plan at the time some of its assets were merged into this
                    Plan, or with Nationwide Care, Inc., for purposes of
                    eligibility under Section 2.1 and vesting under Section 5.5,
                    provided that no Employee shall be credited with more than 5
                    Years of Service under this Paragraph 1.43(g). For purposes
                    of this Section 1.43(g), if an Employee transferred
                    employment from a partner of a partnership employer
                    participating in the CKP Savings and Retirement Plan to that
                    partnership, his most recent date of hire shall be his most
                    recent date of hire with the partner.

Section 1.44   Top Heavy Plan means any plan under which, as of any
               determination date (the last day of the preceding Plan Year), the
               present value of the cumulative accrued benefits under the plan
               for Key Employees exceeds 60% of the present value of cumulative
               accrued benefits under the Plan for all Employees. For purposes
               of this definition the following provisions shall apply:

                                      11
<PAGE>

               (a)  If such plan is a Defined Contribution Plan, the present
                    value of cumulative accrued benefits shall be deemed to be
                    the market value of all Employee accounts under the plan,
                    other than voluntary deductible Employee contributions. If
                    such plan is a Defined Benefit Plan, the present value of
                    cumulative accrued benefits shall be the lump sum present
                    value determined pursuant to the plan. Moreover, the present
                    value of the cumulative accrued benefits shall be increased
                    by the amount of all Plan distributions made with respect to
                    a current or former employee during the five year period
                    ending on the determination date, including distributions
                    under a terminated plan which, if it had not been
                    terminated, would have been required to be included in a
                    Required Aggregation Group.

               (b)  A plan shall be considered to be a Top Heavy Plan for any
                    Plan Year if, on the last day of the preceding Plan Year,
                    the above rules were met. For the first Plan Year that the
                    Plan shall be in effect, the determination of whether the
                    Plan is a Top Heavy Plan shall be made as of the last day of
                    such Plan Year.

               (c)  Each plan of an Employer required to be included in a
                    Required Aggregation Group shall be treated as a Top Heavy
                    Plan if such group is a top heavy group.

               (d)  With regard to a Participant or former Participant who (i)
                    has not performed any service for an Employer at any time
                    during the five year period ending on the determination
                    date, or (ii) was formerly a Key Employee, but who is not a
                    Key Employee on the determination date, the present value of
                    the cumulative Accrued Benefit for such Participant or
                    former Participant shall not be taken into account for the
                    purposes of determining whether this Plan is a Top Heavy
                    Plan.

               (e)  This definition shall be interpreted consistent with Code
                    Section 416 and rules and regulations issued thereunder.
                    Further, such law and regulation shall be controlling in all
                    determinations under this definition inclusive of any
                    provisions and requirements stated thereunder but
                    hereinabove absent.

Section 1.45   Total and Permanent Disability or Totally and Permanently
               Disabled means a physical or mental condition arising after the
               original date of employment of the Participant which is expected
               to totally and permanently prevent him from substantially
               performing his usual duties with the Employer or from performing
               like duties for which he is reasonably qualified based upon
               education, experience and abilities. The determination by the
               Committee as to whether a Participant is totally and permanently
               disabled shall be made (i) on medical evidence by a licensed
               physician designated by the Committee, (ii) on evidence that the
               Participant is eligible for disability benefits under any long-
               term disability plan sponsored by the Employer, or (iii) on
               evidence that the Participant is eligible for disability benefits
               under the Social Security Act in effect at the date of
               disability.

                                      12
<PAGE>

Section 1.46   Trust Agreement means the agreement entered into between the
               Sponsoring Employer and the Trustee pursuant to Article 7 hereof.

Section 1.47   Trust Fund means the trust fund created in accordance with
               Article 7 hereof.

Section 1.48   Trustee means such individual or corporation as shall be
               designated in the Trust Agreement to hold in trust any assets of
               the plan for the purpose of providing benefits under the Plan,
               and shall include any successor trustee designated thereunder.

Section 1.49   Valuation Date means each date on which the U.S. securities
               trading markets are open on or after January 1, 1997. As of each
               Valuation Date the Trust Fund shall be valued at fair market
               value.

Section 1.50   VRSP means the Vencor Retirement Savings Plan as amended from
               time to time.

                                      13
<PAGE>

                                   ARTICLE 2

                                 PARTICIPATION


Section 2.1    Eligibility Requirements

               (a)  Effective January 1, 1997, any Employee who has attained the
                    age of 21 and has remained an Employee until 12 months
                    following the first date on which the Employee logged an
                    Hour of Service, shall be eligible as of the next Entry
                    Date, provided, however, that an Employee who does not meet
                    these rules shall nonetheless be eligible no later than the
                    Entry Date coincident with or next following the (1)
                    completion of 1000 Hours of Service in a 12 consecutive
                    month period and (2) attainment the age of 21. Thereafter,
                    the period shall be the Plan Year in which occurs the
                    anniversary of the date the Employee completes his first
                    Hour of Service.

               (b)  Any employee in a class of employees that was eligible to
                    participate in The Hillhaven Corporation Deferred Savings
                    Plan ("Affiliate Plan") prior to January 1, 1997 and who was
                    hired prior to January 1, 1997 shall be eligible to
                    participate in this Plan on January 1, 1997 if, at that
                    date, that employee is employed in a capacity defined as an
                    Employee in this Plan. Any Employee hired prior to January
                    1, 1997 in a class of employees eligible to participate in
                    this Plan prior to January 1, 1997 shall become eligible for
                    the Plan at the next Entry Date coincident with or following
                    the date they meet the eligibility rule applicable to them
                    at their hire date under the Plan (e.g., no age 21
                    requirement shall apply to those hired prior to January 1,
                    1997).

               (c)  For purposes of this Section, in the event that an employee
                    of an entity that is or would be an Employer if the entity
                    adopted this Plan for its employees or of an entity that is
                    a participating employer in the VRSP becomes an Employee as
                    defined in Section 1.14 (either because of a change in
                    employment status or adoption of this Plan by the entity by
                    which he is employed), all periods of service while an
                    employee of the Employer or of an entity which participates
                    in the VRSP, shall be counted for purposes of determining
                    eligibility to participate in the Plan. In all events, this
                    Plan and the VRSP shall be construed so that, at no point in
                    time, does any one Participant have a right to participate
                    in both this Plan and the VRSP.

               (d)  Employees who are members of a collective bargaining unit
                    shall not be eligible to participate in this Plan unless the
                    applicable collective bargaining agreement provides
                    otherwise, and then only with respect to the types of
                    contributions required by that agreement (i.e., if an
                    applicable collective bargaining agreement provides for
                    participation only in elective deferrals, the Employees in
                    that unit will not be (or will cease to be) eligible to
                    share in the allocation of matching contributions.

                                      14
<PAGE>

Section 2.2    Plan Binding

               Upon becoming a Participant, a Participant shall be bound then
               and thereafter by the terms of this Plan and the Trust Agreement,
               including all amendments to the Plan and the Trust Agreement made
               in the manner herein authorized.

Section 2.3    Reemployment and Transfers

               Solely for purposes of this Section 2.3, the following rules
               shall apply:

               (a)  Termination of employment shall be deemed to occur when an
                    Employee has an interruption in continuity of his employment
                    by the Employer. Such termination may have resulted from
                    retirement, death, voluntary or involuntary termination of
                    employment, unauthorized absence, or by failure to return to
                    active employment with the Employer or to retire by the date
                    on which an authorized leave of absence expired.

               (b)  If an Employee who was not eligible to become a Participant
                    in the Plan during his prior period of employment is
                    reemployed, he shall be eligible to participate in the Plan
                    after he has met the requirements of Section 2.1(a),
                    calculated from his original date of hire, unless he has had
                    a one-year Break in Service, in which case Service before
                    such Break in Service shall not be taken into account for
                    purposes of this Section until the Employee has met the
                    requirements of Section 2.1(a) calculated from his date of
                    rehire.

               (c)  If an Employee who was a Participant in the Plan during his
                    prior period of employment (or who had met the age and
                    service requirements of Section 2.1(a) or (b) but did not
                    remain employed until the applicable Entry Date) is
                    reemployed, he shall be eligible to again become a
                    Participant as of the Entry Date first following his date of
                    rehire.

               (d)  If an Employee transfers employment from an entity that
                    would be an Employer if it adopted this Plan for the benefit
                    of its employees or from an entity which participates in the
                    VRSP to the Employer (for purposes of this Section, an
                    "Affiliate"), the Employee shall become a Participant under
                    this Plan as of the date of transfer of employment to the
                    Employer, provided he has been employed by the Affiliate, as
                    of the date of transfer of employment, for the period
                    required in Section 2.1(a) or (b), calculated from his
                    original date of hire with the Affiliate. If the Employee
                    who transfers employment from an Affiliate to the Employer
                    has not been employed, as of the date of transfer of
                    employment, for the period required in Section 2.1(a) or
                    (b), he shall become a Participant under this Plan upon
                    meeting the eligibility requirements of Section 2.1(a) or
                    (b), counting all past Service with the Affiliate for that
                    purpose.

                                      15
<PAGE>

               (e)  The Individual Account in this Plan of an Employee who
                    transfers to or from an Affiliate shall remain in this Plan
                    and be eligible for the same Investment Funds as an active
                    Participant. No distribution shall be made of an Individual
                    Account (other than on account of hardship or after age 70
                    1/2) until and unless the former Employee has terminated
                    service with all Affiliates.

Section 2.4    Beneficiary Designation

               Upon commencing participation, each Participant shall designate a
               Beneficiary on forms furnished by the Committee. Such Participant
               may then from time to time change his Beneficiary designation by
               written notice to the Committee and, upon such change, the rights
               of all previously designated Beneficiaries to receive any
               benefits under this Plan shall cease. A married Participant may
               not name as a Beneficiary someone other than the Participant's
               spouse unless the spouse consents in writing to such other
               designation, which consent shall be acknowledged by a Plan
               representative or by a notary public. The consent of the spouse
               must be limited to a specific Beneficiary and must be obtained
               each time the Beneficiary is changed. If, at the time of a
               Participant's death while benefits are still outstanding, his
               named Beneficiary does not survive him, the benefits shall be
               paid to his named contingent Beneficiary. If a deceased
               Participant is not survived by either a named Beneficiary or
               contingent Beneficiary (or if no Beneficiary was effectively
               named), the benefits shall be paid in a single sum to the person
               or in equal parts to the persons in the first of the following
               classes of successive preference beneficiaries then surviving:
               the Participant's (i) surviving spouse, unless the spouse
               disclaims the benefit, (ii) natural and adopted children, (iii)
               parents, (iv) brothers and sisters, (v) estate. If the
               Beneficiary or contingent Beneficiary is living at the death of
               the Participant, but such person dies prior to receiving the
               entire death benefit, the remaining portion of such death
               benefits shall be paid in a single sum to the estate of such
               deceased Beneficiary or contingent Beneficiary.

Section 2.5    Notification of Individual Account Balance

               After the end of each calendar quarter, or more frequently as
               determined by the Committee, the Committee shall notify each
               Participant of the amount of his share in the Adjustments and
               Contributions for the period just completed, and the new balance
               of his Individual Account.

                                      16
<PAGE>

                                   ARTICLE 3

                                 CONTRIBUTIONS

Section 3.1    Salary Redirection

               Each Participant may elect to have Salary Redirection made on his
               behalf by agreeing to salary reduction contributions from cash
               wages payable via an identity-secure telephonic enrollment system
               (or in writing, if the telephonic system is impracticable)
               ("IVR"), provided that such enrollment is concluded before 11:59
               p.m. Central Standard Time on the 15th day of the month (the
               "enrollment deadline"). A new Participant in this Plan who was,
               immediately prior to becoming an Employee, a Participant in the
               VRSP or The Hillhaven Deferred Savings Plan, shall be deemed to
               have made a salary reduction agreement for this Plan in the same
               amount as was in effect for that other plan, unless and until the
               Participant changes his salary reduction agreement by the IVR,
               subject to the enrollment deadline.

               (a)  Salary Redirection each payroll period must equal an whole
                    percentage from 1% to 16% of a Participant's Compensation.
                    Salary Redirection shall begin, be increased or revoked
                    effective with the first pay date processed in the month
                    after a Participant has entered into or changed his salary
                    reduction agreement via IVR. In the event a Participant does
                    not so elect when initially eligible, he may subsequently
                    elect to have Salary Redirection made on his behalf at any
                    time effective for the first pay date in the month after the
                    Participant has entered into a salary reduction agreement
                    via IVR.

               (b)  The Employer shall pay to the Trustee any Salary Redirection
                    made on behalf of any Participant as soon as practicable
                    following the end of each regular pay period.

               (c)  The Employer may amend, to the extent it deems appropriate,
                    a Participant's salary reduction Agreement for any Plan Year
                    or portion thereof if the Employer determines that such
                    amendment is necessary to ensure that a Participant's Annual
                    Additions for any Plan Year might exceed the limitations of
                    Sections 3.4, 3.5, 3.6 or 4.5 the requirements of Code
                    Sections 401(k) or (m) or such other requirements prescribed
                    by law.

               (d)  In the event the Employer fails to withhold Participant
                    Salary Redirection Contributions pursuant to a Salary
                    Redirection election in effect for a Participant for a
                    payroll period, the Participant shall be considered to have
                    revoked his Salary Redirection election on the 30th day
                    after the pay date on which the Salary Redirection election
                    was first not honored. Such revocation shall not be
                    considered to be retroactive. The Company shall take such
                    steps as it deems advisable to correct the failure to
                    withhold and

                                      17
<PAGE>

                    make Salary Redirection contributions for a Participant for
                    the period prior to the effective date of the revocation.

Section 3.2    Matching Contributions

               (a)  As of the end of each calendar quarter, the Employer shall
                    make a Matching Contribution to the Trust Fund on behalf of
                    eligible Participants. If Matching Contributions are made
                    prior to the end of a calendar quarter, they shall
                    nonetheless be left unallocated until the quarter ends.
                    Matching contributions will be equal to the "applicable
                    percentage" of the eligible Participant's net eligible
                    Salary Redirection.

               (b)  Net eligible Salary Redirection means Salary Redirection of
                    up to 4% of Compensation, during the period since the last
                    preceding calendar-quarter end, which Salary Redirection has
                    not been withdrawn since the preceding calendar-quarter end.
                    For purposes of calculating net eligible Salary Redirection,
                    withdrawals shall be deemed to have been made from the
                    earliest Salary Redirection not yet withdrawn. Any Matching
                    Contribution shall be allocated to the Matching Contribution
                    Account of each eligible Participant.

               (c)  For purposes of this Section, the term "eligible
                    Participant" shall mean a Participant who is either (i)
                    actively employed by the Employer or an employer which
                    participates in the VRSP (even if not still an "Employee")
                    as of the end of each calendar quarter, or (ii) died since
                    the end of the preceding calendar quarter, or (iii) retired
                    or became disabled pursuant to Section 5.1, 5.2, or 5.4
                    since end of the preceding calendar quarter, or (iv) on a
                    Family and Medical Leave Act leave of absence at the end of
                    the calendar quarter.

               (d)  The "applicable percentage" for each calendar quarter shall
                    be determined based on the number of the Participant's
                    completed years of Service as of March 31 of the Plan Year
                    in which the last day of the quarter occurs, as follows:


                                                      Percentage of net eligible
                                                              Salary Redirection
                         Years of Service as of              Contributions up to
                         March 31 of Plan Year          first 4% of Compensation

                         At least 1, but less than 2                    12 1/2%
                         At least 2, but less than 3                        25%
                         At least 3, but less than 4                    37 1/2%
                         4 or more                                          50%

                                      18
<PAGE>

Section 3.3    Profit Sharing Contributions

               As of the last day of each Plan Year, the Employer may make a
               Profit Sharing Contribution to the Trust Fund. Any such Profit
               Sharing Contribution shall be allocated to the Profit Sharing
               Contribution Account of each Participant who (i) has satisfied
               the eligibility requirements of Section 2.1 (without regard to
               whether the Participant has made an election pursuant to Section
               3.1), (ii) is actively employed by the Company on said date and
               in a class which is included in the definition of "Employee," and
               (iii) has been credited with at least 1000 Hours of Service
               during the Plan Year. Any such Profit Sharing Contribution shall
               also be allocated to the Profit Sharing Account of each Former
               Participant (i) who died since the end of the preceding Plan
               Year, or (ii) who retired or became disabled pursuant to Section
               5.1, 5.2, or 5.4 since the end of the preceding Plan Year, (iii)
               who is on a Family and Medical Leave Act leave of absence on the
               last day of the Plan Year. Any such Profit Sharing Contributions
               shall be allocated to the Profit Sharing Contribution Accounts of
               the Participants described in the two immediately preceding
               sentences in the proportion that each such Participant's
               Compensation during the Plan Year bears to the total Compensation
               of all such Participants and Former Participants during such Plan
               Year.

Section 3.4    Nondiscrimination Test for Salary Redirection

               (a)  Periodically as determined by the Committee, the Employer
                    shall check the actual deferral percentages against the
                    tests identified below.

               (b)  The term "eligible Participants," for purposes of this
                    Section shall mean all Participants under this Plan who are
                    eligible to make Salary Redirection contributions during the
                    Plan Year for which the tests are being made.

               (c)  The term "actual deferral percentage," means the average of
                    the percentages (calculated separately for each eligible
                    Participant) of Salary Redirection and Qualified Nonelective
                    Contributions on behalf of each eligible Participant divided
                    by the compensation of the eligible Participant.

               (d)  The term "compensation" for purposes of this Section shall
                    include Compensation is defined in Treasury Regulations
                    (S)1.414(s)-1T(c)(1) and (2) as modified by Treasury
                    Regulation (S)1.414(s)-1T(c)(4), applied uniformly to all
                    employees for any Plan Year or portion thereof during which
                    they are eligible to participate. Compensation for purposes
                    of this Section shall be limited pursuant to Code Section
                    401(a)(17).

               (e)  Only one of the following two tests need be satisfied not to
                    have a reduction in Salary Redirection.

                    Test I -  The actual deferral percentage for the current
                              Plan Year of the group of Highly Compensated
                              Employees is not more

                                      19
<PAGE>

                              than the actual deferral percentage for the
                              preceding Plan Year of all Non-Highly Compensated
                              Employees, multiplied by 1.25.

                    Test II - The excess of the actual deferral percentage for
                              the current Plan Year of the group of Highly
                              Compensate Employees over the actual deferral
                              percentage for the preceding Plan Year of all Non-
                              Highly Compensated Employees is not more than two
                              percentage points, and the actual deferral
                              percentage for the current Plan Year of the group
                              of Highly Compensated Employees is not more than
                              the actual deferral percentage for the preceding
                              Plan Year of all Non-Highly Compensated Employees,
                              multiplied by two. If Test II in Subsection 3.5(e)
                              is used in testing other contributions pursuant to
                              that Section, Test II under this Section shall be
                              limited as provided for in Code Section 401(m)(9)
                              and the regulations issued by the Secretary of the
                              Treasury of notices issued by the Internal Revenue
                              Service. If a multiple use of Test II occurs, such
                              multiple use shall be corrected by reducing either
                              the actual deferral percentage or actual
                              contribution percentage of the Highly Compensated
                              Employee in an amount calculated in the manner
                              provided in Section 3.4(f) or Section 3.5(f).

                    Notwithstanding the above, the Sponsoring Employer may elect
                    to perform the tests using the Average Actual Deferral
                    Percentage for the current Plan Year for Participants who
                    are Non-Highly Compensated Employees for the current Plan
                    Year rather than using prior Plan Year data, provided that
                    if such election is made for the 1998 or a later Plan Year,
                    the test must continue to be performed based on current Plan
                    Year data until the election is changed in a manner
                    prescribed by the Secretary of the Treasury. Unless the
                    Sponsoring Employer elects to use current Plan Year data,
                    the Participants taken into account in determining the prior
                    Plan Year's Average Actual Deferral Percentage for Non-
                    Highly Compensated Employees are those individuals who were
                    Non-Highly Compensated Employees during the preceding Plan
                    Year, without regard to the Participants' status during the
                    current Plan Year (i.e., a Participant who was a Non-Highly
                    Compensated Employee for the preceding Plan Year is included
                    in the calculation as a Non-Highly Compensated Employee even
                    if the Participant is no longer employed by the Employer or
                    has become a Highly Compensated Employee for the current
                    Plan Year). For the 1997 Plan Year, the determination of who
                    was a Non-Highly Compensated Employee for the 1996 Plan Year
                    shall be made using the definition of Non-Highly Compensated
                    Employee in effect prior to this restatement.

                    For purposes of these tests, the actual deferral percentage
                    for any Participant who is a Highly Compensated Employee for
                    the Plan Year

                                      20
<PAGE>

                    and who is eligible to have Salary Redirection allocated to
                    his accounts under two or more arrangements described in
                    Code Section 401(k) that are maintained by the Company,
                    shall be determined as if such Salary Redirection were made
                    under a single arrangement.

               (f)  If neither Test I nor Test II is initially satisfied for any
                    Plan Year, the Plan shall nevertheless be deemed to comply
                    with the requirements of Section 401(k)(3)(A)(ii) of the
                    Code for such Plan Year if, before the last day of the
                    following Plan Year, the amount of any excess contribution
                    (and any income thereon) is distributed to Participants who
                    are Highly Compensated Employees. The amount to be returned
                    shall be determined as follows:

                    (i)   Calculate the dollar amount that would be returned to
                          each Highly Compensated Employee if the Average
                          Deferral Percentage of Highly Compensated Employees
                          were reduced by returning Salary Redirection
                          contributions to such Participants, beginning with
                          those Highly Compensated Employees' with the highest
                          Actual Deferral Percentage and only to the extent
                          necessary to meet either test above.

                    (ii)  Determine the total of the dollar amounts calculated
                          in Step (i), and return that amount to Highly
                          Compensated Employees in accordance with Steps (iii)
                          and (iv) below by distributing Salary Redirection
                          contributions as Excess Contributions. Excess
                          Contributions, adjusted for any income or loss
                          allocable thereto, may be distributed before the end
                          of the following Plan Year to Participants on whose
                          behalf such Excess Contributions were made for such
                          preceding Plan Year. Excess Contributions shall be
                          adjusted for income or loss, and the income or loss
                          allocable to Excess Contributions shall be determined
                          by multiplying the income or loss allocable to the
                          Participant's Salary Redirection contributions for the
                          Plan Year by a fraction, the numerator of which is the
                          Excess Contribution on behalf of the Participant for
                          the preceding Plan Year and the denominator of which
                          is the value of the Participant's Salary Redirection
                          Account on the last day of the preceding Plan Year.

                    (iii) Reduce the Salary Redirection contributions of the
                          Highly Compensated Employee with the highest dollar
                          amount of Salary Redirection contributions by the
                          amount required to cause that Highly Compensated
                          Employee's Salary Redirection contributions to equal
                          the dollar amount of the Salary Redirection
                          contributions of the Highly Compensated Employee with
                          the next highest dollar amount of Salary Redirection
                          Contributions. However, if a lesser reduction would
                          equal the total remaining excess contributions to be
                          distributed, the lesser reduction amount is
                          distributed.

                                      21
<PAGE>

                    (iv) If the total amount distributed is less than the total
                         excess contributions from Step (ii), Step (iii) is
                         repeated.

                    If it is necessary to reduce the matched Salary Redirection,
                    the Participant shall nevertheless receive from the Plan a
                    distribution equal to the vested portion of the Employer
                    Matching Contribution plus any income thereon that would
                    have been allocated to him had such reduction in
                    contribution not been necessary. Any remaining portion of
                    the Matching Contribution shall be forfeited in accordance
                    with the provisions of Section 5.5.

Section 3.5    Nondiscrimination Test for Other Contributions

               (a)  Periodically as determined by the Committee, the Employer
                    shall check the actual contribution percentages against the
                    tests identified below.

               (b)  The term "eligible Participants," for purposes of this
                    Section, shall mean all Participants under this Plan who are
                    eligible to make Salary Redirection contributions, and
                    receive Matching Contributions during the Plan Year for
                    which the tests are being made.

               (c)  The term "actual contribution percentage," means the average
                    of the following percentages (calculated separately for each
                    eligible Participant): Matching Contributions (and Salary
                    Redirection to the extent elected by the Employer and
                    permitted by Regulations under Code Section 401(m)) on
                    behalf of each eligible Participant divided by compensation
                    of the eligible Participant.

               (d)  The term "compensation" for purposes of this Section shall
                    include compensation as defined in Treasury Regulations
                    (S)1.414(s)-1T(c)(1) and (2) as modified by Treasury
                    Regulation (S)1.414(s)-1T(c)(4), applied uniformly to all
                    employees for any plan year or portion thereof during which
                    they are eligible to participate. Compensation for purposes
                    of this Section shall be limited pursuant to Code Section
                    401(a)(17).

               (e)  Only one of the following two test need be satisfied not to
                    have a reduction in contribution tested pursuant to this
                    Section.

                    Test I -  The actual contribution percentage for the current
                              Plan Year of the group of Highly Compensated
                              Employees is not more than the actual contribution
                              percentage for the preceding Plan Year of all Non-
                              Highly Compensated Employees, multiplied by 1.25.

                    Test II - The excess of the actual contribution percentage
                              for the current Plan Year of the group of Highly
                              Compensated Employees over the actual contribution
                              percentage for the preceding Plan Year of all Non-
                              Highly Compensated Employees is not more than two
                              percentage points, and the

                                      22
<PAGE>

                              actual contribution percentage for the current
                              Plan Year of the group of Highly Compensated
                              Employees is not more than the actual contribution
                              percentage for the preceding Plan Year of all Non-
                              Highly Compensated Employees, multiplied by two.
                              If Test II in Subsection 3.4(e) is used in testing
                              Salary Redirection pursuant to that Section, Test
                              II under this Section shall be limited as provided
                              for in Code Section 401(m)(9) and the regulations
                              issued by the Secretary of the Treasury of notices
                              issued by the Internal Revenue Service. If a
                              multiple use of Test II occurs, such multiple use
                              shall be corrected by reducing either the actual
                              deferral percentage or actual contribution
                              percentage of the Highly Compensated Employee in
                              an amount calculated in the manner provided in
                              Section 3.4(f) or Section 3.5(f).

                    Notwithstanding the above, the Sponsoring Employer may elect
                    to perform the tests using the Average Contribution
                    Percentage for the current Plan Year for Participants who
                    are Non-Highly Compensated Employees for the current Plan
                    Year rather than using prior Plan Year data, provided that
                    if such election is made for the 1998 or a later Plan Year,
                    the test must continue to be performed based on current Plan
                    Year data until the election is changed in a manner
                    prescribed by the Secretary of the Treasury. Unless the
                    Sponsoring Employer elects to use current Plan Year data,
                    the Participants taken into account in determining the prior
                    Plan Year's Average Contribution Percentage for Non-Highly
                    Compensated Employees are those individuals who were Non-
                    Highly Compensated Employees during the preceding Plan Year,
                    without regard to the Participants' status during the
                    current Plan Year (i.e., a Participant who was a Non-Highly
                    Compensated Employee for the preceding Plan Year is included
                    in the calculation as a Non-Highly Compensated Employee even
                    if the Participant is no longer employed by the Employer or
                    has become a Highly Compensated Employee for the current
                    Plan Year). For the 1997 Plan Year, the determination of who
                    was a Non-Highly Compensated Employee for the 1996 Plan Year
                    shall be made using the definition of Non-Highly Compensated
                    Employee in effect prior to this restatement.

                    For purposes of these tests, the actual contribution
                    percentage for any Participant who is a Highly Compensated
                    Employee for the Plan Year and who is eligible to have
                    Matching Contributions allocated to his accounts under two
                    or more arrangements described in Code Section 401(k) that
                    are maintained by the Company, shall be determined as if
                    such Matching Contributions were made under a single
                    arrangement.

               (f)  If neither Test I nor Test II is initially satisfied for any
                    Plan Year, the Plan shall nevertheless be deemed to comply
                    with the requirements of Section 401(m) of the Code for such
                    Plan Year if, before the last day of the following Plan
                    Year, the amount of any excess contribution (and any

                                      23
<PAGE>

                    income thereon) is distributed to Participants who are
                    Highly Compensated Employees or if forfeitable, is
                    forfeited. The amount to be reduced shall be determined as
                    follows:

                    (i)   Calculate the dollar amount by which each Highly
                          Compensated Employee's Employer Matching contributions
                          must be reduced to pass wither test, beginning with
                          those Highly Compensated Employees with the highest
                          Contribution Percentage and only to the extent
                          necessary to meet either test above.

                    (ii)  Determine the total of the dollar amounts calculated
                          in Step (i), and reduce Highly Compensated Employees'
                          Employer Matching contributions in accordance with
                          Steps (iii) and (iv) below.

                    (iii) Reduce the Employer Matching contributions of the
                          Highly Compensated Employee with the highest dollar
                          amount of Employer Matching contributions by the
                          amount required to cause that Highly Compensated
                          Employee's Employer Matching contributions to equal
                          the dollar amount of the Employer Matching
                          contributions of the Highly Compensated Employee with
                          the next highest dollar amount of Employer Matching
                          contributions. However, if a lesser reduction would
                          equal the total remaining excess contributions to be
                          distributed, the lesser reduction amount is
                          distributed.

                    (iv)  If the total amount distributed is less than the total
                          excess contributions from Step (ii), Step (iii) is
                          repeated.

                    If it is necessary to reduce the Employer Matching
                    Contribution, the Participant shall nevertheless receive
                    from the Plan a distribution equal to the vested portion of
                    the Employer Matching Contribution plus any income thereon
                    that would have been allocated to him had such reduction in
                    contribution not been necessary. Any remaining portion of
                    the Matching Contribution shall be forfeited in accordance
                    with the provisions of Section 5.5.

               (g)  This Section shall be governed by Code Section 401(m) and
                    any rules or regulations issued pursuant thereto, which may
                    include coordination and/or combination with allocations
                    subject to Section 401(k) in accordance with Treasury
                    Regulation Section 1.401(m)-2.

                                      24
<PAGE>

Section 3.6    Maximum Individual Deferral

               A Participant shall not be permitted to have his Employer
               redirect an amount in excess of $9,500 in any calendar year
               pursuant to the provisions of Section 3.1, including
               contributions to any other plan of an Employer which are made
               pursuant to Code Section 402(a)(8). The $9,500 limitation shall
               be adjusted in accordance with cost-of-living adjustments made by
               the Secretary of the Treasury pursuant to Code Section 402(g)(5).
               If any amount is redirected pursuant to Section 3.1 in excess of
               this limit (as adjusted), or if a Participant notifies the
               Committee, in writing, by March 1 following the close of the
               taxable year of the amount contributed in excess of this limit
               (as adjusted) to all plans pursuant to Code Section 402(a)(8),
               such amount shall be deemed an "excess deferral" and the
               Committee shall direct the Trustee to distribute to the
               Participant (not later than the April 15 following the calendar
               year in which the excess deferral was made) the amount of the
               excess deferral plus any income allocable to such amount.

Section 3.7    Mistake of Fact

               If due to a mistake of fact, Employer Contributions to the Trust
               Fund for any Plan Year exceed the amount intended to be
               contributed, notwithstanding any provision to the contrary, the
               Employer, as soon as such mistake of fact is discovered, shall
               notify the Trustee. The Employer shall direct that the Trustee
               return such excess to the Employer, provided such return is made
               within one year of the date on which the Employer made the
               contribution.

Section 3.8    Qualified Nonelective Contributions

               The Employer may, as of the end of any calendar quarter, make a
               Qualified Nonelective Contribution to the Trust Fund on behalf of
               any Participant with a Prior Plan Employer Contribution Account
               or Prior Plan Salary Redirection Account in an amount equal to
               the surrender charges assessed by the insurer which held the
               assets in those accounts in the plan which was merged into this
               Plan. Such Qualified Nonelective Contributions shall be added to
               the Salary Redirection Accounts of those Participants in amounts
               equal to the allocation of the surrender charges to the
               Participant's combined Prior Plan Employer and Prior Plan Salary
               Redirection Accounts, shall be 100% vested when made, subject to
               the same distribution rules as Salary Redirection Contribution,
               and shall be tested for nondiscrimination as Salary Redirection
               Contributions in accordance with the provisions of Section 3.4.

Section 3.9    Uniformed Services Employment and Reemployment Rights Act of 1994
               ("USERRA")

               Effective December 12, 1994, notwithstanding any provision of
               this Plan to the contrary, contributions, benefits and service
               credit with respect to qualified military service will be
               provided in accordance with Section 414(u) of the Code.

                                      25
<PAGE>

               Section 414(u) generally provides that an employer maintaining a
               plan shall be treated as meeting the requirements of USERRA only
               if an employee reemployed under USERRA is treated as not having
               incurred a break in service because of the period of military
               service, the employee's military service is treated as service
               with the employer for vesting and benefit accrual purposes, the
               employee is permitted to make additional elective deferrals and
               employee contributions in an amount not exceeding the maximum
               amount the employee would have been permitted or required to
               contribute during the period of military service if the employee
               had actually been employed by the employer during that period
               ("make-up contributions"), and the employee is entitled to any
               accrued benefits that are contingent on employee contributions or
               elective deferrals to the extent the employee pays the
               contributions or elective deferrals to the plan. Make-up
               contributions must be permitted during the period that begins on
               the date of reemployment and continues for five years or, if
               less, three times the period of military service. With respect to
               make-up contributions, the employer must make matching
               contributions that would have been required if the make-up
               contributions had actually been made during the period of
               military service.

               Section 414(u) provides that an employee is treated as receiving
               compensation from the employer during the period of military
               service equal to the compensation the employee otherwise would
               have received from the employer during that period, or, if the
               compensation the employee otherwise would have received is not
               reasonably certain, the employee's average compensation from the
               employer during the period immediately preceding the period of
               military service. For purpose of (S) 414(u), USERRA is not
               treated as requiring the crediting of earnings to an employee
               with respect to any contribution before the contribution is
               actually made or requiring any allocation of forfeitures to the
               employee for the period of military service.

               Section 414(u) generally provides that a contribution that is
               made by an employer or employee to an individual account plan or
               by an employee to a contributory defined benefit plan, and that
               is required under USERRA, is taken into account for purposes of
               the limitations of (S) 402(g), 402(h), 403(b), 404(a), 404(h),
               408, 415 or 457 in the year to which the contribution relates,
               not the year in which the contribution is made. In addition, (S)
               414(u) provides that a plan is not treated as failing to meet the
               requirements of (S) 401(a)(4), 401(a)(26), 401(k)(3), 401(k)(11),
               401(k)(12), 401(m), 403(b)(12), 408(k)(3), 408(k)(6), 408(p),
               410(b), or 416 because of the contribution (or the right to make
               the contribution).

                                      26
<PAGE>

                                   ARTICLE 4

                       ALLOCATION TO INDIVIDUAL ACCOUNTS

Section 4.1    Individual Accounts

               The Committee shall establish and maintain an Individual Account
               in the name of each Participant to which the Committee shall
               credit all amounts allocated to each such Participant pursuant to
               Article 3 and the following Sections of this Article.

Section 4.2    Investment of Accounts

               (a)  Each Participant shall have the right to direct the
                    Committee how to invest the cumulative balance in his
                    Individual Account attributable to Salary Redirection, Prior
                    Plan Salary Redirection Contributions, Prior Plan Employer
                    Contributions and current Salary Redirection, in any whole
                    percentage (25% increments if elections made prior to
                    January 1, 1997, in which case they continue until a change
                    is made by the Participant) as among the Investment Funds
                    designated by the Committee from time to time (the
                    "Investment Funds"). Investment directions shall be effected
                    as soon as practicable, provided the Participant gives the
                    direction by identity-secured telephonic instructions (or in
                    writing if telephonic instructions are impracticable). All
                    elections shall control until a new election is filed.
                    Neither the Trustee nor any other Fiduciary shall be
                    responsible for investment losses resulting from a
                    Participant's exercise of investment discretion, in
                    accordance with ERISA Section 404(c).

               (b)  A Participant who does not make any election under this
                    Section shall have his Individual Account invested in an
                    interest income fund or a similar investment vehicle
                    designated by the Committee from time to time.

               (c)  If a Participant's investment direction is not implemented
                    and the Participant does not notify the Committee, in
                    writing, within 45 days of the date the direction is filed
                    that the direction has not been implemented, then the
                    investment direction shall be void and treated as if never
                    made.

Section 4.3    Valuation of Accounts

               (a)  Individual Account. As of each Valuation Date, the Committee
                    shall determine the fair market value of the Individual
                    Account of each Participant for each Investment Fund in
                    which the Individual Account is invested as follows:

                    (1)  The value of the Individual Account of each Participant
                         as of the last Valuation Date;

                                      27
<PAGE>

                    (2)  Minus the amount of any withdrawals and distributions
                         -----
                         made from such account since the last Valuation Date;

                    (3)  Plus any contributions to the Participant's Salary
                         ----
                         Redirection Account since the last Valuation Date;

                    (4)  Plus any allocation to the Participant's Matching
                         ----
                         Contribution Account since the last Valuation Date;

                    (5)  Plus any allocation to the Participant's Profit Sharing
                         ----
                         Account since the last Valuation Date;

                    (6)  Plus the Individual Account's proportionate share of
                         ----
                         any investment earnings allocated to each Investment
                         Fund held within the Individual Account since the last
                         Valuation Date;

                    (7)  Minus the Individual Account's proportionate share of
                         -----
                         any investment losses allocated to each Investment Fund
                         held within the Individual Account since the last
                         Valuation Date.

               (b)  Investment Earnings or Losses. The investment earnings (or
                    losses, if such computation is negative) from the Investment
                    Funds shall mean the difference between the unit price of
                    any Investment Fund from one business day to the next, and
                    any net gain or loss on non-mutual fund investments in an
                    Investment Fund, as reflected by interest payments,
                    dividends, realized and unrealized gains and losses on
                    securities, other investment transactions and expenses paid
                    from the fund.

               (c)  Allocation of Investment Earnings or Losses. On each
                    Valuation Date the investment earnings or losses from the
                    Trust Fund shall be allocated to the Individual Account of
                    each Participant invested in the respective Investment Fund
                    in the ratio of "A" divided by "B" where "A" is an amount
                    determined pursuant to Section 4.3(d) for the portion of the
                    Individual Account of each Participant invested in the
                    respective Investment Fund and "B" is an amount determined
                    pursuant to Section 4.3(d) for the portion of the Individual
                    Account of all Participants invested in the respective
                    Investment Fund.

               (d)  Determination of Ratio. For purposes of determining the
                    ratio in Section 4.3(c), the amounts shall be determined as
                    follows:

                    (1)  the value of the portion of such Individual Account(s)
                         in the Investment Fund on such Valuation Date;

                    (2)  Minus withdrawals and benefit payments to or on behalf
                         -----
                         of Participants from the portion of such Individual
                         Account(s) in the Investment Fund on such Valuation
                         Date.

                                      28
<PAGE>

Section 4.4    Trustee and Committee Judgment Controls

               In determining the fair market value of the Trust Fund and of
               Individual Accounts, the Trustee shall exercise its best
               judgment, and all such determinations of value (in the absence of
               bad faith) shall be binding upon all Participants and their
               beneficiaries.

Section 4.5    Maximum Additions

               Effective for Plan Years beginning after December 31, 1994,
               notwithstanding any other provisions of the Plan, contributions
               and other additions with respect to a Participant exceed the
               limitation of Section 415(c) of the Code if, when expressed as an
               annual addition (within the meaning of Section 415(c)(2) of the
               Code to the Participant's Account, such annual addition is
               greater than the lesser of:

               (a)  $30,000; or

               (b)  25% of the Participant's compensation (as defined in Section
                    415(c)(3) of the Code).

               (c)  In the event a Participant is covered by one or more Defined
                    Contribution Plans maintained by an Employer, the maximum
                    annual additions as noted above shall be decreased in the
                    last Defined Contribution Plan maintained by an Employer in
                    which he participated to ensure that all such plans will
                    remain qualified under the Code.

Section 4.6    Corrective Adjustments

               In the event that corrective adjustments in the Annual Addition
               to any Participant's Individual Account are required as the
               result of a reasonable error in estimating a Participant's
               compensation, the corrective adjustments shall be made pursuant
               to and in the order of the subsections in this Section.

               (a)  The portion of the Participant's unmatched Salary
                    Redirection made pursuant to Subsection 3.1(a) shall be
                    returned by distribution to the Participant, with earnings
                    thereon. Any amount so returned shall be disregarded for
                    purposes of the tests in Sections 3.4 and 3.5.

               (b)  The portion of the Participant's matched Salary Redirection
                    made pursuant to Subsection 3.1(a) and his Matching
                    Contributions shall be proportionally reduced to insure
                    compliance with Section 4.5. Any affected Salary Redirection
                    will be distributed to the Participant and shall not be
                    considered for purposes of the tests in Sections 3.4 and
                    3.5. Any affected Matching Contributions shall be used to
                    reduce future Matching Contributions.

                                      29
<PAGE>

               (c)  The Participant's Profit Sharing Contribution shall be
                    reduced to insure compliance with Section 4.5. Any such
                    amount reduced shall be allocated as of the end of the next
                    Plan Year among the Profit Sharing Contribution Accounts of
                    all other Participants in the same manner as is indicated in
                    Section 3.3.

Section 4.7    Defined Contribution and Defined Benefit Plan Fraction

               If a Participant is a participant in a Defined Benefit Plan
               maintained by an Employer, the sum of his defined benefit plan
               fraction and his defined contribution plan fraction for any
               Limitation Year may not exceed 1.0.

               (a)  For purposes of this Section, the term "defined contribution
                    plan fraction" shall mean a fraction the numerator of which
                    is the sum of all of the Annual Additions of the Participant
                    under this Plan and any other Defined Contribution Plan
                    maintained by an Employer as of the close of the Limitation
                    Year and the denominator of which is the sum of the lesser
                    of the following amounts determined for such Limitation Year
                    and for each prior Limitation Year of employment with an
                    Employer:

                    (1)  the product of 1.25 multiplied by the dollar limitation
                         in effect under Section 415(c)(1)(A) of the Code; or

                    (2)  the product of 1.4 multiplied by the amount which may
                         be taken into account under Code Section 415(c)(1)(B)
                         with respect to each individual under the Plan for such
                         Limitation Year.

               (b)  For purposes of this Section, the term "defined benefit plan
                    fraction" shall mean a fraction, the numerator of which is
                    the Participant's projected annual benefit (as defined in
                    the Defined Benefit Plan) determined as of the close of the
                    Limitation Year and the denominator of which is the lesser
                    of:

                    (1)  the product of 1.25 multiplied by the dollar limitation
                         in effect pursuant to Section 415(b)(1)(A) of the Code
                         for such Limitation year; or

                    (2)  the product of 1.4 multiplied by the amount which may
                         be taken into account pursuant to Section 415(b)(1)(B)
                         of the Code with respect to each individual under the
                         Plan for such Limitation year.

               (c)  The limitation on aggregate benefits from a Defined Benefit
                    Plan and a Defined Contribution Plan which is contained in
                    Section 2004 of ERISA, as amended, shall be complied with by
                    a reduction (if necessary) in the Participant's benefits
                    under the Defined Benefit Plan.

                                      30
<PAGE>

                                   ARTICLE 5

                                 DISTRIBUTIONS

Section 5.1    Normal Retirement

               When a Participant lives to his Normal Retirement Date and
               retires, he shall become entitled to the full value of his
               Individual Account as soon as practicable after the distribution
               forms are completed (or their time for completion has elapsed),
               at a value determined as of the date the distribution check is
               prepared.

Section 5.2    Late Retirement

               A Participant may continue his employment past his Normal
               Retirement Date on a year to year basis. He shall continue to be
               an active Participant under the Plan. Upon his actual retirement,
               he shall become entitled to the full value of his Individual
               Account as soon as practicable after the distribution forms are
               completed (or their time for completion has elapsed), at a value
               determined as of the date of distribution check is prepared.

Section 5.3    Death

               If a Participant dies while an active Participant under the Plan,
               his Beneficiary shall be entitled to the full value of his
               Individual Account as soon as practicable after the distribution
               forms are completed (or their time for completion has elapsed),
               at a value determined as of the date of distribution check is
               prepared.

Section 5.4    Disability

               When it is determined that a Participant is Totally and
               Permanently Disabled, the Committee shall certify such fact to
               the Trustee and such Disabled Participant shall be entitled to
               receive the full value of his Individual Account as soon as
               practicable after the distribution forms are completed, at a
               value determined as of the date of distribution check is
               prepared.

Section 5.5    Termination of Employment

               (a)  Subject to Section 5.5(j) below, upon termination of
                    employment for any reason (other than Normal Retirement,
                    Late Retirement, Disability Retirement or Death), a
                    Participant shall be entitled to a benefit equal to the
                    vested portion (as determined in this Section) of the
                    balance of his Individual Account as soon as practicable
                    after the distribution forms are completed, at a value
                    determined as of the date of distribution check is prepared.

               (b)  A Participant shall always be 100% vested in the balance of
                    his Salary Redirection Account, and Prior Plan Salary
                    Redirection Account. A Participant shall be 100% vested in
                    all amounts in his Prior Plan

                                      31
<PAGE>

                    Employer Contribution Account that were transferred from the
                    CKP Savings and Retirement Plan (the "CKP Plan"). A
                    Participant who had three years of service under the CKP
                    Plan and whose plan benefit was transferred from that plan
                    to this Plan shall be 100% immediately vested in all
                    accounts under this Plan. All participants in the CKP Plan
                    who do not have three Years of Service on the date a portion
                    of the CKP Plan was merged into this Plan, and all
                    participants employed by Nationwide Care, Inc., regardless
                    of their Years of Service, shall be subject to the vesting
                    schedule contained in Section 5.5 of this Plan for purposes
                    of Employer Contributions made to this Plan.

               (c)  A Participant shall be vested in the balance attributable to
                    his Matching and Profit Sharing Contribution Accounts based
                    on years of Service as of his date of termination, in
                    accordance with the following schedule:

                         Years of Service     Vested Percentage
                         ----------------     -----------------

                         Less than 3 years           0%
                         3 but less than 4          20%
                         4 but less than 5          40%
                         5 but less than 6          60%
                         6 but less than 7          80%
                         7 years or more           100%

               (d)  Notwithstanding the above, a Participant who has a Prior
                    Plan Employer Contribution Account from The Hillhaven
                    Corporation Deferred Savings Plans, shall be vested in the
                    balance attributable to such account based on years of
                    Service as of his date of termination, in accordance with
                    the following schedule:

                         Years of Service     Vested Percentage
                         ----------------     -----------------

                         Less than 3 years           0%
                         3 but less than 4          30%
                         4 but less than 5          40%
                         5 but less than 6          60%
                         6 but less than 7          80%
                         7 years or more           100%

                    In addition, any Participant who had an account in The
                    Hillhaven Corporation Deferred Savings Plan and who
                    terminated employment during the 1996 calendar year shall be
                    100% vested in the Participant's Individual Account
                    transferred to this Plan from The Hillhaven Corporation
                    Deferred Savings Plan.

               (e)  Notwithstanding the above, a Participant who attains Normal
                    Retirement Age or dies or becomes Totally and Permanently
                    Disabled, while

                                      32
<PAGE>

                    employed by an Employer, shall be fully vested in his
                    Individual Account under the Plan.

               (f)  A Participant who terminates employment pursuant to this
                    Section with a zero percent vested percentage shall be
                    deemed to have received a distribution on the date he
                    terminates employment. If a Former Participant receives a
                    distribution of the vested portion of his Individual Account
                    prior to incurring five consecutive Breaks in Service or
                    said Former Participant is zero percent vested in his
                    Individual Account, the non-vested balance of such
                    terminated Participant's Individual Account shall be
                    forfeited as of the date he receives or is deemed to receive
                    said distribution. If a Participant who has received a
                    distribution (or deemed distribution) is later rehired
                    before the period described in subsection 5.5(h) below, the
                    Participant need not repay the distributed amount, but his
                    Account shall automatically have the forfeited amount
                    restored to it at the earlier of (1) the last day of the
                    Plan Year in which rehired, or (2) the date of a subsequent
                    termination of employment. Restoration of a forfeiture will
                    come from forfeitures in the year in which he is reemployed
                    and, to the extent such forfeitures are not sufficient, from
                    a special Employer Contribution. Upon a subsequent
                    termination of employment prior to the Participant becoming
                    100% vested, the gross distribution shall be determined by
                    multiplying the vested percentage at the subsequent
                    termination by the account balance then actually restored to
                    the Plan, plus the distribution previously received. The
                    amount to be distributed to the Participant shall be the
                    vested percentage of the adjusted account, minus the amount
                    previously distributed.

               (g)  The non-vested balance of the Individual Account of a
                    terminated Participant shall be forfeited as of the last day
                    of the Plan Year in which such terminated Participant incurs
                    five consecutive Breaks in Service if the Participant is
                    vested in any portion of his Individual Account and does not
                    receive a distribution prior to incurring five consecutive
                    Breaks in Service.

               (h)  A terminated Participant who is reemployed and again becomes
                    a Participant after incurring five or more consecutive
                    Breaks in Service shall not have any amount forfeited
                    pursuant to this Section restored to his Individual Account.

               (i)  Any Matching Contributions and Profit Sharing Contributions
                    forfeited will be first used to reduce Matching
                    Contributions pursuant to Section 3.2.

               (j)  Notwithstanding anything to the contrary in this Section 5.5
                    or in Section 5.6(a), no portion of a Participant's
                    Individual Account shall be distributed to him until the
                    participant has separated from service within the meaning of
                    Code Section 401(k)(2)(B), unless the distribution is in

                                      33
<PAGE>

                    connection with an event described in Code Section
                    401(k)(10) and the Treasury Regulations under that Section.

Section 5.6    Commencement of Benefits

               (a)  Any benefits payable under this Article shall be paid as
                    soon as reasonably possible following the actual date of
                    severance, at the value determined as of the Valuation Date
                    coincident with or immediately preceding receipt of properly
                    completed distribution forms from the Participant, subject
                    to the Participant's consent if his actual date of severance
                    is prior to Normal Retirement Age and subject to Subsection
                    5.7(a). In no event, however, shall payment begin beyond 60
                    days after the last day of the Plan Year in which occurs the
                    latest of (i) the Participant's reaching Normal Retirement
                    Age; (ii) the 10th anniversary of the date the Employee
                    became a Participant; or (iii) termination of the
                    Participant's employment. Notwithstanding anything in the
                    Plan to the contrary and notwithstanding the Participant's
                    lack of consent, benefits under this Plan shall be paid as
                    soon as reasonably possible following the later of the
                    Participant's actual date of severance or his Normal
                    Retirement Date.

               (b)  Except as required in this Section for a Participant who has
                    an Individual Account to which Section 5.7(b) or Section
                    5.6(c) applies, a Participant may defer distribution to a
                    subsequent date. If the Participant does not consent to a
                    distribution as provided above, such distribution shall be
                    made based on the value of the Individual Account as of the
                    date the check for the distribution is prepared and shall be
                    delivered as soon as reasonably practical after notice to
                    the Committee of the election to receive a distribution.

               (c)  Notwithstanding any other provisions of the Plan, the
                    payment of a Participant's benefits hereunder shall begin by
                    payment of a lump sum of the entire Accounts of the
                    Participant no later than the April 1 following the calendar
                    year in which the Participant has both attained age 70 1/2
                    and has retired, provided that for 5% owners as defined in
                    Section 416 of the Code, distribution must begin by April 1
                    following the calendar year in which the Participant attains
                    age 70 1/2, regardless of whether the Participant has
                    retired; and further provided that a Participant who had
                    attained age 70 1/2 on or before December 31, 1998 shall
                    have the option to take a lump sum distribution even while
                    employed, at the April 1 following attainment of age 70 1/2,
                    if the Participant so elects in writing, and, if so elected,
                    shall receive a distribution on or before December 31 of the
                    year after attainment of age 70 1/2, and again each year
                    thereafter while still employed, shall receive a similar
                    distribution of all amounts accrued in Accounts of the
                    Participant since the last such distribution.

               (d)  Notwithstanding anything in the Plan to the contrary, any
                    benefit payable to an alternate payee pursuant to a
                    qualified domestic relations order, as

                                      34
<PAGE>

                    defined in Section 414(p) of the Code, shall be paid as soon
                    as administratively possible following the determination
                    that the order meets the requirements of Section 414(p) of
                    the Code.

               (e)  Notwithstanding anything in the Plan to the contrary, in the
                    event a Participant terminates employment for any reason and
                    recommences employment prior to distribution of his entire
                    vested account in the Plan, the undistributed portion of his
                    vested account shall remain in the Plan until his account
                    again becomes distributable due to a subsequent termination.

Section 5.7    Methods of Payment

               (a)  A Participant or Beneficiary shall elect a distribution of
                    the Individual Account in a single lump sum payment in cash
                    as provided hereinafter. Except as provided in Section
                    5.7(c) or Section 5.11, no other manner of distribution
                    shall be provided. The request by the Participant or the
                    Beneficiary shall be in writing and shall be filed with the
                    Committee. The Committee may not require a distribution
                    without the consent of the Participant prior to his reaching
                    Normal Retirement Age or, if the Participant is deceased,
                    without the consent of his spouse, if the spouse is living
                    and if the spouse is his Beneficiary, unless the vested
                    value of the Individual Account is $5,000 or less. If the
                    vested value of the Participant's Individual Account is
                    $5,000 or less, the benefits payable will be paid as soon as
                    reasonably possible following the actual date of severance,
                    notwithstanding lack of consent. If the vested value of the
                    Participant's Individual Account has been more than $5,000
                    at the time of any distribution, the value the Participant's
                    Individual Account will be deemed to be more than $5,000 at
                    the time of any subsequent distribution for purposes of the
                    consent requirements of this Section.

               (b)  If the Participant dies before distribution occurs, the
                    Participant's entire interest will be distributed no later
                    than five years after the Participant's death, except, if
                    the designated Beneficiary is the Participant's surviving
                    spouse, the distribution must be made no later than the date
                    on which the Participant would have attained age 65.

               (c)  Notwithstanding anything in this Section to the contrary, in
                    the case of a Participant who has a Prior Plan Salary
                    Redirection Account or a Prior Plan Employer Contribution
                    Account, the Participant may take distribution of his Prior
                    Plan Salary Redirection Account or Prior Plan Employer
                    Contribution Account at such time or in such other form as
                    was provided in the plan (as in effect as of the date of
                    transfer) from which the Prior Plan Salary Redirection
                    Account or Prior Plan Employer Contribution Account was
                    transferred.

                                      35
<PAGE>

Section 5.8    Benefits to Minors and Incompetents

               If any person entitled to receive payment under the Plan shall be
               a minor, the Committee, in its discretion, may dispose of such
               amount in any one or more of the ways specified in Subsections
               (a) through (c) of this Section.

               (a)  By payment thereof directly to such minor;

               (b)  By application thereof for benefit of such minor;

               (c)  By payment thereof to either parent of such minor or to any
                    adult person with whom such minor may at the time be living
                    or to any person who shall be legally qualified and shall be
                    acting as guardian of the person or the property of such
                    minor; provided only that the parent or adult person to whom
                    any amount shall be paid shall have advised the Committee in
                    writing that he will hold or use such amount for the benefit
                    of such minor.

               In the event that it shall be found that person entitled to
               receive payment under the Plan is physically or mentally
               incapable of personally receiving and giving a valid receipt for
               any payment due (unless prior claim therefor shall have been made
               by a duly qualified committee or other legal representative),
               such payment may be made to the spouse, son, daughter, parent,
               brother, sister or other person deemed by the Committee to have
               incurred expense for such person otherwise entitled to payment.

Section 5.9    Unclaimed Benefits

               (a)  The Plan does not require either the Trustee or the
                    Committee to search for, or ascertain the whereabouts of,
                    any Participant or Beneficiary. The Committee, by certified
                    mail addressed to his last known address of record with the
                    Committee or the Employer, shall notify any Participant, or
                    Beneficiary, that he is entitled to a distribution under
                    this Plan. If the Participant, or Beneficiary, fails to
                    claim his distributive share or make his whereabouts known
                    in writing to the Committee within six months from the date
                    of mailing of the notice, or before the termination or
                    discontinuance of this Plan, whichever should first occur,
                    the Committee shall thereafter treat the Participant's or
                    Beneficiary's unclaimed payable Account as a Forfeiture. A
                    Forfeiture under this Section shall occur when the Committee
                    determines that the Participant or Beneficiary cannot be
                    located, but not earlier than the end of the notice period,
                    or if later, the earliest date applicable Treasury
                    regulations would permit the Forfeiture.

               (b)  If a Participant or Beneficiary who has incurred a
                    forfeiture of his Account under this Section makes a claim,
                    at any time, for his forfeited Account, the Committee shall
                    restore the Participant's or Beneficiary's forfeited Account
                    to the same dollar amount as the dollar amount of the

                                      36
<PAGE>

                    Account forfeited, unadjusted for any gains or losses
                    occurring subsequent to the date of the forfeiture. The
                    Committee shall make the restoration during the Plan Year in
                    which the Participant or Beneficiary makes the claim, first
                    from the amount, if any, of forfeitures the Administrator
                    otherwise would allocate for the Plan Year, then from the
                    amount, if any, of the Trust net income or gain for the Plan
                    Year and then from the amount, or additional amount, the
                    Employer shall contribute to enable the Committee to make
                    the required restoration. The Committee shall direct the
                    Trustee to distribute the Participant's or Beneficiary's
                    restored Account to him not later than 60 days after the
                    close of the Plan Year in which the Committee restores the
                    forfeited Account. The forfeiture provisions of this Section
                    shall apply solely to the Participant's or to the
                    Beneficiary's Account derived from Employer contributions.

Section 5.10   Participant Directed Rollovers

               (a)  This Section applies to distributions made on or after
                    January 1, 1993. Notwithstanding any provision of the Plan
                    to the contrary that would otherwise limit a distributee's
                    election under this Section, a distributee may elect, at the
                    time and in the manner prescribed by the Committee, to have
                    any portion of an eligible rollover distribution paid
                    directly to an eligible retirement plan specified by the
                    distributee in a direct rollover.

               (b)  For purposes of this Section, an eligible rollover
                    distribution is any distribution of all or any portion of
                    the balance to the credit of the distributee, except that an
                    eligible rollover distribution does not include: any
                    distribution that is one of a series of substantially equal
                    periodic payments (not less frequently than annually) made
                    for the life (or life expectancy) of the distributee or the
                    joint lives (or joint life expectancies) of the distributee
                    and the distributee's designated beneficiary, or for a
                    specified period of 10 years or more; any distribution to
                    the extent such distribution is required under Section
                    401(a)(9) of the Code; and the portion of any distribution
                    that is not includible in gross income (determined without
                    regard to the exclusion for net unrealized appreciation with
                    respect to employer securities).

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

                    For purposes of this Section, a distributee includes an
                    Employee or former Employee. In addition, the Employee's or
                    former Employee's surviving spouse and the Employee's or
                    former Employee's spouse or former spouse

                                      37
<PAGE>

                    who is the alternate payee under a qualified domestic
                    relations order, as defined in Section 414(p) of the Code,
                    are distributees with regard to the interest of the spouse
                    or former spouse.

               (d)  A direct rollover is a payment by the plan to the eligible
                    retirement plan specified by the distributee.

Section 5.11   Joint and Survivor Options

               This Section shall only apply to a Participant who has a Prior
               Plan Employer Contribution Account and/or a Prior Plan Salary
               Redirection Account that was transferred as a result of a plan
               merger from a plan that provided for an annuity form of
               distribution.

               (a)  Qualified Joint and Survivor Annuity. Except as otherwise
                    provided below, unless an optional form of benefit is
                    selected pursuant to a qualified election within the 90 day
                    period ending on the date benefit payments would commence, a
                    Participant's vested Prior Plan Employer Contribution
                    Account and Prior Plan Salary Redirection Account will be
                    paid in the form of a qualified joint and survivor annuity,
                    and an unmarried Participant's benefit shall be paid in the
                    form of a life annuity unless otherwise elected by the
                    Participant. A qualified joint survivor annuity will not be
                    applicable and this Section shall not apply if the following
                    conditions are met:

                    (1)  The Participant's vested Individual Account is payable
                         in full, on the death of the Participant, to the
                         Participant's surviving spouse, or if there is no
                         surviving spouse, or if the surviving spouse has
                         previously consented to the designation of a non-spouse
                         Beneficiary in the manner prescribed under this
                         Section, and

                    (2)  Such Participant does not elect a payment of benefits
                         in the form of a life annuity, and

                    (3)  With respect to such Participant, such Plan is not a
                         direct or indirect transfer of a Plan which is
                         described in clause (i) or (ii) of Code Section
                         401(a)(11)(B), or

                    (4)  If the distribution is subject to the terms and
                         conditions contained in Section 5.7 concerning the
                         distribution of vested Individual Accounts of $5,000 or
                         less.

               (b)  Qualified Preretirement Survivor Annuity. Except as
                    otherwise provided in this Subsection, unless an optional
                    form of benefit has been selected within the election period
                    pursuant to a qualified election, if a Participant dies
                    before benefits have commenced, then the Participant's
                    vested Prior Plan Employer Contribution Account and Prior
                    Plan Salary Redirection Account shall be applied toward the
                    purchase of an annuity

                                      38
<PAGE>

                    for the life of the surviving spouse. Benefits will not be
                    required to be paid in the form of a preretirement survivor
                    annuity if the following conditions are met:

                    (1)  The Participant's vested Individual Account is payable
                         in full, on the death of the Participant, to the
                         Participant's surviving spouse, or if there is no
                         surviving spouse, or if the surviving spouse has
                         previously consented to the designation of a non-spouse
                         Beneficiary in the manner prescribed under this
                         Section, and

                    (2)  Such Participant does not elect a payment of benefits
                         in the form of a life annuity, and

                    (3)  With respect to such Participant, such Plan is not a
                         direct or indirect transfer of a Plan which is
                         described in clause (i) or (ii) of Section
                         401(a)(11)(b) of the Code, and

                    (4)  If the distribution is subject to the terms and
                         conditions contained in Section 5.7 concerning the
                         distribution of vested Individual Accounts of $5,000 or
                         less.

               (c)  Election Period shall mean, for purposes of this Section,
                    the period which begins on the first day of the Plan Year in
                    which the Participant attains age 35 and ends on the date of
                    the Participant's death. If a Participant separates from
                    service prior to the first day of the Plan Year in which age
                    35 is attained, with respect to the Individual Account
                    Balance as of the date of separation, the election period
                    shall begin on the date of separation.

               (d)  Early Retirement Age shall mean, for purposes of this
                    Section, the earliest date on which, under the Plan, the
                    Participant could elect to receive retirement benefits.

               (e)  Qualified Election shall mean, for purposes of this Section,
                    an election pursuant to this Subsection. A waiver of a
                    qualified joint and survivor annuity or a qualified
                    preretirement survivor annuity is permitted. The waiver must
                    be in writing, must be executed by the Participant, must
                    specify the Beneficiary and the optional form of benefit and
                    must be consented to by the Participant's spouse. The
                    spouse's consent to a waiver must be witnessed by a Plan
                    representative or a notary public. Notwithstanding this
                    consent requirement, if the Participant establishes to the
                    satisfaction of a Plan representative that such written
                    consent may not be obtained because there is no spouse or
                    the spouse cannot be located, a waiver will be deemed a
                    qualified election. Any consent necessary under this
                    provision will be valid only with respect to the spouse who
                    signs the consent, or in the event of a deemed qualified
                    election, the designated spouse. Additionally a revocation
                    of a prior waiver may be made by a Participant without the
                    consent of the spouse at any time before the

                                      39
<PAGE>

                    commencement of benefits. The number of revocations shall
                    not be limited.

               (f)  Qualified Joint and Survivor Annuity shall mean, for
                    purposes of this Section, an annuity for the life of the
                    Participant with a survivor annuity for the life of the
                    spouse which is not less than 50% and not more than 100% of
                    the amount of the annuity which is payable during the joint
                    lives of the Participant and the spouse and which is the
                    amount of benefit which can be purchased with the
                    Participant's vested Prior Plan Employer Contribution
                    Account and Prior Plan Salary Redirection Account.

               (g)  Qualified Preretirement Survivor Annuity shall mean, for
                    purposes of this Section, a survivor annuity for the life of
                    the surviving spouse, the actuarial equivalent of which is
                    not less than 50% of the vested Prior Plan Employer
                    Contribution Account and Prior Plan Salary Redirection
                    Account of the Participant as of the date of death, which
                    may become payable as a result of the Participant's death
                    prior to his Normal Retirement Date.

               (h)  Notice Requirements.

                    (1)  In the case of a qualified joint and survivor annuity
                         the Committee shall provide each Participant no less
                         than 30 days and no more than 90 day prior to the
                         annuity starting date (or such other time as provided
                         by regulations or other pronouncements), a written
                         explanation of (i) the terms and conditions of a
                         qualified joint and survivor annuity; (ii) the
                         Participant's right to make and the effect of an
                         election to waive the qualified joint and survivor
                         annuity form of benefit; (iii) the rights of a
                         Participant's spouse; and (iv) the right to make and
                         the effect of a revocation of a previous election to
                         waive the qualified joint and survivor annuity.

                    (2)  In the case of a qualified preretirement survivor
                         annuity the Committee shall provide each Participant
                         within the period beginning on the first day of the
                         Plan Year in which the Participant attains age 32 and
                         ending with the close of the Plan Year preceding the
                         Plan Year in which the Participant attains age 35, a
                         written explanation of the qualified preretirement
                         survivor annuity in such terms and in such manner as
                         would be comparable to the explanation provided for
                         meeting the requirement of a qualified joint and
                         survivor annuity. If a Participant enters the Plan
                         after the first day of the Plan Year in which the
                         Participant attained age 32, the Committee shall
                         provide notice no later than the close of the third
                         Plan Year succeeding the entry of the Participant in
                         the Plan.

                    (3)  Notwithstanding the other requirements of this Section,
                         the respective notices prescribed by this Section need
                         not be given to a

                                      40
<PAGE>

                         Participant if the Plan "fully subsidizes" the costs of
                         a qualified joint and survivor annuity or qualified
                         preretirement survivor annuity, and the Participant
                         cannot elect another form of benefit. For purposes of
                         this Section, the Plan fully subsidizes the costs of a
                         benefit if under the Plan the failure to waive such
                         benefit by a Participant would not result in a decrease
                         in any plan benefits with respect to such Participant
                         and would not result in increased contributions from
                         the Participant.

                                      41
<PAGE>

                                   ARTICLE 6

                                  WITHDRAWALS

Section 6.1    Hardship Withdrawal

               (a)  Except as otherwise provided in this Section, and upon
                    proper written application of a Participant made at least 30
                    days in advance of the withdrawal date, in such form as the
                    Committee may specify, the Committee in its sole discretion
                    may permit the Participant to withdraw a portion or all of
                    the balance of his Salary Redirection Account and Prior Plan
                    Salary Redirection Account, provided that earnings allocated
                    to said account may not be withdrawn. Such withdrawal shall
                    be based on the Valuation Date coincident with or
                    immediately preceding the date of distribution and may not
                    be less than $500, or if the amount of hardship exceeds $500
                    but the amount available for distribution is lower, the
                    total amount available for distribution as a hardship
                    withdrawal.

               (b)  The reason for a withdrawal pursuant to this Section must be
                    to enable the Participant to meet unusual or special
                    situations in his financial affairs resulting in immediate
                    and heavy financial needs of the Participant. Such
                    situations shall be limited to:

                    (1)  uninsured medical expenses (described in Code Section
                         213(d)) incurred by or needed to procure services for
                         the Participant, the Participant's spouse or any
                         dependents of the Participant (as defined in Code
                         Section 152);

                    (2)  purchase (excluding mortgage payments) of a principal
                         residence for the Participant;

                    (3)  payment of tuition for the next 12 months of post-
                         secondary education for the Participant, his or her
                         spouse, children, or dependents;

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

                    (5)  any additional items which may be added to the list of
                         deemed immediate and heavy financial needs by the
                         Commissioner of Internal Revenue through the
                         publication of revenue rulings, notices, and other
                         documents of general applicability.

                    Any withdrawal hereunder may not exceed the amount required
                    to meet the immediate financial need created, and provided
                    further that such amount must not be reasonably available
                    from other resources of the Participant.

                                      42
<PAGE>

               (c)  The Committee may shorten the notice period if it finds it
                    is administratively feasible. In granting or refusing any
                    request for withdrawal or in shortening the notice period,
                    the Committee shall apply uniform standards consistently and
                    such discretionary power shall not be applied so as to
                    discriminate in favor of Highly Compensated Employees.

               (d)  The withdrawals under this Section shall in no way affect
                    said Participant's continued participation in this Plan
                    except by the reduction in account balances caused by such
                    withdrawal.

               (e)  A Participant shall present evidence to the Committee that
                    the requested withdrawal is not in excess of the amount
                    necessary to relieve the financial need of the Participant
                    and that the need can not be satisfied from other resources
                    that are reasonably available to the Participant. The
                    determination by the Committee that the distribution will be
                    necessary to satisfy an immediate and heavy financial need
                    will be made on the basis of all relevant facts and
                    circumstances, which may include written statements from a
                    Participant which the Administrator has no reason to doubt,
                    supported by cancelled checks, invoices or other written
                    materials generated by third parties. A distribution
                    generally will be treated as necessary to satisfy a
                    financial need if the Committee relies, without actual
                    knowledge to the contrary, on the Participant's
                    representation that the need cannot be relieved:

                    (1)  through reimbursement of compensation by insurance or
                         otherwise;

                    (2)  by reasonable liquidation of the Participant's assets,
                         to the extent such liquidation would not itself cause
                         an immediate and heavy financial need;

                    (3)  by cessation of Salary Redirection under the Plan; or

                    (4)  by other distributions or non-taxable loans from the
                         plans maintained by the Employer or by any other
                         employer, or by borrowing from commercial sources on
                         reasonable commercial terms.

               For purposes of this Subsection, the Participant's resources
               shall be deemed to include those of his spouse and minor children
               that are reasonably available to the Participant.

                                      43
<PAGE>

Section 6.2    Prior Plan Employer Contribution Account Withdrawals

               Upon proper written application in such manner and in such form
               as the Committee may specify, a Participant shall be permitted to
               withdraw a portion or all of the balance of his Prior Plan
               Employer Contribution Account and Prior Plan Salary Redirection
               Account while employed, determined as of the Valuation Date
               coincident with or immediately preceding the date of application
               but only to the extent that he would have been permitted to
               withdraw the funds in the account if they had not been
               transferred from the prior plan which was merged into this Plan.

Section 6.3    Participant Loans

               No Participant loans are permitted under this Plan. However, to
               the extent that a plan that is merged into this Plan has loans
               outstanding, the outstanding loan balance and accrued interest
               may be transferred to this Plan and segregated in the
               Participant's Individual Account until repaid. The loan shall be
               repaid and subject to the terms of the loan agreement, including
               the provisions of the merged plan.

                                      44
<PAGE>

                                   ARTICLE 7

                                    FUNDING

Section 7.1    Contributions

               Contributions by the Employer and by the Participants as provided
               for in Article 3 shall be paid over to the Trustee. All
               contributions by the Employer shall be irrevocable, except as
               herein provided, and may be used only for the exclusive benefit
               of the Participants, Former Participants and their Beneficiaries.

Section 7.2    Trustee

               The Sponsoring Employer has entered into an agreement with the
               Trustee whereunder the Trustee will receive, invest and
               administer trust fund contributions made under this Plan in
               accordance with the Trust Agreement.

               Such Trust Agreement is incorporated by reference as a part of
               the Plan, and the rights of all persons hereunder are subject to
               the terms of the Trust Agreement. The Trust Agreement
               specifically provides, among other things, for the investment and
               reinvestment of the Fund and the income thereof, the management
               of the Trust Fund, the responsibilities and immunities of the
               Trustee, removal of the Trustee and appointment of a successor,
               accounting by the Trustee and the disbursement of the Trust Fund.

               The Trustee shall, in accordance with the terms of such Trust
               Agreement, accept and receive all sums of money paid to it from
               time to time by the Employer, and shall hold, invest, reinvest,
               manage and administer such moneys and the increment, increase,
               earnings and income thereof as a trust fund for the exclusive
               benefit of the Participants, Former Participants and their
               Beneficiaries or the payment of reasonable expenses of
               administering the Plan.

               In the event that affiliated or subsidiary Employers become
               signatory hereto, completely independent records, allocations,
               and contributions shall be maintained for each Employer. The
               Trustee may invest all funds without segregating assets between
               or among signatory Employers.

                                      45
<PAGE>

                                   ARTICLE 8

                                  FIDUCIARIES

Section 8.1    General

               (a)  Each Fiduciary who is allocated specific duties or
                    responsibilities under the Plan or any Fiduciary who assumes
                    such a position with the Plan shall discharge his duties
                    solely in the interest of the Participants, Former
                    Participants and Beneficiaries and for the exclusive purpose
                    of providing such benefits as stipulated herein to such
                    Participants, Former Participants and Beneficiaries, or
                    defraying reasonable expenses of administering the Plan.
                    Each Fiduciary, in carrying out such duties and
                    responsibilities, shall act with the care, skill, prudence,
                    and diligence under the circumstances then prevailing that a
                    prudent man acting in a like capacity and familiar with such
                    matters would use in exercising such authority or duties.

               (b)  A Fiduciary may serve in more than one Fiduciary capacity
                    and may employ one or more persons to render advice with
                    regard to his Fiduciary responsibilities. If the Fiduciary
                    is serving as such without compensation, all expenses
                    reasonably incurred by such Fiduciary shall be paid from the
                    Trust Fund or by the Employer.

               (c)  A Fiduciary may allocate any of his responsibilities for the
                    operation and administration of the Plan. In limitation of
                    this right, a Fiduciary may not allocate any
                    responsibilities as contained herein relating to the
                    management or control of the Trust Fund except through the
                    employment of an investment manager as provided in Section
                    8.3 of this Article and in the Trust Agreement relating to
                    the Fund.

Section 8.2    Employer

               (a)  The Sponsoring Employer established and maintains the Plan
                    for the benefit of its Employees and for Employees of
                    Participating Employers and of necessity retains control of
                    the operation and administration of the Plan. The Sponsoring
                    Employer, in accordance with specific provisions of the
                    Plan, has as herein indicated, delegated certain of these
                    rights and obligations to the Trustee, and the Committee and
                    these parties shall be solely responsible for these, and
                    only these, delegated rights and obligations.

               (b)  The Employer shall supply such full and timely information
                    for all matters relating to the Plan as (a) the Committee,
                    (b) the Trustee, and (c) the accountant engaged on behalf of
                    the Plan by the Sponsoring Employer may require for the
                    effective discharge of their respective duties.

                                      46
<PAGE>

Section 8.3    Trustee

               The Trustee, in accordance with the Trust Agreement, shall be a
               directed Trustee with respect to Trust Fund, except that the
               Committee may in its discretion employ the Trustee any time and
               from time to time as an investment manager (as defined in Section
               3(38) of ERISA) with respect to all or a designated portion of
               the assets comprising the Trust Fund. The committee or an
               investment manager so appointed shall have the exclusive
               authority or discretion to manage the Trust Fund.

Section 8.4    Retirement Committee

               (a)  The Board of the Sponsoring Employer shall appoint a
                    Committee of one or more persons to hold office at the
                    pleasure of the Board, such committee to be known as the
                    Retirement Committee or Committee. No compensation shall be
                    paid members of the Committee from the Trust Fund for
                    service on such Committee. The Committee shall choose from
                    among its members a chairman and a secretary. Any action of
                    the Committee shall be determined by the vote of a majority
                    of its members. Either the chairman or the secretary may
                    execute any certificate or written direction on behalf of
                    the Committee.

               (b)  Every decision and action of the Committee shall be valid if
                    concurrence is by a majority of the members then in office,
                    which concurrence may be had without a formal meeting.

               (c)  In accordance with the provisions hereof, the Committee has
                    been delegated certain administrative functions relating to
                    the Plan with all powers necessary to enable it to properly
                    carry out such duties. The Committee shall have no power in
                    any way to modify, alter, add to or subtract from, any
                    provisions of the Plan, except as provided in Section 9.1.
                    The Committee shall have the power and authority in its
                    sole, absolute and uncontrolled discretion to control and
                    manage the operation and administration of the Plan and its
                    investment and shall have all powers necessary to accomplish
                    these purposes, and to make factual determinations regarding
                    Participants and their accounts. The responsibility and
                    authority of the Committee shall include, but shall not be
                    limited to, (i) determining all questions relating to the
                    eligibility of employees to participate; (ii) determining
                    the amount and kind of benefits payable to any Participant,
                    spouse or Beneficiary; (iii) establishing and reducing to
                    writing and distributing to any Participant or Beneficiary a
                    claims procedure and administering that procedure, including
                    the processing and determination of all appeals thereunder
                    and (iv) interpreting the provisions of the Plan including
                    the publication of rules for the regulation of the Plan as
                    in its sole, absolute and uncontrolled discretion are deemed
                    necessary or advisable and which are not inconsistent with
                    the express terms hereof or the Code or ERISA, as amended.
                    All disbursements by the Trustee, except for the ordinary

                                      47
<PAGE>

                    expenses of administration of the Trust Fund or the
                    reimbursement of reasonable expenses at the direction of the
                    Sponsoring Employer, as provided herein, shall be made upon,
                    and in accordance with, the written directions of the
                    Committee. When the Committee is required in the performance
                    of its duties hereunder to administer or construe, or to
                    reach a determination, under any of the provisions of the
                    Plan, it shall do so on a uniform, equitable and
                    nondiscriminatory basis.

               (d)  The Committee shall establish rules and procedures to be
                    followed by the Participants, Former Participants and
                    Beneficiaries in filing applications for benefits and for
                    furnishing and verifying proofs necessary to establish age,
                    Service, and any other matters required in order to
                    establish their rights to benefits in accordance with the
                    Plan. Additionally, the Committee shall establish accounting
                    procedures for the purpose of making all allocations,
                    valuations and adjustments to Participants' accounts. Should
                    the Committee determine that the strict application of its
                    accounting procedures will not result in an equitable and
                    nondiscriminatory allocation among the accounts of
                    Participants, it may modify its procedures for the purpose
                    of achieving an equitable and non-discriminatory allocation
                    in accordance with the general concepts of the Plan,
                    provided however that such adjustments to achieve equity
                    shall not reduce the vested portion of a Participant's
                    interest.

               (e)  The Committee may employ such counsel, accountants, and
                    other agents as it shall deem advisable. The Sponsoring
                    Employer shall pay, or cause to be paid from the Trust Fund,
                    the compensation of such counsel, accountants, and other
                    agents and any other expenses incurred by the Committee in
                    the administration of the Plan and Trust.

Section 8.5    Claims Procedures

               The Committee has delegated to the Human Resources Department
               (the "Claims Coordinator") the processing of all applications for
               benefits. Upon receipt by the Claims Coordinator of such an
               application, it shall determine all facts which are necessary to
               establish the right of an applicant to benefits under the
               provisions of the Plan and the amount thereof as herein provided.
               Upon request, the Claims Coordinator will afford the applicant
               the right of a hearing with respect to any finding of fact or
               determination. The applicant shall be notified in writing of any
               adverse decision with respect to his claim within 90 days after
               its submission. The notice shall be written in a manner
               calculated to be understood by the applicant and shall include
               the items specified in Section 8.5(a) through (d).

               (a)  The specific reason or reasons for the denial;

               (b)  Specific references to the pertinent Plan provisions on
                    which the denial is based;

                                      48
<PAGE>

               (c)  A description of any additional material or information
                    necessary for the applicant to perfect the claim and an
                    explanation why such material or information is necessary;
                    and

               (d)  An explanation of the Plan's claim review procedures.

               (e)  If special circumstances require an extension of time for
                    processing the initial claim, a written notice of the
                    extension and the reason therefor shall be furnished to the
                    claimant before the end of the initial 90 day period. In no
                    event shall such extension exceed 90 days.

               (f)  In the event a claim for benefits is denied or if the
                    applicant has had no response to such claim within 90 days
                    of its submission (in which case the claim for benefits
                    shall be deemed to have been denied), the applicant or his
                    duly authorized representative, at the applicant's sole
                    expense, may appeal the denial to the Committee within 60
                    days of the receipt of written notice of denial or 60 days
                    from the date such claim is deemed to be denied. In pursuing
                    such appeal the applicant or his duly authorized
                    representative:

                    (1)  May request in writing that the Committee review the
                         denial;

                    (2)  May review pertinent documents; and

                    (3)  May submit issues and comments in writing.

               (g)  The decision on review shall be made within 60 days of
                    receipt of the request for review, unless special
                    circumstances require an extension of time for processing,
                    in which case a decision shall be rendered as soon as
                    possible, but not later than 120 days after receipt of a
                    request for review. If such an extension of time is
                    required, written notice of the extension shall be furnished
                    to the claimant before the end of the original 60 day
                    period. The decision on review shall be made in writing,
                    shall be written in a manner calculated to be understood by
                    the claimant, and shall include specific references to the
                    provisions of the Plan on which such denial is based. If the
                    decision on review is not furnished within the time
                    specified above, the claim shall be deemed denied on review.

Section 8.6    Records

               All acts and determinations of the Claims Coordinator or the
               Committee shall be duly recorded by the Claims Coordinator or the
               secretary of the Committee and all such records together with
               such other documents as may be necessary in exercising their
               duties under the Plan shall be preserved in the custody of such
               secretary. Such records and documents shall at all times be open
               for inspection and for the purpose of making copies by any person
               designated by the Sponsoring Employer. The Committee shall
               provide such timely information, resulting from the application
               of its responsibilities under the Plan, as needed by the Trustee
               and the accountant engaged on behalf of the Plan by the
               Sponsoring Employer, for the effective discharge of their
               respective duties.

                                      49
<PAGE>

                                   ARTICLE 9

                     AMENDMENT AND TERMINATION OF THE PLAN

Section 9.1    Amendment of the Plan

               The Sponsoring Employer shall have the right at any time by
               action of the Board (or, in the case of amendments to the
               eligibility, vesting and service-counting provisions of the Plan
               with respect to participating Employers, or to make changes
               required by amendments to the Code or ERISA, or to clarify the
               Plan's terms as construed by the Committee, then by either the
               Board or the Committee) to modify alter, or amend the Plan in
               whole or in part; provided, however, that the duties, powers and
               liability of the Trustee hereunder shall not be increased without
               its written consent; and provided, further, that the amount of
               benefits which, at the time of any such modification, alteration
               or amendment, shall have accrued for any Participant, Former
               Participant or Beneficiary hereunder shall not be adversely
               affected thereby; and provided, further, that no such amendments
               shall have the effect of reverting to the Employer any part of
               the principal or income of the Trust Fund. No amendment to the
               Plan shall decrease the balance of a Participant's Individual
               Account or eliminate an optional form of distribution.

Section 9.2    Termination of the Plan

               The Sponsoring Employer expects to continue the Plan
               indefinitely, but continuance is not assumed as a contractual
               obligation and the Sponsoring Employer reserves the right at any
               time by action of the Board to terminate its participation in the
               Plan. If the Sponsoring Employer terminates or partially
               terminates its participation in the Plan or permanently
               discontinues its Contributions at any time, each Participant
               affected thereby shall be then vested with the amount allocated
               to his Individual Account.

               In the event of termination or partial termination of the Plan by
               the Sponsoring Employer, the Committee shall value the Trust Fund
               as of the date of termination. That portion of the Trust Fund for
               which the Plan has not been terminated shall be unaffected.

Section 9.3    Return of Contributions

               It is intended that this Plan shall be approved and qualified
               under the Code and Regulations issued thereunder with respect to
               Employees' Plans and Trusts (1) so as to permit the Employers to
               deduct for federal income tax purposes the amounts of
               contributions to the Trust; (2) so that contributions so made and
               the income of the Trust Fund will not be taxable to Participants
               as income until received; (3) so that the income of the Trust
               Fund shall be exempt from federal income tax. In the event the
               Commissioner of Internal Revenue or his delegate rules that the
               deduction for all or a part of any Employer Contribution (or
               Salary Redirection) is not allowed, the Employers reserve the
               right to recover that portion or all of their contributions for
               which no deduction is allowed, provided such recovery is made
               within one year of the disallowance.

                                      50
<PAGE>

                                  ARTICLE 10

                                 MISCELLANEOUS

Section 10.1   Governing Law

               The Plan shall be construed, regulated and administered according
               to the laws of the Commonwealth of Kentucky, except in those
               areas preempted by the laws of the United States of America.

Section 10.2   Construction

               The headings and subheadings in the Plan have been inserted for
               convenience of reference only and shall not affect the
               construction of the provisions hereof. In any necessary
               construction the masculine shall include the feminine and the
               singular the plural, and vice versa.

Section 10.3   Administration Expenses

               The expenses of administering the Trust Fund and the Plan shall
               be paid from the Trust Fund, unless they are paid by the
               Employer.

Section 10.4   Participant's Rights

               No Participant in the Plan shall acquire any right to be retained
               in the Employer's employ by virtue of the Plan, nor, upon his
               dismissal, or upon his voluntary termination of employment, shall
               he have any right or interest in and to the Trust Fund other than
               as specifically provided herein. The Employer shall not be liable
               for the payment of any benefit provided for herein; all benefits
               hereunder shall be payable only from the Trust Fund.

Section 10.5   Nonassignability

               (a)  The benefit or interest under the Plan and Trust of any
                    person shall not be assignable or alienable by that person
                    and shall not be subject to alienation by operation of law
                    or legal process. The preceding sentence shall apply to the
                    creation, assignment or recognition of any right to any
                    benefit payable with respect to a Participant pursuant to a
                    domestic relations order, unless such order is determined to
                    be a qualified domestic relations order, as defined in
                    Section 414(p) of the Code. A domestic relations order
                    entered before January 1, 1985, shall be treated as a
                    qualified domestic relations order if payment of benefits
                    pursuant to the order has commenced as of such date, and may
                    be treated as a qualified domestic relations order if
                    payment of benefits is not commenced as of such date, even
                    though the order does not satisfy the requirements of
                    Section 414(p) of the Code.

                                      51
<PAGE>

               (b)  This Plan specifically permits a distribution to an
                    alternate payee under a qualified domestic relations order
                    at any time, irrespective of whether the Participant has
                    attained his earliest retirement age (as defined under Code
                    Section 414(p)) under the Plan. A distribution to an
                    alternate payee prior to the Participant's attainment of
                    earliest retirement age is available only if: (a) the order
                    specifies distribution at that time or permits an agreement
                    between the Plan and the alternate payee to authorize an
                    earlier distribution; and (b) if the present value of the
                    alternate payee's benefits under the Plan exceeds $5,000,
                    and the order requires, the alternate payee consents to any
                    distribution occurring prior to the Participant's attainment
                    of earliest retirement age. Nothing in this Section 10.5
                    gives a Participant a right to receive distribution at a
                    time otherwise not permitted under the Plan nor does it
                    permit the alternate payee to receive a form of payment not
                    permitted under the Plan.

Section 10.6   Merger, Consolidation or Transfer

               In the event of the merger or consolidation of the Plan with
               another plan or transfer of assets or liabilities from the Plan
               to another plan, each then Participant, Former Participant or
               Beneficiary shall not, as a result of such event, be entitled on
               the day following such merger, consolidation or transfer under
               the termination of the Plan provisions to a lesser benefit than
               the benefit he was entitled to on the date prior to the merger,
               consolidation or transfer if the Plan had then terminated.

Section 10.7   Counterparts

               The Plan and the Trust Agreement may be executed in any number of
               counterparts, each of which shall constitute but one and the same
               instrument and may be sufficiently evidenced by any one
               counterpart.

Section 10.8   Administrative Mistake

               If the Committee discovers that a mistake has been made in
               crediting Salary Redirection contributions or Employer
               contributions, withholding Salary Redirection Contributions from
               a Participant's Compensation, or crediting earnings to the
               account of any Participant, the Committee shall take any
               administrative action which it deems necessary or appropriate to
               remedy the mistake in question, and may request the Employer to
               make a special contribution to the account of the Participant
               where appropriate. If the Committee discovers that a mistake has
               been made in calculating the amount of any excess Salary
               Redirection or other contribution under Sections 3.4, 3.5 or 4.6,
               or earnings on such excess amount, which amount is required to be
               distributed to a Participant, the Committee shall take such
               administrative action as it deems necessary or appropriate to
               remedy the mistake in question.

                                      52
<PAGE>

                                  ARTICLE 11

                           TOP HEAVY PLAN PROVISIONS

Section 11.1   General

               Notwithstanding anything in the Plan to the contrary, if this
               Plan when combined with all other plans required to be aggregated
               pursuant to Code Section 416(g) is deemed to be a top-heavy plan
               for any Plan Year, the provisions of this Article shall apply to
               such Plan Year.

Section 11.2   Minimum Contribution

               Regardless of hours worked, each active Participant who is not a
               Key Employee shall be entitled to a minimum allocation of
               contributions and forfeitures equal to the lesser of (i) three
               percent (3%) of the Participant's Compensation for the Plan Year;
               and (ii) provided that the Plan is not part of a Required
               Aggregation Group with a Defined Benefit Plan because the Plan
               enables the Defined Benefit Plan to meet the requirements of Code
               Section 401(a)(4) or 410, the highest percentage of Compensation
               contributed on behalf of, plus forfeitures allocated to, a Key
               Employee. In the case of a Participant who is also a participant
               in a defined benefit plan maintained by the Employer, the minimum
               accrued benefit provided in the defined benefit plan pursuant to
               Code Section 416(c)(1) equal to two percent of the Participant's
               average monthly compensation for the five consecutive years when
               his aggregate compensation was highest multiplied by his years of
               credited service up to ten years for each plan year in which the
               Plan is top heavy, shall be the only minimum benefit for both
               that plan and this Plan, and the minimum allocation described
               above shall not apply.

Section 11.3   Super Top Heavy Plan

               The multiplier of 1.25 in Section 4.7 shall be reduced to 1.0
               unless (i) all plans of the Required Aggregation Group or the
               Permissive Aggregation Group, when aggregated, are 90% or less
               top heavy, and (ii) the minimum accrued benefit referenced in
               clause (i) of Section 11.2 is modified by substituting three
               percent with four percent. In the case of each Participant who is
               also a participant in a defined benefit plan maintained by the
               Employer, the minimum accrued benefit provided in the defined
               benefit plan pursuant to Code Sections 416(c)(1) and 416(h) equal
               to three percent of the Participant's average monthly
               compensation for the five highest consecutive years when his
               aggregate compensation was highest multiplied by his years of
               credited service up to ten years for each plan year in which the
               Plan is top heavy shall be the only minimum benefit for both that
               plan and this Plan, and the minimum allocation described above
               shall not apply.

                                      53
<PAGE>

Section 11.4   Minimum Vesting

               In the event that the regular vesting schedule in Article 5 is
               less liberal than the vesting schedule hereinafter provided, then
               such vesting schedule shall be substituted with the following to
               the extent that the following schedule is more favorable:


                         Years of Service         Vested Percentage
                         ----------------         -----------------

                         Less than 2 years               0%
                         2 but less than 3              20%
                         3 but less than 4              40%
                         4 but less than 5              60%
                         5 but less than 6              80%
                         6 years or more               100%

               Should the Plan cease to be a Top Heavy Plan, the regular vesting
               schedule in Article 5 shall be put back into effect. However, the
               vested percentage of any Participant cannot be decreased as a
               result of the return to the prior vesting schedule and any
               Participant with three or more years of Service may elect within
               the later of: (1) 60 days after the Plan ceases to be a Top Heavy
               Plan or (2) 60 days after the date the Participant is issued
               written notification of the change in the vesting schedules, to
               remain under the special vesting rules described in this Section.

Section 11.5   Compensation

               For purposes of this Article, compensation shall have the same
               meaning as assigned to it by Code Section 415 and shall be
               limited to such amount as required by Code Section 401(a)(17).

                                      54
<PAGE>

                                  ARTICLE 12

             PROVISIONS RELATED TO EMPLOYERS INCLUDED IN THE PLAN

Section 12.1   General. Any Employer that, with the Committee's consent, adopts
               this Plan and becomes a party to the Trust Agreement shall be a
               "Participating Employer." Participating Employers as of January
               1, 1999 are listed on Appendix B to the Plan, and any
               Participating Employers added in the future shall be so listed as
               soon as reasonably practicable after the Committee consents to
               their adoption of this Plan. Each Participating Employer shall be
               subject to the terms and conditions of this Plan as in effect at
               the effective date of adoption by the Participating Employer and
               as subsequently amended from time to time by the Vencor, Inc.
               (for purposes of this section, the "Sponsoring Employer"),
               subject to such modifications as are set forth in the document
               evidencing the Participating Employer's adoption of the Plan.
               Unless the context of the Plan clearly indicates to the contrary,
               the terms "Company" and "Employer" shall be deemed to include
               each Participating Employer as relates to its adoption of the
               Plan. When an entity ceases to be an "Employer" because it is no
               longer a part of the Company, or ceases to be managed by an
               entity in the Vencor, Inc. controlled group, the entity shall
               cease to be a Participating Employer. Section 12.4 shall not
               apply to such cessation.

Section 12.2   Single Plan. This Plan shall be deemed to be a single plan of all
               Employers that have adopted this Plan. Employer contributions
               shall not be accounted for separately, and all Plan assets shall
               be available to pay benefits to all Participants and their
               Beneficiaries. Forfeitures shall not be specially allocated to
               reduce the Matching Contribution obligation of the Employer whose
               employees suffered the forfeiture. Employees may be transferred
               among Participating Employer or employed simultaneously by more
               than one Participating Employer, and no such transfer or
               simultaneous employment shall effect a termination of employment,
               be deemed retirement or be the cause of a Forfeiture or a loss of
               years of Service under this Plan. For purposes of determining
               years of Service and the payment of benefits upon death or other
               termination of employment, all Participating Employers shall be
               deemed one Employer. Any Participant employed by a Participating
               Employer during a Plan Year who receives any Compensation from a
               Participating Employer during that Plan Year shall receive an
               allocation of any Employer Contributions and Forfeitures for the
               Plan Year in accordance with Article 3 based on his Compensation
               during that Plan Year.

Section 12.3   Sponsoring Employer as Agent. Each Participating Employer shall
               be deemed to have designated irrevocably the Sponsoring Employer
               as its sole agent (1) for all purposes under Section 8 (including
               fixing the number of members of, and the appointment and removal
               of, the Committee); (2) with respect to all its relations with
               the Trustee (including the Trustee's appointment and removal, and
               fixing the number of Trustees); and (3) for the purpose of
               amending this Plan. The Committee shall make any and all rules
               and regulations which it shall deem necessary or appropriate to
               effectuate the purpose of this Article 12, and such

                                      55
<PAGE>

               rules and regulations shall be binding upon the Sponsoring
               Employer, the Participating Employers, the Participants and
               Beneficiaries.

Section 12.4   Withdrawal of Employer. Any Participating Employer may withdraw
               its participation in the Plan by giving written notice to the
               Administrator stating that it has adopted a separate plan. The
               notice shall be given at least six months prior to a designated
               Valuation Date, unless the Committee shall accept a shorter
               period of notification. Upon request of the withdrawing
               Participating Employer, the Committee may, but shall not be
               obligated to, instruct the Trustee to transfer the withdrawing
               Participating Employer's interest in the Plan to the
               Participating Employer's separate plan in accordance with the
               following rules: Promptly after the Valuation Date as of which
               the transfer is to occur, the Committee shall establish the
               withdrawing Participating Employer's interest in the Trust Fund,
               after a reduction for fees and other expenses related to the
               Participating Employer's withdrawal. The Trustee shall then, in
               accordance with the Committee's instructions, transfer the
               withdrawing Participating Employer's interest in the Fund to the
               trustee or other funding agent of the Participating Employer's
               separate plan. Neither the Trustee nor the Committee shall be
               obligated to transfer or direct the transfer of assets under this
               Article until they are satisfied as to all matters pertaining to
               the transfer, including, but not limited to, the tax
               qualification of the plan into which the transfer will be made.
               The Committee and the Trustee may rely fully on the
               representations and instructions of the withdrawing Participating
               Employer and shall be fully protected and discharged with respect
               to any transfer made in accordance with such representations or
               instructions. Any transfer of assets in accordance with this
               Article shall constitute a complete discharge of responsibility
               of the Sponsoring Employer, the remaining Participating Employer,
               their Boards of Directors and officers, and the Trustee without
               any responsibility on their part collectively or individually to
               see to the application thereof. The Committee in its sole
               discretion shall have the right to transfer the withdrawing
               Participating Employer's interest in the Fund to the new plan in
               the form of installments, in cash, or in cash and kind and over a
               period of time not to exceed one year following the designated
               Valuation Date as of which the transfer is to occur. Any assets
               which are invested in accordance with an investment contract or
               agreement which by its terms precludes the realization upon and
               distribution of such assets for a stated period of time shall
               continue to be held by the Trustee under the terms and conditions
               of this Plan until the expiration of such period, subject to the
               Committee's instructions. The Committee may in its sole
               discretion direct the Trustee to segregate the Accounts of all
               affected Participants into a separate fund to facilitate
               transfer, and the Administrator may in its sole discretion direct
               the Trustee to invest the separate fund only in cash equivalent
               investments.

Section 12.5   Termination of Participation. The Board of Directors of a
               Participating Employer may at any time terminate this Plan with
               respect to its Employees by adopting a resolution to that effect
               and delivering a certified copy to the Committee. Section 9.2
               shall not apply to vest the Individual Accounts of a
               Participating Company's Employees upon such termination (unless
               the termination results in a partial termination of the entire
               Plan), and the continuation

                                      56
<PAGE>

               of the Plan by the Sponsoring Employer and other Participating
               Employers shall not be affected. The termination of the Plan with
               respect to a Participating Employer's Employees shall not effect
               a termination with respect to an Employee of the Sponsoring
               Employer or another Participating Employer if such Employee was
               not employed by the terminating Participating Employer on the
               effective date of the termination, even though he may have been
               employed by the terminating Participating Employer at an earlier
               date, and shall not entitle a Participant to a distribution until
               an actual separation from service with the meaning prescribed
               under Code Section 401(k)(2)(B) has occurred, unless distribution
               follows an event in Code Section 401(k)(10) and the Treasury
               Regulations thereunder. Any fees and other expenses related to a
               Participating Employer's termination shall be charged against the
               Accounts of the affected Participants, if not paid by the
               terminating Participating Employer.

Section 12.6   Multiple Employer Plan Testing. This Plan covers the employees of
               employers not considered a controlled group under Code Section
               414. Each of the discrimination tests and limitations on
               contributions in the Plan shall be applied on a controlled group
               by controlled group basis where required by the Code and
               applicable Treasury Regulations.

                                      57
<PAGE>

                                  SIGNATURES
                                  ----------


     IN WITNESS WHEREOF, the Sponsoring Employer has caused this Plan to be
executed this _____ day of _______________, 2000, but effective March 1, 2000.


                                        VENCOR, INC.



                                        By _________________________________

                                        Title: _____________________________

                                      58
<PAGE>

                                 APPENDIX "A"

                   PAST SERVICE PURSUANT TO SECTION 1.43(b)

     Nationwide Care, Inc.--service for all periods from date of hire with this
company.  Any company for which past service was granted prior to January 1,
1997 under this Plan prior to its restatement, or under The Hillhaven
Corporation Deferred Savings Plan

                                      A-1
<PAGE>

                                 APPENDIX "B"

                            PARTICIPATING EMPLOYERS
                            (as of January 1, 1999)

Partnerships:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
                                                               Total Direct or Indirect
Name of Partnership                     Partners                    Vencor Ownership
----------------------------------------------------------------------------------------
<S>                            <C>                             <C>
Advanced Respiratory Care      Advanced Infusion System,                  51%
d/b/a California Respiratory   Inc.--51%
Care Partnership               Alta Bates Medical Center--49%
----------------------------------------------------------------------------------------
Bartlesville Nursing Home      First Healthcare                           50%
Partnership                    Corporation--50%
                               LIC-HHE Limited
                               Partnership--50%
----------------------------------------------------------------------------------------
CPS Sacramento                 Advanced Infusion Systems,                 60%
                               Inc.--60%
                               Western Hospital Equipment &
                               Supply Co.--40%
----------------------------------------------------------------------------------------
Foothill Nursing Company       First Healthcare                           50%
Partnership                    Corporation--50%
                               Foothill Skilled Nursing,
                               Inc.--50%
----------------------------------------------------------------------------------------
Hillhaven-MSC Partnership      First Healthcare Corporation               50%
                               --50%
                               Mercy Services corporation--50%
----------------------------------------------------------------------------------------
Medlife Pharmacy Network       Medsave of Tennessee, Inc.--50%            50%
Partnership                    Life Care Pharmacy Services,
                               Inc.--50%
----------------------------------------------------------------------------------------
Pharmaceutical Infusion        Visiting Nurse Assoc. &                 50.99%
Therapy Partnership            Hospice of No. CA--49.01%
                               Advanced Infusion Therapy,
                               Inc.--50.99%
----------------------------------------------------------------------------------------
</TABLE>

                                      B-1
<PAGE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
                                                               Total Direct or Indirect
Name of Partnership                     Partners                   Vencor Ownership
----------------------------------------------------------------------------------------
<S>                            <C>                             <C>
San Marcos Nursing Home        First Healthcare                          100%
Partnership                    Corporation--50%
                               Nationwide Care, Inc.--50%
----------------------------------------------------------------------------------------
Starr Farm Partnership         First Healthcare                           50%
                               Corporation--50%
                               Vermont Health Ventures,
                               Inc.--50%
----------------------------------------------------------------------------------------
Visiting Nurse Advanced        Advanced Infusion Systems,             50.010%
Infusion Systems-Anaheim       Inc.--50.010%
Partnership                    Strategic Health Technologies,
                               Inc.--24.995%
                               Valley Support Services of
                               VNA, Inc.--24.995%
----------------------------------------------------------------------------------------
Visiting Nurse Advanced        Advanced Infusion Systems,              51.01%
Infusion Systems-Colton        Inc.--51.01%
Partnership                    Inland Empire roadrunners,
                               Inc.--16.33%
                               Visiting Nurse Association
                               Pomona-Pharmacy, Inc.--16.33%
                               RVNA Comprehensive Health
                               Services, Inc.--16.33%
----------------------------------------------------------------------------------------
Visiting Nurse Advanced        Advanced Infusion Systems,              51.01%
Infusion Systems-Newbury Park  Inc.--51.01%
Partnership                    Livingston Memorial
                               VNA-Pharmacy--16.33%
                               Verdugo Hills
                               VNA-Pharmacy--16.33%
                               The Visiting Nurse Service,
                               Inc.--16.33%
----------------------------------------------------------------------------------------
VNA/CPS Partnership            Visiting Nurse Association,           46.2875%
                               Inc.--46.2875%
                               MISCO Investments, Inc.--7.425%
                               Advanced Infusion Systems,
                               Inc.--46.2875%
----------------------------------------------------------------------------------------
</TABLE>

                                      B-2
<PAGE>

Managed Entities:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
Facility                          Owner                                    Manager
------------------------------------------------------------------------------------------------------
<S>                               <C>                                      <C>
Marietta Convalescent #920        Jackson Browne Enterprises, Inc.         Nationwide Care, Inc.
------------------------------------------------------------------------------------------------------
Salemhaven #950                   Salemhaven, Inc.                         First Healthcare Corp.
------------------------------------------------------------------------------------------------------
Foothill #981                     Foothill Nursing Home Partnership        Hillhaven, Inc.
------------------------------------------------------------------------------------------------------
San Marcos Healthcare Center
#982                              San Marcos Nursing Home Partnership      Hillhaven Holding Company
------------------------------------------------------------------------------------------------------
Starr Farm #995                   Starr Farm Partnership                   First Healthcare Corp.
------------------------------------------------------------------------------------------------------
Brookhaven Nursing Center #226    Hillhaven Corp./Tenet                    First Healthcare Corp.
------------------------------------------------------------------------------------------------------
Holladay Healthcare Center #992   Paul Randle Assoc.                       Hillhaven, Inc.
------------------------------------------------------------------------------------------------------
Ledgewood #949                    Ledgewood Healthcare Corp.               Hillhaven Corp.
------------------------------------------------------------------------------------------------------
Heritage Village Nursing
Center - #955                     Bartlesville Nursing Home Partnership    Hillhaven Inc.
------------------------------------------------------------------------------------------------------
Windsor Woods Convalescent
Center - #922                     Windsor Woods Nursing Home Partnership   Hillhaven Inc.
------------------------------------------------------------------------------------------------------
Carrollwood Care Center - #972    Carrollwood Care Center                  Hillhaven Corp.
------------------------------------------------------------------------------------------------------
19th Ave. Healthcare Center -
#926                              Hillhaven MS Partnership                 Hillhaven Corp.
------------------------------------------------------------------------------------------------------
Convalescent Center - #918        Hillhaven Community Health Partnership   Hillhaven Corp.
------------------------------------------------------------------------------------------------------
The French Quarter - #974         NME Hospitals Inc./Tenet                 First Healthcare Corp.
------------------------------------------------------------------------------------------------------
The Menorah House - #169          Hillhaven Inc./Tenet                     First Healthcare Corp.
------------------------------------------------------------------------------------------------------
The North Shore Living Center
- #978                            Hillhaven Corp./Tenet                    First Healthcare Corp.
------------------------------------------------------------------------------------------------------
The Healthcare Center of Palm
Bay - #815                        Tenet Healthcare Corp.                   First Healthcare Corp.
------------------------------------------------------------------------------------------------------
Jo Ellen Smith Convalescent
Center - #990                     Hillhaven Corp./Tenet                    First Healthcare Corp.
------------------------------------------------------------------------------------------------------
</TABLE>

                                      B-3
<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
Facility                          Owner                                    Manager
------------------------------------------------------------------------------------------------------
<S>                               <C>                                      <C>
Alvarado Convalescent & Rehab
Hospital - #902                   Hillhaven West, Inc./Tenet               First Healthcare Corp.
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</TABLE>

                                      B-4