<PAGE>
                                                                   EXHIBIT 10.1b

                               SELECTIVE INSURANCE

                             RETIREMENT SAVINGS PLAN

                            (As Amended and Restated
                           Effective January 1, 1997)
<PAGE>
                               SELECTIVE INSURANCE
                             RETIREMENT SAVINGS PLAN
                            (As Amended and Restated
                           Effective January 1, 1997)

                                TABLE OF CONTENTS

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       Article I.  The Plan

1.1    Establishment of Plan ................................................  1
1.2    Purpose of Plan ......................................................  1
1.3    Applicability of Plan ................................................  1

       Article II.  Definitions

2.1    Accounts .............................................................  2
2.2    Act ..................................................................  2
2.3    Affiliate ............................................................  2
2.4    After-Tax Contributions ..............................................  2
2.5    Alternate Payee ......................................................  2
2.6    Annual Addition ......................................................  2
2.7    Annuity Starting Date ................................................  2
2.8    Authorized Leave of Absence ..........................................  2
2.9    Beneficiary ..........................................................  2
2.10   Board ................................................................  2
2.11   Code .................................................................  2
2.12   Committee ............................................................  3
2.13   Company ..............................................................  3
2.14   Compensation .........................................................  3
2.15   Computation Period ...................................................  4
2.16   Defined Benefit Fraction .............................................  4
2.17   Defined Contribution Fraction ........................................  4
2.18   Determination Date ...................................................  4
2.19   Disability ...........................................................  4
2.20   Disability Retirement Date ...........................................  4
2.21   Domestic Relations Order .............................................  4
2.22   Early Retirement Date ................................................  4
2.23   Elective Contributions ...............................................  4
2.24   Elective Contributions Account .......................................  4
2.25   Eligible Employee ....................................................  4
2.26   Employee .............................................................  4
2.27   Employment Commencement Date .........................................  5
2.28   Entry Date ...........................................................  5
2.29   Exchange Plan ........................................................  5
2.30   Fair Market Value ....................................................  5
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2.31   Highly Compensated Employee .........................................   5
2.32   Hour of Service .....................................................   5
2.33   Investment Funds ....................................................   7
2.34   Key Employee ........................................................   7
2.35   Leased Employee .....................................................   7
2.36   Leasing Organization ................................................   7
2.37   Leasing Organization Pension Plan ...................................   7
2.38   Matched After-Tax Contributions Account .............................   7
2.39   Matching Contributions ..............................................   7
2.40   Matching Contributions Account ......................................   8
2.41   Member ..............................................................   8
2.42   Normal Retirement Age ...............................................   8
2.43   Normal Retirement Date ..............................................   8
2.44   One-Year Period of Severance ........................................   8
2.45   Participating Company ...............................................   8
2.46   Participating Group .................................................   8
2.47   Plan ................................................................   8
2.48   Plan Year ...........................................................   8
2.49   Qualified Domestic Relations Order ..................................   8
2.50   Qualified Matching Contributions ....................................   9
2.51   Qualified Matching Contributions Account ............................   9
2.52   Qualified Nonelective Contributions .................................   9
2.53   Qualified Nonelective Contributions Account .........................   9
2.54   Related Person ......................................................   9
2.55   Rollover Account ....................................................   9
2.56   Salary Reduction Agreement ..........................................   9
2.57   Selective Insurance Stock Fund ......................................   9
2.58   Severance from Service ..............................................   9
2.59   Supplement ..........................................................   9
2.60   Termination of Employment ...........................................  10
2.61   Trust or Trust Fund .................................................  10
2.62   Trust Agreement .....................................................  10
2.63   Trustee .............................................................  10
2.64   Unmatched After-Tax Contributions Account ...........................  10
2.65   Valuation Account ...................................................  10
2.66   Vested Balance ......................................................  10

       Article III.  Participation and Service

3.1    Eligible Employee ...................................................  11
3.2    Commencement of Membership ..........................................  11
3.3    Enrollment Form .....................................................  11
3.4    Eligibility for Contributions .......................................  11
3.5    Reemployed Members ..................................................  12
3.6    Cessation of Membership .............................................  12
3.7    Year of Service .....................................................  12
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3.8    Beneficiary Designation .............................................  14

       Article IV.  Contributions and Allocations

4.1    Elective Contributions ..............................................  15
4.2    After-Tax Contributions .............................................  15
4.3    Matching Contributions ..............................................  16
4.4    Salary Reduction Agreement ..........................................  16
4.5    Qualified Nonelective Contributions .................................  17
4.6    Qualified Matching Contributions ....................................  17
4.7    Limitation on Contributions .........................................  17
4.8    Change and Suspension of Contributions ..............................  18
4.9    Maximum Elective Amount .............................................  18
4.10   Limitation on Elective Contributions ................................  19
4.11   Adjustment of Elective Contributions During Plan Year ...............  19
4.12   Excess Elective Contributions After Plan Year .......................  20
4.13   Limitation on Matching Contributions and After-Tax Contributions ....  21
4.14   Excess Matching Contributions and After-Tax Contributions After
       Plan Year ...........................................................  21
4.15   Application of General Nondiscrimination Requirements ...............  23
4.16   Restriction on Multiple Use of Alternative Limit ....................  23
4.17   Limitation of Annual Additions ......................................  24
4.18   Return of Contributions .............................................  27
4.19   Rollover Amounts ....................................................  27
4.20   Transfer Accounts ...................................................  28

       Article V.  Member Accounts; Investment Funds

5.1    Establishment of Member's Accounts ..................................  29
5.2    Investment Funds ....................................................  29
5.3    Investment Election by Members ......................................  29
5.4    Plan Expenses .......................................................  31
5.5    Valuations; Allocation of Investment Earnings and Losses ............  32

       Article VI.  Vesting and Forfeitures

6.1    Vesting in Elective Contributions Account, After-Tax Contributions,
       Qualified Nonelective Contributions Account, Qualified Matching
       Contributions Account, and Rollover Account .........................  33
6.2    Vesting in Matching Contributions Account ...........................  33
6.3    Forfeitures .........................................................  33
6.4    Reinstatement of Forfeited Amounts ..................................  33
6.5    Calculation of Vested Interest Upon Distribution or Withdrawal ......  34

       Article VII.  Distributions

7.1    Normal or Early Retirement ..........................................  35
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7.2    Disability Retirement ...............................................  35
7.3    Distribution Upon Death of Member ...................................  35
7.4    Distributions Upon a Termination of Employment for Other Causes .....  35
7.5    Form of Timing of Distributions .....................................  35
7.6    Minimum Distribution Requirements ...................................  38
7.7    Withdrawals of Elective Contributions ...............................  40
7.8    Withdrawals from After-Tax Contributions ............................  41
7.9    Withdrawals on Account of Serious Financial Hardship, from
       all Accounts Except Elective Contributions Account ..................  41
7.10   Withdrawals After Age 59-1/2 ........................................  41
7.11   Provisions Applicable to All Withdrawals ............................  42

       Article VIII.  Loans to Members

8.1    Committee Authorized to Make Loans ..................................  43
8.2    Amount and Number of Loans ..........................................  43
8.3    Interest ............................................................  43
8.4    Term ................................................................  44
8.5    Repayment ...........................................................  44
8.6    Loan Treated as Member's Investment .................................  44
8.7    Documentation .......................................................  44
8.8    Default .............................................................  45

       Article IX.  Administration of the Plan

9.1    Committee ...........................................................  46
9.2    Compensation and Expenses ...........................................  46
9.3    Manner of Action ....................................................  46
9.4    Chairman, Secretary, and Employment of Specialists ..................  46
9.5    Records .............................................................  46
9.6    Administration ......................................................  46
9.7    Application for Benefits ............................................  47
9.8    Appeals from Denial of Claims .......................................  47
9.9    No Enlargement of Employee Rights ...................................  47
9.10   Expenses of Administration ..........................................  48
9.11   Facility of Distribution ............................................  48
9.12   Indemnity ...........................................................  48
9.13   Non-Alienation ......................................................  48

       Article X.  Amendment; Termination; Merger

10.1   Right to Amend or Terminate .........................................  49
10.2   Amendment for Tax Exemption .........................................  49
10.3   Terminations and Partial Terminations ...............................  49
10.4   Mergers; Consolidations; Transfers of Assets ........................  49
</TABLE>

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       Article XI.  Leased Employees

11.1   Treatment of Leased Employees Under the Plan .......................   50
11.2   Service Not Counted ................................................   50
11.3   Definitions ........................................................   50
11.4   Construction .......................................................   51

       Article XII.  Top-Heavy Plan Provisions

12.1   General Rule .......................................................   52
12.2   When Plan is Top-Heavy .............................................   52
12.3   When Plan is in Top-Heavy Group ....................................   52
12.4   Minimum Contribution ...............................................   53
12.5   Adjustment in Maximum Limitation on Account Additions ..............   53
12.6   Definitions ........................................................   53
12.7   Top-Heavy Vesting Schedule .........................................   53

       Article XIII.  Qualified Domestic Relations Orders

13.1   Applicability of Article ...........................................   55
13.2   Establishment of Procedures ........................................   55
13.3   Determination of Qualified Domestic Relations Order Status .........   55
13.4   Establishment of Segregated Accounts and Payment Procedures ........   55
13.5   Subsequent Determination or Order to be Applied Prospectively ......   56
13.6   Withdrawals, Distributions, and Loans by or to Members .............   57
13.7   Investment .........................................................   57
13.8   Definitions ........................................................   57

       Article XIV.  Miscellaneous Provisions

14.1   Construction .......................................................   58
14.2   Nonassignability ...................................................   58
14.3   Military Service ...................................................   58
14.4   Missing Persons ....................................................   58
14.5   Interest of Members ................................................   58
14.6   No Right to Employment Granted by Plan .............................   58
14.7   Incompetency .......................................................   58
14.8   Titles .............................................................   59

       Appendix A .........................................................  A-1
       Supplement One .....................................................  S-1
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                                       v
<PAGE>
                               SELECTIVE INSURANCE
                             RETIREMENT SAVINGS PLAN
                            (As Amended and Restated
                           Effective January 1, 1997)

                               Article I. The Plan

      1.1 Establishment of Plan. Selected Risks Insurance Company and
Subsidiaries established a profit sharing plan effective July 1, 1980. Such plan
was amended and restated effective January 1, 1985 in order to conform to the
requirements of the Tax Equity and Fiscal Responsibility Act of 1982, the
Deficit Reduction Act of 1984, and the Retirement Equity Act of 1984, and to
make certain other changes. Selected Risks Insurance Company subsequently
changed its name to Selective Insurance Company of America. The plan was amended
and restated effective January 1, 1989 to comply with provisions of the Tax
Reform Act of 1986, the Technical and Miscellaneous Revenue Act of 1988, and
final Treasury regulations under Code section 401(m), and to make certain other
legal and design changes, and was known as the Thrift Plan for Employees of
Selective Insurance Company of America (Formerly: Selected Risks Insurance
Company) and Subsidiaries (the "Plan"). The Plan was again amended effective
January 1, 1993.

      Effective July 1, 1993 the Exchange Insurance Company 401(k) Plan was
merged into the Plan in accordance with Internal Revenue Code section 414(l),
and its specific provisions are included in a supplement, the terms of which are
applicable to certain former participants in the Exchange Insurance Company
401(k) Plan. In addition, effective July 1, 1993, the Plan was amended and
restated to add a salary deferral opportunity for Eligible Employees, to make
certain other design changes, and to change the name of the Plan to the
SELECTIVE INSURANCE RETIREMENT SAVINGS PLAN. Effective January 1, 1996, the Plan
was again amended and restated. Effective January 1, 1997, the Plan is again
being amended and restated in order to conform to the requirements of the
Uniformed Services Employment and Reemployment Rights Act of 1994, the Small
Business Job Protection Act of 1996, the Taxpayer Relief Act of 1997, the
Internal Revenue Service Restructuring and Reform Act of 1998 and the Community
Renewal Tax Relief Act of 2000, and to make certain other changes.

      1.2 Purpose of Plan. The Purpose of the Plan is to allow Members to elect
to set aside a portion of their salaries on a pre-tax basis and/or an after-tax
basis in order to accumulate capital for their retirement, and to encourage
Employee savings by matching such savings with Company contributions. The Plan
is intended to meet the applicable requirements of sections 401(a), 401(k), and
401(m) of the Internal Revenue Code of 1986, as amended.

      1.3 Applicability of Plan. The provisions of this restated Plan document
are applicable only to Eligible Employees in the employ of the Company on or
after January 1, 1997.


                                       1
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                             Article II. Definitions

      Whenever used in the Plan, the following terms shall have the meanings set
forth below unless otherwise expressly provided.

      2.1 "Accounts" shall mean the Elective Contributions Account, Matching
Contributions Account, Matched After-Tax Contributions Account, Unmatched
After-Tax Contributions Account, Qualified Nonelective Contributions Account,
Qualified Matching Contributions Account, and Rollover Account established for a
Member under the Plan.

      2.2 "Act" shall mean the Employee Retirement Income Security Act of 1974,
as in effect at the time with respect to which such term is used.

      2.3 "Affiliate" shall mean any corporation, trade, or business if it and
the Company are members of a controlled group of corporations, are under common
control, or are members of an affiliated service group, within the meaning of
Code sections 414(b), 414(c), and 414(m), respectively. The term "Affiliate"
shall also include any other entity required to be aggregated with the Company
pursuant to regulations under Code section 414(o). Notwithstanding anything
above to the contrary, for purposes of section 4.17, "Affiliate" status shall be
determined in accordance with Code section 415(h).

      2.4 "After-Tax Contributions" shall mean contributions made under section
4.2 and shall be either Matched After-Tax Contributions or Unmatched After-Tax
Contributions.

      2.5 "Alternate Payee" shall mean any individual described in section
13.8(a).

      2.6 "Annual Addition" shall have the meaning set forth in section
4.17(c)(1).

      2.7 "Annuity Starting Date" shall mean the first day on which all events
have occurred which entitle the Member to commence benefits under the Plan.

      2.8 "Authorized Leave of Absence" shall mean any extraordinary absence
authorized by the Company, under the Company's standard personnel practices,
provided that all persons under similar circumstances must be treated alike in
the granting of such Authorized Leaves of Absence and provided further that the
Employee returns to employment with the Company within the period of authorized
absence. An absence due to service in the Armed Forces of the United States
shall be considered an Authorized Leave of Absence, provided that the absence is
caused by war or other emergency, or provided that the Employee is required to
serve under the laws of conscription in time of peace, and further provided that
the Employee returns to employment with the Company within the period provided
by law.

      2.9 "Beneficiary" shall mean the person or persons designated under
section 3.8.

      2.10 "Board" shall mean the Board of Directors of Selective Insurance
Company of America.

      2.11 "Code" shall mean the Internal Revenue Code of 1986, as in effect at
the time with respect to which such term is used.


                                       2
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      2.12 "Committee" shall mean the committee appointed under the terms of
section 9.1

      2.13 "Company" shall mean Selective Insurance Company of America, and with
the approval of the Board, any other Affiliate which adopts the Plan for the
benefit of its employees and is designated a Participating Company hereunder.

      2.14 "Compensation" shall mean a Member's pay, determined as follows:

            (a)   In General. For all purposes of the Plan, except as otherwise
                  specified, Compensation shall mean the basic earnings paid to
                  an Employee by the Company, excluding all overtime pay and
                  bonuses, provided, however, that the term Compensation shall
                  include Elective Contributions under section 4.1 of this plan
                  and salary reduction amounts under a cafeteria plan pursuant
                  to Code section 125, but shall not include any other
                  contributions or benefits paid under this Plan.
                  Notwithstanding the foregoing, for limitation years beginning
                  on and after January 1, 2001, for purposes of applying the
                  limitations described in Section 4.17 of the Plan,
                  Compensation paid or made available during such limitations
                  years shall include elective amounts that are not includible
                  in the gross income of the Employees by reason of Code section
                  132(f)(4). This amendment shall also apply to the definition
                  of Compensation for purposes of this Section 2.14.

            (b)   Special Rule for Limits on Elective, After-Tax, and Matching
                  Contributions and for Determining Highly Compensated
                  Employees. For purposes of satisfying the limits on
                  contributions described in sections 4.10 and 4.13 and for
                  purposes of determining Highly Compensated Employees under
                  section 2.30, Compensation shall mean an Employee's
                  compensation as defined in Code section 415(c)(3) and the
                  applicable Treasury regulations thereunder, increased by
                  amounts attributable to the Employee's salary reduction
                  amounts under a cafeteria plan under Code section 125,
                  Elective Contributions under section 4.1 of this Plan, and
                  elective amounts under Code section 132(f)(4).

                  Notwithstanding the foregoing, for purposes of sections 4.10
                  and 4.13, the Company may use compensation as reported in Box
                  1 on Form W-2, or any alternative definition that may be
                  permitted under Treasury regulations in lieu of compensation
                  as defined in Code section 415(c)(3).

            (c)   Special Rules for Top-Heavy. For purposes of the top-heavy
                  provisions of Article XII, Compensation shall mean an
                  Employee's compensation as defined in Code section 415(c)(3)
                  and the applicable Treasury regulations thereunder.

      The maximum amount of Compensation taken into account under the Plan for
any Plan Year shall be $150,000, or such other amount as is determined by the
Secretary of the Treasury to reflect a cost-of-living adjustment under Code
section 401(a)(17).


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      2.15 "Computation Period" shall mean the Plan Year.

      2.16 "Defined Benefit Fraction" shall have the meaning set forth in
section 4.17(c)(2).

      2.17 "Defined Contribution Fraction" shall have the meaning set forth in
section 4.17(c)(3).

      2.18 "Determination Date" shall have the meaning set forth in section
12.6(a).

      2.19 "Disability" shall mean the inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment that can result in death or to be of long, continued, and indefinite
duration. Such determination of Disability shall be made by the Committee with
the advice of competent medical authority. All Members in similar circumstances
shall be treated alike.

      2.20 "Disability Retirement Date" shall mean the first day of the month
after the Committee has determined that a Member's incapacity is a Disability.

      2.21 "Domestic Relations Order" shall have the meaning set forth in
section 13.8(b).

      2.22 "Early Retirement Date" shall mean the first day of any month (prior
to Normal Retirement Date) coinciding with or following the date on which a
Member terminates employment with the Company after attaining age fifty-five and
completing at least ten Years of Service.

      2.23 "Elective Contributions" shall mean contributions made under section
4.1 and shall be either Matched Elective Contributions or Unmatched Elective
Contributions.

      2.24 "Elective Contributions Account" shall mean the Account established
for a Member to which Matched Elective Contributions, Unmatched Elective
Contributions, and earnings thereon are credited.

      2.25 "Eligible Employee" shall mean an Employee described in section 3.1,
except an Employee who is working in a unit subject to collective bargaining,
unless the applicable collective bargaining agreement otherwise provides and
retirement benefits were the subject of good faith bargaining. The exception for
an Employee in a unit subject to collective bargaining shall only be applicable
during the period the Employee is working in such unit.

      2.26 "Employee" shall mean any individual employed by the Company except
an individual employed as an independent contractor and an individual who is a
Leased Employee. Notwithstanding the foregoing, effective as of January 1, 2001,
if an individual who is not classified as an Employee is retroactively
reclassified as an Employee, he or she will not be eligible for benefits under
the Plan for any period prior to such reclassification, nor for periods
following such reclassification, unless otherwise specified by the Company.


                                       4
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      2.27 "Employment Commencement Date" shall mean the date on which an
Employee first performs an Hour of Service for the Company.

      2.28 "Entry Date" shall mean the first day of each calendar month.

      2.29 "Exchange Plan" shall mean the Exchange Insurance Company 401(k)
Plan, effective July 1, 1986.

      2.30 "Fair Market Value" shall mean, with respect to the purchase or sale
of Selective Insurance Group, Inc. common stock, the price of a share of such
common stock as reported on the principal securities exchange on which such
shares of common stock are then listed or admitted to trading at such time.
Notwithstanding the above, effective May 2, 1997, with respect to the purchase
of shares of the Selective Insurance Group, Inc. common stock for the Selective
Insurance Stock Fund on any day, "Fair Market Value" shall mean, (i) the closing
price of a share of such common stock as reported on the principal securities
exchange on which shares of such common stock are then listed or admitted to
trading on the date the transaction is executed, (ii) if not reported on such
day, the closing price at the end of the next business day of a share of such
common stock as reported on such principal securities exchange, or (iii) if not
reported on such day, the fair market value of a share of such common stock as
determined in good faith by the Committee in its absolute discretion.

      2.31 "Highly Compensated Employee" shall mean an Employee who:

            (a)   at any time during the Plan Year or the preceding year was a
                  more than 5% owner of the Company (applying the constructive
                  ownership rules of Section 318 of the Code); or

            (b)   for the preceding year had Compensation in excess of $80,000
                  (as adjusted by the Commissioner of Internal Revenue for the
                  relevant year).

            The term "Highly Compensated Employee" also includes any former
Employee who separated from service (or has a deemed separation from service, as
determined under Treasury regulations) prior to the Plan Year, performs no
service for the Employer during the Plan Year, and was a Highly Compensated
Employee either for the separation year or any Plan Year ending on or after his
or her 55th birthday. If the former Employee's separation from service occurred
prior to January 1, 1987, he or she is a Highly Compensated Employee only if he
or she satisfied the definition of Highly Compensated Employee as then in effect
or received Compensation in excess of $50,000 during: (1) the year of his or her
separation from service (or the prior year); or (2) any year ending after his or
her 54th birthday.

            The Committee shall also have discretion to use any other definition
of "Highly Compensated Employee" promulgated by the Secretary of Treasury.

      2.32 "Hour of Service."

            (a)   General Rule. The words "Hour of Service" shall mean each hour
                  for which the Employee is directly or indirectly paid or
                  entitled to payment by the Company or an Affiliate:


                                       5
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                  (1)   for the performance of duties.

                  (2)   on account of a period of time during which no duties
                        are performed (irrespective of whether the employment
                        relationship has terminated) due to vacation, holiday,
                        illness, incapacity (including disability), layoff, jury
                        duty, or Authorized Leave of Absence, or

                  (3)   for which back pay, irrespective of mitigation of
                        damages, is either awarded or agreed to by the Company;

                  provided, however, that no hour shall be credited as an Hour
                  of Service under more than one of the preceding paragraphs.

            (b)   Applicable Computation Period.

                  (1)   Hour of Service described in subsection (a)(1) shall be
                        credited to the Computation Period in which the duties
                        are performed.

                  (2)   Hour of Service described in subsection (a)(2) shall be
                        credited to the Computation Period in which the Employee
                        is compensated for such Hour of Service.

                  (3)   Hour of Service described in subsection (a)(3) shall be
                        credited to the Computation Period to which the award,
                        agreement, or payment is made.

                  (4)   Notwithstanding anything to the contrary in subsection
                        (a)(1), (a)(2), or (a)(3), in the case of Hours of
                        Service to be credited to the Employee in connection
                        with a payroll period of no more than 31 days which
                        extends beyond the end of a Computation Period, all such
                        Hours of Service shall be credited to the following
                        computation period.

            (c)   Hours Not Counted. This subsection limits the Hours of Service
                  credited for periods during which no duties are performed and
                  applies whether or not Hours of Service otherwise would have
                  been counted for such periods under subsection (a)(2).

                  (1)   Unpaid Time. An hour for which an Employee is not paid,
                        either directly or indirectly, shall not be credited
                        except in the case of an Authorized Leave of Absence.

                  (2)   Workers' Compensation, Disability Insurance,
                        Unemployment Compensation. An hour for which an Employee
                        is directly or indirectly paid or entitled to payment on
                        account of a period during which the Employee performed
                        no duties:


                                       6
<PAGE>
                        (A)   may be credited in the sole discretion of the
                              Committee if such payment is made or due under a
                              plan maintained solely for the purposes of
                              complying with an applicable workers' compensation
                              or disability insurance law, but

                        (B)   shall not be credited if such payment is made or
                              due under a plan maintained solely for the purpose
                              of complying with an applicable unemployment
                              compensation law.

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

                  (4)   501 Hour Limitation. Not more than 501 Hours of Service
                        shall be credited under subsection (a)(2) on account of
                        any single period during which the Employee performs no
                        duties (whether or not such period occurs in a single
                        calendar year).

            (e)   Construction. This section is intended to be consistent with
                  the requirements of paragraphs (b) and (c) of section
                  2530.200b-2 of the Department of Labor regulations and such
                  regulations are incorporated herein by this reference.

      2.33 "Investment Funds" shall mean the fund or funds established under the
Trust Fund by the Committee for investment of Members' Accounts under section
5.2.

      The Board and the Committee shall have the right to terminate particular
Investment Funds and the right to establish particular Investment Funds from
time to time to implement and carry out investment objectives and policies
established by the Company and the Committee. The Board and the Committee may
from time to time eliminate or liquidate Investment funds by providing at least
30 days' written notice to the Trustee and Members that the fund or funds will
in the future cease to be an Investment Fund.

      2.34 "Key Employee" shall mean any individual described in section
12.6(b).

      2.35 "Leased Employee" shall mean any individual described in section
11.3(a).

      2.36 "Leasing Organization" shall mean any entity described in section
11.3(b).

      2.37 "Leasing Organization Pension Plan" shall mean any plan described in
section 11.3(c).

      2.38 "Matched After-Tax Contributions Account" shall mean the Account
established for a Member to which Matched After-Tax Contributions and earnings
thereon are credited.

      2.39 "Matching Contributions" shall mean contributions made by the Company
under section 4.3


                                       7
<PAGE>
      2.40 "Matching Contributions Account" shall mean the account for each
Member to which Matching Contributions and the earnings thereon are credited.

      2.41 "Member" shall mean an Employee who has become a Member under Article
III, and shall include a former Employee (and the Beneficiary of a deceased
Employee) until his or her Vested Balance has been fully distributed.

      2.42 "Normal Retirement Age" shall mean the date the Member attains age
sixty-five.

      2.43 "Normal Retirement Date" shall mean the first day of the month
coinciding with or next following the date a Member attains his Normal
Retirement Age.

      2.44 "One-Year Period of Severance."

            (a)   A One-Year Period of Severance means a
                  twelve-consecutive-month period beginning on the date an
                  Employee incurs a Severance from Service and ending on each
                  anniversary of such date, provided that the Employee does not
                  perform an Hour of Service for the Company or any Affiliate
                  during such period.

            (b)   Solely for purposes of determining whether a One-Year Period
                  of Severance has occurred, in the case of an Employee who is
                  absent from work beyond the first anniversary of the first
                  date of an absence and the absence is for maternity or
                  paternity reasons, the date the Employee incurs a Severance
                  from Service shall be the second anniversary of the Employee's
                  absence from employment. The period between the first and
                  second anniversary of the first date of absence will not
                  constitute a Year of Service. For purposes of this subsection,
                  an absence from work for maternity or paternity reasons means
                  an absence (1) by reason of 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 such Employee, or (4) for
                  purposes of caring for such child for a period beginning
                  immediately following such birth or placement.

      2.45 "Participating Company" shall mean those Affiliates set forth in
Appendix A attached hereto.

      2.46 "Participating Group" shall mean each separate group of Employees
which is classified by the Company by specific function, location, or otherwise
as constituting a separate Participating Group covered by the Plan, as set forth
in the applicable Supplement.

      2.47 "Plan" shall mean the Selective Insurance Retirement Savings Plan.

      2.48 "Plan Year" shall mean the calendar year.

      2.49 "Qualified Domestic Relations Order" shall mean any Domestic
Relations Order described in section 13.8(c).


                                       8
<PAGE>
      2.50 "Qualified Matching Contributions" shall mean contributions made
under section 4.6.

      2.51 "Qualified Matching Contributions Account" shall mean the Account
established for a Member to which Qualified Matching Contributions and earnings
thereon are credited.

      2.52 "Qualified Nonelective Contributions" shall mean contributions made
under section 4.5.

      2.53 "Qualified Nonelective Contributions Account" shall mean the Account
established for a Member to which Qualified Nonelective Contributions and
earnings thereon are credited.

      2.54 "Related Person" shall mean any person described in section 11.3(d).

      2.55 "Rollover Account" shall mean the account for an Employee to which a
Rollover Contribution and earnings thereon are credited pursuant to section
4.19(b).

      2.56 "Salary Reduction Agreement" shall mean an agreement described in
section 4.4.

      2.57 "Selective Insurance Stock Fund" shall mean an investment fund
comprised of shares of Selective Insurance Group Inc. common stock, $2 par
value, in which dividends, if any, are used to purchase additional shares of
such common stock. Notwithstanding the foregoing, the Selective Insurance Stock
Fund may also hold, from time to time, cash, short-term obligations of the
United States Government, commercial paper, or other instruments of a short-term
nature, unless otherwise provided by applicable law.

      2.58 "Severance from Service." A Severance from Service shall occur on the
earlier of (a) or (b) below:

            (a)   the date as of which the Employee ceases employment with the
                  Company and all Affiliates by reason of a quit, discharge,
                  retirement, or death, or

            (b)   the first anniversary of the first day of an Employee's
                  absence from employment with the Company and its Affiliates
                  for any reason other than in (a), above.

      Notwithstanding the foregoing, an Employee who is absent on account of
service in the armed forces of the United States of America shall not incur a
Severance from Service in contradiction of federal law.

      2.59 "Supplement" shall mean the attachment to this Plan containing the
necessary provisions pertaining to the Participating Group that is to be covered
by the Plan. Any such Participating Group shall become covered by the Plan as of
the effective date of coverage set forth in the applicable Supplement. To the
extent a Supplement provides different rights and features than the text of the
Plan, the terms of the Supplement shall govern.


                                       9
<PAGE>
      2.60 "Termination of Employment" shall mean an Employee's cessation of
employment with the Company and its Affiliates which satisfies the requirements
for a "separation from service" within the meaning of Code section
401(k)(2)(B)(i)(I).

      2.61 "Trust or Trust Fund" shall mean the trust established by and under
the Trust Agreement under which Plan assets are held and invested and from which
all benefits under the Plan are paid.

      2.62 "Trust Agreement" shall mean the agreement entered into between the
Company and the Trustee to carry out the provisions of the Plan.

      2.63 "Trustee" shall mean the person or persons acting as trustee of the
Trust.

      2.64 "Unmatched After-Tax Contributions Account" shall mean the Account
established for a Member to which Unmatched After-Tax Contributions and earnings
thereon are credited.

      2.65 "Valuation Date" shall mean each business day during the Plan Year.

      2.66 "Vested Balance" as of a given date shall mean the aggregate balances
of a Member's Matched After-Tax Contributions Account, Unmatched After-Tax
Contributions Account, Elective Contributions Account, Qualified Nonelective
Contributions Account, Qualified Matching Contributions Account, and Rollover
Account, plus the Member's vested interest in his or her Matching Contributions
Account, as determined under section 6.2.


                                       10
<PAGE>
                     Article III. Participation and Service

      3.1 Eligible Employee. Each Employee of the Company shall become an
Eligible Employee after completing one Year of Service. Effective October 1,
1997, an Employee shall become an Eligible Employee on his date of hire.

      3.2 Commencement of Membership. Each Employee who was a Member in the Plan
on December 31, 1996 shall remain a Member in the Plan. Each other Employee may
begin to participate on the Entry Date next following the date he or she becomes
an Eligible Employee, provided such Eligible Employee completes the enrollment
process described in Section 3.3.

      3.3 Enrollment. Prior to becoming a Member, an Employee shall enroll in
the Plan at the time and in the manner specified by the Committee. Effective
January 1, 2001, an Employee is deemed to make an election to enter into a
Salary Reduction Agreement and reduce his or her Compensation by two percent
(2%) effective as of the first payroll period of the calendar month next
following the Employee's date of hire. Any such Employee shall become a Member
as of the date his or her Compensation is reduced.

      3.4 Eligibility for Contributions.

            (a)   Elective Contributions. An Employee may elect to have Elective
                  Contributions made on his or her behalf as of the first
                  payroll period of the calendar month next following the date
                  the Employee becomes eligible to commence membership in
                  accordance with section 3.2, provided that the Member
                  completes the enrollment process described in section 3.3 on
                  or before the fifteenth day of the month preceding the first
                  payroll period of the calendar month for which contributions
                  are to be made. If such Employee does not elect to have
                  Elective Contributions made when such Employee first becomes
                  eligible, then Elective Contributions may begin for the first
                  payroll period of the calendar month next following the
                  Eligible Employee's completion of the enrollment process
                  described in section 3.3, provided that the enrollment process
                  is completed before the fifteenth day of the month preceding
                  the first payroll period of the calendar month for which
                  contributions are to be made.

            (b)   Automatic Salary Reduction Agreement. Any Employee hired on or
                  after January 1, 2001, who does not elect to decline to enter
                  into a Salary Reduction Agreement with the Employer, shall be
                  deemed to have elected to have the Company make Elective
                  Contributions in each payroll period equal to two percent (2%)
                  of his Compensation as of the first payroll period of the
                  calendar month next following the Employee's date of hire and
                  have elected that such contributions be invested in the T.
                  Rowe Price Prime Reserve Fund.

            (c)   After-Tax Contributions. An Eligible Employee may elect to
                  make After-Tax Contributions as of the first payroll period of
                  the calendar month next following the date the Employee
                  becomes eligible to commence


                                       11
<PAGE>
                  membership in accordance with section 3.2, provided that the
                  Member completes the enrollment process described in section
                  3.3 on or before the fifteenth day of the month preceding the
                  first payroll period of the calendar month for which
                  contributions are to be made. If such Employee does not elect
                  to make After-Tax Contributions when he or she first becomes
                  eligible to participate, then After-Tax Contributions may
                  begin for the first payroll period of the calendar month next
                  following the Eligible Employee's completion of the enrollment
                  process described in section 3.3, provided that the enrollment
                  process is completed on or before the fifteenth day of the
                  month preceding the first payroll period of the calendar month
                  for which contributions are to be made.

            (d)   Matching Contributions. An Employee shall be eligible to have
                  Matching Contributions, Qualified Nonelective Contributions,
                  and Qualified Matching Contributions made on his or her behalf
                  as soon as the Employee elects to have Elective Contributions
                  made or elects to make After-Tax Contributions.

      3.5 Reemployed Members. Each former Employee who was an Eligible Employee
prior to his or her Termination of Employment shall be eligible to participate
on the Entry Date coincident with or next following the date on which such
Employee again becomes an Employee. Upon reemployment all his or her prior Years
of Service shall be restored for purposes of calculating such Member's Vested
Balance, except as otherwise provided in section 3.7. Each former Employee who
was not an Eligible Employee prior to his or her Termination of Employment shall
be eligible to participate on the Entry Date coincident with or next following
the date on which such Employee becomes an Eligible Employee.

      3.6 Cessation of Membership. Membership hereunder shall cease upon the
complete distribution of the Member's Accounts or, if earlier, the Member's
death.

      3.7 Years of Service. For purposes of determining eligibility for
membership and vesting, an Employee shall be credited with Service for the
Employee's period of employment with the Company and Affiliates, determined as
follows:

            (a)   Service shall be determined in completed years and days, with
                  each 365 days constituting one Year of Service.

            (b)   An Employee shall receive credit for Service from the date the
                  Employee first performs an Hour of Service until the
                  Employee's Severance from Service.

            (c)   If an Employee who has had a Severance from Service is
                  subsequently reemployed as an Employee, the following
                  provisions shall apply:

                  (1)   If the Employee is reemployed before five (5)
                        consecutive One-Year Periods of Severance occurs, the
                        Years of Service such Employee had at such Severance
                        from Service shall be reinstated upon reemployment.


                                       12
<PAGE>
                        (A)   If such Severance from Service resulted from a
                              quit, discharge, or retirement, the Employee shall
                              receive credit (but not in excess of twelve
                              months) for Service for the period between his or
                              her Severance from Service and reemployment.

                        (B)   If the Employee's Severance from Service is by
                              reason of a quit, discharge, or retirement and
                              such Severance from Service occurs during any
                              absence from employment of twelve months or less
                              for any reason (other than a quit, discharge,
                              retirement, or death), and the Employee then
                              performs an Hour of Service within twelve months
                              of the date he or she was first absent from
                              employment, such Employee shall receive credit for
                              Service for the period between the Severance from
                              Service and reemployment.

                  (2)   If the Employee is reemployed after five (5) consecutive
                        One-Year Periods of Severance occurs, credit for Years
                        of Service will resume as of the date the Employee first
                        performs an Hour of Service upon rehire.

                        (A)   If the Employee had a vested interest in any
                              portion of his or her Matching Contributions
                              Account, the Years of Service the Employee had at
                              Severance from Service shall continue to be
                              credited upon reemployment by the Company or an
                              Affiliate.

                        (B)   If the Employee did not have a vested interest in
                              any portion of his or her Matching Contributions
                              Account, and if the number of One-Year Periods of
                              Severance between such Employee's Severance from
                              Service and reemployment does not equal or exceed
                              the greater of five or the number of Years of
                              Service the Employee had prior to Severance from
                              Service, such Employee's prior Years of Service
                              shall be reinstated upon reemployment by the
                              Company or an Affiliate.

      Notwithstanding anything to the contrary above and solely for purposes of
determining eligibility for membership in the Plan, "Years of Service" shall,
with the approval of the Board by written resolution, include all "Years of
Service" credited with Exchange Insurance Company.

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


                                       13
<PAGE>
      3.8 Beneficiary Designation.

            (a)   Unmarried Members. Each unmarried Member may designate a
                  Beneficiary or Beneficiaries to receive such Member's interest
                  in the Plan in the event of such Member's death. Such
                  designation shall not be effective unless it is made on a form
                  provided for that purpose by the Committee and filed with the
                  Committee by the Member during the Member's lifetime. The
                  Member may, from time to time during the Member's lifetime, on
                  a form approved by and filed with the Committee, change the
                  Member's Beneficiary or Beneficiaries.

            (b)   Married Members. The Beneficiary of each Member who is married
                  shall be the surviving spouse of such Member, unless such
                  spouse consents in writing to the designation of another
                  Beneficiary or Beneficiaries. Each married Member may, from
                  time to time during the Member's lifetime, on a form approved
                  by and filed with the Committee, change such Member's
                  designation of Beneficiaries; provided, however, that the
                  Member may not change the Member's Beneficiary without the
                  written consent of the Member's spouse, unless such spouse's
                  prior consent expressly permits designations by the Member
                  without any requirement of further consent by the spouse. Any
                  consent by a spouse hereunder shall only be effective with
                  respect to that particular spouse.

                  (1)   Requirements of Written Consent. The written consent
                        described in this subsection (b) shall acknowledge the
                        effect of such election and shall be witnessed by a Plan
                        representative designated by the Committee or a notary
                        public. Any consent by a spouse which expressly permits
                        designations by the Member without any requirement of
                        further consent by the spouse must acknowledge the
                        spouse's right to limit consent to a specific
                        Beneficiary and must further acknowledge that such right
                        is voluntarily relinquished.

                  (2)   Circumstances Where No Consent is Required. A married
                        Member may designate a non-spouse Beneficiary without
                        spousal consent only if it is established to the
                        satisfaction of the Committee that the consent of the
                        spouse could not have been obtained because there is no
                        spouse, because the spouse cannot be located, or because
                        of other circumstances prescribed by regulations under
                        Code section 417(a).

            (c)   Default Beneficiary. In the event that no Beneficiary is
                  designated (or deemed designated) pursuant to paragraph (a) or
                  (b), the Member's Beneficiary shall be the Member's estate.


                                       14
<PAGE>
                    Article IV. Contributions and Allocations

      4.1 Elective Contributions.

            (a)   Amount. The Company shall contribute to the Trust for each
                  payroll period on behalf of each Member an amount equal to the
                  amount by which the Member's Compensation has been reduced for
                  that payroll period under a Salary Reduction Agreement (as
                  described in section 4.4), subject to the limitations in
                  sections 4.7, 4.9, and 4.17. In addition to the foregoing,
                  effective January 1, 2002, the Company shall contribute to the
                  Trust on behalf of each Member an amount equal to the amount
                  by which the Member elects to reduce his or her annual
                  cash-incentive payment, if applicable, under a Salary
                  Reduction Agreement (as described in Section 4.4) subject to
                  the limitations in Sections 4.7, 4.9 and 4.17. Notwithstanding
                  any provision of this Plan to the contrary, Elective
                  Contributions made with respect to an annual cash-incentive
                  payment shall be treated as Unmatched Elective Contributions
                  as defined in Section 4.4(b) of the Plan.

            (b)   Timing. Such contribution shall be transferred to the Trustee
                  and invested by the Trustee in the Investment Funds designated
                  by the Member under section 5.3 as soon as practicable after
                  the applicable payroll period ends. Contributions transferred
                  to the Trust during the first thirty days of a Plan Year may
                  be credited to a Member's Account as if made on the last day
                  of the preceding Plan Year unless deemed to have been made in
                  the Plan Year in which such contribution was transferred to
                  the Trust.

            (c)   Account. Contributions under this section on behalf of each
                  Member shall be credited to the Member's Elective
                  Contributions Account.

      4.2 After-Tax Contributions.

            (a)   Amount. An Eligible Employee may elect to contribute for each
                  payroll period --

                  (1)   2 to 6 percent of such Employee's Compensation (in whole
                        percentages) which shall be eligible for Matching
                        Contributions under section 4.3 ("Matched After-Tax
                        Contributions"), and

                  (2)   1 to 6 percent (in whole percentages) which shall not be
                        eligible for Matching Contributions under section 4.3
                        ("Unmatched After-Tax Contributions").

                  The initial election to make After-Tax Contributions shall be
                  effective until canceled or amended, subject to the
                  limitations in sections 4.7, 4.13 and 4.17.


                                       15
<PAGE>
            (b)   Timing. Such contribution shall be transferred to the Trustee
                  and invested by the Trustee in the Investment Funds designated
                  by the Member under section 5.3 as soon as practicable after
                  the applicable payroll period ends. Contributions transferred
                  to the Trust during the first thirty days of a Plan Year may
                  be credited to a Member's Account as if made on the last day
                  of the preceding Plan Year unless deemed to have been made in
                  the Plan Year in which such contribution was transferred to
                  the Trust.

            (c)   Account. Matched After-Tax Contributions shall be credited to
                  the Member's Matched After-Tax Contributions Account and
                  Unmatched After-Tax Contributions shall be credited to the
                  Member's Unmatched After-Tax Contributions Account.

      4.3 Matching Contributions.

            (a)   Amount. For each Member, the Company shall make a contribution
                  equal to 50 percent of such Member's Matched Elective
                  Contributions or Matched After-Tax Contributions not in excess
                  of 6 percent of the Member's Compensation payable in the
                  payroll period with respect to which such contribution is
                  made. Notwithstanding anything to the contrary in Section 4.3,
                  for each Member who is an Employee on the last day of the Plan
                  Year, the Company shall make a contribution equal to (1) 50
                  percent of such Member's Matched Elective Contributions and
                  Matched After-Tax Contributions attributable to the Plan Year
                  (however Matched Elective Contributions and Matched After-Tax
                  Contributions will not be taken into account for this purpose
                  to the extent they exceed 6 percent of a Member's Compensation
                  for the Plan Year), minus (2) Matching Contributions already
                  made with respect to that Member which are attributable to the
                  Plan Year. Matching Contributions made pursuant to this
                  Section 4.3(a) shall be subject to the limitations in sections
                  4.7, 4.13, and 4.17.

            (b)   Timing. Matching Contributions shall be paid to the Trust no
                  later than the tax filing deadline for the Company for the
                  fiscal year in which the Plan Year ends for which the Matching
                  Contributions are made hereunder.

            (c)   Account. Matching Contributions shall be credited to the
                  Member's Matching Contributions Account.

      4.4 Salary Reduction Agreement. In order to have Elective Contributions
made on his or her behalf, an Eligible Employee shall execute a Salary Reduction
Agreement or be deemed to have executed a Salary Reduction Agreement with the
Company in accordance with procedures adopted by the Committee from time to time
whereby such Employee's Compensation shall be reduced by a specified whole
percentage from --

            (a)   2 to 6 percent, which shall be eligible for Matching
                  Contributions under section 4.3 ("Matched Elective
                  Contributions"), and


                                       16
<PAGE>
            (b)   1 to 6 percent, which shall not be eligible for Matching
                  Contributions ("Unmatched Elective Contributions"),

and whereby the Company agrees to contribute an identical amount on the
Employee's behalf to the Plan under section 4.1. The initial agreement shall be
effective for payroll periods commencing on and after the date on which
membership commences under section 3.2, and shall be effective until canceled or
amended.

      4.5 Qualified Nonelective Contributions.

            (a)   Amount. If the Committee determines that the limitation of
                  section 4.10 has been or may be exceeded, to the extent
                  permitted by the final Treasury Regulations under Code section
                  401(k) and 401(m), the Company may make Qualified Nonelective
                  Contributions on behalf of Employees who are not Highly
                  Compensated Employees in order to satisfy the limitation of
                  section 4.10.

            (b)   Timing. Qualified Nonelective Contributions, if any, shall be
                  paid to the Trust as soon as practicable after the amount of
                  such contributions has been determined by the Committee.

            (c)   Restrictions. Such contributions shall be fully and
                  immediately nonforfeitable and shall not be distributable
                  prior to a Member's Termination of Employment with the Company
                  and Affiliates.

            (d)   Account. Qualified Nonelective Contributions shall be credited
                  to the Qualified Nonelective Contributions Account.

      4.6 Qualified Matching Contributions.

            (a)   Amount. If the Committee determines that the limitation of
                  section 4.13 has been or may be exceeded, to the extent
                  permitted by the final Treasury Regulations under Code section
                  401(k) and 401(m), the Company may make a Qualified Matching
                  Contribution on behalf of Employees who are not Highly
                  Compensated Employees in order to satisfy the limitation of
                  section 4.13.

            (b)   Timing. Qualified Matching Contributions, if any, shall be
                  paid to the Trust as soon as practicable after the amount of
                  such contributions has been determined by the Committee.

            (c)   Account. Qualified Matching Contributions shall be credited to
                  the Qualified Matching Contributions Account.

      4.7 Limitation on Contributions.

            (a)   Elective, Matching, Qualified Nonelective, and Qualified
                  Matching Contributions. Notwithstanding anything herein to the
                  contrary,


                                       17
<PAGE>
                  contributions for any Plan Year made under sections 4.1, 4.3,
                  4.5, and 4.6 shall not exceed the amount allowable as a
                  deduction to the Company under the applicable provisions of
                  Code section 404 (unless the Company is required to make
                  minimum contributions under Code section 416 as described in
                  section 12.4).

            (b)   Elective and After-Tax Contributions. Notwithstanding anything
                  herein to the contrary, the sum of an Employee's Matched
                  Elective Contributions and Matched After-Tax Contributions for
                  a Plan Year shall not exceed 6 percent of such Employee's
                  Compensation for the Plan Year, and the sum of an Employee's
                  Unmatched Elective Contributions and Unmatched After-Tax
                  Contributions for a Plan Year shall not exceed 6 percent of
                  such Employee's Compensation for the Plan Year.

      4.8 Change and Suspension of Contributions.

            (a)   Change. A Member may change the amount of his or her Elective
                  Contributions and/or After-Tax Contributions as of the first
                  payroll period of any month by giving reasonable notice to the
                  Committee in accordance with procedures adopted by the
                  Committee from time to time. Effective January 1, 2001, a
                  Member may change the amount of his or her Elective
                  Contributions and/or After-Tax Contributions as of the first
                  practicable payroll period following reasonable notice to the
                  Committee in accordance with procedures adopted by the
                  Committee from time to time.

            (b)   Suspension. A Member may suspend his or her Elective
                  Contributions and/or After-Tax Contributions as of the first
                  payroll period of any month by giving reasonable notice to the
                  Committee in accordance with procedures adopted by the
                  Committee from time to time. During a period of suspension of
                  Elective Contributions and After-Tax Contributions, no
                  Matching Contributions shall be made on behalf of such Member.

            (c)   Resumption of Contributions. A Member who has suspended
                  Elective Contributions and/or After-Tax Contributions may
                  resume such contributions as of the first payroll period of
                  any month by completing the enrollment process described in
                  section 3.3 by the 15th day of the month preceding the first
                  payroll period of the calendar month for which such
                  contributions are to resume or by such other date as the
                  Committee may establish. Effective January 1, 2001, a Member
                  who has suspended Elective Contributions and/or After-Tax
                  Contributions may resume such contributions as of the first
                  practicable payroll period following reasonable notice to the
                  Committee in accordance with procedures adopted by the
                  Committee from time to time by completing the enrollment
                  process described in Section 3.3.

      4.9 Maximum Elective Amount. The maximum amount of Elective Contributions
for any Individual for any calendar year shall be $7,000, or such other amount
determined by the


                                       18
<PAGE>
Secretary of the Treasury under Code section 402(g)(5) (cost-of-living
adjustments). If Elective Contributions under this Plan exceed the maximum limit
for any Member for any calendar year, the excess amount (and any income
attributable to such excess) shall be distributed to such Member and such
distribution shall be charged against such Member's Elective Contributions
Account. Distribution shall be made as soon as practicable without regard to any
limitation otherwise imposed by law or by the provisions of this Plan, but in no
event shall such distribution be made after April 15 of the year immediately
following the calendar year in which the excess was contributed. In the event a
matching contribution relates to an excess Elective Contribution under Section
4.09, or an Excess Contribution under Section 4.12, the Matching Contribution
and income allocable thereto shall be forfeited. The income allocable to a
Matching Contribution shall be determined in accordance with the procedure for
determining income allocable to excess Matching Contributions set forth in
Section 4.14.

      4.10 Limitation on Elective Contributions. In each Plan Year the actual
deferral percentage of Elective Contributions for the group of Highly
Compensated Employees eligible to participate in the Plan may not exceed the
greater of--

      (a)   1.25 times the actual deferral percentage of the group of all other
            Eligible Employees; or

      (b)   the lesser of (1) 2 times the actual deferral percentage of the
            group of all other Eligible Employees or (2) the actual deferral
            percentage of the group of all other Eligible Employees plus 2
            percentage points.

      The "actual deferral percentage" for each such group of Eligible Employees
for a Plan Year is the average of the ratios, calculated separately for each
Employee in each such group, of the amount of Elective Contributions made on
behalf of each Eligible Employee for such Plan Year to the Employee's
Compensation for such Plan Year. In the case of a Highly Compensated Employee
who is eligible to participate in more than one cash or deferred arrangement
maintained by the Company or an Affiliate, the ratio of the amount of Elective
Contributions made on behalf of such Highly Compensated Employee for such Plan
Year to the Highly Compensated Employee's Compensation for such Plan Year shall
be calculated by treating all the cash or deferred arrangements in which the
Highly Compensated Employee is eligible to participate as one arrangement.

      In performing the above actual deferral percentage test, the "prior year"
testing method shall be utilized.

      4.11 Adjustment of Elective Contributions During Plan Year.
Notwithstanding anything in this Article IV to the contrary, if the Committee
determines that the nondiscrimination test set forth in section 4.10 otherwise
might not be met for the Plan Year, the Committee may reduce the maximum
percentage of Compensation at which Highly Compensated Employees may elect to
have Elective Contributions made on their behalf to such percentage, if any, as
the Committee determines appropriate to ensure that such test will be met for
such Plan Year. Such a reduction may be imposed for the entire Plan Year or any
part thereof.


                                       19
<PAGE>
      4.12 Excess Elective Contributions After Plan Year.

            (a)   Correction of Excess Elective Contributions After Plan Year.
                  If the Committee determines after the end of the Plan Year
                  that the nondiscrimination test set forth in section 4.10 has
                  not been met, excess Elective Contributions (adjusted to
                  reflect any income or losses allocable to such excess to the
                  date of distribution) of the Highly Compensated Employees
                  shall be distributed to such Highly Compensated Employees to
                  eliminate such excess Elective Contributions. The income or
                  loss allocable to the excess Elective Contributions shall be
                  the amount determined by multiplying the income or loss
                  allocable to the Member's accounts containing the excess
                  amounts for the Plan Year by a fraction, the numerator of
                  which is the excess Elective Contributions on behalf of the
                  Member for the Plan Year and the Denominator of which is the
                  Member's account balance in the accounts containing the excess
                  amounts as of the Valuation Date of the Plan Year in which the
                  excess Elective Contribution is made without regard to any
                  gain or loss allocable to such total amount for the Plan Year.

            (b)   Elimination of Amount of Excess Elective Contributions. For
                  any Plan Year in which Elective Contributions on behalf of
                  Highly Compensated Employees exceed the applicable limit under
                  section 4.10, the Committee shall determine the amount of the
                  excess Elective Contributions made on behalf of Highly
                  Compensated Employees for the Plan Year by reducing such
                  contributions in order of actual deferral percentages
                  beginning with the highest of such percentages. Excess
                  Elective Contributions shall be allocated and returned to the
                  Highly Compensated Employees with the largest amount of
                  Elective Contributions taken into account in calculating the
                  actual deferral percentage test for the year in which the
                  excess arose, beginning with the Highly Compensated Employee
                  with the largest amount of Elective Contributions and
                  continuing in descending order until all excess Elective
                  Contributions have been allocated. For purposes of the
                  preceding sentence, the "largest amount" is determined after
                  distribution of any excess Elective Contributions.

            (c)   Return of Excess Elective Contributions. Excess Elective
                  Contributions which are returned to Highly Compensated
                  Employees pursuant to this section 4.12 shall be distributed
                  to such Employees as soon as practicable, without regard to
                  any limitation otherwise imposed by law or by the provisions
                  of this Plan. Excess Elective Contributions and income
                  allocable thereto shall be distributed no later than March 15
                  of the Plan Year following the Plan Year in which any such
                  excess Elective Contributions were made, but in no event shall
                  the excess Elective Contributions be distributed later than
                  the last day of the Plan Year following the Plan Year in which
                  the contributions giving rise to the excess Elective
                  Contributions were allocated. If excess Elective Contributions
                  are distributed more than 2 1/2 months after the last day of


                                       20
<PAGE>
                  the Plan Year in which such excess amounts arose, a ten (10)
                  percent excise tax will be imposed on the Company maintaining
                  the Plan with respect to those amounts.

      Notwithstanding the foregoing, the amount of excess Elective Contributions
which are returned to Highly Compensated Employees with respect to a Plan Year
shall be reduced by the excess Elective Contributions previously distributed to
such Highly Compensated Employee under section 4.9 of the Plan for the Highly
Compensated Employee's taxable year ending with or within such Plan Year.

      4.13 Limitation on Matching Contributions and After-Tax Contributions. In
each Plan Year the contribution percentage of Matching Contributions and
After-Tax Contributions for the group of Highly Compensated Employees eligible
to participate in the Plan may not exceed the greater of --

            (a)   1.25 times the contribution percentage of the group of all
                  other Eligible Employees; or

            (b)   the lesser of (1) 2 times the contribution percentage of the
                  group of all other Eligible Employees or (2) the contribution
                  percentage of the group of all other Eligible Employees plus 2
                  percentage points.

      The "contribution percentage" for each such group of Eligible Employees
for a Plan Year is the average of the ratios, calculated separately for each
Employee in each such group, of Matching Contributions and After-Tax
Contributions made on behalf of each eligible Employee for such Plan Year to the
Employee's Compensation for such Plan Year. To the extent permitted by
applicable regulations, the Committee may elect to take Elective Contributions
into account in determining the contribution percentage, provided, however,
Elective Contributions satisfy the limitation of Section 4.12 both before and
after they are applied to determine the contribution percentage. In the case of
a Highly Compensated Employee who is eligible to participate in more than one
plan maintained by the Company or an Affiliate to which Matching Contributions
are made, the ratio of the amount of Matching Contributions and After-Tax
Contributions made on behalf of such Highly Compensated Employee for such Plan
Year to the Highly Compensated Employee's Compensation for such Plan Year shall
be calculated by treating all the plans in which the Highly Compensated Employee
is eligible to participate as one plan.

      In performing the above average contribution percentage test, the "prior
year" testing method shall be utilized.

      4.14 Excess Matching Contributions and After-Tax Contributions After Plan
Year.

            (a)   Correction of Excess Matching Contributions and After-Tax
                  Contributions After Plan Year. If the Committee determines
                  after the end of the Plan Year that the nondiscrimination
                  limitation in section 4.13 has not been met, Matching
                  Contributions and After-Tax Contributions (adjusted to reflect
                  any income or losses allocable to such excess to the date of
                  distribution) of the Highly Compensated Employees shall be
                  distributed to


                                       21
<PAGE>
                  such Highly Compensated Employees to eliminate such excess
                  Matching Contributions and After-Tax Contributions; provided,
                  however, that to the extent a Highly Compensated Employee is
                  not 100 percent vested in his or her excess Matching
                  Contributions, such nonvested excess Matching Contributions
                  (and the earnings thereon) shall be treated as a forfeiture
                  pursuant to section 6.3. The income or loss allocable to the
                  excess Matching Contributions and After-Tax Contributions
                  shall be the amount determined by multiplying the income or
                  loss allocable to the Member's accounts containing the excess
                  amounts for the Plan Year by a fraction, the numerator of
                  which is the excess amounts on behalf of the Member for the
                  Plan Year and the denominator of which is the Member's account
                  balance in the accounts containing the excess amounts as of
                  the Valuation Date of the Plan Year in which the Excess
                  Matching Contributions and After-Tax Contributions are made
                  without regard to any gain or loss allocable to such total
                  amount for the Plan Year.

                  (b) Elimination of Amount of Excess Matching Contributions and
                  After-Tax Contributions. The amount of excess Matching
                  Contributions and After-Tax Contributions for a Highly
                  Compensated Employee for a Plan Year is to be determined by
                  reducing such contributions made on behalf of Highly
                  Compensated Employees in order of their contribution
                  percentages beginning with the highest of such percentages.
                  Excess Matching Contributions and After-Tax Contributions
                  shall be allocated and returned to the Highly Compensated
                  Employees with the largest contribution percentage amounts
                  taken into account in calculating the average contribution
                  percentage test under section 4.13 of the Plan for the year in
                  which the excess arose, beginning with the Highly Compensated
                  Employee with the largest amount of such contribution
                  percentage amounts and continuing in descending order until
                  all the excess Matching Contributions and After-Tax
                  Contributions have been allocated. Such determination shall be
                  made after first determining excess Elective Contributions
                  pursuant to Section 4.12 and then determining excess Matching
                  Contributions and After-Tax Contributions pursuant to this
                  Section 4.14.

            (c)   Return of Excess Matching Contributions and After-Tax
                  Contributions. Within a Members' Account, the excess shall be
                  reduced and distributed or, if applicable, forfeited, in the
                  following order:

                  (1)   Unmatched After-Tax Contributions,

                  (2)   Vested Matching Contributions,

                  (3)   Nonvested Matching Contributions, and

                  (4)   Matched After-Tax Contributions.


                                       22
<PAGE>
                  Excess Matching Contributions and After-Tax Contributions
                  which are returned to Highly Compensated Employees pursuant to
                  this section 4.14 shall be distributed to such Employees as
                  soon as practicable, without regard to any limitation
                  otherwise imposed by law or by the provisions of this Plan.
                  Excess Matching Contributions and After-Tax Contributions and
                  income allocable thereto shall be distributed no later than
                  March 15 of the Plan Year following the Plan Year in which any
                  such excess contributions were made, but in no event shall the
                  excess contributions be distributed later than the last day of
                  the Plan Year following the Plan Year in which the
                  contributions giving rise to the excess Matching and After-Tax
                  Contributions were allocated. If Excess Matching and After-Tax
                  Contributions are distributed more than 2 1/2 months after the
                  last day of the Plan Year in which such excess amounts arose,
                  a ten (10) percent excise tax will be imposed on the Company
                  maintaining the Plan with respect to those amounts. In order
                  to satisfy Section 4.14(c), the Committee, in its discretion,
                  may forfeit nonvested Matching Contributions and the income
                  allocable thereto in lieu of distributing Excess Matching
                  Contributions.

      4.15 Application of General Nondiscrimination Requirements. In the event
that all or a portion of the Elective Contributions and After-Tax Contributions
of a Member who is a Highly Compensated Employee is distributed to such Member
under section 4.12 or 4.14, the Matching Contribution, generated by such
Elective Contributions and After-Tax Contributions, under section 4.3 (adjusted
to reflect any income or loss allocable thereto for the Plan Year) shall be
distributed to the extent such Matching Contribution is vested and shall be
treated as a forfeiture under section 6.3 to the extent it is not vested.

      4.16 Restriction on Multiple Use of Alternative Limit.

            (a)   General Rule. If the discrimination limits set forth in
                  sections 4.10 and 4.13 would otherwise be satisfied only by
                  use of the alternative limitation set forth in subsection (b)
                  of both section 4.10 and section 4.13 of the Plan, the
                  "contribution percentage" (as defined in section 4.13) of
                  Highly Compensated Employees shall be reduced in the manner
                  described in section 4.14 until the "Aggregate Limit" (as
                  defined in (b) below) is satisfied.

            (b)   Aggregate Limit. For purposes of this section 4.16, the
                  "Aggregate Limit" means the greater of

                  (1)   the sum of--

                        (A)   1.25 times the greater of the actual deferral
                              percentage or the contribution percentage of the
                              group of all Eligible Employees who are not Highly
                              Compensated Employees, and


                                       23
<PAGE>
                        (B)   the lesser of--

                              (i)   2 times the lesser of the actual deferral
                                    percentage or the contribution percentage of
                                    the group of all Eligible Employees who are
                                    not Highly Compensated Employees, or

                              (ii)  the sum of 2 percentage points and the
                                    lesser of the actual deferral percentage or
                                    the contribution percentage of the group of
                                    all Eligible Employees who are not Highly
                                    Compensated Employees; or

                  (2)   The sum of--

                        (A)   1.25 times the lesser of the actual deferral
                              percentage or the contribution percentage of the
                              group of all Eligible Employees who are not Highly
                              Compensated Employees; and

                        (B)   the lesser of--

                              (i)   2 times the greater of the actual deferral
                                    percentage or the contribution percentage of
                                    the group of all Eligible Employees who are
                                    not Highly Compensated Employees; or

                              (ii)  the sum of 2 percentage points and the
                                    greater of the actual deferral percentage or
                                    the contribution percentage of the group of
                                    all Eligible Employees who are not Highly
                                    Compensated Employees.

      4.17 Limitation on Annual Additions.

            (a)   General Limitation. Notwithstanding the foregoing provisions
                  of this Article IV, the amount of Annual Additions with
                  respect to a Member for a Plan Year shall not exceed the
                  lesser of:

                  (1)   $30,000 or, if greater, one-fourth of the defined
                        benefit dollar limitation in effect for the Plan Year
                        under Code section 415(b)(1)(A), or

                  (2)   25 percent of the Member's Limitation Compensation (as
                        defined below) for such Plan Year.

            (b)   Limitation for Member also Covered by Defined Benefit Plan. In
                  the case of a Member who is or has been covered under a
                  qualified defined benefit plan maintained by the Company or an
                  Affiliate, the Projected Annual


                                       24
<PAGE>
                  Benefit (as defined below) under such defined benefit plan
                  shall be reduced (prior to any reduction under this Plan) to
                  the extent necessary to ensure that the sum of the Defined
                  Contribution Fraction (as defined below) and the Defined
                  Benefit Fraction (as defined below) does not exceed 1.0 for
                  any Plan Year. Notwithstanding the foregoing, this subsection
                  4.17(b) shall no longer be effective for Plan Years beginning
                  on or after January 1, 2000.

            (c)   Definitions. For purposes of this section,

                  (1)   Annual Additions shall mean the sum, credited to a
                        Member's Accounts under this Plan and his or her
                        accounts under all other qualified defined contribution
                        plans maintained by the Company or by any Affiliate, of:

                        (A)   Company contributions, including Elective
                              Contributions, Matching Contributions, Qualified
                              Nonelective Contributions, and Qualified Matching
                              Contributions;

                        (B)   Employee contributions, including After-Tax
                              Contributions;

                        (C)   Amounts allocated on behalf of the Member to an
                              individual medical account under Code section
                              401(h)(6) or 419A(d); provided, however, that Code
                              section 415(c)(1)(B) and section 4.17(a)(2) of the
                              Plan shall not apply to any amount treated as an
                              Annual Addition under this subparagraph (C).

                        Restored forfeitures, repaid distributions, rollover
                        contributions, and loan payments shall not be treated as
                        Annual Additions.

                  (2)   Defined Benefit Fraction shall mean a fraction, the
                        numerator of which is the sum of the Member's Projected
                        Annual Benefits under all qualified defined benefit
                        plans (whether or not terminated) maintained by the
                        Company or by any Affiliate, and the denominator of
                        which is the lesser of:

                        (A)   1.25 times the dollar limitation of Code section
                              415(b)(1)(A) in effect for the Plan Year, or

                        (B)   1.4 times the Member's average Limitation
                              Compensation for the three consecutive Plan Years
                              that produce the highest average.

                  (3)   Defined Contribution Fraction shall mean a fraction, the
                        numerator of which is the sum of the Annual Additions to
                        the Member's Accounts under all qualified defined
                        contribution plans (whether or


                                       25
<PAGE>
                        not terminated) maintained by the Company or by any
                        Affiliate for the current Plan Year and all prior years
                        of service with the Company, and the denominator of
                        which is the sum of the lesser of the following amounts
                        determined for such year and for each prior year of
                        service with the Company:

                        (A)   1.25 times the dollar limitation in effect under
                              Code section 415(c)(1)(A) for such year, or

                        (B)   1.4 times the amount which may be taken into
                              account under section 4.17(a)(2) above.

                  (4)   Limitation Compensation shall mean the total of regular,
                        overtime, bonus, and other cash compensation paid or
                        made available to the Employee during the Plan Year for
                        services rendered to the Company during the Plan Year,
                        but not including Elective Contributions or the items
                        listed in Treasury Regulation section 1.415-2(d)(1)
                        (relating to deferred compensation, stock options, and
                        proceeds from the sale of certain securities).
                        Notwithstanding the preceding sentence, effective
                        January 1, 1998, Limitation Compensation shall include
                        any elective deferral (as defined under section
                        402(g)(3) of the Code) and any amount which is
                        contributed by the Company or an Affiliate at the
                        election of the Employee and which is not includible in
                        gross income under section 125 of the Code.

                  (5)   Projected Annual Benefit shall mean the annual benefit
                        to which the Member would be entitled under the terms of
                        a defined benefit plan, if:

                        (A)   the Member continued in covered employment until
                              his or her Normal Retirement Age (or current age,
                              if later), and

                        (B)   the Member's Limitation Compensation for the Plan
                              Year and all other relevant factors used to
                              determine such benefit remained constant until
                              such Normal Retirement Age (or current age, if
                              later).

            (d)   Procedure by Which Excess Annual Additions Shall be Reduced.
                  If Annual Additions in excess of the amount allowed under
                  section 4.17(a) erroneously have been made with respect to a
                  Member for a Plan Year, such additions shall be reduced, to
                  the extent necessary to remove such excess, first under this
                  Plan and then under any other qualified defined contribution
                  plans maintained by the Company or by any Affiliate. Any
                  reductions required pursuant to the foregoing sentence shall
                  be made against Unmatched After-Tax Contributions, and then if
                  additional reduction is necessary such reduction shall be
                  first against Unmatched


                                       26
<PAGE>
                  Elective Contributions and then against Matching
                  Contributions. The amount of the reduction attributable to
                  After-Tax Contributions or Elective Contributions shall be
                  refunded to the Member. Any reduction attributable to Matching
                  Contributions shall be held unallocated by the Trustee and
                  shall be used to offset Matching Contributions for the next
                  Plan Year and, if necessary, each succeeding Plan Year.

      4.18 Return of Contributions. Except as provided in this section 4.18, the
Company shall have no right, title, or interest in the contributions made to the
Trust under the Plan, and no part of the Trust assets shall revert to the
Company.

            (a)   Disallowance of Deductions. In the event that all or part of
                  the Company's deductions under Code section 404 for
                  contributions to the Plan are disallowed by the Internal
                  Revenue Service, the portion of the contributions to which
                  such disallowance applies shall be returned to the Company.

            (b)   Mistake of Fact. In the event that a contribution to the Plan
                  is made by a mistake of fact, then such contribution shall be
                  returned to the Company.

      Any return of contributions permitted under this section 4.18 shall be
made within one year after the disallowance of deduction or the payment of the
contribution due to a mistake of fact, as applicable. The amount returned will
not exceed the amount of the contribution reduced by any loss incurred by the
Trust.

      4.19 Rollover Amounts.

            (a)   Request for Acceptance of Rollover Contribution. Any Employee
                  may file a written request with the Committee requesting that
                  the Trustee accept a Rollover Contribution (as defined below)
                  from such Employee, either directly or from the previous plan
                  trustee. Any written request filed pursuant to this section
                  4.19 shall set forth the amount of such Rollover Contribution
                  (which must be all in U.S. dollars) and a statement,
                  satisfactory to the Committee, that such contribution
                  constitutes a Rollover Contribution within the meaning met
                  forth in subsection (c) below. The Committee, in its sole
                  discretion, shall determine whether or not such contribution
                  would constitute a Rollover Contribution as defined in
                  subsection (c) below.

            (b)   Rollover Account. Any Rollover Contribution shall become part
                  of the Trust and shall be credited to a separate fully vested
                  Rollover Account.

            (c)   Rollover Contribution. Except as provided in subsection (d)
                  below, the term "Rollover Contribution" shall mean any amount
                  which is in U.S. dollars and is attributable to a distribution
                  from another qualified plan, if such distribution meets the
                  requirements for a tax-free rollover defined in:


                                       27
<PAGE>
                  (1)   Code sections 402(c) or 403(a)(4) (relating to certain
                        distributions from an employees' trust or employee
                        annuity described in Code sections 401(a) or 403(a)), or

                  (2)   Code section 408(d)(3) (relating to certain
                        distributions from an individual retirement account or
                        an individual retirement annuity).

            (d)   Employee Contributions. In the event a contribution intended
                  as a Rollover Contribution contains nondeductible employee
                  contributions made under the provisions of another plan, such
                  contributions shall be withdrawn from the Plan as soon as the
                  mistake is detected. Any such withdrawal may be required by
                  the Committee or requested by the Employee by providing the
                  Committee with a written request setting forth the amount
                  requested and a verification of the amount of such mistaken
                  rollover.

            (e)   Investment of Rollover Account. The Rollover Account may be
                  invested only in the Investment Funds.

      4.20 Transfer Accounts. Transfers of accounts from plans qualified under
Code section 401(a) or individual retirement accounts or annuities pursuant to
Code section 408 shall not be permitted.


                                       28
<PAGE>
                  Article V. Member Accounts; Investment Funds

      5.1 Establishment of Member's Accounts. The Committee shall establish on
its books for each Member, if applicable, an Elective Contributions Account, a
Matching Contributions Account, a Matched and Unmatched After-Tax Contributions
Account, a Qualified Nonelective Contributions Account, a Qualified Matching
Contributions Account, and a Rollover Account. Each of such Accounts shall be
maintained so long as there shall be a credit balance therein. Amounts held in
Accounts on behalf of Employees shall remain invested, and shall be subject to
all adjustments under this Article, at all times except:

            (a)   periods during which a change of investment election is being
                  processed, and

            (b)   with respect to a distribution under Article VII, the period
                  following the Valuation Date as of which the value of the
                  distribution in determined.

      5.2 Investment Funds. The Investment Funds shall be established and
maintained by the Trustee as directed by the Committee. The Committee shall also
have the discretion to direct the Trustee to establish and terminate Investment
Funds from time to time as it deems appropriate.

      5.3 Investment Election By Members.

            (a)   Election. At such time and in such manner as the Committee
                  shall prescribe, and subject to the provisions of Article XIII
                  (Qualified Domestic Relations Orders), each Member, including
                  each Member who is a former Employee and the Beneficiary of a
                  deceased Member, may file with the Committee (or its
                  designated agent) such Member's direction with respect to the
                  percentage of the Member's Elective Contribution Account and,
                  if applicable, the portion of future contributions to the
                  Elective Contributions Account to be allocated to each of the
                  Investment Funds. Each Member may elect to have the amounts in
                  his or her Elective Contributions Account invested in
                  increments equal to any whole percentage of the total in such
                  Account in one or more of the Investment Funds. Except as
                  provided in subsection 5.3(c) hereof, a Member's investment
                  elections with respect to his or her Elective Contributions
                  Account shall apply equally to his or her Matching
                  Contributions Account, Matched After-Tax Contributions
                  Account, Unmatched After-Tax Contributions Account, Qualified
                  Nonelective Contributions Account and Qualified Matching
                  Contributions Account. A Member may also make an investment
                  direction with respect to his or her Rollover Account;
                  provided, however, that if the Member does not make such an
                  election, the Member's election with respect to his or her
                  Elective Contributions Account shall apply equally to his or
                  her Rollover Account, if any. Each Member is solely
                  responsible for the selection of his or her investment
                  options. The fact that an Investment Fund is available to
                  Members for


                                       29
<PAGE>
                  investment under the Plan shall not be construed as a
                  recommendation for investment in that Investment Fund.

            (b)   Change of Election; Future Contributions. Any investment
                  direction given by a Member shall be deemed to be a continuing
                  direction until changed. A Member may change his or her
                  investment elections under this paragraph (b) in increments
                  equal to any whole percentage of the total amount in his or
                  her Elective Contributions Account with respect to future
                  contributions via telephone fund transfer. A Member may elect
                  to change his or her investment election with respect to
                  future contributions via telephone transfer as often as the
                  Member chooses. The election shall be effective as of that
                  date, or as of the following date if the date of transfer is
                  not a business day or if the election is made after the time
                  which the Committee (or its designated agent) establishes as
                  the deadline for effectuating a same day election.

            (c)   Transfers of Existing Accounts Among Investment Funds. Subject
                  to subsection (d) below, a Member may elect to transfer
                  amounts in his or her Account among the Investment Funds in
                  increments equal to any whole percentage via telephone fund
                  transfer. A Member may elect to transfer amounts in his
                  Accounts among the Investment Funds via telephone transfer as
                  often as the member chooses. The transfer election shall be
                  effective as of that date, or as of the following date if the
                  date of transfer is not a business day or if the election is
                  made after the time which the Committee (or its designated
                  agent) establishes as the deadline for effectuating a same day
                  transfer. The transfer shall be based on the Member's interest
                  in the Investment Funds as of the Valuation Date immediately
                  preceding the effective date of the transfer election and the
                  fair market value of the amount subject to the transfer
                  election shall be determined and transferred an soon an
                  practicable thereafter.

            (d)   Cessation of Transfers Into and Future Contributions to
                  Terminated Investment Funds. Upon the termination of an
                  Investment Fund by the Committee pursuant to section 5.2
                  hereof, no Member may transfer amounts in his or her Accounts
                  into such a terminated Investment Fund nor shall any Member be
                  permitted to direct any future contributions to such
                  terminated Investment Fund. Each Member who immediately prior
                  to the date of the termination of an Investment Fund had a
                  portion or all of his or her Accounts invested in such
                  terminated Investment Fund shall be permitted to either
                  transfer such amounts to other Investment Funds or to continue
                  the investment of such amounts in the terminated Investment
                  Fund for a one-year period following the termination of such
                  Investment Fund. If such Member does not transfer the amounts
                  invested in the terminated Investment Fund by the end of the
                  one-year period, such Member will be deemed to have elected to
                  transfer such amounts to the T. Rowe Price Prime Reserve Fund.
                  Each Member who, as of the date of the termination of an
                  Investment Fund, has in place a continuing


                                       30
<PAGE>
                  investment direction for a portion or all of his or her future
                  contributions to be invested in the terminated Investment Fund
                  shall be permitted to amend such continuing investment
                  direction to direct such future contributions to other
                  Investment Funds as of the date such Investment Fund is
                  terminated. If any such Member does not change his or her
                  continuing investment direction by the date of such
                  termination, such Member shall be deemed to have directed such
                  future contributions to be invested in the T. Rowe Price Prime
                  Reserve Fund. The Committee shall attempt, but shall not be
                  required to, give affected Members at least 30 days prior
                  notice of the termination of an Investment Fund, the cessation
                  of transfers into and future contributions to such Investment
                  Fund, and the opportunity to redirect affected investments as
                  described in this subsection 5.3(d).

            (e)   Direction of Matching Contributions Account. Notwithstanding
                  anything contained herein to the contrary, a Member shall be
                  permitted to direct the investment of 100% of the amount in
                  his or her Matching Contributions Account into the Selective
                  Insurance Stock Fund. If a Member has made such an election
                  with respect to his or her Matching Contributions Account, he
                  or she may terminate such election with respect to future
                  contributions to such Account at any time. If such a
                  termination election is made, future contributions to the
                  Member's Matching Contributions Account shall be invested in
                  accordance with the Member's investment election with respect
                  to his or her Elective Contributions Account, as described in
                  subsection 5.3(a) hereof. If a Member has made an election to
                  invest 100% of his Matching Contributions Account in the
                  Selective Insurance Stock Fund as described in this subsection
                  5.3(e), such Member may also elect, at any time, to transfer
                  the Fair Market Value of such Account from the Selective
                  Insurance Stock Fund to the other available Investment Funds
                  by dollar amount, by number of shares, or by whole
                  percentages. A termination election or a transfer election
                  described under this subsection 5.3 shall be made via
                  telephonic request. Such a termination election or a transfer
                  election shall be effective as soon as administratively
                  practicable after the Member has made such request.

      5.4 Plan Expenses.

            (a)   Investment Fees. Expenses attributable to the management and
                  investment of each Investment Fund shall be charged against
                  the respective fund.

            (b)   Administrative Expenses. All fees paid for recordkeeping
                  services performed by a third-party service provider and all
                  reasonable expenses incurred in the administration of the Plan
                  (including, but not limited to, the fees and compensation of
                  auditors, accountants and legal counsel) shall be payable by
                  the Plan. To the extent not paid by the Plan, the expenses
                  shall be paid by the Company.


                                       31
<PAGE>
      5.5 Valuations; Allocation of Investment Earnings and Losses. Accounts and
Investment Funds shall be valued as of each Valuation Date. Earnings, gains, and
losses (realized or unrealized) for each Investment Fund shall be allocated to
the portion ("subaccount") of a Member's Accounts maintained with respect to
such Investment Fund, in the same ratio that the value of his or her subaccount
bears to the sum of the values of all Members' subaccounts maintained with
respect to such Investment Fund. For the purpose of this ratio, the value of a
sub account shall be the value of the subaccount as of the last preceding
Valuation Date, adjusted for contributions, loan repayments, transfers between
Investment Funds, distributions, withdrawals, and expenses.


                                       32
<PAGE>
                       Article VI. Vesting and Forfeitures

      6.1 Vesting in Elective Contributions Account, After-Tax Contributions
Account, Qualified Nonelective Contributions Account, Qualified Matching
Contributions Account, and Rollover Account. A Member shall have a fully vested
interest in his or her Elective Contributions Account, After-Tax Contributions
Account, Qualified Nonelective Contributions Account, Qualified Matching
Contributions Account, and Rollover Account at all times.

      6.2 Vesting in Matching Contributions Account.

            (a)   General Rule. A Member shall have a vested interest in his or
                  her Matching Contributions Account in accordance with the
                  following schedule:

<TABLE>
<CAPTION>
                                                          Vested
                   Years of Service                     Percentage
                   ----------------                     ----------
<S>                                                     <C>
                    Less than 2                              0%
                  2 but less than 3                         30
                  3 but less than 4                         40
                  4 but less than 5                         50
                  5 but less than 6                         75
                      6 or more                            100
</TABLE>

            (b)   Accelerated Vesting. Notwithstanding anything to the contrary
                  above, a member shall have 100 percent vested interest in the
                  value of his or her Matching Contributions Account if:

                  (1)   the Member is an Employee at any time on or after
                        attaining Normal Retirement Age; or

                  (2)   the Member dies while an Employee.

      6.3 Forfeitures. Any portion of a Member's Matching Contributions Account
in which such Member's interest is not fully vested under section 6.2 shall
constitute a forfeiture immediately following a One-Year Period of Severance,
except to the extent provided in section 6.4. All forfeited amounts shall be
used to reduce the Matching Contributions made in accordance with section 4.3
and/or to pay administrative expenses of the Plan.

      6.4 Reinstatement of Forfeited Amounts. If a Member terminated employment
before his interest in his Matching Contributions Account is fully vested, that
portion which is not vested shall be forfeited as of the last day of the Plan
Year in which (i) he receives a distribution of the nonforfeitable portion of
his Vested Balance or (ii) experiences five (5) consecutive One-Year Periods of
Severance in accordance with Section 6.3. If the value of the Member's vested
Matching Contributions Account is zero, the Member shall be deemed to have
received a distribution of such Vested Balance. In the case of a Member who is
deemed to have received a


                                       33
<PAGE>
distribution and is rehired before he incurs five (5) consecutive One-Year
Periods of Severance, his forfeited Matching Contributions Account shall be
restored upon reemployment.

      If a Member who has received a distribution of the nonforfeitable portion
of his Vested Balance is rehired before he incurs five (5) consecutive One-Year
Periods of Severance, he may repay to the Trustee an amount equal to the
distribution amount. The Member must make repayment prior to the earlier of the
date he would incur five (5) consecutive One-Year Periods of Severance after
such distribution, or five (5) years after the date on which he is reemployed.
Such repayment shall be credited to his Vested Balance and an additional amount
equal to the forfeited portion of his Matching Contributions Account will either
be allocated to the Member's Vested Balance out of current forfeitures or
contributed by the Company as of the last day of that Plan Year. It shall be the
duty of the Company to give timely notification to any rehired Employee if such
Employee is eligible to make a repayment, of his right to make such a repayment,
and of the consequences of not making such repayment. Any amount reinstated
pursuant to this Section shall be invested in the Investment Funds in the
proportions selected in the most recent direction filed with the Committee
pursuant to Section 5.3 of the Plan. Such reinstatement shall be made from
forfeitures and, if there are not sufficient forfeitures, by an additional
Company contribution for the Plan Year of restoration. Any amount reinstated
pursuant to this section shall be invested in the Investment Funds in the
proportions selected in the most recent direction filed with the Committee
pursuant to section 5.3 of the Plan.

      6.5 Calculation of Vested Interest Upon Distribution or Withdrawal. If a
Member with a partially vested interest in his or her Matching Contributions
Account receives a distribution or withdrawal, other than a cash-out
distribution described in Section 6.4, and at such time the Member has not
incurred five consecutive One-Year Periods of Severance, then the portion of
such Member's Matching Contributions Account which is later distributable shall
be determined as follows:

      P (AB+[R x D]) - ( R x D ).

            (a)   P is the Member's vested percentage as of the later event of
                  distribution or withdrawal,

            (b)   AB is the adjusted balance of the Member's Matching
                  Contributions Account,

            (c)   D is the amount distributed or withdrawn from the Member's
                  Matching Contributions Account upon the earlier event, and

            (d)   R is AB divided by (Matching Contributions Account balance at
                  the time of the earlier event minus D).


                                       34
<PAGE>
                           Article VII. Distributions

      7.1 Normal or Early Retirement. A Member whose employment with the Company
terminates on or after such Member's Normal Retirement Age or Early Retirement
Age for any reason other than death or Disability shall be entitled to receive
the entire balance of such Member's Accounts in accordance with the provisions
of section 7.5, subject to Article XIII (Qualified Domestic Relations Orders).

      7.2 Disability Retirement. A Member whose employment with the Company
terminates on account of a Disability shall be entitled to receive the entire
balance of such Member's Accounts in accordance with the provisions of section
7.5, subject to Article XIII (Qualified Domestic Relations Orders).

      7.3 Distribution Upon Death of Member.

            (a)   Death Prior to Annuity Starting Date. In the event of a
                  Member's death prior to such Member's Annuity Starting Date, a
                  distribution of the value of the Member's Account shall be
                  made to such Member's Beneficiary in accordance with section
                  7.5(a). Distribution shall be made as soon as practicable
                  following the Member's death; provided, however, that if the
                  designated Beneficiary is the Member's surviving spouse, the
                  payment of the benefit under this section need not occur until
                  the date on which the Member would have attained his Normal
                  Retirement Age.

            (b)   Death After Annuity Starting Date. In the event of a Member's
                  death after such Member's Annuity Starting Date and after such
                  Member has received a lump sum payment of his or her Vested
                  Balance, no additional benefits shall be paid from the Plan on
                  account of such Member's death.

      7.4 Distributions Upon a Termination of Employment for Other Causes. A
Member whose employment with the Company terminates prior to Early Retirement
Age for reasons other than death or Disability shall be entitled to receive the
Vested Balance of his or her Accounts following such termination in accordance
with the provisions of section 7.5, subject to Article XIII (Qualified Domestic
Relations Orders). Immediately following such a Termination of Employment the
nonvested portion of such Member's Accounts shall be forfeited pursuant to
section 6.4.

      7.5 Form and Timing of Distributions.

            (a)   Form. Whenever a Member's Accounts become distributable
                  pursuant to sections 7.1, 7.2, 7.3, or 7.4 to such Member or
                  such Member's designated Beneficiary, distribution of said
                  Accounts shall be made by the payment of the amount
                  distributable in one lump sum payment in cash. Notwithstanding
                  the above, if any portion of the Member's Accounts is invested
                  in the Selective Insurance Stock Fund, the Member or the
                  Member's designated Beneficiary may elect to receive a
                  distribution in kind of the whole shares of Selective
                  Insurance Group, Inc. common stock


                                       35
<PAGE>
                  held in such Accounts plus cash equal to the Fair Market Value
                  of any fractional shares of Selective Insurance Group, Inc.
                  common stock to which such Member or Member's designated
                  Beneficiary would otherwise be entitled.

            (b)   Timing. Whenever during any Plan Year the amount standing to
                  the credit of a Member's Accounts becomes distributable
                  pursuant to sections 7.1, 7.2, 7.3, or 7.4, the Committee,
                  subject to subsection (c), shall direct that distribution of
                  the Member's Accounts be made as soon as practicable and that
                  any additional amount credited to a Member for the year of
                  retirement, Disability, death, or other Termination of
                  Employment be distributed at such later time as that amount is
                  ascertained. Distribution may commence less than 30 days after
                  the participant is advised that he can elect an immediate
                  distribution, provided that:

                  (1)   the Committee clearly informs the Participant that the
                        Participant has a right to a period of at least 30 days
                        after receiving the notice to consider the decision of
                        whether or not to elect a distribution, and

                  (2)   the Participant, after receiving the notice,
                        affirmatively elects an immediate distribution.

            (c)   Deferral.

                  (1)   Deferral to Normal Retirement Age. If the balance of a
                        Member's Accounts to be distributed prior to the Member
                        attaining Normal Retirement Age exceeds $3,500, or at
                        the time of any previous distribution or withdrawal has
                        ever exceeded $3,500, and the Member (or surviving
                        spouse, if the Member in deceased) does not consent to
                        have the distribution of the Member's Account made as
                        soon as practicable after the Member terminates
                        employment, dies, or incurs a Disability, such Accounts
                        shall not be distributed in part until such time as the
                        Member (or surviving spouse, if applicable) elects
                        distribution, but no later than such member's Normal
                        Retirement Age. Effective May 1, 1998, the $3,500
                        threshold in the preceding sentence shall be increased
                        to $5,000, and whether a Member's Account balance
                        exceeds the threshold shall be determined at the time of
                        distribution, without regard to whether the Member's
                        Account balance has ever exceeded the threshold at the
                        time of any previous distribution or withdrawal.

                  (2)   Deferral for 12 Months. Any Member may elect to defer
                        receipt of his or her Accounts for up to 12 months,
                        subject to the requirements in section 7.6(b).


                                       36
<PAGE>
            (d)   Investment During Deferral Period. Accounts remaining in the
                  Plan after the Member's Termination of Employment or death
                  shall be invested in accordance with the Member's (or
                  Beneficiary's) instructions.

            (e)   Direct Rollover to Another Plan or IRA. Any Distributee may
                  elect in writing, on the form or forms approved by the
                  Committee, to make a Direct Rollover to an Eligible Retirement
                  Plan; provided that the amount of the Eligible Rollover
                  Distribution for the calendar year is or is reasonably
                  expected to be at least $200 and, if only a portion of the
                  Eligible Rollover Distribution is to be rolled over, the
                  amount of the direct rollover is at least $500. A Direct
                  Rollover of an Eligible Rollover Distribution by a Distributee
                  may not be made to more than one Eligible Retirement Plan. If
                  a Distributee fails to make a Direct Rollover election before
                  the deadline chosen by the Committee, the Plan shall
                  distribute the amount as if a Direct Rollover election with
                  respect to the distribution had not been made. This Plan shall
                  accept Direct Rollovers from another Eligible Retirement Plan.

                  For purposes of this Section 7.5(e), the following definitions
                  shall apply:

                  (i) Distributee: Any Member, Beneficiary who is the surviving
                  spouse of the Member, or alternate payee (under Article XIII)
                  who is the spouse or former spouse of the Member, and who
                  receives a distribution which is an Eligible Rollover
                  Distribution.

                  (ii) Direct Rollover: A payment by the Plan to the Eligible
                  Retirement Plan specified by the Distributee.

                  (iii) Eligible Retirement Plan: An individual retirement
                  account described in Code section 408(a), an individual
                  retirement annuity described in Code section 408(b), an
                  annuity plan described in Code section 403(a), or a qualified
                  trust described in Code section 401(a), 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.

                  (iv) Eligible Rollover Distribution: 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 Beneficiary, or the
                  specified period of ten years or more; any distribution to the
                  extent such distribution is required under Code section
                  401(a)(9); and the portion of any distribution that is not
                  includible in gross income (determined without regard to the
                  exclusion for net unrealized


                                       37
<PAGE>
                  appreciation with respect to employer securities). In addition
                  to the foregoing, effective January 1, 1999, an Eligible
                  Rollover Distribution shall not include any hardship
                  distribution described in section 401(k)(2)(B)(i)(IV) of the
                  Code.

      7.6 Minimum Distribution Requirements. Notwithstanding any other provision
of the Plan to the contrary the following rules shall apply.

            (a)   Basic Rule. Unless the Member otherwise elects in writing,
                  distribution to such Member shall be made not later than the
                  sixtieth day after the close of the Plan Year in which occurs
                  the latest of the following events:

                  (1)   the Member attains his or her Normal Retirement Age;

                  (2)   the Member attains the tenth anniversary of the date on
                        which the Member became a Member under the Plan; or

                  (3)   the Member's Termination of Employment.

            (b)   Required Distribution Date. Notwithstanding anything to the
                  contrary in this Article VII, payment of the Vested Balance in
                  the Plan to a Member who is a "5 percent owner" (as defined in
                  Code section 416(i)(1)(B)(i)) shall be made by April 1 of the
                  calendar year following the calendar year in which the Member
                  attains age 70 1/2 regardless of whether he or she is still
                  employed by the Company. In the case of a Member who is not a
                  5 percent owner, the Member's Vested Balance in the Plan shall
                  be paid not later than April 1 following the calendar year in
                  which such Member attains age 70 1/2, regardless of when the
                  Member terminates employment. Notwithstanding the foregoing,
                  effective January 1, 1999, the required beginning date for
                  Members that are five-percent (5%) owners who attain age 70
                  1/2 on or after January 1, 1996, will be the April 1 of the
                  calendar year following the calendar year in which the Member
                  attains age 70 1/2. The required beginning date for Members
                  (other than five-percent (5%) owners) who attain age 70 1/2 on
                  or after January 1, 1999 will be the later of the April 1 of
                  the calendar year following the calendar year in which the
                  participant attains age 70 1/2 or retires.

                  The following additional provisions shall apply to years prior
                  to January 1, 1999:

                  (i) any Member attaining age 70 1/2 in years after 1995 may
                  elect by April 1 of the calendar year following the year in
                  which he attained age 70 1/2 (or by December 31, 1997 in the
                  case of a Member who attained age 70 1/2 in 1996) to defer
                  distributions until the calendar year following the calendar
                  year in which he retires. If no such election is made, the
                  Member will begin receiving distributions by the April 1 of
                  the calendar year following the year in which he attained age
                  70 1/2 (or by December 31, 1997 in the case of a Member
                  attaining age 70 1/2 in 1996); and


                                       38
<PAGE>
                  (ii) any Member who attained age 70 1/2 in years prior to 1997
                  may elect to stop distributions and recommence by the April 1
                  of the calendar year following the year in which he retires.

            (c)   Periodic Benefit Payments. Consistent with Code section
                  401(a)(9), a Member's entire interest in the Plan shall be
                  distributed to such Member, beginning not later than the date
                  required pursuant to subsections (a) and (b) above, over the
                  life of the Member (or over the joint lives of the Member and
                  the Member's designated Beneficiary) or in a payment or series
                  of payments over a period not extending beyond the life
                  expectancy of the Member (or the joint life expectancies of
                  the Member and the Member's designated Beneficiary).

            (d)   Required Distribution Where Employee Dies Before Entire
                  Interest is Distributed. Consistent with Code section
                  401(a)(9), if the distribution of a Member's benefits has
                  begun and the Member dies before the Member's entire interest
                  has been distributed, the remaining portion of the Member's
                  benefits will be distributed at least as rapidly as under the
                  method of distribution being used as of the date of the
                  Member's death.

            (e)   Five-Year Rule. Consistent with Code section 401(a)(9), if a
                  Member dies prior to the distribution of the Member's benefit
                  without having designated a person as his or her Beneficiary
                  (other than a deemed designation of the spouse as provided in
                  section 3.8), then distribution of the Member's Account shall
                  be made within five years after the Member's death.

            (f)   Incidental Death Benefit. Consistent with Code section
                  401(a)(9), the minimum amount which must be distributed each
                  calendar year to the Member shall be the amount determined by
                  dividing the balance in the Member's Account the "applicable
                  divisor." The "applicable divisor" shall be determined under
                  regulations issued by the Secretary of the Treasury under the
                  minimum incidental death benefit requirements of Code section
                  401(a)(9).

      Distributions hereunder will be made in accordance with Code section
401(a)(9) and the regulations thereunder, including regulation section
1.401(a)(9)-2, which are incorporated by reference herein. With respect to
distributions under the Plan made for calendar years beginning on or after
January 1, 2002, the Plan will apply the minimum distribution requirements of
Section 401(a)(9) of the Internal Revenue Code in accordance with the
regulations under Section 401(a)(9) that were proposed on January 17, 2001,
notwithstanding any provision of the Plan to the contrary. This amendment shall
continue in effect until the end of the last calendar year beginning before the
effective date of final regulations under Section 401(a)(9) or such other date
as may be specified in guidance published by the Internal Revenue Service.


                                       39
<PAGE>
      7.7 Withdrawals of Elective Contributions.

            (a)   General Rule. Subject to the provisions of Article XIII
                  (Qualified Domestic Relations Orders) and section 7.11, during
                  employment with the Company a Member may withdraw all or any
                  part of the amount credited to such Member's Elective
                  Contributions Account, other than that amount which represents
                  earnings credited to such Account, but only upon a
                  determination by the Committee that the Member has suffered a
                  financial hardship within the meaning of final regulations
                  issued by the Internal Revenue Service under Code section
                  401(k). Such withdrawal shall not exceed the amount necessary
                  to meet the need created by such hardship. The minimum amount
                  of withdrawal shall be $1,000.

            (b)   Deemed Immediate and Heavy Financial Need. A distribution will
                  be deemed to be made on account of an immediate and heavy
                  financial need of the Member if the distribution in on account
                  of--

                  (1)   medical expenses described in Code section 213(d)
                        incurred by the Member, the Member's spouse, or any
                        dependents of the Member (as defined in Code section
                        152);

                  (2)   the purchase (excluding mortgage payments) of the
                        principal residence of the Member;

                  (3)   tuition and related fees for the next twelve months of
                        post-secondary education for the Member, the member's
                        spouse, children, or dependents;

                  (4)   to prevent the eviction of the Member from his or her
                        principal residence or to prevent foreclosure on the
                        mortgage of the member's principal residence.

            (c)   Distribution Deemed Necessary to Satisfy Financial Need. A
                  distribution pursuant to this section 7.7 will be deemed
                  necessary to satisfy an immediate and heavy financial need of
                  a Member if all of the following requirements are met.

                  (1)   The distribution is not in excess of the amount required
                        to relieve the financial need of the Member. The amount
                        of the financial need may include any amounts necessary
                        to pay any federal, state, or local income taxes or
                        penalties reasonably anticipated to result from the
                        distribution.

                  (2)   The Member has obtained all distributions, other than
                        hardship distributions, and all nontaxable (at the time
                        of the loan) loans currently available under all plans
                        maintained by the Company.


                                       40
<PAGE>
                  (3)   The Plan and all other plans maintained by the Company
                        limit the Elective Contributions for the next Plan Year
                        to the applicable limit under section 4.10 for that year
                        minus the Elective Contributions for the year of the
                        hardship distribution under this section 7.7.

                  (4)   The Member is prohibited, under the terms of the Plan or
                        an otherwise legally enforceable agreement, from making
                        Elective Contributions and After-Tax Contributions to
                        the Plan and all other plans maintained by the Company
                        for at least 12 months after receipt of the hardship
                        distribution under this section 7.7.

      7.8 Withdrawals from Unmatched After-Tax Contributions Account. Subject to
the provisions of Article XIII (Qualified Domestic Relations Orders), a Member
may withdraw the amount in his or her Unmatched After-Tax Contributions Account
provided the following requirements are met:

            (a)   the minimum withdrawal is $1,000,

            (b)   only one withdrawal under this section 7.8 shall be permitted
                  each Plan Year, and

            (c)   no withdrawal under this section 7.8 shall be permitted unless
                  the Member has been a Member for at least twenty-four
                  consecutive months.

      7.9 Withdrawal, on Account of Serious Financial Hardship from All Accounts
Except Elective Contributions Account. Subject to the provisions of Article XIII
(Qualified Domestic-Relations Orders), a Member may withdraw all or any portion
of the Vested Balance in his or her Matched After-Tax Contributions Account,
Unmatched After-Tax Contributions Account, and Rollover Account plus the Vested
Balance in such Member's Matching Contributions Account in the event of a
Serious Financial Hardship. The minimum withdrawal in $1,000. For purposes of
thin section 7.9 only, "Serious Financial Hardship" shall mean the occurrence of
any event of sufficient severity that a Member or his or her family is clearly
endangered by present or impending want or privation, as determined by the
Committee. Such Serious Financial Hardship must be shown by positive evidence
submitted to the Committee that the hardship is of sufficient magnitude to
impair the Member's financial security. Withdrawals shall be determined in a
consistent and nondiscriminatory manner, and shall not affect the Member's right
under the Plan to make additional withdrawals or continue to be an active
Member.

      7.10 Withdrawals After Age 59 1/2. Subject to the provisions of Article
XIII (Qualified Domestic Relations Orders) and section 7.11, a Member who has
attained age 59 1/2 may withdraw all or any part of the amounts credited to such
Member's Elective Contributions Account, Matching Contributions Account, Matched
After-Tax Contributions Account, Unmatched After-Tax Contributions Account,
Qualified Nonelective Contributions Account, Qualified Matching Contributions
Account, and Rollover Account.


                                       41
<PAGE>
      7.11 Provisions Applicable to All Withdrawals.

            (a)   General. Payment of a withdrawal under sections 7.7, 7.8, 7.9,
                  and 7.10 shall be made as soon as practicable after the
                  request for withdrawal is made to the Committee.

            (b)   Allocation Among Investment Funds. All withdrawals shall be
                  made in cash and shall be allocated to the Investment Funds in
                  which the Members' Accounts are invested in accordance with
                  the Member's instructions. Account balances available for
                  withdrawal shall be valued as of the Valuation Date next
                  following the date the withdrawal is approved by the
                  Committee.

            (c)   Coordination with Loan Limitations. No withdrawal shall be
                  permitted which reduces the Member's Vested Balance below the
                  amount permitted under section 8.2(b).


                                       42
<PAGE>
                         Article VIII. Loans to Members

      8.1 Committee Authorized to Make Loans. Upon the application of an
eligible Member, the Committee may direct the Trustee to make a cash loan to the
Member. A Member is eligible to apply for a loan if the Member is an Employee.
The terms of a loan shall be determined by the Committee, subject to the
provisions of this Article and section 13.6 (regarding Qualified Domestic
Relations Orders). Loans shall be granted on a reasonably equivalent basis,
taking into account an applicant's creditworthiness. Any loans made under this
Article VIII shall be made as soon as administratively practicable and the
maximum amount of such loan shall be based upon the valuation of the Member's
Accounts as of the Valuation Date immediately preceding the date of such loan.

      8.2 Amount and Number of Loans.

            (a)   Minimum Amount. The minimum amount of any loan shall be
                  $1,000.

            (b)   Maximum Amount. The maximum amount of any loan together with
                  the amount outstanding on the date of the loan from any other
                  loans under this Plan shall not exceed the lesser of:

                  (1)   $50,000 reduced by the excess (if any) of:

                        (A)   the highest outstanding balance of loans from the
                              Plan during the one-year period ending on the day
                              before the date the loan is made, over

                        (B)   the outstanding balance of loans from the Plan on
                              the date on which the loan is made,

                              or

                  (2)   One-half of the Member's Vested Balance.

      If a Member is also covered under another plan maintained by the Company
or an Affiliate which meets the requirements of Code sections 401(a) and 501(a),
the limitations of paragraphs (1) and (2) shall be applied as though all such
plans are one plan.

            (c)   Number of Loans. Only one loan may be made each Plan Year and
                  no more than one loan may be outstanding at any time.

            (d)   Account. All loans shall be made from funds in the Member's
                  Elective Contributions Account and the Member's Rollover
                  Account.

      8.3 Interest. Each loan shall bear such reasonable rate of interest as the
Committee may determine. In determining such rate of interest, the interest rate
being charged by persons in the business of lending monies for loans made under
similar circumstances shall be considered.


                                       43
<PAGE>
      8.4 Term. Except as provided below, loans shall be for the period
requested by the Member but shall not exceed five years, except in the case of a
purchase of a primary residence, in which case the term of the loan shall not
exceed fifteen years.

      8.5 Repayment.

            (a)   Loans shall be repaid in substantially equal installments, at
                  least quarterly, representing a combination of interest and
                  principal, sufficient to amortize the loan during its term.
                  Repayment shall commence as soon as practicable after the loan
                  in made.

            (b)   Payments by active Employees shall be made through payroll
                  withholding or other means acceptable to the Committee in its
                  sole and absolute discretion.

            (c)   Each payment shall be allocated proportionately to the
                  Investment Funds in which the Members' Accounts are invested
                  at the time the payment is received by the Trustee.

            (d)   Notwithstanding the foregoing, loan repayments shall be
                  suspended under this Plan as permitted under Section 414(u)(4)
                  of the Code.

      8.6 Loan Treated As Member's Investment.

            (a)   Loan proceeds shall be paid from the Member's Account. A
                  promissory note of the same face value shall then be credited
                  as an asset of the Member's Account.

            (b)   Repayments received by the Trustee shall be transferred to the
                  Plan as soon as practicable.

      8.7 Documentation. No loan under this Article shall be made until the
Member has completed the appropriate application and submitted to the Committee
the following:

            (a)   A loan application setting forth such information as the
                  Committee deems appropriate.

            (b)   A promissory note designating the Plan as payee, stating the
                  amount, term, repayment schedule, interest rate, and other
                  conditions consistent with this Article.

            (c)   A Member's authorization and direction that the Company shall
                  withhold each payroll period, and remit to the Trustee, the
                  installment amounts determined under section 8.5(a). This
                  paragraph shall not apply to Members who are former Employees
                  and "parties in interest" within the meaning of section 3(14)
                  of the Act.


                                       44
<PAGE>
            (d)   A security agreement granting a conditional security interest
                  in the borrowing Member's Account, in an amount equal to the
                  principal of the loan at the time the loan is originated to
                  the Plan as security for repayment of the loan.

      8.8 Default. If a Member fails to make payment on a loan when due and such
failure continues for sixty days thereafter, or in the event of the Member's
Termination of Employment with the Company, bankruptcy, impending bankruptcy,
insolvency, or impending insolvency, the Committee may declare the loan to be in
default, in which case the entire unpaid balance shall become due and payable.
The Trustee may pursue collection of the debt by any means generally available
to a creditor where a promissory note is in default. If the entire amount due in
not paid by the Member within 30 days following the declaration of default and
if the Member has either incurred a financial hardship within the meaning of
section 7.7 or has had a Termination of Employment with the Company, the Trustee
may exercise its security interest by reducing the Member's Vested Balance by
the amounts due and by amounts withheld for the payment of taxes payable in
connection with such reduction. Upon such exercise the note shall be canceled to
the extent of such reduction.


                                       45
<PAGE>
                     Article IX. Administration of the Plan

      9.1 Committee. The Plan shall be administered by a Committee appointed by
the Board. The Committee shall be composed of as many members (not less than
three) as may be appointed from time to time and shall hold office at the
pleasure of the Board. The Committee shall be the administrator of the Plan, and
the Committee shall be a fiduciary under the Plan as a named fiduciary in
accordance with the Act. The Committee may appoint or designate other
fiduciaries hereunder and may allocate fiduciary responsibilities among them,
including members of the Committee.

      9.2 Compensation and Expenses. A member of the Committee shall serve
without Compensation for services as such if he or she is an Employee of the
Company. He or she may receive reimbursement by the Company of expenses properly
and actually incurred. All expenses incurred by the Committee, or a member
thereof, in carrying out the duties of the Committee shall be paid by the
Company.

      9.3 Manner of Action. A majority of the members of the Committee at the
time in office shall constitute a quorum for the transaction of business. All
resolutions adopted and other actions taken by the Committee at any meeting
shall be by vote of a majority of those present at any such meeting. Upon
concurrence in writing of a majority of the members at the time in office,
action of the Committee may be taken without a meeting.

      9.4 Chairman, Secretary, and Employment of Specialties. The members of the
Committee shall elect one of their number as Chairman and shall elect a
Secretary who may, but need not, be a member of the Committee. They may
authorize one or more of their number or any agent to execute or deliver any
instrument or instruments in their behalf and may employ at the Company's or
Trust's expense such counsel, auditors, and other specialists and such clerical,
actuarial, and other services as they may require in carrying out the provisions
of the Plan.

      9.5 Records. All resolutions, proceedings, acts, and determinations of the
Committee shall be recorded by the Secretary thereof or under his supervision,
and all such records, together with such documents and instruments as may be
necessary for the administration of the Plan, shall be preserved in the custody
of the Secretary.

      9.6 Administration. The Committee shall be responsible for the
administration of the Plan, including instructing the Trustee concerning all
payments which should be made out of the Trust Fund pursuant to the provisions
of the Plan. The Committee shall have all such powers as may be necessary to
carry out the provisions hereof and may, from time to time, establish rules for
the administration of the Plan and the transaction of the Plan's business. In
making any such determination or rule, the Committee shall pursue uniform
policies as from time to time established by the Committee. The Committee shall
have the exclusive right to make any finding of fact necessary or appropriate
for any purpose under the Plan including, but not limited to, the determination
of the eligibility for and the amount of any benefit payable under the Plan. The
Committee shall have the exclusive right to interpret the terms and provisions
of the Plan and to determine any and all questions arising under the Plan or in
connection with the administration thereof, including, without limitation, the
right to remedy or resolve possible ambiguities, inconsistencies, or omissions,
by general rule or particular decision. The


                                       46
<PAGE>
Committee shall make, or cause to be made, all reports or other filings
necessary to meet the reporting and disclosure requirements of the Act which are
the responsibility of "plan administrators" under the Act. To the extent
permitted by law, all findings of fact, determinations, interpretations, and
decisions of the Committee shall be conclusive and binding upon all persons
having or claiming to have any interest or right under the Plan.

      9.7 Application for Benefits. Each person eligible for a benefit under the
Plan shall apply for such benefit by signing an application form to be furnished
by the Committee. Each such person shall also furnish the Committee with such
documents, evidence, data, or information in support of such application as it
considers necessary or desirable.

      9.8 Appeals from Denial of Claims. If any claim for benefits under the
Plan is wholly or partially denied, the claimant shall be given notice in
writing of such denial within a reasonable period of time, setting forth the
following information:

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

            (b)   specific reference to pertinent Plan provisions on which the
                  denial is based;

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

            (d)   an explanation that a full and fair review by the Committee of
                  the decision denying the claim may be requested by the
                  claimant or his authorized representative by filing with the
                  Committee, within ninety days after such notice has been
                  received, a written request for such review; and

            (e)   If such request in so filed, the claimant or his authorized
                  representative may review pertinent documents and submit
                  issues and comments in writing within the same ninety-day
                  period specified in paragraph (d) above.

      The decision of the Committee shall be made promptly, and not later than
sixty days after the Committee's 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 the request for review. If the claim in denied on appeal, in
whole or in part, the claimant shall be given a copy of the decision promptly.
The decision shall be in writing and shall include specific reasons for the
denial, written in a manner calculated to be understood by the claimants and
specific references to the pertinent Plan provisions on which the denial is
based.

      9.9 No Enlargement of Employee Rights. Neither the establishment of the
Plan, nor anything contained herein or in the Trust Agreement nor any
modification thereof, nor the operation of the Trust Fund or any account, nor
the payment of any benefits, shall be deemed to give or be construed as
conferring any legal or equitable rights upon any Employee, Member, Beneficiary,
or other person whomsoever, unless such right shall be specifically provided for
in


                                       47
<PAGE>
the Plan or Trust Agreement, or as giving any Employee, Member, or other person
whomsoever the right to require the Company either to continue his employment or
to continue the Plan or the making of contributions thereunder to the Trust, nor
shall it interfere with the right of the Company to discharge or retire any
Employee, Member, or other person whomsoever, at any time, without regard to the
effect which such treatment might have upon him as a Member in the Plan, and all
Employees and Members shall remain subject to discharge to the same extent as if
this Plan had never been adopted.

      9.10 Expenses of Administration. The compensation of the Trustee, any
reasonable and proper attorney's fee incurred in the administration of the Trust
Fund, or other reasonable and proper Plan expenses may be paid by the Trust, to
the extent that they are not paid directly by the Company.

      9.11 Facility of Distribution. In the event that the Committee shall find
that a Member or any other person entitled to any distribution under the Plan is
unable to care for his affairs because of illness or accident or any other
reason, any such distributions due may, unless claim shall have been made
therefor by a duly appointed guardian, conservator, or other legal
representative, be made at the direction of the Committee to the spouse, child,
parent, or other blood relative or to any person deemed by it to have incurred
expenses for such Member or other person entitled to distributions under the
Plan, and such distribution so made shall be a complete discharge of the
liabilities of the Plan therefor.

      9.12 Indemnity. The Company shall indemnify each member of the Committee
(which, for purposes of this subsection, includes any Employee to whom the
Committee has delegated fiduciary duties) against any and all claims, losses,
damages, and expenses, including counsel fees, incurred by the Committee or
member and any liability, including any amounts paid in settlement with the
Company's approval, arising from the member's or Committee's action or failure
to act, except when the same is judicially determined to be attributable to the
gross negligence or willful misconduct of such member. The right of indemnity
described in the preceding sentence shall be conditioned upon (a) the timely
receipt of notice by the Company of any claim asserted against the Committee
member, which notice, in the event of a lawsuit, shall be given within ten days
after receipt by the Committee member of the complaint, and (b) the receipt by
the Company of an offer from the Committee member of an opportunity to
participate in the settlement or defense of such claim.

      9.13 Non-Alienation. No benefit payable at any time under the Plan shall
be subject to the debts or liabilities of a Member or his Beneficiary. Any
attempt to alienate, sell, transfer, assign, pledge, or otherwise encumber any
such benefit, whether presently or thereafter payable, shall be void. No benefit
under the Plan shall be subject in any manner to alienation, sale, transfer,
assignment, pledge, attachment, garnishment, or encumbrance of any kind, except
as provided under Internal Revenue Code sections 401(a)(13) or 414(p) or under
Article XIII of the Plan.


                                       48
<PAGE>
                    Article X. Amendment; Termination; Merger

      10.1 Right to Amend or Terminate. The Company reserves the right at any
time and from time to time to amend this agreement, or discontinue or terminate
the Plan by delivering to the Committee a copy of an amendment or appropriate
Board resolution of discontinuance or termination certified by an officer of the
Company; provided, however, that except as provided in section 10.2, the Company
shall have no power to amend or terminate this agreement in such manner as would
cause or permit any of the Trust assets to be diverted to purposes other than
for the exclusive benefit of the Employees of the Company or their Beneficiaries
or would cause any reduction in the amount theretofore credited to any Member or
would cause or permit any portion of the Trust assets to revert to or become the
property of the Company; and provided, further, that the duties or liabilities
of the Committee shall not be changed without its written consent.

      10.2 Amendment for Tax Exemption. The Company reserves the right to amend
this agreement in such manner as may be necessary or advisable so that said Plan
may continue to qualify as a qualified employee benefit plan under the
provisions of the Code as now in force or as it may hereafter be changed or
amended, and any such amendment may be made retroactively.

      10.3 Terminations and Partial Terminations. In the event of, and upon, the
Company's termination or partial termination of the Plan or the Company's
complete discontinuance of contributions, the interest in the Accounts of each
Member on the date of such termination or complete discontinuance (or, in the
case of a partial termination, the Members affected thereby) shall vest. For the
purposes hereof "partial termination" shall have the same meaning as under
section 1.411(d)-2 of the Treasury Regulations.

      10.4 Mergers; Consolidations; Transfers of Assets. The Plan shall not be
merged or consolidated with, nor shall any of its assets or liabilities be
transferred to, another plan unless, immediately after such merger,
consolidation or transfer, each Member and Beneficiary shall be entitled to
receive a benefit which is at least as large as the benefit he or she would have
been entitled to receive if the Plan had been terminated immediately prior to
such merger, consolidation, or transfer.


                                       49
<PAGE>
                          Article XI. Leased Employees

      11.1 Treatment of Leased Employees Under the Plan.

            (a)   Eligibility. Solely for purposes of determining when an
                  individual is eligible to participate in the Plan, hours of
                  service as a Leased Employee (as defined below) shall be
                  treated as Hours of Service as an Employee.

            (b)   Vesting. For purposes of determining when an individual vests
                  in amounts in his or her Matching Contributions Account, the
                  individual shall be treated as an Employee in the active
                  service of the Company as of the close of a Plan Year if he or
                  she is performing services as a Leased Employee as of the
                  close of such plan Year.

            (c)   Limitation on Annual Additions. For purposes of determining
                  the maximum Annual Additions which may be contributed to this
                  Plan on behalf of a Leased Employee for any Plan Year:

                  (1)   any contributions or benefits which are provided under a
                        plan maintained by a Leasing Organization (as defined
                        below) and which are attributable to an individual's
                        service as a Leased Employee performed for the Company
                        or a Related Person (as defined below) shall be treated
                        as provided by the recipient of such services, and

                  (2)   Limitation Compensation shall include the amounts
                        specified in section 4.17(c)(4) which are received by
                        the individual for his or her service as a Leased
                        Employee.

            (d)   Eligibility to Participate. A Leased Employee shall not be
                  eligible to become a Member under the Plan unless and except
                  to the extent that he or she shall qualify as an Eligible
                  Employee without regard to the provisions of this Article XI.

      11.2 Service Not Counted. This Article XI shall not apply to any Leased
Employee for the entire period during which such individual is covered by a
Leasing Organization Pension Plan (as defined below), unless Leased Employees
constitute more than 20 percent of the Company's Nonhighly Compensated Work
Force (as defined below).

      11.3 Definitions. For purposes of this Article--

            (a)   Leased Employee shall mean any individual who provides
                  services for the Company if:

                  (1)   such services are provided pursuant to an agreement
                        between the Company and a Leasing Organization;

                  (2)   such individual is not a common law employee of the
                        Company;


                                       50
<PAGE>
                  (3)   such individual has performed such services as a Leased
                        Employee for the Company and any Related Person on a
                        substantially full-time basis for a period of at least
                        one year; and

                  (4)   such services are performed under the primary direction
                        or control of the Company.

      For purposes of the preceding sentence, an individual is considered to
have performed services on a substantially full-time basis for a period of at
least one year if during any consecutive twelve-month period such person has
either (A) performed at least 1,500 Hours of Service for the Company and any
Related Person (as defined below), or (B) performed services for the Company and
any Related Person for a number of hours of service at least equal to 75 percent
of the number of hours customarily performed by a common law employee of the
Company or Related Person in the particular position.

            (b)   Leasing Organization shall have the same meaning as under Code
                  section 414(n)(2)(A).

            (c)   Leasing Organization Pension Plan shall mean a plan maintained
                  by a Leasing Organization which with respect to the Leased
                  Employee:

                  (1)   is a money purchase pension plan with a nonintegrated
                        Company contribution rate of at least 10 percent,

                  (2)   provides for immediate participation and for full and
                        immediate vesting, and

                  (3)   provides for immediate participation for each Leased
                        Employee (other than Leased Employees who perform
                        substantially all of their services for the Leasing
                        organization and Leased Employees whose compensation
                        (within the meaning of Code section 414(n)(5)(C)(iii))
                        from the Leasing Organization is less than $1,000 in
                        each Plan Year during the four-plan-year period ending
                        with the Plan Year for which a determination is being
                        made).

            (d)   Related Person shall have the meaning prescribed in Code
                  section 144(a)(3).

            (e)   Nonhighly Compensated Work Force shall have the meaning in
                  Code section 414(n)(5)(C)(ii).

      11.4 Construction. The purpose of this Article XI is to comply with the
provisions of Code section 414(n). All provisions of this Article shall be
construed consistently therewith, and, without limiting the generality of the
foregoing, no individual shall be treated as a Leased Employee except as
required under such Code section 414(n).


                                       51
<PAGE>
                     Article XII. Top-Heavy Plan Provisions

      12.1 General Rule. In the event that the Plan becomes top-heavy, or is a
member of a top-heavy group, the provisions of this Article shall apply.

      12.2 When Plan Is Top-Heavy. The Plan shall be top-heavy for a Plan Year
if, as of the Determination Date (as defined below), the aggregate of the
Account balances of Key Employees (as defined below) under the Plan exceeds 60
percent of the aggregate of the Account balances of all Employees under the
Plan. For purposes of this section and section 12.3:

            (a)   Account balances shall include the aggregate amount of any
                  distributions (including distributions from terminated plans)
                  made with respect to the Employee during the five-year period
                  ending on the Determination Date and any contributions due but
                  unpaid as of said determination date, and

            (b)   the Account balance of any individual who has not performed
                  services for the Company or the Affiliates at any time during
                  the five-year period ending on the Applicable Determination
                  Date shall not be taken into account.

      The determination of the foregoing ratio shall be made in accordance with
Code section 416(g), which in incorporated herein by this reference.
Notwithstanding the foregoing, the Plan shall not be top-heavy if it is part of
an affiliation group of plans, as defined in section 12.3(a), that it is not a
top-heavy group.

      12.3 When Plan is in Top-Heavy Group. A Plan is a member of a top-heavy
group with respect to a Plan Year if, as of the Determination Date, it is part
of an affiliation group of plans which is top-heavy. For purposes of this
section:

            (a)   An "affiliation group of plans", includes all plans qualified
                  under Code section 401(a) which are maintained by the Company
                  or an Affiliate and (1) in which a Key Employee is a Member or
                  (2) which enables any other plan described in paragraph (1) to
                  meet the requirements of Code section 401(a)(4) or 410.

            (b)   An affiliation group of plans shall be a "top-heavy group"
                  with respect to a Plan Year if, as of the Determination Date,
                  the sum of:

                  (1)   the present value of the cumulative accrued benefits for
                        Key Employees under all defined benefit plans included
                        in such group and

                  (2)   the aggregate of the accounts of Key Employees under all
                        defined contribution plans included in such group
                        exceeds 60 percent of a similar sum determined for all
                        Employees covered under the affiliation group of plans.
                        In making this determination, the


                                       52
<PAGE>
                        provisions of section 12.2 (other than the first
                        sentence thereof) shall be applicable.

      12.4 Minimum Contribution. For each Plan Year with respect to which the
Plan in top-heavy or in a member of a top-heavy group, the minimum amount
allocated under the Plan (other than Elective Contributions) for the benefit of
each Member who is not a Key Employee and who is otherwise eligible or such an
allocation, together with amounts allocated under all other qualified defined
contribution plans maintained by the Company or an Affiliate, shall be the
lesser of:

            (a)   3 percent of the Member's Compensation for the Plan Year or

            (b)   the Member's Compensation times a percentage equal to the
                  largest percentage of such Compensation allocated under such
                  plans with respect to any Key Employee for the Plan Year
                  (including Elective Contributions).

      The minimum contribution is determined without regard to any Social
Security contribution. The minimum contribution shall be made to any non-key
Member who is employed on the last day of the Plan Year without regard to the
Member's failure to complete 1,000 Hours of Service during the Plan Year, the
Member's failure to make Elective Contributions to the Plan, or the Member's
Compensation. This section shall not apply to an Employee covered under a
qualified defined benefit plan maintained by the Company if the Employee's
vested accrued benefit thereunder satisfies the requirements of Code section
416(c).

      12.5 Adjustment in Maximum Limitation on Account Additions. For any Plan
Year with respect to which the Plan is top-heavy, or a member of a top-heavy
group, sections 4.17(c)(2)(A) and (3)(A) shall be applied by substituting "1.0"
for "1.25". Notwithstanding the foregoing, this section shall no longer be
effective for Plan Years beginning on or after January 1, 2000.

      12.6 Definitions. For purposes of this Article XII--

            (a)   Determination Date with respect to a Plan Year shall mean (1)
                  the last date of the preceding Plan Year, or (2) in the case
                  of the first Plan Year of any plan, the last day of such Plan
                  Year.

            (b)   Key Employee shall mean an Employee, former Employee, or a
                  Beneficiary an prescribed in Code section 416(i)(1).

            (c)   Non-key Employee shall mean any Employee who is not a Key
                  Employee.

      12.7 Top-Heavy Vesting Schedule. In the event a Member's employment with
the Company terminates for reasons other than retirement, disability, or death,
such Member shall have a fully vested interest in his or her Elective
Contributions Account, Matched After-Tax Contributions Account, Unmatched
After-Tax Contributions Account, Qualified Nonelective Contributions Account,
Qualified Matching Contributions Account, and Rollover Account plus a


                                       53
<PAGE>
vested interest in his or her Matching Contributions Account in accordance with
the following schedule:

<TABLE>
<CAPTION>
                                                      Vested
                    Years of Service                Percentage
                    ----------------                ----------
<S>                                                 <C>
                     Less than 2                         0%
                   2 but less than 3                    30
                   3 but less than 4                    40
                   4 but less than 5                    60
                   5 but less than 6                    80
                       6 or more                       100
</TABLE>

      Such minimum vesting schedule applies to the Matching Contributions
Account of the Member, including amounts credited before the effective date of
Code section 416 and amounts credited before the Plan became top-heavy. However,
this schedule does not apply to the Matching Contributions Account of any Member
who does not work an Hour of Service after the Plan has initially become
top-heavy. In the event the Plan ceases to be top-heavy for any subsequent Plan
Year, a Member's vesting percentage shall in no event be less than the
percentage determined under this section 12.7 as of the last day of the last
Plan Year during which the Plan was top-heavy and a Member who has completed
three or more Years of Service at such time shall continue to have his or her
vested interest in amounts credited to the Matching Contributions Account
determined in accordance with the above vesting schedule.


                                       54
<PAGE>
                Article XIII. Qualified Domestic Relations Orders

      13.1 Applicability of Article. The Committee shall apply the provisions of
this Article with regard to a Domestic Relations Order (as defined below) to the
extent not inconsistent with Code section 414(p).

      13.2 Establishment of Procedures. The Committee shall establish
procedures, consistent with Code section 414(p), to determine the qualified
status of any Domestic Relations Order, to administer distributions under any
Qualified Domestic Relations Order (as defined below), and to provide to the
Member and the Alternate Payee(s) (as defined below) all notices required under
Code section 414(p) with respect to any Domestic Relations Order.

      13.3 Determination of Qualified Domestic Relations Order Status. Within a
reasonable period of time after the receipt of a Domestic Relations Order (or
any modification thereof), the Committee shall determine whether such order is a
Qualified Domestic Relations Order.

      13.4 Establishment of Segregated Accounts and Payment Procedures.

            (a)   Separate Account for Members Not Yet Entitled to Receive
                  Benefits. If a Domestic Relations order has been determined to
                  be a Qualified Domestic Relations Order in accordance with
                  section 13.3, a separate account for the benefit of the
                  Alternate Payee named in such order shall be established. The
                  Committee shall cause to be transferred from the affected
                  Member's Accounts to the Alternate Payee's account such amount
                  as the Committee deems reasonable and necessary to satisfy
                  such order. If the Committee subsequently determines that the
                  amounts it has caused to be so transferred are less than are
                  reasonable and necessary to satisfy such order, the Committee
                  may cause to be transferred such additional amounts as it
                  deems reasonable and necessary to satisfy such order. If the
                  Committee subsequently determines that the amounts it has
                  caused to be so transferred are more than are reasonable or
                  necessary to satisfy such order, the Committee may cause any
                  such excess amounts to be paid to the person or persons who
                  would have been entitled to such amounts if there had been no
                  order; provided, however, that it the Member or the Member's
                  Beneficiaries are not yet entitled, or have not elected, to
                  receive benefit payments under the Plan, such excess amounts
                  shall be credited to the Member's Accounts and invested in
                  accordance with the investment election most recently
                  submitted by the Member pursuant to section 5.3. The amount of
                  any transfers caused to be made by the Committee pursuant to
                  this subsection (a) shall be determined in the sole and
                  absolute discretion of the Committee.

            (b)   Temporary Holding Account for Members Entitled to Receive
                  Benefits. If, during any period in which the issue of whether
                  a Domestic Relations Order is a Qualified Domestic Relations
                  order is being determined (by the Committee, by a court of
                  competent jurisdiction, or otherwise), the


                                       55
<PAGE>
                  Alternate Payee would be entitled to any payment if the order
                  had been determined to be a Qualified Domestic Relations
                  Order, the Committee shall cause to be segregated in a
                  separate account all amounts which would have been payable to
                  any Alternate Payee during such period if such order had been
                  determined to be a Qualified Domestic Relations Order.

            (c)   Payment from Temporary Holding Account to Plan Member In
                  Certain Cases. If, by the expiration of the eighteen-month
                  period beginning on the date the first payment would be
                  required to be made to an Alternate Payee under a Domestic
                  Relations Order, either it has been determined that a Domestic
                  Relations Order is not a Qualified Domestic Relations Order or
                  the issue as to whether such order is a Qualified Domestic
                  Relations Order has not been resolved, the Committee shall
                  cause to be paid all amounts which have been segregated by
                  reason of such order pursuant to subsection (b) above,
                  including any earnings accrued thereon, to the person or
                  persons who would have been entitled to such amounts if there
                  had been no order. Notwithstanding the preceding sentence, if
                  the Member or the Member's Beneficiaries are not yet entitled,
                  or have not elected, to receive benefit payments under the
                  Plan, such segregated amounts, including all earnings having
                  accrued thereon, shall be restored to the Member's Accounts
                  and invested in accordance with the investment election most
                  recently submitted by the Member pursuant to section 5.3.

            (d)   Payment from Separate Account and Temporary Holding Account to
                  Alternate Payee if Order Is Determined to be a Qualified
                  Domestic Relations Order. If a Domestic Relations Order (or
                  any modification thereof) is determined to be a Qualified
                  Domestic Relations Order, the Committee shall instruct the
                  Trustee to apply, on a prospective basis, the terms and
                  provisions of such Qualified Domestic Relations Order, and, in
                  the event any amounts were segregated by reason of such order
                  pursuant to subsection (b) above, the Committee shall cause to
                  be paid in accordance with the provisions of the Plan all
                  amounts which have been so segregated (and have not been
                  released pursuant to subsection (c)), including any earnings
                  accrued thereon, to the Alternate Payee(s) entitled thereto.

      13.5 Subsequent Determination of Order to be Applied Prospectively. If a
determination is made after the expiration of the 18-month period beginning on
the date the first payment would be required to be made to an Alternate Payee
under a Domestic Relations Order that such order (or any modification thereof)
is a Qualified Domestic Relations Order, such order shall be applied
prospectively only.


                                       56
<PAGE>
      13.6 Withdrawals, Distributions and Loans by or to Members.

            (a)   Withdrawals and Distributions. A Member shall not be permitted
                  to withdraw from the Plan, nor shall there be distributed to a
                  Member, any amounts being held in a segregated account by
                  reason of a Domestic Relations Order.

            (b)   Loans. In determining the maximum amount of any loan to a
                  Member pursuant to Article VIII, the Committee shall not
                  include in the Vested Balance of the Member the vested portion
                  of his or her Accounts being held in a segregated account by
                  reason of a Domestic Relations Order.

      13.7 Investment. To the extent the Committee, in its sole and absolute
discretion, deems reasonable and necessary to satisfy the terms of a Domestic
Relations Order, the Committee shall limit the investment discretion of the
Member and any Alternate Payee(s) under section 5.3 and shall direct the
investment of all amounts held in a segregated account by reason of such order
in any investment vehicle which the Committee shall select in its sole and
absolute discretion.

      13.8 Definitions. For purposes of this Article:

            (a)   Alternate Payee shall mean any spouse, former spouse, child,
                  or other dependent of a Member who in recognized by a Domestic
                  Relations Order as having a right to receive all, or a portion
                  of, the benefits payable under the Plan with respect to such
                  Member.

            (b)   Domestic Relations Order shall mean any judgment, decree, or
                  order (including approval of a property settlement agreement)
                  which:

                  (1)   relates to the provision of child support, alimony
                        payments, or marital property rights to a spouse, former
                        spouse, child, or other dependent of a Member and

                  (2)   is made pursuant to state domestic relations law
                        (including a community property law).

            (c)   Qualified Domestic Relations Order shall mean a Domestic
                  Relations Order which meets the requirements of Code section
                  414(p)(1).


                                       57
<PAGE>
                      Article XIV. Miscellaneous Provisions

      14.1 Construction. Except an otherwise provided in section 514 of the Act,
the Plan shall be construed and regulated in accordance with the laws of the
State of New Jersey.

      14.2 Nonassignability. Except to the extent permissible under Code
sections 401(a)(13) and 414(p) and Article XIII, no Account or interest under
this Plan shall be anticipated, assigned (either at law or in equity), alienated
or subject to attachment, garnishment, levy, execution, or other legal or
equitable process (whether voluntary or involuntary); provided, however, that
nothing herein shall prevent a Member from assigning such Member's interest
under this Plan an security for the repayment of any loan made to him or her
from the Plan pursuant to Article VIII. Any attempt at such a prohibited
assignment, alienation, attachment, garnishment, levy, execution, pledge,
transfer, mortgage, or encumbrance shall be void and unenforceable.

      14.3 Military Service. Notwithstanding any provisions of this Plan to the
contrary, effective December 12, 1994, contributions, benefits and service
credit with respect to qualified military service will be provided in accordance
with Code section 414(u).

      14.4 Missing Persons. If the Company in unable to locate a proper payee
within one year after an Account becomes payable, the Company may treat the
balance credited to the Account as a forfeiture; however, if a claim for
benefits is subsequently presented by a person entitled to a payment, the
forfeited amount shall be recredited to the Account upon verification of the
claim, except for those amounts that have been paid pursuant to an escheat or
other applicable law. Forfeitures restored under this subsection shall be paid
from forfeitures under section 6.3 and, to the extent these are not sufficient,
from an additional Company contribution.

      14.5 Interest of Members. The sole interest of each Member and the
Member's respective Beneficiaries under the Plan shall be to receive the
benefits provided for hereunder as and when the same shall become due and
payable in accordance with the terms hereof, and neither any Member nor any such
Beneficiary shall have any right, title or interest in or to any asset of the
Plan.

      14.6 No Right to Employment Granted by Plan. Nothing contained herein
shall require the Company to continue any Member in its employ, or require any
Member to continue in the employ of the Company, or require the Company to
continue to compensate any Member during a leave of absence, or require the
Company to compensate any Member during any leave of absence at the same rate as
prior to the commencement thereof, or require the Company to rehire any former
Member.

      14.7 Incompetency. Every person receiving or claiming benefits under the
Plan shall be conclusively presumed to be mentally competent and of age until
the Committee receives written notice, in a form and manner acceptable to it,
that such person is incompetent or a minor, and that a guardian, conservator, or
other person legally vested with the care of his or her estate has been
appointed. In the event that such a guardian or conservator of the estate of any
person receiving or claiming benefits under the Plan shall be so appointed,
payments shall be made to such guardian or conservator, provided that proper
proof of appointment in furnished in a form


                                       58
<PAGE>
and manner suitable to the Committee. To the extent permitted by law, any
payment under the provisions of this section shall be a complete discharge of
liability under the Plan.

      14.8 Titles. The titles of sections are included only for convenience and
shall not be construed as part of this Plan or in any respect affecting or
modifying its provisions.

      IN WITNESS WHEREOF, the Company has caused this document to be executed by
its duly authorized officer as of this _____ day of ________________, 2001.

                                        SELECTIVE INSURANCE CO.

                                        By:___________________________


                                       59
<PAGE>
                                   APPENDIX A

                             PARTICIPATING COMPANIES

Selective Insurance Company of America

Alta Services LLC

Consumer Health Network Plus, LLC

FloodConnect LLC

Selective Risk Managers


                                      A-1
<PAGE>
                                 SUPPLEMENT ONE

                                     OF THE

                               SELECTIVE INSURANCE

                             RETIREMENT SAVINGS PLAN

               (As Amended and Restated Effective January 1, 1996)

      The Participating Group described herein shall be covered by the Savings
Plan for Employees of Selective Insurance Company of America and Subsidiaries
(As Amended and Restated Effective January 1, 1996) on the following basis:

Description of Participating Group:

      (a)   Employees of the Company as of July 1, 1993 who were previously
            employed by Exchange Insurance Company and who were "Participants"
            in the Exchange Plan (as defined in section 2.1(w) of the Exchange
            Plan) an of June 30, 1993;

      (b)   Employees of the Company as of July 1, 1993 who were previously
            employed by Exchange Insurance Company and who would have become
            participants in the Exchange Plan on July 1, 1993;

      (c)   "Former Participants" in the Exchange Plan as of June 30, 1993 (as
            defined in section 2.1(s) of the Exchange Plan);

      (d)   "Beneficiaries" of deceased Participants in the Exchange Plan (as
            defined in section 2.1(f) of the Exchange Plan), provided that any
            such Beneficiary continued to have vested rights in the
            undistributed portion of the account balance standing to the credit
            of any such deceased Participant as of June 30, 1993; and

      (e)   "Alternate Payees" of Participants or Former Participants (as
            defined in section 6.6 (j) of the Exchange Plan), provided that any
            such Alternate Payee continued to have vested rights in the
            undistributed portion of the account balance standing to the credit
            of any Participant or Former Participant as of June 30, 1993.

      In addition, and solely for purposes of paragraphs 2 and 3 below, each
other Employee of the Company who was employed by Exchange Insurance Company on
June 30, 1993, who was not a Participant in the Exchange Plan, and who would not
have been eligible to become a Participant in the Exchange Plan as of July 1,
1993, shall be deemed a member of the Participating Group.


                                      S-1
<PAGE>
Definitions Applicable to this Supplement.

      1.    Solely for purposes of this Supplement, section 2.1 of the Plan
            shall read as follows:

            "Accounts" shall mean the Elective Contributions Account, Matching
            Contributions Account, Matched After-Tax Contributions Account,
            Unmatched After-Tax Contributions Account, Qualified Nonelective
            Contributions Account, Qualified Matching Contributions Account, and
            Rollover Account established for a Member under the Plan. In
            addition, the term "Accounts" shall include a Salary Reduction
            Account and an Employer Matching Account in which contributions and
            earnings previously held in the Exchange Plan for such Member shall
            continue to be held.

            2.    Solely for purposes of this Supplement, section 2.10 of the
                  Plan shall read an follows:

            "Disability" shall, solely for purposes of this Supplement, mean a
            physical or mental condition which totally and presumably
            permanently prevents a member of the Participating Group from
            engaging in any substantial activity.

            3.    Solely for purposes of this Supplement, section 2.22 of the
                  Plan shall read as follows:

            "Early Retirement Date" shall, solely for purposes of this
            Supplement, mean the member's sixty-second birthday.

Provisions Applicable to the Participating Group:

      For purposes of this Supplement the following special provisions shall
apply.

            1.    Membership.  Each member of the Participating Group shall
                               become a Member of the Plan on July 1, 1993.

            2.    Eligibility. Each other Employee of the Company who was
                               employed by Exchange Insurance Company of June
                               30, 1993, who was not a Participant in the
                               Exchange Plan, and who would not have been
                               eligible to become a Participant in the Exchange
                               Plan as of July 1, 1993 shall be eligible to
                               become a Member in the Plan as of the earlier of
                               (A) the date such Employee satisfies the
                               requirements of section 3.1 and 3.2 of the Plan,
                               or (B) the date such Employee would have been
                               eligible to become a Participant in the Exchange
                               Plan pursuant to section 3.1(b) of the Exchange
                               Plan.


                                       S-2
<PAGE>
            3.    Service.     For purposes of determining Years of Service
                               under section 3.7 of the Plan, an individual's
                               "Years of Service" (as defined in section 3.2 of
                               the Exchange Plan) with Exchange Insurance
                               Company prior to July 1, 1993 shall be included.

            4.    Vesting.     (a)   Vesting in Employer Matching Account and
                                     Salary Reduction Account. Notwithstanding
                                     anything herein to the contrary, a member
                                     of the Participating Group shall have a
                                     vested percentage in his or her Salary
                                     Reduction Account and Employer Matching
                                     Account which is no less than that under
                                     the Exchange Plan as of June 30, 1993.

                                     In addition, a member of the Participating
                                     Group shall  continue to vest in his or her
                                     Employer Matching Account in accordance
                                     with the following schedule:

<TABLE>
<CAPTION>
                                                                   Vested
                                      Years of Service           Percentage
                                      ----------------           ----------
<S>                                                              <C>
                                     Less than 1                      0%
                                     1                                5%
                                     2                               10%
                                     3                               20%
                                     4                               40%
                                     5                               60%
                                     6                               80%
                                     7 or more                      100%
</TABLE>

                               (b)   Accelerated Vesting. Notwithstanding
                                     anything to the contrary in paragraph 4 (a)
                                     above, a member of the Participating Group
                                     shall become fully vested in his or her
                                     Accounts under the Plan upon (A)
                                     Termination of Employment at or after
                                     attaining Early Retirement Age, (B)
                                     Termination of Employment on account of
                                     Disability, or (C) Termination of
                                     Employment on account of Death.

            5.    Loans.       With respect to any member of the Participating
                               Group who was a Participant in the Exchange Plan
                               and who had a loan outstanding under the Exchange
                               Plan on June 30, 1993, such loan shall be
                               administered for the remainder of its duration
                               under the terms of the Exchange Plan. Any such
                               loan which is renegotiated or issued under this
                               Plan on or after July 1, 1993 shall be issued and
                               administered solely in accordance with the terms
                               of this Plan.


                                      S-3