U S WEST SAVINGS PLAN/ESOP



              As Amended and Restated Effective as of June 12, 1998
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                           U S WEST SAVINGS PLAN/ESOP
                                TABLE OF CONTENTS

                                                                            Page

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

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

ARTICLE II    PARTICIPATION................................................. 15

         2.1   - Eligibility Requirements................................... 15
         2.2   - Participation.............................................. 16
         2.3   - Reemployment............................................... 16
         2.4   - Designation of Beneficiary................................. 17
         2.5   - Investment Funds........................................... 17
         2.6   - Requirements for Participant Elections..................... 19

ARTICLE III   CONTRIBUTIONS................................................. 20

         3.1   - Contributions by Participants.............................. 20
         3.2   - Before-Tax Contributions................................... 20
         3.3   - After-Tax Contributions  .................................. 21
         3.4   - Employer Matching Contributions............................ 22
         3.5   - Rollover Contributions..................................... 24
         3.6   - Section 402(g) Limit on Before-Tax Contributions........... 25
         3.7   - Section 401(k) Limitations on Before-Tax Contributions..... 25
         3.8   - Section 401(m) Limitations on After-Tax Contributions...... 28
         3.8A  - Section 401(m) Limitations on Employer Matching
                 Contributions.............................................. 30
         3.9   - Discretionary Company Contributions........................ 32
         3.10  - Limits on Employer and Before-Tax Contributions............ 32
         3.11  - Allocation of Certain Forfeitures.......................... 32
         3.12  - Valuation of Accounts...................................... 33
         3.13  - Minimum Employer Contribution.............................. 34

ARTICLE IIIA  ESOP PROVISIONS............................................... 36

         3A.1  - ESOP Portion of the Plan................................... 36
         3A.2  - Participating Company Contributions........................ 37
         3A.3  - Investment of Participating Company Contributions.......... 37
         3A.4  - Investment of ESOP Accounts................................ 37
         3A.5  - Acquisition Loans.......................................... 37
         3A.6  - Allocations to ESOP Accounts............................... 39
         3A.7  - Distribution of Dividends.................................. 39

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         3A.8  - Provision for Allocation of ESOP Shares in Connection with
                 Change in Control.......................................... 39
         3A.9  - ESOP Diversification....................................... 41

ARTICLE IV    LIMITATION ON ANNUAL ADDITIONS................................ 42

ARTICLE V     VESTING....................................................... 43

         5.1   - Fully Vested Accounts...................................... 43
         5.2   - ESOP Account............................................... 43

ARTICLE VI    DISTRIBUTIONS................................................. 45

         6.1   - Distribution of Benefits after Termination of Employment... 45
         6.2   - Distribution While a Participant is an Employee............ 48
         6.3   - Distributions to Beneficiary(ies).......................... 51
         6.4   - Distributions to Alternate Payees.......................... 52
         6.5   - Inability to Locate Participant; Forfeitures of Small
                 Amounts.................................................... 52
         6.6   - Direct Rollovers........................................... 53
         6.7   - Timing Distributions and Withdrawals....................... 53
         6.8   - Return of Basis............................................ 53

ARTICLE VII   NAMED FIDUCIARIES - ALLOCATION OF
              RESPONSIBILITIES.............................................. 53

         7.1   - No Joint Fiduciary Responsibilities........................ 53
         7.2   - The Participating Companies................................ 54
         7.3   - U S WEST................................................... 54
         7.4   - The Committee.............................................. 54
         7.5   - The Investment Committee................................... 54
         7.6   - Delegation................................................. 55
         7.7   - The Trustee................................................ 55
         7.8   - Allocation of Fiduciary Responsibilities................... 55
         7.9   - Organization of the Committee.............................. 56
         7.10  - Agent for Process.......................................... 57
         7.11  - Claims Procedure........................................... 57

ARTICLE VIII  TRUST AGREEMENT - INVESTMENTS................................. 58

         8.1   - Trust Agreement............................................ 58
         8.2   - Expenses of Trust.......................................... 58

ARTICLE IX    PARTICIPATING COMPANIES....................................... 58

         9.1   - Adoption of Plan........................................... 58

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         9.2   - Agency of U S WEST......................................... 58
         9.3   - Disaffiliation and Withdrawal From Plan.................... 59

ARTICLE X     AMENDMENT AND TERMINATION..................................... 59

         10.1  - Amendments................................................. 59
         10.2  - Discontinuance or Termination of Plan...................... 60
         10.3  - Failure to Contribute ..................................... 60
         10.4  - Plan Merger or Consolidation; Transfer of Plan Assets...... 60

ARTICLE XI    MISCELLANEOUS................................................. 61

         11.1  - Contributions Not Recoverable.............................. 61
         11.2  - Limitation on Participant's Rights......................... 61
         11.3  - Receipt or Release......................................... 61
         11.4  - Alienation................................................. 61
         11.5  - Military Service........................................... 62
         11.6  - Governing Law.............................................. 62
         11.7  - Headings, etc. Not Part of Plan............................ 62
         11.8  - Masculine Gender Includes Feminine and Neuter.............. 62
         11.9  - Instruments in Counterparts................................ 63
         11.10 - Loans to Account Owners.................................... 63
         11.11 - Top-Heavy Plan Requirements................................ 65
         11.12 - Voting Rights.............................................. 65
         11.13 - Payments Due Minors or Incapacitated Persons............... 66

APPENDIX A    TOP-HEAVY PROVISIONS

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                           U S WEST SAVINGS PLAN/ESOP


                                    PREAMBLE

         U S WEST, Inc., a Delaware corporation ("U S WEST"), established the U
S WEST Savings and Security Plan/ESOP, effective January 1, 1984 (the "Plan").
The Plan has subsequently been amended, been merged with the U S WEST Savings
Plan/ESOP for Salaried Employees, and been renamed the U S WEST Savings
Plan/ESOP. The Plan's most recent favorable determination letter is dated March
6, 1997.

         This Plan document is effective as of the Separation Time (as defined
herein, generally June 12, 1998), which is the date that the communications
group and the media group separated into two public companies.

         The Plan and Trust are intended to comply with the provisions of the
Internal Revenue Code of 1986, as amended, and the Employee Retirement Income
Security Act of 1974, as amended.

         Each Appendix is a part of this Plan. It is intended that an Appendix
will be used to address any special situations that affect the Plan.

         The Plan has several purposes. The purposes of the Savings Plan portion
of the Plan, which is a profit-sharing plan, are to provide a convenient way for
Management and Occupational employees to save on a regular and a long-term basis
and to encourage such employees to make and continue careers with U S WEST and
its subsidiaries. The purposes of the employee stock ownership plan portion of
the Plan, which is a stock bonus plan, are to provide eligible employees with an
opportunity to acquire and hold for long-term investment an ownership interest
in U S WEST, and to provide such employees with a voice in major decisions
affecting U S WEST and an opportunity to share in the fortunes of U S WEST. More
than half of the assets in the employee stock ownership plan portion of the Plan
shall be invested in U S WEST Shares at all times.

         In order to accomplish these purposes, the Company herein established
this Plan to provide incentives and security for its employees and their
beneficiaries. Except as provided by applicable law, the Trust created pursuant
to this Plan (incorporated herein by this reference) and its assets shall not be
used for, or diverted to, purposes other than the exclusive benefit of
Participants or their beneficiaries.

         This Plan is intended to be a profit sharing plan and employee stock
ownership plan. Contributions may be made to this Plan without regard to the
current or accumulated profits of the Company.

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                                    ARTICLE I

                                   DEFINITIONS

         Whenever the following terms are used in this Plan, with the first
letter capitalized, they shall have the meanings specified below.

         1.1      "Account" or "Accounts" shall mean Savings Accounts and ESOP
Accounts.

         1.2      "Account Owner" shall mean a Participant who has an Account
balance, an Alternate Payee who has an Account balance or a Beneficiary who has
obtained an interest in the Account of the previous Account Owner because of the
previous Account Owner's death.

         1.3      "Acquisition Loan" shall mean a loan or other extension of
credit used by the Trustee to finance the acquisition of U S WEST Shares, or to
repay and refinance, to the extent permitted by law, a prior Acquisition Loan.

         1.4      "After-Tax Account" shall mean the Account that is credited
with After-Tax Contributions to the Plan in accordance with Section 3.3,
together with the investment earnings (or losses) thereon. The After-Tax Account
has separate subaccounts for matched and unmatched After-Tax Contributions, as
well as for pre-87 and post-86 After-Tax Contributions.

         1.5      "After-Tax Contributions" shall mean an amount that a
Participant elects to have deducted from his salary or wages and contributed to
the Participant's After-Tax Account, after income taxes have been withheld on
such amounts. After-Tax Contributions shall be made by payroll deduction in
accordance with the Participant's election.

         1.6      "Alternate Payee" shall mean a Participant's spouse, former
spouse, child, or other dependent who is recognized by a QDRO as having a right
to receive all, or a portion of, the benefits payable under this Plan with
respect to such Participant.

         1.7      "Annual Additions" shall mean the sum credited to a
Participant's Accounts for any Plan Year of (a) Participating Company
contributions, (b) voluntary contributions, (c) forfeitures, (d) amounts
credited to an individual medical account, as defined in section 415(l)(2) of
the Code which is part of a Defined Benefit Plan maintained by the Company or a
Related Company, and (e) amounts attributable to post-retirement medical
benefits allocated to the separate account required with respect to a Key
Employee (as defined in Section A.2(e) of Appendix A to the Plan) under a
welfare benefit plan (as defined in section 419(e) of the Code) maintained by
the Company or a Related Company. Participating Company contributions applied to
the payment of interest on an Acquisition Loan and forfeitures of U S WEST
Shares purchased with the proceeds of an Acquisition Loan shall be excluded from
a Participant's Annual Addition for a Plan Year if no more than one-third of the
Participating Company contribution deductible under section 404(a)(9) of the
Code for that Plan Year is allocated to the Accounts of Highly Compensated
Employees. The reinstatement of the forfeited benefit of a missing Account Owner
pursuant to Section 6.5 is not an Annual Addition nor are rollovers, loan
repayments, repayments of forfeitures for rehired Participants as described in
Code section 411(a)(7)(B) and 411(a)(3)(D), or direct transfers from one
qualified plan to this Plan.

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         1.8      "AT&T" shall mean the American Telephone and Telegraph
Company.

         1.9      "Before-Tax Account" shall mean the Account that is credited
with Before-Tax Contributions as well as any Participating Company contribution
made to correct a failed ADP or ACP test pursuant to Sections 3.7(d)(iii) or
3.8(d)(ii), together with any investment earnings (or losses) thereon. The
Before-Tax Account has separate subaccounts for matched and unmatched Before-Tax
Contributions.

         1.10     "Before-Tax Contributions" shall mean an amount contributed to
this Plan by a Participating Company in lieu of being paid to a Participant as
salary or wages. Before-Tax Contributions shall be made under salary reduction
arrangements elected by the Participant with respect to salary or wages not yet
paid or otherwise available to the Participant as of the date of the
Participant's election.

         1.11     "Beneficiary" or "Beneficiaries" shall mean the person or
persons or legal entities designated in accordance with the provisions of
Section 2.4.

         1.12     "Board of Directors" shall mean the Board of Directors of U S
WEST.

         1.13     "Break in Employment" shall mean any termination of employment
with the Company and all Related Companies by reason of resignation, discharge,
retirement, disability or death. If a Participant is laid off or if a
Participant's disability benefits expire at a time when he is neither an
Employee in active service nor on leave of absence, then the Participant shall
be deemed to have had a Break in Employment at such time. A transfer by a
Participant between Related Companies or between the Company and a Related
Company shall not result in a Break in Employment.

         1.14     "Claims Administrator" shall mean the Manager-Savings Plan or
his delegate who shall have authority to grant or deny claims for benefits under
the Plan for all Participating Companies.

         1.15     "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.

         1.16     "Combined Shares Fund" shall mean a fund, maintained only in
the ESOP, consisting primarily of U S WEST Shares and MediaOne Group, Inc.
common stock, which shall be actively managed by an independent Investment
Manager. Subject to the Employee Matters Agreement, all MediaOne Group, Inc.
common stock held in the Combined Shares Fund shall be sold or otherwise
disposed of prior to June 30, 2000, at which time the U S WEST Shares held in
the Combined Shares Fund shall be transferred to the U S WEST Shares Fund and
the Combined Shares Fund will cease to exist.

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         1.17     "Committee" shall mean the Employee Benefits Committee
referred to in Section 7.4.

         1.18     "Company" shall mean U S WEST, Inc., a Delaware corporation,
any successor company and any adopting subsidiary approved by U S WEST, Inc., or
its successor.

         1.19     "Company Discretionary Contribution" shall mean an amount
contributed to this Plan by a Participating Company in accordance with Section
3.9.

         1.20     "Company Discretionary Contribution Account" shall mean the
Account that is credited with Company Discretionary Contributions to the Plan in
accordance with Section 3.9, together with the investment earnings (or losses)
thereon.

         1.21     "Compensation" shall mean the wages, within the meaning of
Code section 3401(a), which are paid by the Company or a Related Company to or
for an Employee (including amounts paid to the Employee under the Management
Separation Plan), all other compensatory payments to an Employee by the Company
or a Related Company (in the course of its trade or business) for which the
Company or a Related Company is required to furnish the Employee a written
statement under Code sections 6041(d), 6051(a)(3) and 6052, and any amounts
excluded from the Employee's income under Code section 125 or 402(e)(3).
Compensation shall be limited as required by Code section 401(a)(17).

         1.22     "Defined Benefit Plan" shall mean a plan described in section
414(j) of the Code.

         1.23     "Defined Benefit Plan Fraction" shall mean a fraction, the
numerator of which is the projected annual benefit (determined as of the close
of the relevant Plan Year) of the Participant under all Defined Benefit Plans
maintained by the Company or a Related Company, and the denominator of which is
the lesser of (a) the product of 1.25 multiplied by the dollar limitation in
effect under section 415(b)(1)(A) of the Code for the Plan Year, or (b) the
product of 1.4 multiplied by the amount which may be taken into account under
section 415(b)(1)(B) of the Code with respect to the Participant for the Plan
Year.

         1.24     "Defined Contribution Plan" shall mean a plan described in
section 414(i) of the Code.

         1.25     "Defined Contribution Plan Fraction" shall mean a fraction,
the numerator of which is the sum of the annual additions to a Participant's
accounts under all Defined Contribution Plans maintained by the Company or a
Related Company, and the denominator of which is the sum of the lesser of (a) or
(b) for such Plan Year and for each prior Plan Year of service with one or more
Related Companies, where (a) is the product of 1.25 multiplied by the dollar
limitation in effect under section 415(c)(1)(A) of the Code for the Plan Year
(determined without regard to section 415(c)(6) of the Code), and (b) is the
product of 1.4 multiplied by the amount which may be taken into account under
section 415(c)(1)(B) of the Code (or section 415(c)(7) of the Code, if
applicable) with respect to the Participant for the Plan Year. Solely for
purposes of this definition, contributions made directly by an Employee to a
Defined Benefit Plan which maintains a qualified cost-of-living arrangement as

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such term is defined in section 415(k)(2) shall be treated as Annual Additions.
Notwithstanding the foregoing, the numerator of the Defined Contribution Plan
Fraction shall be adjusted pursuant to Treasury Regulations 1.415-7(d)(1),
Questions T-6 and T-7 of Internal Revenue Service Notice 83-10, and Questions
Q-3 and Q-14 of Internal Revenue Service Notice 87-21.

         1.26     "Direct Rollover" is a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.

         1.27     "Distributee" includes an Employee, a former Employee, the
surviving spouse of an Employee or former Employee, and an Alternate Payee who
is the Employee's or former Employee's spouse or former spouse.

         1.28     "Eligible Employee" shall mean:

                  (a)      General. An Eligible Employee shall mean an Employee
of a Participating Company who is: (i) a regular or regular-term Employee in
active service (on a full-time or part-time basis); (ii) a regular flexible
Employee; or (iii) a person classified as a temporary or incidental Employee or
an intern.

                  (b)      Exclusions. An Eligible Employee shall not include
any Employee of a Non-Participating Company. Anyone classified as an "occasional
employee" or "ETC Employee" shall not be an Eligible Employee. An Eligible
Employee shall not include any Leased Employees or any individuals who would be
Leased Employees but for their length of service with the Company and Related
Companies. An Eligible Employee shall not include any individual who enters into
an agreement with the Company stating that he is not to participate in the Plan.

                  (c)      Non-resident Aliens. Any non-resident alien who
either (i) receives from the Company or a Related Company no earned income
(within the meaning of Code section 911(d)(2)) that constitutes income from
sources within the United States (within the meaning of Code section 861(a)(3))
or (ii) receives from a Company or a Related Company earned income that
constitutes income from sources within the United States, but such income is
exempt from United States income tax by an income tax treaty or convention,
shall not be an Eligible Employee.

         1.29     "Eligible Retirement Plan" shall mean an individual retirement
account described in section 408(a) of the Code, an individual retirement
annuity described section 408(b) of the Code, an annuity plan described in
section 403(a) of the Code, or a qualified trust described in section 401(a) of
the Code, that accepts the Distributee's Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distribution for the Participant's
surviving spouse, an Eligible Retirement Plan is an individual retirement
account or individual retirement annuity.

         1.30     "Eligible Rollover Distribution" shall mean any distribution
or withdrawal other than (a) installment payments in a series of substantially
equal payments made at least annually and (i) made over the life (or life
expectancy) of the Distributee or (ii) made over a specified period of 10 or
more years; (b) any distribution to the extent it is required under Code section

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401(a)(9); (c) the portion of any distribution that is not includible in gross
income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities); (d) a distribution to satisfy
the limits of Code section 415 or 402(g); (e) a distribution to satisfy the ADP,
ACP, or multiple use tests; (f) distributions under Section 3A.7 of dividends on
employer securities; (g) effective January 1, 2000, a hardship distribution
under Section 6.2 to an Employee under age 59 1/2; and (h) any other actual or
deemed distribution that the Internal Revenue Service announces (pursuant to
regulation, notice or otherwise) is not an Eligible Rollover Distribution.

         1.31     "Employee"

                  (a)      General. "Employee" shall mean any individual
employed as a common law employee by any Participating or Non-Participating
Company on a full-time or part-time basis who receives Compensation other than a
pension, retainer, or fee under contract.

                  (b)      Exclusions. An individual shall not be an Employee if
he meets any of the following: (i) the individual was performing services for
the Company or any Related Company under an agreement, contract, or any other
arrangement pursuant to which the individual is characterized or classified by
the employing company as an independent contractor (or an employee of an
independent contractor); (ii) the individual's payments for services for the
Company or any Related Company have not been initially treated by the employing
company as subject to wage withholding under the Code and applicable state law;
(iii) any individual who was not initially classified by the Company or Related
Company as a common law employee of the employing company; (iv) any individual
who was initially classified as a Leased Employee; or (v) any other individual
who was leased by the Company or a Related Company from an entity that is the
individual's employer of record. Notwithstanding paragraph (a) above, if the
Company or Related Company determines or agrees that the classification or
treatment was incorrect and that the individual was or is in fact a common law
employee, such an individual shall not be an Employee (or an Eligible Employee
or Participant) either retroactively or prospectively; however, if the Company
or Related Company informs the individual in writing that he is an Employee for
purposes of the Plan, he shall be an Employee with respect to service after the
date specified in such writing. Notwithstanding the foregoing, if an individual
files a claim with the Committee in accordance with Section 7.11 within 60 days
of such initial classification, and the Committee determines that such
classification is incorrect, the determination by the Committee shall be given
retroactive effect.

                  (c)      Statutory Additions. Leased Employees will be treated
as Employees for the purposes of (i) counting service for eligibility and
vesting, (ii) determining the Leased Employee's compensation, (iii) satisfying
the limit on Annual Additions in Article IV, and (iv) determining if the Plan is
top-heavy, unless Leased Employees constitute less than 20% of the Participating
Companies' non-highly compensated work force within the meaning of Code section
414(n)(5)(C)(ii), in which case only those Leased Employees who are not covered
by a plan described in Code section 414(n)(5)(B) are treated as Employees. In
addition, any individual described in subsection (b) who is actually a
common-law employee of the Company or a Related Company will be treated as an
Employee solely for the purpose of counting service for eligibility and vesting.

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                  (d)      Example. By way of example, assume a technician is
leased from an entity (or hired as an independent contractor) on May 1, 1998.
The Company later determines or agrees that the individual has in fact always
been a common law employee and reclassifies him as such (including subjecting
him to wage withholding) on June 1, 2000; however, he continues as a technician.
Solely for purposes of the requirements described in (c)(i) through (c)(iv),
this individual will be treated as an Employee on and after May 1, 1998.
However, the individual shall not be a Employee (or an Eligible Employee or
Participant) for any other purpose with respect to employment either prior or
subsequent to June 1, 2000, even though other technicians of the Company are
treated as Employees. The individual shall not become an Employee (or Eligible
Employee or Participant) unless and until the Company informs the individual in
writing that he is an Employee for purposes of the Plan.

         1.32     "Employee Matters Agreement" shall mean the Employee Matters
Agreement executed by Old U S WEST and USW-C, Inc. (now known as U S WEST, Inc.
or the Company) in connection with the corporate split-off of USW-C, Inc.

         1.33     "Employer Group" shall mean the Company and all Related
Companies. The Employer Group also includes an Interchange Company if the
Interchange Agreement provides that the Plan shall recognize the Employee's
service with the Interchange Company. The Employer Group also includes a
Portability Company if the Portability Agreement provides that the Plan shall
recognize the Employee's service with the Portability Company

         1.34     "Employer Matching Contribution" shall mean an amount
contributed to this Plan by a Participating Company in accordance with Section
3.4.

         1.35     "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time.

         1.36     "ESOP" shall mean the employee stock ownership plan portion of
the Plan.

         1.37     "ESOP Account" shall mean the Account that is credited with
payments to the ESOP by a Participating Company in accordance with Sections 3.4
and 3.9, together with the investment earnings (or losses) thereon. The ESOP
Account shall be comprised of subaccounts entitled the Matching Contribution
Account, the Company Discretionary Contribution Account, and the Pre-85 Matching
Account.

         1.38     "Fiduciary" shall mean anyone described in section 3(21) of
ERISA who is associated in any manner with the control, management, operation,
and administration of the Plan or the assets of the Plan, and such term shall be
construed as including the term "Named Fiduciary" with respect to those
Fiduciaries named in the Plan or who are identified as Fiduciaries pursuant to
procedures specified in the Plan.

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         1.39     "Financed Shares" shall mean U S WEST Shares acquired by the
Plan with the proceeds of an Acquisition Loan.

         1.40     "Global Assets Fund" shall mean a fund to be invested in a
broad range of securities of U.S. and non-U.S. issuers. U.S. equity investments
will include large, intermediate and small capitalization companies. The equity
securities in the non-U.S. component will typically include shares of larger
capitalization companies of the major developed nations. The fund will also
invest in debt securities of U.S. and non-U.S. issuers, including governments as
well as corporations as may be purchased by the Trustee in its discretion (or in
the discretion of an Investment Manager appointed by U S WEST, subject, in
either case, to any general investment guidelines that may be adopted by U S
WEST), and shall also include short-term obligations of the United States
Government and other investments of a short-term nature, including commercial
paper, purchased pending the selection and purchase of other investments of the
type described in this paragraph and, pending such selection and purchase, may
also include bank deposits bearing reasonable interest rates, including deposits
with a Fiduciary of the Plan. The non-U.S. fixed income component will typically
invest in government issuers. U.S. securities will reflect a broad range of
investment maturities, qualities and sectors.

         1.41     "Highly Compensated Employee" shall mean, with respect to a
determination year, any Employee who: (a) at any time during the determination
year or the look-back year was a 5% owner of the Company; or (b) received
Compensation from the Company or any Related Company in excess of $80,000 (as
adjusted pursuant to section 415(d) of the Code) during the "look-back year" and
was a member of the "top-paid group" for such year. The "determination year"
shall be the Plan Year for which compliance is being tested, and the "look-back
year" shall be the 12-month period immediately preceding the determination year.
The "top-paid group" for a look-back year shall consist of the top 20% of
Employees ranked on the basis of Compensation received during the year excluding
Employees described in sections 414(q)(5) and 414(q)(8) of the Code and Treasury
Regulations thereunder.

         1.42     "IMC" shall mean the U S WEST Investment Management Company.

         1.43     "Interchange Agreement" shall mean the agreement made between
Old U S WEST, AT&T and one or more other companies in connection with the
reorganization of AT&T and its subsidiaries on January 1, 1984, which agreement
provides for the portability of benefits with respect to certain Employees who
are employed by a Participating Company and were previously employed by an
Interchange Company, or who are employed by an Interchange Company and were
previously employed by a Participating Company. An Interchange Agreement shall
be applicable for an interchange period, which shall be such period of time as
is specified in the Interchange Agreement.

         1.44     "Interchange Company" shall mean a company, other than a
Participating Company which is a party to the Interchange Agreement, and any
subsidiary or affiliate of such company identified in the Interchange Agreement,
but only so long as the Interchange Agreement is in full force and effect.
Notwithstanding any other provision of the Plan, any reference to a person
employed by an Interchange Company (or any similar reference) shall be limited
to employees covered by the Interchange Agreement.

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         1.45     "Interest Income Fund" shall mean a fund to be invested in a
diversified portfolio consisting of fixed income investments and agreements in
support of capital preservation and liquidity. The fixed income investments
will, in each case, represent an issuer's promise to repay principal plus a rate
of interest, and may include, but are not limited to, group annuity contracts
with life insurance companies, deposit agreements with banks, obligations of the
United States Government or its agencies, asset-backed securities and other high
quality fixed income securities. The fund will be managed to provide a stable
rate of return consistent with the preservation of principal. As in all
investments, there is some risk of loss.

         1.46     "International Stock Fund" shall mean a fund that invests
chiefly in common stocks issued by non-U.S. companies and securities of
companies whose principal markets are outside the U.S. at the discretion of the
Trustee (or in the discretion of an Investment Manager, subject, in either case,
to any general investment guidelines that may be adopted by U S WEST). However,
the fund may invest in short-term and long-term debt securities or preferred
stocks when market and economic conditions warrant. Since the fund can invest in
non-dollar denominated securities, it may hedge against possible variations in
exchange rates between currencies by purchasing or selling currency futures.

         1.47     "Investment Committee" shall mean the Plan Investment
Committee referred to in Section 7.5.

         1.48     "Investment Fund" shall mean one of the funds established by
IMC for the investment of the assets of the Plan pursuant to Section 2.5.

         1.49     "Investment Manager" shall mean a Fiduciary designated by IMC
under this Plan to whom has been delegated the responsibility and authority to
manage, acquire or dispose of Plan assets: (a) who (i) is registered as an
investment adviser under the Investment Advisers Act of 1940; (ii) is a bank, as
defined in that Act; or (iii) is an insurance company qualified to perform
investment advisory services under the laws of more than one state; and (b) who
has acknowledged in writing that he is a Fiduciary with respect to the
management, acquisition, and control of Plan assets.

         1.50     "Leased Employee" shall mean any leased employee, within the
meaning of Code section 414(n), of the Company or a Related Company.

         1.51     "Management Employee" shall mean an Employee of a
Participating Company whose pay is at a monthly or annual rate and whose
position is not subject to automatic wage progression.

         1.52     "Matching Contribution Account" shall mean the Account that is
credited with payments to the ESOP by a Participating Company in accordance with
Section 3.4, together with the investment earnings (or losses) thereon. The
Matching Contribution Account may contain separate subaccounts for any reason,

                                        9
<PAGE>

such as for amounts contributed to the PAYSOP, for allocations of U S WEST
Shares acquired by an Acquisition Loan, and for allocations of U S WEST Shares
not acquired by an Acquisition Loan.

         1.53     "Matching Formula" shall mean the formula under which
allocations are made to the respective Matching Contribution Accounts of
Participants set forth in Section 3.4(b) and (c).

         1.54     "MediaOne Group Shares Fund" shall mean a fund invested in
MediaOne Group, Inc. common stock (which prior to the Separation Time was U S
WEST Media Group stock).

         1.55     "Media Participants" shall mean Media Employees and Terminated
Media Employees, as such terms are defined in the Employee Matters Agreement.

         1.56     "Minimum Employer Contribution" shall mean contributions made
by a Participating Company in accordance with the provisions of Section 3.13.

         1.57     "Non-Participating Company" shall mean any Related Company
that is not a Participating Company.

         1.58     "Normal Retirement Age" shall mean a Participant's 65th
birthday.

         1.59     "Occupational Employee" shall mean an Employee of a
Participating Company who is not a Management Employee.

         1.60     "Old U S WEST" shall mean U S WEST, Inc., a Delaware
corporation, prior to the Separation Time. Effective at the Separation Time, U S
WEST, Inc. was renamed MediaOne Group, Inc. On or after the Separation Time,
MediaOne Group, Inc. (and the corporations that are its subsidiaries) shall not
be Participating Companies or Non-Participating Companies.

         1.61     "Participating Company" shall mean the Company and any Related
Company that, in accordance with Article IX, participates in the Plan. A Related
Company that becomes a Participating Company agrees to be bound by any Plan
amendment. If a Participating Company ceases to be a Related Company, except by
merger with the Company or another Related Company, the employment of each
Employee of the Participating Company shall be deemed to have terminated for
purposes of this Plan, except to any extent any such individual is required by
law to continue to be treated under the Plan as an Employee of a Participating
Company.

         1.62     "Participant" shall mean an Employee or former Employee who
has an Account balance in this Plan.

         1.63     "Personal Choice Retirement Account" or "PCRA" shall mean an
investment alternative in which, a Participant or Alternate Payee may direct the
investment among designated mutual funds, common stocks and bonds and other
fixed-income investments.

                                       10
<PAGE>

         1.64     "Plan" shall mean the U S WEST Savings Plan/ESOP set forth
herein, now in effect or hereafter amended.

         1.65     "Plan Administrator" shall mean the Committee.

         1.66     "Plan Year" shall mean the 12 consecutive-month period ending
on December 31. The Plan Year shall be the limitation year for purposes of
section 415 of the Code.

         1.67     "Portability Agreement" shall mean the agreement made
effective January 1, 1985 between Old U S WEST, and one or more other companies
to implement certain mandatory portability legislation passed by Congress, which
agreement provides for the portability of benefits with respect to certain
Employees who are employed by certain Participating Companies and were
previously employed by a Portability Company, or who are employed by a
Portability Company and were previously employed by certain Participating
Companies.

         1.68     "Portability Company" shall mean a company other than a
Participating Company which is party to the Portability Agreement and any
subsidiary or affiliate of any such company identified as an interchange company
in the Portability Agreement. Notwithstanding any other provisions of the Plan,
any reference to a person employed by a Portability Company (or any similar
reference) shall be limited to "covered employees" as defined in the Portability
Agreement.

         1.69     "Pre-85 Matching Account" shall mean the subaccount in the
ESOP Account that was credited with the match for management employees before
1985, together with the investment earnings (or losses) thereon.

         1.70     "Qualified Domestic Relations Order" ("QDRO") shall mean a
domestic relations order which meets the requirements for assignment of
retirement benefits under section 206(d) of ERISA and section 414(p) of the
Code.

         1.71     "Related Company" shall mean (a) each corporation which is a
member of a controlled group of corporations (within the meaning of section
1563(a) of the Code, determined without regard to section 1563(a)(4) and
(e)(3)(C) thereof) of which the Company is a component member, (b) each entity
(whether or not incorporated) which is under common control with the Company, as
such common control is defined in section 414(c) of the Code, (c) any
organization which is a member of an affiliated service group (within the
meaning of section 414(m) of the Code) of which the Company or a Related Company
is a member, and (d) any organization which is required by regulations issued
under section 414(o) of the Code to be treated as a Related Company. For the
purposes of Article IV of this Plan the phrase "more than 50%" shall be
substituted for the phrase "at least 80%" each place it appears in section
1563(a)(1) of the Code. The term "Related Company" shall also include each
predecessor employer to the extent required by section 414(a) of the Code.

         1.72     "Rollover Account" shall mean the Account that is credited
with the amount, if any, received by the Plan in accordance with Section 3.5 as
a rollover contribution, together with the investment earnings (or losses)
thereon.

                                       11
<PAGE>

         1.73     "Savings Account" shall mean the Account in the Savings Plan
that is credited with Before-Tax Contributions, After-Tax Contributions, and
rollover contributions (described in Section 3.5), together with the investment
earnings (or losses) thereon. The Savings Account shall be comprised of
subaccounts entitled the Before-Tax Account, the After-Tax Account, and the
Rollover Account, each of which may in turn have subaccounts.

         1.74     "Savings Plan" shall mean the savings plan portion of the
Plan.

         1.75     "Savings Plan Eligible Earnings" shall mean the remuneration
that is used to determine the benefits in this Plan.

                  (a)      Included Items. Savings Plan Eligible Earnings shall
include:

                           (i)    basic salary rate for Management Employees or
base pay for Occupational Employees (including any elective salary deferrals
that excluded from federal taxable income pursuant to Code sections 402(e)(3) or
125),

                           (ii)   annual lump sum merit awards (or a pro rata
portion thereof paid to Employees terminating employment under the Management
Separation Plan),

                           (iii)  awards under short-term incentive plans for
senior management,

                           (iv)   merit awards for performance on specific job
projects;

                           (v)    annual lump sum team incentives and gain share
awards,

                           (vi)   retroactive wage increases,

                           (vii)  incentive compensation including marketing and
team incentive compensation, as determined from payroll records,

                           (viii) pay in lieu of unused vacation, but only for
Employees terminating under the Management Separation Plan,

                           (ix)   the 60-day transition pay for participants in
the Management Separation Plan,

                           (x)    short-term disability benefits paid to an
Eligible Employee under the U S WEST Disability Plan or under the terms of a
Participating Company's predecessor Sickness and Accident Disability Benefit
Plan received by a Participant who is absent on account of disability;

                                       12
<PAGE>

                           (xi)   effective January 1, 1997, all amounts
received by a Participant who is on a leave of absence, including a military or
political leave of absence, approved by the Participating Company with which the
Participant is employed,

                           (xii)  commissions,

                           (xiii) for an Occupational Employee only, imputed
base pay for non-paid union time solely related to U S WEST business, and any
other payments similar in nature bargained for by the Employee's collective
bargaining representative, and

                           (xiv)  lump sum or biweekly payments under the
Reassignment Pay Protection Allowance.

                  (b)      Excluded Items. Savings Plan Eligible Earnings
shall not include:

                           (i)    overtime,

                           (ii)   shift differentials,

                           (iii)  personal vehicle reimbursements,

                           (iv)   awards under any senior management long term
incentive plans,

                           (v)    compensation received from a non-qualified
deferred compensation plan,

                           (vi)   other premium pay including awards associated
with any type of Employee suggestion plan or special community service project,

                           (vii)  payments received from redeployment or
severance plans,

                           (viii) differentials based on geographic location,

                           (ix)   pay in lieu of unused vacation (except as
expressly included above),

                           (x)    workers' compensation payments,

                           (xi)   foreign service premiums, differentials, or
housing allowances.

                  (c)      Limits. Savings Plan Eligible Earnings in any Plan
Year shall not exceed the limit under Code section 401(a)(17) for that Plan
Year, for the purpose of determining the maximum match or the maximum amount of
After-Tax or Before-Tax Contributions that a Participant can make. A Participant
may only elect to make Before-Tax and After-Tax Contributions from his first
$150,000 (or whatever the Code section 401(a)(17) limit is for the Plan Year) of
Savings Plan Eligible Earnings for the Plan Year that he receives while eligible
to make Before-Tax and After-Tax Contributions.

                                       13
<PAGE>

                  (d)      Time Period for Measuring Savings Plan Eligible
Earnings.

                           (i)    General. Savings Plan Eligible Earnings shall
only include amounts paid to an Eligible Employee, except as provided in
paragraph (ii) below. Savings Plan Eligible Earnings shall only include amounts
paid after the Employee has satisfied the participation requirements described
in Article II, and for purposes of calculating the match, shall only include
amounts paid after the Employee has become eligible to receive a match.

                           (ii)   Trailing Pay. Savings Plan Eligible Earnings
shall also include amounts that are paid in the month in which the Eligible
Employee terminates employment with the Company and Related Companies or in any
of the following three months.

         1.76     "Separation Time" shall be defined in accordance with the
Employee Matters Agreement, generally June 12, 1998.

         1.77     "Service" shall generally mean the duration of an Employee's
employment with the Employer Group. Sections 5.2(b) and 5.2(c) contain special
rules for calculating Service for vesting purposes. Service includes all time
that was recognized as Service before the Separation Time under the prior terms
of the Plan. After the Separation Time, the following additional periods are
included in Service (but not double-counting any Service).

                  (a)      Service includes the period commencing on the day the
Employee first performs an hour of work for the Employer Group (upon rehire or
initial hire) and ending on the Employee's Severance Date.

                  (b)      Service includes service in the Armed Forces of the
United States or the Public Health Service of the United States as a result of
which such Employee is entitled to reemployment rights from the Employer Group
pursuant to applicable federal law, provided the Employee returns to work within
the time period specified in such law.

                  (c)      Service includes any period between an Employee's
Severance Date and the date he subsequently performs an hour of work for the
Employer Group upon rehire, but only if such period is less than twelve months
long.

         1.78     "Severance Date" shall mean the date on which an Employee
resigns, retires, is discharged, or dies, or, if earlier, the first anniversary
of the first day the Employee is absent from service (with or without pay) with
the Employer Group for any reason other than resignation, retirement, or
discharge (such as vacation, holiday, sickness, leave of absence or layoff).
However, if the Employee is absent from service (a) by reason of the pregnancy
of the Employee, (b) by reason of the birth of a child of the Employee, (c) by
reason of the placement of a child with the Employee in connection with the
adoption of such child by such Employee, or (d) for purposes of caring for such
child for a period beginning immediately following such birth or placement, the

                                       14
<PAGE>

Severance Date shall be the second anniversary of the first day the Employee was
absent from service and the period between the first and second anniversaries of
the first day of absence is not included in Service.

         1.79     "Testing Compensation" shall mean any definition of
compensation for a Plan Year, as selected by the Committee, that satisfies the
requirements of Code section 414(s) and the regulations promulgated thereunder.
The definition of Testing Compensation used in one Plan Year may differ from the
definition used in another Plan Year. Testing Compensation shall be limited as
required by Code section 401(a)(17).

         1.80     "Trust" shall mean the trust that has been established to hold
and invest contributions under this Plan.

         1.81     "Trustee" or "Trustees," (if more than one is appointed and
acting) shall mean the trustee or trustees, whether original or successor,
appointed under the Trust.

         1.82     "Units" shall mean the units referred to Section 3.12.

         1.83     "U.S. Asset Allocation Fund" shall mean a fund invested in a
mix of U.S. stock, bond and money market portfolios. The Fund periodically
shifts its asset allocation to emphasize the asset classes that offer the best
investment value, while considering investment risk.

         1.84     "U.S. Stock Fund" shall mean a passive fund invested in a
portfolio of common stocks that closely tracks the return of the S&P 500 Index.

         1.85     "U S WEST" shall mean U S WEST, Inc., a Delaware corporation,
and any successor entity.

         1.86     "U S WEST Shares" shall mean the common shares of U S WEST.

         1.87     "U S WEST Shares Fund" shall mean a fund to be invested
primarily in U S WEST Shares. The Trustee shall purchase any U S WEST Shares
required for the Plan, or cause such shares to be purchased, in the open market
or by private purchase, including purchase from U S WEST. Any purchase from U S
WEST shall be at the Value on the date of purchase or any more favorable price
that may be made available to the Trustee from time to time as a holder of U S
WEST Shares. Open market purchases and purchases from U S WEST will be made
pursuant to a regular program mutually agreed upon between the Trustee and U S
WEST. Subject to Section 3A.7, dividends and other distributions received in
cash with respect to U S WEST Shares or MediaOne Group Inc. common stock held in
the U S WEST Shares Fund, MediaOne Group Shares Fund or Combined Shares Fund
shall be reinvested in the U S WEST Shares Fund. Dividends and other
distributions received in the form of U S WEST Shares, whether with respect to U
S WEST Shares or MediaOne Group, Inc. common stock held in the U S WEST Shares
Fund, MediaOne Group Shares Fund or Combined Shares Fund, shall be held in the
U S WEST Shares Fund.

                                       15
<PAGE>

         1.88     "Valuation Date" shall mean any day that the New York Stock
Exchange is open, unless the Committee specifies otherwise.

         1.89     "Value" shall mean the value determined as of any Valuation
Date, based upon investments and earnings.

                                   ARTICLE II

                                  PARTICIPATION

2.1 - Eligibility Requirements.
      -------------------------

         (a)      Employee's Contributions. An Eligible Employee is eligible to
make Before-Tax and After-Tax Contributions to the Plan from his first paycheck
in the calendar month following the later of: (i) the completion of three months
of Service; or (ii) the date he became an Eligible Employee. See Section 2.3 for
rehires.

         (b)      Match. An Eligible Employee is generally eligible to receive
an allocation of Employer Matching Contributions after completing one year of
Service. See Section 3.4 for details.

         (c)      Rollover. An Eligible Employee is generally able to make a
rollover to this Plan on any date on which he is an Eligible Employee. See
Section 3.5 for details.

         (d)      Company Discretionary Contribution. An Eligible Employee may
receive an allocation of Company Discretionary Contributions, based on his
Compensation paid while he was eligible to make Before-Tax and After-Tax
Contributions under subsection (a) above. See Section 3.9 for details.

         (e)      Enrolling in the Plan pursuant to Section 2.6 shall signify
the Employee's acceptance of the benefits and terms of this Plan and Trust and
shall signify the Employee's agreement to make contributions to the Trust
pursuant to Article III of this Plan.

2.2 - Participation.
      -------------

         (a)      General. An Eligible Employee may continue to participate in
the Plan while he remains an Eligible Employee.

         (b)      Retroactive Participation. If the Eligible Employee is not
provided with enrollment materials before he became eligible to make
contributions to the Plan, then once the enrollment materials are provided to
the Eligible Employee, he has 30 days to "enroll retroactively." By enrolling
retroactively, the Eligible Employee shall be given the opportunity to make the
Before-Tax and After-Tax Contributions he could have made if he had enrolled as
early as he could have, and those contributions shall be matched according to
the Matching Formula in effect when the make-up contributions are made (or, if
greater, according to the Matching Formula in effect when the original
contributions could have been made). The make-up contributions shall be subject

                                       16
<PAGE>

to the limits described in Article III for the Plan Year in which they were made
(rather than the Plan Year in which they could have been made).

         (c)      Trailing Pay. A former Employee may receive some pay after
terminating employment ("trailing pay"), as discussed in the definition of
Savings Plan Eligible Earnings. To the extent that the trailing pay comprises
Savings Plan Eligible Earnings, and if the former Employee was an Eligible
Employee when he ceased to be an Employee, the former Employee may make
Before-Tax and After-Tax Contributions from the trailing pay, and receive the
appropriate match.

2.3 - Reemployment.
      ------------

         (a)      Less than 3 Months Prior Service. A rehired Employee who has
less than three months of prior Service shall become eligible to make Before-Tax
and After-Tax Contributions from his first paycheck in the calendar month
following the later of: (i) the completion by the Eligible Employee of three
months of Service after rehire; or (ii) the date he becomes an Eligible
Employee, provided that he is then an Eligible Employee.

         (b)      3 Months or More of Prior Service. An Employee who is rehired
at a time when he has more than three months of prior Service shall become
eligible to make Before-Tax and After-Tax Contributions from his first paycheck
in the calendar month after he became an Eligible Employee.

2.4 - Designation of Beneficiary.
      --------------------------

         (a)      General. Except as required by subsection (b), each
Participant or Alternate Payee shall designate the Beneficiary or Beneficiaries
who are to receive any portion of his vested Account after his death, and each
Participant or Alternate Payee may change such designation at any time and
without the consent of any previously designated Beneficiary.

         (b)      Married Participants. A married Participant's spouse shall be
his Beneficiary unless the spouse has consented to the designation of a
different Beneficiary. No spousal consent is necessary if it is established (to
the satisfaction of a Plan representative) that there is no spouse or that the
required consent cannot be obtained because the spouse cannot be located, or
because of other circumstances prescribed by Treasury Regulations. To be
effective, the spouse's consent must be in writing, witnessed by a notary
public, and filed with the Committee.

         (c)      Lack of Beneficiary. In the absence of an effective
beneficiary designation as to part or all of a Participant's vested Account, the
Beneficiary shall be the Participant's surviving spouse, if any, otherwise the
Beneficiary shall be the Participant's estate. In the absence of an effective
beneficiary designation as to part or all of an Alternate Payee's vested
Account, the Beneficiary shall be the Alternate Payee's estate. When the
Beneficiary of a deceased Participant or a deceased Alternate Payee dies, any
remaining Account balance shall be paid to the Beneficiary's estate.

                                       17
<PAGE>

         (d)      Special Rules. If a charity or non-profit organization that
has been designated as a beneficiary fails to return the required documents
within 60 days of being notified of the benefits to be distributed, then that
beneficiary shall be treated as having predeceased the Account Owner.

2.5 - Investment Funds.
      ----------------

         The following Investment Funds shall be established under this Plan:

         (a)      Combined Shares Fund (ESOP Account only)
         (b)      U.S. Stock Fund
         (c)      Interest Income Fund
         (d)      U.S. Asset Allocation Fund
         (e)      Global Assets Fund
         (f)      International Stock Fund
         (g)      U S WEST Shares Fund
         (h)      MediaOne Group Shares Fund
         (i)      Personal Choice Retirement Account

         IMC shall select the specific investments for the Investment Funds
(other than the Personal Choice Retirement Account), either by selecting a
mutual fund, common, group or collective trust fund, or similar vehicle, or by
designating an Investment Manager (or Trustee) who will be responsible for
investment of all or a portion of a particular fund.

         The Employee may designate in accordance with Section 2.6 that amounts
contributed to his Savings Account will be initially invested in any one or more
of the Investment Funds, other than the Combined Shares Fund, MediaOne Group
Shares Fund or Personal Choice Retirement Account, provided that such
designation shall be in increments of one percent of the aggregate
contributions. Any direction for investment of a Savings Account shall be deemed
to be a continuing direction until changed.

         An Account Owner may direct that the investment of his Savings Account
be redirected into any or all other Investment Funds in one percent increments
of the aggregate balance in accordance with Section 2.6; provided, however, that
transfers may not be made (a) from the Interest Income Fund to the Personal
Choice Retirement Account, or (b) from any Investment Fund to the Combined
Shares Fund or the MediaOne Group Shares Fund. The preceding sentence shall also
apply to the ESOP Account of a former Employee, Alternate Payee, Beneficiary or
Participant who can diversify his ESOP Account pursuant to Section 3A.9. When
the Account Owner provides an investment direction for his After-Tax or
Before-Tax Contributions, the same investment direction will apply to the
corresponding match (unless the match must be invested in the U S WEST Shares
Fund). See Section 6.1(d)(ii)(C) for restrictions on PCRA investments. The
Committee may establish any other rules and regulations regarding the Investment
Funds as it deems appropriate in its sole discretion.

                                       18
<PAGE>

         Participant loans made pursuant to Section 11.10 shall be treated as an
investment of the Participant, with the result that all loan repayments,
including interest, shall be allocated solely to the borrowing Participant's
Account.

         This Plan is intended to constitute a plan described in section 404(c)
of ERISA, and the regulations thereunder. Accordingly, the Committee intends to
provide to Account Owner the information described in section
2550.404c-1(b)(2)(i)(B)(1) of the Department of Labor Regulations. In addition,
upon request by an Account Owner, the Committee shall provide the information
described in sections 2550.404c-1(b)(2)(i)(B)(2) of the Department of Labor
Regulations.

         The Committee shall take such actions and establish such procedures as
it deems necessary to ensure the confidentiality of information relating to the
purchase, sale, and holding of U S WEST Shares, and the exercise of voting,
tender and similar rights with respect to such shares by an Account Owner.
Notwithstanding the foregoing, such information may be disclosed to the extent
necessary to comply with applicable state and federal laws.

         In the event of a tender or exchange offer with respect to U S WEST, or
in the event of a contested election with respect to the Board of Directors, U S
WEST shall, at its own expense, appoint an independent Fiduciary to carry out
the Committee's administrative functions with respect to U S WEST Shares. Such
independent Fiduciary shall not be an "affiliate" of any Participating Company
as such term is defined in section 2550.404c-1(e)(3) of the Department of Labor
Regulations.

         The Committee may take such other actions or implement such other
procedures as it deems necessary or desirable in order that the Plan comply with
section 404(c) of ERISA.

2.6 - Requirements for Participant Elections.
      --------------------------------------

         (a)      This Section 2.6 sets forth the requirements for Participants
(and other Account Owners to the extent applicable) to make (i) initial and
subsequent elections with respect to investment of contributions into Investment
Funds as set forth in Section 2.5, (ii) initial elections, suspensions or
changes in Before-Tax Contributions pursuant to Section 3.2, (iii) initial
elections, suspensions or changes of After-Tax Contributions pursuant to Section
3.3, (iv) elections with respect to redirection of Account balances into
Investment Funds, pursuant to Section 2.5, and (v) requests for distributions
pursuant to Section 6.1, voluntary withdrawals pursuant to Sections 6.2 and 6.3
and loans pursuant to Section 11.10.

         (b)      (i)      The elections described in subsection (a) shall be
made according to such rules and procedures that the Committee establishes.

                  (ii)     Elections described in Section 2.6(a)(i), (ii) and
(iii) will generally be effective as soon as administratively practicable,
except that the initial election is not effective before the date the
Participant is eligible to participate in the Plan.

                                       19
<PAGE>

                  (iii)    Elections described in Section 2.6(a)(iv) will
generally be effective as soon as administratively practicable.

                  (iv)     Requests described in Section 2.6(a)(v) will
generally be processed on the last Valuation Date of the week in which the
notice is given. Proceeds from transactions described in Section 2.6(a)(v) will
be delivered as soon as practicable thereafter.

                  (v)      Elections under Sections 2.6(a)(i), (ii), and (iii)
shall be made through the U S WEST Service Center, unless the Committee
determines otherwise. The Committee (or its delegate) shall send the Participant
a written confirmation containing the particulars of such election. If the
Participant fails to object, in writing, within 120 days after the election was
effective that the written confirmation is incorrect, the particulars set forth
in such written confirmation shall be deemed conclusive evidence of the election
made by the Participant.

         (c)      If an Account Owner properly requested the Committee or
Participating Company or recordkeeper to take some action with respect to his
Account or his participation in the Plan, and such action was not taken, the
Committee shall correct the mistaken action or the omission to act only if the
Account Owner notifies the Committee in writing of the mistake or omission
within 120 days of the mistake or omission.

                                   ARTICLE III

                                  CONTRIBUTIONS

3.1 - Contributions by Participants.
      -----------------------------

         Every Participant may make Before-Tax Contributions pursuant to Section
3.2 and/or After-Tax Contributions pursuant to Section 3.3. A Participant may
make Before-Tax Contributions and After-Tax Contributions during the same pay
period provided that, subject to the limitations of Sections 3.6, 3.7, 3.8, 3.10
and Article IV, the Participant's combined After-Tax Contributions and
Before-Tax Contributions for a pay period cannot exceed 16% of the Participant's
Savings Plan Eligible Earnings for the pay period.

3.2 - Before-Tax Contributions.
      ------------------------

         (a)      Election to Defer. Subject to the limitations in Sections 3.1,
3.6, 3.7, 3.10 and Article IV, each Participant may elect Before-Tax
Contributions, in accordance with Section 2.6, in whole percentages from 1% to
16% of the Participant's Savings Plan Eligible Earnings for each payroll period.
The Participant's Savings Plan Eligible Earnings shall be reduced by the amount
of his Before-Tax Contributions, which shall be credited to the Participant's
Before-Tax Account, and shall be made in accordance with rules established by
the Committee. See the definition of Savings Plan Eligible Earnings for
Participants whose Savings Plan Eligible Earnings exceed the Code section
401(a)(17) limit for the Plan Year.

                                       20
<PAGE>

         (b)      Change in Percentage or Suspension of Before-Tax
Contributions. A Participant's Before-Tax Contribution percentage will remain in
effect, notwithstanding any change in Savings Plan Eligible Earnings, until the
Participant elects to change the percentage. A Participant may elect to suspend,
change or resume his Before-Tax Contributions in accordance with the rules set
forth in Section 2.6.

         If a Participant's Before-Tax Contributions are halted during a Plan
Year because of some limit in the Plan (as opposed to the Participant's
voluntarily suspending his contributions), the Committee shall establish
procedures regarding the reactivation of the Participant's election for the next
Plan Year. Until changed by the Committee, the procedure will be to (i)
automatically increase the Participant's After-Tax Contribution rate, to the
extent possible, by the amount of Before-Tax Contributions that the Participant
is precluded from making, (ii) if the Participant does not thereafter change his
contribution rate, the Committee will reactivate the Participant's Before-Tax
Contribution election at the beginning of the next Plan Year, and (iii) if the
Participant changed his contribution rate, his election will not be reactivated
the next Plan Year.

         In the event of a change in the Savings Plan Eligible Earnings of a
Participant, the Before-Tax Contribution percentage currently in effect shall be
applied with respect to such changed Savings Plan Eligible Earnings, without
action by the Participant.

         If a Participant terminates employment with a Participating Company and
is reemployed within 30 days by another Participating Company, any previous
elections to make Before-Tax Contributions shall remain in effect.

         (c)      Status of Before-Tax Contributions. To make Before-Tax
Contributions under this Section, the Participating Company will reduce the
Participant's Savings Plan Eligible Earnings by the amount authorized by the
Participant and promptly contribute such amount to the Trustee. Before-Tax
Contributions constitute Participating Company contributions under the Plan and
are intended to qualify as elective contributions under Code section 401(k).

3.3 - After-Tax Contributions.
      -----------------------

         (a)      Election to Make After-Tax Contributions.

                  (i)      Subject to the limitations of Sections 3.1, 3.8 and
Article IV, each Participant may elect After-Tax Contributions on his own
behalf, in accordance with Section 2.6, in whole percentages from 1% to 16% of
the Participant's Savings Plan Eligible Earnings for each payroll period. Such
contributions by Participants shall be credited to the Participant's After-Tax
Account, and shall be made in accordance with rules established by the
Committee. See the definition of Savings Plan Eligible Earnings for Participants
whose Savings Plan Eligible Earnings exceed the Code section 401(a)(17) limit
for the Plan Year.

                  (ii)     A Participant's rate of After-Tax Contributions may
be increased when his Before-Tax Contributions are limited, as described in
Section 3.2(b).

                                       21
<PAGE>

         (b)      Change in Percentage or Suspension of After-Tax Contributions.
A Participant's After-Tax Contribution percentage will remain in effect,
notwithstanding any change in Savings Plan Eligible Earnings, until the
Participant elects to change the percentage. A Participant may elect to suspend,
change or resume his After-Tax Contributions in accordance with the rules set
forth in Section 2.6.

         In the event of a change in the Savings Plan Eligible Earnings of a
Participant, the After-Tax Contribution percentage currently in effect shall be
applied with respect to such changed Savings Plan Eligible Earnings, without
action by the Participant.

         If a Participant terminates employment with a Participating Company and
is reemployed within 30 days by another Participating Company, any previous
elections to make After-Tax Contributions shall remain in effect.

         (c)      Status of After-Tax Contributions. To make After-Tax
Contributions under this Section, the Participating Company will deduct from the
Participant's Savings Plan Eligible Earnings the amount authorized by the
Participant and promptly contribute such amount to the Trustee.

3.4 - Employer Matching Contributions.
      -------------------------------

         (a)      Amount of Employer Matching Contribution. The Participating
Companies shall make sufficient Employer Matching Contributions to the Plan so
that the Matching Contribution Account of each Participant will be allocated
with an amount required by (and limited to) the Matching Formula set forth in
subsections (b) and (c) below. Such allocations shall be provided through a
combination of (i) Financed Shares released as a result of Employer Matching
Contributions used to repay an Acquisition Loan and/or (ii) Employer Matching
Contributions not used to repay an Acquisition Loan and/or (iii) forfeitures
described in Section 3.11.

         (b)      Matching Formula. Subject to the limitations of Sections 3.8A,
3.10 and Article IV and except as provided in subsections 2.2(c) and 3.4(c)
below, a Participant shall receive an allocation only with respect to each
paycheck made on or after the first day of the month after a Participant has
completed one year of Service and while the Participant is an Eligible Employee.
If a Participant makes both Before-Tax and After-Tax Contributions for a pay
period, the Before-Tax Contributions will be matched first. Subject to the
foregoing, the Matching Formula is as follows:

                  (i)      Occupational.

                           (A)    Before January 1, 1999, the Matching Formula
for each Participant who is an Occupational Employee shall be an allocation
equal to 70% of the Before-Tax Contributions and After-Tax Contributions made
during such pay period by such Participant; provided, however, that the
allocation for any such Participant for any pay period shall not exceed 4.2% of
such Participant's Savings Plan Eligible Earnings for that pay period. The
maximum allocation for the Plan Year for a Participant is equal to 4.2% of the
dollar limit under Code section 401(a)(17) for the Plan Year.

                                       22
<PAGE>

                           (B)    During 1999, the Matching Formula for each
Participant who is an Occupational Employee shall be an allocation equal to 75%
of the Before-Tax Contributions and After-Tax Contributions made during such pay
period by such Participant; provided, however, that the allocation for any such
Participant for any pay period shall not exceed 4.5% of such Participant's
Savings Plan Eligible Earnings for that pay period. The maximum allocation for
the Plan Year for a Participant is equal to 4.5% of the dollar limit under Code
section 401(a)(17) for the Plan Year.

                           (C)    Effective January 1, 2000, the Matching
Formula for each Participant who is an Occupational Employee shall be an
allocation equal to 81% of the Before-Tax Contributions and After-Tax
Contributions made during such pay period by such Participant; provided,
however, that the allocation for any such Participant for any pay period shall
not exceed 4.86% of such Participant's Savings Plan Eligible Earnings for that
pay period. The maximum allocation for the Plan Year for a Participant is equal
to 4.86% of the dollar limit under Code section 401(a)(17) for the Plan Year.

                           (D)    This Section 3.4(b)(i)(D) applies instead of
(A), (B), and (C) for Occupational Employees of the Pocatello Customer Service
Center. Effective as of April 1, 1998, the Matching Formula for each such
Participant shall be an allocation equal to 75% of the Before-Tax Contributions
and After-Tax Contributions made during such pay period by such Participant;
provided, however, that the allocation for any such Participant for any pay
period shall not exceed 4.5% of such Participant's Savings Plan Eligible
Earnings for that pay period. The maximum allocation for the Plan Year for such
a Participant is equal to 4.5% of the dollar limit under Code section 401(a)(17)
for the Plan Year.

                           (E)    Effective January 1, 2000, this Section
3.4(b)(i)(E) applies instead of (C) for customer service agents. The Matching
Formula for each customer service agent shall be an allocation equal to 25% of
his Before-Tax Contributions and After-Tax Contributions made during such pay
period; provided, however, that the allocation for any customer service agent
for any pay period shall not exceed 1.5% of his Savings Plan Eligible Earnings
for that pay period. The maximum allocation for the Plan Year for a customer
service agent is equal to 1.5% of the dollar limit under Code section 401(a)(17)
for the Plan Year.

                  (ii)     Management. The Matching Formula for each Participant
who is a Management Employee shall be an allocation equal to 83-1/3% of the
Before-Tax Contributions and After-Tax Contributions made during such pay period
by such Participant; provided, however, that the allocation for any such
Participant for any pay period shall not exceed 5% of such Participant's Savings
Plan Eligible Earnings for that pay period. The maximum allocation for the Plan
Year for such a Participant is equal to 5% of the dollar limit under Code
section 401(a)(17) for the Plan Year.

         (c)      Special Matching Formula Provisions. Notwithstanding
subsection (b) above and subject to the limitations of Sections 3.8A, 3.10 and
Article IV:

                                       23
<PAGE>

                  (i)      In the case of a Participant who is an Occupational
Employee employed by U S WEST Dex, Inc., a Colorado corporation, the maximum
allocations under the Matching Formula shall be $3,850 for the 1998 Plan Year,
$4,500 for the 1999 Plan Year, and $4,860 thereafter, or such other amount as is
agreed upon as a result of collective bargaining.

                  (ii)     In the case of a Participant employed as of the
Separation Time by U S WEST, Inc., allocations under the Matching Formula shall
be made in accordance with the applicable formula set forth in subsection (b)
for each paycheck made on or after the first day of the month after the
Participant has completed three months of Service.

                  (iii)    In the case of a Participant employed by U S WEST
Dex, Inc., allocations under the Matching Formula shall be made in accordance
with the applicable formula set forth in subsection (b) for each paycheck made
on or after the first day of the month after the Participant has completed three
months of Service.

                  (iv)     The Matching Formula shall be suspended in certain
situations, as described in Article VI, following a distribution or withdrawal.

                  (v)      The Matching Formula may be applied retroactively in
certain situations as described in Section 2.2(b).

         (d)      Allocation of Employer Matching Contributions.

                  (i)      Each pay period, the Matching Contribution Account
maintained for each Participant shall be allocated with the Participant's
allocable share, as determined under and limited to the Matching Formula, of (A)
Financed Shares released from the loan suspense account (as set forth in Section
3A.6) and (B) Employer Matching Contributions not used to repay an Acquisition
Loan and forfeitures described in Section 3.11. For purposes of the Matching
Formula, allocations of U S WEST Shares shall be valued based on the Value as of
the date of the allocation. Notwithstanding any other provision of the Plan, the
allocation under this Section 3.4 for any Participant for any pay period (other
than the last pay period of the Plan Year) shall not exceed the amount permitted
to be allocated pursuant to the Matching Formula.

                  (ii)     In the event that the sum of the value of Financed
Shares released pursuant to Sections 3A.5 and 3A.6 for the Plan Year and the
Employer Matching Contributions not used to repay an Acquisition Loan exceed the
total Value of required allocations as determined under the Matching Formula,
such excess Value (which may be converted to a number of excess shares) shall be
allocated as of December 31 of such Plan Year. A percentage of such excess Value
shall be allocated to the Matching Contribution Account of each Participant who
is both an Employee and a Participant on December 31 of such Plan Year; such
percentage shall be determined by dividing (i) the total Value of all
allocations (as of the appropriate allocation dates) to the Participant's
Matching Contribution Account made during the Plan Year pursuant to the Matching
Formula, by (ii) the total Value of all allocations (as of the appropriate
allocation dates) to the Matching Contribution Accounts of all Participants who
are Participants on December 31 of such Plan Year made during the Plan Year
pursuant to the Matching Formula.

                                       24
<PAGE>

3.5 - Rollover Contributions.
      ----------------------

         (a)      An Eligible Employee, regardless of whether he has satisfied
the participation requirements of Section 2.1, or a former Employee who retains
a vested Account balance under the Plan may, in accordance with procedures
approved by the Committee, make a rollover contribution. The rollover
contribution may be (i) a direct rollover that meets the requirements of Code
sections 401(a)(31) and 402(c) and that comes from another plan that meets the
qualification requirements of Code section 401(a), (ii) a rollover that meets
the requirements of Code section 402(c) of a distribution from another plan that
meets the qualification requirements of Code section 401(a), or (iii) a rollover
from an IRA that meets the requirements of Code section 408(d)(3)(A)(ii).

         (b)      The Committee shall develop such other procedures, and may
require such information from an individual desiring to make such a transfer, as
it deems necessary or desirable to determine that the proposed rollover will
meet the applicable requirements of the Code. Upon approval by the Committee,
the amount transferred shall be deposited in the Trust and shall be credited to
the individual's Rollover Account. Such account shall not be taken into account
for purposes of determining Employer Matching Contributions. If the Plan accepts
a rollover and subsequently determines that it was not a valid rollover, the
Plan shall distribute the invalid rollover (adjusted to reflect investment
experience) to the Participant, as soon as administratively practicable, without
the Participant's consent.

         (c)      If an Eligible Employee makes a transfer pursuant to this
Section 3.5 before completing the requirements of Section 2.1, his Rollover
Account shall represent his sole interest in the Plan until he becomes a
Participant. Such Eligible Employee shall be entitled to direct the investment
of his Rollover Account pursuant to Section 2.5 but shall not be permitted to
withdraw or take a loan from the Rollover Account until he has satisfied the
requirements of Section 2.1.

3.6 - Section 402(g) Limit on Before-Tax Contributions.
      ------------------------------------------------

         (a)      Before-Tax Contributions made on behalf of any Participant
under this Plan and all other plans that are described in Section 3.6(c) that
are maintained by the Company or a Related Company shall not exceed the
limitation under Code section 402(g)(1) (as adjusted by the Secretary of the
Treasury) for the taxable year of the Participant.

         (b)      If the dollar limitation provided for in Section 3.6(a) is
exceeded, the Participant is deemed to have requested a distribution of the
excess amount by March 1 following the close of the Participant's taxable year,
and the Committee shall distribute such excess amount, and any income allocable
to such amount, to the Participant by April 15th. In determining the excess
amount distributable with respect to a Participant's taxable year, excess
Before-Tax Contributions previously distributed or redesignated as after-tax
contributions for the Plan Year beginning in such taxable year shall reduce the
amount otherwise distributable under this subsection (b). Unmatched Before-Tax
Contributions shall be distributed first. If a matched Before-Tax Contribution
is returned to the Participant, the match associated with that returned
Before-Tax Contribution (adjusted to reflect investment experience) shall be
forfeited.

                                       25
<PAGE>

         (c)      In the event that a Participant makes Before-Tax Contributions
to this Plan and also makes contributions to another plan that is not sponsored
by the Company or a Related Company and those contributions are subject to the
limit under Code section 402(g), and all such contributions exceed the Code
section 402(g) limit for such Participant's taxable year, the Participant may,
not later than March 1 following the close of his taxable year, notify the
Committee in writing of such excess and request that the Before-Tax
Contributions made on his behalf under this Plan be reduced by an amount
specified by the Participant. The Committee may then determine to distribute
such excess in the same manner as provided in Section 3.6(b). Unmatched
Before-Tax Contributions shall be distributed first. If a matched Before-Tax
Contribution is returned to the Participant, the match associated with that
returned Before-Tax Contribution (adjusted to reflect investment experience)
shall be forfeited.

3.7 - Section 401(k) Limitations on Before-Tax Contributions.
      ------------------------------------------------------

         Each Plan Year, the Plan must satisfy the actual deferral percentage
test (the "ADP test") that is described in Code section 401(k)(3)(a)(ii) and the
regulations. The ADP test shall be performed in accordance with the relevant
provisions of the Code and the regulations, and as described more fully in this
Section 3.7. Separate ADP tests will be performed for separate groups of
Participants where mandatory disaggregation is required by the regulations or
where permissive disaggregation is permitted by the regulations and the
Committee chooses such permissive disaggregation. Furthermore, where the
regulations permit the aggregation of any of the disaggregated groups with
another plan or another disaggregated group, the Committee may choose such
aggregation. For Plan Years beginning after 1998, the Committee may elect to
exclude from the ADP test those non-Highly Compensated Employees who, at the end
of the Plan Year (or the Severance Date for those who had a Severance Date
during the Plan Year), had not attained age 21 and/or whose period of Service
was for less than one year. To the extent permitted in the regulations,
Before-Tax Contributions and the contributions discussed in Section 3.7(d)(iii)
may be used to satisfy the ACP tests discussed in Sections 3.8 and 3.8A if they
are not needed to satisfy the ADP test. Similarly, Participating Company
contributions discussed in Section 3.8(d)(ii) may be used to satisfy the ADP
test if they are not needed to satisfy the ACP test.

         (a)      If the Committee believes that the ADP test will not be
satisfied for a Plan Year, the Committee may reduce the amount of Before-Tax
Contributions that some or all Highly Compensated Employees can make for the
remainder of the Plan Year. In accordance with any such estimate, the Committee
may modify the limits in Section 3.2(a), or set initial or interim limits, for
Before-Tax Contributions relating to any Participant or class of Participants.
These rules may include provisions authorizing the suspension or reduction of
Before-Tax Contributions above a specified dollar amount or percentage of
Savings Plan Eligible Earnings.

         (b)      For each Plan Year, an actual deferral percentage will be
determined for each Employee who was eligible to make Before-Tax Contributions
at some time during the Plan Year. The actual deferral percentage is equal to
the total amount of the Employee's Before-Tax Contributions allocated under
Section 3.2(a) and Participating Company contributions under Section 3.7(d)(iii)
for the Plan Year, divided by the Participant's Testing Compensation for the

                                       26
<PAGE>

Plan Year. The actual deferral ratio of a Highly Compensated Employee shall be
determined by treating all cash or deferred arrangements maintained by the
Company or a Related Company (other than those that cannot be aggregated) as a
single arrangement.

         (c)      The average of the actual deferral percentages for
Participants who are Highly Compensated Employees for the Plan Year ("High
Average") when compared with the average of the actual deferral percentages for
Participants who are not Highly Compensated Employees for the Plan Year ("Low
Average") must meet one of the following requirements:

                  (i)      The High Average is no greater than 1.25 times the
Low Average; or

                  (ii)     The High Average is no greater than two times the Low
Average, and the High Average is no greater than the Low Average plus two
percentage points.

         (d)      If the ADP test is not satisfied, the Committee shall decide
which one or more of the following methods shall be employed to satisfy the ADP
test. All corrections shall be accomplished if possible before March 15 of the
following Plan Year, and in no event later than December 31 of the following
Plan Year.

                  (i)      Excess Before-Tax Contributions for a Plan Year may
be redesignated as After-Tax Contributions and accounted for separately pursuant
to Section 3.2(d). Excess Before-Tax Contributions, however, may not be
redesignated as After-Tax Contributions with respect to a Highly Compensated
Employee to any extent that such redesignated After-Tax Contributions would
exceed the limits of Sections 3.3 or 3.8 when combined with the other After-Tax
Contributions of that Employee for the Plan Year.

                  (ii)     Excess Before-Tax Contributions, and any earnings
attributable thereto through the end of the Plan Year may be paid to the
Participant (subject to required withholding). Unmatched Before-Tax
Contributions shall be returned first. If a matched Before-Tax Contribution is
returned, then the match associated with it shall be forfeited.

                  (iii)    The Participating Companies, in their discretion, may
make a contribution to the Plan, which will be allocated as a fixed dollar
amount among the Before-Tax Accounts of Participants who are not Highly
Compensated Employees and who have met the requirements of Section 2.1.

         Any such excess Before-Tax Contributions recharacterized as After-Tax
Contributions or distributed from the Plan with respect to a Participant for a
Plan Year shall be reduced by any amount previously distributed to such
Participant under any other provision of Articles III or IV.

         (e)      Excess Before-Tax Contributions shall be determined in the
following manner:

                  (i)      The amount of aggregate excess Before-Tax
Contributions of all Highly Compensated Employees will be determined by the
Committee by reducing the actual deferral percentage of the Highly Compensated
Employee(s) with the highest actual deferral percentage for the Plan Year by the

                                       27
<PAGE>

lesser of: (A) the amount required to enable the Plan to meet the limits in
subsection (c) above; or (B) the amount required to cause the actual deferral
percentage of such Highly Compensated Employee(s) to equal the actual deferral
percentage of the Highly Compensated Employee(s) with the next-highest actual
deferral percentage for the Plan Year. The process in the preceding sentence
shall be repeated until the Plan satisfies the limits in subsection (c) above.

                  (ii)     The amount of excess Before-Tax Contributions of each
Highly Compensated Employee will be determined by the Committee by reducing the
Before-Tax Contributions of the Highly Compensated Employee(s) with the highest
dollar amount of Before-Tax Contributions for the Plan Year by the lesser of:
(A) the amount determined under paragraph (i) above; or (B) the amount required
to cause the Before-Tax Contributions of such Highly Compensated Employee(s) to
equal the Before-Tax Contributions of the Highly Compensated Employee(s) with
the next-highest dollar amount of Before-Tax Contributions for the Plan Year.
The process in the preceding sentence shall be repeated until the sum of the
amounts determined under this paragraph (ii) equals the aggregate amount
determined under paragraph (i) above.

                  (iii)    The earnings attributable to excess Before-Tax
Contributions will be determined in accordance with Treasury Regulations. The
Committee will not be liable to any Participant (or his Beneficiary, if
applicable) for any losses caused by inaccurately estimating or calculating the
amount of any Participant's excess Before-Tax Contributions and earnings
attributable to the Before-Tax Contributions.

3.8 - Section 401(m) Limitations on After-Tax Contributions.
      -----------------------------------------------------

         Each Plan Year, the Plan must satisfy the actual contribution
percentage test (the "ACP test") that is described in Code section 401(m)(2)(A)
and the regulations. The ACP test shall be performed in accordance with the
relevant provisions of the Code and the regulations, and as described more fully
in this Section 3.8. Separate ACP tests will be performed for separate groups of
Participants where mandatory disaggregation is required by the regulations or
where permissive disaggregation is permitted by the regulations and the
Committee chooses such permissive disaggregation. Furthermore, where the
regulations permit the aggregation of any of the disaggregated groups with
another plan or another disaggregated group, the Committee may choose such
aggregation. Section 3.8A explains the ACP test for the ESOP, and this Section
3.8 explains the ADP test for the After-Tax Contributions. For Plan Years
beginning after 1998, the Committee may elect to exclude from the ACP test those
non-Highly Compensated Employees who, at the end of the Plan Year (or the
Severance Date for those who had a Severance Date during the Plan Year), had not
attained age 21 and/or whose period of Service was for less than one year. To
the extent permitted in the regulations, Before-Tax Contributions and the
contributions discussed in Section 3.7(d)(iii) may be used to satisfy this ACP
test if they are not needed to satisfy the ADP test in Section 3.7 or the ACP
test in Section 3.8A below.

                                       28
<PAGE>

         (a)      If the Committee believes that the ACP test will not be
satisfied for a Plan Year, the Committee may reduce the amount of After-Tax
Contributions that some or all Highly Compensated Employees can make for the
remainder of the Plan Year. In accordance with any such estimate, the Committee
may modify the limits in Section 3.3, or set initial or interim limits, for
After-Tax Contributions relating to any Participant or class of Participants.
These rules may include provisions authorizing the suspension or reduction of
After-Tax Contributions above a specified dollar amount or percentage of Savings
Plan Eligible Earnings.

         (b)      For each Plan Year, a contribution percentage will be
determined for each Employee who was eligible to make After-Tax Contributions at
some time during the Plan Year. The contribution percentage is equal to the
ratio of the total amount of the Participant's After-Tax Contributions allocated
under Section 3.3 for the Plan Year and any Before-Tax Contributions of the
Participant redesignated as After-Tax Contributions under Sections 3.2(d),
3.7(d) and 3.8(h) in the Plan Year in which such excess Before-Tax Contributions
would be included in the gross income of the Participant, divided by the
Participant's Testing Compensation for the Plan Year. The contribution
percentage of a Highly Compensated Employee shall be determined by treating all
cash or deferred arrangements maintained by the Company or a Related Company
(other than those that cannot be aggregated) as a single arrangement.

         (c)      The average of the contribution percentages for Participants
who are Highly Compensated Employees for a Plan Year ("High Average") when
compared with the average of the contribution percentages for Participants who
are not Highly Compensated Employees for the Plan Year ("Low Average") must meet
one of the following requirements:

                  (i)      The High Average is no greater than 1.25 times the
Low Average; or

                  (ii)     The High Average is no greater than two times the Low
Average, and the High Average is no greater than the Low Average plus two
percentage points.

         (d)      If the ACP test is not satisfied, the Committee shall decide
which one or more of the following methods shall be employed to satisfy the ACP
test. All corrections shall be accomplished if possible before March 15 of the
following Plan Year, and in no event later than December 31 of the following
Plan Year.

                  (i)      Excess contributions (and any earnings attributable
to such excess amounts through the end of the Plan Year) will be distributed to
the Participant or Participants. The Plan shall distribute unmatched After-Tax
Contributions before distributing any matched After-Tax Contributions. If a
matched After-Tax Contribution is distributed, the associated match shall be
forfeited.

                  (ii)     The Participating Companies, in their discretion, may
make a contribution to the Plan, which will be allocated as a fixed dollar
amount among the Before-Tax Accounts of Participants who are not Highly
Compensated Employees and who have met the requirements of Section 2.1.

                                       29
<PAGE>

         (e)      Excess After-Tax Contributions shall be determined in the
following manner:

                  (i)      The amount of aggregate excess After-Tax
Contributions of all Highly Compensated Employees will be determined by the
Committee by reducing the contribution percentage of the Highly Compensated
Employee(s) with the highest contribution percentage for the Plan Year by the
lesser of: (A) the amount required to enable the Plan to meet the limits in
subsection (c) above; or (B) the amount required to cause the contribution
percentage of such Highly Compensated Employee(s) to equal the contribution
percentage of the Highly Compensated Employee(s) with the next-highest
contribution percentage for the Plan Year. The process in the preceding sentence
shall be repeated until the Plan satisfies the limits in subsection (c) above.

                  (ii)     The amount of excess After-Tax Contributions of each
Highly Compensated Employee will be determined by the Committee by reducing the
After-Tax Contributions of the Highly Compensated Employee(s) with the highest
dollar amount of After-Tax Contributions for the Plan Year by the lesser of: (A)
the amount determined under paragraph (i) above; or (B) the amount required to
cause the After-Tax Contributions of such Highly Compensated Employee(s) to
equal the After-Tax Contributions of the Highly Compensated Employee(s) with the
next-highest dollar amount of After-Tax Contributions for the Plan Year. The
process in the preceding sentence shall be repeated until the sum of the amounts
determined under this paragraph (ii) equals the aggregate amount determined
under paragraph (i) above.

                  (iii)    The earnings attributable to excess After-Tax
Contributions will be determined in accordance with Treasury Regulations. The
Committee will not be liable to any Participant (or his Beneficiary, if
applicable) for any losses caused by inaccurately estimating or calculating the
amount of any Participant's excess After-Tax Contributions and earnings
attributable to the After-Tax Contributions.

         (f)      The tests of Sections 3.7(c) and 3.8(c) shall be met in
accordance with the prohibition against the multiple use of the alternative
limitation under Code section 401(m)(9). In the event such limitations are
violated, corrections shall be made in accordance with Section 3.8(d).

3.8A - Section 401(m) Limitations on Employer Matching Contributions.
       -------------------------------------------------------------

         Each Plan Year, the Plan must satisfy the actual contribution
percentage test (the "ACP test") that is described in Code section 401(m)(2)(A)
and the regulations. The ADP test shall be performed in accordance with the
relevant provisions of the Code and the regulations, and as described more fully
in this Section 3.8A. Separate ACP tests will be performed for separate groups
of Participants where mandatory disaggregation is required by the regulations or
where permissive disaggregation is permitted by the regulations and the
Committee chooses such permissive disaggregation. Furthermore, where the
regulations permit the aggregation of any of the disaggregated groups with
another plan or another disaggregated group, the Committee may choose such
aggregation. Section 3.8 explains the ACP test for the After-Tax Contributions,
and this Section 3.8A explains the ACP test for the match. For Plan Years
beginning after 1998, the Committee may elect to exclude from the ACP test those
non-Highly Compensated Employees who, at the end of the Plan Year (or the
Severance Date for those who had a Severance Date during the Plan Year), had not

                                       30
<PAGE>

attained age 21 and/or whose period of Service was for less than one year. To
the extent permitted in the regulations, Before-Tax Contributions and the
contributions discussed in Sections 3.7(d)(iii) and 3.8(d)(ii) may be used to
satisfy this ACP test if they are not needed to satisfy the ADP test in Section
3.7 or the ACP test in Section 3.8.

         (a)      If the Committee believes that the ACP test will not be
satisfied for a Plan Year, the Committee may reduce the amount of Before-Tax
Contributions and/or After-Tax Contributions that some or all Highly Compensated
Employees can make for the remainder of the Plan Year. In accordance with any
such estimate, the Committee may modify the limits in Section 3.4, or set
initial or interim limits, for Before-Tax and/or After-Tax Contributions
relating to any Participant or class of Participants. These rules may include
provisions authorizing the suspension or reduction of After-Tax Contributions
above a specified dollar amount or percentage of Savings Plan Eligible Earnings.

         (b)      For each Plan Year, a contribution percentage will be
determined for each Employee who is eligible to receive an allocation of
Employer Matching Contributions (if the Employee makes the requisite After-Tax
and/or Before-Tax Contributions). The contribution percentage is equal to the
ratio of the total amount of the Participant's Employer Matching Contributions
allocated under Section 3.4 for the Plan Year divided by the Participant's
Testing Compensation for the Plan Year.

         (c)      The average of the contribution percentages for Participants
who are Highly Compensated Employees for the Plan Year ("High Average") when
compared with the average of the contribution percentages for Participants who
are not Highly Compensated Employees for the Plan Year for the Plan Year ("Low
Average") must meet one of the following requirements:

                  (i)      The High Average is no greater than 1.25 times the
Low Average; or

                  (ii)     The High Average is no greater than two times the Low
Average, and the High Average is no greater than the Low Average plus two
percentage points.

         (d)      If the ACP test is not satisfied, the Committee shall decide
which one or more of the following methods shall be employed to satisfy the ACP
test. All corrections shall be accomplished if possible before March 15 of the
following Plan Year, and in no event later than December 31 of the following
Plan Year.

                  (i)      Excess Employer Matching Contributions (and any
earnings attributable thereto through the end of the Plan Year) that are not
vested will be forfeited.

                  (ii)     Excess Employer Matching Contributions (and any
earnings attributable to such excess amounts through the end of the Plan Year)
that are vested will be distributed to the Participant.

         (e)      Excess Employer Matching Contributions shall be determined in
the following manner:

                                       31
<PAGE>

                  (i)      The amount of aggregate excess Employer Matching
Contributions of all Highly Compensated Employees will be determined by the
Committee by reducing the contribution percentage of the Highly Compensated
Employee(s) with the highest contribution percentage for the Plan Year by the
lesser of: (A) the amount required to enable the Plan to meet the limits in
subsection (c) above; or (B) the amount required to cause the contribution
percentage of such Highly Compensated Employee(s) to equal the contribution
percentage of the Highly Compensated Employee(s) with the next-highest
contribution percentage for the Plan Year. The process in the preceding sentence
shall be repeated until the Plan satisfies the limits in subsection (c) above.

                  (ii)     The amount of excess Employer Matching Contributions
of each Highly Compensated Employee will be determined by the Committee by
reducing the Employer Matching Contributions of the Highly Compensated
Employee(s) with the highest dollar amount of Employer Matching Contributions
for the Plan Year by the lesser of: (A) the amount determined under paragraph
(i) above; or (B) the amount required to cause the Employer Matching
Contributions of such Highly Compensated Employee(s) to equal the Employer
Matching Contributions of the Highly Compensated Employee(s) with the
next-highest dollar amount of Employer Matching Contributions for the Plan Year.
The process in the preceding sentence shall be repeated until the sum of the
amounts determined under this paragraph (ii) equals the aggregate amount
determined under paragraph (i) above.

                  (iii)    The earnings attributable to excess Employer Matching
Contributions will be determined in accordance with Treasury Regulations. The
Committee will not be liable to any Participant (or his Beneficiary, if
applicable) for any losses caused by inaccurately estimating or calculating the
amount of any Participant's excess Employer Matching Contributions and earnings
attributable to the Employer Matching Contributions.

3.9 - Discretionary Company Contributions.
      -----------------------------------

         (a)      Each Participating Company may make a Company Discretionary
Contribution to the Trust for any Plan Year in such amounts as the Board of
Directors shall determine in its sole discretion. Notwithstanding the foregoing,
Company Discretionary Contributions shall be subject to the limitations of
Section 3.10 and Article IV. U S WEST may direct in its sole discretion that
Company Discretionary Contributions may be used to repay an Acquisition Loan.

         (b)      As of the last day of each Plan Year, there shall be allocated
from the Company Discretionary Contribution under Section 3.9(a) for the Plan
Year and/or the Financed Shares released as a result of such Company
Discretionary Contribution to the Company Discretionary Contribution Account of
each Participant who is employed on the last day of the Plan Year, an amount
equal to that portion of the total allocable amount that the Participant's
Compensation bears to the total Compensation of all such Participants. A
Participant's Compensation taken into account for this purpose shall be limited
to Compensation received during the Plan Year while eligible to make Before-Tax
and After-Tax Contributions. If Company Discretionary Contributions are used to
repay an Acquisition Loan, only those shares released as a result of such
payment shall be allocated under this Section 3.9(b).

                                       32
<PAGE>

3.10 - Limits on Employer and Before-Tax Contributions.
       -----------------------------------------------

         (a)      Tax-Deductible Contributions. Company contributions for a Plan
Year shall not exceed the amount allowable as a deduction for U S WEST's tax
year (for federal income tax purposes) ending with or within the Plan Year
pursuant to Code section 404, including carryforwards of unused deductions for
prior tax years.

         (b)      Timing of Contributions. The Participating Company shall pay
to the Trustee any Company Discretionary Contribution or Employer Matching
Contribution or other contribution for any Plan Year no later than the last day
prescribed by law, including extensions of time, for the filing of U S WEST's
federal income tax return for its taxable year ending with or within the Plan
Year to which the contribution relates, with the following exceptions.
Participating Company contributions made to satisfy the ADP or ACP test shall be
paid to the Trustee within one year after the Plan Year to which they relate.
Contributions required for qualified servicemen pursuant to Code section 414(u)
shall be made as specified in Code section 414(u).

3.11 - Allocation of Certain Forfeitures.
       ---------------------------------

         Forfeitures shall be used to restore prior forfeitures for re-employed
Participants as described in Section 5.2(d), to pay those expenses of the Plan
that are properly payable from the Trust and that are not paid by a
Participating Companies or charged to Accounts, or to reduce Participating
Company contributions.

3.12 - Valuation of Accounts.
       ---------------------

         (a)      Unit Accounting. The interest of an Account Owner in each
Investment Fund, other than the Personal Choice Retirement Account, shall be
represented by Units, which shall be valued and credited to such individual's
Accounts as follows:

                  (i)      General Rule. On the Valuation Date immediately
following the commencement of operation of each Investment Fund, the Account of
each individual was (or will be) credited at the rate of one Unit for each
dollar invested in each such Investment Fund as of such Valuation Date.
Thereafter, the Value of a Unit representing each type of Investment Fund shall
be determined at the beginning of each succeeding Valuation Date by dividing the
total number of Units representing each type of Investment Fund credited to the
Accounts of all Participants, former Employees and Beneficiaries immediately
prior to such Valuation Date into the Value of all the assets then held by the
Trustee with respect to each Investment Fund.

                           Following such determination of the Value of the
Units representing each Investment Fund, the Account of each individual who has
selected each Investment Fund shall be credited, as of the end of the Valuation
Date as of which the determination is made, with a number of Units representing
the amount invested in each Investment Fund determined by dividing the Value of

                                       33
<PAGE>

a Unit of each type of investment into the amount of Before-Tax Contributions,
After-Tax Contributions, Employer Matching Contributions, Company Discretionary
Contributions and rollover contributions to be invested in each type of
investment. An individual's Account will also be credited, as of the Valuation
Date on which the determination is made, with a number of Units representing
investment in the U S WEST Shares Fund determined by dividing the Value of a
Unit representing investment in such fund into the amount of the individual's
allocable share of any earnings attributable to dividends (but not the dividends
themselves) paid with respect to U S WEST Shares held in such fund.

                  (ii)     Exceptions to the General Rule. The Committee has the
authority to adjust the general procedures outlined in Section 3.12(a)(i) above
in order to provide a more equitable result when the Committee determines there
are extraordinary circumstances. In addition, the Committee, IMC, Investment
Managers, and the Trustee have the following authority.

                           Any Investment Fund may suspend purchases,
redemptions, or postpone payment when the Trustee or Investment Manager
determines that such suspension is necessary or desirable for the orderly
administration or management of the Investment Fund, which could occur, for
example, when a relevant exchange is closed, when trading on a relevant exchange
is halted or restricted, when there are large redemption requests from Account
Owners, or because of a natural disaster where the Investment Fund is managed.
The Committee, IMC, Investment Manager, or Trustee shall establish special
procedures to value the purchases and redemptions during the business days
affected by the suspension.

                           The Committee, IMC, Investment Manager, or Trustee
may establish special procedures to value the purchases and redemptions during
any period of market upheaval, when transactions are suspended, when there are
large redemption requests from Account Owners, or to handle any other
extraordinary or abnormal situation.

         (b)      Allocation of Plan Expenses. All expenses of any party
lawfully payable from the assets of the Plan shall be paid from such assets
except to the extent that U S WEST or its delegate determines otherwise. Such
expenses include, without limitation, recordkeeping and administrative fees,
consultant fees, and fees for external and internal vendors (e.g. including but
not limited to postage, printing and shipping expenses). Unless the Committee
directs otherwise, or a Participating Company pays the fee or expense, fees and
expenses shall be paid from the following Plan assets. Fees and expenses of an
Investment Manager shall be deemed to be part of the cost of maintaining the
portion of the Trust assets which the Investment Manager manages, and shall be
payable out of that portion of the Trust assets. Consultant and administrative
fees related specifically to the Interest Income Fund will be paid out of that
fund. Brokerage fees, transfer taxes and other expenses incident to the purchase
or sale of securities of the Trust shall be deemed to be part of the cost of
such securities, or deducted in computing the proceeds therefrom, as the case
may be. Transfer taxes in connection with distribution of U S WEST Shares to
Account Owners shall be borne by the Trust. Taxes, if any, on any assets held or
income received by the Trust shall be charged appropriately against individual
Accounts as the Committee shall determine. Certain transaction fees may be
charged directly to the Accounts of the individual who requests the transaction.

                                       34
<PAGE>

The Committee may charge an individual's Accounts for any fee or expense that is
properly allocable to such Accounts. All other expenses of the Plan not
specifically addressed herein shall be charged to Accounts on an equitable basis
by the Committee. See also Section 6.5, which addresses certain fees that may be
charged against individual Accounts.

         (c)      Other rules. The allocations required by this Section 3.12
shall be made before the allocations required by any other Section are made. If
the Committee determines that an alternative method of allocating earnings and
losses would better serve the interests of Account Owners or could be more
readily implemented, the Committee may substitute such alternative.

3.13 - Minimum Employer Contribution (This Section 3.13 is effective January 1,
       ------------------------------------------------------------------------
       1999).
       -----

         (a)      Each Plan Year, each Participating Company may make
contributions to the Plan in the form of employer contributions, in cash or
stock, at least equal to a specified dollar amount, on behalf of those
individuals who are entitled to an allocation under Section 3.13(b). Such amount
shall be determined by the Participating Company, or its delegatee, by
appropriate action on or before the last day of its fiscal year that ends with
such Plan Year.

                  The Minimum Employer Contribution for a Plan year shall be
paid by the Participating Company in one or more installments without interest.
The Minimum Employer Contribution shall be deemed to be satisfied for the Plan
Year as soon as the total of "employer contributions" for the Plan Year is at
least equal to the amount of the Minimum Employer Contribution. For purposes of
this Section 3.13(a), "employer contributions" means employer contributions, as
defined under section 404 of the Code, including, but not limited to, Before-Tax
Contributions, Employer Matching Contributions and other employer contributions.
For purposes of deducting the Minimum Employer Contribution, the Participating
Company shall make the contribution not later than the time prescribed by the
Code for filing the Participating Company's Federal income tax return including
extensions, for its taxable year that ends with such Plan Year. Notwithstanding
any provision of the Plan to the contrary, the Minimum Employer Contribution
made to the Plan by the Participating Company shall not revert to, or be
returned to, the Participating Company.

         (b)      Allocation of Minimum Employer Contributions. The Minimum
Employer Contribution for the Plan Year shall be allocated as follows.

                  (i)      First, the Minimum Employer Contribution for the Plan
Year shall be allocated during the Plan Year to each individual who is a
Participant at any time during the Plan Year (1) to each such Participant's
Before-Tax Account as Before-Tax Contribution pursuant to Section 3.2, (2) to
each such Participant's Matching Contribution Account as Employer Matching
Contributions resulting from Financed Shares released from the loan suspense
account (as set forth in Section 3A.6) pursuant to Section 3.4 and (3) to each
such Participant's Matching Contribution Account as Employer Matching
Contributions not used to repay an Acquisition Loan pursuant to Section 3.4.

                                       35
<PAGE>

                  (ii)     Second, the balance of the Minimum Employer
Contribution remaining after the allocation in Section 3.13(b)(i) shall be
allocated to the Matching Contribution Account of each individual who is not a
Highly Compensated Employee and who is an MEC Participant (as defined below) at
any time during the Plan Year and is employed on the last day of the Plan Year,
in the ratio that such MEC Participant's Before-Tax Contribution during the Plan
Year bears to the Before-Tax Contribution of all such MEC Participants during
the Plan Year.

                  (iii)    Third, notwithstanding Article IV of the Plan, if the
total contributions allocated to a Participant's Accounts including the Minimum
Employer Contribution exceed the Participant's maximum Annual Additions limit
for any limitation year as a result of the allocation in Section 3.13(b)(ii),
then such excess shall be held in a suspense account. Such amounts shall be used
to reduce employer contributions in the next and succeeding limitation years.

                  (iv)     Fourth, the balance of the Minimum Employer
Contribution remaining after the allocation under Sections 3.13(b)(i), (ii) and
(iii) shall be allocated as a nonelective contribution to each individual who is
not a Highly Compensated Employee and who is an MEC Participant at any time
during the Plan Year, in the ratio that such MEC Participant's Savings Plan
Eligible Earnings for the Plan Year bears to the Savings Plan Eligible Earnings
for the Plan Year of all such MEC Participants. Contributions made pursuant to
this subsection 3.13(b)(iv) shall be allocated to the Company Discretionary
Contribution Account of such MEC Participant and are distributable only in
accordance with the distribution provisions applicable to Company Discretionary
Contributions. Contributions made pursuant to this subsection shall be subject
to the vesting schedule set forth in Section 5.2(A)(ii). Such contributions
shall be invested under the Plan in the same manner as Company Discretionary
Contributions. Contributions allocated pursuant to this Section 3.13(b)(iv) that
exceed the Participant's maximum Annual Additions limit for any limitation year
shall be held in a suspense account. Such amounts shall be used to reduce
employer contributions in the next, and succeeding, limitation years. U S WEST
may direct in its sole discretion that contributions made pursuant to this
subsection may be used to repay an Acquisition Loan.

                  (v)      Each installment of the Minimum Employer Contribution
shall be held in a contribution suspense account unless, or until, allocated on
or before the end of the Plan Year in accordance with this Section 3.13(b). Such
suspense account shall not participate in the allocation of investment gains,
losses, income and deductions of the Trust as a whole, but shall be invested
separately, as directed by the Participating Company, and all gains, losses,
income and deductions attributable to such investment shall be applied to reduce
Plan expenses, and thereafter, to reduce employer contributions.

                  (vi)     The Minimum Employer Contribution allocated to the
Matching Contribution Account of a Participant pursuant to Section 3.13(b)(ii)
shall be treated in the same manner as Employer Matching Contributions for all
purposes of the Plan.

                  (vii)    Notwithstanding any other provision of the Plan to
the contrary, any allocation of Before-Tax Contributions shall be made under
either Section 3.2 or this Section 3.13(b), as appropriate, but not both
Sections. Similarly, any allocation of an Employer Matching Contribution shall
be made under either Section 3.4 or this Section 3.13(b), as appropriate, but
not both Sections.

                                       36
<PAGE>

                  (viii)   An "MEC Participant" for purposes of this Section
3.13(b) is any Employee who has satisfied the eligibility requirements of
Article II, and is thereby eligible to make Before-Tax Contributions, whether or
not such Employee has elected to make contributions.

                                  ARTICLE IIIA

                                 ESOP PROVISIONS

3A.1 - ESOP Portion of the Plan.
       ------------------------

         This Article IIIA sets forth special provisions applicable only to the
ESOP portion of the Plan. The ESOP is an employee stock ownership plan within
the meaning of Code section 4975(e)(7). The ESOP is maintained as a portion of
the Plan as authorized by Treasury Regulations section 54.4975-11(a)(5). The
ESOP shall be comprised of the ESOP Accounts established under the Plan. Any
reference in this Article IIIA to the ESOP portion of the Plan shall mean the
ESOP Accounts established under the Plan. Unless otherwise specifically stated
therein or unless the context otherwise requires, all other Articles of this
Plan apply to the Plan as a whole, and not solely to the ESOP portion or the
Savings Plan portion of the Plan.

3A.2 - Participating Company Contributions.
       -----------------------------------

         Each Participating Company shall contribute to the ESOP such amounts as
are required by Section 3.4 and may contribute to the ESOP such amounts as are
determined under Section 3.9. Such contributions may be made in cash or U S WEST
Shares.

3A.3 - Investment of Participating Company Contributions.
       -------------------------------------------------

         As directed by U S WEST in its sole discretion, all contributions to
the ESOP shall be invested in the U S WEST Shares Fund or used to repay
Acquisition Loans.

3A.4 - Investment of ESOP Accounts.

         The ESOP is designed to invest primarily in qualifying employer
securities, as defined in Code section 409(l). More than 50% of the amounts held
by the ESOP shall be invested in U S WEST Shares. The following amounts, which
are not invested in U S WEST Shares, shall not in the aggregate total 50% or
more of the value of the ESOP's assets.

         (a)      Shares of MediaOne Group, Inc. common stock which were held in
the ESOP through the Combined Shares Fund or MediaOne Group Shares Fund
immediately after the Separation Time. These shares shall be disposed of on or
before June 30, 2000, in accordance with the Employee Matters Agreement.

                                       37
<PAGE>

         (b)      Amounts invested in accordance with Sections 3A.7 and 3A.9;

         (c)      Dividends awaiting distribution in accordance with Section
3A.7; and

         (d)      Cash as shall be determined by the Committee to be necessary
to meet the needs of the ESOP.

3A.5 - Acquisition Loans.
       -----------------

         The Plan may incur Acquisition Loans from time to time to finance the
acquisition of Financed Shares or to repay a prior Acquisition Loan. An
installment obligation incurred in connection with the purchase of U S WEST
Shares shall constitute an Acquisition Loan.

         (a)      An Acquisition Loan shall be for a specific term, shall bear a
reasonable rate of interest and shall not be payable on demand except in the
event of default. An Acquisition Loan shall provide for full payment immediately
upon a Change in Control (as defined in Section 3A.8).

         (b)      An Acquisition Loan may be secured by a collateral pledge of
the Financed Shares so acquired, provided that such pledge does not violate
regulations promulgated by the Federal Reserve Board or any other applicable law
or regulation. No other Trust Fund assets may be pledged as collateral for an
Acquisition Loan, and no lender shall have recourse against Trust Fund assets
other than any Financed Shares remaining subject to pledge. Any pledge of
Financed Shares must provide for the release of shares so pledged under either
the General Rule or the Special Rule (as defined in paragraphs (f) and (g)
below).

         (c)      Within a reasonable time after receipt by the Trustee of the
proceeds of an Acquisition Loan, the Trustee shall, as directed by the
Committee, apply the loan proceeds to acquire U S WEST Shares from either U S
WEST or by open market purchases, or to repay an Acquisition Loan.

         (d)      Payments of principal and interest on any Acquisition Loan
during a Plan Year shall not exceed an amount equal to the sum of Employer
Matching Contributions, Company Discretionary Contributions and Trust Fund
earnings in or attributable to the ESOP during or prior to such Plan Year, less
payments with respect to the Acquisition Loan in prior Plan Years. For this
purpose, Trust Fund earnings in or attributable to the ESOP shall include
dividends on Financed Shares held in a loan suspense account, as such term is
defined in paragraph (e), earnings on such dividends, earnings on the proceeds
of Acquisition Loans awaiting investment in U S WEST Shares, earnings on
Employer Matching Contributions and Company Discretionary Contributions, and
such other amounts as may be permitted by law.

         (e)      Any Financed Shares acquired by the Trustee shall initially be
credited to a "loan suspense account" and shall be allocated to the ESOP
Accounts with respect to a Plan Year on the basis of payments on the Acquisition
Loan made by the Trustee during the Plan Year. The number of Financed Shares to
be released from a loan suspense account for allocation to ESOP Accounts for
each Plan Year shall be determined in accordance with the General Rule or the

                                       38
<PAGE>

Special Rule as defined in paragraphs (f) and (g) below. With respect to each
Acquisition Loan, the Committee shall determine whether the General Rule or the
Special Rule is to apply.

         (f)      General Rule: The General Rule is based upon the payment of
principal and interest on the Acquisition Loan. For each Plan Year during the
duration of the Acquisition Loan, the Committee shall release from the loan
suspense account a number of shares equal to the total number of shares held in
the loan suspense account immediately prior to the release, multiplied by a
fraction in which:

                  (i)      the numerator is the amount of principal and interest
paid for the Plan Year; and

                  (ii)     the denominator is the sum of the numerator plus the
principal and interest to be paid for all future Plan Years.

         (g)      Special Rule: The Special Rule is based solely on principal
payments. For each Plan Year during the duration of the Acquisition Loan, the
Committee shall release from the loan suspense account a number of shares equal
to the total number of such shares held in the loan suspense account immediately
prior to the release, multiplied by a fraction in which:

                  (i)      the numerator is the amount of principal paid for the
Plan Year; and

                  (ii)     the denominator is the sum of the numerator plus the
principal to be paid for all future Plan Years.

         (h)      The Committee may apply the Special Rule only if the
Acquisition Loan provides for annual payments of principal and interest at a
cumulative rate which is not less rapid at any time than level annual payments
of such amounts for ten years, and only if the interest included in any payment
is disregarded to the extent that it would be determined to be interest under
standard loan amortization tables. The Special Rule shall not be applicable from
the time that, by reason of a renewal, extension or refinancing, the sum of the
expired duration of the Acquisition Loan, the renewal period, the extension
period and the duration of a new Acquisition Loan exceeds ten years.

         (i)      In determining the number of shares to be released for any
Plan Year under either the General Rule or the Special Rule:

                  (i)      the number of future years under the Acquisition Loan
must be definitely ascertainable and must be determined without taking into
account any possible extensions or renewal periods; and

                  (ii)     if the Acquisition Loan provides for a variable
interest rate, the interest to be paid for all future Plan Years must be
computed by using the interest rate applicable as of the end of the Plan Year
for which the determination is being made.

                                       39
<PAGE>

3A.6 - Allocations to ESOP Accounts.
       ----------------------------

         (a)      The ESOP Account maintained for each Participant shall be
allocated with an amount set forth in Section 3.4(d) and, if applicable, Section
3.9(b).

         (b)      Financed Shares shall be released from a loan suspense account
and allocated to ESOP Accounts pursuant to Section 3.4(d) and, if applicable,
Section 3.9(b) to the extent that such shares would be released under the
General Rule or the Special Rule (whichever is applicable) based on the sum of
(i) loan payments already made during such Plan Year, and (ii) Trust Fund assets
(subject to the limitation in Section 3A.5(d)) that have been designated by the
Committee to be used for loan payments during such Plan Year. The computation
shall be made separately with respect to amounts to be allocated under Section
3.4(d) and amounts to be allocated under Section 3.9(b).

3A.7 - Distribution of Dividends.
       -------------------------

         Dividends on the U S WEST Shares held in each ESOP Account shall be
deposited in an interest bearing account and distributed in cash to such
individual as determined by the Committee. Such dividends may be distributed in
cash and will be distributed no later than 90 days after the last day of the
Plan Year in which such dividends were paid. Interest earned on the dividends
will be allocated to the ESOP Account as reinvested earnings on Employer
Matching Contributions. Dividends on the U S WEST Shares held in the loan
suspense account described in Section 3A.5 shall be used to repay any
outstanding Acquisition Loans. See Section 6.5 for missing Account Owners and
uncashed checks.

3A.8 - Provision for Allocation of ESOP Shares in Connection with Change in
       --------------------------------------------------------------------
       Control.
       -------

         (a)      Notwithstanding any other provisions of this Plan, the
provisions of this Section 3A.8 shall apply.

         (b)      Change in Control Provisions. Upon the occurrence of a Change
in Control (as defined in Section 3A.8(f)), the following provisions shall be
applicable for the period commencing on the date on which a Change in Control
occurs and ending with the earlier of the fifth anniversary of such date or the
date on which all unallocated U S WEST Shares have been fully allocated to the
ESOP Accounts of Participants (the "Change in Control Period"):

                  (i)      upon a Change in Control, U S WEST shall immediately
make a contribution to the Plan in an amount sufficient to permit the Trustee to
pay off all outstanding Acquisition Loans;

                  (ii)     the Trustee shall immediately use such contribution
to repay all outstanding Acquisition Loans;

                                       40
<PAGE>

                  (iii)    Financed Shares released from a loan suspense account
as a result of such prepayment of an Acquisition Loan shall be allocated to the
ESOP Accounts of Participants, without regard to the Matching Formula, in
proportion to their Compensation for the Plan Year;

                  (iv)     to the extent that such allocations of released
shares, together with other annual additions, would exceed the limitation in
Article IV or would otherwise exceed the limitations imposed by section 415 of
the Code for the limitation year, such shares shall be reallocated among other
Participants to the maximum extent permitted;

                  (v)      any released shares which may not be allocated to
Participants' ESOP Accounts in the Plan Year in which the Change in Control
occurs shall be held in a section 415 suspense account, pursuant to Treasury
Regulations section 1.415-6(b)(6), and shall be allocated to Participants' ESOP
Accounts, in proportion to their Compensation, in each subsequent year to the
maximum extent permitted by section 415 of the Code.

         (c)      Restrictions on Trustees. The assets of the Plan shall not be
transferred to any successor Trustee (whether by spin-off, merger,
consolidation, transfer of assets, or otherwise) or to any other funding vehicle
unless it is trusteed by a corporate Trustee which has trust assets in excess of
ten billion dollars and such successor Trustee specifically agrees in writing to
comply with the provisions of this Section 3A.8.

         (d)      Amendment. The provisions of this Section 3A.8 may not be
amended during a Change in Control Period without the written consent of a
majority of both (i) all Participants who were actively employed by a
Participating Company immediately prior to the Change in Control, and (ii) all
Participants who are actively employed by a Participating Company at the date of
such amendment. A Participant shall not be deemed to have consented in a form
approved by U S WEST to any amendments affecting this Section 3A.8 unless actual
written consent is received by U S WEST.

         (e)      Restriction on Plan Termination or Merger. The Plan may not be
terminated, nor may the Plan be merged or consolidated with, nor may the assets
of the Plan be transferred to, any other Plan (other than pursuant to an
Interchange Agreement) during any period in which any shares are unallocated.

         (f)      Change in Control. For purposes of this Section 3A.8, a
"Change in Control" shall be deemed to have occurred if a change in the
beneficial ownership of U S WEST's voting stock or a change in the composition
of the Board of Directors is the result of any of the following:

                  (i)      any "person" (as such term is used in sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934) is or becomes a beneficial
owner of (or otherwise has the authority to vote), directly or indirectly, stock
representing 20 percent or more of the total voting power of U S WEST's then
outstanding stock, unless through a transaction arranged by, or consummated with
the prior approval of the Board of Directors;

                                       41
<PAGE>

                  (ii)     if a tender offer (for which a filing has been made
with the Securities and Exchange Commission which purports to comply with the
requirements of section 14(d) of the Securities Exchange Act of 1934 and the
corresponding Securities and Exchange Commission rules) is made for U S WEST
Shares, which has not been arranged by or consummated with the prior approval of
the Board of Directors, then upon the first to occur: either (i) any time during
the offer when the person (using the definition in (i) above) making the offer
owns or has accepted for payment U S WEST Shares with 20 percent or more of the
total voting power of voting stock, or (ii) three business days before the offer
is to terminate unless the offer is withdrawn first if the person making the
offer could own, by the terms of the offer plus any shares owned by this person,
stock with 50 percent or more of the total voting power of U S WEST stock when
the offer terminates; or

                  (iii)    any period of two consecutive calendar years during
which there shall cease to be a majority of the Board of Directors comprised as
follows: individuals who at the beginning of such period constitute the Board of
Directors and any new director(s) whose election by the Board of Directors or
nomination for election by U S WEST's stockholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved.

         (g)      U S WEST shall give written notice to the Trustee of any of
the events described in paragraphs (b)(i), (b)(ii), or (b)(iii) of this Section
3A.8 upon the occurrence of such event.

3A.9 - ESOP Diversification.
       --------------------

         (a)      Special One-Time Election. An Employee who has attained age 55
may direct that all or any portion of the amounts credited to his ESOP Account
be transferred among the funds specified in paragraphs (b), (c), (d), (e), (f),
and (i) of Section 2.5 in accordance with Section 2.6. The direction described
in this Section 3A.9(a) may be exercised only one time by any Employee and
applies to amounts in the ESOP Account at the time of the direction.

         (b)      Qualified Participant. Each Participant who has attained age
55 and has completed at least 10 years of participation in the ESOP may elect,
in accordance with Section 2.6, that any whole percentage of his ESOP Account be
transferred among the funds specified in paragraphs (b), (c), (d), (e), (f), and
(i) of Section 2.5; provided, however, that he shall have no right to make a
transfer election if the value of his ESOP Account, at the time of the transfer,
is $500 or less. The election under this Section 3A.9(b) may be made once each
Plan Year during the six consecutive Plan Years beginning with the Plan Year in
which the Participant first elects a transfer under this subsection.

         (c)      Non-Employee Account Owners. A former Employee, Alternate
Payee, or Beneficiary may direct that all or any portion of the amounts credited
to his ESOP Account be transferred among the funds specified in paragraphs (b),
(c), (d), (e), (f), and (i) of Section 2.5 in accordance with Section 2.6. There
is no limitation on the number of such transfers.

                                       42
<PAGE>

         (d)      Pre-85 Match. The Pre-85 Matching Account may be invested in
any of the funds specified in paragraphs (b), (c), (d), (e), (f), and (i) of
Section 2.5 in accordance with Section 2.6.

                                   ARTICLE IV

                         LIMITATION ON ANNUAL ADDITIONS

         The Annual Additions to all the Accounts of a Participant shall not
exceed the lesser of $30,000 (as adjusted by the Secretary of the Treasury) or
25% of the Participant's Compensation from the Company and all Related Companies
during the Plan Year.

         This limitation shall not apply to any contribution for medical
benefits (within the meaning of section 419A(f)(2)) after separation from
service which is treated as an Annual Addition. In the event that Annual
Additions to all the Accounts of a Participant would exceed the limitations of
this Article IV, they shall be reduced in the following order: (i) unmatched
After-Tax Contributions, (ii) unmatched Before-Tax Contributions, (iii) matched
After-Tax Contributions (and the corresponding match), and (iv) matched
Before-Tax Contributions (and the corresponding match). The excess Before-Tax or
After-Tax Contributions, adjusted to reflect any investment earnings (but not
any investment losses), shall be refunded to the Participant, subject to any
required withholding. Any excess Employer Matching Contribution shall be placed
in a suspense account in the Plan. The amounts in the suspense account shall be
used as soon as administratively practicable, at the direction of the Committee,
to reduce future Employer Matching Contributions or other contributions from a
Participating Company to the Plan.

         If any Company or any Related Company contributes amounts, on behalf of
Participants covered by the Plan, to other Defined Contribution Plans, the
limitation on Annual Additions provided in this Article IV of the Plan shall be
applied to Annual Additions in the aggregate to the Plan and such other plans.
Reduction of Annual Additions, where required, shall be accomplished by first
refunding any voluntary contributions to Participants, then by reducing
contributions under such other plans pursuant to the directions of the fiduciary
for administration of such other plans or under priorities, if any, established
by the terms of such other plans, and then, if necessary, by reducing
contributions under the Plan.

         For only those Plan Years beginning before January 1, 2000, the sum of
the Defined Benefit Plan Fraction and the Defined Contribution Plan Fraction
shall not exceed 1.0. Reduction of contributions to or benefits from all plans,
where required, shall be accomplished by first reducing benefits under such
other Defined Benefit Plan or plans, then by allocating any excess in the manner
set out above with respect to the Plan, and finally by reducing contributions or
allocating any excess contributions with respect to other Defined Contribution
Plans, if any; provided, however, that adjustments necessary under this or the
next preceding paragraph may be made in a different manner and priority pursuant
to the agreement of the Committee and the administrators of all other plans
covering such Participant, provided such adjustments are consistent with
procedures and priorities prescribed by Treasury Regulations under section 415
of the Code.

                                       43
<PAGE>

                                    ARTICLE V

                                     VESTING

5.1 - Fully Vested Accounts.
      ---------------------

         A Participant's Before-Tax Account, After-Tax Account and Rollover
Account shall be 100% vested and nonforfeitable at all times.

5.2 - ESOP Account.
      ------------

         (a)      The interest of each Participant in his ESOP Account shall
vest and become nonforfeitable as follows:

                  (i)      Such Account shall become 100% vested at such time
that the Participant:

                           (A)    is entitled to retire on an immediate service
pension under the U S WEST Pension Plan,

                           (B)    separates from service at the expiration of
Company-provided disability benefits,

                           (C)    attains Normal Retirement Age while an
Employee,

                           (D)    separates from service pursuant to the
provisions of the Management Separation Plan or the terms of the applicable
bargaining agreement that is similar in nature or, in accordance with a
Participating Company's practices with respect to technological displacement or
layoff,

                           (E)    dies while employed by the Company or a
Related Company, or

                           (F)    ceases to participate in the Plan as a result
of a sale or other disposition which satisfies the requirements of Code section
401(k)(10)(A)(ii) or (iii) by a Participating Company of (1) substantially all
the assets used by such Participating Company in a trade or business in which
the Participant is employed to an unrelated corporation or (2) its interest in a
subsidiary in which the Participant is employed to an unrelated entity or
individual.

                  (ii)     If paragraph (i) does not apply, the ESOP Account
shall become vested in accordance with the following schedule, except that the
PAYSOP subaccount of the Matching Contribution Account shall always be 100%
vested:

                                       44
<PAGE>

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

                      less than 3                  0%
                      3 or more                  100%

         (b)      If a rehired Participant has an ESOP Account balance when he
is rehired (or if his previously forfeited ESOP Account balance is restored
pursuant to subsection (d) below), and the Participant notifies the Committee of
his past Service, all Service from both episodes of employment shall be taken
into account when determining the vested percentage of his ESOP Account.

         (c)      If a rehired Participant has forfeited his ESOP Account, the
forfeiture may be restored under Subsection (d) below. Whether or not such
forfeiture is restored, all Service from both episodes of employment shall be
taken into account when determining the vested percentage of the ESOP Account if
the Participant notifies the Committee of his past Service.

         (d)      A Participant's non-vested interest in his Accounts shall be
forfeited on the fifth anniversary of his Severance Date, unless he becomes an
Employee before such date or an earlier forfeiture is permitted by one of the
following rules. If a Participant receives a distribution of his entire vested
interest in his Accounts, his non-vested interest in his Accounts shall be
forfeited as of the day he received the distribution. If a Participant has a
vested Account balance of $0 when he incurs a Break in Employment, his
non-vested interest in his Accounts shall be forfeited as of his last day of
employment. Forfeitures shall be applied in accordance with Section 3.11. If a
former Participant who has suffered a forfeiture becomes an Employee before the
fifth anniversary of his Severance Date, he may repay to the Plan the entire
amount previously distributed to him within 60 months after such reemployment;
if he does so, any amounts previously forfeited (unadjusted for any increase or
decrease in the value of Trust assets subsequent to the date on which the
forfeiture occurred) shall be reinstated to the Participant's Accounts within a
reasonable time after such repayment. Such reinstatement shall be made from
forfeitures of Participants occurring during the Plan Year in which such
reinstatement occurs to the extent such forfeitures are attributable to
contributions by the same Participating Company and earnings on such
contributions; provided, however, if such forfeitures are not sufficient to
provide such reinstatement, the reinstatement shall be made from the current
year's contribution by that Participating Company to the Plan.

         (e)      Any repaid and reinstated amounts pursuant to Subsection (d)
shall be invested according to the Participant's investment direction, except
that the portion of the repaid and restored amounts replacing funds attributable
to Employer Matching Contributions and Company Discretionary Contributions that
must be allocated to the ESOP Account. The number of Units credited to a
Participant's Accounts through the investment of the repaid and reinstated
amounts shall be based on the Value of the Units representing each type of
investment as of the Valuation Date on which such repayment is made. Except for
the Units credited to the Participant's Accounts during the Plan Year of
distribution and each of the two preceding Plan Years, such Units shall be
credited with respect to the Plan Years for which Units were credited to the
Participant's Accounts immediately before the distribution which resulted in the
forfeiture. For purposes of the preceding sentence, the Value of the Units
credited with respect to such Plan Year shall equal the Value, at the time of
distribution, of the Units credited to such Plan Year which were distributed.

                                       45
<PAGE>

                  Units credited from the reinstatement of forfeited amounts and
from the portion of the repaid amounts attributable to Units credited to the
Participant's Accounts during the Plan Year of distribution and each of the two
preceding Plan Years shall be credited with respect to the Plan Year in which
repayment is made and the preceding two Plan Years. The Units credited with
respect to the Plan Year in which repayment is made shall equal the Value, at
the time of distribution, of the Units credited with respect to the Plan Year of
distribution. The Units credited with respect to each of the two Plan Years
preceding the Plan Year of repayment shall equal the Value, at the time of
distribution, of the Units credited with respect to each of the two Plan Years,
respectively, preceding the Plan Year of distribution.

                  Any amount reinstated pursuant to subsection (d) above shall
be treated as a contribution made on the date of reinstatement for purposes of
applying Section 6.2 of the Plan.

                                   ARTICLE VI

                                  DISTRIBUTIONS

6.1 - Distribution of Benefits after Termination of Employment.
      --------------------------------------------------------

         This Section 6.1 contains the rules for distributions once a
Participant is no longer on the payroll of the Company or Related Companies. See
Section 6.2 for distributions while the Participant is still on the payroll of
the Company or a Related Company. See Section 6.3 for distributions to
Beneficiaries and Section 6.4 for distributions to Alternate Payees.

         (a)      General Rule. In general, a Participant's distribution shall
be processed as soon as practicable after the Participant's Break in Employment,
and after the Participant requests the distribution pursuant to Section 2.6.

         (b)      Exceptions to General Rule.

                  (i)      Restrictions Imposed by the Code on Before-Tax
Accounts. No amount may be distributed to the Participant from his Before-Tax
Account after his Break in Employment unless (A) the Break in Employment
constituted a separation from service within the meaning of Code section
401(k)(2)(B)(i)(I); (B) the Participant incurred a disability for which he
receives disability benefits from the Social Security Administration; (C) the
Plan terminates, the Company and Related Companies do not establish or maintain
any other defined contribution plan (other than an employee stock ownership plan
as defined in Code section 4975(e)(7)), and the Participant receives a lump sum
distribution of his Account; (D) the Participant has attained age 59 1/2; (E)
the Participant has a financial hardship that would allow him (if he were still
an Employee) to take a hardship withdrawal under Section 6.2; (F) the
Participant's employer was the Company or a corporate Related Company that sold
or disposed of substantially all of the assets used in a trade or business, the
Participant continues employment with the acquiring corporation, the Participant

                                       46
<PAGE>

elects a lump sum distribution of his vested Account, and the distribution is
paid by the end of the second calendar year after the calendar year of the asset
sale; or (G) the Company or a corporate Related Company sold or disposed of its
interest in a subsidiary employing the Participant, the Participant continues
employment with the subsidiary, the Participant elects a lump sum distribution
of his vested Account, and the distribution is paid by the end of the second
calendar year after the calendar year of the sale or disposition of the
subsidiary.

                  (ii)     Transfer to Another Plan. No distribution or other
payment may be made to a Participant if assets attributable to the Participant's
Accounts are transferred to another plan in a transaction described in Section
10.4.

                  (iii)    Rehire. No distribution shall be made under this
Section after the date a Participant is reemployed by the Company or a Related
Company, except for installment payments that were elected before the
Participant was reemployed, as provided in Section 6.1(d)(ii)(B).

                  (iv)     QDRO. When the Committee receives a signed order from
a court that purports to be a QDRO, the Participant may not receive a
distribution under this Section until the Committee has finally disposed of the
order, except for the minimum distribution under Section 6.1(f) below that is
necessary to comply with Code section 401(a)(9). In addition, the Committee may
temporarily freeze distributions under this Section (except for the minimum
distribution under Section 6.1(f) below that is necessary to comply with Code
section 401(a)(9)) because a domestic relations order affecting the Participant
is or may be in the process of becoming a QDRO.

                  (v)      ESOP Dividends. See Section 3A.7 for the special
rules relating to the distribution of dividends on U S WEST Shares in a
Participant's ESOP Account.

         (c)      Amount Distributable. The amount of the benefits distributable
to a Participant upon a request for distribution following a Break in Employment
shall be the vested portion of his Accounts, less the outstanding balance of any
loan. See Section 6.1(b)(iv) for temporary freezes when a QDRO is involved.

         (d)      Form of Distribution.

                  (i)      Lump Sum. The normal form of distribution shall be a
single payment.

                  (ii)     Installments.

                           (A)    General. A Participant may elect in accordance
with Section 2.6 that all of the amount distributable be distributed in the form
of approximately equal annual installments to be paid over a period not to
exceed the Participant's life expectancy (calculated at the time distributions
begin, according to IRS tables, and rounded down to a whole year). Each
installment shall consist of an approximately equal number of Units.
Installments are paid annually, at approximately the same time each year. A
Participant who elects installments may elect a lump sum payment of the
remaining balance at any time.

                                       47
<PAGE>

                           (B)    Rehire. If a Participant who is receiving
installments becomes an Employee again, the installments will continue as
originally scheduled, unless the Participant elects to discontinue installments
during the period of reemployment.

                                  (1)    Installments Continued. This clause (1)
applies if installments are continued during the later episode of employment. A
separate Account will be established for the Participant's benefits for the
later episode of employment. The Participant's Account from the earlier episode
of employment is not available for distribution under Section 6.2 and is ignored
when determining the amount the Participant can borrow under Section 11.10. If
the Participant's later episode of employment terminates before all installments
are paid, then installment payments will continue to be made on the same
schedule, but the amount of each remaining payment will be increased so that the
entire vested balance in all the Participant's Accounts (from both episodes of
employment) are paid out in the remaining installments.

                                  (2)    Installments Discontinued. This clause
(2) applies if installments are discontinued during the later episode of
employment. Benefits from the later episode of employment will be added to the
Account containing the benefits from the earlier episode of employment. The
Participant may take in-service distributions under Section 6.2 from his entire
Account, and may borrow from his entire Account as permitted under Section
11.10. When the Participant again terminates employment, he may make a new
distribution election under this Section, and that election shall apply to his
entire Account.

                           (C)    Installments Unavailable for Participants With
PCRA Investments. Effective May 1, 2000, a Participant may not elect
installments if any portion of his Account is invested in the PCRA. A
Participant who elected installments before May 1, 2000 shall not be permitted
to invest any additional amounts in the PCRA, and shall be required to sell all
amounts in the PCRA no later than April 30, 2001.

                           (D)    Accounts and Investments From Which
Installments are Taken. An installment shall be taken pro-rata from each of the
Participant's Accounts, in proportion to the vested balance of each Account and
pro rata from each investment fund in the Accounts.

                  (iii)    Deferred Withdrawals. A Participant who has not
elected installment payments may elect, in accordance with Section 2.6, to
receive one or two deferred withdrawals in any Plan Year. Deferred withdrawals
shall either be (A) not be less than $100 and shall be in increments of $25, or
(B) shall be the entire vested Account balance (ignoring any dividends that are
awaiting distribution under Section 3A.7). A deferred withdrawal shall be taken
from the following Accounts, in the following order: After-Tax Account
(unmatched After-Tax Contributions and corresponding earnings distributed before
matched After-Tax Contributions and corresponding earnings); ESOP Account;
Rollover Account; Before-Tax Account (unmatched Before-Tax Contributions and
corresponding earnings distributed before matched Before-Tax Contributions and
corresponding earnings).

                  (iv)     In-Kind Distributions. All distributions under this
Section 6.1 shall be paid in cash except to the extent that the distributed
amount was invested in the U S WEST Shares Fund, the Combined Shares Fund, or

                                       48
<PAGE>

the MediaOne Group Shares Fund and the Employee elects to receive that portion
of his withdrawal in whole shares of common stock of U S WEST, Inc. or MediaOne
Group Inc., as applicable (with fractional shares paid in cash).

         (e)      Consent. A Participant must consent to any distribution from
his Accounts, with the following exceptions. A Participant's consent is not
needed for distributions that are necessary to satisfy the limitations discussed
in Articles III and IV. A Participant's consent is not needed for distributions
to an Alternate Payee. A Participant's consent is not required for the Plan to
make the minimum required distributions discussed in Section 6.1(f).

         (f)      Latest Date of Distribution. A Participant who attains age 70
1/2 during a calendar year must elect a lump sum distribution or installments,
with the lump sum or the first installment to be received in the year in which
the Participant attains age 70 1/2, or by April 1 of the following year. The
second installment shall be received in the year after the year in which the
Participant attained age 70 1/2. Subsequent installments shall be received
annually. The amount of each installment shall be at least as large as the
minimum distribution required under Code section 401(a)(9), which shall be
determined by not recalculating any life expectancy.

6.2 - Distribution While a Participant is an Employee.
      -----------------------------------------------

         (a)      Partial Withdrawal.

                  (i)      Amount of Withdrawal. An Employee may withdraw any
specified dollar amount (in $25 increments, with a $100 minimum) from his
After-Tax Account and his vested ESOP Account, except for (A) any After-Tax
Contribution that was matched during the Plan Year of the withdrawal or the two
preceding Plan Years, (B) any ESOP Contribution for the Plan Year of the
withdrawal or for the preceding two Plan Years, or (C) investment earnings on
the amounts in (A) or (B).

                  (ii)     Source of Withdrawal. A withdrawal under this
subsection (a) shall be taken first from the Employee's After-Tax Account (to
the extent those amounts may be withdrawn), and the remainder of the withdrawal
shall be taken from the Employee's ESOP Account. Amounts shall be withdrawn from
the After-Tax Account on a first-in-first-out basis, and unmatched After-Tax
Contributions and corresponding earnings will be withdrawn before matched
After-Tax Contributions and corresponding earnings.

                  (iii)    Limits. Only two withdrawals are permitted under this
subsection (a) in any one Plan Year. If an Employee takes two withdrawals in a
Plan Year, then as soon as administratively practicable after the second
withdrawal, the Matching Formula for the Employee shall be zero for the next
three months that the Employee makes After-Tax or Before-Tax Contributions.

                                       49
<PAGE>

         (b)      Full Withdrawal.

                  (i)      Amount of Withdrawal. An Employee may withdraw the
entire amount from his After-Tax Account, his vested ESOP Account, and his
Rollover Account, except for any Participating Company contribution for the Plan
Year of the withdrawal or for the preceding two Plan Years (or investment
earnings thereon). Furthermore, an Employee over age 59 1/2 may elect to
withdraw, in addition to those amounts identified in the preceding sentence, the
entire amount from his Before-Tax Account.

                  (ii)     Limits. Only one full withdrawal is permitted under
this subsection (b) in any one Plan Year, except that a second full withdrawal
is permitted if it is made in conjunction with a hardship withdrawal under
subsection (c). As soon as administratively practicable after the full
withdrawal, the Matching Formula for the Employee shall be zero for the next six
months that the Employee makes After-Tax or Before-Tax Contributions.

         (c)      Hardship Withdrawal. An Employee under age 59 1/2 may withdraw
all or any portion from his Before-Tax Account, provided that the Employee has
an immediate and heavy financial need, as defined in paragraph (i), the
withdrawal is needed to satisfy the financial need, as explained in paragraph
(ii), and the amount of the withdrawal is at least $300 but the amount of the
withdrawal does not exceed the limits in paragraph (iii).

                  (i)      Financial Need. The following expenses constitute an
immediate and heavy financial need:

                           (A)    medical care that has been incurred (or
payments necessary to obtain medical care) on behalf of the Employee, the
Employee's spouse, or the Employee's dependents (as defined in Code section
152);

                           (B)    costs directly associated with the purchase of
a principal residence of the Employee (excluding mortgage payments);

                           (C)    tuition, related educational fees, and room
and board for the next 12 months of post-secondary education of the Employee,
the Employee's spouse, or the Employee's dependents (as defined in Code section
152);

                           (D)    payments needed to prevent the Employee from
being evicted from his principal residence;

                           (E)    payments needed to prevent the foreclosure on
the mortgage on the Employee's principle residence; and

                           (F)    any other expenses specifically identified in
Treasury Regulation section 1.401(k)-1(d)(2)(iv)(A), as amended.

                                       50
<PAGE>

                  (ii)     Satisfaction of Need. The withdrawal is necessary to
satisfy the Employee's financial need if (A) the Employee has obtained all
withdrawals and all non-taxable loans available from the Company's and any
Related Companies' qualified plans, (B) for a period of at least 12 months from
the date the Employee receives the withdrawal, he ceases to make After-Tax and
Before-Tax Contributions and elective contributions to all qualified and
non-qualified plans maintained by the Company or any Related Company, (C) the
Before-Tax Contributions that the Employee makes in the calendar year after the
withdrawal are limited to the dollar limit in effect under Code section
402(g)(1) for the calendar year after the withdrawal, less the Employee's
Before-Tax Contributions made during the calendar year of the withdrawal, and
(D) the Employee represents (and the Company does not have actual knowledge to
the contrary) that the financial need cannot reasonably be relieved (1) through
reimbursement or compensation by insurance or otherwise, (2) by liquidating the
Employee's assets, (3) by ceasing After-Tax and Before-Tax Contributions to the
Plan and to any other plan maintained by the Company or a Related Company, or
(4) by borrowing from commercial sources on reasonable commercial terms.

                  (iii)    Maximum Withdrawal. An Employee may not withdraw more
than the sum of the amount needed to satisfy his financial need and any taxes
and penalties resulting from the withdrawal. The Committee shall establish
procedures to determine the amount of any taxes and/or penalties that result
from the hardship withdrawal. The maximum withdrawal is the Before-Tax
Contributions then in the Employee's Account and any earnings credited to his
Before-Tax Account before 1989.

         (d)      Age 70 1/2 Withdrawals. An Employee who attains age 70 1/2
during a Plan Year must make a withdrawal election with respect to the balance
in his Accounts. He has two choices, as detailed below. If he does not make a
choice before the deadline established by the Committee (the deadline will
normally be towards the end of November), he shall receive a single payment of
his entire vested Account balance by the end of the Plan Year.

                  (i)      Single Payment. He may withdraw his entire vested
Account balance by the end of the Plan Year in which he attains age 70 1/2. If
any additional amounts are contributed to his Account after the complete
withdrawal, then, each succeeding Plan Year (towards the end of the Plan Year)
he shall also receive a withdrawal of the entire vested balance in his Accounts.

                  (ii)     Installments. He may elect to be paid his entire
vested balance in 2 to 15 annual installments. Each installment shall consist of
an approximately equal number of Units. Installments are paid annually, on
approximately the same date each year. Once the Participant incurs a Break in
Employment, each annual installment shall be increased, if necessary, to comply
with the minimum distribution required by Code section 401(a)(9). If the
Participant is still an Employee after he has received all his installments, he
shall receive, each succeeding year, the entire vested balance in his Account. A
Participant who has elected to receive installments may subsequently elect at
any time to receive the entire remaining vested balance in his Account.

                                       51
<PAGE>

                  (iii)    Accounts and Investments From Which Installments are
Taken. An installment shall be taken pro-rata from each of the Participant's
Accounts, in proportion to the vested balance of each Account and pro rata from
each investment fund in the Accounts.

         (e)      Form of Withdrawal. Hardship withdrawals under subsection (d)
shall be paid in cash. All other withdrawals under this section 6.2 shall be
paid in cash except to the extent that the withdrawn amount was invested in the
U S WEST Shares Fund, the Combined Shares Fund, or the MediaOne Group Shares
Fund and the Employee elects to receive that portion of his withdrawal in whole
shares of common stock of U S WEST, Inc. or MediaOne Group Inc., as applicable
(with fractional shares paid in cash).

         (f)      Suspensions. The 3-month suspension in the match for partial
withdrawals and the 6-month suspension in the match for full withdrawals shall
run consecutively. The 3-month and 6-month suspensions shall also be treated as
running during the 12-month suspension of After-Tax and Before-Tax Contributions
after a hardship withdrawal. Thus, for example, an Employee who took a full
withdrawal and then a hardship withdrawal will resume receiving a match
immediately upon resuming his Before-Tax or After-Tax Contributions after the
12-month hardship suspension.

         (g)      QDRO. When the Committee receives a signed order from a court
that purports to be a QDRO, the Participant may not receive a distribution under
this Section until the Committee has finally disposed of the order. In addition,
the Committee may temporarily freeze distributions under this Section because a
domestic relations order affecting the Participant is or may be in the process
of becoming a QDRO.

         (h)      ESOP Dividends. See Section 3A.7 for the special rules
relating to the distribution of dividends on U S WEST Shares in a Participant's
ESOP Account.

6.3 - Distributions to Beneficiary(ies).
      ---------------------------------

         (a)      General. Each Beneficiary shall receive a lump sum payment of
the entire amount left to him, unless the Participant elected for the
Beneficiary to be paid two annual installments. Payment will be made as soon as
administratively practicable following the Participant's death and the
Beneficiary's completion of the distribution procedures. The second installment
(if there is one) shall be paid approximately one year after the first
installment.

         (b)      Death of Beneficiary. If a Beneficiary dies after the
Participant but before the lump sum payment or both installments have been made,
a lump sum payment of the Participant's remaining Account balance will be made
to the Beneficiary's estate.

         (c)      Form of Withdrawal. All distributions under this Section 6.3
shall be paid in cash except to the extent that the withdrawn amount was
invested in the U S WEST Shares Fund, the Combined Shares Fund, or the MediaOne
Group Shares Fund and the Beneficiary elects to receive that portion of his
withdrawal in whole shares of common stock of U S WEST, Inc. or MediaOne Group
Inc., as applicable (with fractional shares paid in cash).

                                       52
<PAGE>

         (d)      Accounts and Investments From Which Installments are Taken.
Any distribution of less than the entire balance of the Participant's Account
shall be taken pro-rata from each of the Participant's Accounts, in proportion
to the balance of each Account, and shall be made pro rata from the investment
funds in each Account.

         (e)      ESOP Dividends. See Section 3A.7 for the special rules
relating to the distribution of dividends on U S WEST Shares in an ESOP Account.

6.4 - Distributions to Alternate Payees.
      ---------------------------------

         A QDRO may provide an Alternate Payee with the same distribution
options as a Participant who has terminated employment and separated from
service within the meaning of Code section 401(k)(2)(B)(i)(I); the QDRO may
limit the choices otherwise available to the Alternate Payee. Sections 6.1 and
6.3, which discuss the distribution options of terminated Participants and their
Beneficiaries, shall be applied to the Alternate Payee, to the extent permitted
by the QDRO, by treating the Alternate Payee as a Participant who has terminated
employment and separated from service.

6.5 - Inability to Locate Participant; Forfeitures of Small Amounts.
      -------------------------------------------------------------

         Each Account Owner must file with the Committee from time to time in
writing his address, the address of each beneficiary (if applicable), and each
change of address. Any communication, statement, or notice addressed to such
individual at the last address filed with the Committee (or if no address is
filed with the Committee then at the last address as shown on the appropriate
Participating Company's records) will be binding on such individual for all
purposes of the Plan. The Committee is under no legal obligation to search for
or locate an Account Owner, but may decide to use reasonable efforts to do so.

         If amounts become distributable under the Plan and the Committee is
unable to locate the Account Owner to whom the distribution is payable, his
Accounts shall be forfeited. The forfeiture shall be dealt with in accordance
with Section 3.11. If, after such forfeiture, the missing Account Owner later
claims such benefit, such Accounts shall be reinstated from available
forfeitures, or if those are insufficient, by an additional Participating
Company contribution.

         The Plan may, at the sole discretion of the Committee, charge a fee to
replace uncashed checks from the Plan or to prepare any type of distribution or
withdrawal, including corrective distributions pursuant to Article III. For
uncashed checks, if the fee is greater than the amount of the uncashed check,
and the check has remained uncashed for a certain length of time (as established
by the Committee), the Account Owner shall forfeit the entire amount of the
uncashed check. For distributions and withdrawals, if the fee is equal to or
greater than the amount of the distribution or withdrawal, the Account Owner
shall forfeit the entire amount of the distribution or withdrawal. This
forfeiture shall be treated in the same fashion as a forfeiture under Section
3.11.

                                       53
<PAGE>

6.6 - Direct Rollovers.
      ----------------

         If a Distributee will receive an Eligible Rollover Distribution of at
least $200, the Distributee may elect, at the time and in the manner prescribed
by the Committee, to have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by the Distributee in a Direct
Rollover; provided, however, that a Distributee may not elect to have an
Eligible Rollover Distribution of less than $500 paid directly to an Eligible
Retirement Plan unless the Distributee elects to have the entire Eligible
Rollover Distribution paid directly to the Eligible Retirement Plan.

6.7 - Timing of Distributions and Withdrawals.
      ---------------------------------------

         In general, any distribution or withdrawal will be processed as soon as
administratively practicable, subject to the reasonable procedures promulgated
by the Committee and Trustee. However, no payment will be made until the Account
Owner has completed the appropriate procedures for requesting a distribution or
withdrawal and the Trustee or Committee (as appropriate) has been able to verify
the Account Owner's eligibility for the type of distribution or withdrawal that
the Account Owner has requested. Payment may be further delayed for any
administrative reason, including, for example, but not limited to, the time
necessary to liquidate the assets in the Account, the time needed to prepare the
check(s), and the time needed to verify the identity of a Beneficiary.

6.8 - Return of Basis.
      ---------------

         For purposes of Code section 72, the Plan contains two separate
contracts, one for After-Tax Contributions made before 1987 and the investment
earnings thereon, and the other for all other contributions and their investment
earnings.

                                   ARTICLE VII

               NAMED FIDUCIARIES - ALLOCATION OF RESPONSIBILITIES

7.1 - No Joint Fiduciary Responsibilities.
      -----------------------------------

         The named fiduciaries designated in the Plan or Trust Agreement shall
have only the responsibilities specifically allocated to them herein or in the
Trust Agreement. Named fiduciaries shall have only the responsibilities
specifically allocated to them in such appointment. All allocations of
responsibilities to named fiduciaries are intended to be mutually exclusive, and
there shall be no sharing of fiduciary responsibilities. Whenever one named
fiduciary is required by the Plan, Trust Agreement, or appointment to follow the
directions of another named fiduciary, the two named fiduciaries shall not be
deemed to have been assigned a shared responsibility, but the responsibility of
the named fiduciary giving the directions shall be deemed his sole
responsibility, and the responsibility of the named fiduciary receiving those
directions shall be to follow them insofar as such instructions are on their
face proper under applicable law. In addition, the Company may allocate
responsibility for the operation and administration of the Plan in accordance
with its terms.

                                       54
<PAGE>

7.2 - The Participating Companies.
      ---------------------------

         Each Participating Company shall be responsible for: (i) making its
respective contributions hereunder and (ii) keeping accurate records with
respect to its Employees and their Compensation and furnishing such data to the
Committee.

7.3 - U S WEST.
      --------

         (a)      Acting in its capacity as Plan sponsor and not as a Fiduciary,
U S WEST shall be responsible for:

                  (i)      Amendment or termination of the Plan pursuant to the
terms of Article X herein;

                  (ii)     Subject to Section 7.8(d), appointment of any third
party service providers and vendors to the Plan other than fiduciaries; and

                  (iii)    Appointment and removal of the members of the
Committee and Investment Committee.

         (b)      U S WEST shall also be responsible for exercise of the Plan
Administrator's duties in the absence of the Committee.

7.4 - The Committee.
      -------------

         U S WEST or its delegate shall appoint the Committee consisting of not
fewer than three nor more than seven persons. The Committee shall be a named
fiduciary of the Plan. The members of the Committee shall hold office at the
pleasure of U S WEST or its delegate, and shall serve without compensation. The
Committee shall comply with the provisions of ERISA pertaining to the powers and
responsibilities of administrators and named fiduciaries. The Committee may
delegate its responsibility to employees of U S WEST or any Related company or
to agents outside of U S WEST and Related Companies.

7.5 - The Investment Committee.
      ------------------------

         U S WEST or its delegate shall appoint the Investment Committee
consisting of at least one person, but not more than seven persons. The
Investment Committee shall be a named fiduciary of the Plan. The members of the
Investment Committee shall hold office at the pleasure of U S WEST or its
delegate, and shall serve without compensation. The Investment Committee shall
comply with the provisions of ERISA pertaining to the powers and
responsibilities of named fiduciaries. The Investment Committee may delegate its
responsibility to employees of U S WEST or any Related Company or to agents
outside of U S WEST and Related Companies.

                                       55
<PAGE>

7.6 - Delegation.
      ----------

         The Committee, the Investment Committee, IMC and the other named
fiduciaries may delegate any of their responsibilities hereunder by designating
in writing other persons to carry out specified responsibilities, except as may
be limited or prohibited by the Code or ERISA. Unless otherwise stated in the
delegation, each delegation shall include all power, authority and discretion of
the named fiduciary making such delegation with respect to the function
delegated.

7.7 - The Trustee.
      -----------

         The Trustee shall be responsible for: (a) the investment of the Trust
Fund to the extent and in the manner provided in the Trust Agreement, (b) the
custody and preservation of Trust assets delivered to it, and (c) for making
such payments from the Trust Fund as the Committee, the Investment Committee or
IMC shall direct.

7.8 -  Allocation of Fiduciary Responsibilities.
       ----------------------------------------

         (a)      The Committee shall be the Plan Administrator and shall have
all power and authority necessary for that purpose, including, but not by way of
limitation, the full discretion and power to interpret the Plan, to determine
the eligibility, status and rights of all persons under the Plan and in general
to decide any dispute. The Committee shall direct the Trustee concerning all
non-investment related distributions from the Trust Fund, in accordance with the
provisions of the Plan and Trust Agreement, and shall have such other powers in
the administration of the Trust Fund as may be conferred upon them by the Trust
Agreement. The Committee shall maintain all Plan records except to the extent
responsibility is delegated to others to maintain records of the Trust Fund. The
Committee shall have the discretion and authority to determine conclusively for
all parties all questions arising in the administration of the Plan, and any
decision of the Committee shall not be subject to further review.

         (b)      The Investment Committee (or its delegate) shall be the named
fiduciary solely with regard to the following functions regarding the management
and investment of Plan assets:

                  (i)      appointing and removing Trustees,

                  (ii)     approving processes and policies for the payment of
investment related Plan expenses and approving reimbursement of expenses of U S
WEST and its subsidiaries including IMC, and

                  (iii)    approving the Investment Funds to be directly managed
by IMC and the general investment strategies with respect to such directly
managed Investment Funds.

The Investment Committee shall have all power and authority necessary for these
purposes.

                                       56
<PAGE>

         (c)      IMC shall be the named fiduciary for all purposes of the
management and investment of Plan assets except for those functions which are
the responsibility of the Investment Committee as set forth in subsection (b)
and except as provided in subsection (e) below. Such powers of IMC shall
include, without limitation, appointing, removing and monitoring Investment
Managers and other persons appropriate for trust management and reviewing the
performance of all Investment Funds. IMC shall have all power and authority
necessary for these purposes.

         (d)      With regard to their respective functions, the Committee's,
Investment Committee's and IMC's authority shall include the following:

                  (i)      the selection of agents and fiduciaries to operate
and administer the Plan and Trust;

                  (ii)     the selection of agents and other providers of
services to the Plan;

                  (iii)    the periodic review of the performance of such
agents, service providers, managers, and fiduciaries;

                  (iv)     certifying to the Trustee the names and specimen
signatures of the members of the Committee, Investment Committee or IMC (or
their delegates) acting from time to time;

                  (v)      approving all expenses other than those subject to
the approval of the Investment Committee; and

                  (vi)     establishing compensation arrangements for other
fiduciaries, agents and service providers.

         (e)      Notwithstanding the preceding provisions of this Section or
any other provision of this Plan, neither the Investment Committee, the
Committee, IMC, the Board of Directors, a Participating Company, the Trustee nor
any Investment Manager shall be a Fiduciary with respect to the designation or
direction by an Account Owner of Investment Funds with respect to that Account
Owner's Account. Each Account Owner shall be the named Fiduciary (except as
otherwise provided by section 404(c) of ERISA) with respect to any designation,
direction or other exercise of control of Investment Funds with respect to his
Account. As a result, with respect to designations and directions described in
this Plan and any other exercise of control by an Account Owner over assets in
his Account, such Account Owner shall be solely responsible for such actions and
neither the Investment Committee, the Committee, IMC, the Trustee, a
Participating Company, the Board of Directors nor any other person or entity
which is otherwise a Fiduciary shall be liable for any loss or liability which
results from such Account Owner's exercise of control.

7.9 - Organization of the Committee.
      -----------------------------

         (a)      The Committee shall elect a chairman and appoint a Secretary.
The Committee shall adopt such by-laws and rules of procedures as it deems
desirable for the conduct of its affairs and for the administration of the Plan.

                                       57
<PAGE>

         (b)      The Investment Committee may adopt by-laws and rules of
procedure, as it deems desirable.

         (c)      The Committee and Investment Committee may appoint agents (who
need not be members of the committee) to whom it may delegate such powers, as it
deems appropriate. Each committee may make its determinations with or without
meetings. Each committee may authorize one or more of its members or agents to
sign instructions, notices and determinations on its behalf. The action of a
majority of either committee shall constitute the action of that committee.

7.10 - Agent for Process.
       -----------------

         U S WEST's Deputy General Counsel - Litigation shall be the agent of
the Plan for service of all legal process.

7.11 - Claims Procedure.
       ----------------

         (a)      All claims for benefits shall be filed in writing by the
Account Owner, or his authorized representative, by completing such procedures
as the Claims Administrator shall require. Such procedures shall be reasonable
and may include the completion of forms and the submission of documents and
additional information.

         (b)      The Claims Administrator shall review all materials and decide
whether to approve or deny the claim. If a claim is denied in whole or in part,
written notice of denial shall be furnished by the Claims Administrator to the
claimant within 90 days after the receipt of the claim by the Claims
Administrator, unless special circumstances require an extension of time for
processing the claim, in which event notification of the extension shall be
provided to the claimant (prior to the expiration of the 90-day period) and the
extension shall not exceed 90 days. (If a notice is not provided within the
foregoing time periods, the claim shall be considered denied.) Such written
notice shall set forth the specific reasons for such denial, specific reference
to pertinent Plan provisions, a description of any additional material or
information necessary for the claimant to perfect his claim and an explanation
of why such material or information is necessary, all written in a manner
calculated to be understood by the claimant. Such notice shall include
appropriate information as to the steps to be taken if the claimant wishes to
submit his claim for review. The claimant or the claimant's authorized
representative may request such a review upon written application. The claimant
may review pertinent documents and may submit issues or comments in writing. The
claimant or the claimant's duly authorized representative must request such
review within the reasonable period of time prescribed by the Claims
Administrator. In no event shall such a period of time be less than 60 days.

         (c)      Any appeal of a denied claim under the Plan shall be subject
to review by the Committee. A decision on review shall be rendered within 60
days after the receipt of the request for review by the Committee. If special
circumstances require a further extension of time for processing, a decision
shall be rendered not later than 120 days following the Committee's receipt of
the request for review. If such an extension of time of review is required,
written notice of the extension shall be furnished to the claimant. The decision

                                       58
<PAGE>

of the Committee shall be furnished to the claimant in writing and shall include
specific reasons for the decision, written in a manner calculated to be
understood by the claimant, as well as specific references to the pertinent Plan
provisions on which the decision is based. (If the decision on review is not
furnished within the foregoing time periods, the claim shall be considered
denied on review.)

         (d)      The Committee shall each have full discretionary authority to
determine eligibility, status and rights of all persons under the Plan and to
construe any and all terms of the Plan.

                                  ARTICLE VIII

                          TRUST AGREEMENT - INVESTMENTS

8.1 - Trust Agreement.
      ---------------

         U S WEST has entered into a Trust Agreement to provide for the holding,
investment and administration of the funds of the Plan. The Trust Agreement
shall be part of the Plan and is incorporated into the Plan by this reference,
and the rights and duties of any person under the Plan shall be subject to all
terms and provisions of the Trust Agreement.

8.2 - Expenses of Trust.
      -----------------

         All taxes upon or in respect of the Trust and all expenses of
administering the Trust shall be paid by the Trustee out of the trust assets, to
the extent not paid by a Participating Company.

                                   ARTICLE IX

                             PARTICIPATING COMPANIES

9.1 - Adoption of Plan.
      ----------------

         Any corporation, whether or not presently existing, which is or shall
become a subsidiary of a Participating Company after the date this Plan is
adopted may, with the consent of the Committee, become a party to the Plan and
Trust by adopting the Plan and Trust for its Employees or by being designated by
the Committee to participate in this Plan. Thereafter, such Participating
Company shall promptly deliver to U S WEST a certified copy of the resolutions
or other documents evidencing its adoption of the Plan and Trust and a written
instrument evidencing the consent of the Committee thereto.

9.2 - Agency of U S WEST.
      ------------------

         Each Participating Company by becoming a party to the Plan appoints U S
WEST its agent with authority to act for it in all transactions in which U S
WEST believes such agency will facilitate the administration of the Plan,
including but not limited to the authority to amend and terminate the Plan.

                                       59
<PAGE>

9.3 - Disaffiliation and Withdrawal From Plan.
      ---------------------------------------

         (a)      Unless U S WEST (in its sole discretion) determines otherwise,
(i) any Participating Company that has adopted the Plan and that thereafter
ceases for any reason to be a Related Company shall forthwith cease to be a
party to the Plan, or (ii) U S WEST shall transfer sponsorship of the Plan to
such disaffiliating Participating Company effective on or before the time of the
disaffiliation. If sponsorship is transferred pursuant to clause (ii) of the
preceding sentence, U S WEST (and the Participating Companies that remain
Related Companies) shall cease to be parties to the Plan at the time of the
disaffiliation.

         (b)      Any Participating Company may, by resolution of its board of
directors (or general partner or manager) and written notice thereof to U S
WEST, provide from and after the end of any Plan Year for the discontinuance of
Plan participation by such Participating Company and its Employees.

         (c)      In accordance with this Section 9.3, Old U S WEST transfers
sponsorship of the Plan to U S WEST immediately prior to the Separation Time. In
accordance with and subject to the terms of the Employee Matters Agreement, all
liabilities under this Plan to or relating to "Media Employees" or "Terminated
Media Employees" as such terms are defined in the Employee Matters Agreement
were transferred to the new savings plan sponsored by MediaOne Group, Inc. (or
its affiliates) after the Separation Time (the "Media Plan"). In addition, the
Plan transferred assets to the Media Plan in the amount set forth in the
Employee Matters Agreement; such payment shall operate as a complete discharge
of the Trustee, U S WEST, Inc. and its subsidiaries of all liabilities and
obligations under this Plan to Media Employees and Terminated Media Employees.

         (d)      Old U S WEST (and any subsidiary of Old U S WEST prior to the
Separation Time) that is not a Related Company after the Separation Time shall
be treated as Related Companies with respect to periods prior to the Separation
Time but not periods after the Separation Time. Thus, if an individual was
employed by Old U S WEST or any 80% owned subsidiary of Old U S WEST prior to
the Separation Time (including a Media Participant) and is employed after the
Separation Time by U S WEST or a Related Company, such individual's service with
Old U S WEST or such subsidiary prior to the Separation Time shall be recognized
under this Plan to the same extent as service with U S WEST or a Related
Company, subject to all applicable break in service rules. In the case of a
Media Participant, the period such person is employed by MediaOne Group, Inc.
and its subsidiaries shall be included within the person's Period of Severance.

                                    ARTICLE X

                            AMENDMENT AND TERMINATION

10.1 - Amendments.
       ----------

         U S WEST expects this Plan to be permanent, but as future conditions
cannot be foreseen it reserves the right to amend the Plan at any time, without
prior notice to anyone. The Plan may be amended by a writing approved by U S

                                       60
<PAGE>

WEST's Board of Directors and signed on behalf of U S WEST by an officer of U S
WEST duly authorized by the Board of Directors. The Plan may also be amended in
writing by the Committee or other persons to the extent authority to amend the
Plan has been delegated to the Committee or such other persons by the Board of
Directors. Each amendment shall be effective on such date as U S WEST or its
delegate may determine. No amendment or modification that affects the rights,
powers, privileges, immunities or obligations of the Trustee may be made without
the consent of the Trustee. Amendments may modify the rights and interests of
Employees who are Participants in the Plan at the time thereof as well as future
Participants but amendments may not diminish the accrued benefit (as defined in
section 411(d)(6) of the Code) of any Participant as of the effective date of
such amendment.

10.2 - Discontinuance or Termination of Plan.
       -------------------------------------

         (a)      The Committee, with the consent of the Chairman of the Board
(or, at any time when there is no Chairman of the Board, the President) and
subject to the approval of the Board of Directors (or without such approval in
the case of changes that, in the opinion of the Committee, are required by
federal or state statutes applicable to the Participating Company or authorized
or made desirable by such statutes) may discontinue contributions to the Plan or
terminate the Plan. Upon a complete discontinuance of contributions, termination
or partial termination of the Plan, the Accounts of all affected Participants
shall become fully vested.

         (b)      The Participating Companies expect to continue the Plan
indefinitely, but the continuance of the Plan and the payment of contributions
are not assumed as contractual obligations. Any Participating Company may
withdraw from the Plan as to its Employees at any time by resolution of the
Participating Company's board of directors (or its general partner or its
manager).

         (c)      In the event of a complete termination of the Plan,
Participants shall be deemed to have had a Break in Employment for purposes of
the Plan. If such a Participant does not elect distribution of his Accounts
under the Plan, the Participant will no longer have the withdrawal rights
specified in Section 6.2.

10.3 - Failure to Contribute.
       ---------------------

         Any failure by one or more Participating Companies to contribute to the
Trust in any year when no contribution is required under this Plan shall not of
itself be a discontinuance of contributions under this Plan.

10.4 - Plan Merger or Consolidation; Transfer of Plan Assets.
       -----------------------------------------------------

         (a)      This Plan shall not be merged or consolidated with, nor shall
its assets or liabilities be transferred to, any other plan unless each Account
Owner in this Plan (if the Plan then terminated) would receive a benefit
immediately after the merger, consolidation or transfer which is equal to or
greater than the benefit such Account Owner would have been entitled to receive
immediately before the merger, consolidation or transfer (if this Plan had been
terminated). Where the foregoing requirement is satisfied, this Plan and its
related Trust may be merged or consolidated with another qualified plan and
trust.

                                       61
<PAGE>

         (b)      U S WEST or the Committee may, in its discretion, authorize a
plan to plan transfer, provided such a transfer will meet the requirements of
section 414(l) of the Code and that all other actions legally required are
taken. In the event of a transfer of assets from the Plan pursuant to this
subsection, any corresponding benefit liabilities shall also be transferred.

                                   ARTICLE XI

                                  MISCELLANEOUS

11.1 - Contributions Not Recoverable.
       -----------------------------

         Except where contributions or earnings are required to be returned to
the Participating Company by the provisions of this Plan as permitted or
required by ERISA or the Code, it shall be impossible for any part of the
contributions or earnings made under this Plan to be used for, or diverted to,
purposes other than the exclusive benefit of Account Owners. Notwithstanding
this or any other provision of this Plan, the Participating Company shall be
entitled to recover, and the Account Owners under this Plan shall have no
interest in (a) any contributions made under this Plan by mistake of fact, so
long as the contribution is returned within one year after payment, and (b) any
contributions for which deduction is disallowed under section 404 of the Code,
so long as the contributions are returned to the Participating Company within
one year following such disallowance or as permitted or required by the Code or
ERISA. In the event of such mistake of fact or disallowance of deductions,
contributions shall be returned to the Participating Company, subject to the
limitations, if any, of section 403(c) of ERISA.

11.2 - Limitation on Participant's Rights.
       ----------------------------------

         Any Participating Company or any of its subsidiaries may terminate the
employment of any Employee as freely and with the same effect as if this Plan
were not in existence. Participation in this Plan by an Employee shall not
constitute an express or implied contract of employment between an Employee and
the Participating Company or any of its subsidiaries. All benefits under the
Plan shall be provided solely from the assets of the Trust.

11.3 - Receipt or Release.
       ------------------

         Any payment to any Account Owner in accordance with the provisions of
the Plan shall, to the extent thereof, be in full satisfaction of all claims
against the Trustee, the Committee, U S WEST, and the Participating Companies.
The Trustee may require such Account Owner, as a condition precedent to such
payment, to execute a receipt and release to such effect.

                                       62
<PAGE>

11.4 - Alienation.
       ----------

         (a)      Except as provided in (b), (c), (d), and (e) below, no Account
Owner shall have any right to assign, transfer, hypothecate, encumber or
anticipate his interest in any benefits under this Plan, nor shall such benefits
be subject to any legal process to levy upon or attach the same for payment of
any claim against any such Account Owner.

         (b)      Subsection (a) shall apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a Participant
pursuant to a domestic relations order unless such domestic relations order is a
QDRO, in which case the Plan shall make payment of benefits in accordance with
Section 6.4 above and the applicable requirements of any such QDRO. Whether a
domestic relations order is a QDRO shall be determined by the Committee pursuant
to procedures adopted and applied in compliance with Code section 414(p) and
ERISA section 206(d).

         (c)      A loan described in Section 11.10 of the Plan shall not be
considered a violation of this Section.

         (d)      An offset made pursuant to section 206(d)(4) of ERISA shall
not be considered a violation of this Section.

         (e)      Compliance with a federal tax levy pursuant to Code section
6331 or the collection by the United States on a judgment resulting from an
unpaid tax assessment shall not be considered a violation of this Section.

11.5 - Military Service.
       ----------------

         Notwithstanding any provision of this Plan to the contrary,
contributions and service credit with respect to qualified military service will
be provided in accordance with Code section 414(u).

11.6 - Governing Law.
       -------------

         This Plan shall be construed, administered, and governed in all
respects under applicable federal law, and to the extent that federal law is
inapplicable, under the laws of the State of Colorado; provided, however, that
if any provision is susceptible to more than one interpretation, such
interpretation shall be given thereto as is consistent with this Plan's
remaining qualified within the meaning of section 401(a) of the Code. If any
provisions of this instrument shall be held by a court of competent jurisdiction
to be invalid or unenforceable, the remaining provisions hereof shall continue
to be fully effective.

11.7 - Headings, etc. Not Part of Plan.
       -------------------------------

         Headings and subheadings in this Plan are inserted for convenience of
reference only and are not to be considered in the construction of the
provisions hereof.

                                       63
<PAGE>

11.8 - Masculine Gender Includes Feminine and Neuter.
       ---------------------------------------------

         As used in this Plan, the masculine gender shall include the feminine
gender.

11.9 - Instruments in Counterparts.
       ---------------------------

         This Plan may be executed in several counterparts, each of which shall
be deemed an original, and said counterparts shall constitute but one and the
same instrument, which may be sufficiently evidenced by any one counterpart.

11.10 - Loans to Account Owners.
        -----------------------

         (a)      Loans are available only to Participants who are employees of
the Company or a Related Company and to Account Owners who are
parties-in-interest (within the meaning of ERISA section 3(14)) with respect to
the Plan (collectively referred to in this section as "Borrowers"). No loan
shall be made to any individual while the individual falls into any of the
following categories, nor shall any loan be made of amounts accrued while such
individual fell into any of the following categories:

                  (i)      Owner-employee within the meaning of Code section
401(c)(3); or

                  (ii)     Employee or officer who owns (or is considered as
owning within the meaning of Code section 318(a)(1) on any day during the
taxable year of the Company or Related Company) 5% or more of the stock of the
Company or any Related Company, but only if the Company or Related Company is an
S corporation; or

                  (iii)    Sibling (of the whole- or half-blood), spouse,
ancestor or lineal descendant of any individual described in Section 11.10(a)(i)
or 11.10(a)(ii),

unless such individual has furnished to the Committee a written exemption,
granted by the Department of Labor, exempting the loan from the prohibited
transaction provisions of ERISA and the Code. The Committee shall establish
procedures to temporarily reduce the amount a Participant may borrow or to
temporarily prevent a Participant from borrowing altogether when the Committee
believes that an order affecting the Participant's Account is, or may be, in the
process of becoming a QDRO.

         (b)      The Committee shall grant any loan which meets each of the
requirements of paragraphs (i), (ii) and (iii) below:

                  (i)      The amount of the loan, when added to the outstanding
balance of all other loans to the Borrower from the Plan or any other qualified
plan of the Company or any Related Company shall not exceed the lesser of:

                           (A)    $50,000, reduced by the excess, if any, of a
Borrower's highest outstanding balance of all loans from the Plan or any other
qualified plan maintained by the Company or any Related Company during the
preceding 12 months over the outstanding balance of such loans on the loan date,
or

                                       64
<PAGE>

                           (B)    50% of the value of the vested balance of the
Borrower's Accounts as of the date preceding the date upon which the loan is
made;

                  (ii)     The loan shall be for at least $1,000 and may be made
in increments of $500 over such amount; and

                  (iii)    No more than one loan may be outstanding to a
Borrower at any time.

         (c)      Each loan granted shall, by its terms, satisfy each of the
following additional requirements:

                  (i)      Each loan must be repaid within four years (except
that if the Committee is satisfied that the loan proceeds are being used to
purchase the principal residence of a Borrower, the Committee may, in its
discretion, establish a term of up to 14 years for repayment);

                  (ii)     Each loan must require substantially level
amortization over the term of the loan, with payments not less frequently than
quarterly; and

                  (iii)    Each loan shall be adequately secured, with the
security to consist of a portion of the Borrower's Accounts.

                  (iv)     Each loan shall bear reasonable rate of interest,
which rate shall be determined by the Committee in the method determined by the
Committee. Until the Committee changes the method, the Committee shall cause to
be calculated quarterly the average yields, of the preceding quarter, for two,
five and ten year treasury notes. A spread shall be established from the
treasury yield curve to reflect credit risk. This spread shall be compared to
other consumer rates offered by various financial institutions for
reasonableness. Based on this information, the Committee shall approve a rate.
The rate of interest in effect when a loan is approved will remain in effect for
the life of the loan.

         (d)      Loan repayment for Employee Borrowers shall be made by payroll
deduction except when a Borrower is on a leave of absence or transfers to a
Non-Participating Company, in which case the loan repayment must be mailed to
the Plan Administrator or its designated agent each month until active status is
resumed. Payment must be made by cashier's check or money order, and made
payable to the Plan. Lump sum repayment of a loan will be permitted at any time
except that no lump sum repayment shall be permitted prior to six months
following the date of the loan. Lump sum repayment shall not be made by payroll
deduction, but shall be remitted in the form of cashier's check or money order
to the Plan Administrator or its designated agent. All loan payments shall be
transmitted to the Trustee as soon as practicable.

         (e)      Notwithstanding subsection (d), lump sum repayment of a loan
will be permitted prior to the end of the six-month period following the date of
the loan by an Employee Borrower in the case of retirement or termination of

                                       65
<PAGE>

employment with a Participating Company for any reason other than transfer to
another Participating Company. Such repayment must be made by the last Friday
which is a Valuation Date of the third calendar month following the Borrower's
termination date. If the terminated Borrower does not repay the loan, the unpaid
principal balance of the loan and any accrued interest shall be treated as a
distribution.

         (f)      The loan shall be payable in full on its maturity date. If a
Borrower misses 6 payments, all remaining payments are accelerated and the
entire outstanding balance becomes payable within 60 days after the sixth missed
payment; if not repaid by then, the loan will go into default and the Borrower
will not be permitted to borrow from the Plan again. The loan shall be payable
in full when the Borrower dies, unless the Borrower is a Participant and his
sole Beneficiary is his spouse, in which case the surviving spouse may repay the
loan or the loan will be defaulted on the date the first distribution is made to
the surviving spouse. The loan shall be payable in full at the end of the third
month following the termination of the Borrower's employment with the Company
and Related Companies. The loan shall be payable in full when the Plan
terminates. The loan shall also be payable in full if the Company or Related
Company receives notice from a court of bankruptcy that loan repayments are to
be halted; if not repaid within the time frame established by the Committee, the
loan shall be in default.

         (g)      There shall be an administrative fee charged to a Borrower for
each loan. The Committee shall have the power to modify the above rules or
establish any additional rules with respect to loans extended pursuant to this
Section. Such rules may be included in a separate document or documents and
shall be considered a part of this Plan; provided, each rule and each loan shall
be made only in accordance with the regulations and rulings of the Internal
Revenue Service and Department of Labor and other applicable state or federal
law. The Committee shall act in its sole discretion to ascertain whether the
requirements of such regulations and rulings and this Section have been met.

         (h)      Loan repayments will be suspended under this Plan as permitted
under Code section 414(u).

         (i)      When the Committee receives a signed order from a court that
purports to be a QDRO, the Participant may not receive a loan under this Section
until the Committee has finally disposed of the order. In addition, the
Committee may temporarily freeze the availability of loans because a domestic
relations order affecting the Participant is or may be in the process of
becoming a QDRO.

11.11 - Top-Heavy Plan Requirements.
        ---------------------------

         For any Plan Year for which this Plan is a Top-Heavy Plan, as defined
in Section A.3 of Appendix A, attached hereto, and despite any other provisions
of this Plan to the contrary, this Plan will be subject to the provisions of
Appendix A.

                                       66
<PAGE>

11.12 - Voting Rights.
        -------------

         Within a reasonable time before each annual or special meeting of
shareowners of U S WEST, there shall be sent to each Account Owner who has an
investment in the U S WEST Shares Fund a copy of the proxy solicitation material
for the meeting, together with a form requesting instructions for the Trustee on
how to vote U S WEST Shares represented by Units credited to his Accounts. Upon
receipt of such instructions, the Trustee shall vote the shares as instructed.
The Trustee shall maintain the instructions of each Account Owner in confidence.
The Trustee shall vote U S WEST Shares for which it does not receive voting
instructions, including U S WEST Shares held in a loan suspense account and any
other unallocated U S WEST Shares, in the same proportion as the Trustee votes U
S WEST Shares for which it does receive timely instructions; provided, however,
that the Trustee, as to U S WEST Shares held in the U S WEST Shares Fund and the
Combined Shares Fund, and any loan suspense account, shall in all events
exercise voting obligations consistent with the Trustee's fiduciary duties under
ERISA.

11.13 - Payments Due Minors or Incapacitated Persons.
        --------------------------------------------

         If any person entitled to a payment under the Plan is a minor, or if
the Committee determines than any such person is incapacitated by reason of
physical or mental disability, whether or not legally adjudicated an
incompetent, the Committee shall have the power to cause the payments becoming
due to such person to be made to the legal guardian or conservator of such
person, or if none, to a parent of a minor or the responsible adult with whom a
minor maintains his residence or to the custodian for a minor under the Uniform
Gifts to Minors Act (or Gift to Minors Act), if permitted by the laws of the
state in which the minor resides. Payments made pursuant to such power shall
operate as a complete discharge of the Trust, the Trustee, the Plan,
Participating Companies, and the Committee.

                                       67
<PAGE>

                                   APPENDIX A
                                   ----------
                              TOP-HEAVY PROVISIONS
                              --------------------

         Section 11.11 of the Plan shall be construed in accordance with this
Appendix A. Definitions in this Appendix A shall govern for the purposes of this
Appendix A. Any other words and phrases used in this Appendix A, however, shall
have the same meanings that are assigned to them under the Plan, unless the
context clearly requires otherwise.

A.1 - General.
      -------

         This Appendix A shall be effective for Plan Years beginning on or after
January 1, 1984. This Appendix A shall be interpreted in accordance with section
416 of the Code and the regulations thereunder.

A.2 - Definitions.
      -----------

         (a)      The "Benefit Amount" for any Employee means (1) in the case of
any defined benefit plan, the present value of his normal retirement benefit,
determined on the Valuation Date as if the Employee terminated on such Valuation
Date, plus the aggregate amount of distributions made to such Employee within
the five-year period ending on the Determination Date (except to the extent
already included on the Valuation Date) and (2) in the case of any defined
contribution plan, the sum of the amounts credited, on the Determination Date,
to each of the accounts maintained on behalf of such Employee (including
accounts reflecting any nondeductible Employee contributions) under such plan
plus the aggregate amount of distributions made to such Employee within the
five-year period ending on the Determination Date. For purposes of this Section,
the present value shall be computed using a 5% interest assumption and the
mortality assumptions contained in the defined benefit plan for benefit
equivalence purposes, provided that, if more than one defined benefit plan is
being aggregated for top-heavy purposes, the actuarial assumptions which shall
be used for testing top-heaviness are those of the plan with the lowest interest
assumption, provided further that if the lowest interest assumption is the same
for two or more plans, the actuarial assumptions used shall be that of the plan
with the greatest value of assets on the applicable date.

         (b)      "Company" means any company (including unincorporated
organizations) participating in the Plan or plans included in the "aggregation
group" as defined in this Appendix A.

         (c)      "Determination Date" means the last day of the preceding Plan
Year or, in the case of the first Plan Year of the Plan, the last day of the
Plan Year.

         (d)      "Employees" means Employees, former Employees, beneficiaries,
and former beneficiaries who have a Benefit Amount greater than zero on the
Determination Date.

         (e)      "Key Employee" means any Employee who, during the Plan Year
containing the Determination Date or during the four preceding Plan Years, is:
<PAGE>

                  (1)      one of the ten Employees of a Company having annual
compensation from such Company of more than the limitation in effect under
section 415(c)(1)(A) of the Code and owning (or considered as owning within the
meaning of section 318 of the Code) both more than a 1/2% interest and the
largest interests in such Company (if two Employees have the same interest the
Employee having the greater annual compensation from the Company shall be
treated as having a larger interest);

                  (2)      a 5% owner of a Company;

                  (3)      a 1% owner of a Company who has an annual
compensation above $150,000; or

                  (4)      an officer of a Company having an annual compensation
greater than 50% of the amount in effect under section 415(b)(1)(A) of the Code
for any such Plan Year (however, no more than the lesser of (A) 50 Employees or
(B) the greater of 3 Employees or 10% of the Company's Employees shall be
treated as officers). For purposes of determining the number of Employees taken
into account under this Section A.2(e)(4), Employees described in section
414(q)(8) of the Code shall be excluded.

         (f)      A "Non-Key Employee" means an Employee who is not a Key
Employee.

         (g)      "Valuation Date" means the first day (or such other date which
is used for computing plan costs for minimum funding purposes) of the 12-month
period ending on the Determination Date.

         (h)      A "Year of Service" shall be calculated using the Plan rules
that normally apply for determining vesting service.

         These definitions shall be interpreted in accordance with section
416(i) of the Code and the regulations thereunder and such rules are hereby
incorporated by reference. The term "Key Employee" shall not include any officer
or Employee of an entity referred to in section 414(d) of the Code. For the
purpose of this subsection, "compensation" shall mean compensation as defined in
section 414(q)(7) of the Code and shall be determined without regard to sections
125, 402(e)(3), 402(h)(1)(B) or, in the case of employer contributions made
pursuant to a salary reduction agreement, section 403(b).

A.3 - Top-Heavy Definition.
      --------------------

         The Plan shall be top-heavy for any Plan Year if, as of the
Determination Date, the "top-heavy ratio" exceeds 60%. The top-heavy ratio is
the sum of the Benefit Amounts for all Employees who are Key Employees divided
by the sum of the Benefit Amounts for all Employees. For purposes of this
calculation only, the following rules shall apply:

         (a)      The Benefit Amounts of all Non-Key Employees who were Key
Employees during any prior Plan Year shall be disregarded.
<PAGE>

         (b)      The Benefit Amounts of all Employees who have not performed
any services for any Company at any time during the five-year period ending on
the Determination Date shall be disregarded; provided, however, if an Employee
performs no services for five years and then again performs services, such
Employee's Benefit Amount shall be taken into account.

         (c)      (1)      Required Aggregation. This calculation shall be made
by aggregating any plans, of the Company or a Related Company, qualified under
section 401(a) of the Code in which a Key Employee participates or which enables
this Plan to meet the requirements of section 401(a)(4) or 410 of the Code; all
plans so aggregated constitute the "aggregation group."

                  (2)      Permissive Aggregation. The Company may also
aggregate any such plan to the extent that such plan, when aggregated with this
aggregation group, continues to meet the requirements of section 401(a)(4) and
section 410 of the Code.

         If an aggregation group includes two or more defined benefit plans, the
actuarial assumptions used in determining an Employee's Benefit Amount shall be
the same under each defined benefit plan and shall be specified in such plans.
The aggregation group shall also include any terminated plan which covered a
Key-Employee and which was maintained within the five-year period ending on the
Determination Date.

         (d)      This calculation shall be made in accordance with section 416
of the Code (including 416(g)(3)(B) and (g)(4)(A)) and the regulations
thereunder and such rules are hereby incorporated by reference. For purposes of
determining the accrued benefit of a Non-Key Employee who is a Participant in a
defined benefit plan, this calculation shall be made using the method which is
used for accrual purposes for all defined benefit plans of the Company, or if
there is no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under section 411(b)(1)(C) of the Code.

A.4 - Minimum Benefits or Contributions, Compensation Limitations, and Section
      ------------------------------------------------------------------------
      415 Limitations.
      ---------------

         If the Plan is top-heavy for any Plan Year, the following provisions
shall apply to such Plan Year:

         (a)      (1)      Except to the extent not required by section 416 of
the Code or any other provision of law, notwithstanding any other provision of
this Plan, if the Plan and all other plans which are part of the aggregation
group are defined contribution plans, each Participant (and any other Employee
required by section 416 of the Code) other than Key Employees shall receive an
allocation of employer contributions and forfeitures from a plan which is part
of the aggregation group at least equal to 3% (or, if lesser, the largest
percentage allocated to any Key Employee for the Plan Year) of such
Participant's compensation for such Plan Year (the "defined contribution
minimum"). For purposes of this subsection, salary reduction contributions on
behalf of a Key Employee must be taken into account. For purposes of this
subsection, a non-Key Employee shall be entitled to a contribution if he is
employed on the last day of the Plan Year (A) regardless of his level of
compensation, (B) without regard to whether he has made any mandatory
contributions required under the Plan, and (C) regardless of whether he has less
than 1,000 Hours of Service (or the equivalent) for the accrual computation
period.
<PAGE>

                  (2)      Except to the extent not required by section 416 of
the Code or any other provision of law, notwithstanding any other provisions of
the Plan, if the Plan or any other plan which is part of the aggregation group
is a defined benefit plan each Participant who is a participant in any such
defined benefit plan (who is not a Key Employee) who accrues a full Year of
Service during such Plan Year shall be entitled to an annual normal retirement
benefit from a defined benefit plan which is part of the aggregation group which
shall not be less than the product of (A) the Employee's average compensation
for the five consecutive years when the Employee had the highest aggregate
compensation and (B) the lesser of 2% per Year of Service or 20% (the "defined
benefit minimum"). A Non-Key Employee shall not fail to accrue a benefit merely
because he is not employed on a specified date or is excluded from participation
because his compensation is less than a stated minimum or he fails to make
mandatory Employee contributions. For purposes of calculating the defined
benefit minimum, (A) compensation shall not include compensation in Plan Years
after the last Plan Year in which the Plan is top-heavy and (B) a Participant
shall not receive a Year of Service in any Plan Year before January 1, 1984 or
in any Plan Year in which the Plan is not top-heavy. This defined benefit
minimum shall be expressed as a life annuity (with no ancillary benefits)
commencing at normal retirement age. Benefits paid in any other form or time
shall be the actuarial equivalent (as provided in the plan for retirement
benefit equivalence purposes) of such life annuity. Except to the extent not
required by section 416 of the Code or any other provisions of law, each
Participant (other than Key Employees) who is not a participant in any such
defined benefit plan shall receive the defined contribution minimum (as defined
in paragraph (a)(1) above).

                  (3)      If a non-Key Employee is covered by plans described
in both paragraphs (1) and (2) above, he shall be entitled only to the minimum
described in paragraph (1), except that for the purpose of paragraph (1) "3%
(or, if lesser, the largest percentage allocated to any key Employee for the
Plan Year)" shall be replaced by "5%". Notwithstanding the preceding sentence,
if the accrual rate under the plan described in (2) would comply with this
Section A.5 absent the modifications required by this Section, the minimum
described in paragraph (1) above shall not be applicable.

         (b)      For purposes of this Section, "compensation" shall mean all
earnings included in the Employee's Form W-2 for the calendar year that ends
within the Plan Year, not in excess of $150,000, as adjusted by the Secretary of
the Treasury.

         (c)      (1)      Unless the Plan qualifies for an exception under
Section A.5(c)(2), "1.0" shall be substituted for "1.25" in the definitions of
Defined Benefit Plan Fraction and Defined Contribution Plan Fraction used in
Article IV of the Plan.

                  (2)      A Plan qualifies for an exception from the rule of
Section A.5(c)(1) if the Benefit Amount of all Employees who are Key Employees
does not exceed 90% of the sum of the Benefit Amounts for all Employees and one
of the following requirements is met:

                           (A)    A defined benefit minimum of 3% per Year of
Service (up to 30%) is provided;
<PAGE>

                           (B)    For Participants covered only by a defined
contribution plan, a defined contribution minimum of 4% is provided;

                           (C)    For Participants covered by both types of
plans, benefits from the defined contribution minimum are comparable to the 3%
defined benefit minimum;

                           (D)    The plan provides a floor offset where the
floor is a 3% defined benefit minimum; or

                           (E)    A defined contribution minimum of 7-1/2% of
compensation is provided for any non-Key Employee who is covered under both a
defined benefit plan and a defined contribution plan (each of which is
top-heavy) of a Company.