<PAGE>
 
                                                                   EXHIBIT 10.11



                    WHITTAKER CORPORATION PARTNERSHIP PLAN

                        AMENDED AND RESTATED EFFECTIVE
                               NOVEMBER 1, 1994
<PAGE>
 
                    WHITTAKER CORPORATION PARTNERSHIP PLAN

                               TABLE OF CONTENTS
                                                                            
<TABLE>
<CAPTION>
                                                                                         PAGE

<S>        <C>                                                                         <C>
ARTICLE I -- DESIGNATION OF PLAN AND DEFINITIONS.....................................    I--1
     1.01  Title.....................................................................    I--1
     1.02  Definitions...............................................................    I--1

ARTICLE II -- SERVICE................................................................   II--1
     2.01  Period of Service.........................................................   II--1
     2.02  Year of Eligibility Service...............................................   II--1
     2.03  Hours of Service..........................................................   II--2
     2.04  Former Employee or Participant............................................   II--3

ARTICLE III -- PARTICIPATION.........................................................  III--1
     3.01  Eligibility Requirements..................................................  III--1
     3.02  Participation Application.................................................  III--1
     3.03  Participant May Name Beneficiary..........................................  III--2
     3.04  Termination of Participation..............................................  III--2
     3.05  Termination Date..........................................................  III--3
     3.06  Restricted Participation..................................................  III--4
     3.07  Eligibility upon Reemployment.............................................  III--5

ARTICLE IV -- CONTRIBUTIONS..........................................................   IV--1
     4.01  Employer Contributions....................................................   IV--1
     4.02  Payment...................................................................   IV--3
     4.03  Salary Deferral Contributions.............................................   IV--3
     4.04  Limitations on Contributions for Highly Compensated Employees.............   IV--5
     4.05  Distribution of Excess Deferrals, Excess Contributions and Excess
             Aggregate Contributions.................................................  IV--13
     4.06  Qualified Voluntary Employee Contributions Not Permitted..................  IV--20
     4.07  Duties of Funding Agent Regarding Contributions...........................  IV--20
     4.08  Special Investment Directions.............................................  IV--20
     4.09  Transfers from Other Qualified Plans......................................  IV--22
     4.10  Rollover Contributions....................................................  IV--22
     4.11  Segregation of Rollovers..................................................  IV--23
</TABLE>

                                      (i)
<PAGE>
 
                         TABLE OF CONTENTS, CONTINUED

<TABLE>
<CAPTION>
                                                                                         PAGE

<S>        <C>                                                                         <C>
ARTICLE V -- ALLOCATIONS TO PARTICIPANTS' ACCOUNTS...................................    V--1
     5.01  Individual Accounts.......................................................    V--1
     5.02  Order of Adjustment to Accounts...........................................    V--1
     5.03  Evaluation of Accounts....................................................    V--1
     5.04  Crediting of Salary Deferral Contributions................................    V--2
     5.05  Crediting of Employer Profit Sharing Contributions........................    V--2
     5.06  Limitation on Allocations to Participants.................................    V--3
     5.07  Accounts in General.......................................................    V--8
     5.08  Interim Evaluation of Accounts............................................    V--8
     5.09  Insurance.................................................................    V--9

ARTICLE VI -- RIGHT TO BENEFITS......................................................   VI--1
     6.01  Vesting of Interest in Salary Deferral, Employer Matching, Rollover and
             Permanent  Accounts.....................................................   VI--1
     6.02  Vesting of Interest in Employer Profit Sharing Account....................   VI--1
     6.03  Fully Vested Benefits.....................................................   VI--2
     6.04  Partially Vested Benefits.................................................   VI--2
     6.05  Forfeitures...............................................................   VI--3
     6.06  Top Heavy Provisions......................................................   VI--4
     6.07  Persons under Legal or Other Disability...................................   VI--6
     6.08  Missing Participants or Beneficiaries.....................................   VI--6
     6.09  Lien for Debts to Fund....................................................   VI--7
     6.10  Loans to Participants.....................................................   VI--7
     6.11  Withdrawals prior to Termination of Employment............................  VI--11
     6.12  Nature of Participants' Interest..........................................  VI--13
     6.13  Suspension of Benefits and Immediate Participation upon Reemployment......  VI--14
     6.14  Application for Benefits..................................................  VI--14
     6.15  Appeals Procedure.........................................................  VI--14
     6.16  Application for Correction of Annual Statement............................  VI--15

ARTICLE VII -- DISTRIBUTION OF BENEFITS..............................................  VII--1
     7.01  Methods of Making Distributions...........................................  VII--1
     7.02  Involuntary Cash-Out of Vested Participant Accounts.......................  VII--3
     7.03  Voluntary Cash-Out of Vested Participant Accounts.........................  VII--3
     7.04  Withholding on Distributions..............................................  VII--3
</TABLE>

                                     (ii)
<PAGE>
 
                         TABLE OF CONTENTS, CONTINUED

<TABLE>
<CAPTION>
                                                                                          PAGE

<S>        <C>                                                                         <C>
ARTICLE VIII -- THE COMMITTEE........................................................  VIII--1
     8.01  Committee.................................................................  VIII--1
     8.02  Committee Action..........................................................  VIII--1
     8.03  Rights and Duties.........................................................  VIII--2
     8.04  Funding Policy and Method.................................................  VIII--5
     8.05  Transmittal of Information................................................  VIII--5
     8.06  Compensation..............................................................  VIII--5
     8.07  Retention of Advisors.....................................................  VIII--6
     8.08  Allocation and Delegation of Fiduciary Responsibilities...................  VIII--6
     8.09  Indemnification...........................................................  VIII--7
     8.10  Determinations and Corrections............................................  VIII--7
     8.11  Designation of Agents.....................................................  VIII--7
     8.12  Relationship of Fiduciaries...............................................  VIII--7
     8.13  Discharge of Duties by Fiduciaries........................................  VIII--8 
     8.14  Multiple Fiduciary Capacities.............................................  VIII--9 
           
ARTICLE IX -- AMENDMENT AND TERMINATION..............................................    IX--1
     9.01  Amendment by Employer.....................................................    IX--1
     9.02  Retroactive Amendments....................................................    IX--2
     9.03  Discontinuance or Termination of Plan.....................................    IX--2 
     9.04  Partial Termination of Plan...............................................    IX--3
     9.05  Failure to Contribute.....................................................    IX--4
     9.06  Merger and Consolidation of Plan..........................................    IX--4 
     9.07  Substitution of Successor Employer........................................    IX--4 
     9.08  Distribution upon Sale....................................................    IX--4

ARTICLE X -- SPECIAL PROVISIONS FOR CERTAIN FORMER PARTICIPANTS IN WHITTAR 
  INDUSTRIES, LTD. SAVINGS PLAN AS AMENDED (401(K))..................................     X--1
     10.01  Applicability............................................................     X--1
     10.02  Participant Transfer Contributions.......................................     X--1 
                                                  
ARTICLE XI -- MISCELLANEOUS..........................................................    XI--1
     11.01  Contributions Not Recoverable............................................    XI--1 
     11.02  Employment Rights........................................................    XI--2
     11.03  Receipt or Release.......................................................    XI--3
     11.04  Alienation...............................................................    XI--3
     11.05  Controlling Law..........................................................    XI--3
     11.06  Text Prevails over Captions..............................................    XI--4
     11.07  Counterparts.............................................................    XI--4
     11.08  Successors and Assigns...................................................    XI--4
</TABLE>

                                     (iii)
<PAGE>
 
                                TABLE OF CONTENTS, CONTINUED

<TABLE>
<CAPTION>
                                                                                       PAGE

<S>                                                                                    <C>
ARTICLE XII -- PARTICIPATING EMPLOYERS...............................................   XII--1
     12.01  Adoption by Affiliated Employers.........................................   XII--1
     12.02  Requirements of Participating Employers..................................   XII--1
     12.03  Designation of the Employer as Agent.....................................   XII--1
     12.04  Employee Transfers.......................................................   XII--2
     12.05  Participating Employer Contributions.....................................   XII--2
     12.06  Amendment................................................................   XII--2
     12.07  Participating Employer Discontinuance....................................   XII--2
     12.08  Committee Authority......................................................   XII--3
</TABLE>

                                      (v)
<PAGE>
 
                             WHITTAKER CORPORATION

                               PARTNERSHIP PLAN

                                        
     This Plan is made and entered into by Whittaker Corporation, a corporation
organized and existing under the laws of the State of Delaware, with its
                                                              -         
principal place of business located at Los Angeles, California.

                                   RECITALS

1.   Whittaker Corporation feels the need to continue to encourage Employees to
     contribute to the growth and profitability of the Company.

2.   Whittaker Corporation has decided to continue to afford its Employees the
     opportunity to share in the rewards of continued long and faithful service.

3.   By execution of this instrument, the Employer desires to amend and restate
     as of November 1, 1994, the administrative provisions of the Whittaker
     Corporation Partnership Plan, and as of January 1, 1989 or such earlier
     date as required by law, those regulatory provisions necessary to comply
     with the applicable provisions of the Employee Retirement Income Security
     Act of 1974 (Public Law 93-406), as amended, and to continue to qualify the
     Plan as a profit sharing plan under Sections 401(a) and (k) of the Internal
     Revenue Code of 1986, as amended.

                             OPERATIVE PROVISIONS

     NOW, THEREFORE, effective November 1, 1994, or such earlier date as
required by law the Whittaker Corporation Partnership Plan, first promulgated
and established, effective February 16, 1968, is restated and as so promulgated
and restated, continues to constitute a profit sharing plan for 

                                       1
<PAGE>
 
the Employer. Under no circumstances may a salary reduction agreement or other
deferral mechanism pursuant to this Plan be adopted retroactively.

                                       1
<PAGE>
 
                                   ARTICLE I

                      DESIGNATION OF PLAN AND DEFINITIONS

     1.01 TITLE.  This profit sharing plan shall be known as the "Whittaker
Corporation Partnership Plan."

     1.02 DEFINITIONS.  Whenever used herein, the following terms shall have the
meanings set forth below, unless a different meaning is clearly required by the
context:

     (a)   "Adjustment Factor" shall mean the cost of living adjustment factor
           prescribed by the Secretary of the Treasury under Section 415(d) of
           the Code for years beginning after December 31, 1987, as applied to
           such items and in such manner as the Secretary shall provide.

     (b)   "Affiliated Employer" shall mean the Employer and any corporation
           which is a member of a controlled group of corporations (as defined
           in Section 414(b) of the Code) which includes the Employer; any trade
           or business (whether or not incorporated) which is under common
           control (as defined in Section 414(c) of the Code) with the Employer;
           any organization (whether or not incorporated) which is a member of
           an affiliated service group (as defined in Section 414(m) of the
           Code) which includes the Employer; any "leasing organization" (as
           defined in Section 414(n) of the Code) to the extent its employees
           constitute "leased employees" (within the meaning of Code Section
           414(n)) with respect to a Participating Employer; and any other
           entity required to be aggregated with the Employer pursuant to
           regulations under Section 414(o) of the Code.

     (c)   "Anniversary Date" shall mean the last day of each Plan Year which
           ends on or after the Effective Date. Such date shall be the valuation
           date for determining Top Heavy status for the 

                                      I-1
<PAGE>
 
           succeeding Plan Year, except that the last day of the first Plan Year
           shall function as the determination date for the first Plan Year.

     (d)   "Annual Addition" shall mean, in the case of any Employee, when used
           with respect to the Plan or a Related Plan, the sum for any Plan Year
           of (i) the amount of contributions made by the Employer (or by an
           Affiliated Employer maintaining a Related Plan), including any Salary
           Deferral Contributions, for the Employee's benefit under the Plan (or
           a Related Plan); (ii) the Employee Contributions for such Year under
           such Plan (or the Related Plan); (iii) forfeitures, if any, allocated
           to the Employee's Account for such Year under the Plan (or the
           Related Plan); (iv) excess contributions and excess aggregate
           contributions, as defined under Section 4.05(a), for such year which
           are distributed in accordance with Section 4.05(c); and (v)
           contributions allocated on the Employee's behalf to any individual
           medical account as defined in Section 415(l)(2) of the Code which is
           part of a pension or annuity plan or which are attributable to post-
           retirement medical benefits under a welfare benefit fund as defined
           in Section 419(e) of the Code.

                A restored forfeiture pursuant to Section 6.04, a transfer from
           another qualified pension plan pursuant to Section 4.09, and a
           rollover contribution pursuant to Section 4.10 shall not be counted
           as part of any Participant's "annual addition".

                Notwithstanding the foregoing, the Annual Addition for any
           Limitation Year starting prior to January 1, 1987 shall not be
           recomputed to count all Employee voluntary contributions as Annual
           Additions.

                                      I-2
<PAGE>
 
     (e)   "Beneficiary" or "Beneficiaries" shall mean the person or persons
           last designated by a Participant in accordance with Section 3.03 to
           receive the benefits specified hereunder in the event of the
           Participant's death. A designation of Beneficiary other than the
           spouse shall be automatically revoked on the marriage or remarriage
           (other than a common-law marriage) of a Participant. The designation
           of the spouse as Beneficiary shall be automatically revoked upon any
           finalized divorce of a Participant subsequent to the date of filing
           of the designation of the Beneficiary. If a Participant fails to
           designate a Beneficiary before his death, or if no designated
           Beneficiary survives the Participant, the Committee shall direct the
           Funding Agent to pay any benefits payable to a Beneficiary of such
           Participant pursuant to the provisions of this Plan to the
           Participant's spouse if such spouse survives the Participant or, if
           no spouse survives or exists, then the duly appointed and currently
           acting personal representative of the Participant's estate. If there
           is no personal representative of the Participant's estate duly
           appointed and acting in that capacity within sixty (60) days after
           the Participant's death, then Beneficiary or Beneficiaries shall mean
           the person or persons who can verify by affidavit or Court order to
           the satisfaction of the Committee that they are legally entitled to
           receive the benefits specified hereunder pursuant to the laws of
           intestate succession or other statutory provision in effect at the
           Participant's death in the state in which the Participant resided.

                In the event any amount is payable under the Plan to a minor,
           payment shall not be made to the minor, but instead shall be paid to
           that person's then living parent(s) to act as custodian or, if no
           parent of that person is then living, to a custodian  

                                      I-3
<PAGE>
 
           selected by the Committee to hold the funds for the minor under the
           Uniform Gifts to Minors Act in effect in the jurisdiction in which
           the minor resides. If no parent is living and the Committee decides
           not to select another custodian to hold the funds for the minor, then
           payment shall be made to the duly appointed and currently acting
           guardian of the estate for the minor or, if no guardian of the estate
           for the minor is duly appointed and currently acting within sixty
           (60) days after the date the amount becomes payable, payment shall be
           deposited with the court having jurisdiction over the estate of the
           minor.

                In the event any amount is payable under the Plan to a person
           for whom a conservator has been legally appointed, the payment shall
           be distributed to the duly appointed and currently acting
           conservator, without any duty on the part of the Committee to
           supervise or inquire into the application of any amounts so paid.

     (f)   "Board of Directors" or "Board" shall mean the Board of Directors of
           the Employer or its successor in interest resulting from merger,
           consolidation or transfer of substantially all assets, which
           expressly agrees in writing to continue the Plan as its own.

     (g)   "Break in Employment" shall mean the separation from Service where an
           Employee completes less than 1 day of Service during a twelve (12)
           month period with the Employer, all Affiliated Employers or any
           Predecessor Employer as a result of resignation, discharge, death,
           disability or retirement. In determining whether and when a Break in
           Employment has occurred, the following rules shall apply:

           (i)    A Break in Employment shall not occur solely by reason of a
                  Leave of Absence authorized by the Employer or an Affiliated

                                      I-4
<PAGE>
 
                  Employer in accordance with established nondiscriminatory
                  policies or a vacation, military or maternity/paternity leave.
                  Effective August 5, 1993, leaves of absence shall also be
                  granted in accordance with the requirements of The Family and
                  Medical Leave Act of 1993. Accordingly, an eligible Employee
                  with more than one year of continuous service, during which
                  the Employee worked at least one thousand two hundred and
                  fifty (1,250) hours, may take up to a total of twelve (12)
                  weeks in a twelve (12)-month period for unpaid family care
                  leave. In determining a Break in Service for eligibility
                  purposes, the twelve (12)-month computation period shall be
                  the twelve (12) consecutive month period specified in Section
                  2.02.

           (ii)   Failure to return to work after the expiration of any Leave of
                  Absence shall be considered a resignation effective as of the
                  earlier of (1) expiration of such Leave of Absence, or (2)
                  twelve (12) months following the commencement of such Leave of
                  Absence, except in the case of maternity or paternity leave
                  where the initial one (1)-year period of severance shall not
                  be counted.

           (iii)  A Break in Employment shall not occur solely by reason of a
                  Layoff from the Employer or an Affiliated Employer, but a
                  Break in Employment shall occur on the earlier of (1) a
                  refusal by the Employee to return to the employ of the
                  Employer or Affiliated Employer, or (2) twelve (12) months
                  following the commencement of such Layoff.

           (iv)   Failure of any Employee on military leave to make application
                  for reemployment within the period of time during which he is
                  entitled to retention of reemployment 

                                      I-5
<PAGE>
 
                  rights under applicable laws of the United States shall be
                  considered a resignation effective as of the expiration date
                  of such reemployment rights.

     (h)   "Code" shall mean the Internal Revenue Code of 1986, as amended.
           Reference to a Section of the Code shall include that Section and any
           comparable Section or Sections of any future legislation that amends,
           supplements, or supersedes such section.

     (i)   "Committee" shall mean the Administrative Committee appointed
           pursuant to Article VIII of the Plan.

     (j)   "Compensation" shall mean an Employee's wages, salaries, fees for
           professional services, and other amounts received (without regard to
           whether or not an amount is paid in cash) for services actually
           rendered in the course of employment with the Employer to the extent
           that amounts are includable in gross income (including, but not
           limited to commissions paid salesman, compensation for service on the
           basis of a percentage of profits, commissions on insurance premiums,
           tips, bonuses, reimbursements and expense allowances). Compensation
           shall also include any remuneration which is currently excluded from
           the Participant's gross income by reason of the application of
           Sections 125, 402(a)(8), 402(h)(1)(B), or 403(b) of the Code.

     Compensation with respect to any Employee shall exclude:

           (i)    Any compensation directly paid or payable as fringe benefits
                  including benefits received from the Whittaker Corporation
                  Long Term Incentive Plan and the HMO Bonus Incentive Plan.

           (ii)   Any contributions made by the Employer for or on account of
                  the Employees under this Plan, except for Salary Deferral

                                      I-6
<PAGE>
 
                  Contributions, or under any other employee benefit plan other
                  than any specifically excepted herein;

           (iii)  Any compensation paid or payable by reason of services
                  performed prior to the date the Employee becomes a
                  Participant; and

           (iv)   Any compensation paid or payable by reason of services
                  performed after the date the Employee ceased to be a
                  Participant.

           (v)    Any compensation not included in the Participant's gross
                  income for the current taxable year pursuant to non-qualified
                  deferred compensation plans, however, such amounts shall be
                  included in Compensation in the year such amounts are taxable
                  to the Participant under an unfunded non-qualified plan; and

           (vi)   Amounts included in an Employee's gross income under Section
                  79 of the Code.

           (vii)  For Plan Years beginning after December 31, 1988, Compensation
                  shall exclude amounts in excess of two hundred thousand
                  dollars ($200,000) except as such limit is adjusted for cost
                  of living in accordance with the provisions of Section
                  401(a)(17) of the Code. In determining the Compensation of a
                  Participant for purposes of this limitation, the rules of
                  Section 414(q)(6) of the Code shall apply, except in applying
                  such rules, the term "family" shall include only the spouse of
                  the Participant and any lineal descendants of the Participant
                  who have not attained age nineteen (19) before the close of
                  the year. If, as a result of the application of such rules the
                  adjusted two hundred thousand dollars ($200,000) limitation is
                  exceeded, then the 

                                      I-7
<PAGE>
 
                  limitation shall be prorated among the affected individuals in
                  proportion to each such individual's Compensation as
                  determined under this Section prior to the application of this
                  limitation.

           (viii) In addition to other applicable limitations set forth in the
                  Plan, and notwithstanding any other provision of the Plan to
                  the contrary, for Plan Years beginning on or after January 1,
                  1994, the annual Compensation of each Employee taken into
                  account under the Plan shall not exceed the Omnibus Budget
                  Reconciliation Act of 1993 (OBRA '93) annual Compensation
                  limit. The OBRA '93 annual Compensation limit is one hundred
                  fifty thousand dollars ($150,000), as adjusted by the
                  Commissioner for increases in the cost of living in accordance
                  with Section 401(a)(17)(B) of the Code. The cost-of-living
                  adjustment in effect for a calendar year applies to any
                  period, not exceeding twelve (12) months, over which
                  Compensation is determined (determination period) beginning in
                  such calendar year. If a determination period consists of
                  fewer than twelve (12) months, the OBRA '93 annual
                  Compensation limit will be multiplied by a fraction, the
                  numerator of which is the number of months in the
                  determination period, and the denominator of which is twelve
                  (12).

                       For Plan Years beginning on or after January 1, 1994, any
                  reference in this Plan to the limitation under Section
                  401(a)(17) of the Code shall mean the OBRA '93 annual
                  Compensation limit set forth in this provision.

                       If Compensation for any prior determination period is
                  taken into account in determining an Employee's benefits

                                      I-8
<PAGE>
 
                  accruing in the current Plan Year, the Compensation for that
                  prior determination period is subject to the OBRA '93 annual
                  Compensation limit in effect for that prior determination
                  period. For this purpose, for determination periods beginning
                  before the first day of the first Plan Year beginning on or
                  after January 1, 1994, the OBRA '93 annual Compensation limit
                  is $150,000.

                  Notwithstanding the above provision to the contrary,
            Compensation earned but not paid in a Plan Year may include
            amounts earned but not paid in a Plan Year because of the
            timing of pay periods and pay days if such amounts are paid
            during the first few weeks of the next following Plan Year,
            the amounts are included on a uniform and consistent basis
            with respect to all similarly situated Employees, and no
            Compensation is included in more than one Limitation Year.

     (k)   "Defined Benefit Plan" shall mean any defined benefit plan (as
           defined in Section 415(k) of the Code) maintained by the Employer or
           by any other Affiliated Employer.

     (l)   "Effective Date" shall be February 16, 1968 for the original
           Whittaker Corporation Partnership Plan and November 1, 1994 for the
           amended and restated administrative provisions Plan and, as of
           January 1, 1989 or such earlier date as required by law, for those
           regulatory provisions necessary to comply with the applicable
           provisions of ERISA and the Code.

     (m)   "Elective Deferrals" or "Salary Deferral Contributions" shall mean
           contributions made to the Plan during the Plan Year by the Employer,
           at the election of the Participant, in lieu of Compensation and shall
           include contributions made pursuant to 

                                      I-9
<PAGE>
 
           a salary reduction agreement under the Plan made on behalf of a
           Participant in accordance with Section 4.03.

     (n)   "Eligible Employee" shall mean all Employees who have completed one
           (1) Year of Eligibility Service. Eligible Employees do not include
           (i) any Employee who is a member of a collective bargaining unit and
           who is covered by a collective bargaining agreement, which agreement
           does not specifically provide for coverage of such Employee under
           this Plan, provided that retirement benefits were the subject of good
           faith bargaining between Employee representatives and the Employer,
           or (ii) any non-resident alien who has no earned income from sources
           within the United States unless such nonresident alien is designated
           by the Committee, either individually or by reference to a class of
           which he is part, as an Employee eligible to become a Participant.

     (o)   "Employee" shall mean a person employed by the Employer, or an
           Affiliated Employer, any portion of whose income is subject to
           withholding of income tax and/or for whom Social Security
           contributions are made by the Employer or an Affiliated Employer, as
           well as any other person qualifying as a common-law Employee of the
           Employer or an Affiliated Employer. Employee shall include Leased
           Employees within the meaning of Section 414(n)(2) of the Code.

                For purposes of this Section 1.02(o), the term "Leased Employee"
           shall mean any person (other than an Employee of the Employer) who
           pursuant to an agreement between the Employer and any other person
           ("leasing organization") has performed services for the Employer (or
           for the Employer and related persons determined in accordance with
           Section 414(n)(6) of the Code) on a substantially full time basis for
           a period of at least one year, and 

                                     I-10
<PAGE>
 
           such services are of a type historically performed by employees in
           the business field of the Employer. Contributions or benefits
           provided a Leased Employee by the leasing organization which are
           attributable to services performed for the Employer shall be treated
           as provided by the Employer.

                A Leased Employee shall not be considered an Employee of the
           Employer if:

           (i)    Such Employee is covered by a money purchase pension plan
                  providing:

                  (1)  A nonintegrated employer contribution rate of at least 10
                       percent (10%) of compensation, as defined in Section
                       415(c)(3) of the Code, but including amounts contributed
                       by the Employer pursuant to a salary reduction agreement
                       which are excludable from the Employee's gross income
                       under Section 125, Section 402(a)(8), Section 402(h) or
                       Section 403(b) of the Code,

                  (2)  Immediate participation, and

                  (3)  Full and immediate vesting; and

           (ii)   Leased Employees do not constitute more than twenty percent
                  (20%) of the Employer's nonhighly compensated workforce.

     (p)   "Employee Contributions" shall mean contributions to the Plan made by
           a Participant that are designated or treated at the time of deferral
           or contribution as after-tax employee contributions. Employee
           Contributions shall include amounts, if any, attributable to excess
           contributions within the meaning of Section 401(k)(8)(B) of the Code
           which are recharacterized as Employee Contributions under the
           provisions of this Plan.

                                     I-11
<PAGE>
 
     (q)   "Employer" or "Company" shall mean the Employer named above that has
           adopted this Plan and whose Plan meets the requirements of Section
           401(a) of the Internal Revenue Code of 1986 and, if the context so
           requires, shall also mean a Participating Employer and/or an
           Affiliated Employer; and any successor of such Employer.
 
     (r)   "Employer Matching Account" shall mean the account maintained by the
           Committee for each Participant as required by Section 5.01 for the
           deposit of Employer Matching Contributions

     (s)   "Employer Profit Sharing Account" shall mean the account maintained
           by the Committee for each Participant as required by Section 5.01 for
           the deposit of Employer Profit Sharing Contributions.

     (t)   "Employment Date" shall mean the latest of:

           (i)    The Employee's most recent date of employment (the day on
                  which he is first credited with an Hour of Service) with the
                  Employer or an Affiliated Employer or a Predecessor Employer
                  prior to January 1, 1989; or

           (ii)   The date on which the Employee is first credited with an Hour
                  of Service for the Employer or an Affiliated Employer or a
                  Predecessor Employer; or

           (iii)  His Reemployment Date if he incurs a Break in Employment and
                  is treated as a new Employee pursuant to Section 2.04.
  
     (u)   "ERISA" shall mean the Employee Retirement Income Security Act of
           1974 (Public Law 93-406), as amended. Reference to a Section of ERISA
           shall include that section and any comparable Section or Sections of
           any future legislation that amends, supplements or supersedes such
           section.

                                     I-12
<PAGE>
 
     (v)   "Family Member" shall mean, with respect to any Employee, such
           Employee's spouse and lineal ascendants or descendants and spouses of
           such lineal ascendants or descendants.

     (w)   "Fiscal Year" shall mean the taxable year of the Employer beginning
           on the first day of November and ending on the last day of October.

     (x)   "Fund" shall mean the aggregate of all assets held by the Funding
           Agent for the accounts of Participants and their Beneficiaries.

     (y)   "Funding Agent" shall mean the insurance company or companies and/ or
           trustee(s) selected by the Board of Directors as a depository for
           assets accumulated under this Plan, severally or jointly, as the case
           may be.

     (z)   "Funding Instrument" shall mean the trust and/or insurance contract
           entered into by the Employer to fund this Plan.

     (aa)  "Highly Compensated Employee" shall mean any Employee who performs
           services with respect to the Employer during the Plan Year (the
           "determination year") and is described in one or more of the
           following groups applicable with respect to the determination year or
           the "lookback year" determined pursuant to I. T. Reg. 1.414(q)1-T.
           Accordingly, the Employer hereby elects to make the lookback
           calculation on the basis of the calendar year ending with or within
           the applicable determination year. Such Employees shall include any
           Employee who:

           (i)    Was at any time a five percent (5%) owner as defined under
                  Code Section 416(i)(1); or

           (ii)   Received Compensation from the Employer in excess of seventy-
                  five thousand dollars ($75,000) (as adjusted pursuant to Code
                  Section 415(d)); or

                                     I-13
<PAGE>
 
           (iii)  Received Compensation from the Employer in excess of fifty
                  thousand dollars ($50,000) (as adjusted pursuant to Code
                  Section 415(d)) and who was in the Top Paid Group of Employees
                  for such Plan Year or such preceding Plan Year; or

           (iv)   Was at any time an officer and received Compensation greater
                  than fifty percent (50%) of the amount in excess of Code
                  Section 415(b)(1)(A) for such Plan Year or such preceding Plan
                  Year.

           (v)    An Employee described in paragraphs (ii), (iii) or (iv) above
                  for the current Plan Year who was not described in such
                  paragraphs for the preceding Plan Year shall be treated as a
                  Highly Compensated Employee for the current Plan Year only if
                  such Employee is one (1) of the one hundred (100) Employees
                  who receive the most Compensation from the Employer during the
                  current Plan Year or he is an Employee described under (i)
                  above.

           (vi)   For the purposes of paragraph (iii) above, the term "Top Paid
                  Group" shall mean the top twenty percent (20%) of active
                  Employees ranked on the basis of Compensation received from
                  the Employer during the Plan Year.

           (vii)  For the purposes of paragraph (iv) above, no more than fifty
                  (50) Employees or, if less, the greater of three (3) Employees
                  or ten percent (10%) of the Employees shall be treated as
                  officers. If for any Plan Year no officer of the Employer is
                  described under paragraph (iv), the highest paid officer of
                  the Employer for such Plan Year shall be treated as described
                  in such paragraph.

                                     I-14
<PAGE>
 
           (viii) If any Employee is a Family Member of a five percent (5%)
                  owner or a Highly Compensated Employee in the group consisting
                  of the ten (10) Highly Compensated Employees paid the greatest
                  Compensation during a Plan Year, then such Employee shall not
                  be considered a separate Employee and any Compensation paid to
                  such Employee (and any contribution made on behalf of such
                  Employee) shall be treated as if it were paid to or on behalf
                  of the five percent (5%) owner or Highly Compensated Employee.

           (ix)   A former Employee shall be treated as a highly compensated
                  former Employee if such Employee was a Highly Compensated
                  Employee when such Employee separated from service, or such
                  Employee was a Highly Compensated Employee at any time after
                  attaining age fifty-five (55).

           (x)    For the purpose of this Section 1.02(y):

                  (A)  The term "Compensation" shall have the meaning given such
                       term by Code Section 415(c)(3).

                  (B)  Employers aggregated under Code Sections 414(b), (c),
                       (m), (n), or (o) shall be treated as a single Employer.

           (xi)   The determination of who is a Highly Compensated Employee,
                  including the determination of the number and identity of the
                  Employees in the Top Paid Group, the top one hundred (100)
                  Employees, the number of Employees treated as officers and the
                  Compensation that is considered, will be made in accordance
                  with Code Section 414(q) and the regulations thereunder except
                  as specifically provided to the contrary in Code Section
                  401(a)(17).

                                     I-15
<PAGE>
 
     (bb)  "Inactive Participant" shall mean any Employee or former Employee who
           has ceased to be a Participant on whose behalf an account is
           maintained under the Plan.

     (cc)  "Key Employee" shall mean each Employee or former Employee (including
           a Beneficiary of a Key Employee or former Key Employee) who, at any
           time during the current Plan Year or any of the four (4) immediately
           preceding Plan Years:

           (i)    is or was an officer of the Employer having an annual
                  compensation greater than fifty percent (50%) of the amount
                  specified under Code Section 415(b)(1)(A) for such year;

           (ii)   is among the ten (10) Employees having an annual compensation
                  from the Employer of more than the limitation in effect for
                  such Year under Code Section 415(c)(1)(A) and owning or
                  considered to own (within the meaning of Code Section 318)
                  both more than a one-half percent (.5%) interest and the
                  largest interests in the Employer;

           (iii)  is an Employee owning (within the meaning of Code Section 318)
                  more than five percent (5%) of the Employer; or

           (iv)   is an Employee receiving more than one hundred fifty thousand
                  dollars ($150,000) of annual compensation from the Employer
                  and owning (within the meaning of Code Section 318) more than
                  one percent (1%) of the Employer.

                  Notwithstanding the foregoing, no more than fifty (50)
           Employees or, if less, the greater of three (3) or ten percent (10%)
           (rounded to the next highest integer) of the Employer's Employees
           shall be treated as officers of the Employer. Compensation for the
           purpose of this Section 1.02(aa) shall have the meaning given such
           term by Code Section 414(q)(7).

                                     I-16
<PAGE>
 
                  For the purposes of determining the number of officers under
           (i) above, Employees described in Code Section 418(q)(8) shall be
           excluded. For the purposes of (ii) above, if two Employees have the
           same interest in the Employer, the Employee having the greater annual
           compensation shall be treated as having the larger interest.

     (dd)  "Layoff" shall mean an involuntary suspension of an Employee's
           employment with the Employer or Affiliated Employer resulting from a
           reduction of the work force at the Employee's place of employment and
           during which the Employee has seniority or other employment rights
           with the Employer or Affiliated Employer during a specified recall
           period, pursuant to an applicable collective bargaining agreement or
           Company policy. No Employee shall be considered to be on Layoff for a
           period in excess of the recall period applicable to such Employee
           under an applicable collective bargaining agreement.

     (ee)  "Leave of Absence" shall mean any period of temporary absence
           approved in writing by the Employer or an Affiliated Employer.

     (ff)  "Matching Contribution" shall mean any contribution to the Plan made
           by the Employer for the Plan Year and allocated to a Participant's
           Account by reason of the Participant's Employee Contributions, if
           any, or Elective Deferrals.

     (gg)  "Named Fiduciary" shall mean the Committee.

     (hh)  "Non-Highly Compensated Employee" shall mean an Employee of the
           Employer who is neither a Highly Compensated Employee nor a Family
           Member.

     (ii)  "Non-Key Employee" shall mean each Employee who is not a Key
           Employee.

                                     I-17
<PAGE>
 
     (jj)  "Participant" shall mean any Eligible Employee who participates in
           The Plan in accordance with Article III, including any former
           Employee who is receiving or will receive benefits under the Plan. A
           Participant ceases to be a Participant when all funds to which he is
           entitled under the Plan have been distributed in accordance with the
           terms hereof. A Participant shall be treated as benefiting under the
           Plan for any Plan Year during which such Participant receives or is
           deemed to receive an allocation in accordance with I.T. Regulation
           Section 1.410(b)-3(a).

     (kk)  "Participating Employer" shall mean the Employer and each Affiliated
           Employer and any such other business entity which, by resolution of
           its board of directors and with the written approval of the Employer,
           elects to participate in this Plan.

     (ll)  "Period of Separation" shall mean the period of time commencing with
           the date an Employee incurs a Break in Employment and ending with the
           date such Employee is first credited with an Day of Service by the
           Employer or an Affiliated Employer.

     (mm)  "Permanent Account" shall mean the account maintained by the
           Committee for each Participant as required by Section 4.09 for the
           deposit of assets transferred pursuant to such Section.

     (nn)  "Plan" shall mean the Whittaker Corporation Partnership Plan
           originally effective February 16, 1968 as amended and restated
           herein, together with any and all amendments and supplements hereto.

     (oo)  "Plan Year" shall mean the reporting year used by the Plan beginning
           on the first day of January and ending on the last day of December.
           The Plan Year shall be the Limitation Year for purposes of ERISA and
           for all purposes under this Plan.

                                     I-18
<PAGE>
 
     (pp)  "Predecessor Employer" shall mean any corporation, partnership, or
           sole proprietorship, or a division thereof, a substantial part of the
           assets of which are acquired by the Employer either by purchase from,
           or liquidation, merger or consolidation of or with, such other
           corporation, partnership, or sole proprietorship, which has been
           designated by the Employer as a Predecessor Employer for purposes of
           this Plan.

     (qq)  "Qualified Matching Contributions" and "Qualified Nonelective
           Contributions" shall have the meanings set forth in this Section
           1.02(11). Qualified Matching Contributions shall mean that portion of
           the Employer Matching Contributions pursuant to Section 4.01(a) which
           are to be treated as Elective Deferrals for purposes of the Actual
           Deferral Percentage ("ADP") test described in Section 4.04(a)(ii).
           "Qualified Nonelective Contributions" shall mean contributions (other
           than Matching Contributions) made by the Employer pursuant to Section
           4.01(a) which are to be treated as Elective Deferrals for purposes of
           the ADP test. Both Qualified Matching Contributions and Qualified
           Nonelective Contributions shall be contributions that the Participant
           may not elect to receive in cash earlier than the occurrence of one
           of those events applicable to Salary Deferral Contributions as set
           forth in Section 4.03.

     (rr)  "Reemployment Date" shall mean the date on which the Employee is
           first credited with an Hour of Service by the Employer, an Affiliated
           Employer, or a Predecessor Employer following a Break in Employment.

     (ss)  "Related Plan" shall mean any defined contribution plan (as defined
           in Section 415(k) of the Code), other than this Plan, maintained by
           the Employer or by any other Affiliated Employer, 

                                     I-19
<PAGE>
 
           including, if applicable, after December 31, 1985 any welfare benefit
           fund that is defined in Section 419(e) of the Code.

     (tt)  "Salary Deferral Contributions Account" shall mean a Participant's
           Account hereunder to which his Salary Deferral Contributions, as
           defined in Section 1.02(m), made pursuant to a salary reduction
           agreement are allocated pursuant to Section 4.03.

     (uu)  "Suspense Account" shall mean an account maintained by the Committee
           pursuant to Section 5.06(a)(iii).

     (vv)  "Top Heavy" shall mean that the aggregate of the Employer Matching,
           Employer Profit Sharing and Salary Deferral Accounts of all Key
           Employees hereunder and the accrued benefits under any plan which is
           part of a required or permissive aggregation group, including any
           amounts distributed to any Participants during the five (5) years
           ending on the immediately preceding Anniversary Date but excluding
           any death benefit that exceeds the actuarially equivalent present
           value of accrued benefits existing immediately prior to death and any
           rollover contribution (or similar transfer) initiated by a
           Participant and made after January 1, 1993 to the extent permitted by
           regulations and the value of the Employer Matching Account, Employer
           Profit Sharing Account, Salary Deferral Account and the accrued
           benefits under any plan which is part of a required or permissive
           aggregation group, of each then Non-Key Employee who was previously a
           Key Employee, exceeds sixty percent (60%) of the aggregate of the
           Employer Matching Account, Employer Priofit Sharing Accounts, Salary
           Deferral Accounts and the accrued benefits under any plan which is
           part of a required or permissive aggregation group, of all
           Participants (with the same inclusions and exclusions) as of such
           immediately preceding Anniversary Date. Any account balance or

                                     I-20
<PAGE>
 
           accrued benefit attributable to any individual who has not been an
           Employee (or received any remuneration for services rendered from the
           Employer) with respect to this Plan or any other Related Plan at any
           time during the five (5) years ending on the Anniversary Date shall
           be disregarded. If an Employee returns to employment with the
           Employer after such five (5) year period, such Employee's total
           accrued benefit shall be included in determining the Top Heavy ratio.

                The determination date with respect to determining whether the
           Plan is Top Heavy for a particular Plan Year shall be the last day of
           the preceding Plan Year, or in the case of the first Plan Year, the
           last day of such year.

                The required aggregation group shall consist of any plans
           (including terminated plans where required by Section 416(g)(3) of
           the Code) qualified under Section 401(a) of the Code in which a Key
           Employee participates or which enables this Plan to meet the
           requirements of Code Sections 401(a)(4) or 410. The permissive
           aggregation group shall consist of the required aggregation group
           plus any other plan to the extent that such plan, when so aggregated,
           continues to meet the requirements of Sections 401(a)(4) and 410 of
           the Code.

     (ww)  "Top Heavy Compensation" shall mean the maximum amount of a
           Participant's Compensation which may be taken into account during any
           Plan Year that the Plan is Top Heavy for purposes of determining the
           amount of deductible contributions hereto (currently one hundred
           fifty thousand dollars ($150,000)), as adjusted for increases in the
           cost of living in accordance with the provisions of Section
           401(a)(17) of the Code.

                                     I-21
<PAGE>
 
     (xx)  "Valuation Date" shall mean the last day of each calendar month or,
           in the Committee's discretion, such other dates on which the Funding
           Agent may undertake to provide valuations to the Committee.

     (yy)  A pronoun or adjective in the masculine gender includes the feminine
           gender unless the context clearly indicates otherwise. Where the
           context admits, words in the plural shall include the singular and
           the singular shall include the plural. The words "hereof," "herein,"
           "hereunder," and other similar compounds of the word "here" shall
           mean and refer to the entire Plan and not to any particular provision
           or section. The Plan and Funding Instrument shall each form a part of
           the other and the terms shall be used interchangeably.

                                     I-22
<PAGE>
 
                                  ARTICLE II

                                    SERVICE

     2.01 PERIOD OF SERVICE.  "Period of Service" shall mean the time period
commencing with the Employee's Employment Date and ending on the date a Break in
Employment occurs; provided, however, a Period of Service for these purposes
includes a Period of Separation of less than twelve (12) consecutive months.  An
Employee who separates from Service and later resumes employment with the
Employer or an Affiliated Employer following a Period of Separation of twelve
(12) consecutive months or longer shall be treated as a new Employee and shall
not be entitled to have the Period of Service he completed prior to the Break in
Employment aggregated with his Service subsequent to resumption of employment
unless:

     (a)   at the time of his Break in Employment he had a vested interest in a
           benefit hereunder provided by Employer contributions;

     (b)   the Employee resumes employment before his Period of Separation
           equals or exceeds sixty (60) consecutive months; or

     (c)   he resumes employment before his Period of Separation equals or
           exceeds his Period of Service completed prior to his Break in
           Employment.

     If the Employee satisfies either condition (a), condition (b) or condition
(c) of the preceding sentence, his Period of Service completed prior to his
Break in Employment will be aggregated with Service subsequent to resumption of
employment and he shall be eligible to become a Participant commencing with the
first month after reemployment by a Participating Employer.

     To the extent required under Section 414(a) of the Code and Regulations
issued thereunder, Period of Service shall include Service for a Predecessor
Employer. "Service" means an Employee's period of employment with the Employer
or an Affiliated Employer.

                                     II-1
<PAGE>
 
     2.02 YEAR OF ELIGIBILITY SERVICE.  A Year of Eligibility Service shall mean
a period of twelve (12) consecutive months commencing on an Employee's date of
employment.

     2.03 DAYS OF SERVICE.(a) "Day of Service" shall mean, in the case of any
Employee, each day during the period commencing with the date on which the
Employee first performs one (1) hour of service within the meaning of 29 C.F.R.
2530.200b-2(a) for the Employer or an Affiliated Employer, and ending on the
date on which such employment by the Employer and all Affiliated Employers
terminates for any reason, provided, however, that for the purposes of this
paragraph such termination shall be deemed to occur on the earlier of (i) the
date of retirement, resignation, release, discharge or death, or (ii) the first
anniversary of the day on which the employee last performed one (1) hour of
service within the meaning of 29 C.F. R. 2530.200b-2(a) for the Employer and all
Affiliated Employers.

     (b) Notwithstanding the above, the Board of Directors or the chief
executive offic er may include in the period taken into account for purposes of
computing Days of Service those days in which an Employee or former Employee
performs service for an operating unit, division or subsidiary or any
corporation, trade or business that is acquired by the Employer or an Affiliated
Employer or a part thereof, or for such period as a former Employee subsequently
performs service for any other corporation, trade or business which may have
acquired all or part of an operating unit, division or subsidiary of the
Employer or Affiliated Employer.

     (c) Notwithstanding any provision to the contrary in this Plan, for any
period during which the Plan is a multiple employer plan within the meaning of
Section 413(c) of the Internal Revenue Code an Employee shall accrue Days of
Service only with respect to periods of "covered service" and "contiguous non-
covered service" with the Company. For purposes of determining an Employee's
Days of Service, "covered service" shall mean an Employee's non-

                                     II-2
<PAGE>
 
covered service which immediately precedes or follows such Employee's covered
service and no termination or retirement occurs between such covered service and
uncovered service; provided, however, that any transfer of an Employee between
the Employer and an Affiliated Employer shall result in such Employee's period
of uncovered service which immediately precedes or follows such transfer being
deemed "non-contiguous" for purposes of this subsection 2.03(c)

     (d) Solely for purposes of determining whether a Break in Service, as
defined in Section 1.021(g), has occurred in a computation period, an individual
who is absent from work for maternity or paternity reasons shall receive credit
for the Days of service which would otherwise have been credited to such
individual but for such absence. For purposes of this paragraph, an absence from
work for maternity or paternity reasons means an absence (1) by reason of the
pregnancy of the individual, (2) by reason of a birth of a child of the
individual, (3) by reason of the placement of a child with the individual in
connection with the adoption of such child by such individual, or (4) for
purposes of caring for such child for a period beginning immediately following
such birth or placement. The Days of Service credited under this paragraph shall
be credited (1) in the computation period in which the absence begins if the
crediting is necessary to prevent a Break in Service in that period.

     2.04 FORMER EMPLOYEE OR PARTICIPANT.  Except as otherwise specifically
provided in the Plan, if a former Employee or Participant is reemployed by the
Employer, he will be considered as a new Employee for all purposes.

                                     II-3
<PAGE>
 
                                  ARTICLE III

                                 PARTICIPATION

     3.01 ELIGIBILITY REQUIREMENTS.  All active Eligible Employees who are in
the Service of the Employer on November 1, 1994 and who qualify for
participation in the Plan under the provisions of the second paragraph of this
Section shall become Participants in the Plan as of November 1, 1994. Any other
Eligible Employee who thereafter meets the requirements of said paragraph shall
become a Participant in the Plan as of the first day of the month coinciding
with or following the day upon which he first meets such requirements, provided
he is an Eligible Employee on such day.

     Any Eligible Employee who has completed a Year of Eligibility Service shall
be eligible to participate in the Plan. If an Employee completes a Year of
Eligibility Service as described above, but either is then not employed by a
Participating Employer or is then on an approved Leave of Absence without pay,
Layoff, jury duty or active military duty, he shall be eligible to become a
Participant commencing with the first month thereafter that:

           (i)   he or she becomes actively employed by a Participating Employer
                 (or if later, as of the Effective Date of the Plan with respect
                 to such Participating Employer); or

           (ii)  he or she returns from such Leave of Absence, Layoff, jury
                 duty or active duty.

     Nothing herein shall be construed to permit an Eligible Employee to
commence participation herein prior to the date the entity that employs him
becomes a Participating Employer.

     3.02 PARTICIPATION APPLICATION FOR SALARY DEFERRAL CONTRIBUTIONS

     (a)   To begin salary deferral contributions, an Employee who otherwise
           meets the eligibility requirements of this Article III must file a
           written application for participation with the Committee (in such
           form as the Committee may prescribe) within the time prescribed 

                                     III-1
<PAGE>
 
           by the Committee prior to the first day of the fiscal month during
           which the Employee desires salary deferrals under the Plan to be
           effective (or on such later date prior to such fiscal month as may be
           authorized with respect to the Employee by the Committee).

     (b)   The participation application shall evidence the Employee's
           acceptance of the benefits and terms of this Plan shall indicate the
           Employee's election to defer a portion of his compensation as set
           forth in Section 4.03.

     3.03 PARTICIPANT MAY NAME BENEFICIARY.

     (a)   A Participant may designate, in writing to the Committee upon his/her
           application, the Beneficiary or Beneficiaries whom he desires to
           receive the benefits of the Plan in the event of his death. A married
           Participant may not designate a Beneficiary other than his spouse
           unless:

           (i)    The spouse of the Participant consents in writing to such
                  designation;

           (ii)   The Beneficiary designation may not be changed without spousal
                  consent (or the consent of the spouse expressly permits
                  designations by the Participant without any requirement of
                  further consent by the spouse); and

           (iii)  The spouse's consent acknowledges the effect of such election
                  and is witnessed by a Plan representative or notary public.

           The Employer, the Committee and the Funding Agent may rely upon the
           designation of Beneficiary or Beneficiaries last filed in accordance
           with the terms of this Agreement.

     (b)   If, upon the death of a Participant, there is no designated
           Beneficiary or surviving Beneficiary, the Committee shall 

                                     III-2
<PAGE>
 
           designate as the Beneficiary such person specified in Section
           1.02(e).

     3.04 TERMINATION OF PARTICIPATION.  Active participation in the Plan shall
continue until the Anniversary Date coinciding with or next following the
Participant's Termination Date or, if earlier, as of the date the Plan
terminates.  Participation in the Plan shall continue until a Participants'
Accounts have been withdrawn.  A Participant may not voluntarily withdraw from
participation or receive any distribution of his benefit under the Plan prior to
his Termination Date, except to the extent provided in Sections 6.09 and 6.10.

     3.05 TERMINATION DATE.  A Participant's Termination Date shall be the date
on which his employment with the Employer is terminated because of the first to
occur of the following events:

     (a)   NORMAL RETIREMENT.  The Participant retires or is retired from the
           employ of the Employer on or after attaining age sixty-five (65). The
           Plan contemplates that a Participant retire as of the Anniversary
           Date coinciding with or next following his attainment of age sixty-
           five (65), except that a Participant may continue his employment
           after that date. During the continuation of his employment with the
           Employer after attaining such date, such Participant shall continue
           to participate in the Plan and shall be entitled to receive his
           benefits only upon his actual termination of employment unless
           otherwise required pursuant to the provisions of Section 7.01(e).

     (b)   EARLY RETIREMENT.  A Participant's termination of employment with the
           Employer on or after the date as of which the Participant reaches age
           fifty-five (55).

     (c)   DISABILITY RETIREMENT.  The Participant is retired from the employ of
           the Employer because of disability, irrespective of age.  A

                                     III-3
<PAGE>
 
           Participant will be considered disabled for purposes of the Plan if,
           upon suffering any medically determinable physical or mental
           impairment as a result of sickness, accident or other injury which,
           in the opinion of a physician approved by the Committee, may be
           expected to result in death or be of long, continued duration and
           which renders the Participant incapable of performing the duties of
           his employment with the Employer.

                A Participant who claims to be totally and permanently disabled
           must, within ninety (90) days of the date he became totally and
           permanently disabled, give written notice thereof to the Committee
           and submit, at the expense of the Participant, to the Committee such
           medical evidence of such disability (including without limitation,
           certification thereof by a physician approved by the Administrative
           Committee) as said Committee may from time to time reasonably
           require. Failure by a Participant to comply with the foregoing
           requirements shall be deemed conclusive evidence that such
           Participant is not totally and permanently disabled, or has ceased to
           be so disabled as of the date of such failure.

                A Participant who qualifies for Social Security disability
           benefits will automatically satisfy the requirements under this Plan
           with respect to submission of evidence of disability, throughout the
           period that he remains qualified for Social Security disability
           benefits.

                All rules with respect to the subject of this Section 3.04(c)
           shall be uniformly and consistently applied to all Participants in
           similar circumstances.

                                     III-4
<PAGE>
 
     (d)   DEATH.  The Participant's death.

     (e)   RESIGNATION OR DISMISSAL.  The Participant resigns or is dismissed
           from the employ of the Employer before retirement in accordance with
           paragraphs (a), (b) or (c) above and incurs a Break in Employment. If
           a Participant continues in the employ of the Employer but no longer
           is a member of a group of employees to which the Plan has been and
           continues to be extended by the Employer, any subsequent Termination
           Date nevertheless will be as stated above, and his Salary Deferral
           Account and Employer Matching and Profit Sharing Accounts will be
           held in accordance with the provisions of Section 3.06.

     3.06 RESTRICTED PARTICIPATION.  When distribution of part or all of the
benefits to which a Participant is entitled under the Plan is deferred beyond or
cannot be made until after his Termination Date, or during any period that a
Participant continues in the employ of the Employer but no longer is a member of
a group of Employees to which the Plan has been and continues to be extended by
the Employer, the Participant will be considered and treated as a Participant
for all purposes of the Plan, except that no share of Employer contributions or
forfeitures will be credited to his Accounts for any period during which he
continues in the employ of the Employer, but is no longer a member of the group
of Employees to which the Plan has been and continues to be extended by the
Employer.

     Notwithstanding the preceding paragraph, a Participant who meets the
requirements of Section 5.05 for receiving an allocation of the Employer Profit
Sharing Contributions for a Plan Year, except for the fact that at some time
during the Plan year such Participant became a member of a group of Employees
not covered by the Plan, shall be entitled to share in the allocation of
Employer Profit Sharing 

                                     III-5
<PAGE>
 
Contributions and forfeitures attributable to such Plan Year. Such Participant's
allocable share of Employer Profit Sharing Contributions and forfeitures shall
be determined on the basis of his Compensation for the period during which he
was in a group of Employees eligible to be covered under the Plan.

     3.07 ELIGIBILITY UPON REEMPLOYMENT.  If a former Employee incurs a Break in
Employment and is subsequently reemployed as an Eligible Employee, he shall be
treated as a new Employee and shall commence participation in this Plan only
after satisfying the eligibility requirements set forth in Section 3.01 above
following such reemployment, unless he is entitled to have his prior Period of
Service aggregated under Section 2.01 with Service subsequent to reemployment,
in which event he shall be entitled to commence participation in the Plan on his
Employment Date or the date of his reemployment as an Eligible Employee, if
later.

                                     III-6
<PAGE>
 
                                  ARTICLE IV

                                 CONTRIBUTIONS

     4.01 EMPLOYER CONTRIBUTIONS

     (a)   For the Plan Year ending December 31, 1994, and for each Plan Year
           thereafter, at the discretion of the Board of Directors, the Employer
           may contribute out of its income for the current Fiscal Year and/or
           accumulated earned surplus for such Fiscal Year before all Federal
           income and excess profits taxes to the Plan: (i) a "Matching
           Contribution" in an amount equal to the below listed percentage of
           the Salary Deferral Contributions percentage elected pursuant to
           Section 4.03 by each Participant for each payroll period up to a
           maximum election of six percent (6%) per payroll period, plus (ii) a
           profit sharing contribution that may be authorized at the discretion
           of the Board of Directors, but not to exceed the dollar balance
           remaining after subtracting the sum of the total Salary Deferral
           Contributions and the Employer contributions made pursuant to
           subparagraph (i) above from fifteen percent (15%) of the aggregated
           annual Compensation (after any salary reductions for Salary Deferral
           Contributions) of all Participants for such Fiscal Year. Matching
           Contributions shall be made as follows:

           (a)  For the period during a Plan Year in which a Participant elected
                Salary Deferral Contributions equal to one percent (1%) of his
                Compensation, the Participating Employers shall contribute 
                three-quarters of one percent (.75%) of the Participant's
                Compensation during such period (i.e., seventy-five cents ($.75)
                for each one dollar ($1.00) of Salary Deferral Contributions);


                                     IV-1
<PAGE>
 
           (b)  For the period during a Plan Year in which a Participant elected
                Salary Deferral Contributions equal to two percent (2%) of his
                Compensation, the Participating Employers shall contribute one
                and one-half percent (1-1/2%) of the Participant's Compensation
                during such period (i.e., seventy-five cents ($.75) for each one
                dollar ($1.00) of Salary Deferral Contributions);

           (c)  For the period during a Plan Year in which a Participant elected
                Salary Deferral Contributions equal to three percent (3%) of his
                Compensation, the Participating Employers shall contribute one
                and eight hundred seventy-five thousandths percent (1.875%) of
                the Participant's Compensation during such period (i.e., sixty-
                two and one-half cents ($.62-1/2) for each one dollar ($1.00) of
                Salary Deferral Contributions);

           (d)  For the period during a Plan Year in which a Participant elected
                Salary Deferral Contributions equal to four percent (4%) of his
                Compensation, the Participating Employers shall contribute two
                and one-half percent (2-1/2%) of the Participant's Compensation
                during such period (i.e., sixty-two and one-half cents ($.62-
                1/2) for each one dollar ($1.00) of Salary Deferral
                Contributions);

           (e)  For the period during a Plan Year in which a Participant elected
                Salary Deferral Contributions equal to five percent (5%) of his
                Compensation, the Participating Employers shall contribute two
                and one-half percent (2-1/2%) of the Participant's Compensation
                during such period (i.e., fifty cents ($.50) for each one dollar
                ($1.00) of Salary Deferral Contributions);

                                     IV-2
<PAGE>
 
           (f)  For the period during a Plan Year in which a Participant elected
                Salary Deferral Contributions equal to six percent (6%) or more
                of his Compensation, the Participating Employers shall
                contribute three percent (3%) of the Participant's Compensation
                during such period (i.e., fifty cents ($.50) for each one dollar
                ($1.00) of Salary Deferral Contributions disregarding any such
                Salary Deferral Contributions in excess of six percent (6%) of
                the Participant's Compensation).

     (b)   Notwithstanding the foregoing, the sum of the contribution of the
           Employer and the Salary Deferral Contribution for any Fiscal Year
           shall not exceed an amount equal to fifteen percent (15%) of the
           total Compensation (after any salary reductions) otherwise paid or
           accrued to all Participants employed by the Employer for such Year.

     (c)   In no event shall the Employer contribution attributable to any Plan
           Year be so large as to cause the Annual Addition for any Participant
           to exceed the amount permitted under Section 5.06 below.   

     (d)   In no event shall the Employer contribution for any Fiscal Year
           exceed an amount which the Employer estimates will be deductible
           under Section 404(a)(3) and, if applicable, Section 404(a)(7) of the
           Code.

     (e)   The Employer may, notwithstanding any other provision of this Plan,
           make all contributions to the Plan without regard to current or
           accumulated earnings and profits for the taxable year or years ending
           with or within such Plan Year. Notwithstanding the foregoing, the
           Plan shall continue to be designed to qualify as a 

                                     IV-3
<PAGE>
 
           profit sharing plan for purposes of Sections 401(a), 402, 412 and 417
           of the Code.

     4.02 PAYMENT.  All contributions shall be made directly to the Funding
Agent and may be made on any date or dates selected by the Employer; provided,
however, that the total annual contribution for each Fiscal Year shall be paid,
without interest, on or before the date on which the Federal income tax return
of the Employer for such Year is due, including any extensions of time obtained
for the filing of the return and shall be conditioned on their deductibility
under the Code.

     4.03 SALARY DEFERRAL CONTRIBUTIONS.

     (a)   A Participant may reduce his Compensation and have the Employer
           contribute on his behalf as a Salary Deferral Contribution in each
           Plan Year, subject to the limitation on Annual Additions provided in
           Section 5.06 and any limitation pursuant to the provisions of Section
           6.11, a minimum of zero percent (0%) of his Compensation up to a
           maximum of an amount which does not, exceed twelve percent (12%) of
           such Participant's Compensation for the Plan Year. The rate of his
           Salary Deferral Contribution shall be determined by the Participant
           on a form approved by the Committee and filed with the Committee and
           shall continue unless changed in the manner hereinafter provided. All
           such contributions shall be calculated in integral percentages of a
           Participant's Compensation.

                All Salary Deferral Contributions shall be made by regular
           payroll deductions. The Employer shall segregate such contributions
           from Employer assets as soon as reasonably possible; provided,
           however, that the Employer must pay over any contributions to the
           Funding Agent within ninety (90) days after the date received or
           withheld from payroll.

                                     IV-4
<PAGE>
 
                A Participant may change his contribution rate under this
           Section 4.03(b) (but not retroactively) to any level permitted above
           and at any time but, no more than once per month by filing written
           notice with the Committee in such form as the Committee may
           prescribe. The change in the Participant's contribution rate shall be
           effective as of the first day of the month or next following the
           receipt of such notice if, and only if, the Participant's notice is
           delivered to the Committee within such period as may be authorized by
           the Committee).

     (b)   Notwithstanding any other provision in this Plan to the contrary, no
           Employee shall be permitted to make Salary Deferral Contributions
           during any calendar year (or other taxable year of the Employee)
           which are in excess of the limits set forth under Code Section
           402(g)(1) (nine thousand two hundred forty dollars ($9,240) for 1994)
           multiplied by the Adjustment Factor as provided by the Secretary of
           the Treasury and in effect, at the beginning of such taxable year.
           For the purpose of the preceding sentence only, with respect to any
           taxable year, a Participant's Salary Deferral Contributions shall be
           the sum of all Employer contributions made on behalf of such
           Participant, pursuant to a deferral election under any qualified cash
           or deferred arrangement (CODA) as described in Code Section 401(k);
           any simplified employee pension cash or deferred arrangement as
           described in Code Section 402(h)(1)(B); any eligible deferred
           compensation plan under Code Section 457; any plan as described under
           Code Section 501(c)(18), and any Employer contributions made on the
           behalf of a Participant for the purchase of an annuity contract under
           Code Section 403(b) to a salary reduction agreement.

                                     IV-5
<PAGE>
 
     (c)   The interest of each Participant in his or her Salary Deferral
           Contributions Account shall be, at all times, one hundred percent
           (100%) vested and nonforfeitable.

     (d)   When a Participant terminates employment, his Salary Deferral
           Contributions Account shall be distributed to him in the same manner
           as his Employer Matching Account.

                Except as provided pursuant to Sections 6.09 and 6.10, amounts
           attributable to Elective Deferrals shall not be distributable to Plan
           Participants earlier than upon one of the following events:

           (i)    The Participant's retirement, death, disability, or separation
                  from Service with the Employer

           (ii)   The Participant's attainment of age fifty-nine and one-half
                  (59-1/2)

           (iii)  The termination of the Plan without the establishment of a
                  successor plan

           (iv)   The sale or other disposition by the Employer to an unrelated
                  employer that does not maintain the Plan, of substantially all
                  (eighty-five percent (85%) or more) of the assets of the
                  Employer, provided this paragraph (d) shall not apply with
                  respect to Participants who continue employment with the
                  acquiring employer and

           (v)    The sale or other disposition by the Employer of its interest
                  in a subsidiary to an unrelated employer that does not
                  maintain the Plan, provided this paragraph (e) shall apply
                  only with respect to Participants who continue employment with
                  the subsidiary.

     4.04 LIMITATIONS ON CONTRIBUTIONS FOR HIGHLY COMPENSATED EMPLOYEES.  
Employer Contributions and Salary Deferral Contributions

                                     IV-6
<PAGE>
 
made on behalf of Highly Compensated Employees in accordance with Sections 4.01
and 4.03 respectively shall be subject to limitations described in this Section
4.04. 

     (a)   For the purpose of this Section 4.04:

           (i)  "Contribution Percentage" shall mean the ratio (expressed as
                a percentage) of:

                 (A)  The sum of the Employee Contributions, if any, and
                      Matching and Profit Sharing Contributions made on behalf
                      of a Participant for the Plan Year to

                 (B)  The Compensation paid to such Participant for the Plan
                      Year. 


           The Contribution Percentage shall be determined subject to the
           following provisions:

                 (C)  If one or more Highly Compensated Employees participate in
                      both a cash or deferred arrangement and a plan subject to
                      the Actual Contribution Percentage (ACP) test maintained
                      by the Employer, and as the result of multiple use of the
                      alternative limits, the Aggregate Limit determined in
                      accordance with I.T. Reg. 1.401(m)-2 is exceeded, then the
                      ACP of those Highly Compensated Employees who also
                      participate in a cash or deferred arrangement shall be
                      reduced (beginning with such Highly Compensated Employee
                      whose ACP is the highest) so that the limit is not
                      exceeded. The amount by which each Highly Compensated
                      Employee's Contribution Percentage amount is reduced shall
                      be treated as an Excess Aggregate Contribution. The ADP
                      and ACP of the Highly 

                                     IV-7
<PAGE>
 
                      Compensated Employees shall be determined after any
                      corrections required to meet the ADP and ACP tests.

                 (D)  For purposes of this Section 4.04(a)(i), the Contribution
                      Percentage for any Participant who is a Highly Compensated
                      Employee, and who is eligible to have Contribution
                      Percentage amounts allocated to his or her account under
                      two or more plans subject to Code Section 401(m) that are
                      maintained by the Employer, shall be determined as if the
                      total of such Contribution Percentage amounts were made
                      under each plan. Further, if a Highly Compensated Employee
                      participates in two or more cash or deferred arrangements
                      that have different Plan Years, all cash or deferred
                      arrangements ending with or within the same calendar year
                      shall be treated as a single arrangement.

                 (E)  In the event that this Plan satisfies the requirements of
                      Code Sections 401(m), 401(a)(4), or 410(b) only if
                      aggregated with one or more other plans, or if one or more
                      other plans satisfy the requirements of such Sections of
                      the Code only if aggregated with this Plan, then this
                      Section 4.04(a) shall be applied by determining the
                      Contribution Percentage of Employees as if all such plans
                      were a single plan. For Plan Years beginning after
                      December 31, 1989, other plans may be aggregated with this
                      Plan in order to satisfy Code Section 401(m) only if they
                      have the same Plan Year.

                 (F)  For purposes of determining the Contribution Percentage of
                      a Participant who is a five-percent (5%) 

                                     IV-8
<PAGE>
 
                      owner or one of the ten most highly paid Highly
                      Compensated Employees, the Contribution Percentage amounts
                      and Compensation of such Participant shall include the
                      Contribution Percentage amounts and Compensation for the
                      Plan Year of Family Members. Family Members, with respect
                      to Highly Compensated Employees, shall be disregarded as
                      separate employees in determining the Contribution
                      Percentage both for Participants who are Non-Highly
                      Compensated Employees and Participants who are Highly
                      Compensated Employees.

                 (G)  For purposes of determining the Contribution Percentage
                      test, Employee Contributions are considered to have been
                      made in the Plan Year in which contributed to the Plan.
                      Matching Contributions and Qualified Nonelective
                      Contributions will be considered made for a Plan Year if
                      made no later than the end of the twelve(12)-month period
                      beginning on the day after the close of the Plan Year.

                 (H)  Elective Deferrals may be used in determining the
                      Contribution Percentage amounts so long as the ADP test is
                      met before the Elective Deferrals are used in the ACP test
                      and so long as the ADP test continues to be met following
                      the exclusion of those Elective Deferrals that are used to
                      meet the ACP test.

                 (I)  The actual compensation ratios of all eligible Employees
                      shall be taken into account for the purposes of the ACP
                      test under this Plan. For this purpose, eligible Employees
                      shall include each 

                                     IV-9
<PAGE>
 
                      Employee who would be a Participant under the Plan and
                      eligible to receive an allocation of Employer
                      Contributions hereunder, except that such Employee is not
                      a Plan Participant because:

                     (1)  He has failed to make required contributions, if any;

                     (2)  He has elected not to participate; or

                     (3)  His compensation is less than a stated dollar amount,
                          if such amount is a condition of his participation.

                In the case of an eligible Employee who makes no Employee
           contributions, his Contribution Percentage shall be deemed to be 
           zero(0).

           (ii)  "Actual Deferral Percentage" (ADP) shall mean the ratio
                 (expressed as a percentage) of:

                  (A)  The Salary Deferral Contributions, Qualified Matching
                       Contributions, and Qualified Nonelective Contributions,
                       if any, made on behalf of a Participant for the Plan Year
                       to

                  (B)  The Compensation paid to such Participant for the Plan
                       Year. The ADP shall be determined subject to the
                       following provisions:

                  (C)  The ADP for any Participant who is a Highly Compensated
                       Employee for the Plan Year, and who is eligible to have
                       Elective Deferrals (and Qualified Nonelective
                       Contributions or Qualified Matching Contributions, or
                       both, if treated as Elective Deferrals for purposes of
                       the ADP test) allocated to his or her

                                     IV-10
<PAGE>
 
                      Accounts under two or more arrangements described in Code
                      Section 401(k) that are maintained by the Employer, shall
                      be determined as if such Elective Deferrals (and, if
                      applicable, such Qualified Nonelective Contributions or
                      Qualified Matching Contributions, or both) were made under
                      a single arrangement. If a Highly Compensated Employee
                      participates in two (2) or more cash or deferred
                      arrangements that have different Plan Years, all cash or
                      deferred arrangements ending with or within the same
                      calendar year shall be treated as a single arrangement.

                 (D)  In the event that this Plan satisfies the requirements of
                      Code Section 401(k), 401(a), or 410(b) only if aggregated
                      with one or more other plans, or if one or more other
                      plans satisfy the requirements of such Sections of the
                      Code only if aggregated with this Plan, then this Section
                      4.04(a)(ii) shall be applied by determining the ADP of
                      Employees as if all such plans were a single plan. For
                      Plan Years beginning after December 31, 1989, other plans
                      may be aggregated with the Plan to satisfy Code Section
                      401(k) only if they have the same Plan Year.

                 (E)  For purposes of determining the ADP test, Elective
                      Deferrals, Qualified Nonelective Contributions and
                      Qualified Matching Contributions shall be taken into
                      account under the ADP test for a Plan Year only if
                      allocated to an Employee as of a date within that Plan
                      Year. For this purpose, such allocation shall not be

                                     IV-11
<PAGE>
 
                      contingent on participation or performance of services
                      after such date and actual payment to the Fund shall be
                      made before the last day of the twelve (12)-month period
                      immediately following the Plan Year to which such
                      deferrals or contributions relate.

                 (F)  The actual deferral percentages of all eligible Employees
                      shall be taken into account for the purposes of the ADP
                      test under this Plan. For this purpose, eligible Employees
                      shall include each Employee who would have been eligible
                      to make an Elective Deferral under the Plan, except that
                      no Elective Deferral was made because such Employee:

                      (1)  Was suspended from making an Elective Deferral due to
                           a distribution, loan or a suspension caused by the
                           limitations an annual additions of Code Section
                           415(c)(l) or 415(e);

                      (2)  Elected not to participate in the Plan; or

                      (3)  Received Compensation less than a stated dollar
                           amount, if such amount is a condition of his
                           participation in the Plan.

                       In the case of an Eligible Employee who makes no Elective
                 Deferral, his deferral percentage shall be deemed to be zero
                 (0).

     (b)   Neither the average ACP nor the average ADP for all Participants who
           are Highly Compensated Employees for the Plan Year shall exceed the
           greater of:

           (i)  The average ACP or the average ADP, as applicable, for all
                Participants who are Non-Highly Compensated Employees for the
                Plan Year multiplied by 1.25; or

                                     IV-12
<PAGE>
 
           (ii)   The average ACP or the average ADP for all Participants who
                  are Non-Highly Compensated Employees, as applicable,
                  multiplied by 2.00, provided such averages for the Highly
                  Compensated Employees do not exceed such averages for Non-
                  Highly Compensated Employees by more than two (2) percentage
                  points, or such lesser amount as the Secretary of the Treasury
                  shall prescribe.

                       Notwithstanding the above, the tests provided for under
                  this Section 4.04(b) shall be imposed separately on
                  contributions and deferrals. Except as provided under
                  paragraph (e) below, the Plan shall not test under this
                  Section 4.04(b)(ii) to meet applicable Code requirements for
                  both contributions and deferrals in the same year.

     (c)   In the case of a Highly Compensated Employee who is either a five
           percent (5%) owner or one of the ten (10) most Highly Compensated
           Employees and is thereby subject to the family aggregation rules of
           Code Section 414(q)(6):

           (1)  The Contribution Percentage for the family group (which is
                treated as one (1) Highly Compensated Employee) is the greater
                of (A) the Contribution Percentage determined by combining the
                contributions and Compensation of all eligible Family Members
                who are Highly Compensated without regard to family aggregation,
                or (B) the Contribution Percentage determined by combining the
                Contributions and compensation of all eligible Family Members.

           (2)  The ADP for the family group (which is treated as one (1) Highly
                Compensated Employee) is the ADP determined by combining the
                Elective Deferrals, and Compensation and 

                                     IV-13
<PAGE>
 
                amounts treated as elective contributions of all eligible Family
                Members.

           Except to the extent taken into account in this paragraph (c), the
           contributions, Compensation, Elective Deferrals, and amounts treated
           as elective contributions of all Family Members shall be disregarded
           for determining either the ACPs or ADPs for the groups of Highly
           Compensated Employees and Non-Highly Compensated Employees.

     (d)   The term "Compensation" shall have the meaning given such term by
           Code Section 415(c)(3).

     (e)   If the test described in paragraph (b)(ii) above is used for both
           contributions and deferrals in the same Plan Year, the Aggregate
           Limit as defined below shall not be exceeded.

           (i)    The "Aggregate Limit" for the purposes of this Section 4.04(e)
                  shall mean the greater of:

                  (A)  The sum of:

                       (1)  One hundred twenty-five percent (125%) of the
                            greater of the Relevant Actual Deferral Percentage
                            or the Relevant Actual Contribution Percentage, and

                       (2)  Two (2) percentage points plus the lesser of the
                            Relevant Actual Deferral Percentage or the Relevant
                            Actual Contribution Percentage. In no event,
                            however, shall this amount exceed twice the lesser
                            of the Relevant Actual Deferral Percentage or the
                            Relevant Actual Contribution Percentage; or

                                     IV-14
<PAGE>
 
                  (B)  The sum of:

                       (1)  One hundred twenty-five percent (125%) of the lesser
                            of the Relevant Actual Deferral Percentage or the
                            Relevant Actual Contribution Percentage, and

                       (2)  Two (2) percentage points plus the greater of the
                            Relevant Actual Deferral Percentage or the Relevant
                            Actual Contribution Percentage. In no event,
                            however, shall this amount exceed twice the lesser
                            of the Relevant Actual Deferral Percentage or the
                            Relevant Actual Contribution Percentage.

           (ii)   For the purposes of this Section 4.04(e):

                  (A)  Relevant Actual Deferral Percentage shall mean the ADP of
                       the group of eligible Non-Highly Compensated Employees
                       for the Plan Year; and

                  (B)  Relevant Actual Contribution Percentage shall mean the
                       ACP of the eligible group of Non-Highly Compensated
                       Employees for the Plan Year.

     (f)   The determination and treatment of the Contribution Percentage, the
           Salary Deferral Contributions and the ADP of a Participant shall at
           all times satisfy I.T. Reg. 1.401(k)-1, 1.401(m)-1, 1.401(m)-2 and
           such other requirements as may be required by the Secretary of
           Treasury.

          4.05 DISTRIBUTION OF EXCESS DEFERRALS, EXCESS CONTRIBUTIONS AND EXCESS
     AGGREGATE CONTRIBUTIONS. The Committee shall determine, as soon as is
     reasonably possible after the close of each Plan Year, Employer
     Contributions pursuant to Section 4.01 and Salary Deferral Contributions
     pursuant to Section 4.03, if applicable, which will result in Excess
     Deferrals, Excess Contributions, or Excess Aggregate Contributions for any
     Participant. In addition, prior to the close of each 

                                     IV-15
<PAGE>
 
     Plan Year the Committee, upon a determination that the ADP test will not be
     met for such Plan Year, may direct at any time that an individual Highly
     Compensated Employee's future Salary Deferral Contributions be reduced or
     stopped in order to avoid accumulating Excess Deferrals or Excess
     Contributions under the Plan.

          Notwithstanding any other provisions of this Plan, Excess Deferrals,
     Excess Contributions, Excess Aggregate Contributions and income allocable
     thereto shall be distributed to Participants as described in this 
     Section 4.05.

     (a)   For the purpose of this Section 4.05:

           (i)    "Excess Deferrals" shall mean amounts of Elective Deferrals,
                  Qualified Matching Contributions, and Qualified Nonelective
                  Contributions for a calendar year that:

                  (A)  The Participant requests be distributed pursuant to the
                       claims procedure set forth in Section 4.05(b) below; or

                  (B)  The Committee determines to be, pursuant to I. T. Reg.
                       1.401(k)-1, Excess Deferrals.

           (ii)   "Qualified Matching Contributions" and "Qualified Nonelective
                  Contributions" shall mean contributions reclassified pursuant
                  to Section 1.02(qq) and Section 5.06(d) for the purpose of
                  meeting the ADP test. Such reclassification shall be permitted
                  only if the following requirements are met:

                  (A)  Employer Contributions, including those Qualified
                       Nonelective Contributions treated as Elective Deferrals
                       for purposes of the ADP test must satisfy the
                       requirements of Code Section 401(a)(4).

                                     IV-16
<PAGE>
 
                   (B)  Employer Contributions, excluding those Qualified
                        Matching Contributions and Qualified Nonelective
                        Contributions treated as Elective Deferrals for purposes
                        of the ADP test, must satisfy the requirements of Code
                        Section 401(a)(4).

                   (C)  Those Qualified Matching Contributions and Qualified
                        Nonelective Contributions treated as Elective Deferrals
                        for purposes of the ADP test shall not be taken into
                        account for purposes of satisfying the requirements of
                        Code Section 401(m).

                   (D)  Except as provided in paragraphs (A) and (C), Qualified
                        Matching Contributions and Qualified Nonelective
                        Contributions treated as Elective Deferrals for the
                        purposes of the ADP test shall not be taken into account
                        in determining whether any other contributions or
                        benefits satisfy Code Section 401(a)(4) or in
                        determining whether Employee Contributions or other
                        matching Employer Contributions meet the requirements of
                        Code Section 401(m).

                   (E)  Qualified Nonelective Contributions may not be treated
                        as Elective Deferrals if the effect of such treatment is
                        to increase the difference between the ADP for the group
                        of eligible Highly Compensated Employees and the ADP of
                        all other Eligible Employees.

                   (F)  The Qualified Nonelective Contributions must satisfy the
                        requirements of I.T. Reg. 1.401(k)-1(b)(6)(1) for the
                        Plan Year as if such contributions were Elective
                        Deferrals;

                                     IV-17
<PAGE>
 
                  (G)  For Plan Years which begin after December 31, 1988,
                       Qualified Matching Contributions and Qualified
                       Nonelective Contributions must be taken into account
                       during the Plan Year in which they are deemed made; and

                  (H)  Any other applicable conditions described in I.T. Reg.
                       1.401(m)-1(b)(2) are satisfied.

           (iii)  "Excess Contributions" shall mean amounts described in Section
                  401(k)(8)(B) of the Code. The amount of Excess Contributions
                  for a Highly Compensated Employee shall be determined in the
                  following manner:

                  (A)  First, the ADP of the Highly Compensated Employee with
                       the highest ADP shall be reduced to the extent necessary
                       to satisfy the ADP test or cause such ratio to equal the
                       ADP of the Highly Compensated Employee with the next
                       highest ratio. This process shall be repeated until the
                       ADP test is satisfied.

                  (B)  The amount of Excess Contributions for a Highly
                       Compensated Employee shall then equal the total of
                       Elective Deferrals or other contributions taken into
                       account for the ADP test minus the product of the
                       Employee's contribution ratio as determined above and the
                       Employee's Compensation.

                  (C)  In the case of a Highly Compensated Employee whose ADP is
                       determined under the family aggregation rules prescribed
                       by regulations, the determination of the amount of Excess
                       Contributions for the family unit shall be made by
                       combining the Contributions and Compensation of all
                       Family Members and then reducing the ADP in accordance
                       with the leveling

                                     IV-18
<PAGE>
 
                       methods described in paragraphs (A) and (B) of this
                       Section 4.05(a)(iii). Excess Contributions shall be
                       determined by taking into account the Contributions of
                       all eligible Family Members and shall be allocated among
                       such Family Members in proportion to their Elective
                       Deferrals.

           (iv)   "Excess Aggregate Contributions" shall mean amounts described
                  in Section 401(m)(6)(B) of the Code. The amount of Excess
                  Aggregate Contributions for a Highly Compensated Employee
                  shall be determined in the following manner:

                  (A)  First, the ACP of the Highly Compensated Employee with
                       the highest ACP shall be reduced to the extent necessary
                       to satisfy the ACP test or cause such ratio to equal the
                       ACP of the Highly Compensated Employee with the next
                       highest ratio. This process shall be repeated until the
                       ACP test is satisfied.

                  (B)  The amount of the Excess Aggregate Contribution for a
                       Highly Compensated Employee shall then equal the total
                       amount of Employee Contributions, Employer Matching
                       Contributions, and other contributions taken into account
                       for the ACP test minus the product of the Employee's
                       contribution ratio as determined above and the Employee's
                       Compensation.

                  (C)  In the case of a Highly Compensated Employee whose ACP is
                       determined under the family aggregation rules prescribed
                       by regulations, the determination of Excess Aggregate
                       Contributions shall be made by combining the
                       Contributions and Compensation of all Family

                                     IV-19
<PAGE>
 
                        Members and then reducing the ACP in accordance with the
                        leveling method described in paragraphs (A) and (B) of
                        this Section 4.05(a)(iii). Excess Aggregate
                        Contributions shall be determined by taking into account
                        the Contributions of all eligible Family Members and
                        shall be allocated among such Family Members in
                        proportion to their Contributions.

     (b)   A Participant may determine that deferrals in excess of the limits
           imposed by Code Section 402(g) have been made. Such Participant may
           request a distribution of such Excess Deferral amounts by submitting
           a claim in writing to the Committee no later than March 1, specifying
           the Participant's Excess Deferral amount for the preceding calendar
           year. Such claim shall include the Participant's written statement
           that if such amounts are not distributed, such Excess Deferral
           amounts, when added to amounts deferred under other plans or
           arrangements as described in Sections 401(k), 408(k), or 403(b) of
           the Code, exceed the limit imposed on the Participant by Section
           402(g) of the Code for the year in which the deferral occurred.

                Notwithstanding the above, a Participant shall be deemed to have
           made the designation for the distribution of Excess Deferrals at any
           time the Committee determines that the limits of Code Section 402(g)
           would be exceeded by the Plan or the plan of any Affiliated Employer.

     (c)   Notwithstanding any other provision of the Plan to the contrary:

           (i)    Excess Deferrals and income allocable thereto shall be
                  distributed after the date on which the Plan received the
                  Excess Deferral, but no later than the April 15 following the
                  calendar year during which such Excess Deferral was made. 

                                     IV-20
<PAGE>
 
                  Any such distribution shall be designated by the Plan as a
                  distribution of Excess Deferrals. Excess Deferrals to be
                  distributed with respect to an Employee for an Employee's
                  taxable year shall be reduced by any Excess Contributions
                  previously distributed or recharacterized with respect to such
                  Employee for the Plan Year ending within such taxable year.

           (ii)   A Participant's Excess Contributions and income allocable
                  thereto, shall be distributed to the Participant, if
                  administratively feasible, not later than two and one-half (2-
                  1/2) months following the close of the Plan Year in which such
                  Excess Contributions were made, but in any event, no later
                  than the last day of the Plan Year following the close of the
                  Plan Year in which the Excess Contributions were made. If such
                  excess amounts are distributed more than two and one-half (2-
                  1/2) months following the close of the Plan Year in which such
                  excess amounts arose, a ten percent (10%) excise tax will be
                  imposed on the Employer with respect to such amounts. The
                  amount of Excess contributions to be recharacterized or
                  distributed with respect to an Employee for a Plan Year shall
                  be reduced by any Excess Deferrals previously distributed to
                  such Employee for the Employee's Taxable Year ending with or
                  within such Plan Year.

           (iii)  A Participant's Excess Aggregate Contributions and income
                  allocable thereto shall be distributed to each Participant, if
                  administratively feasible, not later than two and one-half (2-
                  1/2) months following the close of the Plan Year in which such
                  Excess Aggregate Contributions were made, but in any event, no
                  later than the last day of the Plan Year following 

                                     IV-21
<PAGE>
 
                  the close of the Plan Year in which the Excess Aggregate
                  Contributions were made. If such excess amounts are
                  distributed more than two and one-half (2-1/2) months
                  following the close of the Plan Year in which such amounts
                  arose, a ten percent (10%) excise tax will be imposed on the
                  Employer with respect to such amounts.

     (d)   The allocable income required to be distributed in accordance with
           Section 4.05(c) shall be equal to the sum of the income allocable to
           the applicable year in accordance with the procedures detailed in
           Section 5.03.

           (i)    Income shall include all earnings and appreciation, including
                  such items as interest, dividends, rent, royalties, gains or
                  losses from the sale of property, appreciation or depreciation
                  in the value of stocks, bonds, annuity and life insurance
                  contracts, and other property, without regard to whether such
                  appreciation or depreciation has been realized.

           (ii)   No income shall be allocable to periods between the end of the
                  applicable year and the date of distribution.

           (iii)  The Committee shall not be liable to any Participant (or his
                  Beneficiary, if applicable) for any losses caused by
                  inaccurately estimating the amount of any Excess Deferrals,
                  Excess Contributions, or Excess Aggregate Contributions and
                  income allocable to such excess.

     (e)   Excess Contributions distributed under this Section 4.05 shall first
           be treated as distributions from the Participant's Salary Deferral
           Account and shall be treated as distributed from the Participant's
           Account only to the extent such Excess Contributions exceed the
           balance in the Participant's Salary 

                                     IV-22
<PAGE>
 
           Deferral Account. Excess Aggregate Contributions shall be distributed
           from the Participant's Salary Deferral Account and the Participant's
           Account in proportion to the Participant's Employee Contributions, if
           any, and Employer Matching Contributions for the Plan Year.

     (f)   In any year where the Plan allows after-tax Employee Contributions, a
           Participant's Excess Contributions may be recharacterized as an
           amount distributed to the Participant and then contributed by the
           Participant to the Plan. Recharacterized amounts will remain
           nonforfeitable and subject to the same distribution requirements as
           Elective Deferrals. Amounts may not be recharacterized by a Highly
           Compensated Employee, to the extent that such amount, in combination
           with other Employee Contributions made by that Employee, would exceed
           any stated limit under the Plan on Employee Contributions.

                Recharacterization must occur no later than two and one-half (2-
           1/2) months after the last day of the Plan Year in which such Excess
           Contributions arose and is deemed to occur no earlier than the date
           the last Highly Compensated Employee is informed in writing of the
           amount recharacterized and the consequences thereof. Recharacterized
           amounts will be taxable to the Participant for the Participant's tax
           year in which the Participant would have received them in cash.

     4.06 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS NOT PERMITTED.  The Plan
shall accept no Employee Contributions designated by a Participant as deductible
employee contributions (within the meaning of Section 72(o)(5)(A) of the Code)
for a taxable year of the Participant beginning after December 31, 1986.

                                     IV-23
<PAGE>
 
     4.07 DUTIES OF FUNDING AGENT REGARDING CONTRIBUTIONS.  The Funding Agent
shall receive all contributions paid by the Employer in cash or other property
acceptable to the Funding Agent and shall be accountable for all such
contributions, but shall have no duty to collect or enforce payment to it of any
contributions to the Fund, nor to determine or verify the accuracy thereof.

     4.08 SPECIAL INVESTMENT DIRECTIONS.  All contributions other than Employer
Matching Contributions Pursuant Section 4.01(a) (which shall be invested solely
in "Stock Fund" under the terms of the Funding Instrument) shall be invested in
such vehicles as directed by the Participant pursuant to the following
provisions of this Plan.

     Each Participant shall have the right to elect from among one or more
separate and distinct investment vehicles designated, from time to time, by the
Committee, the percentage of his allocated contribution which he wishes to have
invested in each vehicle. The Committee, at its discretion, may make available
to the Participants one (1) or more of the following investment options:

     (a)   A "Money Market Fund" wherein monies contributed by the Participant
           will be invested in a Money Market Certificate with a bank and/or
           savings and loan association;

     (b)   A "Fixed Income Fund" wherein monies contributed by the Participant
           may be invested in guaranteed interest-type contracts issued by an
           insurance company licensed to do business in the State of California
           or such other type of investments geared to provide maximum
           protection of capital with a reasonable rate of return thereon;

     (c)   An "Equity Fund" wherein monies contributed by the Participant will
           be invested primarily in common stocks and such other 

                                     IV-24
<PAGE>
 
           securities or investment opportunities which provide for capital
           appreciation; and

     (d)   A "Stock Fund" which shall consist of an unsegregated fund invested
           in common stock of the Employer, or warrants or other rights to
           purchase common stock of the Employer received as a result of
           holdings of such common stock;

     (e)   Such other investment vehicle, which, in the opinion of the
           Committee, may be appropriate to meet the investment goals of a
           substantial portion of active Participants.

     Notwithstanding any other provision of the Plan, if at any time, the
Registration Statement relating to the Plan filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, shall become
out of date and until a post-effective amendment thereto is filed and declared
effective and a current prospectus thereunder is delivered to the Employees, any
Employee contribution directed to be invested in the Stock Fund during such
period shall be null and void.

     Deposits, contributions and other amounts received by the Funding Agent for
investment in the "Stock Fund" shall be used promptly and solely to purchase
Company securities (as described in subsection (d) above) at the market price
for such securities, subject only to any limitations imposed by administrative
practicalities and applicable laws and regulations.  Until so invested, cash
received by the Funding Agent may be kept temporarily in savings accounts or
other cash equivalent investments.  Company securities held in the "Stock Fund"
may be sold, and cash and equivalent investments may thereafter be held by the
Funding Agent, but only when and to the extent reasonably necessary to pay
benefit distributions under the Plan, or to provide for transfers of all or a
portion of Participants' interests between investment funds pursuant to the
directions of Participants.  However, notwithstanding the foregoing, neither the
Funding Agent, the Employer, a 

                                     IV-25
<PAGE>
 
Participating Employer, nor any other person or committee shall have any
authority or responsibility to attempt to time the purchase of Employer
securities, to attempt to time sales of Employer securities made for the purpose
of distributing benefits or providing for transfers between investment funds, or
otherwise to sell or trade such securities in an effort to anticipate movements
in the market price for Employer securities.

     Participants shall be permitted to change their election of an investment
vehicle and/or the percentage to be allocated to each option out of future
contributions at each Valuation Date of the Plan.  Participants may change the
options in which their prior contributions are invested not more often than
determined by the Committee.  Such change shall be effective only as of a
Valuation Date unless the Committee, in its sole discretion, agrees to another
date.  Participants must notify the Committee of any such change in writing, not
later than thirty (30) days prior to the date the change is to be effective.

     Notwithstanding the above, all Employer Matching Contributions shall be
invested in  the Stock Fund and shall not be subject to the direction of the
Participant provided however that each participant who has attained the age of
fifty-five (55) or more may direct the transfer of fifty percent (50%) of the
balance of the Participant's Employer Matching Account from the Stock Fund to
another investment vehicle or vehicles of his choice as permitted pursuant to
Section 4.08.  Further, a Participant who has attained age sixty (60) or more
may direct the transfer of the remaining balance of the Participant's Employer
Matching Account from the Stock Fund to another investment vehicle or vehicles
of his choice.

     4.09 TRANSFERS FROM OTHER QUALIFIED PLANS.  Notwithstanding any other
provision hereof, there may be transferred to the Funding Agent of this Plan all
or any of the assets held (whether by a trustee, custodian or otherwise) on
behalf of any other plan (excluding any such plan that requires payment of a

                                     IV-26
<PAGE>
 
qualified joint and survivor annuity) which satisfies the applicable
requirements of Sections 401(a) or 403(a) of the Internal Revenue Code, and
which is maintained for the benefit of any persons who are or are about to
become Participants in this Plan. Transferred amounts shall, at all times, meet
the requirements of Code Section 414(l) and, notwithstanding any other
provisions hereof, benefits under the transferor plan which are protected under
the provisions of Code Section 411(d)(6) shall be provided with respect to the
assets so transferred to this Plan.

     4.10 ROLLOVER CONTRIBUTIONS.  Notwithstanding any other provision hereof,
the Funding Agent shall be authorized to accept assets from a person who is or
is about to become a Participant in this Plan, provided the transfer of such
assets to this Plan qualifies as a rollover contribution within the meaning of
Section 402(c) or Section 403(c) of the Internal Revenue Code.

     (a)   An amount will qualify as a rollover contribution if it:

           (i)    Meets the criteria of Section 7.04; or

           (ii)   Represents the balance to his credit of a conduit individual
                  retirement plan; and (in either case)

           (iii)  Is contributed to the Plan within sixty (60) days following
                  distribution of such amount to him.

     (b)   An amount will not qualify if:

           (i)    It includes any amount which constituted or was treated as a
                  contribution made by the Employee to such plan; or

           (ii)   It includes any amount which constituted or was treated as
                  attributable to contributions made on behalf of the Employee
                  while he was a Key Employee in a Top Heavy plan; or

           (iii)  It is attributable to a Plan that requires payment of a
                  qualified joint and survivor annuity pursuant to Sections
                  401(a)(11) and 417 of the Code and such 

                                     IV-27
<PAGE>
 
                  requirement has not been eliminated prior to the attempted
                  rollover.

     The Committee shall require the Participant to provide reasonable evidence
that any such amount meets the above requirements.  Failure of the Participant
to provide such evidence will preclude the Plan's acceptance of any such amount.

     4.11 SEGREGATION OF ROLLOVERS.  Notwithstanding any other provision hereof,
amounts transferred to the Funding Agent of this Plan pursuant to Sections 4.09
and 4.10 shall be maintained in separate accounts known as Permanent Accounts
and Rollover Accounts, respectively, and shall be applied solely for the benefit
of the Participant on whose behalf such amounts were transferred.  Such amounts
shall not be applied to provide any accrued benefit provided by this Plan.  Such
amounts shall, however, be credited with their proportionate share of the Fund's
realized and unrealized earnings and losses except where the Funding Agent or
the Participant, with the consent of the Committee, designates a separate and
distinct investment vehicle for those amounts.

                                     IV-28
<PAGE>
 
                                   ARTICLE V

                     ALLOCATIONS TO PARTICIPANTS' ACCOUNTS


     5.01 INDIVIDUAL ACCOUNTS. The Committee shall establish and maintain an
Employer Matching Account, an Employer Profit Sharing Account, a Salary Deferral
Contribution Account, a Permanent Account, a Rollover Account and an After-Tax
Account (for purposes of those after-tax contributions permissible pursuant to
prior plan provisions) in the name of each Participant. If any Eligible Employee
ceases participation because of a one (1)-year Period of Separation and receives
a distribution and again becomes a Participant, the Committee shall establish a
new, Employer Matching Account, Employer Profit Sharing Account, Salary Deferral
Contributions Account, Permanent Account, Rollover Account and After-Tax Account
for that Participant. To facilitate allocations hereunder, the Committee may
authorize such sub-accounts as may be required or useful.

     5.02 ORDER OF ADJUSTMENT TO ACCOUNTS. The Committee shall have the
authority to establish and thereafter adjust the order of adjustments to
Employee Accounts as may be necessary to accomodate any valuation procedure or
frequencies adopted by the Committee.

     5.03 EVALUATION OF ACCOUNTS. As of each Valuation Date, the Committee shall
determine the fair market value of the Fund and shall deduct from such fair
market value the following amounts in order to determine the net fair market
value of the Fund as of such date:

     (a)   The Employer's annual contribution for the Plan Year ending on such
           Valuation Date, if any, to the extent such contribution has been paid
           prior to such Date; and

     (b)   Salary Deferral Contributions for the period ending on such Valuation
           Date to the extent such contributions have been paid prior to such
           Date, but since the last preceding Valuation Date.

                                      V-1
<PAGE>
 
     To determine any increase or decrease in the fair market value of the Fund,
the net fair market value of such Fund determined in accordance with the
preceding paragraph shall be compared to the net fair market value of the Fund
as of the last preceding Valuation Date.

     Any increase or decrease in the net fair market value of such assets so
determined shall be allocated to the Employer Matching Accounts, Employer 
Profit-Sharing Accounts and Salary Deferral Contributions Accounts of the
Participants in the proportion that the cumulative amounts previously allocated
and remaining credited to the Account of each such Participant bear to the total
of the cumulative amounts previously allocated and remaining credited to the
Accounts of all such Participants.

     Notwithstanding the foregoing, segregated accounts held in accordance with
the provisions of Sections 4.08, 4.09 and 4.10 of Article IV shall be valued
separately on each regular Valuation Date, and the increment or profit shall be
allocated to or, as the case may be, the loss shall be charged against each such
account on a segregated basis.

     5.04 CREDITING OF SALARY DEFERRAL CONTRIBUTIONS. Salary Deferral
Contributions and Qualified Nonelective Contributions made by the Employer on
behalf of Participants shall be allocated to their Salary Deferral Contributions
Accounts as of the Valuation Date by which such contributions were withheld by
the Employer.

                                      V-2
<PAGE>
 
     5.05 CREDITING OF EMPLOYER PROFIT SHARING CONTRIBUTIONS. A person shall be
entitled to share in the Employer Profit Sharing Contributions for a Plan Year,
which occurred during such Year, if he is both a Participant and an Employee on
the last day of such Year or if his employment terminated pursuant to
subsections 3.05(a), (b) or (c). Annual Employee forfeitures pursuant to Section
6.05, if any, shall be used to off-set the annual Employer Profit Sharing
Contribution.

     As of each payroll period, the Employer Matching Contribution, shall be
allocated among and credited to the Employer Matching Accounts of the persons
entitled to share in such amounts in accordance with the matching provision of
Section 4.01(a). The Employer Profit Sharing Contribution pursuant to Section
4.01(a) for the Plan Year ending on such Date shall be allocated among and
credited to the Employer Profit Sharing Accounts of the persons entitled to
share in such amounts (as provided in the preceding paragraph) in proportion to
each Participant's respective amounts of Compensation for such Plan Year.

     5.06 LIMITATION ON ALLOCATIONS TO PARTICIPANTS. Notwithstanding any other
provisions of the Plan:

     (a)   LIMITATIONS APPLICABLE TO PARTICIPANTS IN DEFINED CONTRIBUTION PLANS
           ONLY.

           (i)    The Annual Addition credited to a Participant's Accounts
                  (exclusive of any amounts credited in accordance with Section
                  5.03) for any Plan Year commencing on or after January 1, 1989
                  shall not exceed the lesser of (A) thirty thousand dollars
                  ($30,000) or such larger amount equal to twenty-five percent
                  (25%) of the defined benefit dollar limitation as adjusted for
                  cost-of-living increases pursuant to Code Section 415(d)(3),
                  or (B) twenty-five percent (25%) of the Participant's
                  Compensation (as defined in

                                      V-3
<PAGE>
 
                  Section 5.06(e) for purposes of this Section, and Sections
                  5.06(b) and 5.06(c) of this Plan) for such Year.

           (ii)   In the case of any Participant who also participates in a
                  Related Plan, the sum of his Annual Addition under the Plan
                  and his Annual Addition under all Related Plans for any Plan
                  Year commencing on or after January 1, 1989, shall not exceed
                  the lesser of (A) the amount set forth in (i)(A) above or (B)
                  twenty-five percent (25%) of the sum of (l) the Participant's
                  Compensation for such Year and (2) his remuneration for such
                  Year from all Employers maintaining such Related Plans. The
                  Compensation limitation referred to in (B) shall not apply to
                  any contribution for medical benefits (within the meaning of
                  Section 401(h) or Section 419A(f)(2) of the Code) which is
                  otherwise treated as an Annual Addition under Section
                  415(l)(1) or Section 419A(d)(2) of the Code.

           (iii)  To the extent necessary to satisfy the limitations of (i) and
                  (ii) above, the Committee shall reduce the amount which the
                  Participant is permitted to contribute under the provisions of
                  the Plan and, if the elimination of such Salary Deferral
                  Contributions will not satisfy such limitations, shall first
                  distribute any prior Salary Deferral Contribution made during
                  the year to the extent such excess results from a reasonable
                  error in determining the amount of the Salary Deferral
                  Contribution and secondly shall direct the Employer to reduce
                  the net contribution it would otherwise make for the
                  Participant's benefit for the applicable Plan Year. If after
                  reduction of the net contribution as aforesaid, there is any
                  amount of contribution for the Plan Year which

                                      V-4
<PAGE>
 
                  cannot be allocated to the Accounts of Participants because of
                  the aforesaid limitations, such amount shall be credited to a
                  Suspense Account and shall be applied to reduce the next
                  Year's contribution requirement. If a Suspense Account is in
                  existence at any time during a particular limitation year, all
                  amounts in the Suspense Account must be allocated and
                  reallocated to Participants' Accounts before any Employer or
                  Employee Contributions may be made to the Plan for that
                  limitation year. Excess amounts may not be distributed to
                  Participants or former Participants.

     (b)   LIMITATIONS APPLICABLE TO PARTICIPANTS WHO ALSO PARTICIPATE IN A
           DEFINED BENEFIT PLAN.

           (i)    In the case of any Participant who participates in both the
                  Plan and in a Defined Benefit Plan, his Annual Addition under
                  the Plan for any Plan Year ending on or after December 31,
                  1988 shall be limited so that the sum of his Defined Benefit
                  Plan fraction and his Defined Contribution Plan fraction for
                  such Year does not exceed 1.0.

           (ii)   For purposes of the limitation of (i) above:

                   (A) A Participant's Defined Benefit Plan fraction for any
                       Plan Year is a fraction (1) whose numerator is the
                       Participant's projected annual benefit under all Defined
                       Benefit Plans as a group (determined as of the close of
                       the Plan Year and reflecting any limitation thereof
                       required under the terms of any Defined Benefit Plan or
                       Plans), and (2) whose denominator is the lesser of (i)
                       the product of 1.25, multiplied by the dollar limitation
                       in effect under Internal Revenue Code Section
                       415(b)(1)(A) for such Year, or (ii) the product of

                                      V-5
<PAGE>
 
                       1.4, multiplied by the amount which may be taken into
                       account under Code Section 415(b)(1)(B) with respect to
                       such Participant under the Plan for such Year; and

                  (B)  A Participant's Defined Contribution Plan fraction for
                       any Plan Year is a fraction (1) whose numerator is the
                       sum of the Participant's Annual Additions for all Plan
                       Years under the Plan and all Related Plans determined as
                       of the close of the Plan Year, and (2) whose denominator
                       is the sum of the lesser of the following amounts
                       determined for the current Plan Year and for each prior
                       Year: (i) the product of 1.25, multiplied by the dollar
                       limitation in effect under subsection 5.06(a)(i)(A) for
                       such Year, or (ii) the product of 1.4, multiplied by the
                       amount which may be taken into account under subsection
                       5.06(a)(i)(B) with respect to such Participant under the
                       Plan and all Related Plans for such Year.

     (c)   ADJUSTMENTS ON ACCOUNT OF EXCESSIVE CREDITS. If, as a result of the
           allocation of forfeitures, a reasonable error in estimating a
           Participant's annual compensation or other limited facts and
           circumstances that the Commissioner of the Internal Revenue Service
           finds justifiable, it is determined at any time that the amount
           credited to a Participant's Accounts for any prior Plan Year was in
           excess of the amount permitted under the limitations of (a) above,
           the Committee shall charge against the Participant's Accounts an
           amount or amounts (adjusted to reflect income, expenses, gain or loss
           of the Fund properly attributable to the excess credit or credits)
           sufficient to permit the remaining credits

                                      V-6
<PAGE>
 
           for such prior Year to satisfy the foregoing limitations and make
           adjustments in the order provided below. To the extent the excessive
           credit was an excessive Employee Contribution, as determined by the
           Committee, the Funding Agent shall refund such portion, adjusted as
           aforesaid, to the Participant.

                  To the extent the excessive credit was an excessive Employer
           contribution as determined by the Committee, such excessive portion,
           adjusted as aforesaid, shall be applied to reduce the first
           contribution or contributions thereafter to be made by the Employer.

                  A reduction of benefits and/or contributions to all Plans,
           where required under (b) above, shall be accomplished by first
           reducing the Participant's benefit under any Defined Benefit Plans in
           which he participated, such reduction to be made first with respect
           to the Whittaker Corporation Employees' Pension Plan and then to the
           extent necessary, from the Whittaker Corporation Retirement Security
           Plan and, thereafter, in such priority as shall be determined by the
           Committee and the administrators of such other Plans. Then, by
           reducing contributions or allocating excess forfeitures for Defined
           Contribution Plans in which the Participant participated, such
           reduction to be made first with respect to the Plan in which he most
           recently accrued benefits and, thereafter, in such priority as shall
           be established by the Committee and the administrators of such other
           Plans; provided, however, that, whenever it is in the best interest
           of a Participant, necessary reductions 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.

                                      V-7
<PAGE>
 
                  The charges and credits required by this Section 5.06(c) in
           any Plan Year shall be made prior to any adjustments under Section
           5.02 as of the same Anniversary Date.

     (d)   CODE SECTION 401(K) LIMITS. Under Code Section 401(k), the
           contributions allocated to a Participant's Salary Deferral Account in
           a particular Plan Year shall be limited as described in Section
           4.04(a) and (b).

                  The Committee shall have the responsibility for monitoring
           compliance with the requirements of Section 4.04 and shall have the
           power to take any steps it deems appropriate to ensure compliance,
           including limiting the amount of salary reduction permitted for
           Highly Compensated Employees or designating a portion of the Employer
           contributions pursuant to Section 4.01(a)(ii) on behalf of such Plan
           Year to be allocated to the Salary Deferral Account of Non-Highly
           Compensated Employees, with such amount to be treated as part of
           their deferral percentage until such time as the Committee determines
           that contributions can be made on behalf of the Highly Compensated
           Employees without violating the requirements of Code Section 401(k).

     (e)   CODE SECTION 415 COMPENSATION DEFINITION. Participant's Compensation
           for the purposes of this Section 5.06 shall mean a Participant's
           earned income, wages, salaries and fees for professional services,
           and other amounts received (without regard to whether or not an
           amount is paid in cash) for personal services actually rendered in
           the course of employment with the Employer maintaining the Plan to
           the extent that the amounts are includable in gross income
           (including, but not limited to, commissions paid salesmen,
           compensation for services on the

                                      V-8
<PAGE>
 
           basis of a percentage of profits, commissions on insurance premiums,
           tips, bonuses, fringe benefits, reimbursements and expense
           allowances), and excluding the following:

           (i)    Employer contributions to a plan of deferred compensation
                  which are not included in the Employee's gross income for the
                  taxable year in which contributed, or Employer contributions
                  under a simplified employee pension plan to the extent such
                  contributions are deductible by the Employee, or any
                  distributions from a plan of deferred compensation;

           (ii)   Amounts realized from the exercise of a nonqualified stock
                  option, or when restricted stock (or property) held by the
                  Employee either becomes freely transferable or is no longer
                  subject to a substantial risk of forfeiture;

           (iii)  Amounts realized from the sale, exchange or other disposition
                  of stock acquired under a qualified stock option;

           (iv)   Other amounts which received special tax benefits, or
                  contributions made by the Employer (whether or not under a
                  salary reduction agreement) toward the purchase of an annuity
                  described in Section 403(b) of the Code (whether or not the
                  amounts are actually excludable from the gross income of the
                  Employee).

     Compensation earned but not paid in a Plan Year may include amounts earned
but not paid in a Plan Year because of the timing of pay periods and pay days if
such amounts are paid during the first few weeks of the next following Plan
Year, the amounts are included on a uniform and consistent basis with respect to
all similarly situated Employees, and no Compensation is included in more than
one Limitation Year.

                                      V-9
<PAGE>
 
     5.07 ACCOUNTS IN GENERAL. As soon as the Committee has made the adjustments
to the Participants' Accounts required by this Article, it shall notify each
Participant as to the status of his Account or Accounts. Such notification shall
in any event be made not later than one hundred twenty (120) days after the
Valuation Date. The total amounts so credited to each Participant's Accounts
shall represent each Participant's share of the Fund as of such date. Such
allocation and notification shall not vest in any Participant any right, title
or interest in the Fund, except to the extent, at the time or times, and upon
the terms and conditions set forth herein. The Employer, the Funding Agent and
the Committee do not in any manner or to any extent whatever warrant, guarantee
or represent that the value of any Participant's Accounts will at any time equal
or exceed the amount previously allocated thereto and, except as provided in
ERISA, shall not be liable or responsible for any inadequacy of the Fund to meet
and discharge any or all payments and liabilities under the Plan.

     5.08 INTERIM EVALUATION OF ACCOUNTS. Each Account of a Participant whose
Termination Date occurs on a date other than a Valuation Date shall be valued
currently, using the same procedure described in Section 5.03, if such interim
evaluation, determined in a uniform and nondiscriminatory manner, is necessary
to account for a material change in the fair market value of the Fund. The
Committee shall determine the fair market value, based on information furnished
by the Funding Agent, as of the end of the calendar month next preceding the
Participant's Termination Date, of the net Fund in order to determine the
percentage of increase or decrease in the fair market value of such Fund when
compared with the fair market value of such Fund as of the next preceding
Valuation Date.

     In determining the percentage of increase or decrease of the fair market
value of the Fund, all dividends, declared but not yet paid, interest and other

                                     V-10
<PAGE>
 
income received by the Funding Agent in the interim between the next preceding
Valuation Date and the interim evaluation date shall be included.

     Once the percentage of increase or decrease has been determined, the
Account or Accounts of such Participant as of the next preceding Valuation Date
shall, for purposes of distribution only, be multiplied by the percentage so
determined in order to reflect such increase or decrease.

     This interim evaluation shall not affect the amount to be forfeited, if
any, under Section 6.05 and any increase or decrease in the fair market value of
the Fund so distributed to, or retained with respect to the Account or Accounts
of, a former Participant shall increase or decrease unallocated assets for the
purpose of any evaluation required by Section 5.03.

     5.09 INSURANCE. No portion of the interest of a Participant shall be
applied to the purchase of any policy of insurance relating to other
Participants; and no policy premium shall be less than the premium rate of an
ordinary life insurance policy. The interest of each Participant shall be
invested proportionately with the interests of all Participants in any such
policy of insurance or other earmarked investment. All policies of insurance
shall be issued by a legal reserve life insurance company authorized to do
business in the State of California.

     All proceeds from any "key-man" insurance policies upon the life of any
officer or employee of the Employer shall inure solely to the benefit of the
then Participants of the Employer.

     In valuing the Fund, and notwithstanding anything to the contrary herein,
all policies of insurance actually purchased are to be excluded. Nothing herein
shall be constructed to confer upon a Participant or his Beneficiary any right
to any such policy except to the extent of his vested interest in this Plan.

     Ordinary policies of life insurance may be purchased. However, not more
than 49.9% of the contributions allocated to the interest of a Participant shall

                                     V-11
<PAGE>
 
be applied to the payment of premiums upon such ordinary policies of life
insurance. All policies of ordinary life insurance so purchased for the account
of a Participant shall be distributed at or before retirement to such
Participant.

                                     V-12
<PAGE>
 
                                  ARTICLE VI

                               RIGHT TO BENEFITS


     6.01 VESTING OF INTEREST IN SALARY DEFERRAL, EMPLOYER MATCHING, ROLLOVER
AND PERMANENT ACCOUNTS. The interest of each Participant in his Salary Deferral
Contribution Account, Employer Matching Account, Rollover and Permanent Accounts
shall be 100% vested and nonforfeitable.

     6.02 VESTING OF INTEREST IN EMPLOYER PROFIT SHARING ACCOUNT. The interest
of each Participant in his Employer Profit Sharing Account shall vest and become
nonforfeitable up to a maximum of one hundred percent (100%) as follows:

     (a)   Pursuant to the following schedule:

<TABLE>
<CAPTION>
                                                         Vested
                  Period of Service                    percentage
                  -----------------                    ----------
                  <S>                                  <C>
                  Less than 3 years                         0%
                  3 years but less than 4 years            20
                  4 years but less than 5 years            40
                  5 years but less than 6 years            60
                  6 years but less than 7 years            80
                  7 or more years                         100
                                                          ===
</TABLE>

     (b)   One hundred percent (100%) on the Participant's attaining age sixty-
           five (65).

     (c)   One hundred percent (100%) on the Participant's death, or upon a
           determination, in accordance with Section 3.05(c), that he is totally
           and permanently disabled.

     (d)   For the purpose of determining a Participant's vested percentage
           under subsection (a), the following Periods of Service shall be
           disregarded:

           (i)    All Periods of Service prior to the original Effective Date.

           (ii)   Those Periods of Service of a former nonvested Participant
                  which relate to a Period of Service prior to his incurring a
                  Break in Employment, if his Period of Separation exceeds

                                     VI-1
<PAGE>
 
                  both his prior Period of Service and sixty (60) consecutive
                  months.

           (iii)  Any Period of Separation which exceeds twelve (12) consecutive
                  months.

     The vesting of a Participant's interest in whole, or in part, in his
Employer Profit Sharing Account shall not preclude the allocations and
evaluations required under the preceding Article.

     If the Plan should ever be amended to change the vesting schedule
thereunder, then each then Participant's vested percentage in his Employer
Profit Sharing Account as of the later of the date such amendment is adopted or
the date it becomes effective, shall be, at any time, not less than his vested
percentage computed under the Plan without regard to such amendment; provided,
however, that in the event the vesting schedule in a particular Plan Year goes
from the Top Heavy vesting schedule back to the vesting schedule in Section
6.02(a), only those Participants with three (3) or more Years of Service shall
have the right to retain the Top Heavy schedule.

     6.03 FULLY VESTED BENEFITS. If a Participant retires or is retired from the
employ of the Employer under (a), (b) or (c) of Section 3.05, dies while in the
employ of the Employer, or resigns or is dismissed when his Employer Profit
Sharing Account is fully vested in accordance with Section 6.02, the entire
balances in his Employer Profit Sharing Account and all other Accounts as of the
Valuation Date coinciding with or next preceding his Termination Date (after all
adjustments then required or permitted under the Plan have been made) will
become distributable to or for his benefit, or for the benefit of his
Beneficiary, as the case may be, in accordance with Article VII. Any additional
allocations made pursuant to Section 5.05 shall be paid as soon as possible in
accordance with Article VII.

     6.04 PARTIALLY VESTED BENEFITS. Except as specifically provided in Section
6.03, if a Participant resigns or is dismissed from the employ of the

                                     VI-2
<PAGE>
 
Employer before retirement under (a), (b) or (c) of Section 3.04, the balance in
his Employer Profit Sharing Account as of the Valuation Date coinciding with or
next preceding his Termination Date (after all adjustments then required under
the Plan have been made) will be reduced to an amount from his Employer Profit
Sharing Account (hereinafter referred to as the "Vested Amount") determined in
accordance with Section 6.02. The Vested Amount in the Participant's Employer
Profit Sharing Account and the entire balance in all other Accounts (after all
adjustments then required or permitted under the Plan have been made) will
become distributable to or for his benefit, or to or for the benefit of his
Beneficiary, as the case may be, in accordance with Article VII.

     6.05 FORFEITURES. The non-vested portion of a Participant's Employer Profit
Sharing Account shall be forfeited as of the Valuation Date on or following the
earlier of:

     (a)   The date as of which the Participant receives a distribution of his
           Employer Profit Sharing Account on account of his termination of
           employment or

     (b)   The date which is the close of a sixty (60)-month period of
           Separation following a Break in Employment.

     Provided, however, that if the Participant is reemployed prior to the date
that he incurs a sixty (60)-month Period of Separation following a Break in
Employment, any amounts so forfeited shall be reinstated (unadjusted by any
gains or losses occurring after such forfeitures) to the Participant's Employer
Profit Sharing Account within a reasonable time after repayment by the
Participant of the amount of any distribution he may have received pursuant to
Sections 7.02 or 7.03. Such repayment must be made before the earlier of the
date which is five (5) years after the date on which the Participant is
subsequently reemployed by the Employer or the date which is the close of a

                                     VI-3
<PAGE>
 
sixty (60)-month Period of Separation commencing after a distribution or
withdrawal.

     If a Participant does not receive a total distribution of his Accounts, the
amount forfeited shall be reinstated if the Participant returns to employment
covered by the Plan whether or not the Participant repays the amount of
distribution he may have received.

     For the purposes of this Section 6.05, if the value of an Employee's vested
Account is zero, the Employee shall be deemed to have received a distribution of
such vested Account. If such Participant resumes employment covered by this Plan
before the date the Participant incurs a sixty month Period of Separation, the
amount forfeited shall be restored to the Participant's Account.

     Amounts forfeited pursuant to this Section 6.05 shall be allocated as
provided pursuant to Section 5.05.

     A Participant's vested Account shall not include any accumulated deductible
Employee contributions within the meaning of Code Section 72(o)(5)(B) made for
Plan Years beginning prior to January 1, 1987.

     6.06 TOP HEAVY PROVISIONS. The following provisions shall apply for each
Plan Year for which the Plan is Top Heavy:

     (a)   The Compensation of each Key Employee taken into account for purposes
           of computing the maximum amount of the Employer contribution hereto
           or Annual Additions of any Participant's Account for each such Year
           shall not exceed his Top Heavy Compensation.

     (b)   If the Employer does not maintain a qualified defined benefit
           retirement plan, or does maintain such a plan but each Non-Key
           Employee does not accrue the minimum benefit thereunder required by
           Section 416 of the Code, the Employer Contribution, if any, for any
           such Plan Year shall be allocated on the basis of each

                                     VI-4
<PAGE>
 
           Participant's Top Heavy Compensation in such manner as may be
           prescribed by the Code or any pertinent regulations promulgated
           thereunder as will result in each Non-Key Employee receiving an
           allocation hereunder of the amount which, when added to the amount
           allocated to his Account or any amount allocated pursuant to Section
           401(k) under this or any other qualified defined contribution
           retirement plan maintained by the Employer for such Year, will at
           least equal the lesser of: (i) three percent (3%) of his Top Heavy
           Compensation, (ii) the highest percentage computed by dividing the
           amount of the Employer contributions so allocated to each Key
           Employee's Accounts (including amounts contributed as the result of a
           salary reduction agreement) by his Top Heavy Compensation, or (iii)
           the amount otherwise required after any credit against or reduction
           of the minimum amounts described in clauses (i) or (ii) allowable for
           benefits accrued under any such defined benefit plan. Non-Key
           Employees entitled to the minimum percentage contribution set forth
           in clause (i) or (ii) shall also include (iv) Participants who have
           not incurred a Break in Employment at the end of the Plan Year and
           (v) Eligible Employees who declined to make Salary Deferral
           Contributions to the Plan but must be considered as Participants to
           satisfy the coverage requirements of Code Section 410(b) in
           accordance with Section 401(a)(5) of the Code even if such
           Participants or Eligible Employees have earned less than 1,000 Hours
           of Service and regardless of their level of Compensation. However, if
           the Employer maintains any other qualified defined benefit retirement
           plan and this Plan is aggregated therewith for purposes of meeting
           the requirements of Section 401(a)(4) or 410 of the Code, the minimum
           amount described in clause (ii) of the preceding

                                     VI-5
<PAGE>
 
           sentence shall not be applicable. Further, if the Employer maintains
           any other qualified defined benefit plan for purposes of providing
           the additional benefits permissible by Section 415 of the Code, and
           each Non-Key Employee does not accrue the minimum benefit thereunder
           required by Section 416 of the Code, the percentage set forth in
           clause (i) hereinabove shall be deemed to be seven and one-half
           percent (7-1/2%).

     (c)   A Participant's vested percentage in his Employer Profit Sharing
           Account attributable to Employer contributions made for Years in
           which this Plan is Top Heavy shall be no less than the percentage
           determined in accordance with the schedule below if his participation
           hereunder terminates.

<TABLE>
<CAPTION>
                                                         Vested
                  Period of Service                    percentage
                  -----------------                    ----------
                  <S>                                  <C>
                  Less than 2 years                         0%
                  2 years but less than 3 years            20
                  3 years but less than 4 years            40
                  4 years but less than 5 years            60
                  5 years but less than 6 years            80
                  6 or more years                         100
                                                          ===
</TABLE>

     (d)   Unless the Plan qualifies under an exception as described in Section
           416(h)(2) of the Code, "1.0" shall be substituted for "1.25" in the
           definitions of Defined Benefit Plan fraction and Defined Contribution
           Plan fraction contained in this Plan.

     (e)   Solely for the purpose of determining if the Plan, or any other plan
           included in a required aggregation group of which this Plan is a
           part, is Top Heavy (within the meaning of Section 416(g) of the Code)
           the accrued benefit of an Employee other than a Key Employee (within
           the meaning of Section 416(i)(1) of the Code) shall be determined
           under (i) the method, if any, that uniformly applies for accrual
           purposes under all plans maintained by the Affiliated Employers, or
           (ii) if there is no such method, as if such

                                     VI-6
<PAGE>
 
           benefit accrued not more rapidly than the slowest accrual rate
           permitted under the fractional accrual rule of Section 411(b)(1)(C)
           of the Code.

     (f)   Neither Elective Deferrals nor Matching Contributions shall be used
           to satisfy the minimum contribution or benefit accrual which must be
           made on behalf of Non-Key Employees pursuant to this Section 6.06.

     6.07 PERSONS UNDER LEGAL OR OTHER DISABILITY. In the event a Participant or
his Beneficiary is judicially determined to be incompetent, and a conservator or
other person legally charged with the care of his person or of his estate is
appointed, any benefits to which such Participant or Beneficiary is entitled
shall be paid to such conservator or other person legally charged with the care
of his person or of his estate. Except as provided in this Section, when, in the
opinion of the Committee, a Participant or his Beneficiary is in any way
incapacitated so as to be unable to manage his financial affairs, the Committee
may direct the Funding Agent to make payments or distributions to his legal
representative or to a relative or friend of such person for his benefit, or the
Committee may direct the Funding Agent to make payments and distributions for
the benefit of the Participant or his Beneficiary in any way the Committee
determines as further detailed in Section 1.02(e).

     6.08 MISSING PARTICIPANTS OR BENEFICIARIES. Each Participant and each
Beneficiary shall file, or cause to be filed, with the Committee through the
Employer from time to time in writing, his mailing address and each change of
mailing address. Any communication, statement or notice addressed to a
Participant or his Beneficiary at his last mailing address filed with the
Committee, or if no address is filed with the Committee, then at his last
mailing address as shown on the Employer's records, will be binding on the
Participant and his Beneficiary for all purposes of the Plan.

                                     VI-7
<PAGE>
 
     Neither the Committee nor the Funding Agent shall be required to search for
or locate a Participant or his Beneficiary other than by mailing the notices set
forth in this Section 6.08. If the Committee sends the notice required by this
Section 6.08 to a Participant or his Beneficiary stating that he is entitled to
a distribution and also includes in such notice the provisions of this Section,
and the Participant or his Beneficiary fails to claim his benefits under the
Plan or make his whereabouts known to the Committee within three (3) calendar
years after notification, the benefits under the Plan of the Participant or his
Beneficiary will be disposed of as follows:

     (a)   If the whereabouts of the Participant is unknown but the whereabouts
           of the Participant's Beneficiary then is known to the Committee,
           distribution will be made to the Beneficiary;

     (b)   If the whereabouts of the Participant and his Beneficiary then is
           unknown to the Committee, but the whereabouts of one or more
           relatives by adoption, blood or marriage of the Participant is known
           to the Committee, the Committee shall direct the Funding Agent to
           distribute the Participant's benefits to any one or more of such
           relatives and in such proportions as the Committee in its sole
           discretion determines;

     (c)   If the whereabouts of the Participant, his Beneficiary and relatives
           by adoption, blood or marriage of the Participant then is unknown to
           the Committee, the amount of such benefits shall be forfeited,
           provided that the amount of such benefits shall be reinstated if a
           claim is subsequently made by the Participant or his Beneficiary.

     6.09 LIEN FOR DEBTS TO FUND. If, at the time of occurrence of any event
which causes a distribution to be made hereunder, notwithstanding any other
provisions of the Plan to the contrary, should a Participant have any
outstanding indebtedness to the Fund, the Committee shall determine the total
amount of such indebtedness and notify the Funding Agent. The

                                     VI-8
<PAGE>
 
Funding Agent, upon receipt of such notice, shall retain and pay over to the
Fund such amount from the Participant's vested interest in his Account or
Accounts. In the event the Participant is to receive payment of his interest
herein by lump sum, the Funding Agent shall pay the Fund the debt outstanding
and then distribute the remaining balance, if any, to the Participant.

     6.10 LOANS TO PARTICIPANTS. If a financial emergency arises from such
causes as sickness of a Participant or his family, layoff, divorce or
dissolution of marriage, need to provide adequate housing, need to provide for
education of children or dependents or such other financial need deemed
acceptable by the Committee, the Committee, in its sole discretion and upon
written application of such Participant, may make a loan or loans to such
Participant in an amount aggregating under this Plan or any other Plan (Related
Plan) maintained by the Employer not less than one thousand dollars ($1,000) nor
in excess of the lesser of (1) fifty thousand dollars ($50,000) (reduced by the
highest outstanding loan balance during the one (1)-year period ending on the
day before the loan is made over the outstanding balance of loans from the Plan
to the Participant on the date which such loan is made), or (2) fifty percent
(50%) of the sum of the Participant's vested Employer Matching Account, Employer
Profit Sharing Account, Permanent Account, Rollover Account and the
Participant's Salary Deferral Account, provided that such loans:

     (a)   Are available to all Participants on a reasonably equivalent basis,
           and in the same percentage of their vested balances;

     (b)   Are not made available to Highly Compensated Employees, officers or
           shareholders in an amount greater than the amount made available to
           other Employees;

     (c)   Are adequately secured;

                                     VI-9
<PAGE>
 
     (d)   Will in all events be due and payable in substantially level payments
           made through payroll deductions unless otherwise authorized by the
           Committee in five (5) years or less (unless the loan is used to
           acquire a dwelling which is used or to be used within a reasonable
           time as the principal residence of the Participant or the
           Participant's brothers, sisters, spouse, ancestors or lineal
           descendants which may, by its terms be repaid within fifteen (15)
           years);

     (e)   Are evidenced by the borrowing Participant's promissory note
           (including in the case of a married Participant spousal consent to
           such loan) for a fixed term bearing interest at a rate commensurate
           with the prevailing interest rate charged on similar commercial loans
           by persons in the business of lending money as determined by the
           Committee. Such note shall be payable to the Trustee not later than
           the earliest of :

           (i)    a fixed maturity date as described in (d) above provided,
                  however, that in the event of a Participant's termination of
                  employment with the Employer, such note shall become
                  immediately due and payable; or

           (ii)   the Participant's death.

     (f)   If valid consent has been obtained in accordance with paragraph (g)
           below, then, notwithstanding any other provision of this Plan, upon
           distribution of a Participant's Account, all notes are due and
           payable and total amounts unpaid, including principal and interest,
           will be deducted from the amount distributed, but only if such
           reduction is used as a repayment of the loan. If less than one
           hundred percent (100%) of the Participant's vested Account is payable
           to the surviving spouse, then the Account shall be adjusted by first
           reducing the vested

                                     VI-10
<PAGE>
 
           Account by the amount of the security used as repayment of the loan,
           and then determining the benefit payable to the surviving spouse;

     (g)   Notwithstanding the above, no portion of a Participant's Account may
           be used as security for a loan unless, at the time, the security
           interest is entered into, the Participant's spouse (if any) consents
           to the use of the Participant's Account as security. Such consent
           must:

           (i)    Acknowledge the effect of the consent; and

           (ii)   Be signed within the 90-day period ending on the date on which
                  the loan is to be so secured; and

           (iii)  Be witnessed by a Plan representative or notary public. Such
                  consent shall thereafter be binding with respect to the
                  consenting spouse or any subsequent spouse with respect to
                  that loan.

           A new consent shall be required if the Account is used for
           renegotiation, extension or renewal, or other revision for the loan;

     (h)   Shall be made under specific procedures established by the
           Administrative Committee. Such procedures shall include the basis on
           which loans will be approved or denied; the limitations, if any, on
           the types and amounts of loans offered; and the events constituting a
           default and the steps that will be taken to preserve Plan assets in
           the event of such default. For the purposes of this Section 6.10, if
           three (3) monthly payments are not made, or if one quarterly payment
           is not made the loan shall be in default.

     (i)   A Participant may upon thirty (30) days written notice delivered to
           the Committee (on such form as the Committee may prescribe), request
           that a loan be made to the Participant in conformity with the dollar
           limits set forth above provided no loan request has been

                                     VI-11
<PAGE>
 
           made within the preceding twelve (12) calendar months. A Participant
           shall first borrow the available balance in his Salary Deferral
           Account, shall next borrow the available balance in his Employer
           Matching Account, and finally shall borrow any available balance in
           his Employer Profit Sharing Account. A Participant may not request a
           second loan until any prior outstanding loan has been repaid in full.
           Each loan shall be made only from an Account or Accounts of the
           Participant requesting the loan and shall be treated as an investment
           of such Account or Accounts funding the loan. So long as a loan to a
           Participant under this Plan is outstanding, the Participant may not
           elect to withdraw any portion of his Account or Accounts prior to
           termination under the provisions of Article VI.

     (j)   The Committee shall have the power to establish additional rules with
           respect to loans extended pursuant to this Article VI as may be
           appropriate to ensure the orderly administration of this Plan
           including, but not limited to, rules relating to non-discriminatory
           minimum installments.

     Notwithstanding (e) above, in no event, except as may otherwise be required
by ERISA, may the interest rate charged for a loan exceed any limit established
under the applicable state usury law. Such loan shall be treated as an earmarked
investment of the borrowing Participant who shall be entitled to all earnings or
losses thereon. In the event a Participant is deemed to be in default pursuant
to written procedures maintained by the Plan, the Plan shall treat such loan as
a deemed distribution of Plan benefits as of the date of such default with the
Participant's vested interest reduced accordingly.

                                     VI-12
<PAGE>
 
     6.11 WITHDRAWALS PRIOR TO TERMINATION OF EMPLOYMENT.

     (a)   Amounts may be withdrawn from a Participant's Employer Matching
           Account, Permanent Account or Rollover Account while the Participant
           remains in the employ of the Employer provided that withdrawals are
           limited to contributions made to the stated Accounts at least twenty-
           four (24) full calendar months prior to the beginning of the Plan
           Year in which the withdrawal request is made, together with any
           earnings thereon.

     (b)   If a Participant has attained age fifty-nine and one-half (59-1/2)
           years, all amounts that have been allocated to the Participant's
           Salary Deferral Contributions Account may be withdrawn by the
           Participant upon request to the Committee on approved forms provided
           the Participant has received distribution of all of the value of his
           other Employee Accounts or has requested such withdrawals. Such
           withdrawals shall be allowed only if all loans made to the
           Participant pursuant to Section 6.10 have been repaid in full. The
           minimum amount that may be withdrawn at any one time is the lesser of
           three hundred dollars ($300.00) or the entire value of the
           Participant's Salary Deferral Contribution Account. All other rules
           will be uniformly applicable to all Participants and shall require
           spousal consent if the Participant is married. Such spousal consent
           must acknowledge the effect of the withdrawal, be signed within the
           90-day period preceding the date the withdrawal is to be made, and be
           witnessed by a Plan representative or notary public. No more than two
           (2) requests for withdrawal pursuant to this Section 6.11(b) shall be
           permitted in any Plan Year.

     (c)   In addition, a distribution of the Salary Deferral Contributions (but
           not Qualified Matching Contributions or Qualified

                                     VI-13
<PAGE>
 
           Non-Elective Contributions) made by a Participant may be made from
           such Participant's Salary Deferral Contributions Account on account
           of hardship if the distribution is necessary in light of immediate
           and heavy financial need of the Employee determined in accordance
           with Code Section 401(k)(2)(b)(IV) and regulations issued thereunder.
           Such distribution shall be made subject to spousal consent as
           described above. In no event shall such distribution include any of
           the investment gains earned after December 31, 1988 on such Salary
           Deferral Contributions or any Employer Contribution which was
           recharacterized or eligible to be recharacterized to enable the Plan
           to meet the requirements of the ADP test in Section 4.04.

                  A distribution will not be treated as necessary to satisfy an
           immediate and heavy financial need of an Employee to the extent the
           amount of the distribution is in excess of the amount required to
           relieve the financial need or to the extent such need may be
           satisfied from other resources that are reasonably available to the
           Participant.

           (i)    In order to receive a distribution under this Section 6.11(c)
                  a Participant shall be required to submit an appropriate
                  application to the Committee. Such application shall include
                  the Participant's written statement that the financial need
                  cannot be relieved:

                  (A)  Through reimbursement or compensation by insurance or
                       otherwise,

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

                                     VI-14
<PAGE>
 
                  (C)  By cessation of Elective Deferrals or Employee
                       Contributions under the Plan, or

                  (D)  By other distributions or nontaxable (at the time of the
                       loan) loans from plans maintained by the Employer or by
                       any other employer, or by borrowing from commercial
                       sources on reasonable commercial terms.

           (ii)   The Committee shall deem a distribution to be necessary if all
                  of the following requirements are satisfied:

                  (A)  The distribution is not in excess of the amount of the
                       immediate and heavy financial need of the Participant
                       including the amount necessary to pay income taxes or
                       penalties resulting from the distribution,

                  (B)  The Participant has obtained all distributions, other
                       than hardship distributions, and all nontaxable loans
                       currently available under all plans maintained by the
                       Employer,

                  (C)  The Plan, and all other plans maintained by the Employer,
                       provide that the Participant's Elective Deferrals and
                       Employee Contributions will be suspended for at least
                       twelve months (12) after receipt of the hardship
                       distribution, and

                  (D)  The Plan, and all other plans maintained by the Employer,
                       provide that the Participant may not make Elective
                       Deferrals for the Employee's taxable year immediately
                       following the taxable year of the hardship distribution
                       in excess of the applicable limit under Code Section
                       402(g) for such next taxable year less the amount of such
                       Participant's Elective Deferrals for the taxable year of
                       the hardship distribution.

                                     VI-15
<PAGE>
 
                  (E)  Unless otherwise allowed by the appropriate income tax
                       regulations, the following are the only financial needs
                       which will be considered immediate and heavy: deductible
                       medical expenses (within the meaning of Section 213(d) of
                       the Code) of the Employee, and the Employee's spouse,
                       children, or dependents, either incurred or required; the
                       purchase (excluding mortgage payments) of a principal
                       residence of the Employee; payment of tuition and related
                       education expenses for twelve (12) months of post-
                       secondary education for the Employee, and the Employee's
                       spouse, children, or dependents; or the need to prevent
                       the eviction of the Employee from, or a foreclosure on
                       the mortgage of, the Employee's principal residence.

     6.12 NATURE OF PARTICIPANTS' INTEREST. The interest of a Participant in the
Fund shall not be deemed to be in the assets of the Fund, but rather in a right
to receive, in cash or in kind, from the Funding Agent the nonforfeitable or
vested interest of the Participant in his Employer Profit Sharing Account and
Salary Deferral Account, as determined by the Committee at such time and subject
to the provisions of Articles VII and VIII.

     6.13 SUSPENSION OF BENEFITS AND IMMEDIATE PARTICIPATION UPON REEMPLOYMENT.
Notwithstanding any other provision of this Agreement, the payment of benefits
hereunder to a former Participant who returns to the employ of the Employer
after

                                     VI-16
<PAGE>
 
incurring a Break in Employment shall be suspended for the period of such
reemployment. Such former Participant will become a Participant as of the date
on which he first earns a Day of Service after his reemployment.

     6.14 APPLICATION FOR BENEFITS.

     (a)   A Participant must complete and file an application for benefits
           under the Plan. Application for benefits shall include all pertinent
           information requested by the Committee, including reasonable proof
           thereof. Applications for benefits must be in writing on the forms
           prescribed by the Committee and must be signed by the Participant and
           his spouse, if any, and submitted to the Committee. (b)    Each
           application for benefits shall be acted upon and approved or
           disapproved within ninety (90) days following its receipt by the
           Committee.

     (c)   If any application for benefits is denied, in whole or in part, the
           Committee shall notify the applicant in writing of such denial and of
           such Participant's right to a review by the Committee and shall set
           forth specific reasons for such denial, specific references to
           pertinent Plan provisions on which the denial is based, a description
           of any additional material or information necessary for the applicant
           to perfect the application, an explanation of why such material or
           information is necessary and an explanation of the Plan's review
           procedure. If the Committee fails to act within the ninety (90)-day
           period specified above, the Participant may assume that his
           application for benefits has been denied either in whole or in part.

     6.15 APPEALS PROCEDURE.

     (a)   Any Participant, or such Participant's duly authorized
           representative, whose application for benefits is denied, in whole or
           in part, may appeal from such denial to the Committee for a

                                     VI-17
<PAGE>
 
           review of the decision by submitting to the Committee within sixty
           (60) days after receiving written notice from the Committee of the
           denial of the claim a written statement:

           (i)    Requesting a review of the application for benefits by the
                  Committee;

           (ii)   Setting forth all of the grounds upon which the request for
                  review is based and any facts in support thereof; and

           (iii)  Setting forth any issues or comments which the applicant deems
                  relevant to the application.

                  The Committee shall act upon each such application within
           sixty (60) days after either receipt of the applicant's request for
           review by the Committee or receipt of any additional materials
           reasonably requested by the Committee from such applicant, whichever
           occurs later.

     (b)   The Committee shall make a full and fair review of each such
           application and any written materials submitted by the applicant or
           the Employer in connection therewith and may require the Employer or
           the Participant to submit within thirty (30) days after a written
           notice by the Committee therefore, such additional facts, documents
           or other evidence as is deemed necessary or advisable in the sole
           discretion of the Committee in making such a review. On the basis of
           the review, the Committee shall make an independent determination of
           the applicant's eligibility for benefits under the Plan. The decision
           of the Committee on any application for benefits shall be final and
           conclusive upon all persons if supported by substantial evidence in
           the record. If the Committee denies an application in whole or in
           part, the Committee shall give written notice of the decision to the
           applicant setting forth the specific reasons for such denial and
           specific references to the

                                     VI-18
<PAGE>
 
           pertinent Plan provisions on which the Committee's decision is based.
           Such written notice shall be given within one hundred-twenty (120)
           days of the date the appeal was filed.

     6.16 APPLICATION FOR CORRECTION OF ANNUAL STATEMENT. If a Participant
believes that the annual statement respecting his accounts is incorrect, he may
submit a written request to the Committee for correction or verification of the
statement. The Committee shall respond in writing in the same manner set forth
in Section 6.14 and the same appeal and review procedures shall be available to
the Participant.

                                     VI-19
<PAGE>
 
                                  ARTICLE VII

                           DISTRIBUTION OF BENEFITS


     7.01 METHODS OF MAKING DISTRIBUTIONS.

     (a)   The Committee shall direct the Funding Agent to distribute the net
           credit balances in the Participant's Employer Matching Account,
           Employer Profit Sharing Account, Permanent Account and Rollover
           Account, if any, and Salary Deferral Contributions Account to or for
           the benefit of the Participant, or in the event of his death, to or
           for the benefit of his Beneficiary, in cash (and whole shares in the
           case of investments in the "Stock Fund") as a single payment.

     (b)   Distributions of a Participant's Accounts payable in accordance with
           Section 6.02 will be made or commenced (unless administratively
           unfeasible) no later than the sixtieth (60th) day next following the
           close of the Plan Year during which the Participant's Termination
           Date occurs. Provided, however, that if the Participant fails to
           consent to an immediate distribution, failure to so consent shall be
           construed as an election to defer distribution until the later of the
           Normal Retirement Age or age sixty-two (62). Notwithstanding the
           preceding sentence, a Participant who meets the service requirement,
           if any, for early retirement pursuant to Section 3.05, but who
           terminates prior to his early retirement age, shall be eligible to
           elect to receive his early retirement benefit at any time after
           attaining his early retirement age. When directed by the Committee,
           the Funding Agent shall make interim payments from such accounts to
           the Participant, or in the event of his death to his Beneficiary, at
           such time and in such amounts as the Committee may direct during the
           period from the Participant's Termination Date to the

                                     VII-1
<PAGE>
 
           Anniversary Date coinciding with or next following the Participant's
           Termination Date.

     (c)   Distribution of a Participant's Accounts payable in accordance with
           Section 6.03 will be made or commenced as soon as possible after the
           Valuation Date as of which the net credit balances in the accounts
           are determined subject to the provisions of Sections 7.03 and 7.04.

     (d)   The Funding Agent shall have no discretion with respect to making
           distributions under the Plan and, therefore, except as otherwise
           specifically provided hereinabove, shall make distributions only at
           such time and in such manner as the Committee directs. The Funding
           Agent shall have no responsibility to see to the application of
           distributions so made or to ascertain whether the directions of the
           Committee comply with the Plan.

     (e)   Notwithstanding anything to the contrary contained herein, the
           distribution options under the Plan shall comply with Section
           401(a)(9) of the Code and regulations promulgated thereunder.
           Accordingly, unless otherwise permitted by law, the entire interest
           of each Participant shall commence to be distributed by April 1 of
           the calendar year following the calendar year in which the
           Participant reaches age seventy and one-half (70-1/2) over the life
           of such Participant (or over the lives of the Participant and his
           Beneficiary) or over a period not extending beyond the life
           expectancy of the Participant (or over a period not extending beyond
           the life expectancy of the Participant and his Beneficiary). If a
           distribution has begun in accordance with the preceding sentence and
           the Participant dies before his entire interest has been distributed
           to him, the remaining portion of his

                                     VII-2
<PAGE>
 
           interest shall be distributed at least as rapidly as under the method
           of distribution being used under the preceding sentence as of the
           date of his death. If a Participant dies before the distribution of
           his interest has begun, his entire interest shall be distributed
           within five (5) years after the date of his death, unless the
           requirements of one (1) of the two (2) following exceptions are
           satisfied: (i) the Participant's interest will be distributed to a
           Beneficiary over the life of such Beneficiary or over a period not
           extending beyond the life expectancy of such Beneficiary, and the
           distributions begin not later than one (1) year following the date of
           the Participant's death (or such later date as permitted by law), or
           (ii) the Participant's interest will be distributed to or for the
           benefit of his surviving spouse over the life expectancy of such
           surviving spouse or over a period not extending beyond the life
           expectancy of such surviving spouse, and the distributions begin no
           later than the date on which the Participant would have attained age
           seventy and one-half (70-1/2) (if the surviving spouse dies before
           such distributions begin, this second exception shall be applied as
           if the surviving spouse were the Participant). For purposes of this
           paragraph and to the extent permitted by law, any amount paid to a
           Participant's child shall be treated as if it had been paid to the
           Participant's surviving spouse if such amount will become payable to
           the surviving spouse upon such child reaching majority (or other
           designated event permitted by law).

     (f)   Notwithstanding anything in the above to the contrary, payment of
           benefits shall commence no later than sixty (60) days after the
           latest of the close of the Plan Year in which:

           (i)    The Participant reaches Normal Retirement Age;

                                     VII-3
<PAGE>
 
           (ii)   The tenth (10th) anniversary of the date on which the
                  Participant commenced participation occurs; or

           (iii)  The Participant terminates employment.

     (g)   All payment options shall require that the present value of expected
           payments to be made to the Participant shall be more than fifty
           percent (50%) of the present value of all payments.

     7.02 INVOLUNTARY CASH-OUT OF VESTED PARTICIPANT ACCOUNTS. The Plan will
make a lump sum distribution of the entire vested interest in his Accounts to a
Participant entitled to a distribution in accordance with Sections 6.03 and
6.04, provided that the amount of his Accounts has never exceeded three thousand
five hundred dollars ($3,500).

     7.03 VOLUNTARY CASH-OUT OF VESTED PARTICIPANT ACCOUNTS. A Participant
entitled to a distribution in accordance with Sections 6.03 and 6.04 may elect
to receive a lump sum distribution of his entire vested interest in his
Accounts.

     7.04 WITHHOLDING ON DISTRIBUTIONS. All nonperiodic distributions and
periodic payments shall be subject to the provisions of Section 8.03, items (l)
through (n), hereto, unless pursuant to Code Section 401(a)(31) and I.T.
Regulation Section 1.401(a)(31)-IT the distributee of any eligible rollover
distribution elects to have the distribution paid directly to an eligible
retirement plan in a direct rollover. Accordingly, in addition to any other
required payment restrictions, the Committee shall, not less than 30 days or
more than 90 days prior to a distribution, provide the distributee with a notice
of his right to have his distribution paid in a direct rollover to an eligible
retirement plan and provide the distributee the means to make such election in
accordance with the following:

     (a)   If a distribution is one to which Sections 401(a)(11) and 417 of the
           Internal Revenue Code do not apply, such distribution may commence
           less than 30 days after the notice required under

                                     VII-4
<PAGE>
 
           Section 1.411(a)-11(c) of the Income Tax Regulations is given,
           provided that:

           (i)    The Plan administrator clearly informs the Participant that
                  the Participant has a right to a period of at least 30 days
                  after receiving the notice to consider the decision of whether
                  or not to elect a distribution (and, if applicable, a
                  particular distribution option), and

           (ii)   The Participant, after receiving the notice, affirmatively
                  elects a distribution.

     (b)   This Provision applies to distributions made on or after January 1,
           1993. Notwithstanding any provision of the Plan to the contrary that
           would otherwise limit a distributee's election under the Provision, a
           distributee may elect, at the time and in the manner prescribed by
           the Committee, to have any portion of an eligible rollover
           distribution that is at least equal to five hundred dollars ($500)
           paid directly to an eligible retirement plan specified by the
           distributee in a direct rollover.

     (c)   Definitions

           (i)    Eligible rollover distribution: An eligible rollover
                  distribution is any distribution of all or any portion of the
                  balance to the credit of the distributee, except that an
                  eligible rollover distribution does not include: any
                  distribution that is one of a series of substantially equal
                  periodic payments (not less frequently than annually) made for
                  the life (or life expectancy) of the distributee or the joint
                  lives (or joint life expectancies) of the distributee and the
                  distributee's designated Beneficiary, or for a specified
                  period of ten years or more; any distribution to the extent
                  such distribution is required under Section 401(a)(9) of the
                  Code; and the

                                     VII-5
<PAGE>
 
                  portion of any distribution that is not includable in gross
                  income (determined without regard to the exclusion for net
                  unrealized appreciation with respect to employer securities).

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

           (iii)  Distributee: A distributee includes an Employee or former
                  Employee. In addition, the Employee's or former Employee's
                  surviving spouse and the Employee's or former Employee's
                  spouse or former spouse who is the alternate payee under a
                  qualified domestic relations order, as defined in Section
                  414(p) of the Code, are distributees with regard to the
                  interest of the spouse or former spouse.

           (iv)   Direct rollover: A direct rollover is a payment by the Plan to
                  the eligible retirement plan specified by the distributee.

                                     VII-6
<PAGE>
 
                                 ARTICLE VIII

                                 THE COMMITTEE


     8.01 COMMITTEE. The Employer shall appoint an Administrative Committee of
not less than three (3) persons. The Employer shall certify to the Funding Agent
the names and specimen signatures of the members of the Committee. The members
of the Committee shall serve at the pleasure of the Employer, and any member may
resign by written instrument addressed to the Employer and may be removed by the
Employer with or without cause. While a vacancy exists, the remaining member(s)
of the Committee may perform any act which the Committee is authorized to
perform. The decisions of the majority of the number of members of the Committee
then in office shall constitute the final and binding act of the Committee. The
Committee may act with or without a meeting being called or held and shall keep
minutes of all meetings held and a record of all actions taken by written
consent. The Funding Agent shall be promptly notified in writing by the Employer
of the original membership, and of any change in the membership, of the
Committee and shall be supplied with specimen signatures of each Committee
member. Vacancies in the membership of the Committee shall be filled promptly by
the Employer.

     8.02 COMMITTEE ACTION. The Committee shall choose a secretary (hereinafter
referred to as the "Secretary") who may, but need not, be one of the members of
the Committee. The Secretary shall keep minutes of the Committee's proceedings
and all records and documents pertaining to the Committee's administration of
the Plan. Any action of the Committee shall be taken pursuant to a majority vote
or the written consent of a majority of its members, and such action shall
constitute the action of the Committee and be binding the same as if all members
had joined therein. A quorum of the Committee shall consist of a majority of its
members. The Secretary may execute any certificate or other written direction on
behalf of the Committee.

                                    VIII-1
<PAGE>
 
The Funding Agent or third persons dealing with the Committee may conclusively
rely upon any certificate or other written direction signed by the Secretary
which purports to have been duly authorized by the Committee.

     A member of the Committee shall not vote or act upon any matter which
relates solely to himself as a Participant, unless all Participants are members
of the Committee or there are no other Participants. If a matter arises
affecting one of the members of the Committee as a Participant and the other
members of the Committee are unable to agree as to the disposition of such
matter, the Employer may appoint a substitute member of the Committee in the
place and stead of the affected member, for the sole and only purpose of passing
upon and deciding the particular matter.

     8.03 RIGHTS AND DUTIES. The Employer, on behalf of the Participants and
their Beneficiaries, shall be the administrator as defined in Section 3(16)(A)
of ERISA. The Committee acting as an agent of the Employer shall enforce the
Plan on a nondiscriminatory basis in accordance with its terms; shall be charged
with the general administration of the Plan; and shall have all powers and
duties necessary to accomplish those purposes, including, without limiting the
generality of the foregoing, the following:

     (a)   To make and enforce such rules and regulations as it deems necessary
           or proper for the efficient administration of the Plan;

     (b)   To interpret and construe the terms and provisions of the Plan, its
           interpretation and construction thereof in good faith to be final and
           conclusive on all Employees, former Employees, Participants, former
           Participants and Beneficiaries, except as otherwise provided by law;

     (c)   To determine all questions concerning the Plan and the eligibility of
           any person to participate in the Plan;

     (d)   To determine the service of Participants to be recognized under the
           Plan;

                                    VIII-2
<PAGE>
 
     (e)   To determine, compute and certify to the Funding Agent the amount and
           form of benefits which will be payable to any Participant, former
           Participant, or Beneficiary in accordance with the provisions of the
           Plan, and to determine the person or persons to whom such benefits
           will be paid;

     (f)   To authorize the payment of benefits and all other disbursements by
           the Funding Agent from the Fund;

     (g)   To maintain all the necessary records for the administration of the
           Plan other than those maintained by the Funding Agent;

     (h)   To provide for disclosure of all information and filing or provision
           of all reports and statements to Participants, Beneficiaries or
           governmental bodies as shall be required by ERISA or the Code, and to
           submit to the Employer, at least annually, such information as is
           necessary to fully inform the Employer of the discharge by the
           Committee or its delegates of responsibilities under the Plan;

     (i)   To enter into a written agreement or agreements with one or more
           Investment Managers (as defined by Department of Labor Regulations)
           to advise the Committee or the Funding Agent with respect to
           investment of the Fund, or to manage (including the power to acquire
           or dispose of) any assets of the Plan;

     (j)   To delegate to such Investment Manager or Managers who have
           acknowledged his/their fiduciary status authority to exercise any and
           all powers of the Committee to direct the Funding Agent as to
           investment and reinvestment of the Fund;

     (k)   To instruct the Funding Agent in writing from time to time with
           respect to investments of principal or income of trust funds,
           including, but not limited to: instructing the Funding Agent to
           acquire, retain, sell, exchange or lease any property, real or

                                    VIII-3
<PAGE>
 
           personal, which the Committee may designate; instructing the Funding
           Agent to invest in stated classes of investments (e.g., to invest all
           or a certain percentage of the funds in diversified mutual funds);
           instructing the Funding Agent to implement stated investment goals
           (e.g., to invest all or a certain percentage of the funds in high-
           grade equity securities with potentialities for capital
           appreciation); and instructing the Funding Agent to enter into a
           group contract and to invest assets held by an insurer under a group
           contract in accordance with the investment directions of the
           individual Participants;

     (l)   To withhold, and be liable for, payment of the tax required to be
           withheld from any benefits paid in accordance with the provisions of
           this Plan, unless the Participant or Beneficiary who is payee for
           such benefits shall elect to have withholding not apply to such
           payments. Such election, where otherwise allowable, shall remain in
           effect until revoked by the elector. The maximum amount to be
           withheld shall not exceed the sum of the amount of money and the fair
           market value of other property (within the meaning of applicable law)
           received in payment of benefits, unless otherwise required by law;

     (m)   (i)    To notify the Participant or Beneficiary who is payee of any
                  periodic payments, otherwise subject to withholding, of the
                  right to elect not to apply withholding to such payments.
                  Notice shall be given no earlier than six months before, and
                  no later than, the date of the first periodic payment subject
                  to withholding. Notice of the right to make and revoke such
                  election shall be given to payees not less frequently than
                  once each calendar year.

                                    VIII-4
<PAGE>
 
           (ii)   To notify the Participant or Beneficiary who is payee of any
                  nonperiodic distribution otherwise subject to withholding of
                  the right to elect that withholding shall not apply to such
                  distribution. Notice shall be given no later than the date of
                  distribution or at such earlier date as may be prescribed by
                  the Secretary of the Treasury.

           (iii)  To notify the payee of mandatory withholding requirements in
                  effect for years beginning after December 31, 1992 where
                  appropriate statutory rollover requirements have not been met;

     (n)   To direct the payor of authorized disbursements from the Fund to
           withhold payment of the tax required to be withheld by law. In such
           case, and if the payor is supplied with such information as required
           by regulations, then the payor shall be liable for payment of the tax
           withheld;

     (o)   To establish a procedure for the Plan to deal with qualified domestic
           relations orders. Such procedure shall comply with the applicable
           requirements of Code Sections 401(a)(13) and 414(p), as well as ERISA
           Sections 206(d)(3)(A) and 516(b)(7), provided that the Plan shall be
           permitted to make an immediate distribution to an alternate payee
           pursuant to a qualified domestic relations order that provides for
           such distribution even though the Participant may not have attained
           his earliest possible retirement age; and

     (p)   To determine the allocation, disposition and distribution of Trust
           fund assets in the event the Plan is terminated with respect to any
           one or more Participating Employers.

                                    VIII-5
<PAGE>
 
     8.04 FUNDING POLICY AND METHOD.

     (a)   The Committee shall establish and carry out a funding policy and
           method for the Plan which is consistent with the objectives of the
           Plan and the requirements of Title I of ERISA. In so doing, the
           Committee shall, from time to time, determine whether the Plan has a
           short-run need for liquidity (e.g., to pay benefits) or whether
           liquidity is a long-run goal and investment growth (and the stability
           of the same) is a more current need or the Committee shall appoint a
           qualified person to do so.

     (b)   The funding policy and method, as established and amended from time
           to time, shall be communicated by the Committee or its delegate to
           the Funding Agent in order that the investment policies of the Fund
           may be coordinated with the funding policy and method.

     8.05 TRANSMITTAL OF INFORMATION. In order to enable the Committee to
establish a funding policy and to perform its other functions under the Plan,
the Employer shall supply full and timely information to the Committee on all
matters relating to the compensation of all Employees and Participants, their
employment, their retirement, death, or termination of employment, and such
other pertinent facts as may be required. The Committee shall advise the Funding
Agent of such of the foregoing facts as may be pertinent to the Funding Agent's
administration of the Fund.

     8.06 COMPENSATION. The members of the Committee shall serve without
compensation for their services hereunder. Members of the Committee and its
appointed delegates shall be bonded to the extent required by ERISA and the
regulations issued by the Secretary of Labor. The expense of such bond and all
expenses of the Committee or such delegate shall be paid by the Employer, unless
charged to the Plan, and the Employer shall furnish the

                                    VIII-6
<PAGE>
 
Committee without charge with such clerical and other assistance as is necessary
in the performance of its duties.

     8.07 RETENTION OF ADVISORS. The Committee may employ such persons or
organizations to render advice or perform services with respect to the
responsibilities of the Committee under the Plan as the Committee, in its sole
discretion, determines to be necessary and appropriate. Such persons may
include, without limitation, actuaries, attorneys, accountants, investment
advisors and consultants. All costs, charges and expenses incurred by the
Committee under the provisions of this Section shall be paid by the Employer
unless charged to the Plan.

     8.08 ALLOCATION AND DELEGATION OF FIDUCIARY RESPONSIBILITIES.

     (a)   As provided in this Article, the Employer shall appoint the
           Committee. The Employer shall not, however, be responsible in any way
           or to any extent whatever for the operation and administration of the
           Plan.

     (b)   The Committee, from time to time, may allocate to one (1) or more of
           its members and delegate to others any of its rights, powers,
           responsibilities and duties (hereinafter collectively referred to as
           "Duties") with respect to the operation and administration of the
           Plan. Each such allocation and/or delegation shall be in writing;
           shall specify the Duties so allocated or delegated; and shall be
           subject to termination by the Committee upon notice to the person or
           persons to whom such Duties have been allocated and/or delegated.
           Each person to whom Duties have been allocated and/or delegated
           shall, by a written acknowledgment, accept such allocation or
           delegation and acknowledge that he is a fiduciary with respect to the
           Plan.

                                    VIII-7
<PAGE>
 
     (c)   The Committee shall periodically review the performance of any of its
           members or others to whom Duties have been allocated or delegated
           under the provisions of this Section:

           (i)    by a formal annual review;

           (ii)   by day-to-day contact and evaluation; or

           (iii)  in other appropriate ways.

     8.09 INDEMNIFICATION. To the extent permitted by the laws of the State of
California and ERISA, the Employer shall indemnify and hold harmless the Board
of Directors, the Committee and each member thereof, and any other Employee to
whom any fiduciary responsibility with respect to the Plan is allocated or
delegated, from and against any and all liabilities and claims, including legal
fees to defend against such liabilities and claims, and costs and expenses,
arising out of their discharge in good faith of responsibilities under or
incident to the Plan, excepting only expenses and liabilities arising out of
willful misconduct or gross negligence. This indemnity shall not preclude such
further indemnities as may be available under insurance purchased by the
Employer or provided by the Employer under any agreement, operating policies or
otherwise, as such indemnities are permitted under the laws of the State of
California. Payments with respect to any indemnity and payment of insurance
premiums, expenses or fees under this Section shall be made only from the
Employer's assets and shall not be made directly or indirectly from the Fund
assets.

     8.10 DETERMINATIONS AND CORRECTIONS. It is recognized in the administration
of the Plan that certain mathematical and accounting errors may be made, or
mistakes arise, by reason of factual errors in information supplied to the
Committee. The Committee shall have the power to make such corrections and
equitable adjustments, arising from mathematical, accounting or factual errors
made in good faith, as the Committee shall in its discretion deem appropriate,
which adjustments shall be final and binding on

                                    VIII-8
<PAGE>
 
all Employees, former Employees, Participants, former Participants and
Beneficiaries.

     8.11 DESIGNATION OF AGENTS. The Committee shall, in its sole discretion,
have the right to appoint such agents as it may deem necessary to carry out its
duties pursuant to the provisions of the Plan.

     8.12 RELATIONSHIP OF FIDUCIARIES. It is the intent of all fiduciaries under
the Plan that each fiduciary shall be solely responsible for its own acts or
omissions. Except to the extent imposed by ERISA or the Code, no fiduciary shall
have the duty to question whether any other fiduciary is fulfilling all of the
responsibilities imposed upon such other fiduciary by ERISA or by any
regulations or rulings issued thereunder. No fiduciary shall have any liability
for breach of fiduciary responsibility of another fiduciary with respect to the
Plan unless he participates knowingly in such breach, knowingly undertakes to
conceal such breach, has actual knowledge of such breach and fails to take
reasonable remedial action to remedy said breach or, through his negligence in
performing his own specific fiduciary responsibilities which give rise to his
status as a fiduciary, has enabled such other fiduciary to commit a breach of
the latter's fiduciary responsibilities.

     8.13 DISCHARGE OF DUTIES BY FIDUCIARIES. The Committee and the Funding
Agent and any other fiduciary (as that term is defined below) shall discharge
their respective duties set forth in this Plan solely in the interest of the
Participants and their Beneficiaries:

     (a)   for the exclusive purpose of:

           (i)    providing benefits to Participants and their Beneficiaries,
                  and

           (ii)   defraying reasonable expenses of administering the Plan;

     (b)   with the care, skill, prudence and diligence under the circumstances
           then prevailing that a prudent man acting in a like

                                    VIII-9
<PAGE>
 
           capacity and familiar with such matters would use in the conduct of
           an enterprise of a like character and with like aims;

     (c)   by diversifying the investments of the Plan so as to minimize the
           risk of large losses, unless under the circumstances it is clearly
           prudent not to do so; and

     (d)   in accordance with this Plan insofar as the Plan is consistent with
           the provisions of Title I of ERISA.

     Such fiduciaries shall not permit the indicia of ownership of any Fund
assets to be maintained outside the jurisdiction of the District Courts of the
United States, except as may otherwise be allowed under applicable Department of
Labor rules and regulations.

     For purposes of this Plan, a "fiduciary" is any person who:

     (e)   exercises any discretionary authority or discretionary control
           respecting management of the Plan or exercises any authority or
           control respecting management or disposition of its assets;

     (f)   renders investment advice for a fee or other compensation, direct or
           indirect, with respect to any monies or other property of the Plan,
           or has any authority or responsibility to do so; or

     (g)   has any discretionary authority or discretionary responsibility in
           the administration of the Plan.

     8.14 MULTIPLE FIDUCIARY CAPACITIES. Any person or organization may serve in
more than one fiduciary capacity with respect to the Plan (including service
both as Funding Agent and administrator), provided, however, that the provisions
of ERISA Section 406 and Code Section 4975 are not violated.

                                    VIII-10
<PAGE>
 
                                  ARTICLE IX

                           AMENDMENT AND TERMINATION

     9.01 AMENDMENT BY EMPLOYER. The Employer shall have the right to amend this
Plan from time to time and to amend further or cancel any such amendment. Such
amendments shall be stated in an instrument in writing executed by the Employer,
and this Plan shall be deemed to have been amended in the manner and at the time
therein set forth, and all Employees, former Employees, Participants, former
Participants, Beneficiaries, and the Employer shall be bound thereby; provided,
however:

     (a)   No such amendment shall be effective which shall attempt to cause any
           of the assets of the Fund to be used for or diverted to purposes
           other than for the exclusive benefit of the Participants, former
           Participants, or their Beneficiaries, except such changes, if any, as
           may be required to permit this Plan to meet the applicable
           requirements of ERISA or the Code;

     (b)   No such amendment shall have any retroactive effect so as to deprive
           any Participant of any benefit already vested, except such changes,
           if any, as may be required to permit this Plan to meet the applicable
           requirements of ERISA or the Code;

     (c)   No such amendment shall create or effect any discrimination in favor
           of Participants or former Participants who are officers, shareholders
           or Highly Compensated Employees;

     (d)   No such amendment shall increase the duties or liabilities of the
           Funding Agent without its written consent;

     (e)   No such amendment shall cause any reduction in the retirement
           benefits or other optional form of benefits with respect to benefits
           accrued to the date of the amendment for any Employee who, at any
           time on or after the amendment date, satisfied the pre-amendment
           condition; and

                                     IX-1
<PAGE>
 
     (f)   No such amendment shall eliminate any other benefit, including any
           optional form of benefit, protected pursuant to Code Section
           411(d)(6) with respect to benefits accrued as of the date of the
           amendment.

     9.02 RETROACTIVE AMENDMENTS. An amendment under Section 9.01 may be made
effective on a date prior to the first day of a Plan Year in which it is adopted
only if (a) or (b) below is satisfied:

     (a)   Any amendment may be made effective retroactively as of such date as
           the Employer considers necessary or appropriate to enable the Plan to
           meet any applicable requirements of the Code.

     (b)   Any amendment which is adopted in order to conform the Plan to any
           change in Federal law, or to any regulation or ruling thereunder, may
           be made effective as of the date such amendment is required to be
           effective under such law, regulation or ruling.

     9.03 DISCONTINUANCE OR TERMINATION OF PLAN. It is the Employer's
expectation that the Plan contained herein and the payment of contributions
hereunder will be continued indefinitely, and the Funding Instrument is
irrevocable, but continuance of the Plan by the Employer is not assumed as a
contractual obligation. The Employer, pursuant to Section 10.01(a), shall be
entitled to recover any contributions made to the Fund prior to the time that
the Commissioner of Internal Revenue, or his delegate, makes an initial
determination with respect to the exempt status of the Fund for Federal income
tax purposes and the deductibility of contributions by Employer for its income
tax purposes, if the Commissioner of Internal Revenue, or his delegate,
initially determines that the Plan does not meet the requirements of the
Internal Revenue Code with the result that the Fund is not exempt from Federal
income tax and the contributions of the Employer to the Fund are not deductible
in determining its Federal income tax, and furthermore, if such approval is not
obtained the Plan shall be treated as never having been

                                     IX-2
<PAGE>
 
adopted. The Employer reserves the right at any time to reduce or temporarily
suspend contributions hereunder. The Employer may discontinue contributions
under the Plan at any time by written notice delivered to the Funding Agent
without any liability hereunder for any such discontinuance. In the event of a
complete discontinuance of contributions by the Employer, the entire interest of
each Participant shall be vested to the extent of one hundred percent (100%).

     The Employer may terminate the Plan at any time by written notice delivered
to the Funding Agent without any liability hereunder for any such termination.
The Plan will be deemed terminated:

     (a)   If and when the Employer is judicially declared bankrupt; or

     (b)   If and when the Employer is a party to a merger in which it is not
           the surviving business entity or sells all or substantially all of
           its assets unless the surviving business entity or purchaser
           continues the Plan.

     Upon termination or partial termination of the Plan, the entire interest of
each affected Participant shall be vested to the extent of one hundred percent
(100%).

     The Funding Agent shall, upon direction of the appropriate Committee, with
reasonable promptness, liquidate all assets remaining in the Fund. Upon the
liquidation of all assets, the Committee shall make, after deducting estimated
expense for liquidation and distribution, the allocations required under Article
V, where applicable, with the same effect as though the date of completion of
liquidation were a Valuation Date, which was an Anniversary Date of the Plan.

     Following these allocations, Elective Deferrals, Qualified Employer
Deferral Contributions and income attributable thereto, shall be distributed to
Participants, or their Beneficiaries as soon as administratively feasible after
the termination of the Plan, provided that neither the Employer nor an

                                     IX-3
<PAGE>
 
Affiliated Employer maintains a successor Plan. The Funding Agent shall
promptly, after receipt of appropriate instructions from the Committee,
distribute in accordance with Article VII to each former Participant a benefit
equal to the amount credited to such former Participant's Employer Matching
Account, Employer Profit Sharing Account, Rollover Account, if any, and Salary
Deferral Contributions Account as of the date of completion of the liquidation.

     9.04 PARTIAL TERMINATION OF PLAN. In the event of partial termination of
the Plan, the appropriate portion of the Fund shall be allocated and treated in
accordance with Section 9.03 above.

     9.05 FAILURE TO CONTRIBUTE. The failure of the Employer to contribute to
the Fund for any Plan Year when no contribution is required shall not of itself
be a discontinuance of contributions to the Fund by the Employer.

     9.06 MERGER AND CONSOLIDATION OF PLAN; TRANSFER OF PLAN ASSETS. In the case
of any merger or consolidation with, or transfer of assets and liabilities to,
any other plan, provisions shall be made so that each Participant in the Plan on
the date thereof (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 he would have been entitled to receive immediately
prior to the merger, consolidation or transfer (if the Plan then terminated).
Further, a merger, consolidation or transfer of assets shall be made only if
resolutions of the Board of Directors and the board of directors of the other
plan shall authorize such merger, consolidation or transfer and such other plan
and fund are qualified under Sections 401(a) and 501(a) of the Code.

     9.07 SUBSTITUTION OF SUCCESSOR EMPLOYER. In the event of the dissolution,
merger, consolidation or reorganization of the Employer, provision may be made
by which the Plan will be continued by any successor and, in that event, such
successor shall be substituted for the Employer

                                     IX-4
<PAGE>
 
under the Plan. Resolutions of the Board of Directors and board of directors of
any new or successor employer shall include an assumption of Plan liabilities by
the successor, and the successor shall have all of the powers, duties and
responsibilities of the Employer under the Plan.

     9.08 DISTRIBUTION UPON SALE. Unless the provisions of Section 9.07 are
applicable, all Elective Deferrals, Qualified Employer Deferral Contributions,
and income attributable thereto, may be distributed as soon as administratively
feasible:

     (a)   To Participants after the sale to an entity that is not an Affiliated
           Employer, of substantially all the assets used by the Employer in the
           trade or business in which a Participant is employed; and

     (b)   To Participants employed by a subsidiary of the Employer after the
           sale, to an entity that is not an Affiliated Employer, of an
           Affiliated Employer's interest in such subsidiary.

     For the purpose of this Section 9.08, a sale of eighty-five percent (85%)
of the relevant assets shall be deemed a sale of substantially all assets.

                                     IX-5
<PAGE>
 
                                   ARTICLE X

            SPECIAL PROVISIONS FOR CERTAIN FORMER PARTICIPANTS IN 
           WHITTAR INDUSTRIES, LTD. SAVINGS PLAN AS AMENDED (401(K))


     10.01 APPLICABILITY. This Article shall apply to those Participants who
ceased to be employees of employers participating in the Whittar Industries,
Ltd. Savings Plan as Amended (401(k)) and became Employees within the meaning of
this Plan. Individuals to whom this Article applies shall be referred to herein
as Article X persons. For purposes of this Article X, the Whittar Industries,
Ltd. Savings Plan as Amended (401(k)) shall be referred to herein as the Whittar
Plan.

     10.02 PARTICIPANT TRANSFER CONTRIBUTIONS. Effective as of the date the
Employee became a Participant of this Plan, or such later date as may be
determined by the Committee, the account (as defined in Section 5.01 of the
Whittar Plan), if any, of an Article X person then held in trust under the
Whittar Plan may be transferred to this Plan and credited to the Participant's
corresponding Account in accordance with rules which the Committee shall
prescribe from time to time; provided, however, that the transfer of such
account from the Whittar Plan be transferred directly by the Trustee of the
Whittar Plan to the Trustee of this Plan. Any amounts so transferred shall not
be subject to distribution to an Article X person except as expressly provided
under this Plan. In addition, any amounts so transferred shall be invested in
accordance with the provisions of Section 4.08 of this Plan and at such time
and, in such manner.

                                      X-1
<PAGE>
 
                                  ARTICLE XI

                                 MISCELLANEOUS


     11.01 CONTRIBUTIONS NOT RECOVERABLE. Except where contributions are
required to be returned to the Employer or a Participant as permitted by the
provisions of the Plan or required by ERISA or the Code, it shall be impossible
for any part of the principal or income of the Fund to be used for, or diverted
to, purposes other than the exclusive benefit of such Participants or their
Beneficiaries; provided, however, that notwithstanding this or any other
provision of this Plan, the Employer shall be entitled, subject to the
conditions established under Internal Revenue Service Ruling 91-4, to recover
any contributions made to the Fund:

     (a)   If such contributions were conditioned on the initial qualification
           of the Plan and;

           (i)    The Commissioner of Internal Revenue, or his delegate, makes
                  an initial determination, with respect to the exempt status of
                  the Fund for Federal income tax purposes and the deductibility
                  of contributions by Employer for its income tax purposes, that
                  the Plan does not meet the requirements of the Internal
                  Revenue Code with the result that the Fund is not exempt from
                  Federal income tax and the contributions of the Employer to
                  the Fund are not deductible in determining its Federal income
                  tax; and

           (ii)   The application for determination relating to the initial
                  qualification is filed by the due date of the Employer's
                  return for the taxable year in which the Plan is adopted; and

           (iii)  The contribution is returned within one year of the denial of
                  the contribution; or

     (b)   In error as a result of a mistake in fact; or

                                     XI-1
<PAGE>
 
     (c)   Conditioned upon the contribution being allowed as a deduction for
           Federal income tax purposes and such deduction is disallowed; or

     (d)   Remaining in the Suspense Account after termination of the Plan which
           cannot be allocated to Participants because of the provisions of
           Section 5.06.

     (e)   The permissible recovery under (b) must be made within one (1) year
           from the date the contribution was made to the Plan, and under (c)
           must be made within one (1) year from the date of disallowance of tax
           qualification or tax deduction.

     (f)   Reversions due to a mistake of fact or the disallowance of a
           deduction with respect to a contribution that was conditioned on its
           deductibility shall be permitted only if the surrounding facts and
           circumstances indicate that the contribution of the amount that
           subsequently reverts to the Employer is attributable to a good faith
           mistake of fact or, in the case of the disallowance of the deduction,
           a good faith mistake in determining the deductibility of the
           contribution.

     (g)   The maximum amount that may be returned to the Employer in the case
           of a mistake of fact or the disallowance of a deduction is the excess
           of (i) the amount contributed, over, as relevant, (ii) (A) the amount
           that would have been contributed had no mistake of fact occurred, or
           (B) the amount that would have been contributed had the contribution
           been limited to the amount that is deductible after any disallowance
           by the Internal Revenue Service.

     (h)   Earnings attributable to the excess contribution may not be returned
           to the Employer, but losses attributable to such contribution shall
           reduce the amount returned.

                                     XI-2
<PAGE>
 
     (i)   If, the return of the amount attributable to the mistaken or
           nondeductible contribution would cause the Account of any Participant
           to be reduced to an amount which is less than the amount which would
           have been in the Account of such Participant had the mistaken or
           nondeductible amount not been contributed, the amount returned to the
           Employer shall be limited so as to avoid such reduction.
           Notwithstanding the preceding sentence, in the case of a reversion
           due to initial disqualification of the Plan, the entire assets of the
           Plan attributable to Employer contributions may be returned to the
           Employer.

     11.02 EMPLOYMENT RIGHTS. The Plan is not a contract of employment.
Participation in the Plan shall not give any Employee or any other person (a)
the right to be retained in the employ of the Employer; (b) any right or claim
to any interest in the Plan, unless the right or claim has specifically accrued
under the Plan; or (c) any legal or equitable right against the Employer, the
Committee or the Funding Agent, except as provided herein. The Employer reserves
the right to dismiss (with or without cause) any Employee without any liability
for any claim either against the Fund, except to the extent provided herein, or
against the Committee or the Employer. It is a condition of the Plan, and each
Participant expressly agrees by his participation herein, that each Participant
shall look solely to the assets held in the Fund for the payment of any benefit
to which he is entitled under the Plan.

     11.03 RECEIPT OR RELEASE. Any payment to a Participant, former Participant,
or his Beneficiary in accordance with the provisions of this Plan shall, to the
extent thereof, be in full satisfaction of all claims against the Funding Agent,
the Committee and the Employer, and the Committee or Funding Agent may require
such Participant, former Participant, or

                                     XI-3
<PAGE>
 
Beneficiary, as a condition precedent to such payment, to execute a receipt and
release to such effect.

     11.04 ALIENATION. None of the benefits, payments, proceeds or claims of any
Participant, former Participant, or Beneficiary shall be subject to any claim of
any creditor and, in particular, the same shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
charge, garnishment, execution or levy of any kind, either voluntary or
involuntary. Any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, garnish, levy or otherwise dispose of or execute upon any
right or benefit payable hereunder shall be void. The Fund shall not in any
manner be liable or subject to the debts, contracts, liabilities, engagements or
costs of any Participant entitled to benefits hereunder, and such benefits shall
not be considered an asset of the Participant in the event of his insolvency or
bankruptcy. This provision shall not prevent the Plan from complying with the
terms of a "qualified domestic relations order" as defined in Code Sections
401(a)(13) and 414(p) so long as such compliance will not adversely affect the
qualified status of the Plan.

     11.05 CONTROLLING 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 California;
provided, however, that if any provision is susceptible to more than one
interpretation, such interpretation shall be given thereto as is consistent with
the Plan being a qualified plan within the meaning of Section 401 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.

     11.06 TEXT PREVAILS OVER CAPTIONS. The headings and subheadings of the
Articles and Sections of this Plan are included herein solely for

                                     XI-4
<PAGE>
 
convenience or reference, and if there be any conflict between such headings and
subdivisions and the text of this Plan, the text shall control.

     11.07 COUNTERPARTS. This Plan has been 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.

     11.08 SUCCESSORS AND ASSIGNS. This Plan shall inure to the benefit of, and
be binding upon, the parties hereto and their successors and assigns.

                                     XI-5
<PAGE>
 
                                  ARTICLE XII

                            PARTICIPATING EMPLOYERS


     12.01 ADOPTION BY AFFILIATED EMPLOYERS. With the consent of the Employer,
any Affiliated Employer may adopt this Plan and all of the provisions hereof,
and participate herein and be known as a Participating Employer, by properly
executing a document evidencing said intent and will of such Participating
Employer.

     12.02 REQUIREMENTS OF PARTICIPATING EMPLOYERS.

     (a)   Each Participating Employer shall be required to use the same Funding
           Agent as selected pursuant to Section 1.02(w).

     (b)   The Funding Agent, subject to the provisions of Section 4.08, shall
           commingle, hold and invest as one, all contributions received
           pursuant to Sections 4.01 and 4.03.

     (c)   The transfer of any Participant from or to an Employer participating
           in this Plan, whether he or she be an Employee of the Employer or an
           Affiliated Employer, shall not affect such Participant's rights under
           the Plan, and all amounts credited to such Participant's Accounts, as
           well as his accumulated Years of Service with the transferor or
           predecessor, and his length of participation in the Plan, shall
           continue to his credit.

     (d)   All rights and values forfeited by termination of employment shall
           inure to Participants subject to Plan Section 5.05.

     (e)   Any expenses of the Plan which are to be paid by the Employer or
           borne by the Plan shall be paid by each Participating Employer in the
           same proportion that the total amount standing to the credit of all
           Participants employed by such Employer bears to the total standing to
           the credit of all Participants.

     12.03 DESIGNATION OF THE EMPLOYER AS AGENT. With respect to all of its
relations with the Funding Agent and Administrator for the purpose of this

                                     XII-1
<PAGE>
 
Plan, each Participating Employer shall be deemed to have designated irrevocably
the Employer as its agent. Unless the context of the Plan clearly indicates the
contrary, the word "Employer" shall be deemed to include each Participating
Employer as related to its adoption of the Plan.

     12.04 EMPLOYEE TRANSFERS. In the event an Employee transfers between
Participating Employers, the Employee involved shall carry with him his
accumulated Service and eligibility. No such transfer shall effect a termination
of employment hereunder, and the Participating Employer to which the Employee is
transferred shall thereupon become obligated hereunder with respect to such
Employee in the same manner as was the Participating Employer from whom the
Employee was transferred.

     12.05 PARTICIPATING EMPLOYER CONTRIBUTIONS. All contributions made by a
Participating Employer, as provided for in this Plan, shall be determined
separately by each Participating Employer, and shall be paid to and held by the
Funding Agent for the exclusive benefit of the Employees of such Participating
Employer and the Beneficiaries of such Employees, subject to all the terms and
conditions of this Plan. On the basis of the information furnished by the
Employer, the Committee shall keep separate books and records concerning the
affairs of each Participating Employer hereunder and as to the Accounts and
credits of the Employees of each Participating Employer.

     12.06 AMENDMENT. Amendment of this Plan by the Employer, at any time,
pursuant to Section 9.01, shall be deemed to be an amendment by each
Participating Employer, provided, however, that if such amendment affects the
individual duties or liabilities of any Participating Employer, such amendment
shall not be effective as to such Participating Employer until such
Participating Employer has submitted a properly executed document evidencing its
consent to such amendment.

                                     XII-2
<PAGE>
 
     12.07 PARTICIPATING EMPLOYER DISCONTINUANCE. Any Participating Employer
shall be permitted to discontinue or revoke its participation in the Plan. At
the time of any such discontinuance or revocation, satisfactory evidence thereof
and of any applicable conditions imposed shall be delivered to the Committee.
The Committee shall thereafter cause to be transferred, delivered and assigned
Plan assets allocable to the participants of such Participating Employer to such
new Funding Agent as shall have been designated by such Participating Employer.
If no successor is designated, the Committee shall retain such assets for the
Employees of said Participating Employer, pursuant to the provisions of the
Funding Instrument. In no such event shall any part of the corpus or income of
the Plan as it relates to such Participating Employer be used for or diverted
for purposes other than for the exclusive benefit of the Employees of such
Participating Employer, except as otherwise provided pursuant to Section 5.05.

     12.08 COMMITTEE AUTHORITY. The Committee shall have authority to make any
and all necessary rules or regulations binding upon all Participating Employers
and all Participants to effect the purposes of this Article XI.

                                     XII-3
<PAGE>
 
     IN WITNESS WHEREOF, the Employer has caused this Plan to be executed by its
duly authorized officers this 22nd day of December, 1994.


                                                 ___________________________
                                                   (Whittaker Corporation)
                    
                                       By:     /s/ Thomas A. Brancati
                                               ---------------------------------

                                       Title:  President
                                               ---------------------------------

                                       By:     /s/ Richard B. Levin
                                               ---------------------------------

                                       Title:  Chief Financial Officer
                                               ---------------------------------

Approved as to form:

/s/ Robert Hardy
---------------------------------

Jones, Day, Reavis & Pogue
--------------------------
Counsel for Employer

                                     XII-4
<PAGE>
 
     The undersigned business entities hereby join in the establishment of the
Whittaker Corporation Partnership Plan for Employees of



                                                Whittaker Controls, Inc.
                                                ------------------------
                                                  (Affiliated Employer)


                                       By:     /s/ Richard B. Levin
                                               ---------------------------------
                                                        President


                                       Attest: /s/ Gordon J. Louttit
                                               ---------------------------------
                                                        Secretary


(Corporate Seal)

                                             Whittaker Services Corporation
                                             ------------------------------
                                                  (Affiliated Employer)


                                       By:     /s/ Thomas A. Brancati
                                               ---------------------------------
                                                        President


                                       Attest: /s/ Gordon J. Louttit
                                               ---------------------------------
                                                        Secretary


(Corporate Seal)

                                            Whittaker Technical Products Inc.
                                            ---------------------------------
                                                  (Affiliated Employer)


                                       By:     /s/ Thomas A. Brancati
                                               ---------------------------------
                                                        President


                                       Attest: /s/ Gordon J. Louttit
                                               ---------------------------------
                                                        Secretary

(Corporate Seal)

                                     XII-5