Document:

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                                                                   Exhibit 10.03

                               DIAMOND FOODS, INC.
                        2005 EMPLOYEE STOCK PURCHASE PLAN

     1. ESTABLISHMENT OF PLAN. Diamond Foods, Inc., a Delaware corporation (the
"COMPANY") proposes to grant options for purchase of the Company's Common Stock
to eligible employees of the Company and its Participating Corporations (as
hereinafter defined) pursuant to this Employee Stock Purchase Plan (this
"PLAN"). For purposes of this Plan, "PARENT" and "SUBSIDIARY" shall have the
same meanings as "parent corporation" and "subsidiary corporation" in Sections
424(e) and 424(f), respectively, of the Internal Revenue Code of 1986, as
amended (the "CODE"). "PARTICIPATING CORPORATIONS" are the Company and any
Parents or Subsidiaries that the Board of Directors of the Company (the "BOARD")
designates from time to time as corporations that shall participate in this
Plan. The Company intends this Plan to qualify as an "employee stock purchase
plan" under Section 423 of the Code (including any amendments to or replacements
of such Section), and this Plan shall be so construed. Any term not expressly
defined in this Plan but defined for purposes of Section 423 of the Code shall
have the same definition herein. A total of four hundred thousand (400,000)
shares of the Company's Common Stock is reserved for issuance under this Plan.
The number of Shares available for grant and issuance under the Plan shall be
increased on the first day of each of the Company's fiscal years, commencing
with fiscal year 2007, by the lesser of: (i) one percent (1%) of the number of
Shares issued and outstanding on the last day of the immediately prior fiscal
year prior to the date of increase, and (ii) a lesser number of Shares
determined by the Board. However, the aggregate number of shares issued over the
term of this Plan shall not exceed four million (4,000,000) shares of the
Company's Common Stock (subject to adjustments effected in accordance with
Section 14 of this Plan).

     2. PURPOSE. The purpose of this Plan is to provide eligible employees of
the Company and Participating Corporations with a convenient means of acquiring
an equity interest in the Company through payroll deductions, to enhance such
employees' sense of participation in the affairs of the Company and
Participating Corporations, and to provide an incentive for continued
employment.

     3. ADMINISTRATION. This Plan shall be administered by the Compensation
Committee of the Board (the "COMMITTEE"). Subject to the provisions of this Plan
and the limitations of Section 423 of the Code or any successor provision in the
Code, all questions of interpretation or application of this Plan shall be
determined by the Committee and its decisions shall be final and binding upon
all participants. Members of the Committee shall receive no compensation for
their services in connection with the administration of this Plan, other than
standard fees as established from time to time by the Board for services
rendered by Board members serving on Board committees. All expenses incurred in
connection with the administration of this Plan shall be paid by the Company.

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     4. ELIGIBILITY. Any employee of the Company or the Participating
Corporations is eligible to participate in an Offering Period (as hereinafter
defined) under this Plan except the following:

          (a) employees who are not employed by the Company or a Participating
Subsidiary prior to the beginning of such Offering Period or prior to such other
time period as specified by the Committee, except that employees who are
employed on the Effective Date of the Registration Statement filed by the
Company with the Securities and Exchange Commission ("SEC") under the Securities
Act of 1933, as amended (the "SECURITIES ACT") registering the initial public
offering of the Company's Common Stock shall be eligible to participate in the
first Offering Period under the Plan;

          (b) employees who are customarily employed for twenty (20) hours or
less per week;

          (c) employees who are customarily employed for five (5) months or less
in a calendar year;

          (d) employees who have been an employee of the Company for less than
three (3) months prior to the first day of an offering period;

          (e) employees who, together with any other person whose stock would be
attributed to such employee pursuant to Section 424(d) of the Code, own stock or
hold options to purchase stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company or any of
its Participating Corporations or who, as a result of being granted an option
under this Plan with respect to such Offering Period, would own stock or hold
options to purchase stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company or any of
its Participating Corporations; and

          (f) individuals who provide services to the Company or any of its
Participating Corporations as independent contractors who are reclassified as
common law employees for any reason except for federal income and employment tax
purposes.

     5. OFFERING DATES. The offering periods of this Plan (each, an "OFFERING
PERIOD") shall be of twelve (12) months duration, commencing on December 1 and
June 1 of each year and respectively ending on November 30 and May 31 of each
year; provided, however, that the first such Offering Period shall commence on
the date shares of the Company's Common Stock are initially offered for sale to
the public by the Company's underwriters in the initial public offering of the
Company's Common Stock pursuant to a registration statement filed with the SEC
under the Securities Act (the "FIRST OFFERING DATE") and shall end on November
30, 2006 (the "FIRST OFFERING PERIOD"). Each Offering Period shall consist of
two (2) six-month purchase periods (individually, a "PURCHASE PERIOD") during
which payroll deductions of the participants are accumulated under this Plan.
The First Offering Period shall consist of no more than three (3) Purchase
Periods, any of which may be greater or less than six months as determined by
the

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Committee, but in no event shall the First Offering Period extend beyond
eighteen (18) months. The first business day of each Offering Period is referred
to as the "OFFERING DATE". The last business day of each Purchase Period is
referred to as the "PURCHASE DATE". The Committee shall have the power to change
the Offering Dates, the Purchase Dates and the duration of Offering Periods or
Purchase Periods without stockholder approval if such change is announced prior
to the relevant Offering Period or prior to such other time period as specified
by the Committee.

     6. PARTICIPATION IN THIS PLAN. Eligible employees may become participants
in an Offering Period under this Plan on the Offering Date after satisfying the
eligibility requirements by delivering a subscription agreement to the Company
prior to such Offering Date, or such other time period as specified by the
Committee; PROVIDED, HOWEVER, that all eligible employees employed on or before
the First Offering Date will be automatically enrolled in the First Offering
Period. Notwithstanding the foregoing, (i) an eligible employee may elect to
decrease the number of shares of Common Stock that such employee would otherwise
be permitted to purchase pursuant to Section 7 below for the First Offering
Period and/or purchase shares of Common Stock for the First Offering Period
through payroll deductions by delivering a subscription agreement to the Company
within thirty (30) days following the First Offering Date after the filing of an
effective registration statement pursuant to Form S-8 and (ii) the Committee may
set a later time for filing the subscription agreement authorizing payroll
deductions for all eligible employees with respect to a given Offering Period.
Except as provided above with respect to the First Offering Period, an eligible
employee who does not deliver a subscription agreement to the Company after
becoming eligible to participate in an Offering Period shall not participate in
that Offering Period or any subsequent Offering Period unless such employee
enrolls in this Plan by filing a subscription agreement with the Company prior
to such Offering Period, or such other time period as specified by the
Committee. Once an employee becomes a participant in an Offering Period by
filing a subscription agreement, such employee will automatically participate in
the Offering Period commencing immediately following the last day of the prior
Offering Period unless the employee withdraws or is deemed to withdraw from this
Plan or terminates further participation in the Offering Period as set forth in
Section 11 below. Such participant is not required to file any additional
subscription agreement in order to continue participation in this Plan.

     7. GRANT OF OPTION ON ENROLLMENT. Enrollment by an eligible employee in
this Plan with respect to an Offering Period will constitute the grant (as of
the Offering Date) by the Company to such employee of an option to purchase on
the Purchase Date up to that number of shares of Common Stock of the Company
determined by a fraction, the numerator of which is the amount accumulated in
such employee's payroll deduction account during such Purchase Period and the
denominator of which is the lower of (i) eighty-five percent (85%) of the fair
market value of a share of the Company's Common Stock on the Offering Date (but
in no event less than the par value of a share of the Company's Common Stock),
or (ii) eighty-five percent (85%) of the fair market value of a share of the
Company's Common Stock on the Purchase Date (but in no event less than the par
value of a share of the Company's Common Stock), PROVIDED, HOWEVER, that for
each Purchase Period within the First Offering Period the numerator shall be
fifteen percent (15%) of the eligible employee's compensation for such Purchase
Period

                                       -3-

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and PROVIDED, FURTHER, that the number of shares of the Company's Common Stock
subject to any option granted pursuant to this Plan shall not exceed the lesser
of (x) the maximum number of shares set by the Committee pursuant to Section
10(c) below with respect to the applicable Purchase Date, or (y) the maximum
number of shares which may be purchased pursuant to Section 10(b) below with
respect to the applicable Purchase Date. The fair market value of a share of the
Company's Common Stock shall be determined as provided in Section 8 below.

     8. PURCHASE PRICE. The purchase price per share at which a share of Common
Stock will be sold in any Offering Period shall be eighty-five percent (85%) of
the lesser of:

          (a) The fair market value on the Offering Date; or

          (b) The fair market value on the Purchase Date.

     The term "FAIR MARKET VALUE" means, as of any date, the value of a share of
the Company's Common Stock determined as follows:

          (a) if such Common Stock is then quoted on the Nasdaq National Market,
its closing price on the Nasdaq National Market on the date of determination as
reported in The Wall Street Journal;

          (b) if such Common Stock is publicly traded and is then listed on a
national securities exchange, its closing price on the date of determination on
the principal national securities exchange on which the Common Stock is listed
or admitted to trading as reported in The Wall Street Journal; or

          (c) if such Common Stock is publicly traded but is not quoted on the
Nasdaq National Market nor listed or admitted to trading on a national
securities exchange, the average of the closing bid and asked prices on the date
of determination as reported in The Wall Street Journal.

Notwithstanding the foregoing, for purposes of the First Offering Date, fair
market value shall be the price per share at which shares of the Company's
Common Stock are initially offered for sale to the public by the Company's
underwriters in the initial public offering of the Company's Common Stock
pursuant to a registration statement filed with the SEC under the Securities
Act.

     9. PAYMENT OF PURCHASE PRICE; CHANGES IN PAYROLL DEDUCTIONS; ISSUANCE OF
SHARES.

          (a) The purchase price of the shares is accumulated by regular payroll
deductions made during each Offering Period, PROVIDED, HOWEVER, that for the
First Offering Period the purchase price of the shares shall be paid by the
eligible employee in cash on each Purchase Date within the First Offering Period
unless the eligible employee elects to purchase such shares through payroll
deductions after the filing of an effective Form S-8 registration statement
pursuant to the second sentence of Section 6 above within thirty (30) days
following the First Offering Period. The deductions are made as a percentage of
the participant's

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compensation in one percent (1%) increments not less than one percent (1%), nor
greater than fifteen percent (15%) or such lower limit set by the Committee.
Compensation shall mean all W-2 cash compensation, including, but not limited
to, base salary, wages, commissions, overtime, shift premiums, bonuses and
incentive compensation, plus draws against commissions, PROVIDED, HOWEVER, that
for purposes of determining a participant's compensation, any election by such
participant to reduce his or her regular cash remuneration under Sections 125 or
401(k) of the Code shall be treated as if the participant did not make such
election. Payroll deductions shall commence on the first payday of the Offering
Period and shall continue to the end of the Offering Period unless sooner
altered or terminated as provided in this Plan.

          (b) A participant may increase or decrease the rate of payroll
deductions during an Offering Period by filing with the Company a new
authorization for payroll deductions, in which case the new rate shall become
effective for the next payroll period commencing after the Company's receipt of
the authorization and shall continue for the remainder of the Offering Period
unless changed as described below. Such change in the rate of payroll deductions
may be made at any time during an Offering Period, but not more than one (1)
change may be made effective during any Purchase Period. A participant may
increase or decrease the rate of payroll deductions for any subsequent Offering
Period by filing with the Company a new authorization for payroll deductions
prior to the beginning of such Offering Period, or such other time period as
specified by the Committee.

          (c) A participant may reduce his or her payroll deduction percentage
to zero during an Offering Period by filing with the Company a request for
cessation of payroll deductions. Such reduction shall be effective beginning
with the next payroll period after the Company's receipt of the request and no
further payroll deductions will be made for the duration of the Offering Period.
Payroll deductions credited to the participant's account prior to the effective
date of the request shall be used to purchase shares of Common Stock of the
Company in accordance with Section (e) below. A participant may not resume
making payroll deductions during the Offering Period in which he or she reduced
his or her payroll deductions to zero.

          (d) All payroll deductions made for a participant are credited to his
or her account under this Plan and are deposited with the general funds of the
Company. No interest accrues on the payroll deductions. All payroll deductions
received or held by the Company may be used by the Company for any corporate
purpose, and the Company shall not be obligated to segregate such payroll
deductions.

          (e) On each Purchase Date, so long as this Plan remains in effect and
provided that the participant has not submitted a signed and completed
withdrawal form before that date which notifies the Company that the participant
wishes to withdraw from that Offering Period under this Plan and have all
payroll deductions accumulated in the account maintained on behalf of the
participant as of that date returned to the participant, the Company shall apply
the funds then in the participant's account to the purchase of whole shares of
Common Stock reserved under the option granted to such participant with respect
to the Offering Period to the extent that such option is exercisable on the
Purchase Date. The purchase price per share shall be as specified in Section 8
of this Plan. Any cash remaining in a participant's account after such

                                       -5-

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purchase of shares shall be refunded to such participant in cash, without
interest; provided, however that any amount remaining in such participant's
account on a Purchase Date which is less than the amount necessary to purchase a
full share of the Company shall be carried forward, without interest, into the
next Purchase Period or Offering Period, as the case may be. In the event that
this Plan has been oversubscribed, all funds not used to purchase shares on the
Purchase Date shall be returned to the participant, without interest. No Common
Stock shall be purchased on a Purchase Date on behalf of any employee whose
participation in this Plan has terminated prior to such Purchase Date.

          (f) As promptly as practicable after the Purchase Date, the Company
shall issue shares for the participant's benefit representing the shares
purchased upon exercise of his or her option.

          (g) During a participant's lifetime, his or her option to purchase
shares hereunder is exercisable only by him or her. The participant will have no
interest or voting right in shares covered by his or her option until such
option has been exercised.

     10. LIMITATIONS ON SHARES TO BE PURCHASED.

          (a) No participant shall be entitled to purchase stock under this Plan
at a rate which, when aggregated with participant's rights to purchase stock
under all other employee stock purchase plans of the Company or any Subsidiary,
exceeds $25,000 in fair market value, determined as of the Offering Date (or
such other limit as may be imposed by the Code) for each calendar year in which
the employee participates in this Plan. The Company shall automatically suspend
the payroll deductions of any participant as necessary to enforce such limit
provided that when the Company automatically resumes such payroll deductions,
the Company must apply the rate in effect immediately prior to such suspension.

          (b) The Committee may, in its sole discretion, set a new maximum
number of shares which may be purchased by any employee at any single Purchase
Date (hereinafter the "MAXIMUM SHARE AMOUNT"), which shall then be the Maximum
Share Amount for subsequent Offering Periods. If a new Maximum Share Amount is
set, then all participants must be notified of such Maximum Share Amount prior
to the commencement of the next Offering Period for which it is to be effective.
The Maximum Share Amount shall continue to apply with respect to all succeeding
Purchase Dates and Offering Periods unless revised by the Committee as set forth
above.

          (c) If the number of shares to be purchased on a Purchase Date by all
employees participating in this Plan exceeds the number of shares then available
for issuance under this Plan, then the Company will make a pro rata allocation
of the remaining shares in as uniform a manner as shall be reasonably
practicable and as the Committee shall determine to be equitable. In such event,
the Company shall give written notice of such reduction of the number of shares
to be purchased under a participant's option to each participant affected.

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          (d) Any payroll deductions accumulated in a participant's account
which are not used to purchase stock due to the limitations in this Section 10
shall be returned to the participant as soon as practicable after the end of the
applicable Purchase Period, without interest.

     11. WITHDRAWAL.

          (a) Each participant may withdraw from an Offering Period under this
Plan by signing and delivering to the Company a written notice to that effect on
a form provided for such purpose. Such withdrawal may be elected at any time
prior to the end of an Offering Period, or such other time period as specified
by the Committee.

          (b) Upon withdrawal from this Plan, the accumulated payroll deductions
shall be returned to the withdrawn participant, without interest, and his or her
interest in this Plan shall terminate. In the event a participant voluntarily
elects to withdraw from this Plan, he or she may not resume his or her
participation in this Plan during the same Offering Period, but he or she may
participate in any Offering Period under this Plan which commences on a date
subsequent to such withdrawal by filing a new authorization for payroll
deductions in the same manner as set forth in Section 6 above for initial
participation in this Plan.

          (c) If the Fair Market Value on the first day of the current Offering
Period in which a participant is enrolled is higher than the Fair Market Value
on the first day of any subsequent Offering Period, the Company will
automatically enroll such participant in the subsequent Offering Period. Any
funds accumulated in a participant's account prior to the first day of such
subsequent Offering Period will be applied to the purchase of shares on the
Purchase Date immediately prior to the first day of such subsequent Offering
Period, if any.

     12. TERMINATION OF EMPLOYMENT. Termination of a participant's employment
for any reason, including retirement, death or the failure of a participant to
remain an eligible employee of the Company or of a Participating Subsidiary,
immediately terminates his or her participation in this Plan. In such event, the
payroll deductions credited to the participant's account will be returned to him
or her or, in the case of his or her death, to his or her legal representative,
without interest. For purposes of this Section 12, an employee will not be
deemed to have terminated employment or failed to remain in the continuous
employ of the Company or of a Participating Subsidiary in the case of sick
leave, military leave, or any other leave of absence approved by the Board;
provided that such leave is for a period of not more than ninety (90) days or
reemployment upon the expiration of such leave is guaranteed by contract or
statute.

     13. RETURN OF PAYROLL DEDUCTIONS. In the event a participant's interest in
this Plan is terminated by withdrawal, termination of employment or otherwise,
or in the event this Plan is terminated by the Board, the Company shall deliver
to the participant all payroll deductions credited to such participant's
account. No interest shall accrue on the payroll deductions of a participant in
this Plan.

                                       -7-

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     14. CAPITAL CHANGES.

          (a) Subject to any required action by the stockholders of the Company,
the number of shares of Common Stock covered by each option under this Plan
which has not yet been exercised and the number of shares of Common Stock which
have been authorized for issuance under this Plan but have not yet been placed
under option (collectively, the "RESERVES"), as well as the price per share of
Common Stock covered by each option under this Plan which has not yet been
exercised, and the Maximum Share Amount, shall be proportionately adjusted for
any increase or decrease in the number of issued and outstanding shares of
Common Stock of the Company resulting from a stock split or the payment of a
stock dividend (but only on the Common Stock) or any other increase or decrease
in the number of issued and outstanding shares of Common Stock effected without
receipt of any consideration by the Company; provided, however, that conversion
of any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration". Such adjustment shall be made by
the Committee, whose determination shall be final, binding and conclusive.
Except as expressly provided herein, no issue by the Company of shares of stock
of any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock subject to an option.

          (b) In the event of the proposed dissolution or liquidation of the
Company, the Offering Period will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the
Committee. The Committee may, in the exercise of its sole discretion in such
instances, declare that this Plan shall terminate as of a date fixed by the
Committee and give each participant the right to purchase shares under this Plan
prior to such termination.

          (c) In the event of (i) a merger or consolidation in which the Company
is not the surviving corporation (other than a merger or consolidation with a
wholly-owned subsidiary, a reincorporation of the Company in a different
jurisdiction, or other transaction in which there is no substantial change in
the stockholders of the Company or their relative stock holdings and the options
under this Plan are assumed, converted or replaced by the successor corporation,
which assumption will be binding on all participants), (ii) a merger in which
the Company is the surviving corporation but after which the stockholders of the
Company immediately prior to such merger (other than any stockholder that
merges, or which owns or controls another corporation that merges, with the
Company in such merger) cease to own their shares or other equity interest in
the Company, (iii) the sale of all or substantially all of the assets of the
Company or (iv) the acquisition, sale, or transfer of more than 50% of the
outstanding shares of the Company by tender offer or similar transaction, the
Plan will terminate upon the effective date of such transaction and any funds in
a Participant's account as of such date will be used to purchase shares of the
Company on such date, unless otherwise provided by the Committee.

          (d) The Committee may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per share of Common Stock covered by each outstanding option, in the event that
the Company effects one or

                                       -8-

<PAGE>

more reorganizations, recapitalizations, rights offerings or other increases or
reductions of shares of its outstanding Common Stock, or in the event of the
Company being consolidated with or merged into any other corporation.

     15. NONASSIGNABILITY. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under this Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 22 below) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be void and
without effect.

     16. REPORTS. Individual accounts will be maintained for each participant in
this Plan. Each participant shall receive promptly after the end of each
Purchase Period a report of his or her account setting forth the total payroll
deductions accumulated, the number of shares purchased, the per share price
thereof and the remaining cash balance, if any, carried forward to the next
Purchase Period or Offering Period, as the case may be.

     17. NOTICE OF DISPOSITION. Each participant shall notify the Company in
writing if the participant disposes of any of the shares purchased in any
Offering Period pursuant to this Plan if such disposition occurs within two (2)
years from the Offering Date or within one (1) year from the Purchase Date on
which such shares were purchased (the "NOTICE PERIOD"). The Company may, at any
time during the Notice Period, place a legend or legends on any certificate
representing shares acquired pursuant to this Plan requesting the Company's
transfer agent to notify the Company of any transfer of the shares. The
obligation of the participant to provide such notice shall continue
notwithstanding the placement of any such legend on the certificates.

     18. NO RIGHTS TO CONTINUED EMPLOYMENT. Neither this Plan nor the grant of
any option hereunder shall confer any right on any employee to remain in the
employ of the Company or any Participating Subsidiary, or restrict the right of
the Company or any Participating Subsidiary to terminate such employee's
employment.

     19. EQUAL RIGHTS AND PRIVILEGES. All eligible employees shall have equal
rights and privileges with respect to this Plan so that this Plan qualifies as
an "employee stock purchase plan" within the meaning of Section 423 or any
successor provision of the Code and the related regulations. Any provision of
this Plan which is inconsistent with Section 423 or any successor provision of
the Code shall, without further act or amendment by the Company, the Committee
or the Board, be reformed to comply with the requirements of Section 423. This
Section 19 shall take precedence over all other provisions in this Plan.

     20. NOTICES. All notices or other communications by a participant to the
Company under or in connection with this Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.

     21. TERM; STOCKHOLDER APPROVAL. After this Plan is adopted by the Board,
this Plan will become effective on the First Offering Date (as defined above).
This Plan shall be approved

                                       -9-

<PAGE>

by the stockholders of the Company, in any manner permitted by applicable
corporate law, within twelve (12) months before or after the date this Plan is
adopted by the Board. No purchase of shares pursuant to this Plan shall occur
prior to such stockholder approval. This Plan shall continue until the earlier
to occur of (a) termination of this Plan by the Board (which termination may be
effected by the Board at any time), (b) issuance of all of the shares of Common
Stock reserved for issuance under this Plan, or (c) ten (10) years from the
adoption of this Plan by the Board.

     22. DESIGNATION OF BENEFICIARY.

          (a) A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account under
this Plan in the event of such participant's death subsequent to the end of an
Purchase Period but prior to delivery to him of such shares and cash. In
addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant's account under this Plan in the event
of such participant's death prior to a Purchase Date.

          (b) Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant and in
the absence of a beneficiary validly designated under this Plan who is living at
the time of such participant's death, the Company shall deliver such shares or
cash to the executor or administrator of the estate of the participant, or if no
such executor or administrator has been appointed (to the knowledge of the
Company), the Company, in its discretion, may deliver such shares or cash to the
spouse or to any one or more dependents or relatives of the participant, or if
no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.

     23. CONDITIONS UPON ISSUANCE OF SHARES; LIMITATION ON SALE OF SHARES.
Shares shall not be issued with respect to an option unless the exercise of such
option and the issuance and delivery of such shares pursuant thereto shall
comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange or automated quotation system upon which the shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.

     24. APPLICABLE LAW. The Plan shall be governed by the substantive laws
(excluding the conflict of laws rules) of the State of California.

     25. AMENDMENT OR TERMINATION OF THIS PLAN. The Plan shall terminate on the
tenth anniversary of the First Offering Date. The Board may at any time amend,
terminate or extend the term of this Plan, except that any such termination
cannot affect options previously granted under this Plan other than to advance
the final Purchase Date under any Offering Period, nor may any amendment make
any change in an option previously granted which would adversely affect the
right of any participant, nor may any amendment be made without approval of the

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<PAGE>

stockholders of the Company obtained in accordance with Section 21 above within
twelve (12) months of the adoption of such amendment (or earlier if required by
Section 21) if such amendment would:

          (a) increase the number of shares that may be issued under this Plan;
or

          (b) change the designation of the employees (or class of employees)
eligible for participation in this Plan; or

          (c) extend the term of the Plan.

Notwithstanding the foregoing, the Board may make such amendments to the Plan
(including, without limitation, termination of the Plan and any Offering Period)
as the Board determines to be advisable, if the continuation of the Plan or any
Offering Period would result in financial accounting treatment for the Plan that
is different from the financial accounting treatment in effect on the date this
Plan is adopted by the Board.

                                      -11-
<PAGE>

DIAMOND FOODS, INC.
2005 EMPLOYEE STOCK PURCHASE PLAN ("ESPP")                ENROLLMENT/CHANGE FORM

<TABLE>
<S>                        <C>                                        <C>                        <C>
SECTION 1:                 CHECK DESIRED ACTION:                      AND COMPLETE SECTIONS:

ACTIONS                    [ ]      Enroll in the ESPP                2 + 3 + 4 + 6
                           [ ]      Change Contribution Percentage    2 + 4 + 6
                           [ ]      Discontinue Contributions         2 + 5 + 6

SECTION 2:                 Name: ______________________________________________                  Department:

PERSONAL DATA              Home Address: ______________________________________                  ______________

                           Social Security No.: [ ][ ][ ]-[ ][ ]-[ ][ ][ ][ ]

SECTION 3:                 I hereby elect to participate in the ESPP, effective
                           at the beginning of the next Offering Period. I elect
ENROLL                     to purchase shares of the Common Stock of Diamond
                           Foods, Inc. (the "Company") pursuant to the ESPP. I
                           understand that the stock certificate(s) for the
                           shares purchased on my behalf will be issued in
                           street name and deposited directly into my brokerage
                           account. I hereby agree to establish an account with
                           [____________] for this purpose and to sign all
                           required forms.

                           My participation will continue as long as I remain
                           eligible, unless I withdraw from the ESPP by filing a
                           new Enrollment/Change Form with the Company. I
                           understand that I must notify the Company of any
                           disposition of shares purchased under the ESPP.

SECTION 4:                 I hereby authorize the Company to withhold ___% of my
                           compensation (as defined in the ESPP) from each of my
                           paychecks as long as I continue to participate in the
ELECT CONTRIBUTION         ESPP. That amount will be applied to the purchase of
PERCENTAGE                 shares of the Company's Common Stock pursuant to the
                           ESPP. THE PERCENTAGE MUST BE A WHOLE NUMBER (FROM 1%,
                           UP TO A MAXIMUM OF 15%).

                           NOTE:    You may change your contribution percentage
                                    up to two times within a Contribution
                                    Period. Each change will become effective as
                                    soon as reasonably practicable after the
                                    form is received by the Company.

SECTION 5:                 I hereby elect to stop my contributions under the
                           ESPP, effective as soon as reasonably practicable
                           after this form is received by the Company. The
DISCONTINUE                contributions that I have made to date during this
CONTRIBUTIONS              Contribution Period should be applied as follows:

                           [ ]      Purchase shares of the Company's Common
                                    Stock at the end of the period.

                           [ ]      Refund all contributions to me in cash,
                                    without interest. I UNDERSTAND THAT I CANNOT
                                    RESUME PARTICIPATION UNTIL THE START OF THE
                                    NEXT OFFERING PERIOD.

SECTION 6:                 I acknowledge that I have received a copy of the
                           Prospectus summarizing the major features of the
ACKNOWLEDGMENT AND         ESPP. I have read the Prospectus and this form and
SIGNATURE                  hereby agree to be bound by the terms of the ESPP.

                           Signature:_______________________     Date:__________
</TABLE><PAGE>
                                                                   Exhibit 10.04

                              DIAMOND OF CALIFORNIA

                                   401(k) PLAN

                          Effective Date: April 1, 2001
<PAGE>
                                                                               .
                                                                               .
                                                                               .
                              DIAMOND OF CALIFORNIA

                                   401(K) PLAN

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
Plan Restatement.........................................................     1
Statement of Purpose.....................................................     1
ARTICLE I DEFINITIONS....................................................     2
   1.1    Account:.......................................................     2
   1.2    Account Balance:...............................................     2
   1.3    Actual Contribution Ratio:.....................................     3
   1.4    Average Contribution Percentage:...............................     4
   1.5    Average Contribution Percentage Test:..........................     4
   1.6    Actual Deferral Ratio:.........................................     4
   1.7    Affiliated Company:............................................     5
   1.8    Alternate Payee:...............................................     5
   1.9    Annual Addition:...............................................     5
   1.10   Average Deferral Percentage:...................................     6
   1.11   Average Deferral Percentage Test:..............................     6
   1.12   Beneficiary:...................................................     6
   1.13   Benefit Commencement Date:.....................................     6
   1.14   Board:.........................................................     7
   1.15   Code:..........................................................     7
   1.16   Committee:.....................................................     7
   1.17   Company:.......................................................     7
   1.18   Compensation:..................................................     7
   1.19   Contract:......................................................     9
   1.20   Disability:....................................................     9
   1.21   Early Retirement Date:.........................................     9
   1.22   Effective Date:................................................     9
   1.23   Eligible Compensation:.........................................     9
   1.24   Eligible Employee:.............................................     9
   1.25   Employee:......................................................    10
</TABLE>

                                      -i-
<PAGE>
                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
   1.26   Employment Date:...............................................    11
   1.27   Entry Date:....................................................    11
   1.28   ERISA:.........................................................    11
   1.29   Excess Aggregate Contributions:................................    11
   1.30   Excess Contributions:..........................................    11
   1.31   Former Participant:............................................    11
   1.32   Funding Agent:.................................................    12
   1.33   Highly Compensated Employee:...................................    12
   1.34   Highly Compensated Participant:................................    12
   1.35   Hour of Service:...............................................    12
   1.36   Inactive Participant:..........................................    14
   1.37   Investment Fund:...............................................    14
   1.38   Leased Employee:...............................................    14
   1.39   Limitation Year:...............................................    15
   1.40   Match Account:.................................................    15
   1.41   Matching Contributions:........................................    15
   1.42   Non-Highly Compensated Participant:............................    15
   1.43   Normal Retirement Date:........................................    15
   1.44   Officer:.......................................................    15
   1.45   Owner:.........................................................    16
   1.46   Participant:...................................................    16
   1.47   Participating Company:.........................................    16
   1.48   Plan:..........................................................    16
   1.49   Plan Manager:..................................................    16
   1.50   Plan Year:.....................................................    16
   1.51   Reemployment Date:.............................................    17
   1.52   Retirement Date:...............................................    17
   1.53   Rollover Account:..............................................    17
</TABLE>

                                      -ii-
<PAGE>
                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
   1.54   Rollover Contributions:........................................    17
   1.55   Salary Deferral:...............................................    17
   1.56   Salary Deferral Account:.......................................    17
   1.57   Separation from Service Date:..................................    17
   1.58   Spousal Consent:...............................................    17
   1.59   Spouse:........................................................    18
   1.60   Supplemental Contributions:....................................    18
   1.61   Supplemental Account:..........................................    18
   1.62   Top Paid Group:................................................    18
   1.63   Trustee:.......................................................    19
   1.64   Trust Fund:....................................................    19
   1.65   Valuation Date:................................................    19
   1.66   Year of Service:...............................................    20

ARTICLE II PARTICIPATION.................................................    20
   2.1    Plan Participation Requirements:...............................    20
   2.2    Special Transferred Participants:..............................    20
   2.3    Loss of Participant Status:....................................    20
   2.4    Change in Employment Status:...................................    21
   2.5    Rehire of Former Participant:..................................    21
   2.6    Rehire of Former Employee:.....................................    22

ARTICLE III CONTRIBUTIONS................................................    22
   3.1    Salary Deferrals:..............................................    22
   3.2    Timing of Salary Deferrals:....................................    23
   3.3    Return of Salary Deferrals to the Company:.....................    23
   3.4    Matching Contributions:........................................    24
   3.5    Supplemental Contributions:....................................    25
   3.6    Rollovers from Other Qualified Plans:..........................    25
   3.7    Date of Contributions:.........................................    26
</TABLE>

                                     -iii-
<PAGE>
                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
   3.8    Discrimination Test Requirements:..............................    26
   3.9    Adjustment of Salary Deferrals and Matching Contributions:.....    29

ARTICLE IV PARTICIPANT'S CREDIT IN THE TRUST FUND........................    33
   4.1    Accounts:......................................................    33
   4.2    Maximum Annual Addition:.......................................    34
   4.3    Investment Options.............................................    35
   4.4    Participant Directed Investments...............................    35
   4.5    Transfers Between Investment Funds.............................    36
   4.6    Valuation of Funds and Allocation of Earnings..................    36
   4.7    Committee Action in the Event a Recipient Cannot Be Located:...    36

ARTICLE V PAYMENT OF BENEFITS............................................    37
   5.1    Amount of Distribution from Participant's Accounts:............    37
   5.2    Vesting:.......................................................    38
   5.3    Form of Distribution:..........................................    38
   5.4    Timing of Distributions:.......................................    38
   5.5    Rehire of Former Participant:..................................    40
   5.6    Hardship Withdrawals of Salary Deferrals:......................    40
   5.7    Withdrawals of Matching Contributions:.........................    43
   5.8    Withdrawals of Rollover Contributions:.........................    43
   5.9    Withdrawals After Attaining Age Fifty-Nine and One-Half
             (59-1/2) ...................................................    43
   5.10   Allocation Among Trust Funds:..................................    43
   5.11   Direct Rollover of Eligible Rollover Distributions:............    43

ARTICLE VI DESIGNATION OF BENEFICIARY....................................    45
   6.1    General:.......................................................    45
   6.2    Absence of Proper Designation:.................................    45
   6.3    Consent of Spouse:.............................................    46
   6.4    Authentication:................................................    46

ARTICLE VII COMMITTEE....................................................    46
</TABLE>

                                      -iv-
<PAGE>
                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
   7.1    Designation of Committee Members:..............................    46
   7.2    Transaction of Committee Business:.............................    46
   7.3    Delegation to Act on Behalf of the Committee:..................    47
   7.4    Compensation of Committee Members:.............................    47
   7.5    Disqualification of Committee Member:..........................    47
   7.6    Powers and Duties of Committee in Administering the Plan:......    48
   7.7    Powers and Duties of the Committee with Respect to the Trust
             Fund:.......................................................    49
   7.8    Responsibility for Distributions from the Trust Fund:..........    49
   7.9    Claims Procedure:..............................................    50
   7.10   Procedure for Qualified Domestic Relations Orders:.............    52
   7.11   Fiduciaries:...................................................    53
   7.12   Indemnification:...............................................    54

ARTICLE VIII RIGHTS UNDER THE PLAN.......................................    54
   8.1    Right to Plan Benefits:........................................    54
   8.2    Employment Rights under the Plan:..............................    54
   8.3    Assignment of Rights:..........................................    54
   8.4    Veterans Reemployment Rights...................................    55
   8.5    Incompetency:..................................................    55

ARTICLE IX AMENDMENT OF PLAN.............................................    55
   9.1    Right to Amend Plan:...........................................    55
   9.2    Protection of Participants' Rights:............................    55
   9.3    Mergers, Consolidations and Transfers:.........................    56

ARTICLE X TERMINATION OF PLAN............................................    56
   10.1   General:.......................................................    56
   10.2   Distribution:..................................................    56

ARTICLE XI CONSTRUCTION AND ENFORCEMENT OF PLAN..........................    57
   11.1   Governing Legal Entity:........................................    57
   11.2   Text to Control:...............................................    57
</TABLE>

                                      -v-
<PAGE>
                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
   11.3   Gender:........................................................    57
   11.4   Severability:..................................................    57
   11.5   Liability:.....................................................    58

ARTICLE XII TOP HEAVY PLAN...............................................    58
   12.1   Precedence of Section:.........................................    58
   12.2   Definitions:...................................................    58
   12.3   Determination of Top Heavy Plan:...............................    60
   12.4   Vesting in Top Heavy Plan Year:................................    61
   12.5   Minimum Benefit Under Top Heavy Plan:..........................    61
   12.6   Two or More Plans:.............................................    62

ARTICLE XIII LOANS.......................................................    62
   13.1   General:.......................................................    62
   13.2   Amount of Loan:................................................    64
   13.3   Default:.......................................................    64
</TABLE>

                                      -vi-
<PAGE>
                              DIAMOND OF CALIFORNIA
                                   401(k) PLAN

                                   ----------

                                Plan Restatement

Diamond Walnut Growers, Inc. (AKA Diamond of California, the "Company")
established the Diamond of California 401(k) Plan effective August 1, 2000 (the
"Plan"), for the benefit of its eligible employees and the eligible employees of
Participating Companies. Before August 1, 2000, the Company was one of the
participating companies in the Sun-Diamond Growers of California Employee
Retirement Savings Plan, which was initially established effective August 1,
1987. The Sun-Diamond Growers of California Employee Retirement Savings Plan
account balances of employees of the Company and Participating Companies were
transferred to the Plan effective August 1, 2000.

The Plan is restated in its entirety effective April 1, 2001. The purpose of the
restatement is to amend the Plan to provide for a discretionary matching
contribution and to add an age 21 and service eligibility requirements for all
temporary, seasonal and project Employees.

                              Statement of Purpose

The Company intends to operate the Plan and Trust for the purpose of enabling
Eligible Employees of the Company and their Beneficiaries to provide for their
retirement income requirements. The Plan is intended to qualify under Code
Section 401(a) as a profit sharing plan with a qualified cash or deferred
arrangement that satisfies Code Section 401(k) and is funded by a trust intended
to be exempt from tax under Code Section 501(a).

Except as otherwise stated, the provisions of the Plan as amended and restated
shall not apply to the benefits payable to or on account of an employee who
retired or whose employment with the Company or any adopting employer terminated
before April I, 2001. The rights and benefits of such an employee shall be
determined under the Plan as in effect when the employee retired or terminated
employment.

                                        1
<PAGE>
Moreover, notwithstanding any provision of this Plan to the contrary, no benefit
accrued under the Plan and protected under Code Section 411(d)(6) and
regulations thereunder, shall be reduced or eliminated by this Plan or any
subsequent amendment except as permitted by law.

                              DIAMOND OF CALIFORNIA
                                   401(k) PLAN

Diamond Walnut Growers, Inc. hereby restates and amends in its entirety the
Diamond of California 401(k) Plan effective April 1, 2001 (the "Plan").

                                    ARTICLE I

                                   DEFINITIONS

The following terms, whenever used in the Plan and capitalized shall have the
meanings set forth below, unless a different meaning is plainly required by the
context.

1.1  Account:

     "Account" means the record(s) maintained to record a Participant's (or
     Former Participant's, Inactive Participant's, Beneficiary's or Alternate
     Payee's) interest in the Plan. Each Participant's Account may include:

     (a)  Salary Deferral Account

     (b)  Matching Account

     (c)  Supplemental Account

     (d)  Rollover Account

     (e)  Loan Account

1.2  Account Balance:

     "Account Balance" means, as of any date, the amount credited to an Account
     of an individual as of the Valuation Date coincident with or immediately
     preceding such date plus any contributions and minus any distributions made
     therefrom since such Valuation Date.

                                        2
<PAGE>
1.3  Actual Contribution Ratio:

     "Actual Contribution Ratio" means the percentage (calculated to the nearest
     one-hundredth of one percent (0.01%)) obtained with respect to each Highly
     Compensated Participant and each Non-Highly Compensated Participant by
     dividing (a) by (b), where (a) and (b) are defined as follows:

     (a)  Matching Contributions:

          (1)  Matching Contributions (as described in Section 3.4) made on
               behalf of such individual during the Plan Year, plus,

          (2)  Where such individual is a Highly Compensated Participant, any
               matching contributions and after tax contributions subject to
               Code Section 401(m) made on behalf of such individual to such
               plan maintained by an Affiliated Company, plus

          (3)  Where applicable, any qualified non-elective contributions or
               qualified matching contributions made on behalf of such
               individual under any other plan of an Affiliated Company that is
               aggregated with the Plan in order to meet the requirements of
               Code Section 401(a)(4) or 410(b) (other than Code Section
               410(b)(2)(A)(ii)), plus,

          (4)  If elected by the Committee, elective contributions, qualified
               non-elective contributions or qualified matching contributions
               made by or on behalf of such individual under any other cash or
               deferred arrangement maintained by an Affiliated Company;
               provided that such combined arrangement (and the plans of which
               it is a part) satisfies the requirements of Code Section
               401(a)(4) and 410(b).

     (b)  Compensation:

          The  Compensation earned by such individual for the Plan Year.

                                        3
<PAGE>
1.4  Average Contribution Percentage:

     "Average Contribution Percentage" means, for the group of Highly
     Compensated Participants and separately, for the group of Non-Highly
     Compensated Participants, the average of the Actual Contribution Ratios.

1.5  Average Contribution Percentage Test:

     "Average Contribution Percentage Test" means the test described in Section
     3.8 of the Plan.

1.6  Actual Deferral Ratio:

     "Actual Deferral Ratio" means the percentage obtained with respect to each
     Highly Compensated Participant and each Non-Highly Compensated Participant
     (calculated to the nearest one-hundredth of one percent (0.01%)) by
     dividing (a) by (b), where (a) and (b) are defined as follows:

     (a)  Salary Deferrals:

          (1)  Salary Deferrals made by such individual during the Plan Year (as
               described in Section 3.1), plus,

          (2)  Where such individual is a Highly Compensated Participant, any
               salary reduction or salary deferral contributions subject to Code
               Section 401(k) made on behalf of such individual to any plan
               maintained by an Affiliated Company, plus,

          (3)  Where applicable, any salary reduction contributions, salary
               deferral contributions, qualified non-elective contributions or
               qualified matching contributions made by such individual under
               any other plan of an Affiliated Company that is aggregated with
               the Plan in order to meet the requirements of Code Section
               401(a)(4) or 410(b) (other than Code Section 410(b)(2)(A)(ii)),
               plus,

          (4)  If elected by the Committee, elective contributions, qualified
               non-elective contributions or qualified matching contributions
               made by or on behalf of

                                        4
<PAGE>
               such individual under any other cash or deferred arrangement
               maintained by an Affiliated Company; provided that such combined
               arrangement (and the plans of which it is a part) satisfies the
               requirements of Code Section 401(a)(4) and 410(b).

     (b)  Compensation:

          The Compensation earned by such individual for such Plan Year.

1.7  Affiliated Company:

     "Affiliated Company" means the Company and each organization which is
     either (i) a member of a controlled group with the Company, as defined in
     Code Sections 414(b) and 414(c), or (ii) a member of an affiliated service
     group with the Company, as defined in Code Sections 414(m) and (o). For
     purposes of Section 4.2, an "Affiliated Company" shall be determined by
     substituting "more than 50%" for "at least 80%" where the latter would
     otherwise apply in Code Sections 414(b) or 414(c).

1.8  Alternate Payee:

     "Alternate Payee" means a spouse, former spouse or child of a Participant
     to whom Plan benefits are payable in accordance with a "qualified domestic
     relations order" as determined pursuant to Section 7.10. Whenever the
     rights of a Participant are stated or limited herein, his Alternate
     Payee(s) shall be bound by such statement or limitation.

1.9  Annual Addition:

     "Annual Addition" means, with respect to each Participant for any
     Limitation Year, the aggregate of:

     (a)  Salary Deferrals:

          Salary Deferrals made by the Participant under Section 3.1.

     (b)  Matching Contributions:

          Matching Contributions made on behalf of Participants as provided
          under Section 3.4.

                                        5
<PAGE>
     (c)  Post-Retirement Medical Benefits:

          In the event a Participating Company pre-funds post retirement medical
          benefits in accordance with Code Section 419A(d), any amount allocated
          to the separate account of a Participant who is a Key Employee as
          defined in Section 12.2(b).

     (d)  Company Contributions:

          Company Contributions made on such individuals behalf by a
          Participating Company as provided under Section 12.5.

     (e)  Supplemental Contributions:

          Supplemental Contributions made on behalf of Participants as provided
          under Section 3.5,

     Salary Deferrals that are distributed because they are in excess of the
     limit of Code Section 402(g) will be considered an Annual Addition unless
     the distribution is made on or before April 15 following the year of
     deferral.

1.10 Average Deferral Percentage:

     "Average Deferral Percentage" means, for the group of Highly Compensated
     Participants and separately, for the group of Non-Highly Compensated
     Participants, the average of the Actual Deferral Ratios.

1.11 Average Deferral Percentage Test:

     "Average Deferral Percentage Test" means the test described in Section 3.8
     of the Plan.

1.12 Beneficiary:

     "Beneficiary" means any person or persons actually entitled, as provided in
     Article VI hereof, to receive benefits by reason of the death of a
     Participant. Whenever the rights of a Participant are stated or limited
     herein, his Beneficiary(ies) shall be bound by such statement or
     limitation.

1.13 Benefit Commencement Date:

     "Benefit Commencement Date" means the date as of which a benefit is paid.

                                        6
<PAGE>
1.14 Board:

     "Board" means the Board of Directors of Diamond Walnut Growers, Inc. (AKA
     Diamond of California).

1.15 Code:

     "Code" means the Internal Revenue Code of 1986 as amended from time to
     time.

1.16 Committee:

     "Committee" means the administrative committee appointed and acting in
     accordance with Article VII of this Plan.

1.17 Company:

     "Company" means Diamond Walnut Growers, Inc., (AKA Diamond of California)
     or any successor to all or a major portion of its assets or business that
     adopts the Plan.

1.18 Compensation:

     "Compensation" shall have the applicable meaning described below:

     (a)  Contributions:

          For the purpose of making Salary Deferrals and Matching Contributions,
          Compensation shall be determined in accordance with paragraph (b) but
          shall be determined (i) on a Participating Company rather than an
          Affiliated Company basis and (ii) received while the Employee is
          eligible to make Salary Deferrals.

     (b)  In General; Determination of Highly Compensated Employees:

          For the purpose of determining Eligible Compensation as defined in
          Section 1.23, for purposes of determining Highly Compensated Employees
          and the Top Paid Group, and Code Section 415 purposes, Compensation
          means all amounts paid or made available to an Employee by an
          Affiliated Company for a Plan Year, including (i) salary, commissions,
          bonuses and overtime as they are required to be included in the annual
          calendar year compensation reported in Box 10 (Compensation) on
          Internal Revenue Form W-2, (ii) Salary Deferrals, and (iii) any salary
          deferral or salary reduction amounts to a plan of an Affiliated

                                        7
<PAGE>
          Company (including a plan described in Sections 125, 401(k) and 403(b)
          of the Code).

     (c)  Discrimination Tests:

          For the purpose of calculating the Actual Deferral Ratios and the
          Actual Contribution Ratios, unless the Committee elects otherwise in
          accordance with Code Section 414(s) and the regulations thereunder,
          Compensation shall be determined in accordance with paragraph (b).

     (d)  Top Heavy Test:

          (1)  For the purpose of applying the top heavy provisions of Article
               XII of the Plan (except as provided in paragraph (d)(2) below),
               Compensation shall be determined in accordance with paragraph
               (b).

          (2)  For the purpose of determining Key Employees, Compensation shall
               be determined in accordance with paragraph (b).

     (e)  Limitation:

          In applying paragraphs (a), (c) and (d)(1) above (but not paragraphs
          (b) and (d)(2)), Compensation shall not exceed the OBRA '93 annual
          compensation limit. The OBRA '93 annual compensation limit is
          $170,000, as adjusted by the Commissioner for increases in the cost of
          living in accordance with Code Section 401(a)(17)(B). 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).

                                        8
<PAGE>
1.19 Contract:

     "Contract" means a group annuity contract between a legal reserve life
     insurance company licensed to conduct business in the State of California
     and to issue contracts for the purpose of providing retirement benefits and
     Diamond of California, and any amendments thereto, or any successor
     contract.

1.20 Disability:

     "Disability" means a physical or mental condition that entitles a
     Participant either to benefits under a Participating Company's long-term
     disability plan or to benefits under Social Security Disability Insurance.

1.21 Early Retirement Date:

     "Early Retirement Date" means the date a Participant retires from an
     Affiliated Company prior to his Normal Retirement Date but after his
     attainment of age fifty (50).

1.22 Effective Date:

     "Effective Date" means April 1, 2001, for this restatement. The Plan's
     original effective date is August 1, 2000.

1.23 Eligible Compensation:

     "Eligible Compensation" means Compensation, as defined in Section 1.18(a),
     earned while the Employee is eligible to make Salary Deferrals.

1.24 Eligible Employee:

     "Eligible Employee" means each Employee of a Participating Company except
     the following:

     (a)  Any Employee who has not attained age 18 and is not a temporary,
          seasonal or project Employee,

     (b)  Any Employee who has not attained age 21 and is a temporary, seasonal
          or project Employee,

     (c)  Each Employee whose conditions of employment are covered by the terms
          of a collective bargaining agreement in which retirement benefits were
          the subject of

                                        9
<PAGE>
          good faith bargaining, unless such agreement specifically provides for
          coverage under this Plan,

     (d)  Any Employee who is a nonresident alien and who receives no income
          (within the meaning of Code Section 911(d)(2)) from an Affiliated
          Company which constitutes income from sources within the United States
          (within the meaning of Code Section 861 (a)(3)), and

     (e)  Any Employee who is a Leased Employee.

1.25 Employee:

     "Employee" means any person receiving Compensation for services rendered to
     an Affiliated Company, including a Leased Employee, but excluding the
     following:

     (a)  Director:

          Any person serving as a director only; or

     (b)  Independent Contractor:

          Any person who is an independent contractor and for whom an Affiliated
          Company is not required to make Social Security contributions.

     Notwithstanding any Plan provision to the contrary, however, "Employee"
     shall exclude any individual retained by an Affiliated Company to perform
     services for the Affiliated Company (for either a definite or indefinite
     duration) and is characterized thereby as a fee-for-service worker or
     independent contractor or in a similar capacity (rather than in the
     capacity of a common law employee), regardless of such individual's status
     under common law, including, without limitation, any such individual who is
     or has been determined by a third party, including, without limitation, a
     government agency or board or court or arbitrator, to be an employee of the
     Affiliated Company for any purpose, including, without limitation, for
     purposes of any employee benefit plan of the Affiliated Company (including
     this Plan) or for purposes of federal, state or local tax withholding,
     employment tax or employment law.

                                       10
<PAGE>
1.26 Employment Date:

     "Employment Date" means the date on which an Employee is first credited
     with an Hour of Service with an Affiliated Company.

1.27 Entry Date:

     "Entry Date" means the first day of any payroll period.

1.28 ERISA:

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

1.29 Excess Aggregate Contributions:

     "Excess Aggregate Contributions" means, with respect to any Plan Year, the
     excess of the aggregate amount of the Matching Contributions (and any
     qualified nonelective contribution taken into account in computing the
     Actual Contribution Percentage) actually made on behalf of Highly
     Compensated Participants for the Plan Year, over the maximum amount of
     contributions permitted under the Actual Contribution Percentage Test.

1.30 Excess Contributions:

     "Excess Contributions" means with respect to any Plan Year, the excess of
     the aggregate amount of Salary Deferrals taken into account in computing
     the Actual Deferral Percentage of Highly Compensated Participants, over the
     maximum amount of such contributions permitted under the Average Deferral
     Percentage Test, as determined in accordance with Section 3.8.

1.31 Former Participant:

     "Former Participant" means any former Employee who is entitled to receive a
     distribution under the Plan.

                                       11
<PAGE>
1.32 Funding Agent:

     "Funding Agent" means any legal reserve life insurance company or trustee
     selected by the Employer to receive Plan contributions and to pay the
     benefit under and in accordance with the terms of the Plan.

1.33 Highly Compensated Employee:

     (a)  Highly Compensated Employee:

          "Highly Compensated Participant" means a Highly Compensated Employee
          who is an Eligible Employee (a) who has satisfied the requirements of
          Section 2.1, (b) who has an Account, (c) is directly or indirectly
          eligible to make salary deferral or salary reduction contributions to
          a plan that is aggregated with the Plan in calculating Actual Deferral
          Ratios, or (d) is directly or indirectly eligible to receive matching
          contributions or make after tax contributions to a plan that is
          aggregated with the Plan in calculating Actual Contribution Ratios.

     (b)  Former Highly Compensated Employee:

          A "Former Highly Compensated Employee" is (i) a former Employee who
          was a Highly Compensated Employee when he separated from service, or
          (ii) a former Employee who was a Highly Compensated Employee at any
          time after attaining age 55.

1.34 Highly Compensated Participant:

     "Highly Compensated Participant" means a Highly Compensated Employee who is
     an Eligible Employee (a) who has satisfied the requirements of Section 2.1,
     (b) who has an Account, or (c) is directly or indirectly eligible to make
     salary deferral or salary reduction contributions to a plan that is
     aggregated with the Plan in calculating Actual Deferral Ratios.

1.35 Hour of Service:

     "Hour of Service" means, and each Employee will be credited with an Hour of
     Service, as follows:

                                       12
<PAGE>
     (a)  In General:

          For each Employee for whom an Affiliated Company maintains an hourly
          service record:

          (1)  Performance of Duties:

               Each hour for which an Employee is directly or indirectly paid or
               entitled to payment by an Affiliated Company for the performance
               of duties. These hours shall be credited to the Employee for the
               computation period or periods in which the duties are performed;

          (2)  To the extent not included in paragraph (1), each hour, for which
               an Employee is directly or indirectly paid or entitled to payment
               by an Affiliated Company for reasons (such as vacation, sickness,
               or disability) other than for the performance of duties; provided
               that no more than 501 hours shall be credited on account of any
               single continuous period during which the Employee performs no
               services. These hours shall be credited to the Employee for the
               computation period or periods in which such hours accrued; and to
               the extent not included in paragraphs (1) or (2), each hour for
               which back pay, irrespective of mitigation of damage, has been
               either awarded or agreed to by an Affiliated Company. These hours
               shall be credited to the Employee in accordance with the
               provisions of paragraphs (1) or (2) for the computation period or
               periods to which the award or agreement pertains rather than the
               computation period in which the award, agreement or payment was
               made.

     (b)  Military Service:

          Each Employee in the compulsory or wartime military service of the
          United States shall be credited with his normally schedule Hours of
          Service for each week of such military service, provided that he
          returns to the employ of an Affiliated Company within the period
          provided by law after completing such

                                       13
<PAGE>
          compulsory or wartime service (unless failure to return is caused by
          his death or disability), to the extent required by law.

     (c)  Department of Labor Regulations:

          The number of an Employee's Hours of Service and the Plan Year or
          other computation period to which they are to be credited will be
          determined in accordance with Section 2530.200b-2 of the Rules and
          Regulations for Minimum Standards for Employee Benefit Pension Plans,
          which Section is hereby incorporated by reference into this Plan.

1.36 Inactive Participant:

     "Inactive Participant" means a Participant who remains an Employee but
     ceases to be an Eligible Employee.

1.37 Investment Fund:

     "Investment Fund" means each pooled investment fund, interest-bearing
     deposit, fixed income contract, or any suitable investment product
     designated by the Committee as an investment option in which a participant
     may elect to have his Accounts invested, as provided in Article IV.

1.38 Leased Employee:

     "Leased Employee" means any person (other than an Employee) who pursuant to
     an agreement between the recipient and any other person (a "leasing
     organization") has performed services for the recipient on a substantially
     full-time basis for a period of at least one (1) year, and such services
     are performed under primary direction or control by the recipient employer.
     Contributions or benefits provided a Leased Employee by the leasing
     organization which are attributable to services performed for the recipient
     employer shall be treated as provided by the recipient employer.
     Notwithstanding anything to the contrary in this Section, no individual
     shall be treated as a Leased Employee if (i) he or she is covered by a
     money purchase pension plan maintained by the leasing organization
     providing (a) a non-integrated employer contribution rate of at least (10%)
     of compensation, (b) immediate participation as required under Code Section

                                       14
<PAGE>
     414(n), and (c) full and immediate vesting and (ii) Leased Employees
     (determined without regard to clause (i)) do not constitute more than
     twenty percent (20%) of all Employees.

1.39 Limitation Year:

     "Limitation Year" means the Plan Year.

1.40 Match Account:

     "Match Account" means the Account established to record a Participant's
     Matching Contributions.

1.41 Matching Contributions:

     "Matching Contributions" means a contribution as described by Section 3.4.

1.42 Non-Highly Compensated Participant:

     "Non-Highly Compensated Participant" means an Employee who is not a Highly
     Compensated Employee and (a) who has satisfied the requirements of Section
     2.1, and (b) who has an Account.

1.43 Normal Retirement Date:

     "Normal Retirement Date" means a Participant's sixtieth (60th) birthday.

1.44 Officer:

     "Officer" means, for any period:

     (a)  An administrative executive who provides regular and continued service
          for any Affiliated Company and whose annual Compensation during the
          applicable period is in excess of fifty percent (50%) of the amount in
          effect under Code Section 415(b)(1)(A) for such period; provided that
          if no officer receives such amount of Compensation, the officer who
          receives the highest Compensation shall be an Officer.

     (b)  Notwithstanding the above, the number of Officers shall not exceed the
          lesser of:

          (1)  Fifty (50) Employees, or

                                       15
<PAGE>
          (2)  The greater of three (3) Employees or ten percent (10%) of
               Employees.

     (c)  In determining the number of Officers, Employees excluded in
          determining the Top Paid Group shall be excluded.

1.45 Owner:

     "Owner" means, with respect to a corporation, a person who owns, directly
     or indirectly, an interest in the stock of the corporation. Percentage
     ownership shall be determined using the greater of the percentage of
     outstanding stock owned based upon value or upon voting rights. With
     respect to a non-corporate entity, "Owner" means a person who owns,
     directly or indirectly, an interest in the capital or profits of that
     entity. In determining the percentage of ownership in either a corporation
     or non-corporate entity, the attribution rules described in Code Section
     416(i)(1) shall apply.

1.46 Participant:

     "Participant" means any Eligible Employee who (a) has satisfied the
     requirements of Section 2.1 or (b) who has an Account.

1.47 Participating Company:

     "Participating Company" means the Company and each other Affiliated Company
     that adopts with the approval of the Board this Plan. Adopting Employers
     currently include the Diamond Nut Company.

1.48 Plan:

     "Plan" means the Diamond of California 401(k) Plan and underlying Trust
     Fund, solely as described in this document and all subsequent amendments
     thereto.

1.49 Plan Manager:

     "Plan Manager" means the individual appointed by the Committee under the
     terms of Section 7.6.

1.50 Plan Year:

     "Plan Year" means the calendar year.

                                       16
<PAGE>
1.51 Reemployment Date:

     "Reemployment Date" means the date an Employee is first credited with an
     Hour of Service following his Separation from Service Date.

1.52 Retirement Date:

     "Retirement Date" means a Participant's Separation from Service Date
     occurring on or after his Normal Retirement Date or Early Retirement Date.

1.53 Rollover Account:

     "Rollover Account" means the Account established for each Participant
     electing to make contributions in accordance with Section 3.6, in which
     shall be recorded the amounts of his Rollover Contributions, adjustments,
     withdrawals, and all other information affecting the value of such Account.

1.54 Rollover Contributions:

     "Rollover Contributions" means the contributions as described in Section
     3.6.

1.55 Salary Deferral:

     "Salary Deferral" means an amount which a Participant elects to defer from
     his Eligible Compensation as described in Section 3.1.

1.56 Salary Deferral Account:

     "Salary Deferral Account" means the Account established to record a
     Participant's Salary Deferrals.

1.57 Separation from Service Date:

     "Separation from Service Date" means the date on which a Participant
     permanently terminates employment with all Affiliated Companies.

1.58 Spousal Consent:

     "Spousal Consent" means the written consent of the Participant's Spouse to
     the designation of a specific non-spouse Beneficiary or Beneficiaries by
     the Participant (which designation may not be changed without further
     Spousal Consent), which consent shall be witnessed by a Plan representative
     or a notary public. Written Spousal Consent

                                       17
<PAGE>
     shall not be required if it is established to the satisfaction of a Plan
     representative that such consent cannot be obtained because there is no
     Spouse, or the Spouse cannot be located, or such other circumstances exist
     as may be prescribed by applicable regulations. Once made, a Spousal
     Consent shall be irrevocable unless the Participant changes his Beneficiary
     designation; upon such event, a Spousal Consent shall be deemed to be
     revoked. Any such written Spousal Consent, or establishment that such
     consent cannot be obtained, shall be effective only with respect to that
     Spouse.

1.59 Spouse:

     "Spouse" means the Participant's legally married wife or husband at the
     earlier of the Participant's Benefit Commencement Date or date of death.

1.60 Supplemental Contributions:

     "Supplemental Contributions" means a contribution as described by Section
     3.5.

1.61 Supplemental Account:

     "Supplemental Account" means the Account established to record a
     Participant's Supplemental Contributions.

1.62 Top Paid Group:

     "Top Paid Group" means the top twenty percent (20%) of Employees of all
     Affiliated Companies for any applicable period when ranked in order of
     Compensation. In determining the number of Employees to be included in the
     Top Paid Group, the following Employees shall be excluded:

     (a)  New Hires:

          Employees employed for less than a total of six (6) months in the
          tested year or the preceding year;

     (b)  Part-Time Employees:

          Employees who normally work less than seventeen and one-half (17-1/2)
          hours per week;

                                       18
<PAGE>
     (c)  Seasonal Employees:

          Employees who normally work less than six (6) months per year;

     (d)  Under Age:

          Employees who have not yet attained age twenty-one (21);

     (e)  Union Employees:

          Employees covered by a collective bargaining agreement, except to the
          extent provided by regulation, and

     (f)  Nonresident Aliens:

          Employees who are classified as nonresident aliens and who have no
          United States source earned income.

     Notwithstanding anything to the contrary in this Section, the Company may
     elect, on a consistent and uniform basis, to apply paragraphs (a), (b), (c)
     and/or (d) above on the basis of a shorter period of service, smaller
     number of hours or months, or lower age than specified above and may apply
     paragraphs (b) and/or (c) on an individual or group basis.

1.63 Trustee:

     "Trustee" means the person or entity named as trustee herein or in any
     separate trust agreement forming a part of this Plan, and any successors.

1.64 Trust Fund:

     "Trust Fund" means the trust fund created and maintained under the trust
     agreement for the purpose of holding the assets of and funding the benefits
     provided by the Plan.

1.65 Valuation Date:

     "Valuation Date" means each date on which the Committee directs the Funding
     Agent to determine the fair market value of assets held in the Trust Fund.

                                       19
<PAGE>
1.66 Year of Service:

     "Year of Service" means a computation period during which an Employee is
     credited with 1,000 Hours of Service. An Employee's initial computation
     period is the twelve-month period commencing on the Employee's Employment
     Date. The second computation period commences on the first day of the Plan
     Year that begins during the initial computation period, and thereafter, the
     computation period is the Plan Year.

                                   ARTICLE II

                                  PARTICIPATION

2.1  Plan Participation Requirements:

     Each Eligible Employee who was a Participant as of March 31, 2001, shall
     continue to be a Participant on the Effective Date. An Eligible Employee
     becomes a Participant on the first Entry Date coincident with or next
     following his Employment Date. Any Eligible Employee who is a temporary,
     seasonal or project Employee and who is first credited with an Hour of
     Service on or after May 1, 2001, shall become a Participant on the January
     1st or July 1st next following the date he completes one Year of Service.

2.2  Special Transferred Participants:

     Any Eligible Employee who was an employee of Sun Growers of California on
     August 1, 2000 who later transferred to the Company or a Participating
     Company on or before December 31, 2000, shall become a Participant on his
     Employment Date and his account under the Sun-Diamond Growers of California
     Employee Retirement Savings Plan shall be transferred to the Trust Fund.

2.3  Loss of Participant Status:

     (a)  Inactive Participant:

          A Participant shall become an Inactive Participant when he ceases to
          be an Eligible Employee and he continues to be an Employee. An
          Inactive Participant shall not be entitled to make any Salary
          Deferrals or to receive any Matching

                                       20
<PAGE>
          Contributions. However, his Account(s) shall continue to share in Plan
          investment gains and losses while he is an Inactive Participant.

     (b)  Former Participant:

          A Participant shall become a Former Participant on the date following
          his Separation from Service Date (including Separation from Service
          because of Disability), and will remain a Former Participant until the
          date he is paid the Plan benefit to which he is entitled in accordance
          with the provisions of Article V or is rehired by a Participating
          Company. A Former Participant shall not be entitled to make any Salary
          Deferrals or to receive any Matching Contributions. However, his
          Account(s) shall continue to share in Plan investment gains and losses
          until the Valuation Date immediately preceding his Benefit
          Commencement Date.

2.4  Change in Employment Status:

     (a)  Change in Union Status:

          If an Employee becomes an Eligible Employee because he ceases to be
          covered by a collective bargaining agreement, he shall become a
          Participant on the Entry Date coincident with or next following the
          effective date of his change in status.

     (b)  Change in Employment Status:

          If an Employee's status changes from temporary, seasonal or project
          Employee to full time Employee, he shall become a Participant on the
          first Entry Date coincident with or next following the effective date
          of his change in status.

2.5  Rehire of Former Participant:

     Each Participant who ceases to be an Eligible Employee (including loss due
     to termination of employment with an Affiliated Company) and who,
     thereafter becomes an Eligible Employee, shall subsequently become an
     active Participant as of the date that he regains the status of an Eligible
     Employee.

                                       21
<PAGE>
2.6  Rehire of Former Employee:

     Each Employee who did not become a Participant because he was not an
     Eligible Employee on the applicable Entry Date and who terminates from an
     Affiliated Company and is rehired, shall become an active Participant as of
     the earlier of the first payroll period coinciding with or next following
     his Reemployment Date (if then an Eligible Employee) or the first payroll
     period coinciding with or next following the date that he becomes an
     Eligible Employee.

                                   ARTICLE III

                                  CONTRIBUTIONS

3.1  Salary Deferrals:

     Each Participant may elect to have a portion of his Eligible Compensation
     allocated to his Salary Deferral Account, in accordance with the following
     provisions:

     (a)  Salary Deferral:

          Each active Participant shall be provided the opportunity to elect to
          defer a percentage or specific whole dollar amount of his Eligible
          Compensation, effective as soon as administratively feasible after the
          Participant completes the applicable forms (generally the first day of
          the payroll period following receipt of the completed forms by the
          Participating Company), subject to the limitations described in
          Section 3.1(c). All Salary Deferrals shall be made pursuant to a
          written agreement authorizing regular payroll withholding by the
          Participating Company.

     (b)  Cessation of Salary Deferrals:

          A Participant may direct his Participating Company to cease Salary
          Deferrals effective as soon as administratively feasible after the
          Participant completes the applicable forms (generally the first day of
          the payroll period following receipt of the completed forms by the
          Participating Company). Written notice to such effect

                                       22
<PAGE>
          must be delivered by the Participant to his Participating Company
          prior to the effective date of the cessation of Salary Deferrals.

     (c)  Amount of Salary Deferrals:

          A Participant shall be entitled to defer at least one percent (1%) but
          no more than a maximum percent which shall be set from time to time by
          resolution of the Committee, not to exceed 20% of his Eligible
          Compensation, in increments of one percent (1%) or in a whole dollar
          amount. The sum of Salary Deferrals plus any other elective
          contribution made to any plan maintained by an Affiliated Company on
          behalf of a Participant shall not exceed ten thousand five hundred
          dollars ($10,500) or such greater amount as may be allowed under Code
          Section 402(g)(5) in any calendar year. For each Plan Year, to the
          extent allowed by law, any Salary Deferrals exceeding such amount
          shall be returned to the Participant.

     (d)  Change in Salary Deferrals:

          Each Participant shall have the opportunity to increase or decrease
          his Salary Deferral percentage effective as soon as administratively
          feasible after the Participant completes the applicable forms
          (generally the first day of the payroll period following receipt of
          the completed forms by the Participating Company).

     (e)  Manner of Election:

          The Committee shall establish uniform and nondiscriminatory rules
          governing the manner and method by which Salary Deferrals are made
          and, from time to time, may modify or change such rules.

3.2  Timing of Salary Deferrals:

     Each Participating Company shall transmit Salary Deferrals to the Trust
     Fund as soon as required under DOL Reg. Section 2510.3-102.

3.3  Return of Salary Deferrals to the Company:

     (a)  Return of Contributions:

                                       23
<PAGE>
          Salary Deferrals are contingent upon their deductibility under Code
          Section 404. Any Plan contribution shall be returned by the Trustee or
          Funding Agent to the Participating Companies, from the Trust Fund if

          (1)  They were made in excess of the amount deductible by the
               Participating Companies for the taxable year, or

          (2)  They were made because of a reasonable mistake as to the facts
               and circumstances existing at the time the contributions were
               made.

          As soon as practicable following the return of funds to the
          Participating Companies under this paragraph (a), such funds (plus
          investment earnings and less losses thereon), shall be paid to the
          individuals making such contributions.

     (b)  Limitation:

          Any return of Salary Deferrals under paragraph (a) shall be limited,
          respectively, to:

          (1)  That portion in excess of the amount deductible by the
               Participating Companies for the taxable year, or that portion of
               the contribution attributable to a reasonable mistake of fact.

          (2)  Any such return must be made within one year of the date the
               Salary Deferral was made.

3.4  Matching Contributions:

     The Company shall make a Matching Contribution each payroll period on
     behalf of each Participant who has had Salary Deferrals made on his behalf
     during the payroll period. The Matching Contribution made on a
     Participant's behalf shall be equal to 50% of the first 6% of the
     Participant's Compensation deferred into the Plan as Salary Deferrals for
     the payroll period. Matching Contributions shall not exceed the lesser of
     3% of a Participant's Compensation for the Plan Year or the maximum amount
     permissible under Sections 3.8 and 4.2.

                                       24
<PAGE>
3.5  Supplemental Contributions:

     The Company may, in its discretion, make a Supplemental Contribution for
     any Plan Year for the purpose of passing the tests described in Section
     3.8. Supplemental Contributions are intended to be qualified nonelective
     contributions or qualified matching contributions and shall be made only if
     the applicable requirements of Code Section 401(m) and Treasury Regulation
     Sections 1.041(k)-1(g)(13) and 1.401(m)-l(b)(5) are satisfied. Supplemental
     Contributions shall be allocated to a Participant's Supplemental Account in
     a manner that does not discriminate in favor of Highly Compensated
     Participants. Supplemental Contributions shall be allocated to Non-Highly
     Compensated Participants who are Participants on whose behalf Salary
     Deferrals have been made or such other category of Non-Highly Compensated
     Participants as selected by the Committee.

3.6  Rollovers from Other Qualified Plans:

     Each Participant in the Plan or each Employee who is expected to be
     eligible to participate in the Plan who, as a result of a termination of
     another qualified plan, termination of employment, disability, or
     attainment of age fifty-nine and one-half (59-1/2), has had distributed his
     entire interest in a plan that meets the requirements of Code Section
     401(a) (the "Other Plan") may, in accordance with procedures approved by
     the Committee, transfer the distribution received from such Other Plan to
     the Trust Fund provided the following conditions are met:

     (a)  The distribution from the Other Plan is an "eligible rollover
          distribution" as defined in Code Section 401(a)(31); and

     (b)  The rollover (other than a direct rollover of an eligible rollover
          distribution described in Section 5.11) occurs on or before the
          sixtieth (60th) day following his receipt of such distribution from
          the Other Plan (or from an Individual Retirement Account which
          consisted solely of prior distributions from the Other Plan(s), plus
          earnings thereon); and

     (c)  The amount rolled over (other than a direct rollover of an eligible
          rollover distribution described in Section 5.11) is not in excess of
          such distribution from

                                       25
<PAGE>
          the Other Plan (plus earnings thereon) accrued in an interim
          Individual Retirement Account as described above less the amount, if
          any, considered contributed under Code Section 407(e)(4)(D)(i).

     No transfer to this Plan directly from another qualified plan may be made
     without specific prior Company approval of such a transfer. The Committee
     shall have full responsibility for determining whether or not the
     requirements of the Code have been met with respect to each such transfer,
     including the requirement that any direct transfer will not cause the Plan
     to become a direct or indirect transferee of a plan subject to Code Section
     401(a)(11) (within the meaning of Code Section 401(a)(1 l)(B)(iii)(III)).
     In addition, the Committee may request that the Participant provide a
     statement that meets the requirements of Treas. Reg. Section 1.401(a)(31)-1
     Q&A 31.

3.7  Date of Contributions:

     (a)  The Company shall deposit Salary Deferrals with the Trust Fund as soon
          after each payroll period as the amounts can reasonably be segregated,
          but in no event later than the date specified in Section 2510.3-109 of
          the Department of Labor regulations.

     (b)  All other Company contributions shall be deposited with the Trust Fund
          no later than the due date, including extensions, for the Company's
          income tax return for the Employer's tax year for which the
          contribution is made.

     (c)  Rollover Contributions shall be deposited with the Trust Fund as soon
          as administratively practicable upon receipt by the Company.

3.8  Discrimination Test Requirements:

     (a)  Average Deferral Percentage Test:

          Notwithstanding the foregoing provisions of this Article III, the
          Committee shall limit the amount of Salary Deferrals made on behalf of
          each Highly Compensated Participant for each Plan Year to the extent
          necessary to ensure that either of the following tests is satisfied:

                                       26
<PAGE>
          (1)  the "Average Deferral Percentage" (as defined in Section 1.10
               hereof) of the group of Highly Compensated Participants for the
               Plan Year is not more than the Average Deferral Percentage of all
               Non-Highly Compensated Participants for the prior Plan Year
               multiplied by 1.25; or

          (2)  the excess of the Average Deferral Percentage for the group of
               Highly Compensated Participants for the Plan Year over that of
               all Non-Highly Compensated Participants for the prior Plan Year
               is not more than two percentage points, and the Average Deferral
               Percentage for the group of Highly Compensated Participants for
               the Plan Year is not more than the Average Deferral Percentage of
               all Non-Highly Compensated Participants for the prior Plan Year
               multiplied by 2.0.

          For purposes of determining the Average Deferral Percentage, the
          current Plan Year rather than prior Plan Year may be applied in
          Section 3.4(a)(1) and (2) if the Company so elects, except that such
          election may not be changed except as provided by the Secretary of the
          Treasury.

          Average Deferral Percentages shall further be adjusted to account for
          coverage changes or otherwise to the extent necessary or permitted to
          comply with guidance published by the Internal Revenue Service or
          applicable law.

     (b)  Average Contribution Percentage Test:

          Notwithstanding the foregoing provisions of this Article III, the
          Committee shall limit the amount of Matching Contributions made on
          behalf of each Highly Compensated Participant for each Plan Year to
          the extent necessary to ensure that either of the following tests is
          satisfied:

          (1)  the "Average Contribution Percentage" (as defined in Section 1.4
               hereof) of the group of Highly Compensated Participants for the
               Plan Year is not more than the Average Deferral Percentage of all
               Non-Highly Compensated Participants for the prior Plan Year
               multiplied by 1.25; or

                                       27
<PAGE>
          (2)  the excess of the Average Contribution Percentage for the group
               of Highly Compensated Participants for the Plan Year over that of
               all Non-Highly Compensated Participants for the prior Plan Year
               is not more than two percentage points, and the Average
               Contribution Percentage for the group of Highly Compensated
               Participants for the Plan Year is not more than the Average
               Contribution Percentage of all Non-Highly Compensated
               Participants for the prior Plan Year multiplied by 2.0.

          For purposes of determining the Average Contribution Percentage, the
          current. Plan Year rather than prior Plan Year may be applied in
          Section 3.4(a)(1) and (2) if the Company so elects, except that such
          election may not be changed except as provided by the Secretary of the
          Treasury.

          Average Contribution Percentages shall further be adjusted to account
          for coverage changes or otherwise to the extent necessary or permitted
          to comply with guidance published by the Internal Revenue Service or
          applicable law.

     (c)  Multiple Use Test:

          The limits set forth in paragraphs (a) and (b) for Highly Compensated
          Participants shall be reduced as necessary to prevent multiple use of
          the limitations of subparagraphs (a)(2) and (b)(2). Multiple use
          occurs if the sum of the Average Deferral Percentages and the Average
          Contribution Percentages of the group of Highly Compensated Employees
          for the Plan Year exceeds the greater of (1) and (2) below.

          (1)  The sum of

               (A)  1.25 times the greater of:

                    (i)  the Average Deferral Percentages of the Non-Highly
                         Compensated Participants for the prior Plan Year who
                         are eligible to make Salary Deferrals, or

                                       28
<PAGE>
                    (ii) the Average Contribution Percentages of the Non-Highly
                         Compensated Participants for the prior Plan Year who
                         are eligible to have Matching Contributions made on
                         their behalf, and

               (B)  two plus the lesser of (A)(i) or (A)(ii), provided that this
                    number does not exceed two times the lesser of (A)(i) or
                    (A)(ii).

          (2)  The sum of:

               (A)  1.25 times the lesser of:

                    (i)  the Average Deferral Percentages of the Non-Highly
                         Compensated Employees for the prior Plan Year who are
                         eligible to make Salary Deferrals, or

                    (ii) the Average Contribution Percentages of the Non-Highly
                         Compensated Employees for the prior Plan Year who are
                         eligible to have Matching Contributions made on their
                         behalf, and

               (B)  two plus the greater of (A)(i) or (A)(ii), provided that
                    this number does not exceed two times the greater of (A)(i)
                    or (A)(ii).

3.9  Adjustment of Salary Deferrals and Matching Contributions:

     (a)  Correction of the Average Deferral Percentage Test:

          If the Plan fails or is projected to fail the Average Deferral
          Percentage Test, then the Committee shall take one or more of the
          following steps:

          (1)  Limit Future Salary Deferrals:

               The Committee may limit future Salary Deferrals for some or all
               Highly Compensated Participants (or those individuals projected
               to be Highly

                                       29
<PAGE>
               Compensated Participants) to the extent it deems such action
               advisable to meet such test.

          (2)  Return Excess Contributions:

               The Committee may return Excess Contributions (with income
               allocable thereto in accordance the method in which income shall
               be allocated pursuant to Section 4.6)) to Highly Compensated
               Participants. Such reductions shall be made in the following
               order: (i) first, any amounts previously returned under Sections
               3.1(c) and 3.3 for the Plan Year shall be subtracted and if
               necessary, (ii) the Committee shall reduce the amount of excess
               Salary Deferrals made on behalf of such Highly Compensated
               Participants as described below. Any distribution of the Excess
               Contributions for any Plan Year shall be made to the Highly
               Compensated Participants with the largest amount of Salary
               Deferrals taken into account in calculating the Actual Deferral
               Percentage Test for the year in which the excess arose, beginning
               with the Highly Compensated Participant who had the greatest
               dollar amount of Salary Deferrals and continuing in descending
               order until all the Excess Contributions have been distributed.
               Such excess Salary Deferrals shall be distributed to the affected
               Highly Compensated Participants as soon as practicable after the
               end of such Plan Year, and in all events prior to the end of the
               next following Plan Year.

          (3)  Supplemental Contributions:

               If the Company makes a Supplemental Contribution with respect to
               a Plan Year, the Committee shall include the Supplemental
               Contributions for purposes of the Average Deferral Percentage
               Test in Section 3.8(a) to the extent necessary to pass the test,
               provided that no portion of the Supplemental Contribution is
               taken into account more than once. Supplemental Contributions
               shall satisfy the requirements applicable to "qualified
               nonelective employer contributions" or "qualified matching
               contributions" under Treasury Regulation Sections 1.401(k)-1 and
               1.401(m)-l.

                                       30
<PAGE>
          (4)  Timing of Correction of Excess Contributions:

               To the extent practicable, any correction of Excess Contributions
               in accordance with this Section 3.9 (other than limitations on
               future Salary Deferrals in accordance with paragraph (a)(1))
               shall be made within the two and one-half (2-1/2) month period
               following the end of Plan Year in which the Excess Contribution
               was made; provided that such correction shall not be made later
               than the last day of the Plan Year following such Plan Year, or
               such later date as may be allowed by law. In the event of a
               complete termination of the Plan during the Plan Year in which
               such Excess Contribution was made, such correction shall be made
               as soon as practicable after the date the Plan terminates, but in
               no event later than the close of the twelve-month period
               immediately following such termination.

     (b)  Correction of the Average Contribution Percentage Test:

          If the Plan fails or is projected to fail the Average Contribution
          Percentage Test, then the Committee shall take one or more of the
          following steps:

          (1)  Return Excess Aggregate Contributions:

               The Committee may return Excess Aggregate Contributions (with
               income allocable thereto in accordance the method in which income
               shall be allocated pursuant to Section 4.6)) to Highly
               Compensated Participants. Such reductions shall be made in the
               following order: (i) first, any Matching Contributions
               attributable to Salary Deferrals previously returned under
               Sections 3.1(c) and 4.2(b) for the Plan Year shall be subtracted
               and if necessary, (ii) the Committee shall reduce the amount of
               excess Matching Contributions made on behalf of such Highly
               Compensated Participants as described below. Any distribution of
               the Excess Aggregate Contributions for any Plan Year shall be
               made to the Highly Compensated Participants with the largest
               amount of Matching Contributions taken into account in
               calculating the Actual Contribution Percentage Test for the Plan
               Year in which the excess arose, beginning with the Highly
               Compensated Participant who had the greatest dollar

                                       31
<PAGE>
               amount of Matching Contributions and continuing in descending
               order until all the Excess Aggregate Contributions have been
               distributed. Such excess Matching Contributions shall be
               distributed to the affected Highly Compensated Participants as
               soon as practicable after the end of such Plan Year, and in all
               events prior to the end of the next following Plan Year.

          (2)  Supplemental Contributions:

               If the Company makes a Supplemental Contribution with respect to
               a Plan Year, the Committee shall include the Supplemental
               Contributions for purposes of the test in Section 3.8(b) to the
               extent necessary to pass the Average Contribution Percentage
               Test, provided that no portion of the Supplemental Contribution
               is taken into account more than once. Supplemental Contributions
               shall satisfy the requirements applicable to "qualified
               nonelective employer contributions" or "qualified matching
               contributions" under Treasury Regulation Sections 1.401(k)-1 and
               1.401(m)-1.

          (3)  Timing of Correction of Excess Aggregate Contributions:

               To the extent practicable, any correction of Excess Aggregate
               Contributions in accordance with this Section 3.9 shall be made
               within the two and one-half (2-1/2) month period following the
               end of Plan Year in which the Excess Aggregate Contribution was
               made; provided that such correction shall not be made later than
               the last day of the Plan Year following such Plan Year, or such
               later date as may be allowed by law. In the event of a complete
               termination of the Plan during the Plan Year in which such Excess
               Aggregate Contribution was made, such correction shall be made as
               soon as practicable after the date the Plan terminates, but in no
               event later than the close of the twelve-month period immediately
               following such termination.

                                       32
<PAGE>
                                   ARTICLE IV

                     PARTICIPANT'S CREDIT IN THE TRUST FUND

4.1  Accounts:

     (a)  Salary Deferral Account:

          A Salary Deferral Account shall be opened and maintained by the
          Committee for each Participant electing to make Salary Deferrals under
          Section 3.1, in which shall be recorded the amounts of his Salary
          Deferrals, adjustments for allocations of income, distributions,
          withdrawals and all other factors affecting the value of such Account.

     (b)  Match Account:

          A Match Account shall be opened and maintained by the Committee for
          each Participant who receives a Matching Contribution under Section
          3.4, in which shall be recorded the amounts of his Matching
          Contributions, adjustments for allocations of income, distributions,
          withdrawals and all other factors affecting the value of such Account.

     (c)  Supplemental Account:

          A Supplemental Account shall be opened and maintained by the Committee
          for each Participant who receives a Supplemental Contribution under
          Section 3.5, which shall be recorded the amounts of his Supplemental
          Contributions, adjustments for allocations of income, distributions,
          withdrawals and all other factors affecting the value of such Account.

     (d)  Rollover Account:

          A Rollover Account shall be opened and maintained by the Committee for
          each Participant making a rollover in which shall be recorded the
          amounts of his Rollover Contributions as described in Section 3.6,
          adjustments for income or loss, distributions, withdrawals and all
          other factors affecting the value of such Account.

                                       33
<PAGE>
     (e)  Loan Account:

          A Loan Account shall be opened and maintained by the Committee for
          each Participant receiving a loan from his Accounts as described in
          Article XIII, in which shall be recorded the amount of principal and
          interest payments and all other factors affecting the value of such
          Account.

4.2  Maximum Annual Addition:

     (a)  Maximum Annual Addition:

          Subject to the cost of living adjustments provided under paragraph
          (d), the maximum Annual Addition to a Participant's Account for any
          Limitation Year shall in no event exceed the greater of the lesser of:

          (1)  $30,000 or,

          (2)  Twenty-five percent (25%) of his Compensation as defined in
               Section 1.15(b).

     (b)  Excess Annual Addition:

          If, for any Limitation Year, a Participant's Annual Addition exceeds
          the amount described in paragraph (a) and such Participant made Salary
          Deferrals for such Limitation Year, Salary Deferrals equal to the
          amount of the excess (and income allocable thereto) shall be
          distributed to such Participant within twelve (12) months following
          the end of each Limitation Year in which such excess Annual Additions
          were made.

     (c)  Multiple Defined Contribution Plans:

          If an Affiliated Company is contributing to another defined
          contribution plan, as that term is defined in Code Section 414(i), for
          any Participant, then such Participant's Annual Addition in such other
          plan shall be aggregated with Annual Additions derived from this Plan
          for purposes of applying the limitations under paragraph (a) above.

                                       34
<PAGE>
     (d)  Adjustment of Limitation:

          The limitation imposed by paragraph (a)(1) above shall be adjusted
          annually (or when allowable) for increases in the cost of living, in
          accordance with the Regulations issued by the Secretary of the
          Treasury pursuant to the provisions of Code Section 415(d). Each
          adjustment (when allowable) shall be limited to the scheduled annual
          increase determined by the Commissioner of the Internal Revenue
          Service. Such cost of living adjustment (when allowable) shall be
          effective not earlier than January 1 of the year in which it is made.

4.3  Investment Options

     (a)  The Committee (in conjunction with the Funding Agent and Trustee)
          shall establish Investment Funds for the purpose of investing Plan
          assets. The Committee shall retain the discretion to change, at any
          time, the Investment Funds available under the Plan.

     (b)  Participants will be permitted to direct the contributions made on
          their behalf among the Investment Funds established for this purpose.

     (c)  The Plan provides an opportunity for Participants (and Beneficiaries
          and Alternate Payees) to exercise control over the investment of their
          Accounts by choosing from a range of investment alternatives and is
          intended to be described in ERISA Section 404(c).

4.4  Participant Directed Investments

     (a)  Each Participant will designate to the Company the proportion of each
          contribution made for him which is to be credited to each of the
          Investment Funds. Such proportion may be any whole percentage from 0%
          to 100%. If no such designation is made by the Participant before the
          first such contribution is paid to the Funding Agent, 100% of such
          contributions, and 100% of each contribution on his behalf thereafter
          until such designation is made, will be credited to an Investment Fund
          selected by the Committee.

                                       35
<PAGE>
     (b)  A Participant may change the investment of future contributions to the
          Participant's Accounts in the manner prescribed by the Company. No
          change may be retroactive. The changed proportion will apply to
          contributions received by the Funding Agent on or after the later of
          the effective date of the change and the date of receipt of the
          notification by the Funding Agent, and will remain in effect until any
          subsequent change is made by the Participant.

4.5  Transfers Between Investment Funds

     A Participant, at any time, may transfer amounts between his Investment
     Funds, by notifying the Funding Agent. Such transfer will be made on the
     date specified, subject to any restrictions imposed in accordance with the
     terms of any Contract between the Employer or Trustee, if applicable, and
     the Funding Agent.

4.6  Valuation of Funds and Allocation of Earnings

     As of each December 31, or such other date upon which the Funding Agent,
     Trustee and the Company will mutually agree, the Funding Agent will
     determine the fair market value of any Contracts and any Investment Funds,
     including earnings and losses on each Investment Fund, and will adjust each
     Participant's Accounts in accordance with such valuation.

4.7  Committee Action in the Event a Recipient Cannot Be Located:

     If an Inactive Participant is entitled to receive a benefit under this Plan
     and such benefit has not been paid on or before the date the Inactive
     Participant attains or would have attained age sixty-two (62) because the
     Company has been unable to locate the Inactive Participant or the
     Participant's designated Beneficiary (if any), the Committee shall
     establish an Account in the name of the Inactive Participant (or
     Beneficiary as the ease may be) at a bank or similar financial institution,
     and shall deposit the Individual's entire vested benefit into such account.
     No party shall be entitled to any other Plan distribution with respect to
     such benefit.

                                       36
<PAGE>
                                   ARTICLE V

                               PAYMENT OF BENEFITS

5.1  Amount of Distribution from Participant's Accounts:

     Payments to or on behalf of a Participant shall be made from the Trust
     Fund, in accordance with this Article in the amounts and upon the events
     stated below:

     (a)  Salary Deferral Account:

          A Participant (or his Beneficiary in the event of his death) shall be
          entitled to receive one hundred percent (100%) of his Salary Deferral
          Account Balance upon his Separation from Service Date for any reason.
          Such Account Balance shall be determined as of the Valuation Date
          coincident with or immediately preceding his Benefit Commencement
          Date, plus any Salary Deferrals made after such Valuation Date and
          less any withdrawals made after such Valuation Date.

     (b)  Match Account:

          A Participant (or his Beneficiary in the event of his death) shall be
          entitled to receive one hundred percent (100%) of his Match Account
          Balance upon his Separation from Service Date for any reason. Such
          Account Balance shall be determined as of the Valuation Date
          coincident with or immediately preceding his Benefit Commencement
          Date, plus any Matching Contributions made after such Valuation Date
          and less any withdrawals made after such Valuation Date.

     (c)  Rollover Account:

          A Participant (or his Beneficiary in the event of his death) shall be
          entitled to receive one hundred percent (100%) of his Rollover Account
          Balance upon his Separation from Service Date for any reason. Such
          Account Balance shall be determined as of the Valuation Date
          coincident with or immediately preceding his Benefit Commencement Date
          plus any rollovers and less any withdrawals made after such Valuation
          Date.

                                       37
<PAGE>
     (d)  Supplemental Account:

          A Participant (or his Beneficiary in the event of his death) shall be
          entitled to receive one hundred percent (100%) of his Supplemental
          Account Balance upon his Separation from Service Date for any reason.
          Such Account Balance shall be determined as of the Valuation Date
          coincident with or immediately preceding his Benefit Commencement
          Date, plus any Supplemental Contributions made after such Valuation
          Date and less any withdrawals made after such Valuation Date.

5.2  Vesting:

     All amounts credited to a Participant's Salary Deferral, Match, Rollover,
     and Supplemental Account are fully vested and nonforfeitable at all times.

5.3  Form of Distribution:

     Distribution of benefits under the Plan shall be made by the Funding Agent
     in the form of a lump sum cash payment or a direct rollover, if requested
     by the Participant.

5.4  Timing of Distributions:

     (a)  Distributions to a Participant:

          Except as provided in paragraph (b), the Trustee shall distribute
          benefits as soon as practicable following the Participant's Separation
          from Service Date, provided that if the Participant's vested Account
          Balance in all Accounts exceeds $5,000 and the Participant has neither
          attained age sixty-two (62) nor commenced receiving benefits, the
          Participant must consent in writing to any distribution. The.
          Participant's written consent must be obtained after the Plan has
          provided the written notice required by Code Section 411(a)(11) but
          not more than (90) days prior to the Participant's Benefit
          Commencement Date. If no consent to an earlier distribution is
          obtained, distribution of benefits shall automatically be made as soon
          as practicable following the later of (i) the Participant's Separation
          from Service Date or (ii) the date he attain age sixty-two (62), but
          in no event later than sixty (60) days after the end of the Plan Year
          in which the later of such two events occurs. If the Participant does
          not elect a Benefit Commencement Date, the Participant shall be deemed
          to have elected a later Benefit Commencement Date.

                                       38
<PAGE>
     (b)  Participant's Latest Benefit Commencement Date:

          (1)  In no event shall distribution of benefits be made later than the
               April 1 following:

               (A)  For a Participant who is a five percent (5%) or more Owner
                    of an Affiliated Company, the last day of the calendar year
                    in which he attains age seventy and one-half (70-1/2), or

               (B)  For any other Participant, the later of:

                    (i)  the last day of the calendar year in which his
                         Retirement Date occurs, or

                    (ii) the last day of the calendar year in which he attains
                         age seventy and one-half (70-1/2).

          (2)  With respect to distributions under the Plan made in calendar
               years beginning on or after January 1, 2001, the Plan will apply
               the minimum distribution requirements of Code Section 401(a)(9)
               in accordance with the regulations under Code Section 401(a)(9)
               that were proposed in January 2001, notwithstanding any provision
               of the Plan to the contrary. This provision shall continue in
               effect until the end of the last calendar year beginning before
               the effective date of final regulations under Code Section
               401(a)(9) or such other date specified in guidance published by
               the Internal Revenue Service.

     (c)  Distributions to a Beneficiary:

          If the Participant dies before Plan benefits are required to be paid
          under paragraph (b), payment of the benefits to the Beneficiary shall
          be made as soon as practicable following the Participant's death
          (generally within one (1) year of the Participant's date of death) but
          in no event later than December 31 of the calendar year in which falls
          the fifth (5th) anniversary of the Participant's death. However, if
          the Beneficiary is the Participant's Spouse, the surviving Spouse may
          elect to

                                       39
<PAGE>
          delay distribution of benefits until the date the Participant would
          have attained age seventy and one-half (70-1/2).

5.5  Rehire of Former Participant:

     Subject to the provisions of Section 5.4, in the event that an inactive
     Participant who is no longer an Employee is rehired by an Affiliated
     Company prior to receiving such distribution, the distribution shall be
     delayed until he again has a Separation from Service Date (except as
     required by Section 5.4(b)).

5.6  Hardship Withdrawals of Salary Deferrals:

     (a)  General Requirements:

          Subject to the approval of the Committee, a Participant may make
          hardship withdrawals from his Salary Deferral Account if necessary to
          meet an immediate and heavy financial need, in accordance with the
          following:

          (1)  Maximum/Minimum Amount Available for Withdrawal:

          A Participant may withdraw from his Salary Deferral Account the sum of
          his December 3l, 1988 Salary Deferral Account Balance plus Salary
          Deferrals made after December 31, 1988 (excluding income allocable
          thereto); provided that any such withdrawal shall be in an amount of
          at least $1,000. The hardship withdrawal cannot exceed the amount
          necessary to meet the hardship need and any amounts necessary to pay
          any federal, state or local income taxes or penalties reasonable
          anticipated to result from the distribution. In no event can the
          hardship withdrawal exceed the value of the Participant's Account
          determined as of the Valuation Day coincident with or immediately
          preceding the distribution date of the hardship withdrawal.

          (2)  Withdrawal Must Be Necessary:

          Hardship withdrawals from a Participant's Salary Deferral Account
          shall he granted only if necessary to meet an immediate and heavy
          financial need. A withdrawal will be considered necessary if it meets
          the following requirements:

                                       40
<PAGE>
               (A)  The Participant has withdrawn the maximum allowable amount
                    from his Rollover Account under Section 5.8;

               (B)  The Participant has obtained all loans available under
                    Article XIII of the Plan;

               (C)  The Participant has obtained any other in-service
                    distributions available under the Plan; and

               (D)  The Participant has received all withdrawals, distributions
                    or loans for which he is eligible from ail other plans
                    maintained by any Affiliated Company.

               (E)  The Participant represents in writing, in such form and
                    manner as the Committee may require, that the amount
                    requested for withdrawal is not reasonably available from
                    other resources of the Participant, including;

                    (i)  Reimbursement or compensation by insurance or
                         otherwise;

                    (ii) Reasonable liquidation of the Participant's assets, to
                         the extent such liquidation would not itself cause and
                         immediate and heavy financial need;

                    (iii) Cessation of the Participant's Salary Deferrals or any
                         other contributions that the Participant is making to
                         plans maintained by any Affiliated Company;

                    (iv) Receipt of other plan distributions or loans from plans
                         maintained by any Affiliated Company; or

                    (v)  Borrowing from commercial sources on reasonable
                         commercial terms.

                                       41
<PAGE>
     The Committee shall rely solely on the Participant's representation that a
     withdrawal meets the above criteria, provided that the Company does not
     have actual knowledge to the contrary and that such reliance does not
     discriminate in favor of Highly Compensated Employees.

          (3)  What Constitutes an Immediate and Heavy Financial Need:

               A Participant will be granted a hardship withdrawal only if such
               withdrawal is necessary to meet one or more of the following
               financial needs, which are deemed to be immediate and heavy:

               (A)  The payment of unreimbursed medical expenses described in
                    Code Section 213(d) incurred by the Participant his spouse,
                    or any dependent (as defined in Code Section 152) or
                    obtaining medical care within the Code Section 213(d) for
                    such individuals;

               (B)  The purchase (excluding mortgage payments) of the
                    Participant's principal residence;

               (C)  The payment of tuition and related educational fees
                    (excluding living expenses) for post-secondary education for
                    the next twelve (12) months for the Participant, his Spouse,
                    children or dependents (as defined in Code Section 152);

               (D)  The payment of debts necessary to prevent eviction or
                    foreclosure on the Participant's principal residence; or

               (E)  Such other circumstances as may be recognized by the
                    Internal Revenue Service as constituting an immediate and
                    heavy financial need.

     (b)  Timing of Withdrawals:

          Any hardship withdrawal pursuant to this Section 5.6 will be paid at a
          time determined by the Committee, which shall generally be as soon as
          practicable

                                       42
<PAGE>
          after receipt by the Committee of the withdrawal request and any
          required supporting documentation.

     (c)  Limitation on Withdrawals:

          No Participant shall make more than one (1) withdrawal during any
          twelve (12) month period.

5.7  Withdrawals of Matching Contributions:

     Before his Separation from Service Date, a Participant cannot withdrawal
     amounts from his Match Account except for a loan, in accordance with
     Article XIII.

5.8  Withdrawals of Rollover Contributions:

     A Participant may withdraw any amount from his Rollover Account at any time
     provided that: (a) only one withdrawal may be made in any twelve month
     period, (b) no withdrawal may be less than five hundred dollars ($500), and
     (c) the Participant completes such documentation as the Committee may
     specify.

5.9  Withdrawals After Attaining Age Fifty-Nine and One-Half (59-1/2)

     A Participant may withdraw any amount from his Salary Deferral Account
     after attaining age fifty-nine and one-half (59-1/2), provided that only
     one withdrawal may be made in any six-month period.

5.10 Allocation Among Trust Funds:

     If the Participant's account is invested in more than one Investment Fund,
     withdrawals in accordance with Sections 5.6, 5.7 or 5.8 shall be allocated
     pro rata among the Investment Funds, unless the Participant directs
     otherwise.

5.11 Direct Rollover of Eligible Rollover Distributions:

     Notwithstanding any provision of the Plan to the contrary that would
     otherwise limit a distributee's election under this Section, a distributee
     may elect, at the time and in the manner prescribed by the Company, to have
     any portion of an eligible rollover distribution paid directly to an
     eligible retirement plan specified by the distributee in a direct rollover.

                                       43
<PAGE>
     (a)  Definitions

          (1)  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 distributee's designated
               beneficiary, or for a specified period of ten (10) years or more;
               any distribution to the extent such distribution is required
               under Code Section 401(a)(9); any hardship distribution described
               in Code Section 401(k)(2)(B)(i)(IV); and the portion of any
               distribution that is not includible in gross income (determined
               without regard to the exclusion for net unrealized appreciation
               with respect to employer securities). An Eligible Rollover
               Distribution does not include a financial hardship of Salary
               Deferrals, and investment gains on Salary Deferrals contributed
               to the Plan before January 1, 1989. However, if the Participant
               qualifies for a distribution from the Plan, other than a hardship
               withdrawal, the prior sentence shall be disregarded, even though
               the Committee makes the distribution in the form of a hardship
               distribution.

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

                                       44
<PAGE>
          (3)  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 Code Section 414(p), are
               distributees with regard to the interest of the Spouse or former
               Spouse.

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

                                   ARTICLE VI

                           DESIGNATION OF BENEFICIARY

6.1  General:

     Subject to Section 6.3 below, each Participant may designate in writing, in
     a form and manner designated by the Committee, a Beneficiary or
     Beneficiaries to receive the benefits payable under the Plan by reason of
     his death. Also subject to Section 6.3, Participants shall have the right
     to change such designated Beneficiaries by similar election fled with the
     Committee.

6.2  Absence of Proper Designation:

     Wherever provision is made hereunder for the payment of any death benefit
     to a Beneficiary and a properly designated Beneficiary does not survive the
     Participant, such benefit shall be paid to the following classes of
     survivors, in the following order:

     (a)  Spouse: Surviving spouse; if none, then

     (b)  Children: Children, including adopted children, per stirpes; if none,
          then

     (c)  Estate: Executor or administrator of the Participant's estate.

                                       45
<PAGE>
6.3  Consent of Spouse:

     In the event a Participant is married on his Benefit Commencement Date and
     he designates an individual other than his Spouse as the Beneficiary, a
     Spousal Consent must be on file with the Committee before such Beneficiary
     designation will be honored.

6.4  Authentication:

     The Committee or the Funding Agent may require the execution and delivery
     of such receipts and other documents as it deems appropriate to ensure that
     the payment of any benefit is proper.

                                   ARTICLE VII

                                    COMMITTEE

7.1  Designation of Committee Members:

     The Plan shall be administered by a Pension and Retirement Plan Committee
     (or more briefly denoted as "the Committee") consisting of at least two (2)
     but not more than five (5) individuals. The Committee members shall be
     appointed and shall be removable (with or without cause) at any time by the
     Board. In the event of removal, resignation, death or retirement of any
     Committee member, the Board shall appoint a successor. A Committee member
     may be, but need not be, a Participant. A Committee member may succeed
     himself.

7.2  Transaction of Committee Business:

     A majority of the Committee members shall constitute a quorum for the
     transaction of business. All resolutions or other actions taken by the
     Committee at any meeting at which a quorum is present shall be by a simple
     majority of those present. All Committee members shall be given reasonable
     notice of such meetings. Resolutions may be adopted or any other action
     taken at a meeting in person, at a meeting by telephone, by written consent
     signed by a majority of the members of the Committee or by any other
     reasonable means.

                                       46
<PAGE>
7.3  Delegation to Act on Behalf of the Committee:

     The Committee may, by written direction signed by a majority of its
     members, delegate to one or more of its members or an agent the authority
     to act on its behalf, including the authority to: give notice in writing of
     any action taken by the Committee; provide for such bonding of Committee
     members as may be required by law; and contract for legal, accounting,
     clerical, and other services to carry out the purposes or provisions of the
     Plan or Contract. The Committee shall notify the Funding Agent in writing
     as to the name or names of the member or members authorized to act on its
     behalf. The Funding Agent thereafter shall accept and rely upon any
     document or written direction executed by those so authorized until the
     Committee files with the Funding Agent a written revocation of such
     designation. The costs of such services and expenses of the Committee shall
     be paid by the Company or, to the extent permitted by law and at the
     written direction of the Committee, by the Funding Agent from Trust Fund
     assets.

7.4  Compensation of Committee Members:

     (a)  No fee or compensation shall be paid to any Committee member for his
          services as such. Except as may be required by law, no bond, surety
          or other security shall be required of any Committee member for the
          faithful performance of his duties hereunder.

     (b)  All costs and expenses incurred by the Committee in the performance or
          exercise of any of its obligations or powers hereunder, and all
          reasonable fees, charges and compensation of any counsel, consultant
          or agent employed by the Committee pursuant to Section 7.3 hereof
          shall be charged to and paid by the Company unless the Committee
          elects to charge such expenses to the Trust.

7.5  Disqualification of Committee Member:

     No member of the Committee shall participate in any decision of the
     Committee which involves the payment of benefits to him or in which he has
     an interest other than as a Participant in the Plan. If the entire
     Committee is disqualified to act by reason of this Section, the Board shall
     act as the Committee, or appoint temporary members to act as the Committee.

                                       47
<PAGE>
7.6  Powers and Duties of Committee in Administering the Plan:

     The Committee's powers shall include the full and absolute discretion to do
     the following (without limitation):

     (a)  to construe and interpret the Plan, its interpretation thereof in good
          faith to be final and conclusive on all Employees, Participants and
          Beneficiaries;

     (b)  to decide all questions concerning the Plan and the eligibility of any
          person to participate in the Plan;

     (c)  to make and enforce such rules and regulations as it shall deem
          necessary and proper for the efficient administration of the Plan;

     (d)  to adopt uniform and nondiscriminatory administrative procedures to
          determine whether a court order is a Qualified Domestic Relations
          Order;

     (e)  to select Investment Funds consistent with the objectives of the Plan
          and the requirements of ERISA;

     (f)  to grant or deny withdrawal requests and loan applications and adopt
          procedures to administer withdrawals and loans;

     (g)  to compute the amount of any distribution which shall be payable to
          any Participant or Beneficiary in accordance with the provisions of
          the Plan, and to determine the person or persons to whom such benefits
          shall be paid;

     (h)  to authorize the Trustee and/or Funding Agent to make distributions;

     (i)  to employ actuaries, attorneys, accountants, consultants, investment
          counselors, trustees, and other experts to act as the Committee's
          agents and to assist the Committee in fulfilling its duties and
          obligations as Plan administrator, provided, however, that such
          assistants shall not have discretionary authority over management or
          administration of the Plan or investment of Plan assets unless
          specifically delegated in writing by the Committee and accepted in a
          signed writing by the delegee;

                                       48
<PAGE>
     (j)  to appoint additional or successor Trustees and/or Funding Agent and,
          accordance with the Trust Agreement, to appoint Investment Managers to
          manage the Trust Fund and/or any Investment Fund thereunder;

     (k)  to perform necessary and proper functions in the operation of the
          Plan, such as to serve as agent for service of legal process;

     (l)  to appoint a Plan Manager to authorize benefit payments, approve or
          deny claims, and perform such other duties as the Committee may
          delegate in writing; the Plan Manager shall be removable at any time
          (with or without cause) by the Committee; and

     (m)  to have the duty and the fully discretionary power to adopt the
          following amendments provided that they do not increase the cost of
          the Plan to the Company, (i) administrative or technical amendments to
          the Plan which do not substantially affect the rights of Eligible
          Employees and Beneficiaries under the Plan, or (ii) amendments to the
          Plan which are mandated by law.

7.7  Powers and Duties of the Committee with Respect to the Trust Fund:

     Subject to the provisions of the Plan and any applicable Contract(s), the
     Committee, from time to time, shall have the power and discretion to direct
     (in writing) the Trustee to invest and reinvest the Trust Fund (without
     distinction between principal and income) in such investments as the
     Committee shall deem advisable, including but not limited to, real,
     personal and mixed property of any kind (such as funds, preferred or common
     stocks, open-end or closed-end mutual funds, group annuity contracts,
     mortgages and interests in any kind of investment trust or common trust
     fund).

7.8  Responsibility for Distributions from the Trust Fund:

     The Committee shall have the duty and power to direct the Trustee and/or
     Funding Agent to pay benefits under this Plan at the time, in the manner
     and to the person or persons entitled thereto, and the Trustee and/or
     Funding Agent shall be fully protected in relying upon and acting in
     accordance with any such direction by the Committee set forth in writing
     and signed by such person or persons as the Committee may, by resolution,

                                       49
<PAGE>
     authorize and direct to sign such directions. In making such directions,
     the Committee shall adhere to the provisions of this Plan and shall not at
     any time direct that any payment be made which could cause any part of the
     Trust Fund to be used for or diverted to any purpose other than for the
     exclusive benefit of Participants and Beneficiaries or for payment of
     administrative expenses of the Plan and Contract.

7.9  Claims Procedure:

     (a)  Claims for Plan Benefits:

          (1)  Any person who does not receive a distribution (including a
               hardship or in-service withdrawal) to which he believes he is
               entitled may present a claim to the Company for any unpaid
               benefits in accordance with the procedure described in the
               balance of this Section 7.9.

          (2)  The Company may appoint a delegate to review benefit applications
               and determine benefit rights. The Committee shall be the named
               fiduciary that has the authority to act with respect to any
               appeal from a denial of benefits.

     (b)  Applications for Benefits:

          (1)  All applications for benefits under the Plan shall be submitted
               to the Company. Applications for benefits must be in writing and
               must be signed by the applicant. The Company may require any
               documentation needed to determine the applicant's entitlement to
               a benefit.

          (2)  Each application shall be acted upon and approved or disapproved
               within ninety (90) days following its receipt by the Company
               unless special circumstances require further time for processing
               and the applicant is advised of the extension. In no event shall
               the Company act more than one hundred eighty (180) days after the
               Company receives the application.

          (3)  In the event any application for benefits is denied, in whole or
               in part, the Company shall notify the applicant in writing of
               such denial and of his

                                       50
<PAGE>
               right to a review by the Committee and shall set forth in a
               manner calculated to be understood, 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 to perfect the application, an explanation
               of why such material or information is necessary, and an
               explanation of the Plan's review procedure.

     (c)  Denial of Application:

          (1)  If the application for benefits is denied in whole or in part,
               the applicant, or his duly authorized representative, may appeal
               to the Committee for a review of the decision by submitting to
               the Committee within sixty (60) days after receiving written
               notice of the denial of his 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 pertinent to his application.

          (2)  The Company shall give the applicant or the representative an
               opportunity to review pertinent materials, other than legally
               privileged documents, in preparing the request for review.

     (d)  Committee Review:

          The Committee shall act upon each application within sixty (60) days
          after receipt of the applicant's request for review unless special
          circumstances require further time for processing and the applicant is
          advised of the extension. In no event shall the decision on review be
          rendered more than one hundred twenty (120) days after the Committee
          receives the request for review. The Committee shall make a

                                       51
<PAGE>
          full and fair review of each such application and any written
          materials submitted by the applicant or the Company in connection
          therewith and may require the Company or the applicant to submit such
          additional facts, documents, or other evidence as the Committee, in
          its sole discretion, deems necessary or advisable in making such a
          review. On the basis of its 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.

     (e)  Written Notice of Final Denial:

          In the event the Committee denies an application in whole or in part,
          written notice of its decision shall be given to the applicant setting
          forth in a manner calculated to be understood by the applicant the
          specific reasons for such denial and specific reference to the
          pertinent Plan provisions on which the decision was based.

7.10 Procedure for Qualified Domestic Relations Orders:

     (a)  Upon receipt of a domestic relations order related to the benefit of a
          Participant, the Committee shall promptly notify the parties of its
          receipt of the order. In addition, the Committee shall adopt
          nondiscriminatory procedures, in accordance with the requirements of
          ERISA, to determine whether a domestic relations order received by the
          Committee is a "qualified domestic relations order" as defined in
          Section 206(d)(3)(B)(i) of ERISA. A "qualified domestic relations
          order" shall specify:

          (1)  Name and Address:

               The name and last known mailing address (if any) of the
               Participant and each Alternate Payee covered by the order;

                                       52
<PAGE>
          (2)  Amount of Plan Benefits:

               The amount or percentage of the Participant's benefits to be paid
               by the Plan to each such Alternate Payee, or the manner in which
               such amount or percentage is to be determined;

          (3)  Payment Period:

               The number of payments or period to which such order applies; and

          (4)  Applicable Plans(s):

               Each plan to which it applies.

          In addition, it shall not require the Plan to provide any type or form
          of benefits or any option not otherwise provided under the Plan; and
          it shall not require the payment of benefits to an Alternate Payee
          which are required to be paid to another Alternate Payee under another
          order previously determined to be a "qualified domestic relations
          order."

     (b)  If the Committee determines that the order is a "qualified domestic
          relations order" it shall segregate those assets payable to the
          Alternate Payee from the assets in the Participant's Accounts. The
          Alternate Payee shall be deemed to be a Beneficiary for the purposes
          of directing investment of his portion of the Participant's Account
          and shall have the same rights under the Plan that otherwise apply to
          Beneficiaries, except to the extent that such characterization is
          inconsistent with the terms of the qualified domestic relations order.

     (c)  Distribution of benefits to an Alternate Payee pursuant to a
          "qualified domestic relations order" may commence prior to the date
          the Participant incurs a Separation from Service Date if the order
          specifies such earlier distribution and the Alternate Payee elects
          such distribution under terms of the Plan.

7.11 Fiduciaries:

     In the exercise of any discretion, each Committee member and the Plan
     Manager shall act as a fiduciary on behalf of the Participants and
     Beneficiaries. The Company shall be the Plan Administrator within the
     meaning of Section 3(16) of ERISA.

                                       53
<PAGE>
7.12 Indemnification:

     (a)  The Company shall indemnify each member of the Board, each member of
          the Committee, the Plan Manager and any other person to whom fiduciary
          duties with respect to the Plan are delegated pursuant to Section 7.3
          against all claims, losses, damages, expenses, and liabilities,
          including attorneys fees, from any alleged action or alleged failure
          to. act in connection with such individual's duties with respect to
          the Plan, except when the same is judicially determined to be due to
          the gross negligence or willful misconduct of such member.

     (b)  The Company shall have the right, but not the obligation to conduct
          the defense of such persons in any proceeding to which this Section
          7.12 applies. The Company may satisfy its obligation under this
          Section 7.12, in whole or in part, through the purchase of a policy or
          policies of insurance providing equivalent protection.

                                  ARTICLE VIII

                              RIGHTS UNDER THE PLAN

8.1  Right to Plan Benefits:

     No Participant, Beneficiary or Alternate Payee shall have any right or
     claim to benefits under the Plan except in accordance with the provisions
     of the Plan document.

8.2  Employment Rights under the Plan:

     Nothing contained in the Plan shall be deemed to give any Employee the
     right to be retained in the services of the Company.

8.3  Assignment of Rights:

     No benefits under the Plan shall be subject to alienation or assignment,
     including transfer, disposition, attachment, execution, garnishment,
     sequestration, or other legal or equitable process, unless such alienation
     or assignment is pursuant to (a) a "qualified domestic relations order" as
     described in Code Section 414(p); (b) a federal levy or collection by the
     Internal Revenue Service on a judgment resulting from an unpaid tax
     assessment; or

                                       54
<PAGE>
     (c)  a judgment or settlement as described in Code Section 401(a)(13)(C),
          subject to the spousal consent requirements described therein.

8.4  Veterans Reemployment Rights

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

8.5  Incompetency:

     If an individual to whom benefits shall be due under the Plan has been
     declared legally incompetent, the Committee shall pay any benefits due
     under the Plan to such individual's legal guardian.

                                   ARTICLE IX

                                AMENDMENT OF PLAN

9.1  Right to Amend Plan:

     The Board may at any time amend any of the provisions of this Plan;
     provided, however, that no such amendment shall permit any part of the
     Trust Fund to be used for or diverted to purposes other than for the
     exclusive benefit of Participants, Inactive Participants, Former
     Participants, Beneficiaries and Alternative Payees, at any time prior to
     the satisfaction of all Plan liabilities.

9.2  Protection of Participants' Rights:

     (a)  No Decrease of Vested Percentage:

          No amendment of the Plan may decrease the vested percentage of any
          Participant's Account Balance.

     (b)  No Decrease of Account Balance:

          No Account Balance of any Participant may be decreased by amendment of
          this Plan.

     (c)  No Reduction of Protected Rights:

                                       55
<PAGE>
          No amendment of the Plan may reduce or eliminate any right protected
          under Code Section 411(d)(6).

9.3  Mergers, Consolidations and Transfers:

     This Plan shall not be merged into or consolidated with any other plan, nor
     shall any of its assets or liabilities be transferred to any other plan,
     unless each Participant would (if such other plan then terminated) 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 before the merger, consolidation, or transfer (if this Plan had
     then terminated).

                                    ARTICLE X

                               TERMINATION OF PLAN

10.1 General:

     The Company has established the Plan with the intention and expectation
     that it will be able to make its contributions indefinitely, but the
     Company shall not be under any obligation or liability whatsoever to
     continue its contributions and may discontinue such contributions or
     terminate the Plan at any time. The Plan shall terminate upon the
     dissolution of the Company unless, upon such dissolution, a successor to
     the Company elects to continue the Plan.

10.2 Distribution:

     Upon a complete termination of the Plan, a partial termination of the Plan
     with respect to the Employees of one (1) or more Participating Companies or
     a complete discontinuance of contributions under the Plan, the Accounts of
     each affected Participant, Inactive Participant, Former Participant,
     Beneficiary and Alternate Payee shall immediately vest in full and be
     non-forfeitable; and the Committee shall revalue the assets of the Plan and
     the Account Balances of such individuals as of the date of termination or
     discontinuance of contributions, and, after satisfying current obligations
     of the Plan and setting aside funds for anticipated future obligations of
     the Plan, shall allocate all unallocated assets held in the respective
     Funds to the Accounts of such individuals as of the date of

                                       56
<PAGE>
     termination or discontinuance of contributions, in the proportion that the
     value of the Fund balances held in each Account bears to the aggregate
     value of the entire Fund balances held by all Accounts as of such date. The
     Trustee shall then pay over to each affected Participant, Former
     Participant, Inactive Participant, Beneficiary and Alternate Payee, in
     accordance with the instructions of the Committee, the net value of his
     Account Balance(s). In the event of such termination, after payment of all
     expenses, all assets of the Contract shall be used for the exclusive
     benefit of Participants, Former Participants, Inactive Participants,
     Beneficiaries and Alternate Payees, in accordance with the terms of this
     Plan.

                                   ARTICLE XI

                      CONSTRUCTION AND ENFORCEMENT OF PLAN

11.1 Governing Legal Entity:

     The Plan shall be construed, administered and enforced according to the
     laws of the United States and the laws of the State of California to the
     extent the latter are not preempted by the former.

11.2 Text to Control:

     The headings of the sections and subsections are included solely for
     convenience of reference and, if there is any conflict between such
     headings and the text of this Plan, the text shall control.

11.3 Gender:

     The masculine pronoun wherever used includes the feminine pronoun.

11.4 Severability:

     In the event any provision of this Plan shall be considered illegal or
     invalid for any reason, such provision shall be fully severable, and the
     Plan shall be construed and enforced as such provision had never been
     included therein.

                                       57
<PAGE>
11.5 Liability:

     All benefits payable under the Plan shall be paid or provided for solely as
     provided in the Plan and Contract and no Participating Company assumes any
     liability or responsibility therefor.

                                  ARTICLE XII

                                 TOP HEAVY PLAN

12.1 Precedence of Section:

     Anything in this Plan to the contrary notwithstanding, the provisions of
     this Section 12 shall supersede and take precedence over any other
     provisions of the Plan for any Plan Year in which the Plan is determined to
     be a Top Heavy Plan as determined under Section 12.3.

12.2 Definitions:

     The following terms, wherever capitalized, shall have the meanings set
     forth below:

     (a)  Determination Date:

          "Determination Date" means the date on which the Plan is tested to
          determine if it is a Top Heavy Plan, which date shall generally be the
          last day of the Plan Year preceding the Plan Year for which the
          determination is being made.

     (b)  Key Employee:

          "Key Employee" means an Employee (or Beneficiary of an Employee) who,
          at any time during a Plan Year or any of the four (4) preceding Plan
          Years, is or was:

          (1)  Employee Owner:

               One (1) of the ten (10) Employees owning (or considered as owning
               within the meaning of Code Section 318) both the largest
               interests in an Affiliated Company and at least one-half of one
               percent (0.5%) of an Affiliated Company provided that his annual
               Compensation during the Limitation Year of such ownership is
               greater than the limitation specified

                                       58
<PAGE>
               in Code Section 415(c)(1)(A) (thirty thousand dollars ($30,000)
               or such greater amount as may be recognized for increases in the
               cost of living in accordance with Code Section 416(i)(1)(A)(ii))
               (for purposes of this paragraph, if two (2) Employees have the
               same ownership interests, the Employee with the greater annual
               Compensation shall be treated as having a larger interest),

          (2)  Five Percent Shareholder:

               An Employee who is a five percent (5%) or more Owner of an
               Affiliated Company,

          (3)  Highly Compensated Shareholder:

               An Employee who is a one percent (1%) or more Owner of an
               Affiliated Company and who has annual Compensation in excess of
               one hundred fifty thousand dollars ($150,000), or

          (4)  Officer: An Officer.

     (c)  Former Key Employee:

          "Former Key Employee" means a Participant in the Plan who, at any time
          during the four (4) preceding Plan Years, was a Key Employee but who
          is not a Key Employee in the current Plan Year or who terminated his
          service with an Affiliated Company in one of the four (4) preceding
          Plan Years and was not a Key Employee in the Plan Year in which he
          terminated.

     (d)  Non-Key Employee:

          "Non-Key Employee" means an Employee or Former Key Employee (or the
          Beneficiary of either) who is not a Key Employee.

     (e)  Top Heavy Plan:

          "Top Heavy Plan" means a Plan which is determined to be a Top Heavy
          Plan for a Plan Year, as described in Section 12.3.

     (f)  Year of Service:

                                       59
<PAGE>
          "Year of Service" means a Plan Year in which a Non-Key Employee is
          credited with 1,000 Hours of Service.

12.3 Determination of Top Heavy Plan:

     (a)  The Plan shall be a Top Heavy Plan if, as of the applicable
          Determination Date, the aggregate of the Account Balances of Key
          Employees (excluding Former Key Employees) under the Plan exceeds
          sixty percent (60%) of the aggregate of the Account Balances of all
          Key Employees (excluding Former Key Employees) and all Non-Key
          Employees under the Plan. In making such determination, distributions
          made from Accounts during the five (5) year period ending on the
          Determination Date shall be included and the Account Balances of all
          individuals who were not employed by the Company during the five (5)
          year period ending on the Determination Date shall be excluded. In
          determining if the Plan is a Top Heavy Plan, it shall be aggregated
          with each other plan of an Affiliated Company in the required
          aggregation group (as defined below) and may be aggregated with any
          other plan of an Affiliated Company in the permissive aggregation
          group (as defined below).

     (b)  Required Aggregation Group:

          "Required Aggregation Group" means (1) each qualified plan of an
          Affiliated Company in which at least one Key Employee participates,
          and (2) any other qualified plan of an Affiliated Company which
          enables a plan described in (1) to meet the requirements of Code
          Section 401(a)(4) or 410.

     (c)  Permissive Aggregation Group:

          "Permissive Aggregation Group" means the required aggregation group of
          plans plus any other plan or plans of an Affiliated Company which,
          when considered as a group with the required aggregation group, would
          continue to satisfy the requirements of Code Sections 401(a)(4) and
          410.

                                       60
<PAGE>
12.4 Vesting in Top Heavy Plan Year:

     With respect to any Plan Year for which the Plan is determined to be a Top
     Heavy Plan, the Company shall establish a Company Contribution Account for
     each Participant who is eligible to receive a minimum benefit as described
     in Section 12.5 or 12.6, whichever is applicable. The Company Contribution
     Account shall vest in accordance with the following vesting schedule:

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

12.5 Minimum Benefit Under Top Heavy Plan:

     With respect to any Plan Year for which the Plan is determined to be a Top
     Heavy Plan, the Participating Companies' contributions allocated to the
     Company Contribution Accounts of Participants as described in Section 12.4
     who are Non-Key Employees and who are employed by an Affiliated Company on
     the last day of the Plan Year (regardless of whether such Non-Key Employees
     have less than one thousand (1,000) Hours of Service for such Plan Year or
     have elected to make Salary Deferrals for such Plan Year) shall not be less
     than the lesser of:

     (a)  3% of Compensation:

          Three percent (3%) of each such Participant's Compensation, or

     (b)  Company Contribution Totaling Less than 3% of Compensation:

          If the Company's contribution, including Salary Deferrals on behalf of
          each Key Employee for a Plan Year totals less than three percent (3%)
          of the Compensation of each such Participant for such Plan Year (and
          if the Plan does not enable any defined benefit plan to meet Code
          Section 401(a)(4) or 410), not less than the highest percentage of
          Compensation which is contributed by the Company on behalf of a Key
          Employee, (including Salary Deferrals) to the Plan for such Plan Year.

                                       61
<PAGE>
          For the purpose of this Section, Company contributions shall include
          Salary Deferrals and, for the purpose of computing the minimum
          contribution required to be made on behalf of any Non-Key Employee,
          any similar contributions made to any plan of an Affiliated Company
          that meets the vesting requirement of Code Section 416(b) and that
          limits compensation as described in Code Section 416(d). However,
          contributions allocated to the accounts of Non-Key Employees shall not
          include any Company contributions allocated on the basis of employee
          pretax or after tax contributions to the extent used to meet the
          Average Deferral Percentage Test or any Salary Deferrals (or other
          elective contributions).

12.6 Two or More Plans:

     If the Company maintains more than one plan which is Top Heavy, the minimum
     contributions requirement may be satisfied as follows:

     (a)  Non-Key Employees covered under only this Plan must receive the
          minimum contribution described in Section 12.5.

     (b)  Non-Key Employees covered under only a defined benefit plan must
          receive the defined benefit minimum described in Code Section
          415(c)(1); and

     (c)  Non-Key Employees covered under both a defined benefit plan and this
          Plan shall receive the defined benefit minimum, offset by any benefits
          provided under the defined contribution plan.

                                  ARTICLE XIII

                                      LOANS

13.1 General:

     (a)  General:

          Any active Participant shall be eligible to borrow from his Accounts
          in accordance with the provisions of this Article.

                                       62
<PAGE>
     (b)  Procedure:

          Each loan shall be evidenced by a promissory note and/or a loan
          application form executed, by the borrower. The making of such loan
          shall be approved by an individual designated by the Committee and
          shall be subject to the following terms, conditions and provisions:

          (1)  The minimum loan amount shall be $1,000.

          (2)  A Participant may have only one outstanding Plan loan at any
               time.

          (3)  The note and/or loan application form shall specify that it is
               secured by a portion of the borrower's interest under the Plan
               equal to the amount borrowed, plus any unpaid interest on the
               loan.

          (4)  All loans equal to the amount borrowed shall be secured by the
               borrower's vested interest in the Plan.

          (5)  All loans shall call for periodic payments (at least quarterly)
               of principal and interest in amounts sufficient to fully amortize
               the loan over its stated terms. Loan repayment terms may not be
               changed and must be by payroll deduction.

          (6)  The interest rate on loans will be equal to the prime rate, as
               shown in the Wall Street Journal fifteen (15) days prior to each
               calendar quarter, plus 1%. This rate will not change during the
               loan repayment period.

          (7)  The term of the loan may not exceed five (5) years; provided that
               a loan used to purchase the borrower's principal residence may be
               for a period of up to twenty (20) years.

          (8)  The borrower must pay a loan origination fee and processing fees.

          (9)  Loan repayments will be allocated to the Investment Funds in
               accordance with the borrower's then current investment
               instructions.

                                       63
<PAGE>
          (10) The expiration of the repayment period shall be the loan's
               maturity date. Notwithstanding the foregoing, a borrower shall
               have the right to prepay principal and interest amounts in full
               without penalty.

          (11) Loan payments will be suspended under the Plan as permitted under
               Code Section 414(u).

13.2 Amount of Loan:

     An individual's outstanding loan balance shall not exceed the lesser of the
     following:

     (a)  One-half the borrower's vested Account Balances (as of the preceding
          Valuation Date), or

     (b)  $50,000 (as adjusted in paragraph (c) below).

     (c)  Adjustment to $50,000 Limit:

          The $50,000 limit in paragraph (b) shall be further reduced by the
          highest outstanding loan balance from the Plan to the borrower during
          the one-year period ending on the day before such loan was made.

13.3 Default:

     In the event that a borrower (a) files a petition in bankruptcy or makes
     any assignment for the benefit of creditors or similar action intended to
     adjust the rights of creditors, (b) becomes the subject of any involuntary
     petition in bankruptcy which is not dismissed within thirty (30) days of
     its filing, or (c) fails to make a payment on the loan on the date such
     payment is due, or (d) does not otherwise repay a loan in accordance with
     the terms of the loan application form and/or the promissory note, the
     borrower will be considered to be in default on the loan at the end of the
     calendar quarter following the calendar quarter in which such event occurs.
     The Committee shall declare the loan due and payable, treat the outstanding
     principal and interest as a taxable distribution to the Participant, and
     reduce the Participant's Account Balance by the amount of the outstanding
     principal and interest owing on the promissory note, if there is a
     distributable event, as described by Code Section 401(k)(2)(B). If there is
     no distributable event, there

                                       64
<PAGE>
     shall be a deemed distribution of the promissory note from the Borrower's
     vested Account Balance.

                                EXECUTION OF PLAN

     IN WITNESS WHEREOF, Diamond Walnut Growers, Inc. has caused the Diamond of
     California 401(k) Plan, restated effective April 1, 2001, to be executed by
     its duly authorized officers this 28th day of March, 2001.

                                        DIAMOND WALNUT GROWERS, INC.

                                        By /s/ Michael P. Riley
                                           -------------------------------------

                                        Title  V.P. & C.F.O.
                                              ----------------------------------

                                       65

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