Document:

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                                                                    EXHIBIT 10.6

                                 ALLERGAN, INC.

                          EMPLOYEE STOCK OWNERSHIP PLAN

RESTATED
2001

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                                TABLE OF CONTENTS

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ARTICLE I
NAME AND EFFECTIVE DATE...........................................................................................1

1.1           Plan Name...........................................................................................1
1.2           Effective Date of 2001 Restated Plan................................................................1
1.3           Plan Purpose........................................................................................1
1.4           Plan Intended to Qualify............................................................................1

ARTICLE II
DEFINITIONS.......................................................................................................2

2.1           Affiliated Company..................................................................................2
2.2           Beneficiary.........................................................................................2
2.3           Board of Directors..................................................................................2
2.4           Break in Service....................................................................................2
2.5           Code................................................................................................2
2.6           Committee...........................................................................................2
2.7           Company.............................................................................................2
2.8           Company Stock.......................................................................................2
2.9           Compensation........................................................................................2
2.10          Credited Service....................................................................................4
2.11          Disability..........................................................................................5
2.12          Effective Date......................................................................................5
2.13          Eligible Employee...................................................................................5
2.14          Eligible Retirement Plan............................................................................6
2.15          Eligible Rollover Distribution......................................................................6
2.16          Employee............................................................................................6
2.17          Employment Commencement Date........................................................................7
2.18          ERISA...............................................................................................7
2.19          ESOP Account........................................................................................7
2.20          Exempt Loan.........................................................................................7
2.21          Exempt Loan Suspense Subfund........................................................................7
2.22          415 Suspense Account................................................................................7
2.23          Highly Compensated Employee.........................................................................7
2.24          Hour of Service.....................................................................................8
2.25          Investment Manager..................................................................................8
2.26          Leased Employee.....................................................................................8
2.27          Leave of Absence....................................................................................9
2.28          Normal Retirement Age..............................................................................10
2.29          Participant........................................................................................10
2.30          Period of Severance................................................................................10
2.31          Plan...............................................................................................10
2.32          Plan Administrator.................................................................................10
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2.33          Plan Year..........................................................................................10
2.34          Reemployment Commencement Date.....................................................................10
2.35          Severance..........................................................................................11
2.36          Severance Date.....................................................................................11
2.37          Sponsor............................................................................................12
2.38          Trust..............................................................................................12
2.39          Trust Agreement....................................................................................12
2.40          Trustee............................................................................................12
2.41          Valuation Date.....................................................................................12

ARTICLE III
ELIGIBILITY AND PARTICIPATION....................................................................................13

3.1           Commencement of Participation......................................................................13
3.2           Participation after Reemployment...................................................................13
3.3           Duration of Participation..........................................................................13
3.4           Participation After Normal Retirement Age..........................................................13

ARTICLE IV
CONTRIBUTIONS AND ALLOCATION TO ACCOUNTS.........................................................................14

4.1           Contributions to the Trust Fund....................................................................14
4.2           Allocation of Contributions to Trust Fund..........................................................14
4.3           Forfeitures........................................................................................16
4.4           Employee Contributions and Rollovers...............................................................16

ARTICLE V
VESTING AND DISTRIBUTIONS........................................................................................17

5.1           No Vested Rights Except as Herein Specified........................................................17
5.2           Vesting............................................................................................17
5.3           Severance When Less Than Fully Vested..............................................................17
5.4           Distribution upon Severance........................................................................18
5.5           Distribution upon Death............................................................................18
5.6           Distribution upon Disability.......................................................................19
5.7           Withdrawal upon Age 59-1/2.........................................................................19
5.8           Designation of Beneficiary.........................................................................19
5.9           Form of Distribution...............................................................................20
5.10          Distribution Rules.................................................................................21
5.11          Put Option for Company Stock Allocated to ESOP Accounts............................................22
5.12          Diversification Rule...............................................................................26
5.13          Lapsed Benefits....................................................................................28
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ARTICLE VI
TRUST FUND AND INVESTMENTS.......................................................................................29

6.1           General............................................................................................29
6.2           Single Trust.......................................................................................29
6.3           Investment of the Trust............................................................................29
6.4           Certain Offers for Company Stock...................................................................30
6.5           Securities Law Limitation..........................................................................34
6.6           Accounting and Valuations..........................................................................34
6.7           Dividends..........................................................................................36
6.8           Non-Diversion of Trust Fund........................................................................37
6.9           Company, Committee and Trustee
              Not Responsible for Adequacy of Trust Fund.........................................................38
6.10          Distributions......................................................................................38
6.11          Taxes..............................................................................................38
6.12          Trustee Records to be Maintained...................................................................38
6.13          Annual Report of Trustee...........................................................................39
6.14          Appointment of Investment Manager..................................................................39

ARTICLE VII
OPERATION AND ADMINISTRATION.....................................................................................40

7.1           Appointment of Committee...........................................................................40
7.2           Transaction of Business............................................................................40
7.3           Voting.............................................................................................40
7.4           Responsibility of Committee........................................................................40
7.5           Committee Powers...................................................................................41
7.6           Additional Powers of Committee.....................................................................42
7.7           Claims Procedures..................................................................................42
7.8           Appeals Procedures.................................................................................43
7.9           Limitation on Liability............................................................................44
7.10          Indemnification and Insurance......................................................................44
7.11          Compensation of Committee and Plan Expenses........................................................44
7.12          Resignation........................................................................................44
7.13          Voting of Company Stock............................................................................44
7.14          Reliance Upon Documents and Opinions...............................................................46

ARTICLE VIII
AMENDMENT AND ADOPTION OF PLAN...................................................................................48

8.1           Right to Amend Plan................................................................................48
8.2           Adoption of Plan by Affiliated Companies...........................................................48
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ARTICLE IX
DISCONTINUANCE OF CONTRIBUTIONS..................................................................................49

ARTICLE X
TERMINATION AND MERGER...........................................................................................50

10.1          Right to Terminate Plan............................................................................50
10.2          Effect on Trustee and Committee....................................................................50
10.3          Merger Restriction.................................................................................50
10.4          Effect of Reorganization, Transfer of Assets or Change in Control..................................50

ARTICLE XI
LIMITATION ON ALLOCATIONS........................................................................................54

11.1          General Rule.......................................................................................54
11.2          Annual Additions...................................................................................54
11.3          Other Defined Contribution Plans...................................................................55
11.4          Adjustments for Excess Annual Additions............................................................55
11.5          Compensation.......................................................................................56
11.6          Treatment of 415 Suspense Account Upon Termination.................................................56

ARTICLE XII
TOP-HEAVY RULES..................................................................................................58

12.1          Applicability......................................................................................58
12.2          Definitions........................................................................................58
12.3          Top-Heavy Status...................................................................................59
12.4          Minimum Contributions..............................................................................61
12.5          Minimum Vesting Rules..............................................................................61
12.6          Non-Eligible Employees.............................................................................61

ARTICLE XIII
RESTRICTION ON ASSIGNMENT OR
OTHER ALIENATION OF PLAN BENEFITS................................................................................62

13.1          General Restrictions Against Alienation............................................................62
13.2          Qualified Domestic Relations Orders................................................................62

ARTICLE XIV
MISCELLANEOUS PROVISIONS.........................................................................................66

14.1          No Right of Employment Hereunder...................................................................66
14.2          Limitation on Company Liability....................................................................66
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14.3          Effect of Article Headings.........................................................................66
14.4          Gender.............................................................................................66
14.5          Interpretation.....................................................................................66
14.6          Withholding For Taxes..............................................................................66
14.7          California Law Controlling.........................................................................66
14.8          Plan and Trust as One Instrument...................................................................66
14.9          Invalid Provisions.................................................................................66
14.10         Counterparts.......................................................................................67
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                                 ALLERGAN, INC.
                          EMPLOYEE STOCK OWNERSHIP PLAN

                                    ARTICLE I
                             NAME AND EFFECTIVE DATE

         1.1 Plan Name. This document, made and entered into by Allergan,
Inc., a Delaware corporation ("Allergan"), amends and restates in its entirety
the Allergan, Inc. Employee Stock Ownership Plan (Restated 2000) and
incorporates the First Amendment made thereto, and shall be known hereafter as
the "Allergan, Inc. Employee Stock Ownership Plan (Restated 2001)."

         1.2 Effective Date of 2001 Restated Plan. The Effective Date of
the Allergan, Inc. Employee Stock Ownership Plan (Restated 2001), hereinafter
referred to as the "Plan," shall be January 1, 2001; provided, however, that the
amendments made to the Plan to comply with the Economic Growth and Tax Relief
Reconciliation Act of 2001 shall be effective January 1, 2002 unless otherwise
specified in the Plan.

         1.3 Plan Purpose. The purpose of the Plan is to offer Participants
a systematic program for accumulation of beneficial ownership interests in
Company Stock and to encourage and develop employee interest and involvement in
the Company. Through the beneficial ownership of Company Stock, enhanced by
means of possible debt financed acquisition of Company Stock, Allergan, Inc.
intends to provide Participants with a meaningful voice in matters affecting
both it and Participants as shareholders. In order to accomplish these
objectives, the Plan is expressly authorized and directed to acquire and hold
Company Stock as its primary investment. All assets acquired under the Plan
shall be administered, distributed, forfeited and otherwise governed by the
provisions of the Plan, which is to be administered by the Committee for the
exclusive benefit of Participants in the Plan and their Beneficiaries.

         1.4 Plan Intended to Qualify. The Plan is an employee benefit plan
that is intended to qualify under Code Section 401(a) as a qualified stock bonus
plan and under Code Section 4975(e)(7) as an employee stock ownership plan. The
provisions of the Plan are intended to comply with all changes to the
qualification requirements made by the Uruguay Round Agreements Act (GATT), the
Uniformed Services Employment and Reemployment Rights Act of 1994, the Small
Business Job Protection Act of 1996, the Taxpayer Relief Act of 1997, the
Internal Revenue Service Restructuring and Reform Act of 1998, and the Community
Renewal Tax Relief Act of 2000, including qualification requirements that are
effective for Plan Years beginning on or after January 1, 1999 (collectively
referred to as the "GUST Amendments"), and the Economic Growth and Tax Relief
Reconciliation Act of 2001 ("EGTRRA"). It is further intended that the EGTRRA
provisions of the Plan are to be regarded as good faith compliance with the
requirements of EGTRRA and are to be construed in accordance with EGTRRA and
guidance issued thereunder.

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                                   ARTICLE II
                                   DEFINITIONS

         2.1. Affiliated Company. "Affiliated Company" shall mean (i) any
corporation, other than the Sponsor, which is included in a controlled group of
corporations (within the meaning of Code Section 414(b)) of which the Sponsor is
a member, (ii) any trade or business, other than the Sponsor, which is under
common control (within the meaning of Code Section 414(c)) with the Sponsor,
(iii) any entity or organization, other than the Sponsor, which is a member of
an affiliated service group (within the meaning of Code Section 414(m)) of which
the Sponsor is a member, and (iv) any entity or organization, other than the
Sponsor, which is affiliated with the Sponsor under Code Section 414(o). An
entity shall be an Affiliated Company pursuant to this Section only during the
period of time in which such entity has the required relationship with the
Sponsor under clauses (i), (ii), (iii) or (iv) of this Section after the
original Effective Date of the Plan.

         2.2. Beneficiary. "Beneficiary" or "Beneficiaries" shall mean the
person or persons last designated by a Participant as set forth in Section 5.8
or, if there is no designated Beneficiary or surviving Beneficiary, the person
or persons designated pursuant to Section 5.8 to receive the interest of a
deceased Participant in such event.

         2.3. Board of Directors. "Board of Directors" shall mean the Board of
Directors of the Sponsor (or its delegate) as it may from time to time be
constituted.

         2.4. Break in Service. "Break in Service" shall mean, with respect to
an Employee, each period of 12 consecutive months during a Period of Severance
that commences on the Employee's Severance Date or on any anniversary of such
Severance Date.

         2.5. Code. "Code" shall mean the Internal Revenue Code of 1986 and the
regulations thereunder. Reference to a specific Code Section shall be deemed
also to refer to any applicable regulations under that Section, and shall also
include any comparable provisions of future legislation that amend, supplement
or supersede that specific Section.

         2.6. Committee. "Committee" shall mean the committee appointed under
the provisions of Section 7.1.

         2.7. Company. "Company" shall mean collectively the Sponsor and each
Affiliated Company that adopts the Plan in accordance with Section 8.2.

         2.8. Company Stock. "Company Stock" shall mean any class of stock of
the Sponsor which both constitutes "qualifying employer securities" as defined
in Section 407(d)(5) of ERISA and "employer securities" as defined in Code
Section 409(1).

         2.9. Compensation. "Compensation" shall mean the following:

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                  (a) Compensation shall include amounts paid during a Plan Year
         to a Participant by the Company for services rendered, including base
         earnings, commissions and similar incentive compensation, cost of
         living allowances earned within the United States of America, holiday
         pay, overtime earnings, pay received for election board duty, pay
         received for jury and witness duty, pay received for military service
         (annual training), pay received for being available for work, if
         required (call-in premium), shift differential and premium,
         sickness/accident related pay, vacation pay, vacation shift premium,
         and bonus amounts paid under the (i) Sales Bonus Program, (ii)
         Management Bonus Plan or Executive Bonus Plan, either in cash or in
         restricted stock, and (iii) group performance sharing payments, such as
         the "Partners for Success."

                  (b) Compensation shall include amounts of salary reduction
         elected by a Participant under a Code Section 401(k) cash or deferred
         arrangement or a Code Section 125 cafeteria plan.

                  (c) Compensation shall not include business expense
         reimbursements; Company gifts or the value of Company gifts; Company
         stock related options and payments; employee referral awards; flexible
         compensation credits paid in cash; special overseas payments,
         allowances and adjustments including, but not limited to, pay for cost
         of living adjustments and differentials paid for service outside of the
         United States, expatriate reimbursement payments, and tax equalization
         payments; forms of imputed income; long-term disability pay; payment
         for loss of Company car; Company car allowance; payments for patents or
         for writing articles; relocation and moving expenses; retention and
         employment incentive payments; severance pay; long-term incentive
         awards, bonuses or payments; "Impact Award" payments; "Employee of the
         Year" payments; "Awards for Excellence" payments; special group
         incentive payments and individual recognition payments which are
         nonrecurring in nature; tuition reimbursement; and contributions by the
         Company under the Plan or distributions hereunder, any contributions or
         distributions pursuant to any other plan sponsored by the Company and
         qualified under Code Section 401(a) (other than contributions
         constituting salary reduction amounts elected by the Participant under
         a Code Section 401(k) cash or deferred arrangement), any payments under
         a health or welfare plan sponsored by the Company, or premiums paid by
         the Company under any insurance plan for the benefit of Employees.

                  (d) Compensation for any Plan Year shall not include amounts
         in excess of $200,000 ($150,000 for Plan Years beginning prior to
         January 1, 2002), as adjusted for cost-of-living increases in
         accordance with Code Section 401(a)(17)(B) for purposes of determining
         all benefits provided under the Plan for any Plan Year. Any
         cost-of-living adjustments in effect for a calendar year shall apply to
         the Plan Year beginning with or within such calendar year.

                  (e) Notwithstanding the foregoing, for purposes of applying
         the provisions of Articles XI and XII, a Participant's Compensation
         shall be determined pursuant to the definition of "Compensation" as set
         forth in Section 11.5 or 12.2(i), as the case may be.

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         2.10. Credited Service. "Credited Service" shall mean, with respect to
each Employee, his or her years and months of Credited Service determined in
accordance with the following rules:

                  (a) In the case of any Employee who was employed by the
         Company on the original Effective Date, for the period prior to such
         Effective Date such Employee shall be credited with Credited Service
         under the Plan equal to the period (if any) of uninterrupted employment
         of such Employee with the Company up to and including the day before
         the original Effective Date. For purposes of this paragraph (a), such a
         period of pre-Effective Date employment shall not be deemed to have
         been interrupted by reason of (i) any break in or interruption of
         employment which continued for less than one year, or (ii) any Leave of
         Absence granted to such Employee under applicable Company policies
         regarding Leaves of Absence.

                  (b) On and after the Effective Date, an Employee shall receive
         Credited Service credit for the elapsed period of time between each
         Employment Commencement Date (or Reemployment Commencement Date) of the
         Employee and the Severance Date which immediately follows that
         Employment Commencement Date (or Reemployment Commencement Date).
         Solely for the purpose of determining an Employee's Credited Service
         under this paragraph (b), in the case of an Employee who is employed on
         the Effective Date, that date shall be deemed to be an Employment
         Commencement Date of the Employee (with service credit for periods
         prior to the Effective Date to be determined under paragraph (a)
         above). An Employee who is absent from work on an authorized Leave of
         Absence shall be deemed to have incurred a Severance (if any) in
         accordance with the rules of Section 2.35.

                  (c) An Employee shall receive Credited Service credit for
         periods between a Severance and his or her subsequent Reemployment
         Commencement Date in accordance with the following rules:

                           (i) If an Employee incurs a Severance by reason of a
                  quit, discharge or retirement (other than such a Severance
                  occurring during an approved Leave of Absence, which situation
                  is covered under the provisions of subparagraph (ii) below),
                  and the Employee is later reemployed by the Company prior to
                  his or her incurring a Break in Service, he or she shall
                  receive Credited Service for the period commencing with his or
                  her Severance Date and ending with his or her subsequent
                  Reemployment Commencement Date.

                           (ii) If an Employee is on an approved Leave of
                  Absence and then incurs a Severance by reason of a quit,
                  discharge or retirement during the Leave of Absence, or a
                  failure to return to work as scheduled following such Leave,
                  and such Employee is later reemployed by the Company within 12
                  months of the date on which he or she discontinued active
                  employment and commenced such Leave, he or she shall receive
                  Credited Service for the period commencing with his or her

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                  Severance Date and ending with his or her subsequent
                  Reemployment Commencement Date. For such purposes an Employee
                  shall be deemed to have incurred a Severance (if any) in
                  accordance with the rules of Section 2.35.

                           (iii) Other than as expressly set forth above in this
                  paragraph (c), an Employee shall receive no Credited Service
                  with respect to periods between a Severance and a subsequent
                  Reemployment Commencement Date.

                  (d) For all purposes of the Plan, an Employee's total Credited
         Service shall be determined by aggregating any separate periods of
         Credited Service separated by any Breaks in Service.

                  (e) An Employee shall be credited with Credited Service with
         respect to a period of employment with an Affiliated Company, but only
         to the extent that such period of employment would be so credited under
         the foregoing rules set forth in this Section had such Employee been
         employed during such period by the Company.

                  (f) Notwithstanding the foregoing, unless the Sponsor shall so
         provide by resolution of its Board of Directors, or unless otherwise
         expressly stated in the Plan, an Employee shall not receive such
         Credited Service credit for any period of employment with an Affiliated
         Company prior to such entity becoming an Affiliated Company, except
         that Employees of Allergan Optical, Inc., Allergan Humphrey, and
         Allergan Medical Optics shall receive Credited Service credit for any
         period of employment with such companies prior to the time such
         companies became Affiliated Companies.

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

         2.11. Disability. "Disability" shall mean any mental or physical
condition which, in the judgment of the Committee, based on such competent
medical evidence as the Committee may require, renders an individual unable to
engage in any substantial gainful activity for the Company for which he or she
is reasonably fitted by education, training, or experience and which condition
can be expected to result in death or which has lasted or can be expected to
last for a continuous period of at least 12 months. The determination by the
Committee, upon opinion of a physician selected by the Committee, as to whether
a Participant has incurred a Disability shall be final and binding on all
persons.

         2.12. Effective Date. "Effective Date" of this restated Plan shall mean
January 1, 2001 unless otherwise specified in the Plan. The original Effective
Date of the Plan was July 26, 1989.

         2.13. Eligible Employee. "Eligible Employee" shall mean any United
States-based payroll Employee of the Company and any expatriate Employee of the
Company who is a United States citizen or permanent resident, but excluding any
Employee of the Company who is employed at the Sponsor's facility in Puerto
Rico, any non-resident alien, any non-regular

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manufacturing site transition Employee, any Leased Employee, and any Employee
covered by a collective bargaining agreement.

         2.14. Eligible Retirement Plan. "Eligible Retirement Plan" shall mean
an individual retirement account or annuity described in Code Section 408(a) or
408(b) and a qualified retirement plan described in Code Section 401(a) or
403(a) that accepts Eligible Rollover Distributions. For Eligible Rollover
Distributions made after December 31, 2001, an Eligible Retirement Plan shall
also mean an annuity contract described in Code Section 403(b) and an eligible
plan described in Code Section 457(b) which is maintained by a state, political
subdivision of a state, or any agency or instrumentality of a state or political
subdivision of a state and which agrees to separately account for amounts
transferred into such plan from this Plan. The definition of Eligible Retirement
Plan shall also apply in the case of an Eligible Rollover Distribution to a
surviving spouse, or to a spouse or former spouse who is an Alternate Payee
under a Qualified Domestic Relations Order (as defined in Article XIII); except,
however, the definition of Eligible Retirement Plan shall only mean an
individual retirement account or annuity described in Code Section 408(a) or
408(b) in the case of an Eligible Rollover Distribution to a surviving spouse
prior to January 1, 2002.

         2.15. Eligible Rollover Distribution. "Eligible Rollover Distribution"
shall mean 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:

                  (a) any distribution that is one of a series of substantially
         equal periodic payments (not less frequently than annually) made for
         the life (or life expectancy) of the Distributee or the joint lives (or
         joint life expectancies) of the Distributee and the Distributee's
         designated beneficiary, or for a specified period of ten years or more;

                  (b) any distribution to the extent such distribution is
         required under Code Section 401(a)(9); and

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

                  (d) any other distribution that is reasonably expected to
         total less than $200 during the year.

         For purposes of this Section, "Distributee" shall mean any Employee or
former Employee receiving a distribution from the Plan. A Distributee also
includes the Employee or former Employee's surviving spouse and the Employee or
former Employee's spouse or former spouse who is the Alternate Payee under a
Qualified Domestic Relations Order (as defined in Article XIII) with regard to
the interest of the spouse or former spouse.

         2.16. Employee. "Employee" shall mean, for purposes of the Plan, any
person who is employed by the Sponsor or an Affiliated Company in any capacity,
any portion of whose income

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is subject to withholding of income tax and/or for whom Social Security
contribution are made by the Sponsor or an Affiliated Company except that such
term shall not include (i) any individual who performs services for the Sponsor
or an Affiliated Company and who is classified or paid as an independent
contractor as determined by the payroll records of the Sponsor or an Affiliated
Company even if a court or administrative agency determines that such individual
is a common-law employee and not an independent contractor and (ii) any
individual who performs services for the Sponsor or an Affiliated Company
pursuant to an agreement between the Sponsor or an Affiliated Company and any
other person including a leasing organization except to the extent such
individual is a Leased Employee.

         2.17. Employment Commencement Date. "Employment Commencement Date"
shall mean the date on which an Employee is first credited with an Hour of
Service for the Sponsor or an Affiliated Company. An Employee shall not, for the
purpose of determining his or her Employment Commencement Date, be deemed to
have commenced employment with an Affiliated Company prior to the effective date
on which the entity became an Affiliated Company unless the Sponsor expressly
determines otherwise, and except as is expressly provided otherwise in the Plan
or in resolutions of the Board of Directors.

         2.18. ERISA. "ERISA" shall mean the Employee Retirement Income Security
Act of 1974 and the regulations thereunder. Reference to a specific ERISA
Section shall be deemed also to refer to any applicable regulations under that
Section, and shall also include any comparable provisions of future legislation
that amend, supplement or supersede that specific Section.

         2.19. ESOP Account. "ESOP Account" shall mean, with respect to each
Participant, the account established and maintained for purposes of holding and
accounting for the Participant's allocated share of assets of the Plan,
including any subaccounts established thereunder from time to time (including
his or her Stock Subaccount and Non-Stock Subaccount established pursuant to
Section 6.6).

         2.20. Exempt Loan. "Exempt Loan" shall mean any loan to the Plan or
Trust not prohibited by Code Section 4975(c), including a loan which meets the
requirements set forth in Code Section 4975(d)(3) and the regulations
promulgated thereunder, the proceeds of which are used to finance the
acquisition of Company Stock or to refinance such a loan.

         2.21. Exempt Loan Suspense Subfund. "Exempt Loan Suspense Subfund"
shall mean the subfund established under Section 4.1 hereof as part of the Trust
Fund to hold Company Stock purchased with the proceeds of an Exempt Loan pending
the allocation of such Company Stock to individual ESOP Accounts.

         2.22. 415 Suspense Account. "415 Suspense Account" shall mean the
account (if any) established and maintained in accordance with the provisions of
Article XI for the purpose of holding and accounting for allocations of excess
Annual Additions (as defined in Article XI).

         2.23. Highly Compensated Employee. "Highly Compensated Employee" shall
mean:

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<PAGE>

                  (a) An Employee who performed services for the Employer during
         the Plan Year or preceding Plan Year and is a member of one or more of
         the following groups:

                           (i) Employees who at any time during the Plan Year or
                  preceding Plan Year were Five Percent Owners (as defined in
                  Section 12.2).

                           (ii) Employees who received Compensation during the
                  preceding Plan Year from the Employer in excess of $80,000 (as
                  adjusted in such manner as permitted under Code Section
                  414(q)(1)).

                  (b) For the purpose of this Section, the term "Compensation"
         means compensation as defined in Code Section 415(c)(3), as set forth
         in Section 11.6.

                  (c) The term "Highly Compensated Employee" includes a Former
         Highly Compensated Employee. A Former Highly Compensated Employee is
         any Employee who was (i) a Highly Compensated Employee when he or she
         terminated employment with the Employer or (ii) a Highly Compensated
         Employee at any time after attaining age 55. Notwithstanding the
         foregoing, an Employee who separated from service prior to 1987 shall
         be treated as a Former Highly Compensated Former Employee only if
         during the separation year (or year preceding the separation year) or
         any year after the Employee attains age 55 (or the last year ending
         before the Employee's 55th birthday), the Employee either received
         Compensation in excess of $50,000 or was a Five Percent Owner.

                  (d) For the purpose of this Section, the term "Employer" shall
         mean the Sponsor and any Affiliated Company.

                  (e) The determination of who is a Highly Compensated Employee,
         including the determination of the Compensation that is considered,
         shall be made in accordance with Code Section 414(q) and the
         regulations thereunder.

         2.24. Hour of Service. "Hour of Service" shall mean an hour for which
an Employee is paid or entitled to payment for the performance of duties for the
Sponsor and any Affiliated Company.

         2.25. Investment Manager. "Investment Manager" shall mean the one or
more investment managers, if any, appointed pursuant to Section 6.15 and who
constitute investment managers under Section 3(38) of ERISA.

         2.26. Leased Employee. "Leased Employee" shall mean any person (other
than an Employee of the recipient) who pursuant to an agreement between the
recipient and any other person ("leasing organization") has performed services
for the recipient (or for the recipient and related persons determined in
accordance with Code Section 414(n)(6)) on a substantially full time basis for a
period of at least one (1) year, and such services are performed under the
primary

                                       8
<PAGE>

direction or control by 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. A Leased Employee shall not be considered an Employee of the
recipient if Leased Employees do not constitute more than 20 percent of the
recipient's nonhighly compensated workforce and such Leased Employee is covered
by a money purchase pension plan providing (i) a nonintegrated employer
contribution rate of at least ten (10) percent of compensation as defined under
Code Section 415(c)(3); (ii) immediate participation; and (iii) full and
immediate vesting.

         2.27. Leave of Absence.

                  (a) "Leave of Absence" shall mean any personal leave from
         active employment (whether with or without pay) duly authorized by the
         Company under the Company's standard personnel practices. All persons
         under similar circumstances shall be treated alike in the granting of
         such Leaves of Absence. Leaves of Absence may be granted by the Company
         for reasons of health (including temporary sickness or short term
         disability) or public service or for any other reason determined by the
         Company to be in its best interests.

                  (b) In addition to Leaves of Absence as defined in paragraph
         (a) above, the term Leave of Absence shall also mean a Maternity or
         Paternity Leave, as defined herein, but only to the extent and for the
         purposes required under paragraph (c) below. As used herein, "Maternity
         or Paternity Leave" shall mean an absence from work for any period (i)
         by reason of the pregnancy of the Employee, (ii) by reason of the birth
         of a child of the Employee, (iii) by reason of the placement of a child
         with the Employee in connection with the adoption of the child by the
         Employee, or (iv) for purposes of caring for the child for a period
         beginning immediately following the birth or placement referred to in
         clauses (ii) or (iii) above.

                  (c) Subject to the provisions of paragraph (d) below, a
         Maternity or Paternity Leave described in paragraph (b) above shall be
         deemed to constitute an authorized Leave of Absence for purposes of the
         Plan only to the extent consistent with the following rules:

                           (i) For purposes of determining whether a Break in
                  Service has occurred, the Severance Date of a Participant who
                  is absent by reason of a Maternity or Paternity Leave shall
                  not be deemed to occur any earlier than the second anniversary
                  of the date upon which such Maternity or Paternity Leave
                  commences.

                           (ii) The Maternity or Paternity Leave shall be
                  treated as a Leave of Absence solely for purposes of
                  determining whether or not an Employee has incurred a Break in
                  Service. Accordingly, such a Maternity or Paternity Leave
                  shall not result in an accrual of Credited Service for
                  purposes of the vesting provisions of the Plan or for purposes
                  of determining eligibility to participate in

                                       9
<PAGE>

                  the Plan pursuant to the provisions of Article III (except
                  only in determining whether a Break in Service has occurred).

                           (iii) A Maternity or Paternity Leave shall not be
                  treated as a Leave of Absence unless the Employee provides
                  such timely information as the Committee may reasonably
                  require to establish that the absence is for the reasons
                  listed in paragraph (b) above and to determine the number of
                  days for which there was such an absence.

                  (d) Notwithstanding the limitations provided in paragraph (c)
         above, a Maternity or Paternity Leave described in paragraph (b) above
         shall be treated as an authorized Leave of Absence, as described in
         paragraph (a), for all purposes of the Plan to the extent the period of
         absence is one authorized as a Leave of Absence under the Company's
         standard personnel practices and thus is covered by the provisions of
         paragraph (a) above without reference to the provisions of paragraph
         (b) above, provided, however, that the special rule provided under this
         paragraph (d) shall not apply if it would result in a Participant who
         is absent on a Maternity or Paternity Leave being deemed to have
         incurred a Break in Service sooner than under the rules set forth in
         paragraph (c).

         2.28. Normal Retirement Age. "Normal Retirement Age" shall mean a
Participant's sixty-fifth (65th) birthday.

         2.29. Participant. "Participant" shall mean any Eligible Employee who
has commenced participation in the Plan pursuant to Article III and who retains
rights under the Plan.

         2.30. Period of Severance. "Period of Severance" shall mean the period
of time commencing on an Employee's Severance Date and ending on the Employee's
subsequent Reemployment Commencement Date, if any.

         2.31. Plan. "Plan" shall mean the Allergan, Inc. Employee Stock
Ownership Plan described herein and as amended from time to time.

         2.32. Plan Administrator. "Plan Administrator" shall mean the
administrator of the Plan within the meaning of Section 3(16)(A) of ERISA. The
Plan Administrator shall be the Allergan Corporate Benefits Committee whose
members are appointed by the Board of Directors pursuant to the provisions of
Section 7.1 to administer the Plan.

         2.33. Plan Year. "Plan Year" shall mean the calendar year.

         2.34. Reemployment Commencement Date. "Reemployment Commencement Date"
shall mean, in the case of an Employee who incurs a Severance and who is
subsequently reemployed by the Sponsor or an Affiliated Company, the first day
following the Severance on which the Employee is credited with an Hour of
Service for the Sponsor or an Affiliated Company with respect to which he or she
is compensated or entitled to compensation by the Sponsor or an Affiliated
Company. An Employee shall not, for the purpose of determining his or

                                       10
<PAGE>

her Reemployment Commencement Date, be deemed to have commenced employment with
an Affiliated Company prior to the effective date on which such entity becomes
an Affiliated Company unless the Sponsor shall expressly determine otherwise,
and except as is expressly provided otherwise in the Plan or in resolutions of
the Board of Directors.

         2.35. Severance. "Severance" shall mean the termination of an
Employee's employment with the Sponsor or an Affiliated Company by reason of
such Employee's quit, discharge, Disability, death, retirement, or otherwise.
For purposes of determining whether an Employee has incurred a Severance, the
following rules shall apply:

                  (a) An Employee shall not be deemed to have incurred a
         Severance (i) because of his or her absence from employment with the
         Sponsor or an Affiliated Company by reason of any paid vacation or
         holiday period, or (ii) by reason of any Leave of Absence, subject to
         the provisions of paragraph (b) below.

                  (b) For purposes of the Plan, an Employee shall be deemed to
         have incurred a Severance on the earlier of (i) the date on which he or
         she dies, resigns, is discharged, or otherwise terminates his or her
         employment with the Sponsor or an Affiliated Company; or (ii) the date
         on which he or she is scheduled to return to work after the expiration
         of an approved Leave of Absence, if he or she does not in fact return
         to work on the scheduled expiration date of such Leave; or (iii) in the
         case of a Leave of Absence for longer than one year, the first
         anniversary of the commencement of such Leave, provided such Employee
         does not actually return to work on or before said first anniversary
         date. In no event shall an Employee's Severance be deemed to have
         occurred before the last day on which such Employee performs any
         services for the Sponsor or an Affiliated Company in the capacity of an
         Employee with respect to which he or she is compensated or entitled to
         compensation by the Sponsor or an Affiliated Company.

                  (c) Notwithstanding the foregoing, in the case of a
         Participant who is absent by reason of a Maternity or Paternity Leave,
         the provisions of Section 2.27(c)-(d) shall apply for purposes of
         determining whether such a Participant has incurred a Break in Service
         by reason of such Leave.

         2.36. Severance Date. "Severance Date" shall mean, in the case of any
Employee who incurs a Severance, the day on which such Employee is deemed to
have incurred said Severance as determined in accordance with the provisions of
Section 2.35, provided, however, that the special rule set forth under Section
2.27(c)-(d) shall apply with respect to determining whether a Participant on a
Maternity or Paternity Leave has incurred a Break in Service. In the case of any
Employee who incurs a Severance as provided under Section 2.35 and who is
entitled to a subsequent payment of compensation for reasons other than future
services (e.g., as back pay for past services rendered or as payments in the
nature of severance pay), the Severance Date of such Employee shall be as of the
effective date of the Severance event (e.g., the date of his or her death,
effective date of a resignation or discharge, etc.), and the subsequent payment
of the aforementioned type of post-Severance compensation shall not operate to
postpone the timing of the Severance Date for purposes of the Plan.

                                       11
<PAGE>

         2.37. Sponsor. "Sponsor" shall mean Allergan, Inc., a Delaware
corporation, and any successor corporation or entity.

         2.38. Trust. "Trust" or "Trust Fund" shall mean the trust maintained
pursuant to the Trust Agreement and as described in Section 6.1 hereof, which
shall hold all cash and securities and all other assets of whatsoever nature
deposited with or acquired by the Trustee in its capacity as Trustee hereunder,
together with accumulated net earnings.

         2.39. Trust Agreement. "Trust Agreement" shall mean the agreement
between the Trustee and the Sponsor pursuant to which the Trust is maintained.

         2.40. Trustee. "Trustee" shall mean the one or more trustees of the
Trust established pursuant to Section 6.1 hereof.

         2.41. Valuation Date. "Valuation Date" shall mean the last day of each
Plan Year and any other date which the Committee may designate from time to
time.

                                       12
<PAGE>

                                   ARTICLE III
                          ELIGIBILITY AND PARTICIPATION

         3.1. Commencement of Participation. Each Eligible Employee shall become
a Participant on the date that immediately follows the later of:

                  (a) The date such Eligible Employee performs an Hour of
         Service as an Eligible Employee; or

                  (b) The date such Eligible Employee completes six (6) months
         of Credited Service with a Sponsor or an Affiliated Company as an
         Employee.

         Notwithstanding the foregoing, any Employee who is an Eligible Employee
on the Effective Date and who has satisfied the requirements of paragraphs (a)
and (b) above, as of the Effective Date, shall become a Participant on the
Effective Date.

         3.2. Participation after Reemployment. Any Employee who is not a
Participant but who has completed the service requirement specified in Section
3.1(b) shall, if he or she incurs a Severance and is subsequently reemployed as
an Eligible Employee, become a Participant as of his or her Reemployment
Commencement Date as an Eligible Employee. Any Employee who has not completed
the service requirement specified in Section 3.1(b) shall, if he or she incurs a
Severance and is subsequently reemployed, become a Participant on the date
determined under Section 3.1 above.

         3.3. Duration of Participation. An Eligible Employee who becomes a
Participant shall remain an active Participant until he or she incurs a
Severance, at which time he or she shall become an inactive Participant until he
or she receives a distribution of his or her entire vested interest in his or
her ESOP Account. Once such a distribution is made, any Participant who incurs
such a Severance shall no longer be considered a Participant in the Plan. Any
Participant who (i) transfers out of employment with the Company but who remains
an Employee of an Affiliated Company that has not adopted the Plan pursuant to
Section 8.2, or (ii) remains an Employee of the Company but is no longer an
Eligible Employee, shall become an inactive Participant. Any Compensation of an
Employee while an inactive Participant shall not be included as Compensation for
the purpose of allocations based on Compensation made pursuant to Article IV.

         3.4. Participation After Normal Retirement Age. An Eligible Employee
may become, or continue as, a Participant after reaching his or her Normal
Retirement Age in the same manner as an Eligible Employee who has not reached
his or her Normal Retirement Age.

                                       13
<PAGE>

                                   ARTICLE IV
                    CONTRIBUTIONS AND ALLOCATION TO ACCOUNTS

         4.1. Contributions to the Trust Fund. The Company may contribute to the
Trust Fund for each Plan Year an amount to be determined by the Board of
Directors solely in its discretion. Such amount shall be contributed in cash or
Company Stock and paid over to the Trustee for allocation to the Trust Fund not
later than the date prescribed for filing the Sponsor's federal income tax
return (including all extensions thereto) for its fiscal year corresponding to
such Plan Year. Contributions shall first be applied, if necessary, to reinstate
the ESOP Accounts of applicable reemployed Participants who had previously
forfeited their ESOP Accounts pursuant to Section 5.3 of the Plan, but only
after all forfeitures for the Plan Year have been so applied pursuant to Section
4.3. Some or all of the remaining contributions under this Section 4.1 may be
applied to repay any principal and/or interest outstanding on any Exempt Loan or
to pay Plan expenses as provided in Section 7.11. The determination of the
extent to which such contributions shall be used to repay such Exempt Loans or
pay Plan expenses shall be made at the sole discretion of the Committee. Company
Stock acquired by the Trust Fund through an Exempt Loan shall be added to and
maintained in the Exempt Loan Suspense Subfund and shall thereafter be released
from the Exempt Loan Suspense Subfund and allocated to Participants' ESOP
Accounts as provided in Section 4.2. Contributions in excess of amounts used for
other purposes described in this Section 4.1 shall be allocated to the ESOP
Accounts of Participants as provided in Section 4.2.

         4.2. Allocation of Contributions to Trust Fund.

                  (a) As of a date not later than the last day of each Plan
         Year, an allocation shall be made to the ESOP Account of each "Eligible
         Participant" of such Participant's allocable share for such Plan Year
         of (i) Company contributions of Company Stock contributed in kind to
         the Trust Fund and (ii) Company contributions in other than Company
         Stock, which are not used for other purposes described in Section 4.1.
         For the purposes of this Section 4.2, the term "Eligible Participant"
         shall include all Participants who are Eligible Employees on the last
         business day of such Plan Year or who ceased to be Eligible Employees
         during such Plan Year due to death, Disability, or retirement at or
         after age 55 (as such retirement is determined under the Allergan, Inc.
         Pension Plan). Such allocations shall be made in the same proportion
         that the Compensation for the Plan Year for such Eligible Participant
         bears to the total Compensation of all Eligible Participants for such
         Plan Year.

                  (b) Company Stock acquired for the Trust Fund through an
         Exempt Loan shall be released from the Exempt Loan Suspense Subfund as
         the Exempt Loan is repaid, in accordance with the provisions of this
         Section 4.2(b).

                           (i) For each Plan Year until the Exempt Loan is fully
                  repaid, the number of shares of Company Stock released from
                  the Exempt Loan Suspense Subfund shall equal the number of
                  unreleased shares immediately before such release for the
                  current Plan Year multiplied by the "Release Fraction." As
                  used

                                       14
<PAGE>

                  herein, the Release Fraction shall be a fraction, the
                  numerator of which is the amount of principal and interest
                  paid on the Exempt Loan for such current Plan Year, and the
                  denominator of which is the sum of the numerator plus the
                  principal and interest to be paid on such Exempt Loan for all
                  future years during the duration of the term of such Loan
                  (determined without reference to any possible extensions or
                  renewals thereof). Notwithstanding the foregoing, in the event
                  such Loan shall be repaid with the proceeds of a subsequent
                  Exempt Loan (the "Substitute Loan"), such repayment shall not
                  operate to release all such Company Stock in the Exempt Loan
                  Suspense Subfund, but, rather, such release shall be effected
                  pursuant to the foregoing provisions of this Section 4.2(b) on
                  the basis of payments of principal and interest on such
                  Substitute Loan.

                           (ii) If the Committee so determines in its
                  discretion, then in lieu of applying the provisions of Section
                  4.2(b)(1) hereof with respect to such Exempt Loan or
                  Substitute Loan, shares shall be released from the Exempt Loan
                  Suspense Subfund as the principal amount of an Exempt Loan is
                  repaid (and without regard to interest payments), provided the
                  following three conditions are satisfied:

                                    (1) The Exempt Loan must provide for annual
                           payments of principal and interest at a cumulative
                           rate that is not less rapid at any time than level
                           annual payments of such amounts for ten years.

                                    (2) The interest portion of any payment is
                           disregarded only to the extent it would be treated as
                           interest under standard loan amortization tables.

                                    (3) If the Exempt Loan is renewed, extended
                           or refinanced, the sum of the expired duration of the
                           Exempt Loan and the renewal, extension or new Exempt
                           Loan period must not exceed ten years.

                           (iii) It is intended that the provisions of this
                  Section 4.2(b) shall be applied and construed in a manner
                  consistent with the requirements and provisions of Treasury
                  Regulation Section 54.4975-7(b)(8), and any successor
                  regulation thereto. All Company Stock released from the Exempt
                  Loan Suspense Subfund during any Plan Year shall be allocated
                  among Participants as prescribed by Section 4.2(c) hereof,
                  except to the extent provided in Section 6.7.

                  (c) Shares of Company Stock released from the Exempt Loan
         Suspense Subfund for a Plan Year in accordance with Section 4.2(b)
         hereof and Section 6.7(b)(1) shall be held in the Trust Fund on an
         unallocated basis until allocated by the Committee as of not later than
         the last day of that Plan Year. The allocation of such shares shall be
         made among the ESOP Accounts of Eligible Participants (as that term is
         defined in Section 4.2(a)). The number of shares allocable to each such
         Eligible Participant's ESOP Account shall be the number of shares which
         bears the same ratio to the total shares

                                       15
<PAGE>

         released for such Plan Year as the Compensation for the Plan Year for
         such Eligible Participant bears to the total Compensation of all
         Eligible Participants for such Plan Year.

                  (d) For the 1998 Plan Year only, the term "Eligible
         Participant" as defined in Section 4.2(a) shall include any Participant
         who ceased to be an Eligible Employee during the 1998 Plan Year due to
         his or her election to participate in the Sponsor's Voluntary Early
         Retirement Incentive by August 31, 1998 (or such later date as approved
         by the Sponsor but in no event later than September 30, 1998).

         4.3. Forfeitures. Any amount which is forfeited pursuant to Section 5.3
or 5.13 during a Plan Year shall be segregated from other amounts held under the
Plan and shall first be used to reinstate the ESOP Accounts of reemployed
Participants (or Beneficiaries, if applicable) who had previously forfeited such
ESOP Accounts and who have a right to reinstatement of their forfeited ESOP
Accounts pursuant to Section 5.3 or 5.13. Should any forfeitures then remain,
they may next be used to pay Plan expenses as provided under Section 7.11.
Should any forfeitures then remain, they shall be allocated as of the last day
of the Plan Year to the ESOP Accounts of Eligible Participants (as that term is
defined in Section 4.2(a)) based on Compensation in the same manner as
allocations under Section 4.2(a) and (c).

         4.4. Employee Contributions and Rollovers. No Employee contributions
are permitted under the Plan. No rollover contributions to the Plan are
permitted whether or not any such contributions would satisfy the applicable
requirements of Code Sections 402, 403, 408 or 409.

                                       16
<PAGE>

                                    ARTICLE V
                            VESTING AND DISTRIBUTIONS

         5.1. No Vested Rights Except as Herein Specified. No Employee shall
have any vested right or interest in any assets of the Trust, except as provided
in this Article V. Neither the making of any allocations nor the credit to any
ESOP Account of a Participant in the Trust shall vest in any Participant any
right, title, or interest in or to any assets of the Trust except as provided in
this Article V.

         5.2. Vesting.

                  (a) The interest of a Participant in amounts allocated to his
         or her ESOP Account shall vest in accordance with the following
         schedule:

<Table>
<Caption>
                Year of Credited Service           Vested Percentage
                ------------------------           -----------------
<S>                                                <C>

                    Less than 1                             0%
                    1 but less than 2                      20%
                    2 but less then 3                      40%
                    3 but less than 4                      60%
                    4 but less than 5                      80%
                    5 or more                             100%
</Table>

                  (b) Notwithstanding the above, a Participant shall become
         fully vested in his or her ESOP Account upon the occurrence of the
         death, Disability, or attainment of age 62 of such Participant while an
         Employee, or upon the occurrence of a Change in Control pursuant to
         Section 10.4(b).

         5.3. Severance When Less Than Fully Vested. A Participant who incurs a
Severance and who is not or does not become 100% vested pursuant to Section 5.2,
shall receive a distribution of the vested portion of his or her ESOP Account in
a single lump sum payment in the form prescribed by Section 5.9 hereof, as soon
as practicable following the Participant's Severance Date, but in no event later
than the last day of the Plan Year following the Plan Year in which the
Participant incurred the Severance. The non-vested portion of such Participant's
ESOP Account shall be forfeited in accordance with the following rules:

                  (a) In the event that a distribution of the entire vested
         portion of such a Participant's ESOP Account is made pursuant to this
         Section 5.3, the non-vested portion shall be forfeited as of such
         Participant's distribution date. In the event such Participant is
         rehired by the Company prior to the date such Participant incurs five
         consecutive Breaks in Service, the amount so forfeited shall be
         reinstated to the Participant's ESOP Account as of the Participant's
         Reemployment Commencement Date (without regard to any interest or
         investment earnings on such amount). For the purpose of this paragraph
         (a), a Participant with no vested portion of his or her ESOP Account
         shall be

                                       17
<PAGE>

         deemed to have received a distribution pursuant to this paragraph (a)
         as of his or her Severance Date.

                  (b) In the event such a Participant who incurs a Severance
         does not receive a distribution of the entire vested portion of his or
         her ESOP Account, the non-vested portion shall be forfeited as of such
         Participant's Severance Date. In the event such Participant is rehired
         by the Company prior to the date such Participant incurs five
         consecutive Breaks in Service, the amount so forfeited plus an amount
         equal to the rate of return, the amount forfeited would have received
         but for forfeiture pursuant to this paragraph (b) shall be reinstated
         to the Participant's ESOP Account as of the Participant's Reemployment
         Commencement Date. The Company shall be obligated to contribute to the
         Trust Fund any amounts necessary after application of Section 4.3 to
         reinstate any ESOP Account if reinstatement is required under the
         provisions of this paragraph.

                  (c) At any relevant time after Severance pursuant to
         paragraphs (a) and (b) above, the Participant's vested portion of his
         or her ESOP Account shall be equal to an amount ("X") determined by the
         following formula:

                               X = P*(AB + D) - D

         For the purposes of applying the formula:

                  P = the vested percentage at any relevant time determined
                      pursuant to Section 5.2

                  AB = the ESOP Account balance at the relevant time

                  D = the total amount of any distributions from the ESOP
                      Account since such Severance

         5.4. Distribution upon Severance. A Participant who incurs a Severance
on or after becoming 100% vested pursuant to Section 5.2, shall receive a
distribution of his or her ESOP Account, in a single lump-sum payment in the
form prescribed by Section 5.9 hereof, as soon as practicable following the
Participant's Severance Date, but in no event later than the last day of the
Plan Year following the Plan Year in which the Participant incurred the
Severance. Notwithstanding anything to the contrary, upon receipt of a Qualified
Domestic Relations Order on or after a Participant is 100% vested pursuant to
Section 5.2, the amount payable to an Alternate Payee (as such terms are
described in Section 13.2) shall be distributed to the Alternate Payee as soon
as administratively feasible regardless of whether the Participant incurs a
Severance.

         5.5. Distribution upon Death.

                  Upon the death of a Participant while still an Employee, the
         Committee shall give such directions as may be necessary to cause a
         distribution of his or her ESOP Account to be made in a single lump-sum
         payment to the Beneficiary designated by the deceased

                                       18
<PAGE>

         Participant in the form prescribed in Section 5.9 hereof, as soon as
         practicable following the Participant's death, but in no event later
         than the last day of the Plan Year following the Plan Year in which the
         Participant died.

                  (b) Upon the death of a Participant after he or she ceases to
         be an Employee but before he or she receives his or her entire vested
         interest in the Trust, the Committee shall give such directions as may
         be necessary to cause a distribution, in the manner and time provided
         in Section 5.5(a) hereof, of any vested balance remaining in the
         Participant's ESOP Account to the Beneficiary designated by the
         Participant.

                  (c) The Committee may require the execution and delivery of
         such documents, papers and receipts as the Committee may determine
         necessary or appropriate in order to establish the fact of death of the
         deceased Participant and of the right and identity of any Beneficiary
         or other person or persons claiming any benefits under this Section
         5.5.

         5.6. Distribution upon Disability. In the event the Committee shall
determine that a Participant has suffered a Disability while an Employee, the
Committee shall proceed to cause a distribution to be made of such Participant's
ESOP Account in a single lump-sum payment in the form prescribed in Section 5.9
hereof as soon as practicable following the Committee's determination that the
Participant has incurred a Disability, but in no event later than the last day
of the Plan Year following the Plan Year in which the Committee makes such
determination.

         5.7. Withdrawal upon Age 59-1/2. After attaining age 59-1/2, a
Participant who is still an Employee may, following such reasonable advance
notice as may be required by the Committee, withdraw the entire vested amount
credited to his or her ESOP Account. Such a withdrawal shall be in the same form
and using the same valuation methods as provided for distributions pursuant to
Section 5.9. For the 2000 Plan Year only, a Participant who is still an Employee
may withdraw the entire vested amount credited to his or her ESOP Account if
such Participant shall incur a Severance between June 19, 2000 and July 31,
2000, inclusive, on or after attaining age 55 and such Participant provides such
reasonable advance notice of his or her expected Severance as required by the
Committee.

         5.8. Designation of Beneficiary.

                  (a) At any time, and from time to time, each Participant shall
         have the unrestricted right to designate the Beneficiary to receive the
         portion of his or her death benefit and to revoke any such designation.
         Each such designation shall be evidenced by a written instrument signed
         by the Participant and filed with the Committee.

                  (b) If the Participant is married and designates a Beneficiary
         other than his or her spouse, said designation shall not be honored by
         the Committee unless accompanied by the written consent of said spouse
         to said designation. Such consent (i) must designate a Beneficiary
         which may not be changed without the consent of the spouse (or the
         consent of the spouse expressly permits designation by the Participant
         without any further consent

                                       19
<PAGE>

         by the spouse), (ii) must acknowledge the effect of the designation,
         and (iii) must be witnessed by a Plan representative or a notary
         public. No consent of such spouse shall be necessary if it is
         established to the satisfaction of a Plan representative that the
         consent required under this paragraph (b) cannot or need not be
         obtained because (i) there is no spouse, (ii) the spouse cannot be
         located, or (iii) there exist such other circumstances which, pursuant
         to regulations under Code Section 417, permit a distribution to another
         Beneficiary. Any consent of a spouse obtained pursuant to this
         paragraph (b) or any determination that the consent of the spouse
         cannot (or need not) be obtained, shall be effective only with respect
         to that spouse. If a Participant becomes married following his or her
         designation of a Beneficiary other than his or her spouse, such
         designation shall be ineffective unless the spousal consent
         requirements of this paragraph are satisfied with respect to such
         spouse (subject, however, to the provisions of Article XIII regarding
         Qualified Domestic Relations Orders).

                  (c) If the Participant is married and does not designate a
         Beneficiary, the Participant's spouse shall be his or her Beneficiary
         for purposes of this Section. If the deceased Participant is not
         married and shall have failed to designate a Beneficiary, or if the
         Committee shall be unable to locate the designated Beneficiary after
         reasonable efforts have been made, or if such Beneficiary shall be
         deceased, distribution of the Participant's death benefit shall be made
         by payment of the deceased Participant's entire interest in the Trust
         to his or her personal representative in a single lump-sum payment. In
         the event the deceased Participant is not a resident of California at
         the date of his or her death, the Committee, in its discretion, may
         require the establishment of ancillary administration in California. If
         the Committee cannot locate a qualified personal representative of the
         deceased Participant, or if administration of the deceased
         Participant's estate is not otherwise required, the Committee, in its
         discretion, may pay the deceased Participant's interest in the Trust to
         his or her heirs at law (determined in accordance with the laws of the
         State of California as they existed at the date of the Participant's
         death).

         5.9. Form of Distribution.

                  (a) All shares of Company Stock allocated to a Participant's
         ESOP Account shall be distributed in the form of cash or other
         property, unless the Participant elects under paragraph (b) below to
         receive the distribution in the form of Company Stock with cash in lieu
         of fractional shares. To the extent that Company Stock must be valued
         to effect such a distribution, such valuation shall be equal to the
         fair market value of such stock determined as of the last Valuation
         Date prior to the date of distribution.

                  (b) A Participant may elect that all shares of Company Stock
         allocated to his or her ESOP Account be distributed in the form of
         Company Stock with cash in lieu of fractional shares. Any cash or other
         property in a Participant's ESOP Account ("non-stock assets") shall be
         used to acquire Company Stock for distribution only if such Participant
         further elects and only if such stock is available on the open market.
         If such Participant elects to receive the non-stock assets in his or
         her ESOP Account in Company

                                       20
<PAGE>

         Stock and such stock is available on the open market, the value of such
         non-stock assets shall be used to acquire such whole shares of Company
         Stock as may be acquired with such value and any remaining amount shall
         be distributed in cash. Notwithstanding the foregoing, if applicable
         corporate charter or bylaw provisions restrict ownership of
         substantially all outstanding Company Stock to Employees or to a plan
         or trust described in Code Section 401(a), then any distribution of a
         Participant's ESOP Account shall only be in cash.

                  (c) Notwithstanding the foregoing, a Participant who elected
         to diversify the investment of a portion of his or her ESOP Account
         pursuant to Section 5.12(d) shall not have the right to receive such
         diversified portion in Company Stock, but, rather, shall receive any
         distribution of such diversified portion in cash.

                  (d) Notwithstanding the foregoing, in the case of an Eligible
         Rollover Distribution, a Participant may elect that an Eligible
         Rollover Distribution be paid directly by the Trustee to the trustee of
         an Eligible Retirement Plan.

         5.10. Distribution Rules. Notwithstanding the provisions of Sections
5.3, 5.4, 5.5, 5.6, 5.7, and 5.9 of the Plan regarding distributions of
Participants' ESOP Accounts, the following additional rules shall apply to all
such distributions.

                  (a) In no event shall any benefits under the Plan, including
         benefits upon retirement, termination of employment, or Disability, be
         paid to a Participant prior to the "Consent Date" (as defined herein)
         unless the Participant consents in writing to the payment of such
         benefits prior to said Consent Date. As used herein, the term "Consent
         Date" shall mean the later of (i) the Participant's 62nd birthday, or
         (ii) the Participant's Normal Retirement Age. Notwithstanding the
         foregoing, the provisions of this paragraph shall not apply (i)
         following the Participant's death, or (ii) with respect to a lump-sum
         distribution of the vested portion of a Participant's ESOP Account if
         the total amount of such vested portion at the time of distribution
         does not exceed $5,000.

                  (b) Unless the Participant elects otherwise pursuant to
         paragraph (a) above, distributions of the vested portion of a
         Participant's ESOP Accounts shall commence no later than the 60th day
         after the close of the Plan Year in which the latest of the following
         events occurs: (i) the Participant's Normal Retirement Age; (ii) the
         tenth anniversary of the year in which the Participant commenced
         participation in the Plan; or (iii) the Participant's Severance.

                  (c) Notwithstanding paragraphs (a) or (b) above, distributions
         of the entire vested portion of a Participant's ESOP Accounts shall be
         made no later than the Participant's Required Beginning Date, or, if
         such distribution is to be made over the life of such Participant or
         over the lives of such Participant and a Beneficiary (or over a period
         not extending beyond the life expectancy of such Participant and
         Beneficiary) then such distribution shall commence no later than the
         Participant's Required Beginning Date. Required Beginning Date shall
         mean:

                                       21
<PAGE>

                           (i) Participants attaining age 70-1/2 prior to 1999:
                  The Required Beginning Date of a Participant who attains age
                  70-1/2 prior to 1999 shall be April 1 of the calendar year
                  immediately following the year in which the Participant
                  attains age 70-1/2; provided, however, that a Participant,
                  other than a Five Percent Owner (as defined in Code Section
                  416(i) and applicable regulations), who attains age 70-1/2 in
                  1996, 1997, or 1998 may elect to defer the Required Beginning
                  Date until April 1 of the calendar year following the later of
                  the calendar year in which the Participant attains age 70-1/2
                  or retires.

                           (ii) Participants attaining age 70-1/2 after 1998:
                  The Required Beginning Date of a Participant who attains age
                  70-1/2 after 1998 shall be April 1 of the calendar year
                  immediately following the later of the calendar year in which
                  the Participant attains age 70-1/2 or retires; provided,
                  however, if such Participant is a Five Percent Owner (as
                  defined in Code Section 416(i) and applicable regulations)
                  with respect to the Plan Year ending in the calendar year in
                  which such Participant attains age 70-1/2, the Required
                  Beginning Date shall be April 1 of the calendar year
                  immediately following the year in which such Participant
                  attains age 70-1/2.

                  (d) If it is not administratively practical to calculate and
         commence payments by the latest date specified in the rules of
         paragraphs (a), (b) and (c) above because the amount of the
         Participant's benefit cannot be calculated, or because the Committee is
         unable to locate the Participant after making reasonable efforts to do
         so, the payment shall be made as soon as is administratively possible
         (but not more than 60 days) after the Participant can be located and
         the amount of the distributable benefit can be ascertained.

                  (e) If any payee under the Plan is a minor or if the Committee
         reasonably believes that any payee is legally incapable of giving a
         valid receipt and discharge for any payment due him, the Committee may
         have such payment, or any part thereof, made to the person (or persons
         or institution) whom it reasonably believes is caring for or supporting
         such payee, or, if applicable, to any duly appointed guardian or
         committee or other authorized representative of such payee. Any such
         payment shall be a payment for the account of such payee and shall, to
         the extent thereof, be a complete discharge of any liability under the
         Plan to such payee.

         5.11. Put Option for Company Stock Allocated to ESOP Accounts.

                  (a) Solely in the event that a Participant receives a
         distribution consisting in whole or in part of Company Stock that at
         the time of distribution thereof is not readily tradable stock within
         the meaning of Code Section 409(h) then such distributed Company Stock
         shall be made subject to a put option in the hands of a Qualified
         Holder (as defined hereinbelow), with such put option to be subject to
         the following provisions:

                                       22
<PAGE>

                           (i) As used herein, the term "Qualified Holder" shall
                  mean the Participant or Beneficiary receiving the distribution
                  of such Company Stock, any other party to whom such stock is
                  transferred by gift or by reason of death, and also any
                  trustee of an Individual Retirement Account (as defined under
                  Code Section 408) to which all or any portion of such
                  distributed Company Stock is transferred pursuant to a
                  tax-free "rollover" transaction satisfying the requirements of
                  Code Section 402.

                           (ii) During the sixty (60) day period following any
                  distribution of such Company Stock, a Qualified Holder shall
                  have the right to require the Company to purchase all or any
                  portion of said distributed Company Stock held by said
                  Qualified Holder. A Qualified Holder shall exercise such right
                  by giving written notice to the Company within the aforesaid
                  sixty (60) day period of the number of shares of distributed
                  Company Stock that such Qualified Holder intends to sell to
                  the Company. The purchase price to be paid for any such
                  Company Stock shall be its fair market value determined as of
                  the Valuation Date coincident with or immediately preceding
                  the date of the distribution.

                           (iii) If a Qualified Holder shall fail to exercise
                  his or her put option right under subparagraph (ii) above,
                  such option right shall temporarily lapse upon the expiration
                  of the sixty (60) day period thereof. As soon as is reasonably
                  practicable following the last day of the Plan Year in which
                  said sixty (60) day option period expires, the Company shall
                  notify each such non-electing Qualified Holder who is then a
                  shareholder of record of the valuation of such Company Stock
                  as of the most recent Valuation Date. During the sixty (60)
                  day period following receipt of such valuation notice, any
                  such Qualified Holder shall have the right to require the
                  Company to purchase all or any portion of such distributed
                  Company Stock. The purchase price to be paid therefor shall be
                  based on the valuation of such Company Stock as of the
                  Valuation Date coinciding with or next preceding the exercise
                  of the option under this Section 5.11(c). If a Qualified
                  Holder fails to exercise his or her option right under this
                  subparagraph (iii) with respect to any portion of such
                  distributed Company Stock, no further options shall be
                  applicable under the Plan and the Company shall have no
                  further purchase obligations hereunder.

                           (iv) In the event that a Qualified Holder shall
                  exercise a put option under this Section, then the Company
                  shall have the option of paying the purchase price of the
                  Company Stock which is subject to such put option (hereafter
                  the "Option Stock") under either of the following methods:

                                    (1) A lump sum payment of the purchase price
                           within ninety (90) days after the date upon which
                           such put option is exercised (the "Exercise Date") or

                                       23
<PAGE>

                                    (2) A series of six equal installment
                           payments, with the first such payment to be made
                           within thirty (30) days after the Exercise Date and
                           the five remaining payments to be made on the five
                           anniversary dates of the Exercise Date, so that the
                           full amount shall be paid as of the fifth anniversary
                           of such Exercise Date. If the Company elects to pay
                           the purchase price of the Option Stock under the
                           installment method provided in this clause (2), then
                           the Company shall, within thirty (30) days after the
                           Exercise Date, give the Qualified Holder who is
                           exercising the put option the Company's promissory
                           note for the full unpaid balance of the option price.
                           Such note shall, at a minimum, provide adequate
                           security (if required under applicable regulations),
                           state a rate of interest reasonable under the
                           circumstances (but at least equal to the imputed
                           compound rate in effect as of the Exercise Date
                           pursuant to the regulations promulgated under Code
                           Sections 483 or 1274, whichever shall be applicable)
                           and provide that the full amount of such note shall
                           accelerate and become due immediately in the event
                           that the Company defaults in the payment of a
                           scheduled installment payment.

                           (v) The put options under subparagraphs (ii)and (iii)
                  above shall be effective solely against the Company and shall
                  not obligate the Plan in any manner; provided, however, with
                  the Company's consent, the Plan may elect to purchase any
                  Company Stock that otherwise must be purchased by the Company
                  pursuant to a Qualified Holder's exercise of any such option.

                           (vi) If at the time of any distribution of said
                  Company Stock it is known that any applicable Federal or State
                  law would be violated by the Company's honoring of such a put
                  option as provided under this Section, the Company shall
                  designate another entity that will honor such put option. Such
                  other entity shall be one having a substantial net worth at
                  the time such loan is made and whose net worth is reasonably
                  expected to remain substantial.

                           (vii) In the event that a Qualified Holder is unable
                  to exercise the put option provided hereunder because the
                  Company (or other entity bound by such put option) is
                  prohibited from honoring it by reason of any applicable
                  Federal or State law, then the sixty (60) day option periods
                  during which such put option is exercisable under
                  subparagraphs (ii) and (iii) shall not include any such time
                  during which said put option may not be exercised due to such
                  reason.

                           (viii) Except as is expressly provided hereinabove
                  with respect to any distributed Company Stock that is readily
                  tradeable stock within the meaning of Code Section 409(h), no
                  Participant shall have any put option rights with respect to
                  Company Stock distributed under the Plan, and neither the
                  Company nor the Plan shall have any obligation whatsoever to
                  purchase any such distributed Company Stock from any
                  Participant or other Qualified Holder.

                                       24
<PAGE>

                           (ix) At the time of distribution of Company Stock
                  that is not readily tradable stock within the meaning of Code
                  Section 409(h), to a Participant or Beneficiary, the Company
                  shall furnish to such Participant or Beneficiary the most
                  recent annual certificate of value prepared by the Company
                  with respect to such Stock. In addition, the Company shall
                  furnish to such Participant or Beneficiary a copy of each
                  subsequent annual certificate of value until the put options
                  provided for in this Section with respect to such distributed
                  Company Stock shall expire.

                  (b) Notwithstanding any other provisions of the Plan regarding
         a Participant's right to exercise a put option, the put option
         described in paragraph (a) above shall be subject to the following
         additional provisions:

                           (i) If the distribution constitutes a Total
                  Distribution (as defined below), in the event that a Qualified
                  Holder exercises a put option under this Section, then the
                  Company shall have the right to pay the purchase price of the
                  Option Stock under either of the following methods:

                                    (1) A lump sum payment of the purchase price
                           within thirty (30) days after the Exercise Date; or

                                    (2) A series of five substantially equal
                           annual payments with the first such payment to be
                           made within thirty (30) days after the Exercise Date.
                           If the Company elects to pay the purchase price of
                           the Option Stock under the installment method
                           provided in this clause (2), then the Company shall,
                           within 30 days after the Exercise Date, give the
                           Qualified Holder who is exercising the put option the
                           Company's promissory note for the full unpaid balance
                           of the option price. Such note shall, at a minimum,
                           provide adequate security, state a rate of interest
                           reasonable under the circumstances (but at least
                           equal to the imputed compound rate in effect as of
                           the Exercise Date pursuant to the regulations
                           promulgated under Code Sections 483 or 1274,
                           whichever shall be applicable) and provide that the
                           full amount of such note shall accelerate and become
                           due immediately in the event that the Company
                           defaults in the payment of a scheduled installment
                           payment.

                           (ii) If the distribution does not constitute a Total
                  Distribution (as defined below), in the event that a Qualified
                  Holder exercises a put option under this Section, then the
                  Company shall pay the purchase price of the Option Stock in a
                  lump sum within thirty (30) days after the Exercise Date.

                  For purposes of this Section, "Total Distribution" shall mean
         a distribution to a Participant (or his or her Beneficiary, if
         applicable) within one taxable year of such recipient of the entire
         balance to the credit of the Participant.

                                       25
<PAGE>

                  (c) The foregoing provisions of this Section shall be
         interpreted and applied in accordance with all applicable requirements
         of Code Section 409(h) and the regulations issued thereunder.

         5.12. Diversification Rule.

                  (a) For the purpose of Section 5.12 only, the following
         definitions shall apply:

                           (i) "Qualified Participant" shall mean a Participant
                  who is fully vested in his or her ESOP Account as determined
                  under Section 5.2.

                           (ii) "Insider" shall mean any Participant who is
                  directly or indirectly the beneficial owner of more than 10%
                  of any class of any equity security (other than an exempted
                  security) of the Sponsor (or the Company) which is registered
                  pursuant to Section 12 of the Securities Exchange Act of 1934,
                  or who is a "director" or an "officer" of the sponsor or the
                  Company as those terms are interpreted under the Securities
                  Exchange Act of 1934 for the purpose of determining persons
                  subject to Section 16 of such Act.

                  (b) A Participant may elect to diversify his or her ESOP
         Account as follows:

                           (i) Any Participant who is a Qualified Participant as
                  of December 31, 2001 may elect to diversify up to 50% of the
                  Company Stock allocated to his or her ESOP Account in
                  accordance with the following schedule that increases the
                  Diversification Percentage over the following three Plan
                  Years:
<Table>
<Caption>
                      Plan Year                                                 Diversification Percentage
                      ---------                                                 --------------------------
<S>                                                                             <C>
                  2002                                                                   up to 25%
                  2003                                                                   up to 40%
                  2003 and thereafter                                                    up to 50%
</Table>

                           (ii) Any Participant who becomes a Qualified
                  Participant on or after January 1, 2002 may elect to diversify
                  up to 50% of the Company Stock allocated to his or her ESOP
                  Account in accordance with the following schedule that
                  increases the Diversification Percentage over the following
                  three Plan Years:

<Table>
<Caption>
                      Plan Year                                                 Diversification Percentage
                      ---------                                                 --------------------------
<S>                                                                             <C>
                  Plan Year after becoming a Qualified Participant                       up to 25%
                  Next succeeding Plan Year                                              up to 40%
                  Next succeeding Plan Year                                              up to 50%
</Table>

                           (iii) The number of shares of Company Stock that may
                  be diversified in any given Plan Year shall be determined by
                  applying the Diversification

                                       26
<PAGE>

                  Percentage in the above schedules to the total number of
                  shares allocated to a Participant's ESOP Account as of the
                  beginning of the Plan Year, rounded to the nearest whole
                  shares, and reducing such number by the number of shares of
                  Company Stock previously diversified under this Section.

                  (c) The Committee shall establish at least three investment
         options under the Plan for the purpose of diversification under
         paragraph (b). The Committee may, at its discretion, establish
         alternative investment funds or eliminate any previously established
         funds. A Qualified Participant shall elect the investment funds for
         purposes of diversifying his or her ESOP Account; provided, however,
         that any allocations among the investment funds shall be made in 1%
         increments. A Qualified Participant may also elect at any time to
         transfer previously diversified amounts among any of the investment
         funds currently offered by the Committee and currently available to the
         Qualified Participant, provided, however, the total amount transferred
         shall be in increments of 1% of the amount accrued in such funds. Any
         change in investment funds shall be effective as soon as
         administratively feasible. A Qualified Participant shall effect any
         investment fund election by properly completing and submitting the form
         authorized by the Committee for this purpose. Amounts invested in any
         one of the investment funds shall not share in gains and losses
         experienced by any other fund and, notwithstanding the establishment of
         separate investment funds within the Trust, the Trust shall at all
         times constitute a single trust.

                  (d) Notwithstanding the foregoing, for Plan Years prior to the
         2002 Plan Year, each Qualified Participant shall be permitted to direct
         the Plan as to the diversification of 25 percent of the value of the
         vested portion of the Participant's ESOP Account within 90 days after
         the last day of each Plan Year during the Participant's Qualified
         Election Period. For the purpose of this paragraph (d), the term
         "Qualified Participant" means a Participant who has attained age 55 and
         who has completed at least 10 years of participation in the Plan and
         the term "Qualified Election Period" shall mean the six Plan Year
         period beginning with the Plan Year in which the Participant first
         becomes a Qualified Participant. Within 90 days after the close of the
         last Plan Year in the Participant's Qualified Election Period, a
         Qualified Participant may direct the Plan as to the diversification of
         50 percent of the value of the vested portion of such ESOP Account.
         Upon such direction by a Qualified Participant, the Plan shall transfer
         to the Allergan, Inc. Savings and Investment Plan (the "SIP") that
         portion of the Participant's ESOP Account that is covered by the
         election within 90 days after the last day of the period during which
         the election can be made which shall be allocated to a rollover account
         maintained on behalf of the Qualified Participant. Under the SIP, the
         Qualified Participant may invest the amount so transferred under any of
         the investment options available under the SIP or may direct that the
         amount so transferred be distributed to him or her.

                  (e) For purposes of this Section and consistent with the
         requirements of Code Section 401(a)(28) if applicable, a Qualified
         Participant who is an Insider may only elect to diversify his or her
         ESOP Account if within six (6) months before the Participant's

                                       27
<PAGE>

         election, he or she has not made an election under the Allergan, Inc.
         Savings and Investment Plan or the provision of any company plan
         covered by Rule 16b-3 (promulgated pursuant to the Securities Exchange
         Act of 1934) then in existence that would result in the transfer into a
         Company equity securities fund.

         5.13. Lapsed Benefits.

                  (a) In the event that a benefit is payable under the Plan to a
         Participant and after reasonable efforts the Participant cannot be
         located for the purpose of paying the benefit during a period of three
         consecutive years, the Participant shall be presumed dead and the
         benefit shall, upon the termination of that three year period, be paid
         to the Participant's Beneficiary.

                  (b) If any eligible Beneficiary cannot be located for the
         purpose of paying the benefit for the following two years, then the
         benefit shall be forfeited and allocated to the ESOP Accounts of the
         other Participants for such Plan Year in accordance with Section 4.3.

                  (c) If a Participant shall die prior to receiving a
         distribution of his or her entire benefit under the Plan (other than a
         Participant presumed to have died as provided above), if after
         reasonable efforts an eligible Beneficiary of the Participant cannot be
         located for the purpose of paying the benefit during a period of five
         consecutive years, the benefit shall, upon expiration of such five-year
         period, be forfeited and reallocated to the ESOP Accounts of the other
         Participants in accordance with Section 4.3.

                  (d) For purposes of this Section, the term "Beneficiary" shall
         include any person entitled under Section 5.8 to receive the interest
         of a deceased Participant or deceased designated Beneficiary. It is the
         intention of this provision that during the relevant waiting period
         (two years or five years) the benefit shall be distributed to an
         eligible Beneficiary in a lower priority category under Section 5.8 if
         no eligible Beneficiary in a higher priority category can be located by
         the Committee after reasonable efforts have been made.

                  (e) Notwithstanding the foregoing rules, if after such a
         forfeiture the Participant or an eligible Beneficiary shall claim the
         forfeited benefit, the amount forfeited shall be reinstated (without
         regard to any interest or investment earnings on such amount) and paid
         to the claimant as soon as practical following the claimant's
         production of reasonable proof of his or her identity and entitlement
         to the benefit (determined pursuant to the Plan's normal claim review
         procedures under Section 7.8).

                  (f) The Committee shall direct the Trustee with respect to the
         procedures to be followed concerning a missing Participant (or
         Beneficiary), and the Company shall be obligated to contribute to the
         Trust Fund any amounts necessary after the application of Section 4.3
         to pay any reinstated benefit after it has been forfeited pursuant to
         the provisions of this Section.

                                       28
<PAGE>

                                   ARTICLE VI
                           TRUST FUND AND INVESTMENTS

         6.1. General. All contributions made under the Plan and investments
made and property of any kind or character acquired with any such funds or
otherwise contributed, and all income, profits, and proceeds derived therefrom,
shall be held in Trust and shall be held and administered by the Trustee in
accordance with the provisions of the Plan and Trust Agreement.

         6.2. Single Trust. Assets of the Trust shall be held in a separate fund
which shall consist of the Trust Fund. Individual Participant interests in the
Trust Fund shall be reflected in the ESOP Accounts maintained for the
Participants. Notwithstanding the foregoing, the Trust Fund shall be treated as
a single trust for purposes of investment and administration, and nothing
contained herein shall require a physical segregation of assets for any fund or
for any Account maintained under the Plan.

         6.3. Investment of the Trust.

                  (a) Subject to Sections 6.4 and 5.11 hereof, the Trust Fund
         shall be invested primarily in Company Stock and neither the Company
         nor the Committee nor the Trustee shall have any responsibility or duty
         to time any transaction involving Company Stock, in order to anticipate
         market conditions or changes in stock value, nor shall any such person
         have any responsibility or duty to sell Company Stock held in the Trust
         Fund (or otherwise to provide investment management for Company Stock
         held in the Trust Fund) in order to maximize return or minimize loss.
         The Committee may direct the Trustee to have the Plan enter into one or
         more Exempt Loans to finance the acquisition of Company Stock for the
         Trust Fund. Company contributions in cash, and other cash received or
         held by the Trustee, may be used to acquire shares of Company Stock
         from the Company, Company shareholders, from the ESOP Accounts of
         Participants about to receive distributions under the Plan, or on the
         open market.

                  (b) Notwithstanding anything contained herein to the contrary,
         proceeds of an Exempt Loan shall be used, within a reasonable time
         after receipt by the Trust, only for the following purposes:

                           (i)   to acquire Company Stock;

                           (ii)  to repay the same Exempt Loan; or

                           (iii) to repay any previous Exempt Loan.

                  An Exempt Loan shall be repaid only from amounts loaned to the
         Trust and the proceeds of such loans, from Company contributions in
         cash and earnings attributable thereto, from any collateral given for
         the loan (including, in the case where the Exempt Loan is a refinancing
         of a prior Exempt Loan, unallocated Company Stock acquired with

                                       29
<PAGE>

         the proceeds of the prior Exempt Loan), and from dividends paid on
         Company Stock acquired with proceeds of the Exempt Loan. Except as
         provided in Section 5.11 or as otherwise required by applicable law, no
         Company Stock acquired with the proceeds of an Exempt Loan may be
         subject to a put, call, or other option or buy-sell or similar
         arrangement while held by and when distributed from the Plan.

         6.4. Certain Offers for Company Stock. Notwithstanding any other
provision of the Plan to the contrary, in the event an offer shall be received
by the Trustee (including but not limited to a tender offer or exchange offer
within the meaning of the Securities Exchange Act of 1934, as from time to time
amended and in effect) to acquire any or all shares of Company Stock held by the
Trust (an "Offer"), whether or not such Company Stock is allocated to
Participants' ESOP Accounts, the discretion or authority to sell, exchange or
transfer any of such shares of Company Stock shall be determined in accordance
with the following rules:

                  (a) The Trustee shall have no discretion or authority to sell,
         exchange or transfer any Company Stock pursuant to an Offer except to
         the extent, and only to the extent that the Trustee is timely directed
         to do so in writing (i) with respect to any Company Stock held by the
         Trustee subject to such Offer and allocated to any Participant's ESOP
         Account, by each Participant to whose ESOP Account any of such Company
         Stock is allocated and (ii) with respect to any Company Stock held by
         the Trustee subject to such Offer and not allocated to any
         Participant's ESOP Account, by each Participant who is an Eligible
         Employee with respect to a number of shares (including fractional
         shares) of such unallocated Company Stock equal to the total number of
         shares of such unallocated Company Stock multiplied by a fraction the
         numerator of which is the annualized Compensation of such Participant
         for the calendar year in which such Offer is made and the denominator
         of which is the total annualized Compensation for the calendar year in
         which such Offer is made of all such Participants who are Eligible
         Employees.

                  (b) To the extent there remains any residual fiduciary
         responsibility with respect to Company Stock pursuant to an Offer after
         application of paragraph (a) above, the Trustee shall sell, exchange or
         transfer such Company Stock as directed by the Committee or as directed
         by an independent fiduciary if duly appointed by the Sponsor. To the
         extent the Committee or an independent fiduciary is required to
         exercise any residual fiduciary responsibility with respect to an
         Offer, the Committee or independent fiduciary shall take into account
         in exercising its fiduciary judgment, unless it is clearly imprudent to
         do so, directions timely received from Participants, as such directions
         are most indicative of what action is in the best interests of
         Participants. Further, the Committee or independent fiduciary, in
         addition to taking into consideration any relevant financial factors
         bearing on any such decision, shall take into consideration any
         relevant non-financial factors, including, but not limited to, the
         continuing job security of Participants as employees of the Sponsor or
         any Affiliated Company, conditions of employment, employment
         opportunities and other similar matters, and the prospect of the
         Participants and prospective Participants for future benefits under the
         Plan (including any

                                       30
<PAGE>

         subsequent release and allocation of Company Stock held in the Exempt
         Loan Suspense Subfund).

                  (c) Upon timely receipt of such instructions, the Trustee
         shall, subject to the provisions of paragraphs (e) and (o) of this
         Section, sell, exchange or transfer pursuant to such Offer, only such
         shares as to which such instructions were given. The Committee shall
         use its best efforts to communicate or cause to be communicated to each
         Participant the consequences of any failure to provide timely
         instructions to the Trustee.

                  (d) In the event, under the terms of an Offer or otherwise,
         any shares of Company Stock tendered for sale, exchange or transfer
         pursuant to such Offer may be withdrawn from such Offer, the Trustee
         shall follow such instructions respecting the withdrawal of such shares
         from such Offer in the same manner and the same proportion as shall be
         timely received by the Trustee from the Participants entitled under
         this Section to give instructions as to the sale, exchange or transfer
         of shares pursuant to such Offer.

                  (e) In the event that an Offer for fewer than all of the
         shares of Company Stock held by the Trustee in the Trust shall be
         received by the Trustee, each Participant shall be entitled to direct
         the Trustee as to the acceptance or rejection of such Offer (as set
         forth herein) with respect to the largest portion of such Company Stock
         as may be possible given the total number or amount of shares of
         Company Stock the Plan may sell, exchange or transfer pursuant to the
         Offer based upon the instructions received by the Trustee from all
         other Participants who shall timely instruct the Trustee pursuant to
         this paragraph to sell, exchange or transfer such shares pursuant to
         such Offer, each on a pro rata basis in accordance with the maximum
         number of shares each such Participant would have been permitted to
         direct under paragraph (a) had the Offer been for all shares of Company
         Stock held in the Trust.

                  (f) In the event an Offer is received by the Trustee and
         instructions have been solicited from Participants regarding such
         Offer, and prior to termination of such Offer, another Offer is
         received by the Trustee for the Company Stock subject to the first
         Offer, the Trustee shall inform the Committee of such other Offer and
         the Committee shall use its best efforts under the circumstances to
         solicit instructions from the Participants (i) with respect to
         securities tendered for sale, exchange or transfer pursuant to the
         first Offer, whether to withdraw such tender, if possible, and, if
         withdrawn, whether to tender any Company Stock so withdrawn for sale,
         exchange or transfer pursuant to the second Offer and (ii) with respect
         to Company Stock not tendered for sale, exchange or transfer pursuant
         to the first Offer, whether to tender or not to tender such Company
         Stock for sale, exchange or transfer pursuant to the second Offer. The
         Trustee shall follow all such instructions received in a timely manner
         from Participants in the same manner and in the same proportion as
         provided in paragraph (a) of this Section. With respect to any further
         Offer for any Company Stock received by the Trustee and subject to any
         earlier Offer (including successive Offers from one or more existing
         offers), the Trustee shall act in the same manner as described above.

                                       31
<PAGE>

                  (g) With respect to any Offer received by the Trustee, the
         Trustee shall inform the Sponsor of such Offer and the Sponsor shall
         distribute, at its expense, copies of all relevant material including
         but not limited to material filed with the Securities and Exchange
         Commission with such Offer or regarding such Offer, which shall seek
         confidential written instructions from each Participant who is entitled
         to respond to such Offer pursuant to paragraph (a). The identities of
         Participants, the amount of Company Stock allocated to their ESOP
         Accounts, and the Compensation of each Participant shall be determined
         from the list of Participants delivered to the Sponsor by the Committee
         which shall take all reasonable steps necessary to provide the Sponsor
         with the latest possible information.

                  (h) The Sponsor shall distribute and/or make available to each
         Participant who is entitled to respond to an Offer pursuant to
         paragraphs (a), an instruction form to be used by each such Participant
         who wishes to instruct the Trustee. The instruction form shall state
         that (i) if the Participant fails to return an instruction form to the
         Trustee by the indicated deadline, the Company Stock with respect to
         which he or she is entitled to give instructions shall not be sold,
         exchanged or transferred pursuant to such Offer unless the Trustee is
         directed otherwise as provided in paragraph (b) above, (ii) the
         Participant shall be a named fiduciary (as described in paragraph (m)
         below) with respect to all shares of Company Stock for which he or she
         is entitled to give instructions, and (iii) the Company acknowledges
         and agrees to honor the confidentiality of the Participant's
         instructions to the Trustee.

                  (i) Each Participant may choose to instruct the Trustee in one
         of the following two ways: (i) not to sell, exchange or transfer any
         shares of Company Stock for which he or she is entitled to give
         instructions, or (ii) to sell, exchange or transfer all Company Stock
         for which he or she is entitled to give instructions. The Sponsor shall
         follow up with additional mailings and postings of bulletins, as
         reasonable under the time constraints then prevailing, to obtain
         instructions from Participants not otherwise responding to such
         requests for instructions. Subject to paragraph (e), the Trustee shall
         then sell, exchange or transfer shares according to instructions from
         Participants, except that shares for which no instructions are received
         shall not be sold, exchanged or transferred unless directed otherwise
         as provided in paragraph (b) above.

                  (j) The Sponsor shall furnish former Participants who have
         received distributions of Company Stock so recently as to not be
         shareholders of record with the information given to Participants
         pursuant to paragraphs (g), (h) and (i) of this Section. The Trustee
         shall then sell, exchange or transfer shares according to instructions
         from such former Participants, except that shares for which no
         instructions are received shall not be sold, exchanged or transferred.

                  (k) Neither the Company, the Committee nor the Trustee shall
         express any opinion or give any advice or recommendation to any
         Participant concerning the Offer, nor shall they have any authority or
         responsibility to do so.

                                       32
<PAGE>

                  (l) The Trustee shall not reveal or release a Participant's
         instructions to the Company, its officers, directors, employees, or
         representatives. If some but not all Company Stock held by the Trust is
         sold, exchanged, or transferred pursuant to an Offer, the Company, with
         the Trustee's cooperation, shall take such action as is necessary to
         maintain the confidentiality of Participant's records including,
         without limitation, establishment of a security system and procedures
         which restrict access to Participant records and retention of an
         independent agent to maintain such records. If an independent record
         keeping agent is retained, such agent must agree, as a condition of its
         retention by the Sponsor, not to disclose the composition of any
         Participant ESOP Accounts to the Company, its officers, directors,
         employees, or representatives. The Company acknowledges and agrees to
         honor the confidentiality of Participants' instructions to the Trustee.

                  (m) Each Participant shall be a named fiduciary (as that term
         is defined in Section 402(a)(2) of ERISA) with respect to Company Stock
         allocated to his or her ESOP Account under the Plan and with respect to
         his or her pro-rata portion of the unallocated Company Stock for which
         he or she is entitled to issue instructions in accordance with
         paragraph (a) of this Section solely for purposes of exercising the
         rights of a shareholder with respect to an Offer pursuant to this
         Section 6.4 and voting rights pursuant to Section 7.13.

                  (n) To the extent that an Offer results in the sale of Company
         Stock in the Trust and allocated to the ESOP Accounts of Participants,
         the Committee shall instruct the Trustee as to the investment of the
         proceeds of such sale. To the extent that an Offer results in the sale
         of Company Stock in the Trust and not allocated to the ESOP Accounts of
         any Participant, the proceeds from such sale shall first be applied to
         repay the fullest extent possible, all Exempt Loans then outstanding.
         To effect such repayment, the Trustee shall seek such consents and
         approvals from lenders under any Exempt Loans as may be necessary or
         convenient to permit the tender of shares of Company Stock held in the
         Exempt Loan Suspense Subfund. To the extent that proceeds from the sale
         of shares held in the Exempt Loan Suspense Subfund exceed the
         outstanding principal and interest of all Exempt Loans, such excess
         proceeds shall be allocated to each Participant's Non-Stock Subaccount
         in the same manner as allocations under Section 4.2(a); provided,
         however, that any Participant who is employed on the date of the
         closing of the sale pursuant to the Offer shall be deemed an Eligible
         Participant entitled to an allocation of excess sale proceeds for
         purposes of this Section 6.4(l) only. To the extent that less than all
         of the shares of Company Stock held in the Exempt Loan Suspense Subfund
         are tendered in an Offer and repayment of an Exempt Loan results in a
         release of shares of Company Stock from the Exempt Loan Suspense
         Subfund in excess of those tendered in such Offer, the excess released
         shares of Company Stock shall be allocated to each Participant's ESOP
         Account in the same manner as allocations under Section 4.2(c);
         provided, however, that any Participant who is employed on the date of
         the closing of the sale pursuant to the Offer shall be deemed an
         Eligible Participant entitled to an allocation of Company Stock for
         purposes of this Section 6.4(l) only. To the extent that allocations to
         Participants under this Section 6.4(l) constitute Annual Additions, all
         such allocations

                                       33
<PAGE>

         shall be subject to the limitations set forth in Article XI hereof. Any
         allocations to which Participants would be entitled under this Section
         6.4(l) but for the limitations of Article XI, shall be held in the 415
         Suspense Account and allocated to Participants in accordance with
         Article XI.

                  (o) In the event a court of competent jurisdiction shall issue
         to the Plan, the Committee, the Sponsor or the Trustee an opinion or
         order, which shall, in the opinion of counsel to the Committee, the
         Sponsor or the Trustee, invalidate, in all circumstances or in any
         particular circumstances, any provision or provisions of this Section
         regarding the determination to be made as to whether or not Company
         Stock held by the Trustee shall be sold, exchanged or transferred
         pursuant to an Offer or cause any such provision or provisions to
         conflict with securities laws, then, upon notice thereof to the
         Committee, the Sponsor or the Trustee, as the case may be, such invalid
         or conflicting provisions of this Section shall be given no further
         force or effect. In such circumstances, the Trustee shall continue to
         follow instructions received from Participants, to the extent such
         instructions have not been invalidated by such order or opinion. To the
         extent the Trustee is required by such opinion or order to exercise any
         residual fiduciary responsibility with respect to such Offer, the
         Sponsor shall appoint an independent fiduciary who shall exercise such
         residual fiduciary responsibility as provided in paragraph (b) above
         and shall direct the Trustee as to whether or not Company Stock held by
         the Trustee shall be sold, exchanged or transferred pursuant to such
         Offer.

         6.5. Securities Law Limitation. Neither the Committee nor the Trustee
shall be required to engage in any transaction, including without limitation,
directing the purchase or sale of Company Stock, which either determines in its
sole discretion might tend to subject itself, its members, the Plan, the
Company, or any Participant or Beneficiary to a liability under federal or state
securities laws.

         6.6. Accounting and Valuations.

                  (a) The following special accounting rules shall apply to the
         Trust Fund.

                           (i) Each Participant's ESOP Account shall consist of
                  a portion comprised of cash and all other assets except for
                  Company Stock (the "Non-Stock Subaccount") and a portion
                  comprised solely of Company Stock (the "Stock Subaccount").

                           (ii) Gains or losses on Non-Stock Subaccounts shall
                  be credited in accordance with this Section as if the
                  Non-Stock Subaccounts collectively constituted a separate
                  pooled investment fund.

                           (iii) Stock Subaccounts shall be credited with a
                  specific number of shares of Company Stock rather than an
                  individual interest in a pool of Company Stock.

                                       34
<PAGE>

                  (b) Non-Stock Subaccounts may be invested in Company Stock
         from time to time, and Company Stock so acquired shall be allocated
         among Stock Subaccounts in proportion to the amount debited to the
         corresponding Non-Stock Subaccounts.

                  (c) As of each Valuation Date each Participant's Non-Stock
         Subaccount shall be credited (debited) with the "allocable share" of
         the net income (loss) of the non-Company Stock portion of the Trust
         Fund valued as of such Valuation Date in proportion to Non-Stock
         Subaccount balances. For this purpose, except as provided in Section
         6.7, the net income (loss) of the Trust Fund shall not include any
         income with respect to securities in the Exempt Loan Suspense Subfund
         acquired with the proceeds of an Exempt Loan.

                  (d) In making valuations required by the Plan, the Trustee
         shall value all assets of the Trust at fair market value. Such fair
         market value shall be determined from facts reasonably available to the
         Trustee. In making said determination, the Trustee may, but need not,
         select and rely upon the advice and opinions of appraisers, brokers,
         investment counsel, or any other persons believed by the Trustee to be
         competent. Any determination of value so made shall, for all purposes
         of the Plan, conclusively establish such value.

                  (e) If Company Stock is readily tradeable stock (as that term
         is used under Code Section 409(h)), valuation of each Participant's
         Stock Subaccount shall, at any relevant times, be worth the fair market
         value on that date of the shares of Company Stock credited to it.
         Valuations of any Company Stock held by the Trust which is not readily
         tradable stock shall be performed by an independent appraiser or
         valuation consultant.

                  (f) The Committee shall establish accounting procedures for
         the purpose of making the allocations, valuations and adjustments to
         Participants' ESOP Accounts provided for in Article VI hereof. Such
         accounting procedures shall include adequate records of the cost basis
         of Company Stock allocated to ESOP Accounts and the identity of shares
         acquired with the proceeds of an Exempt Loan. From time to time, the
         Committee may modify its accounting procedures for the purpose of
         achieving equitable and nondiscriminatory allocations among the ESOP
         Accounts of Participants in accordance with the provisions of the Plan.

                  (g) In the event any rights, warrants, or options are issued
         with respect to Company Stock held in Stock Subaccounts, the Committee
         shall direct the Trustee as to whether such rights, warrants, or
         options shall be exercised for such Subaccounts using cash as may be
         available in corresponding Non-Stock Subaccounts. Company Stock so
         acquired shall be credited to corresponding Stock Subaccounts in
         proportion to the amount of cash withdrawn from the corresponding
         Non-Stock Subaccounts. A Participant shall have no right to request,
         direct, or demand that the Trust exercise on his or her behalf rights
         to purchase Company Stock.

                                       35
<PAGE>

                  (h) The Participants and their Beneficiaries shall assume all
         risks in connection with any decrease in the value of any assets
         invested in the Trust Fund which are allocated to their ESOP Accounts.

         6.7. Dividends.

                  (a) As determined by the Committee, dividends on shares of
         Company Stock allocated to ESOP Accounts shall be either (i) applied to
         repay an Exempt Loan then outstanding; (ii) paid directly to
         Participants or Beneficiaries; or (iii) retained in the Trust and
         treated as net income of the Trust. Any resulting allocation shall be
         made according to the following rules:

                           (i) If cash dividends are used to repay an Exempt
                  Loan, the appropriate number of shares of Company Stock shall
                  be released from the Exempt Loan Suspense Subfund pursuant to
                  Section 4.2(b). Notwithstanding the foregoing, if the fair
                  market value of the shares released pursuant to Section 4.2(b)
                  from the application of cash dividends to repay an Exempt Loan
                  under this Section 6.7(a)(i) is less than such cash dividends,
                  additional shares shall be released from the Exempt Loan
                  Suspense Subfund until the fair market value of such released
                  shares equals the amount of such cash dividends. Such Company
                  Stock shall be allocated to Participants' Stock Subaccounts in
                  proportion to the number of shares of Company Stock allocated
                  to Participants' Stock Subaccounts for which such cash
                  dividend was paid.

                           (ii) If cash dividends are retained in the Trust and
                  are not used to pay expenses of the Plan, such dividends shall
                  be allocated as of the date specified by the Committee to
                  Non-Stock Subaccounts in proportion to the shares of Company
                  Stock held in corresponding Stock Subaccounts for which such
                  dividends were distributed to the Trust.

                           (iii) If stock dividends are retained in the Trust
                  and are not used to pay expenses of the Plan, such dividends
                  shall be credited on the date specified by the Committee to
                  Stock Subaccounts in proportion to the shares of Company Stock
                  held in such Subaccounts for which such dividends were
                  distributed to the Trust.

                           (iv) If cash or stock dividends are distributed
                  directly to Participants or Beneficiaries, such dividends
                  shall be distributed on the date specified by the Committee in
                  proportion to the shares of Company Stock held in such
                  Participant's or Beneficiary's Stock Subaccount for which such
                  dividends were distributed.

                           (v) If cash dividends on shares of Company Stock
                  allocated to ESOP Accounts are received by the Trust on or
                  after January 1, 2002, such dividends, as elected by
                  Participants or Beneficiaries, shall either be distributed not
                  later than 90 days after the close of the Plan Year in which
                  such dividends are paid or shall

                                       36
<PAGE>

                  be reinvested in Company Stock which shall be held in such
                  Participant's or Beneficiary's Stock Subaccounts.

                  (b) As determined by the Committee, dividends on shares of
         Company Stock held in the Exempt Loan Suspense Subfund or on shares of
         Company Stock contributed to the Trust Fund but not yet allocated to
         Participant's ESOP Accounts shall be either (i) applied to repay an
         Exempt Loan then outstanding or (ii) retained in the Trust. Any
         resulting allocation shall be made according to the following rules:

                           (i) If cash or stock dividends are used to repay an
                  Exempt Loan, the appropriate number of shares of Company Stock
                  shall be released from the Exempt Loan Suspense Subfund
                  pursuant to Section 4.2(b). Such Company Stock shall be
                  allocated to Participants Stock Subaccounts pursuant to
                  Section 4.2(c).

                           (ii) If cash dividends are not used to repay an
                  Exempt Loan, they shall be considered income of the Trust and,
                  if not used to pay expenses of the Plan, shall be allocated to
                  Participants' ESOP Accounts in proportion to their respective
                  ESOP Account balances.

                           (iii) If stock dividends are not used to repay an
                  Exempt Loan or used to pay expenses of the Plan, they shall be
                  retained in the Exempt Loan Suspense Subfund until released
                  from such Subfund pursuant to Section 4.2(b) and allocated to
                  Participants Stock Subaccounts pursuant to Section 4.2(c).

         6.8. Non-Diversion of Trust Fund. Except as hereinafter provided, all
assets of the Trust shall be held by the Trustee for the exclusive benefit of
Plan Participants and Beneficiaries. At no time shall any part of the Trust be
used for or diverted to purposes other than for the exclusive benefit of the
Participants and Beneficiaries under the Plan except as follows:

                  (a) In the case of a contribution which is made by a mistake
         of fact, that contribution, at the Company's election, may be returned
         to the Company within one year after it is made.

                  (b) All contributions to the Trust are hereby conditioned upon
         the Plan satisfying all of the requirements of Code Section 401(a), as
         evidenced by the issuance by the Internal Revenue Service of a
         favorable determination letter with respect to the Plan. If the Plan
         does not qualify, at the Company's written election, the Plan may be
         revoked and any or all such contributions with respect to the portion
         revoked may be returned to the Company within one year after the date
         of the Internal Revenue Service's denial of the qualification of the
         Plan or a portion thereof. Upon such a revocation, the affairs of the
         Plan or the portion revoked shall be terminated and wound up as the
         Committee shall direct.

                                       37
<PAGE>

                  (c) Contributions to the Trust Fund are conditioned on
         deductibility under Code Section 404. In the event a deduction is
         disallowed for any such contribution, then such contribution may be
         returned to the Company within one year of the disallowance.

                  (d) The residue of the 415 Suspense Account that cannot be
         allocated to Participants upon a Plan termination may revert to the
         Company in accordance with the provisions of Section 11.7.

         6.9. Company, Committee and Trustee Not Responsible for Adequacy of
Trust Fund. Neither any member of the Committee, any Trustee nor the Company
shall be liable or responsible for the adequacy of the Trust to meet and
discharge any or all payments and liabilities hereunder. All Plan benefits will
be paid only from the Trust assets, and neither any member of the Committee, any
Trustee, nor the Company shall have any duty or liability to furnish the Trust
with any funds, securities or other assets except as expressly provided in the
Plan. Except as required under the Plan or Trust or under Part 4 of Subtitle B,
Title I of ERISA, the Company shall not be responsible for any decision, act, or
omission of a Trustee or a member of the Committee or any Investment Manager (if
applicable), or responsible for the application of any moneys, securities,
investments, or other property paid or delivered to the Trustee.

         6.10. Distributions. Money and property of the Trust shall be paid out,
disbursed, or applied by the Trustee for the benefit of Participants and
Beneficiaries under the Plan in accordance with directions received by the
Trustee from the Committee. Upon direction of the Committee, the Trustee may pay
money or deliver property from the Trust for any purpose authorized under the
Plan. The Trustee shall be fully protected in paying out money or delivering
property from the Trust from time to time upon written order of the Committee
and shall not be liable for the application of such money or property by the
Committee.

         The Trustee shall not be required to determine or to make any
investigation to determine the identity or mailing address of any person
entitled to benefits hereunder and shall have discharged its obligation in that
respect when it shall have sent checks or other property by first-class mail to
such persons at their respective addresses as may be certified to it by the
Committee.

         6.11. Taxes. If the whole or any part of the Trust, or the proceeds
thereof, shall become liable for the payment of any estate, inheritance, income
or other tax, charge, or assessment which the Trustee shall be required to pay,
the Trustee shall have full power and authority to pay such tax, charge, or
assessment out of any moneys or other property in its hands for the account of
the person whose interests hereunder are so liable, but at least ten (10) days
prior to making any such payment, the Trustee shall mail notice to the Committee
of its intention to make such payment. Prior to making any transfers or
distributions of any of the Trust, the Trustee may require such releases or
other documents from any lawful taxing authority as it shall deem necessary.

         6.12. Trustee Records to be Maintained. The Trustee shall keep accurate
and detailed accounts of all investments, receipts, disbursements, and other
transactions hereunder, and all

                                       38
<PAGE>

accounts, books, and records relating thereto shall be open to inspection and
audit at all reasonable times by any person designated by the Company (subject
to the provisions of Section 6.4(k)).

         6.13. Annual Report of Trustee. Promptly following the close of each
Plan Year (or such other period as may be agreed upon between the Trustee and
Committee), or promptly after receipt of a written request from the Company, the
Trustee shall prepare for the Company a written account which will enable the
Company to satisfy the annual financial reporting requirements of ERISA, and
which will set forth among other things all investments, receipts,
disbursements, and other transactions effected by the Trustee during such Plan
Year or during the period from the close of the last Plan Year to the date of
such request. Such account shall also describe all securities and other
investments purchased and sold during the period to which it refers, the cost of
acquisition or net proceeds of sale, the securities and investments held as of
the date of such account, and the cost of each item thereof as carried on the
books of the Trustee. All accounts so filed shall be open to inspection during
business hours by the Company, the Committee, and by Participants and
Beneficiaries of the Plan (subject to the provisions of Section 6.4(k)).

         6.14. Appointment of Investment Manager. From time to time the
Committee, in accordance with Section 7.6 hereof, may appoint one or more
Investment Managers who shall have investment management and control over assets
of the Trust not invested or to be invested in Company Stock. The Committee
shall notify the Trustee of such assets of the appointment of the Investment
Manager. In the event more than one Investment Manager is appointed, the
Committee shall determine which assets shall be subject to management and
control by each Investment Manager and shall also determine the proportion in
which funds withdrawn or disbursed shall be charged against the assets subject
to each Investment Manager's management and control. As shall be provided in any
contract between an Investment Manager and the Committee, such Investment
Manager shall hold a revocable proxy with respect to all securities which are
held under the management of such Investment Manager pursuant to such contract
(except for Company Stock), and such Investment Manager shall report the voting
of all securities subject to such proxy on an annual basis to the Committee.

                                       39
<PAGE>

                                   ARTICLE VII
                          OPERATION AND ADMINISTRATION

         7.1. Appointment of Committee. There is hereby created a committee (the
"Committee") which shall exercise such powers and have such duties in
administering the Plan as are hereinafter set forth. The Board of Directors
shall determine the number of members of such Committee. The members of the
Committee shall be appointed by the Board of Directors and such Board shall from
time to time fill all vacancies occurring in said Committee. The members of the
Committee shall constitute the Named Fiduciaries of the Plan within the meaning
of Section 402(a)(2) of ERISA; provided that solely for purposes of Section 6.4
hereof, Participants shall be Named Fiduciaries with respect to shares of
Company Stock for which they have the right to sell, transfer, or exchange
pursuant to Section 6.4 and solely for purposes of Section 7.13, Participants
shall be Named Fiduciaries with respect to shares of Company Stock on matters as
to which they are entitled to provide voting directions pursuant to Section
7.13.

         7.2. Transaction of Business. A majority of the Committee shall
constitute a quorum for the transaction of business. Actions of the Committee
may be taken either by vote at a meeting or in writing without a meeting. All
action taken by the Committee at any meeting shall be by a vote of the majority
of those present at such meeting. All action taken in writing without a meeting
shall be by a vote of the majority of those responding in writing. All notices,
advices, directions and instructions to be transmitted by the Committee shall be
in writing and signed by or in the name of the Committee. In all its
communications with the Trustee, the Committee may, by either of the majority
actions specified above, authorize any one or more of its members to execute any
document or documents on behalf of the Committee, in which event it shall notify
the Trustee in writing of such action and the name or names of its members so
designated and the Trustee shall thereafter accept and rely upon any documents
executed by such member or members as representing action by the Committee until
the Committee shall file with the Trustee a written revocation of such
designation.

         7.3. Voting. Any member of the Committee who is also a Participant
hereunder shall not be qualified to act or vote on any matter relating solely to
himself or herself, and upon such matter his or her presence at a meeting shall
not be counted for the purpose of determining a quorum. If, at any time a member
of the Committee is not so qualified to act or vote, the qualified members of
the Committee shall be reduced below two (2), the Board of Directors shall
promptly appoint one or more special members to the Committee so that there
shall be at least one qualified member to act upon the matter in question. Such
special Committee members shall have power to act only upon the matter for which
they were especially appointed and their tenure shall cease as soon as they have
acted upon the matter for which they were especially appointed.

         7.4. Responsibility of Committee. The authority to control and manage
the operation and administration of the Plan, the general administration of the
Plan, the responsibility for carrying out the Plan and the authority and
responsibility to control and manage the assets of the Trust are hereby
delegated by the Board of Directors to and vested in the Committee, except to
the extent reserved to the Board of Directors, the Sponsor, or the Company.
Subject to the

                                       40
<PAGE>

limitations of the Plan, the Committee shall, from time to time, establish rules
for the performance of its functions and the administration of the Plan. In the
performance of its functions, the Committee shall not discriminate in favor of
Highly Compensated Employees.

         7.5. Committee Powers. The Committee shall have all discretionary
powers necessary to supervise the administration of the Plan and control its
operations. In addition to any discretionary powers and authority conferred on
the Committee elsewhere in the Plan or by law, the Committee shall have, but not
by way of limitation, the following discretionary powers and authority:

                  (a) To designate agents to carry out responsibilities relating
         to the Plan, other than fiduciary responsibilities as provided in
         Section 7.6.

                  (b) To employ such legal, actuarial, medical, accounting,
         clerical, and other assistance as it may deem appropriate in carrying
         out the provisions of the Plan, including one or more persons to render
         advice with regard to any responsibility any Named Fiduciary or any
         other fiduciary may have under the Plan.

                  (c) To establish rules and regulations from time to time for
         the conduct of the Committee's business and the administration and
         effectuation of the Plan.

                  (d) To administer, interpret, construe, and apply the Plan and
         to decide all questions which may arise or which may be raised under
         the Plan by any Employee, Participant, former Participant, Beneficiary
         or other person whatsoever, including but not limited to all questions
         relating to eligibility to participate in the Plan, the amount of
         Credited Service of any Participant, and the amount of benefits to
         which any Participant or his or her Beneficiary may be entitled.

                  (e) To determine the manner in which the assets of the Plan,
         or any part thereof, shall be disbursed.

                  (f) To direct the Trustee, in writing, from time to time, to
         invest and reinvest the Trust Fund, or any part thereof, or to
         purchase, exchange, or lease any property, real or personal, which the
         Committee may designate. This shall include the right to direct the
         investment of all or any part of the Trust in any one security or any
         one type of securities permitted hereunder. Among the securities which
         the Committee may direct the Trustee to purchase are "qualifying
         employer securities" as defined in Code Section 4975(e) or any
         successor statutes thereto.

                  (g) Subject to provisions (a) through (d) of Section 8.1, to
         make administrative amendments to the Plan that do not cause a
         substantial increase or decrease in benefit accruals to Participants
         and that do not cause a substantial increase in the cost of
         administering the Plan.

                                       41
<PAGE>

                  (h) To perform or cause to be performed such further acts as
         it may deem to be necessary, appropriate or convenient in the efficient
         administration of the Plan.

         Any action taken in good faith by the Committee in the exercise of
discretionary power conferred upon it by the Plan shall be conclusive and
binding upon the Participants and their Beneficiaries. All discretionary powers
conferred upon the Committee shall be absolute; provided, however, that all such
discretionary power shall be exercised in a uniform and nondiscriminatory
manner.

         7.6. Additional Powers of Committee. In addition to any discretionary
powers or authority conferred on the Committee elsewhere in the Plan or by law,
such Committee shall have the following discretionary powers and authority:

                  (a) To appoint one or more Investment Managers to manage and
         control any or all of the assets of the Trust not invested or to be
         invested in Company Stock.

                  (b) To designate persons (other than the members of the
         Committee) to carry out fiduciary responsibilities, other than any
         responsibility to manage or control the assets of the Trust;

                  (c) To allocate fiduciary responsibilities among the members
         of the Committee, other than any responsibility to manage or control
         the assets of the Trust;

                  (d) To cancel any such designation or allocation at any time
         for any reason;

                  (e) To direct the voting of any Company Stock or any other
         security held by the Trust subject to Section 7.13 hereof; and

                  (f) To exercise management and control over Plan assets and to
         direct the purchase and sale of Company Stock for the Trust.

         Any action under this Section 7.6 shall be taken in writing, and no
designation or allocation under Subsection (a), (b) or (c) shall be effective
until accepted in writing by the indicated responsible person.

         7.7. Claims Procedures. If a Participant believes that he or she is
being denied any rights or benefits under the Plan, such Participant (or his or
her beneficiary or duly appointed representative) may file a claim for benefits
in writing with the Committee. The Committee shall follow the procedures set
forth in this Section in processing a claim for benefits.

                  (a) Within 90 days following receipt by the Committee of a
         claim for benefits and all necessary documents and information, the
         Committee shall furnish the person claiming benefits under the Plan
         ("Claimant") with written notice of the decision rendered with respect
         to such claim. Should special circumstances require an extension of
         time for processing the claim, written notice of the extension shall be
         furnished to the

                                       42
<PAGE>

         Claimant prior to the expiration of the initial 90 day period. The
         notice shall indicate the special circumstances requiring an extension
         of time and the date by which a final decision is expected to be
         rendered. In no event shall the period of the extension exceed 90 days
         from the end of the initial 90 day period.

                  (b) In the case of a denial of the Claimant's claim, the
         written notice of such denial shall set forth (i) the specific reasons
         for the denial, (ii) references to the Plan provisions upon which the
         denial is based, (iii) a description of any additional information or
         material necessary for perfection of the claim (together with an
         explanation why such material or information is necessary), and (iv) an
         explanation of the Plan's appeals procedures.

                  (c) If the Committee does not respond or does not furnish an
         extension notice within 90 days, the Claimant may consider his or her
         claim denied.

         7.8. Appeals Procedures. A Claimant who wishes to appeal the denial of
his or her claim for benefits shall follow the administrative procedures for an
appeal as set forth in this Section and shall exhaust such administrative
procedures prior to seeking any other form of relief.

                  (a) In order to appeal a decision rendered with respect to his
         or her claim for benefits, a Claimant must file an appeal with the
         Committee in writing within 60 days after the date of notice of the
         decision with respect to the claim, or if the claim has neither been
         approved nor denied within the period provided in Section 7.7(a) above,
         then the appeal must be made within 150 days of the date the claim for
         benefits was filed with the Committee.

                  (b) The Claimant may request that his or her appeal be given
         full and fair review by the Committee. The Claimant also may review all
         pertinent documents and submit issues and comments in writing in
         connection with the appeal. The decision of the Committee shall be made
         no later than 60 days after the Claimant has completed his or her
         submission to the Committee of his or her appeal and any documentation
         or other information to be submitted in support of such request. Should
         special circumstances require an extension of time for processing,
         written notice of the extension shall be furnished to the Claimant
         prior to the expiration of the initial 60 day period. The notice shall
         indicate the special circumstances requiring an extension of time and
         the date by which a final decision is expected to be rendered. In no
         event shall the period of the extension exceed 60 days from the end of
         the initial 60 day period.

                  (c) The decision on the Claimant's appeal shall be in writing
         and shall include specific reasons for the decision, written in a
         manner calculated to be understood by the Claimant with specific
         reference to the pertinent Plan provisions upon which the decision is
         based.

                                       43
<PAGE>

                  (d) If the Committee does not respond or does not furnish an
         extension notice within 60 days, the Claimant may consider his or her
         appeal denied.

         7.9. Limitation on Liability. Each of the fiduciaries under the Plan
shall be solely responsible for its own acts and omissions and no fiduciary
shall be liable for any breach of fiduciary responsibility resulting from the
act or omission of any other fiduciary or person to whom fiduciary
responsibilities have been allocated or delegated pursuant to Section 7.6,
except as provided in Sections 405(a) and 405(c)(2)(A) or (B) of ERISA. The
Committee shall have no responsibility over assets as to which management and
control has been delegated to an Investment Manager appointed pursuant to
Section 6.15 hereof or as to which management and control has been retained by
the Trustee.

         7.10. Indemnification and Insurance. To the extent permitted by law,
the Company shall indemnify and hold harmless the Committee and each member
thereof, each Trustee, the Board of Directors and each member thereof, and such
other persons as the Board of Directors may specify, from the effects and
consequences of his or her acts, omissions, and conduct in his or her official
capacity in connection with the Plan and Trust. To the extent permitted by law,
the Company may also purchase liability insurance for such persons.

         7.11. Compensation of Committee and Plan Expenses. Members of the
Committee shall serve as such without compensation unless the Board of Directors
shall otherwise determine, but in no event shall any member of the Committee who
is an Employee receive compensation from the Plan for his or her services as a
member of the Committee. All members shall be reimbursed for any necessary
expenditures incurred in the discharge of duties as members of the Committee.
The compensation or fees, as the case may be, of all officers, agents, counsel,
the Trustee or other persons retained or employed by the Committee shall be
fixed by the Committee, subject to approval by the Board of Directors. The
expenses incurred in the administration and operation of the Plan, including but
not limited to the expenses incurred by the members of the Committee in
exercising their duties, shall be paid by the Plan from the Trust Fund, unless
paid by the Company, provided, however, that the Plan and not the Company shall
bear the cost of interest and normal brokerage charges which are included in the
cost of securities purchased by the Trust Fund (or charged to proceeds in the
case of sales). If such expenses are to be paid by the Plan from the Trust Fund,
the Committee may direct the Trustee to use forfeitures and dividends (and to
sell the shares of Company Stock that represent such forfeitures or dividends)
to pay such expenses.

         7.12. Resignation. Any member of the Committee may resign by giving
fifteen (15) days notice to the Board of Directors, and any member shall resign
forthwith upon receipt of the written request of the Board of Directors, whether
or not said member is at that time the only member of the Committee.

         7.13. Voting of Company Stock. Notwithstanding any other provision of
the Plan to the contrary, the Trustee shall have no discretion or authority to
vote Company Stock held in the Trust on any matter presented for a vote by the
stockholders of the Company except in accordance with timely directions received
by the Trustee either from the Committee or from

                                       44
<PAGE>

Participants, depending on who has the right to direct the voting of such
Company Stock as provided in the following provisions of this Section 7.13.

                  (a) All Company Stock held in the Trust Fund shall be voted by
         the Trustee as the Committee directs in its absolute discretion, except
         as provided in this Section 7.13(a).

                           (i) If the Sponsor has a registration-type class of
                  securities (as defined in Code Section 409(e)(4)), then with
                  respect to all corporate matters, (1) each Participant shall
                  be entitled to direct the Trustee as to the voting of all
                  Company Stock allocated and credited to his or her ESOP
                  Account and (2) each Participant who is an Eligible Employee
                  shall be entitled to direct the Trustee as to the voting of a
                  portion of all Company Stock not allocated to the ESOP
                  Accounts of Participants, with such portion equal to the total
                  number of shares of such unallocated stock multiplied by a
                  fraction the numerator of which is the number of shares of
                  Company Stock allocated and credited to his or her ESOP
                  account and the denominator of which is the total number of
                  shares of Company Stock allocated and credited to all ESOP
                  Accounts of Participants.

                           (ii) If the Sponsor does not have a registration-type
                  class of securities, then only with respect to such matters as
                  the approval or disapproval of any corporate merger or
                  consolidation, recapitalization, reclassification,
                  liquidation, dissolution, sale of substantially all assets of
                  trade or business, or such similar transactions as may be
                  prescribed in Code Section 409(e)(4) and the regulations
                  thereunder, (1) each Participant shall be entitled to direct
                  the Trustee as to the voting of all Company Stock allocated
                  and credited to his or her ESOP Account and (2) each
                  Participant who is an Eligible Employee shall be entitled to
                  direct the Trustee as to the voting of a portion of all
                  Company Stock not allocated to the ESOP Accounts of
                  Participants, with such portion determined in the same manner
                  as under paragraph (a)(i) above.

                  (b) To the extent there remains any residual fiduciary
         responsibility with respect to the voting of Company Stock after
         application of paragraph (a) above, the Trustee shall vote such Company
         Stock as directed by the Committee or as directed by an independent
         fiduciary if duly appointed by the Sponsor. To the extent the Committee
         or an independent fiduciary is required to exercise any residual
         fiduciary responsibility with respect to the voting of Company Stock,
         the Committee or independent fiduciary shall take into account in
         exercising its fiduciary judgment, unless it is clearly imprudent to do
         so, directions timely received from Participants, as such directions
         are most indicative of what action is in the best interests of
         Participants. Further, the Committee or independent fiduciary, in
         addition to taking into consideration any relevant financial factors
         bearing on any such decision, shall take into consideration any
         relevant non-financial factors, including, but not limited to, the
         continuing job security of Participants as employees of the Sponsor or
         any Affiliated Company, conditions of employment, employment

                                       45
<PAGE>

         opportunities and other similar matters, and the prospect of the
         Participants and prospective Participants for future benefits under the
         Plan.

                  (c) All Participants entitled to direct such voting shall be
         notified by the Sponsor, pursuant to its normal communications with
         shareholders, of each occasion for the exercise of such voting rights
         within a reasonable time before such rights are to be exercised. Such
         notification shall include all information distributed to shareholders
         either by the Sponsor or any other party regarding the exercise of such
         rights. Such Participants shall be so entitled to direct the voting of
         fractional shares (or fractional interests in shares); provided,
         however, that the Trustee may, to the extent possible, vote the
         combined fractional shares (or fractional interests in shares) so as to
         reflect the aggregate direction of all Participants giving directions
         with respect to fractional shares (or fractional interests in shares).
         To the extent that a Participant shall fail to direct the Trustee as to
         the exercise of voting rights arising under Company Stock credited to
         his or her ESOP Account, such Company Stock shall not be voted unless
         the Trustee is directed otherwise as provided in paragraph (b) above.
         The Trustee shall maintain confidentiality with respect to the voting
         directions of all Participants.

                  (d) Each Participant shall be a named fiduciary (as that term
         is defined in Section 402(a)(2) of ERISA) with respect to Company Stock
         for which he or she has the right to direct the voting under the Plan
         but solely for the purpose of exercising voting rights pursuant to this
         Section 7.13 or certain Offers pursuant to Section 6.4.

                  (e) In the event a court of competent jurisdiction shall issue
         an opinion or order to the Plan, the Committee, the Sponsor or the
         Trustee, which shall, in the opinion of counsel to the Committee, the
         Sponsor or the Trustee, invalidate under ERISA, in all circumstances or
         in any particular circumstances, any provision or provisions of this
         paragraph regarding the manner in which Company Stock held in the Trust
         shall be voted or cause any such provision or provisions to conflict
         with ERISA, then, upon notice thereof to the Committee, the Sponsor or
         the Trustee, as the case may be, such invalid or conflicting provisions
         of this Section shall be given no further force or effect. In such
         circumstances the Trustee shall continue to follow instructions
         received from Participants, to the extent such instructions have not
         been invalidated by such order or opinion. To the extent the Trustee is
         required by such opinion or order to exercise any residual fiduciary
         responsibility with respect to voting, the Sponsor shall appoint an
         independent fiduciary who shall exercise such residual fiduciary
         responsibility as provided in paragraph (b) above and shall direct the
         Trustee as to the manner in which Company Stock held by the Trustee
         shall be voted.

         7.14. Reliance Upon Documents and Opinions. The members of the
Committee, the Board of Directors, the Company and any person delegated to carry
out any fiduciary responsibilities under the Plan (hereinafter a "delegated
fiduciary"), shall be entitled to rely upon any tables, valuations,
computations, estimates, certificates and reports furnished by any consultant,
or firm or corporation which employs one or more consultants, upon any opinions
furnished by legal counsel, and upon any reports furnished by the Trustee or any
Investment

                                       46
<PAGE>

Manager. The members of the Committee, the Board of Directors, the Company and
any delegated fiduciary shall be fully protected and shall not be liable in any
manner whatsoever for anything done or action taken or suffered in reliance upon
any such consultant, or firm or corporation which employs one or more
consultants, Trustee, Investment Manager, or counsel. Any and all such things
done or such action taken or suffered by the Committee, the Board of Directors,
the Company and any delegated fiduciary shall be conclusive and binding on all
Employees, Participants, Beneficiaries, and any other persons whomsoever, except
as otherwise provided by law. The Committee and any delegated fiduciary may, but
are not required to, rely upon all records of the Company with respect to any
matter or thing whatsoever, and may likewise treat such records as conclusive
with respect to all Employees, Participants, Beneficiaries, and any other
persons whomsoever, except as otherwise provided by law.

                                       47
<PAGE>

                                  ARTICLE VIII
                         AMENDMENT AND ADOPTION OF PLAN

         8.1. Right to Amend Plan. The Sponsor, by resolution of the Board of
Directors, shall have the right to amend the Plan and Trust Agreement at any
time and from time to time and in such manner and to such extent as it may deem
advisable, including retroactively, subject to the following provisions:

                  (a) No amendment shall have the effect of reducing any
         Participant's vested interest in the Plan or eliminating an optional
         form of distribution.

                  (b) No amendment shall have the effect of diverting any part
         of the assets of the Plan to persons or purposes other than the
         exclusive benefit of the Participants or their Beneficiaries.

                  (c) No amendment shall have the effect of increasing the
         duties or responsibilities of a Trustee without its written consent.

                  (d) No amendment shall result in discrimination in favor of
         officers, shareholders, or other highly compensated or key employees.

         The Committee shall have the right to amend the Plan, subject to
paragraphs (a) through (d), in accordance with the provisions of Section 7.5(g).

         8.2. Adoption of Plan by Affiliated Companies. Subject to approval by
the Board of Directors and consistent with the provisions of ERISA, an
Affiliated Company may adopt the Plan for all or any specified group of its
Eligible Employees by entering into an adoption agreement in the form and
substance prescribed by the Committee. The adoption agreement may include such
modification of the Plan provisions with respect to such Eligible Employees as
the Committee approves after having determined that no prohibited discrimination
or other threat to the qualification of the Plan is likely to result. The Board
of Directors may prospectively revoke or modify an Affiliated Company's
participation in the Plan at any time and for any or no reason, without regard
to the terms of the adoption agreement, or terminate the Plan with respect to
such Affiliated Company's Eligible Employees and Participants. By execution of
an adoption agreement (each of which by this reference shall become part of the
Plan), the Affiliated Company agrees to be bound by all the terms and conditions
of the Plan.

                                       48
<PAGE>

                                   ARTICLE IX
                         DISCONTINUANCE OF CONTRIBUTIONS

         In the event the Company decides it is impossible or inadvisable for
business reasons to continue to make contributions under the Plan, it may, by
resolution of the Board of Directors, discontinue contributions to the Plan.
Upon the permanent discontinuance of contributions to the Plan and
notwithstanding any other provisions of the Plan, the rights of Participants
shall become fully vested and nonforfeitable unless replaced by a comparable
plan. The permanent discontinuance of contributions on the part of the Company
shall not terminate the Plan as to the funds and assets then held in the Trust,
or operate to accelerate any payments of distributions to or for the benefit of
Participants or Beneficiaries, and the Trust shall continue to be administered
in accordance with the provisions hereof until the obligations hereunder shall
have been discharged and satisfied. If, at the time of discontinuance, there is
any amount outstanding on an Exempt Loan, any amount remaining in the Exempt
Loan Suspense Subfund shall be disposed of as provided in any applicable loan
agreement.

                                       49
<PAGE>

                                    ARTICLE X
                             TERMINATION AND MERGER

         10.1. Right to Terminate Plan. In the event the Board of Directors
decides it is impossible or inadvisable for business reasons to continue the
Plan, then it may, by resolution, terminate the Plan. Upon and after the
effective date of such termination, the Company shall not make any further
contributions under the Plan. Upon the termination or partial termination of the
Plan for any reason, the interest in the Trust of each affected Participant
shall automatically become fully vested unless the Plan is continued after its
termination by conversion of the Plan into a comparable Plan through Plan
amendment or through merger. If, at the time of termination, there is any amount
outstanding in an Exempt Loan, any amount remaining in the Exempt Loan Suspense
Subfund shall be disposed of in a manner that provides for the repayment of
amounts outstanding in any such Exempt Loan. After the satisfaction of all
outstanding liabilities of the Plan to persons other than Participants and
Beneficiaries, all unallocated assets shall be allocated to the ESOP Accounts of
Participants to the maximum extent permitted by law. The Trust Fund may not be
fully or finally liquidated until all assets are allocated to ESOP Accounts;
alternatively any unallocated assets may be transferred to another defined
contribution plan maintained by the Sponsor or an Affiliated Company qualified
under Code Section 401 where such assets shall be allocated among the accounts
of Participants herein who are participants in such transferee plan. In no
event, however, shall any part of the Plan revert to or be recoverable by the
Company, or be used for or diverted to purposes other than for the exclusive
benefit of the Participants or their Beneficiaries. Notwithstanding the
foregoing, amounts held in the 415 Suspense Account may revert to the Company in
accordance with Section 11.6.

         10.2. Effect on Trustee and Committee. The Trustee and the Committee
shall continue to function as such for such period of time as may be necessary
for the winding up of the Plan and for the making of distributions in the manner
prescribed by the Board of Directors at the time of termination of the Plan.

         10.3. Merger Restriction. Notwithstanding any other provision in the
Plan, the Plan shall not in whole or in part merge or consolidate with, or
transfer its assets or liabilities to, any other plan unless each affected
Participant in the Plan 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 or she would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan had then
terminated).

         10.4. Effect of Reorganization, Transfer of Assets or Change in
Control.

                  (a) In the event of a consolidation or merger of the Company,
         or in the event of a sale and/or any other transfer of the operating
         assets of the Company, any ultimate successor or successors to the
         business of the Company may continue the Plan in full force and effect
         by adopting the same by resolution of its board of directors and by
         executing a proper supplemental or transfer agreement with the Trustee.

                                       50
<PAGE>

                  (b) In the event of a Change in Control (as herein defined),
         all Participants who were Participants on the date of such Change in
         Control shall become 100% vested in any amounts allocated to their ESOP
         Accounts on the date of such Change in Control and in any amounts
         allocated to their ESOP Accounts subsequent to the date of the Change
         in Control. Notwithstanding the foregoing, the Board of Directors may,
         at its discretion, amend or delete this paragraph (b) in its entirety
         prior to the occurrence of any such Change in Control. For the purpose
         of this paragraph (b) and prior to January 1, 2000, a "Change in
         Control" shall be as defined in the Plan prior to this restatement. On
         or after January 1, 2000, a "Change in Control" shall mean the
         following and shall be deemed to occur if any of the following events
         occur:

                           (i) Any "person," as such term is used in Sections
                  13(d) and 14(d) of the Securities Exchange Act of 1934, as
                  amended (the "Exchange Act") (a "Person"), is or becomes the
                  "beneficial owner," as defined in Rule 13d-3 under the
                  Exchange Act (a "Beneficial Owner"), directly or indirectly,
                  of securities of the Sponsor representing (1) 20% or more of
                  the combined voting power of the Sponsor's then outstanding
                  voting securities, which acquisition is not approved in
                  advance of the acquisition or within 30 days after the
                  acquisition by a majority of the Incumbent Board (as
                  hereinafter defined) or (2) 33% or more of the combined voting
                  power of the Sponsor's then outstanding voting securities,
                  without regard to whether such acquisition is approved by the
                  Incumbent Board;

                           (ii) Individuals who, as of the date hereof,
                  constitute the Board of Directors (the "Incumbent Board"),
                  cease for any reason to constitute at least a majority of the
                  Board of Directors, provided that any person becoming a
                  director subsequent to the date hereof whose election, or
                  nomination for election by the Sponsor's stockholders, is
                  approved by a vote of at least a majority of the directors
                  then comprising the Incumbent Board (other than an election or
                  nomination of an individual whose initial assumption of office
                  is in connection with an actual or threatened election contest
                  relating to the election of the directors of the Sponsor, as
                  such terms are used in Rule 14a-11 of Regulation 14A
                  promulgated under the Exchange Act) shall, for the purposes of
                  the Plan, be considered as though such person were a member of
                  the Incumbent Board of the Sponsor;

                           (iii) The consummation of a merger, consolidation or
                  reorganization involving the Sponsor, other than one which
                  satisfies both of the following conditions:

                                    (1) a merger, consolidation or
                           reorganization which would result in the voting
                           securities of the Sponsor outstanding immediately
                           prior thereto continuing to represent (either by
                           remaining outstanding or by being converted into
                           voting securities

                                       51
<PAGE>

                           of another entity) at least 55% of the combined
                           voting power of the voting securities of the Sponsor
                           or such other entity resulting from the merger,
                           consolidation or reorganization (the "Surviving
                           Corporation") outstanding immediately after such
                           merger, consolidation or reorganization and being
                           held in substantially the same proportion as the
                           ownership in the Sponsor's voting securities
                           immediately before such merger, consolidation or
                           reorganization, and

                                    (2) a merger, consolidation or
                           reorganization in which no Person is or becomes the
                           Beneficial Owner, directly or indirectly, of
                           securities of the Sponsor representing 20% or more of
                           the combined voting power of the Sponsor's then
                           outstanding voting securities; or

                           (iv) The stockholders of the Sponsor approve a plan
                  of complete liquidation of the Sponsor or an agreement for the
                  sale or other disposition by the Sponsor of all or
                  substantially all of the Sponsor's assets.

                  Notwithstanding the preceding provisions of this paragraph
         (b), a Change in Control shall not be deemed to have occurred if the
         Person described in the preceding provisions of this paragraph (b) is
         (i) an underwriter or underwriting syndicate that has acquired any of
         the Sponsor's then outstanding voting securities solely in connection
         with a public offering of the Sponsor's securities, (ii) the Sponsor or
         any subsidiary of the Sponsor or (iii) an employee stock ownership plan
         or other employee benefit plan maintained by the Company or an
         Affiliated Company that is qualified under the provisions of the Code.
         In addition, notwithstanding the preceding provisions of this paragraph
         (b), a Change in Control shall not be deemed to have occurred if the
         Person described in the preceding provisions of this paragraph (b)
         becomes a Beneficial Owner of more than the permitted amount of
         outstanding securities as a result of the acquisition of voting
         securities by the Company or an Affiliated Company which, by reducing
         the number of voting securities outstanding, increases the proportional
         number of shares beneficially owned by such Person, provided, that if a
         Change in Control would occur but for the operation of this sentence
         and such Person becomes the Beneficial Owner of any additional voting
         securities (other than through the exercise of options granted under
         any stock option plan of the Sponsor or through a stock dividend or
         stock split), then a Change in Control shall occur.

                  (c) In the event of a Change in Control (as defined in Section
         10.4(b) above), the Company shall be required to repay in full, solely
         from its own funds and within thirty (30) days following the date of
         such Change in Control, all Exempt Loans and Substitute Loans
         outstanding on the date of the Change in Control. Notwithstanding any
         other provision of the Plan to the contrary, all assets (including
         Company Stock) and funds that released from the Exempt Loan Suspense
         Subfund on account of repayment by

                                       52
<PAGE>

         the Company under this Section 10.4(c) shall be allocated, for the Plan
         Year in which the Change in Control occurs, in accordance with the
         formula set forth herein (consistent with the requirements imposed
         under Article XI, Section 4.2(d) and other requirements of the Code).
         Under the formula for allocation set forth herein, assets and funds
         that are released shall be allocated to Employees who are Participants
         as of the date of the Change in Control (or who would have been
         Participants but for their death, Disability or retirement at or after
         age 55 during the Plan Year) in the same ratio that each such
         Participant's Compensation for the Plan Year through the last pay
         period ending on or before the date of such Change in Control bears to
         the total Compensation of all such Participants for the Plan Year
         through their last pay periods ending on or before the date of such
         Change in Control.

                                       53
<PAGE>

                                   ARTICLE XI
                            LIMITATION ON ALLOCATIONS

         11.1. General Rule.

                  (a) For Limitation Years beginning on or after January 1,
         2002, the total Annual Additions under the Plan to a Participant's ESOP
         Account shall not exceed the lesser of:

                           (i) Forty Thousand Dollars ($40,000), as adjusted for
                  increases in the cost-of-living under Code Section 415(d); or

                           (ii) One Hundred Percent (100%) of the Participant's
                  Compensation (as defined in Section 11.5), from the Company
                  for the Limitation Year.

         Notwithstanding the foregoing sentence, the compensation limit set
         forth in subparagraph (ii) shall not apply to any contribution for
         medical benefits after separation from service (within the meaning of
         Code Section 401(h) or Code Section 419A(f)(2)) which is otherwise
         treated as an Annual Addition.

                  (b) For Limitation Years beginning prior to January 1, 2002,
         the total Annual Additions under the Plan to a Participant's ESOP
         Account shall not exceed the lesser of:

                           (i) Thirty Thousand Dollars ($30,000), as adjusted
                  for increases in the cost-of-living under Code Section 415(d);
                  or

                           (ii) Twenty-five percent (25%) of the Participant's
                  Compensation (as defined in Section 11.5), from the Company
                  for the Limitation Year.

                  (c) For the purpose of this Article XI, the term "Company"
         shall mean the Sponsor and any Affiliated Company (determined by
         reference to Code Section 415(h)) whether or not such Affiliated
         Company has adopted the Plan pursuant to Section 8.2 and the term
         "Limitation Year" shall mean the Plan Year.

         11.2. Annual Additions. For purposes of Section 11.1, the term "Annual
Additions" shall mean with respect to a Participant, for any Limitation Year
with respect to the Plan, the sum of the amounts described below:

                  (a) All amounts contributed or deemed contributed by the
         Company, except that the Annual Addition shall exclude the portion of
         the Company contribution representing interest on an Exempt Loan,
         provided that no more than one-third of the Company's contributions to
         the Trust Fund deductible under Code Section 404(a)(9) for a Limitation
         Year are allocated to Highly Compensated Employees.

                                       54
<PAGE>

                  (b) All amounts contributed by the Participant.

                  (c) Forfeitures allocated to such Participant. For purposes of
         this Section 11.2, forfeitures shall not include forfeitures of Company
         Stock acquired through the Trust Fund with the proceeds of an Exempt
         Loan, provided that no more than one-third of the Company's
         contributions to the Trust Fund deductible under Code Section 404(a)(9)
         for a Limitation Year are allocated to Highly Compensated Employees.

                  (d) Any amounts allocated, after March 31, 1984, to an
         individual medical account as defined in Code Section 415(l)(2)
         established under a pension or annuity plan maintained by the Company.

                  (e) Any amounts allocated for such Plan Year which amounts are
         derived from contributions paid or accrued after December 31, 1985, in
         taxable years ending after such date, which are attributable to post
         retirement medical benefits allocated to the separate account of a key
         employee (as defined in Code Section 419A(d)(3)) under a welfare
         benefit fund (as defined in Code Section 419(e)) maintained by the
         Company.

         11.3. Other Defined Contribution Plans. If the Company maintains any
other defined contribution plan, then each Participant's Annual Additions under
such defined contribution plan shall be aggregated with the Participant's Annual
Additions under the Plan for the purposes of applying the limitations of Section
11.1.

         11.4. Adjustment for Excess Annual Additions. If as a result of the
allocation of forfeitures, a reasonable error in estimating a Participant's
Compensation, or under other limited facts and circumstances that the
Commissioner of Internal Revenue finds justify the availability of the rules set
forth in Regulation Section 1.415-6(b)(6), the Annual Additions on behalf of any
Participant in a Limitation Year to the Plan and all other defined contribution
plans maintained by the Company exceed the limitations set forth in Section
11.1, then excess Annual Additions shall be eliminated in accordance with the
following rules and in the following order:

                  (a) Excess Annual Additions shall be eliminated by reducing
         the allocation to the Participant's ESOP Account by the amount of the
         excess and treating such amount as a forfeiture under Section 5.3
         hereof and reallocating such amount proportionately to the ESOP
         Accounts of other Participants receiving allocations for the Limitation
         Year up to the limits set forth in Section 11.1.

                  (b) After each Participant's ESOP Account has been credited
         under paragraph (a) with an amount bringing his or her ESOP Account up
         to his or her maximum Annual Addition (determined under the provisions
         of this Article XI), any remaining excess Annual Addition shall be
         transferred and credited to a 415 Suspense Account established for the
         purpose of this Section 11.4.

                  (c) Any amounts held in the 415 Suspense Account shall be
         treated as Company contributions and allocated to the ESOP Accounts of
         Participants as of the last

                                       55
<PAGE>

         day of the next succeeding Plan Year in accordance with the allocation
         formula applicable to Company contributions provided in Section 4.2.
         The 415 Suspense Account shall be exhausted before any Company
         contributions shall be allocated to the ESOP Accounts of Participants
         subsequent to the date upon which any residue excess Annual Addition as
         described in paragraph (c) is credited to the 415 Suspense Account.

         11.5. Compensation. For the purpose of this Article XIII, Compensation
shall mean a Participant's earned income, wages, salaries, fees for professional
services, and other amounts received (without regard to whether or not an amount
is paid in cash) for personal services actually rendered in the course of
employment with the Company maintaining the Plan and shall be determined as
described below:

                  (a) Compensation shall include to the extent that the amounts
         are includible in gross income (including, but not limited to,
         commissions paid salespeople, compensation for services on the basis of
         a percentage of profits, commissions on insurance premiums, tips,
         bonuses, fringe benefits, and reimbursements or other expense
         allowances under a nonaccountable plan as described in Regulation
         1.62-2(c)).

                  (b) Compensation shall include any elective deferral as
         defined in Code Section 402(g)(3), any amount which is contributed or
         deferred by the Company at the election of the Employee that is
         excludable from an Employee's gross income under Code Sections 125 or
         457 and, for Plan Years beginning on or after January 1, 1998, any
         elective amount that is excludable from an Employee's gross income
         under Code Section 132(f)(4).

                  (d) Compensation shall not include (i) any employer
         contributions to a plan of deferred compensation which are not included
         in the Employee's gross income for the taxable year in which
         contributed, (ii) any distributions from a plan of deferred
         compensation, (iii) any amounts realized from the exercise of a
         non-qualified stock option or when restricted stock or property held by
         the Employee becomes either freely transferable or is no longer subject
         to a substantial risk of forfeiture under Code Section 83 if such
         option, stock, or property was granted to the Employee by the Company,
         (iv) any amounts realized from the sale, exchange, or other disposition
         of stock acquired under a qualified stock option, (v) any contribution
         for medical benefits (within the meaning of Code Section 419(f)(2)
         after termination of employment which is otherwise treated as an Annual
         Addition, and (vi) any amount otherwise treated as an Annual Addition
         under Code Section 415(l)(1).

                  (d) Notwithstanding anything in the Plan to the contrary,
         Compensation shall be determined in accordance with Code Section
         415(c)(3) as in effect for Plan Years beginning prior to January 1,
         1998 where required by applicable law.

         11.6. Treatment of 415 Suspense Account Upon Termination. In the event
the Plan shall terminate at a time when all amounts in the 415 Suspense Account
have not been allocated

                                       56
<PAGE>

to the ESOP Accounts of the Participants, the 415 Suspense Account amounts shall
be applied as follows:

                  (a) The amount in the 415 Suspense Account shall first be
         allocated, as of the Plan termination date, to Participants in
         accordance with the allocation formula applicable to Company
         contributions provided under Section 4.2(a).

                  (b) If, after those allocations have been made, any further
         residue funds remain in the 415 Suspense Account, the residue may
         revert to the Company in accordance with applicable provisions of the
         Code, ERISA, and the regulations thereunder.

                  (c) Notwithstanding paragraphs (a) and (b) above, in the event
         that termination of the plan occurs after a Change in Control, all
         amounts in the 415 Suspense Account shall be allocated to Participants
         only in accordance with Section 10.4 hereof, and no part of the 415
         Suspense Account shall revert to or be recoverable by the Company, or
         be used for or diverted to purposes other than for the exclusive
         benefit of the Participants or their Beneficiaries.

                                       57
<PAGE>

                                   ARTICLE XII
                                 TOP-HEAVY RULES

         12.1. Applicability. Notwithstanding any provision in the Plan to the
contrary, and subject to the limitations set forth in Section 12.6, the
requirements of Sections 12.4 and 12.5 shall apply under the Plan in the case of
any Plan Year in which the Plan is determined to be a Top-Heavy Plan under the
rules of Section 12.3. For the purpose of this Article XII, the term "Company"
shall mean the Sponsor and any Affiliated Company whether or not such Affiliated
Company has adopted the Plan.

         12.2. Definitions. For purposes of this Article XII, the following
special definitions and rules shall apply:

                  (a) The term "Key Employee" means any Employee or former
         Employee (including any deceased Employee) who, at any time during the
         Plan Year that includes the Determination Date, was an officer of the
         Company having annual Compensation greater than $130,000 (as adjusted
         under Code Section 416(i)(1) for Plan Years beginning after December
         31, 2002), a Five Percent Owner of the Company, or an One Percent Owner
         of the Company having annual Compensation of more than $150,000.
         Notwithstanding the foregoing, for Plan Years beginning prior to
         January 1, 2002, the term "Key Employee" means any Employee or former
         Employee (including any deceased Employee) who, at any time during the
         Plan Year or any of the four preceding Plan Years, is or was: (i) an
         officer of the Company having an annual Compensation greater than 50%
         of the amount in effect under Code Section 415(b)(1)(A) for the Plan
         Year; provided, however, for such purposes no more than 50 Employees
         (or, if lesser, the greater of three Employees or 10% of the Employees)
         shall be treated as officers; (ii) one of the ten Employees having
         annual Compensation from the Company of more than the limitation in
         effect under Code Section 415(c)(1)(A) and owning (or considered as
         owning within the meaning of Code Section 318) the largest interests in
         the Company; provided, however, if two Employees have the same interest
         in the Company, the Employee having greater annual Compensation from
         the Company shall be treated as having a larger interest; (iii) a Five
         Percent Owner of the Company; or (iv) a One Percent Owner of the
         Company having an annual Compensation from the Company of more than
         $150,000.

                  (b) The term "Five Percent Owner" means any person who owns
         (or is considered as owning within the meaning of Code Section 318)
         more than 5% of the outstanding stock of the Company or stock
         possessing more than 5% of the total combined voting power of all stock
         of the Company.

                  (c) The term "One Percent Owner" means any person who would be
         described in paragraph (b) if "1%" were substituted for "5%" each place
         where it appears therein.

                                       58
<PAGE>

                  (d) The term "Non-Key Employee" means any Employee who is not
         a Key Employee.

                  (e) The term "Determination Date" means, with respect to any
         plan year, the last day of the preceding plan year. In the case of the
         first plan year of any plan, the term "Determination Date" shall mean
         the last day of that plan year.

                  (f) The term "Aggregation Group" means (i) each qualified plan
         of the Company in which at least one Key Employee participates or
         participated at any time during the determination period (regardless of
         whether the plan has terminated), and (ii) any other qualified plan of
         the Company which enables a plan described in clause (i) to meet the
         requirements of Code Sections 401(a)(4) or 410. Any plan not required
         to be included in an Aggregation Group under the preceding rules may be
         treated as being part of such group if the group would continue to meet
         the requirements of Code Sections 401(a)(4) and 410 with the plan being
         taken into account.

                  (g) For purposes of determining ownership under paragraphs
         (a), (b) and (c) above, the following special rules shall apply: (i)
         Code Section 318(a)(2)(C) shall be applied by substituting "5%" for
         "50%", and (ii) the aggregation rules of Code Sections 414(b), (c) and
         (m) shall not apply, with the result that the ownership tests of this
         Section 12.2 shall apply separately with respect to each Affiliated
         Company.

                  (h) The terms "Key Employee" and "Non-Key Employee" shall
         include their Beneficiaries, and the definitions provided under this
         Section 12.2 shall be interpreted and applied in a manner consistent
         with the provisions of Code Section 416(i) and the regulations
         thereunder.

                  (i) For purposes of this Article XII, an Employee's
         Compensation shall be determined in accordance with the rules of
         Section 11.5.

         12.3. Top-Heavy Status

                  (a) The term "Top-Heavy Plan" means, with respect to any Plan
         Year:

                           (i) Any defined benefit plan if, as of the
                  Determination Date, the present value of the cumulative
                  accrued benefits under the plan for Key Employees exceeds 60%
                  of the present value of the

                           (ii) cumulative accrued benefits under the plan for
                  all Employees; and

                           (iii) Any defined contribution plan if, as of the
                  Determination Date, the aggregate of the account balances of
                  Key Employees under the plan exceeds 60% of the aggregate of
                  the account balances of all Employees under the plan.

                                       59
<PAGE>

                  In applying the foregoing provisions of this paragraph (a),
         the valuation date to be used in valuing Plan assets shall be (i) in
         the case of a defined benefit plan, the same date which is used for
         computing costs for minimum funding purposes, and (ii) in the case of a
         defined contribution plan, the most recent valuation date within a
         12-month period ending on the applicable Determination Date.

                  (b) Each plan maintained by the Company required to be
         included in an Aggregation Group shall be treated as a Top-Heavy Plan
         if the Aggregation Group is a Top-Heavy Group.

                  (c) The term "Top-Heavy Group" means any Aggregation Group if
         the sum (as of the Determination Date) of (i) the present value of the
         cumulative accrued benefits for Key Employees under all defined benefit
         plans included in the group, and (ii) the aggregate of the account
         balances of Key Employees under all defined contribution plans included
         in the group exceeds 60% of a similar sum determined for all Employees.
         For purposes of determining the present value of the cumulative accrued
         benefit of any Employee, or the amount of the account balance of any
         Employee, such present value or amount shall be increased by the
         aggregate distributions made with respect to the Employee under the
         plan (including a terminated plan which, had it not been terminated,
         would have been aggregated with the plan under Code Section
         416(g)(2)(A)(i))during the one year period ending on the Determination
         Date. In the case of distributions made for a reason other than
         separation from service, death, or disability, the preceding sentence
         shall be applied by substituting "5-year period" for "l -year period."
         For Plan Years beginning prior to January 1, 2002, the present value of
         the cumulative accrued benefit of any Employee or the amount of the
         account balance of any Employee shall be increased by the aggregate
         distributions made with respect to the Employee under the plan during
         the five year period ending on the Determination Date. For all Plan
         Years, any rollover contribution or similar transfer initiated by the
         Employee and made after December 31, 1983, to a plan shall not be taken
         into account with respect to the transferee plan for purposes of
         determining whether such plan is a Top-Heavy Plan (or whether any
         Aggregation Group which includes such plan is a Top-Heavy Group).

                  (d) If any individual is a Non-Key Employee with respect to
         any plan for any plan year, but the individual was a Key Employee with
         respect to the plan for any prior plan year, any accrued benefit for
         the individual (and the account balance of the individual) shall not be
         taken into account for purposes of this Section 12.3.

                  (e) If any individual has not performed services for the
         Company at any time during the one year period (five year period for
         Plan Years beginning prior to January 1, 2002) ending on the
         Determination Date, any accrued benefit for such individual (and the
         account balance of the individual) shall not be taken into account for
         purposes of this Section 12.3.

                  (f) In applying the foregoing provisions of this Section, the
         accrued benefit of a Non-Key Employee shall be determined (i) under the
         method, if any, which is used for

                                       60
<PAGE>

         accrual purposes under all plans of the Company and any Affiliated
         Companies, or (ii) if there is no such uniform method, as if such
         benefit accrued not more rapidly than the slowest accrual rate
         permitted under Code Section 411(b)(1)(C).

                  (g) For all purposes of this Article XII, the definitions
         provided under this Section 12.3 shall be applied and interpreted in a
         manner consistent with the provisions of Code Section 416(g) and the
         regulations thereunder.

         12.4. Minimum Contributions. For any Plan Year in which the Plan is
determined to be a Top-Heavy Plan, the minimum Company Contributions for that
year shall be determined in accordance with the rules of this Section 12.4.

                  (a) Except as provided below, the minimum contribution for
         each Non-Key Employee shall be not less than 3% of his or her
         compensation.

                  (b) Subject to the following rules of this paragraph (b), the
         percentage set forth in paragraph (a) above shall not be required to
         exceed the percentage at which contributions are made (or are required
         to be made) under the Plan for the year for the Key Employee for whom
         the percentage is the highest for the year. This determination shall be
         made by dividing the contributions for each Key Employee by so much of
         his or her total compensation for the Plan Year as does not exceed the
         applicable Compensation limit. For purposes of this paragraph (b), all
         defined contribution plans required to be included in an Aggregation
         Group shall be treated as one plan. Notwithstanding the foregoing, the
         exceptions to paragraph (a) as provided under this paragraph (b) shall
         not apply to any plan required to be included in an Aggregation Group
         if the plan enables a defined benefit plan to meet the requirements of
         Code Sections 401(a)(4) or 410.

                  (c) The Participant's minimum contribution determined under
         this Section 12.4 shall be calculated without regard to any Social
         Security benefits payable to the Participant.

                  (d) In the event a Participant is covered by both a defined
         contribution and a defined benefit plan maintained by the Company, both
         of which are determined to be Top-Heavy Plans, the Company shall
         satisfy the minimum benefit requirements of Code Section 416 by
         providing (in lieu of the minimum contribution described in paragraph
         (a) above) a minimum benefit under the defined benefit plan so as to
         prevent the duplication of required minimum benefits hereunder.

         12.5. Minimum Vesting Rules. For any Plan Year in which it is
determined that the Plan is a Top-Heavy Plan, the vesting schedule shall be the
vesting schedule set forth in Section 5.2.

         12.6. Non-Eligible Employees. The rules of this Article XII shall not
apply to any Employee included in a unit of employees covered by a collective
bargaining agreement between employee representatives and one or more employers
if retirement benefits were the subject of good faith bargaining between such
employee representatives and the employer or employers.

                                       61
<PAGE>

                                  ARTICLE XIII
                       RESTRICTION ON ASSIGNMENT OR OTHER
                           ALIENATION OF PLAN BENEFITS

         13.1. General Restrictions Against Alienation.

                  (a) The interest of any Participant or his or her Beneficiary
         in the income, benefits, payments, claims or rights hereunder, or in
         the Trust Fund, shall not in any event be subject to sale, assignment,
         hypothecation, or transfer. Each Participant and Beneficiary is
         prohibited from anticipating, encumbering, assigning, or in any manner
         alienating his or her interest under the Trust Fund, and is without
         power to do so, except as may be permitted in connection with providing
         security for a loan from the Plan to the Participant pursuant to the
         provisions of the Plan as it may be amended from time to time. The
         interest of any Participant or Beneficiary shall not be liable or
         subject to his or her debts, liabilities, or obligations, now
         contracted, or which may hereafter be contracted, and such interest
         shall be free from all claims, liabilities, or other legal process now
         or hereafter incurred or arising. Neither the interest of a Participant
         or Beneficiary, nor any part thereof, shall be subject to any judgment
         rendered against any such Participant or Beneficiary. Notwithstanding
         the foregoing, a Participant's or Beneficiary's interest in the Plan
         may be subject to the enforcement of a Federal tax levy made pursuant
         to Code Section 6331 or the collection by the United States on a
         judgment resulting from an unpaid tax assessment.

                  (b) In the event any person attempts to take any action
         contrary to this Article XIII, such action shall be null and void and
         of no effect, and the Company, the Committee, the Trustee and all
         Participants and their Beneficiaries, may disregard such action and are
         not in any manner bound thereby, and they, and each of them, shall
         suffer no liability for any such disregard thereof, and shall be
         reimbursed on demand out of the Trust Fund for the amount of any loss,
         cost or expense incurred as a result of disregarding or of acting in
         disregard of such action.

                  (c) The foregoing provisions of this Section shall be
         interpreted and applied by the Committee in accordance with the
         requirements of Code Section 401(a)(13) and Section 206(d) of ERISA as
         construed and interpreted by authoritative judicial and administrative
         rulings and regulations.

         13.2. Qualified Domestic Relations Orders. The rules set forth in
Section 13.1 above shall not apply with respect to a "Qualified Domestic
Relations Order" as described below.

                  (a) A "Qualified Domestic Relations Order" is a judgment,
         decree, or order (including approval of a property settlement
         agreement) that:

                                       62
<PAGE>

                           (i) Creates or recognizes the existence of an
                  Alternate Payee's right to, or assigns to an Alternate Payee
                  the right to, receive all or a portion of the benefits payable
                  under the Plan with respect to a Participant,

                           (ii) Relates to the provision of child support,
                  alimony payments, or marital property rights to a spouse,
                  former spouse, child or other dependent of a Participant,

                           (iii) Is made pursuant to a State domestic relations
                  law (including a community property law), and

                           (iv) Clearly specifies: (1) the name and last known
                  mailing address (if any) of the Participant and the name and
                  mailing address of each Alternate Payee covered by the order
                  (if the Committee does not have reason to know that address
                  independently of the order); (2) the amount or percentage of
                  the Participant's benefits to be paid to each Alternate Payee,
                  or the manner in which the amount or percentage is to be
                  determined; (3) the number of payments or period to which the
                  order applies; and (4) each plan to which the order applies.

                   For purposes of this Section 13.2, "Alternate Payee" means
         any spouse, former spouse, child or other dependent of a Participant
         who is recognized by a domestic relations order as having a right to
         receive all, or a portion of, the benefits payable with respect to the
         Participant.

                  (b) A domestic relations order is not a Qualified Domestic
         Relations Order if it requires:

                           (i) The Plan to provide any type or form of benefit,
                  or any option, not otherwise provided under the Plan;

                           (ii) The Plan to provide increased benefits; or

                           (iii) The payment of benefits to an Alternate Payee
                  that are required to be paid to another Alternate Payee under
                  a previous Qualified Domestic Relations Order.

                  (c) A domestic relations order shall not be considered to fail
         to satisfy the requirements of paragraph (b)(i) above with respect to
         any payment made before a Participant has separated from service solely
         because the order requires that payment of benefits be made to an
         Alternate Payee:

                           (i) On or after the date on which the Participant
                  attains (or would have first attained) his or her earliest
                  retirement age (as defined in Code Section 414(p)(4)(B));

                                       63
<PAGE>

                           (ii) As if the Participant had retired on the date on
                  which such payment is to begin under such order (but taking
                  into account only the present value of accrued benefits and
                  not taking into account the present value of any subsidy for
                  early retirement benefits); and

                           (iii) In any form in which such benefits may be paid
                  under the Plan to the Participant (other than in the form of a
                  joint and survivor annuity with respect to the Alternate Payee
                  and his or her subsequent spouse).

                  Notwithstanding the foregoing, if the Participant dies before
         his or her earliest retirement age (as defined in Section
         414(p)(4)(B)), the Alternate Payee is entitled to benefits only if the
         Qualified Domestic Relations Order requires survivor benefits to be
         paid to the Alternate Payee.

                  (d) To the extent provided in any Qualified Domestic Relations
         Order, the former spouse of a Participant shall be treated as a
         surviving Spouse of the Participant for purposes of applying the rules
         (relating to minimum survivor annuity requirements) of Code Sections
         401(a)(11) and 417, and any current spouse of the Participant shall not
         be treated as a spouse of the Participant for such purposes.

                  (e) In the case of any domestic relations order received by
         the Plan, the Committee shall promptly notify the Participant and any
         Alternate Payee named in the order that an order has been received and
         shall provide a copy of the Plan's procedures for determining the
         qualified status of domestic relations orders. An Alternate Payee may
         designate a representative for receipt of copies of notices and plan
         information that are sent to the Alternate Payee with respect to
         domestic relations order. Within a reasonable period after the receipt
         of the order, the Committee shall determine whether the order is a
         Qualified Domestic Relations Order and shall notify the Participant and
         each Alternate Payee of such determination.

                  (f) The Committee shall establish reasonable procedures to
         determine the qualified status of domestic relations orders and to
         administer distributions under Qualified Domestic Relations Orders.
         During any period in which the issue of whether a domestic relations
         order is a Qualified Domestic Relations Order is being determined (by
         the Committee, by a court of competent jurisdiction, or otherwise), the
         Committee shall direct the Trustee to segregate in a separate account
         in the Plan (or in an escrow account) the amounts which would have been
         payable to the Alternate Payee during the period if the order had been
         determined to be a Qualified Domestic Relations Order. If within the 18
         Month Period (as defined below), the order (or modification thereof) is
         determined to be a Qualified Domestic Relations Order, the Committee
         shall direct the Trustee to pay the segregated amounts (plus any
         interest thereon) to the person or persons entitled thereto. However,
         if within the 18 Month Period (i) it is determined that the order is
         not a Qualified Domestic Relations Order, or (ii) the issue as to
         whether the order is a Qualified Domestic Relations Order is not
         resolved, then the Committee shall direct the Trustee to pay the
         segregated amounts (plus any interest thereon) to the person or persons
         who

                                       64
<PAGE>

         would have been entitled to the amounts if there had been no order
         (assuming such benefits were otherwise payable). Any determination that
         an order is a Qualified Domestic Relations Order that is made after the
         close of the 18 Month Period shall be applied prospectively only. For
         purposes of this Section 13.2, the "18 Month Period" shall mean the 18
         month period beginning with the date on which the first payment would
         be required to be made under the domestic relations order.

                                       65
<PAGE>

                                   ARTICLE XIV
                            MISCELLANEOUS PROVISIONS

         14.1. No Right of Employment Hereunder. The adoption and maintenance of
the Plan and Trust shall not be deemed to constitute a contract of employment or
otherwise between the Company and any Employee or Participant, or to be a
consideration for, or an inducement or condition of, any employment. Nothing
contained herein shall be deemed to give any Employee the right to be retained
in the service of the Company or to interfere with the right of the Company to
discharge, with or without cause, any Employee or Participant at any time, which
right is hereby expressly reserved.

         14.2. Limitation on Company Liability. Any benefits payable under the
Plan shall be paid or provided for solely from the Plan and the Company assumes
no liability or responsibility therefor.

         14.3. Effect of Article Headings. Article headings are for convenient
reference only and shall not be deemed to be a part of the substance of this
instrument or in any way to enlarge or limit the contents of any Article.

         14.4. Gender. Masculine gender shall include the feminine and the
singular shall include the plural unless the context clearly indicates
otherwise.

         14.5. Interpretation. The provisions of the Plan shall in all cases be
interpreted in a manner that is consistent with the Plan satisfying (a) the
requirements of Code Section 401(a) and related statutes for qualification as a
stock bonus plan and (b) the requirements of Code Section 4975(e)(7) and related
statutes for qualification as an employee stock ownership plan and eligibility
for the prohibited transaction exemption provided under Code Section 4975(d)(3)
and its related statutes under ERISA.

         14.6. Withholding For Taxes. Any payments from the Trust Fund may be
subject to withholding for taxes as may be required by any applicable federal or
state law.

         14.7. California Law Controlling. All legal questions pertaining to the
Plan which are not controlled by ERISA shall be determined in accordance with
the laws of the State of California and all contributions made hereunder shall
be deemed to have been made in that State.

         14.8. Plan and Trust as One Instrument. The Plan and the Trust
Agreement shall be construed together as one instrument. In the event that any
conflict arises between the terms and/or conditions of the Trust Agreement and
the Plan, the provisions of the Plan shall control, except that with respect to
the duties and responsibilities of the Trustee, the Trust Agreement shall
control.

         14.9. Invalid Provisions. If any paragraph, section, sentence, clause
or phrase contained in the Plan shall become illegal, null or void or against
public policy, for any reason, or shall be

                                       66
<PAGE>

held by any court of competent jurisdiction to be incapable of being construed
or limited in a manner to make it enforceable, or is otherwise held by such
court to be illegal, null or void or against public policy, the remaining
paragraphs, sections, sentences, clauses or phrases contained in the Plan shall
not be affected thereby.

         14.10. Counterparts. This instrument may be executed in one or more
counterparts each of which shall be legally binding and enforceable.

                                       67
<PAGE>

         IN WITNESS WHEREOF, Allergan, Inc. hereby executes this instrument,
evidencing the terms of the Allergan, Inc. Employee Stock Ownership Plan as
restated this 29th day of November, 2001.

ALLERGAN, INC.

By  /s/ Eric Brandt
    ---------------------------
    Eric Brandt
    Corporate Vice President

                                       68<PAGE>

                                                                    EXHIBIT 10.7

                                 ALLERGAN, INC.

                           SAVINGS AND INVESTMENT PLAN

RESTATED
2001

<PAGE>

                                TABLE OF CONTENTS

<Table>
<Caption>

                                                                                                                 PAGE
                                                                                                                 ----

<S>                                                                                                              <C>
ARTICLE I
NAME AND EFFECTIVE DATE...........................................................................................1

1.1           Plan Name...........................................................................................1
1.2           Effective Date of 2001 Restated Plan................................................................1
1.3           Plan Purpose........................................................................................1
1.4           Merger of Allergan, Inc. Puerto Rico Savings and Investment Plan....................................1
1.5           Plan Intended to Qualify............................................................................1
ARTICLE II
DEFINITIONS.......................................................................................................3

2.1           Accounts............................................................................................3
2.2           Affiliated Company..................................................................................3
2.3           After Tax Deposits..................................................................................3
2.4           After Tax Deposits Account..........................................................................3
2.5           Anniversary Date....................................................................................3
2.6           Before Tax Deposits.................................................................................3
2.7           Before Tax Deposits Account.........................................................................3
2.8           Beneficiary.........................................................................................3
2.9           Board of Directors..................................................................................3
2.10          Break in Service....................................................................................4
2.11          Code................................................................................................4
2.12          Committee...........................................................................................4
2.13          Company.............................................................................................4
2.14          Company Contributions...............................................................................4
2.15          Company Contributions Account.......................................................................4
2.16          Company Stock.......................................................................................4
2.17          Compensation........................................................................................4
2.18          Credited Service....................................................................................5
2.19          Disability..........................................................................................7
2.20          Effective Date......................................................................................7
2.21          Eligible Employee...................................................................................7
2.22          Eligible Retirement Plan............................................................................7
2.23          Eligible Rollover Distribution......................................................................8
2.24          Employee............................................................................................8
2.25          Employment Commencement Date........................................................................9
2.26          ERISA...............................................................................................9
2.27          Forfeitures.........................................................................................9
2.28          415 Suspense Account................................................................................9
2.29          Highly Compensated Employee.........................................................................9
2.30          Hour of Service....................................................................................10
2.31          Investment Manager.................................................................................10
2.32          Leased Employee....................................................................................10
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2.33          Leave of Absence...................................................................................10
2.34          Matched Deposits...................................................................................12
2.35          Matching Contributions.............................................................................12
2.36          Normal Retirement Age..............................................................................12
2.37          Participant........................................................................................12
2.38          Participant Deposits...............................................................................12
2.39          Period of Severance................................................................................12
2.40          Plan...............................................................................................12
2.41          Plan Administrator.................................................................................12
2.42          Plan Year..........................................................................................12
2.43          Reemployment Commencement Date.....................................................................12
2.44          Rollover Account...................................................................................13
2.45          Severance..........................................................................................13
2.46          Severance Date.....................................................................................13
2.47          Sponsor............................................................................................14
2.48          Trust..............................................................................................14
2.49          Trust Agreement....................................................................................14
2.50          Trustee............................................................................................14
2.51          Valuation Date.....................................................................................14

ARTICLE III
ELIGIBILITY AND PARTICIPATION....................................................................................15

ARTICLE IV
PARTICIPANT DEPOSITS.............................................................................................16

4.1           Election...........................................................................................16
4.2           Amount Subject to Election.........................................................................17
4.3           Limitation on Compensation Deferrals...............................................................18
4.4           Provisions for Return of Excess Before Tax Deposits Over $10,500...................................22
4.5           Provision for Recharacterization or Return of Excess Deferrals by Highly Compensated Participants..23
4.6           Termination, Change in Rate, or Resumption of Deferrals............................................25
4.7           Character of Deposits..............................................................................26
4.8           Rollover Contributions.............................................................................26

ARTICLE V
TRUST FUND AND COMPANY CONTRIBUTIONS.............................................................................28

5.1           General............................................................................................28
5.2           Single Trust.......................................................................................28
5.3           Company Contributions..............................................................................28
5.4           Form of Company Contributions......................................................................29
5.5           Investment of Trust Assets.........................................................................29
5.6           Irrevocability.....................................................................................31
5.7           Company, Committee and Trustee Not Responsible for Adequacy of Trust Fund..........................32
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5.8           Certain Offers for Company Stock...................................................................32
5.9           Voting of Company Stock............................................................................35
5.10          Securities Law Limitation..........................................................................37
5.11          Distributions......................................................................................37
5.12          Taxes..............................................................................................38
5.13          Trustee Records to be Maintained...................................................................38
5.14          Annual Report of Trustee...........................................................................38
5.15          Appointment of Investment Manager..................................................................38

ARTICLE VI
ACCOUNTS AND ALLOCATIONS.........................................................................................39

6.1           Participants' Accounts.............................................................................39
6.2           Allocation of Amounts Contributed by Participants..................................................39
6.3           Allocation of Company Contributions and Forfeitures................................................39
6.4           Valuation of Participants' Accounts................................................................39
6.5           Valuation of Company Stock.........................................................................40
6.6           Dividends, Splits, Recapitalizations, Etc..........................................................40
6.7           Stock Rights, Warrants or Options..................................................................40
6.8           Treatment of Accounts Upon Severance...............................................................41
6.9           Cash Dividends.....................................................................................41
6.10          Miscellaneous Allocation Rules.....................................................................41
6.11          Limitations on After Tax Deposits and Company Contributions........................................42
6.12          Provision for Disposition of Excess After Tax Deposits
              or Matching Contributions on Behalf of Highly Compensated Participants.............................46

ARTICLE VII
VESTING IN PLAN ACCOUNTS.........................................................................................49

7.1           No Vested Rights Except as Herein Provided.........................................................49
7.2           Vesting Schedule...................................................................................49
7.3           Vesting of Participant Deposits....................................................................49

ARTICLE VIII
PAYMENT OF PLAN BENEFITS.........................................................................................50

8.1           Withdrawals During Employment......................................................................50
8.2           Distributions Upon Termination of Employment or Disability.........................................51
8.3           Distribution Upon Death of Participant.............................................................52
8.4           Designation of Beneficiary.........................................................................52
8.5           Hardship Withdrawal Rules..........................................................................53
8.6           Distribution Rules.................................................................................54
8.7           Forfeitures........................................................................................56
8.8           Valuation of Plan Benefits Upon Distribution.......................................................57
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8.9           Lapsed Benefits....................................................................................57
8.10          Persons Under Legal Disability.....................................................................58
8.11          Additional Documents...............................................................................58
8.12          Trustee-to-Trustee Transfers.......................................................................58
8.13          Loans to Participants..............................................................................59

ARTICLE IX
OPERATION AND ADMINISTRATION.....................................................................................61

9.1           Appointment of Committee...........................................................................61
9.2           Transaction of Business............................................................................61
9.3           Voting.............................................................................................61
9.4           Responsibility of Committee........................................................................61
9.5           Committee Powers...................................................................................62
9.6           Additional Powers of Committee.....................................................................63
9.7           Periodic Review of Funding Policy..................................................................63
9.8           Claims Procedures..................................................................................63
9.9           Appeals Procedures.................................................................................64
9.10          Limitation on Liability............................................................................65
9.11          Indemnification and Insurance......................................................................65
9.12          Compensation of Committee and Plan Expenses........................................................65
9.13          Resignation........................................................................................65
9.14          Reliance Upon Documents and Opinions...............................................................66

ARTICLE X
AMENDMENT AND ADOPTION OF PLAN...................................................................................67

10.1          Right to Amend Plan................................................................................67
10.2          Adoption of Plan by Affiliated Companies...........................................................67

ARTICLE XI
DISCONTINUANCE OF CONTRIBUTIONS..................................................................................68

ARTICLE XII
TERMINATION AND MERGER...........................................................................................69

12.1          Right to Terminate Plan............................................................................69
12.2          Merger Restriction.................................................................................69
12.3          Effect on Trustee and Committee....................................................................69
12.4          Effect of Reorganization, Transfer of Assets or Change in Control..................................69
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ARTICLE XIII
LIMITATION ON
ALLOCATIONS...........              .............................................................................72

13.1          General Rule.......................................................................................72
13.2          Annual Additions...................................................................................72
13.3          Other Defined Contribution Plans...................................................................73
13.4          Adjustments for Excess Annual Additions............................................................73
13.5          Compensation.......................................................................................73
13.6          Treatment of 415 Suspense Account Upon Termination.................................................74

ARTICLE XIV
TOP-HEAVY RULES..................................................................................................75

14.1          Applicability......................................................................................75
14.2          Definitions........................................................................................75
14.3          Top-Heavy Status...................................................................................76
14.4          Minimum Contributions..............................................................................78
14.5          Minimum Vesting Rules..............................................................................79
14.6          Noneligible Employees..............................................................................79

ARTICLE XV
RESTRICTION ON ASSIGNMENT OR OTHER ALIENATION OF PLAN BENEFITS...................................................80

15.1          General Restrictions Against Alienation............................................................80
15.2          Qualified Domestic Relations Orders................................................................80

ARTICLE XVI
MISCELLANEOUS PROVISIONS.........................................................................................84

16.1          No Right of Employment Hereunder...................................................................84
16.2          Effect of Article Headings.........................................................................84
16.3          Limitation on Company Liability....................................................................84
16.4          Gender.............................................................................................84
16.5          Interpretation.....................................................................................84
16.6          Withholding For Taxes..............................................................................84
16.7          California Law Controlling.........................................................................85
16.8          Plan and Trust as One Instrument...................................................................84
16.9          Invalid Provisions.................................................................................84
16.10         Counterparts.......................................................................................85

APPENDIX A
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                                       v
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                                 ALLERGAN, INC.
                           SAVINGS AND INVESTMENT PLAN

                                   ARTICLE I
                             NAME AND EFFECTIVE DATE

         1.1 Plan Name. This document, made and entered into by Allergan, Inc.,
a Delaware corporation ("Allergan"), amends and restates in its entirety the
"Allergan, Inc. Savings and Investment Plan (Restated 2000)" and incorporates
the First Amendment made thereto, and shall be known hereafter as the "Allergan,
Inc. Savings and Investment Plan (Restated 2001)."

         1.2 Effective Date of 2001 Restated Plan. The Effective Date of the
Allergan, Inc. Savings and Investment Plan (Restated 2001), hereinafter referred
to as the "Plan," shall be January 1, 2001; provided, however, that the
amendments made to the Plan to comply with the Economic Growth and Tax Relief
Reconciliation Act of 2001 shall be effective January 1, 2002 unless otherwise
specified in the Plan.

         1.3 Plan Purpose. The purpose of the Plan is to enable Eligible
Employees of Allergan, and any Affiliated Companies that are authorized by the
Board of Directors to participate in the Plan, to share in the growth and
prosperity of the Company and to provide Participants with an opportunity to
accumulate capital for their future economic security. All assets acquired under
the Plan as a result of Company Contributions, income, and other additions to
the Fund under the Plan shall be administered, distributed, forfeited and
otherwise governed by the provisions of the Plan, which is to be administered by
the Committee for the exclusive benefit of Participants in the Plan and their
Beneficiaries.

         1.4 Merger of Allergan, Inc. Puerto Rico Savings and Investment Plan.
The Allergan, Inc. Puerto Rico Savings and Investment Plan was merged with and
into the Plan effective as of January 1, 1999. All account balances of the
Allergan, Inc. Puerto Rico Savings and Investment Plan were transferred to the
Plan and all account balances transferred to the Plan as a result of the merger
shall be administered, distributed, forfeited and otherwise governed by the
provisions of the Plan and Appendix A, which is attached hereto and made a part
hereof.

         1.5 Plan Intended to Qualify. The Plan is an employee benefit plan that
is intended to qualify under Code Section 401(a) as a qualified profit sharing
plan and under Code Section 401(k) as a qualified cash or deferred arrangement.
The Plan's last determination letter was issued by the Internal Revenue Service
on September 24, 1999 with respect to the Allergan, Inc. Savings and Investment
Plan (Restated 1998) and its compliance with the changes to the qualification
requirements made by the Uruguay Round Agreements Act (GATT), the Uniformed
Services Employment and Reemployment Rights Act of 1994, the Small Business Job
Protection Act of 1996, and the Taxpayer Relief Act of 1997 (collectively
referred to as the "GUST Amendments") which were effective for Plan Years
beginning prior to January 1, 1999. The provisions of the Plan are intended to
comply with all changes to the qualification requirements made by the GUST
Amendments, the Community Renewal Tax Relief Act of 2000, including
qualification requirements that are effective for Plan Years beginning on or
after January 1, 1999, and the Economic Growth and Tax Relief Reconciliation Act
of 2001

<PAGE>

("EGTRRA"). It is further intended that the EGTRRA provisions of the Plan are to
be regarded as good faith compliance with the requirements of EGTRRA and are to
be construed in accordance with EGTRRA and guidance issued thereunder.

                                       2
<PAGE>

                                   ARTICLE II
                                   DEFINITIONS

         2.1 Accounts. "Accounts" or "Participant's Accounts" shall mean the
After Tax Deposits Accounts, Before Tax Deposits Accounts, Company Contribution
Accounts, and Rollover Accounts maintained for the various Participants.

         2.2 Affiliated Company. "Affiliated Company" shall mean (i) any
corporation, other than the Sponsor, which is included in a controlled group of
corporations (within the meaning of Code Section 414(b)) of which the Sponsor is
a member, (ii) any trade or business, other than the Sponsor, which is under
common control (within the meaning of Code Section 414(c)) with the Sponsor,
(iii) any entity or organization, other than the Sponsor, which is a member of
an affiliated service group (within the meaning of Code Section 414(m)) of which
the Sponsor is a member, and (iv) any entity or organization, other than the
Sponsor, which is affiliated with the Sponsor under Code Section 414(o). An
entity shall be an Affiliated Company pursuant to this Section only during the
period of time in which such entity has the required relationship with the
Sponsor under clauses (i), (ii), (iii) or (iv) of this Section after the
original Effective Date of the Plan.

         2.3 After Tax Deposits. "After Tax Deposits" shall mean those
contributions made by a Participant which represent after-tax contributions.

         2.4 After Tax Deposits Account. "After Tax Deposits Account" of a
Participant shall mean his or her individual account in the Trust Fund in which
are held his or her After Tax Deposits and the earnings thereon.

         2.5 Anniversary Date. "Anniversary Date" shall mean the last day of
each Plan Year.

         2.6 Before Tax Deposits. "Before Tax Deposits" shall mean those
contributions made by a Participant which represent pre-tax contributions.

         2.7 Before Tax Deposits Account. "Before Tax Deposits Account" of a
Participant shall mean his or her individual account in the Trust Fund in which
are held his or her Before Tax Deposits and the earnings thereon.

         2.8 Beneficiary. "Beneficiary" or "Beneficiaries" shall mean the person
or persons last designated by a Participant as set forth in Section 8.4 or, if
there is no designated Beneficiary or surviving Beneficiary, the person or
persons designated pursuant to Section 8.4 to receive the interest of a deceased
Participant in such event.

         2.9 Board of Directors. "Board of Directors" shall mean the Board of
Directors of the Sponsor (or its delegate) as it may from time to time be
constituted.

                                       3
<PAGE>

         2.10 Break in Service. "Break in Service" shall mean, with respect to
an Employee, each period of 12 consecutive months during a Period of Severance
that commences on the Employee's Severance Date or on any anniversary of such
Severance Date.

         2.11 Code. "Code" shall mean the Internal Revenue Code of 1986 and the
regulations thereunder. Reference to a specific Code Section shall be deemed
also to refer to any applicable regulations under that Section, and shall also
include any comparable provisions of future legislation that amend, supplement
or supersede that specific Section.

         2.12 Committee. "Committee" shall mean the committee to be appointed
under the provisions of Section 9.1 to administer the Plan.

         2.13 Company. "Company" shall mean collectively the Sponsor and each
Affiliated Company that adopts the Plan in accordance with Section 10.2.

         2.14 Company Contributions. "Company Contributions" shall mean all
amounts (whether in cash or other property, including Company Stock), including
Matching Contributions, paid by the Company pursuant to Section 5.3 into the
Trust Fund established and maintained under the provisions of the Plan for the
purpose of providing benefits for Participants and their Beneficiaries. Unless
expressly stated otherwise in the Plan, Company Contributions shall not include
Participant Before Tax or After Tax Deposits.

         2.15 Company Contributions Account. "Company Contributions Account"
shall mean a Participant's individual account in the Trust Fund in which are
held Matching Contributions and the earnings thereon and amounts transferred
from a Participant's account in the SmithKline Beckman Savings and Investment
Plan to the Plan, if any. Any amounts so transferred shall be fully vested.

         2.16 Company Stock. "Company Stock" shall mean any class of stock of
the Sponsor which both constitutes "qualifying employer securities" as defined
in Section 407(d)(5) of ERISA and "employer securities" as defined in Code
Section 409(l).

         2.17 Compensation. "Compensation" shall mean the following:

                  (a) Compensation shall include amounts paid during a Plan Year
         to a Participant by the Company for services rendered, including base
         earnings, commissions and similar incentive compensation, cost of
         living allowances earned within the United States of America, holiday
         pay, overtime earnings, pay received for election board duty, pay
         received for jury and witness duty, pay received for military service
         (annual training), pay received for being available for work, if
         required (call-in premium), shift differential and premium,
         sickness/accident related pay, vacation pay, vacation shift premium,
         and bonus amounts paid under the (i) Sales Bonus Program, (ii)
         Management Bonus Plan or Executive Bonus Plan, either in cash or in
         restricted stock, and (iii) group performance sharing payments, such as
         the "Partners for Success."

                                       4
<PAGE>

                  (b) Compensation shall include amounts of salary reduction
         elected by a Participant under a Code Section 401(k) cash or deferred
         arrangement or a Code Section 125 cafeteria plan.

                  (c) Compensation shall not include business expense
         reimbursements; Company gifts or the value of Company gifts; Company
         stock related options and payments; employee referral awards; flexible
         compensation credits paid in cash; special overseas payments,
         allowances and adjustments including, but not limited to, pay for cost
         of living adjustments and differentials paid for service outside of the
         United States, expatriate reimbursement payments, and tax equalization
         payments; forms of imputed income; long-term disability pay; payment
         for loss of Company car; Company car allowance; payments for patents or
         for writing articles; relocation and moving expenses; retention and
         employment incentive payments; severance pay; long-term incentive
         awards, bonuses or payments; "Impact Award" payments; "Employee of the
         Year" payments; "Awards for Excellence" payments; special group
         incentive payments and individual recognition payments which are
         nonrecurring in nature; tuition reimbursement; and contributions by the
         Company under the Plan or distributions hereunder, any contributions or
         distributions pursuant to any other plan sponsored by the Company and
         qualified under Code Section 401(a) (other than contributions
         constituting salary reduction amounts elected by the Participant under
         a Code Section 401(k) cash or deferred arrangement), any payments under
         a health or welfare plan sponsored by the Company, or premiums paid by
         the Company under any insurance plan for the benefit of Employees.

                  (d) Compensation for any Plan Year shall not include amounts
         in excess of $200,000 ($150,000 for Plan Years beginning prior to
         January 1, 2002), as adjusted for cost-of-living increases in
         accordance with Code Section 401(a)(17)(B) for purposes of determining
         all benefits provided under the Plan for any Plan Year. Any
         cost-of-living adjustments in effect for a calendar year shall apply to
         the Plan Year beginning with or within such calendar year.

                  (e) Notwithstanding the foregoing, for purposes of applying
         the provisions of Articles XIII and XIV, a Participant's Compensation
         shall be determined pursuant to the definition of "Compensation" as set
         forth in Section 13.5 or 14.2(i), as the case may be.

         2.18 Credited Service. "Credited Service" shall mean, with respect to
each Employee, his or her years and months of Credited Service determined in
accordance with the following rules:

                  (a) In the case of any Employee who was employed by the
         Company at any time prior to the original Effective Date, for the
         period prior to January 1, 1989 such Employee shall be credited with
         Credited Service under the Plan equal to the period (if any) of service
         credited to such Employee under the SmithKline Beckman Savings and
         Investment Plan.

                                       5
<PAGE>

                  (b) In the case of any Employee who is employed by the Company
         on or after the original Effective Date, an Employee shall receive
         Credited Service for the elapsed period of time between each Employment
         Commencement Date (or Reemployment Commencement Date) of the Employee
         and the Severance Date which immediately follows that Employment
         Commencement Date (or Reemployment Commencement Date). Solely for the
         purpose of determining an Employee's Credited Service under this
         paragraph (b), in the case of an Employee who is employed on January 1,
         1989, that date shall be deemed to be an Employment Commencement Date
         of the Employee (with service credit for periods prior to January 1,
         1989 to be determined under paragraph (a) above). An Employee who is
         absent from work on an authorized Leave of Absence shall be deemed to
         have incurred a Severance (if any) in accordance with the rules of
         Section 2.45.

                  (c) An Employee shall receive Credited Service credit for
         periods between a Severance and his or her subsequent Reemployment
         Commencement Date in accordance with the following rules:

                           (i) If an Employee incurs a Severance by reason of a
                  quit, discharge, Disability, or retirement whether or not such
                  a Severance occurs during an approved Leave of Absence and the
                  Employee is later reemployed by the Company prior to his or
                  her incurring a Break in Service, he or she shall receive
                  Credited Service for the period commencing with his or her
                  Severance Date and ending with his or her subsequent
                  Reemployment Commencement Date.

                           (ii) Other than as expressly set forth above in this
                  paragraph (c), an Employee shall receive no Credited Service
                  with respect to periods between a Severance and a subsequent
                  Reemployment Commencement Date.

                  (d) For all purposes of the Plan, an Employee's total Credited
         Service shall be determined by aggregating any separate periods of
         Credited Service separated by any Breaks in Service.

                  (e) An Employee shall be credited with Credited Service with
         respect to a period of employment with an Affiliated Company, but only
         to the extent that such period of employment would be so credited under
         the foregoing rules set forth in this Section had such Employee been
         employed during such period by the Company.

                  (f) Notwithstanding the foregoing, unless the Sponsor shall so
         provide by resolution of its Board of Directors, or unless otherwise
         expressly stated in the Plan, an Employee shall not receive such
         Credited Service credit for any period of employment with an Affiliated
         Company prior to such entity becoming an Affiliated Company.

                  (g) In accordance with paragraph (f) above, an Eligible
         Employee shall receive Credited Service for any period of employment
         with Allergan Medical Optics - Lenoir facility prior to its becoming an
         Affiliated Company but only to the extent provided in paragraph (e)
         above. Notwithstanding anything therein to the contrary, the

                                       6
<PAGE>

         Employment Commencement Date for such Eligible Employee under paragraph
         (b) shall mean the date the Employee was first credited with an Hour of
         Service with Allergan Medical Optics - Lenoir facility, including any
         date prior to Allergan Medical Optics - Lenoir facility becoming an
         Affiliated Company.

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

         2.19 Disability. "Disability" shall mean any mental or physical
condition which, in the judgment of the Committee, based on such competent
medical evidence as the Committee may require, renders an individual unable to
engage in any substantial gainful activity for the Company for which he or she
is reasonably fitted by education, training, or experience and which condition
can be expected to result in death or which has lasted or can be expected to
last for a continuous period of at least 12 months. The determination by the
Committee, upon opinion of a physician selected by the Committee, as to whether
a Participant has incurred a Disability shall be final and binding on all
persons.

         2.20 Effective Date. "Effective Date" of this restated Plan shall mean
January 1, 2001 unless otherwise specified in the Plan. The original Effective
Date of the Plan was July 26, 1989.

         2.21 Eligible Employee. "Eligible Employee" shall mean any United
States-based payroll Employee and any Puerto Rico-based payroll Employee of the
Company and any expatriate Employee of the Company who is a United States
citizen or permanent resident, but excluding any non-resident alien of the
United States and Puerto Rico, any non-regular manufacturing site transition
Employee, any Leased Employee, and any Employee covered by a collective
bargaining agreement.

         2.22 Eligible Retirement Plan. "Eligible Retirement Plan" shall mean an
individual retirement account or annuity described in Code Section 408(a) or
408(b) and a qualified retirement plan described in Code Section 401(a) or
403(a) that accepts Eligible Rollover Distributions. For Eligible Rollover
Distributions made after December 31, 2001, an Eligible Retirement Plan shall
also mean an annuity contract described in Code Section 403(b) and an eligible
plan described in Code Section 457(b) which is maintained by a state, political
subdivision of a state, or any agency or instrumentality of a state or political
subdivision of a state and which agrees to separately account for amounts
transferred into such plan from this Plan. The definition of Eligible Retirement
Plan shall also apply in the case of an Eligible Rollover Distribution to a
surviving spouse or to a spouse or former spouse who is an Alternate Payee under
a Qualified Domestic Relations Order (as defined in Article XV); except,
however, the definition of Eligible Retirement Plan shall only mean an
individual retirement account or annuity described in Code Section 408(a) or
408(b) in the case of an Eligible Rollover Distribution to a surviving spouse
prior to January 1, 2002.

                                       7
<PAGE>

         2.23 Eligible Rollover Distribution. "Eligible Rollover Distribution"
shall mean any distribution of all or any portion of the balance to the credit
of the Distributee, except that an Eligible Rollover Distribution shall not
include:

                  (a) 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 of the joint lives (or
         joint life expectancies) of the Distributee and the Distributee's
         designated beneficiary, or for a specified period of ten years or more;

                  (b) any distribution to the extent such distribution is
         required under Code Section 401(a)(9);

                  (c) the portion of any distribution that is not includable in
         gross income (determined without regard to the exclusion for net
         unrealized appreciation with respect to employer securities);

                  (d) any hardship distribution described in Code Section
         401(k)(2)(B)(I)(IV), and any hardship withdrawal made pursuant to
         Section 8.1(e) after December 31, 2001; and

                  (e) any other distribution that is reasonably expected to
         total less than $200 during the year.

         For distributions made after December 31, 2001, a portion of a
distribution shall not fail to be an Eligible Rollover Distribution merely
because the portion consists of After Tax Deposits or the portion consists of
rollover after tax employee contributions made pursuant to Section 4.8.which are
not includible in gross income. However, such portion(s) may be transferred only
to an individual retirement account or annuity described in Code Section 408(a)
or 408(b) or to a qualified defined contribution plan described in Code Section
401(a) or 403(a) that agrees to separately account for amounts so transferred,
including separately accounting for the portion of such distribution which is
includible in gross income and the portion of such distribution which is not so
includible. For purposes of this Section, "Distributee" shall mean any Employee
or former Employee receiving a distribution from the Plan. A Distributee also
includes the Employee or former Employee's surviving spouse and the Employee or
former Employee's spouse or former spouse who is the Alternate Payee under a
Qualified Domestic Relations Order (as defined in Article XV) with regard to the
interest of the spouse or former spouse.

         2.24 Employee. "Employee" shall mean, for purposes of the Plan, any
person who is employed by the Sponsor or an Affiliated Company in any capacity,
any portion of whose income is subject to withholding of income tax and/or for
whom Social Security contribution are made by the Sponsor or an Affiliated
Company, as well as a Puerto Rico-based payroll Employee of the Sponsor or an
Affiliated Company except that such term shall not include (i) any individual
who performs services for the Sponsor or an Affiliated Company and who is
classified or paid as an independent contractor as determined by the payroll
records of the Sponsor or an Affiliated Company even if a court or
administrative agency determines that such

                                       8
<PAGE>

individual is a common-law employee and not an independent contractor and (ii)
any individual who performs services for the Sponsor or an Affiliated Company
pursuant to an agreement between the Sponsor or an Affiliated Company and any
other person including a leasing organization except to the extent such
individual is a Leased Employee.

         2.25 Employment Commencement Date. "Employment Commencement Date" shall
mean the date on which an Employee is first credited with an Hour of Service for
the Sponsor or an Affiliated Company. An Employee shall not, for the purpose of
determining his or her Employment Commencement Date, be deemed to have commenced
employment with an Affiliated Company prior to the effective date on which the
entity became an Affiliated Company unless the Sponsor expressly determines
otherwise, and except as is expressly provided otherwise in the Plan or in
resolutions of the Board of Directors.

         2.26 ERISA. "ERISA" shall mean the Employee Retirement Income Security
Act of 1974 and the regulations thereunder. Reference to a specific ERISA
Section shall be deemed also to refer to any applicable regulations under that
Section, and shall also include any comparable provisions of future legislation
that amend, supplement or supersede that specific Section.

         2.27 Forfeitures. "Forfeitures" shall mean the nonvested portion of a
Participant's benefit that is forfeited in accordance with the provisions of
Article VIII.

         2.28 415 Suspense Account. "415 Suspense Account" shall mean the
account (if any) established and maintained in accordance with the provisions of
Article XIII for the purpose of holding and accounting for allocations of excess
Annual Additions (as defined in Article XIII).

         2.29 Highly Compensated Employee. "Highly Compensated Employee" shall
mean:

                  (a) An Employee who performed services for the Employer during
         the Plan Year or preceding Plan Year and is a member of one or more of
         the following groups:

                           (i) Employees who at any time during the Plan Year or
                  preceding Plan Year were Five Percent Owners (as defined in
                  Section 14.2).

                           (ii) Employees who received Compensation during the
                  preceding Plan Year from the Employer in excess of $80,000 (as
                  adjusted in such manner as permitted under Code Section
                  414(q)(1)).

                  (b) For the purpose of this Section, the term "Compensation"
         means compensation as defined in Code Section 415(c)(3), as set forth
         in Section 13.5.

                  (c) The term "Highly Compensated Employee" includes a Former
         Highly Compensated Employee. A Former Highly Compensated Employee is
         any Employee who was (i) a Highly Compensated Employee when he or she
         terminated employment with the Employer or (ii) a Highly Compensated
         Employee at any time after attaining age 55. Notwithstanding the
         foregoing, an Employee who separated from service prior to

                                       9
<PAGE>

         1987 shall be treated as a Former Highly Compensated Former Employee
         only if during the separation year (or year preceding the separation
         year) or any year after the Employee attains age 55 (or the last year
         ending before the Employee's 55th birthday), the Employee either
         received Compensation in excess of $50,000 or was a Five Percent Owner.

                  (d) For the purpose of this Section, the term "Employer" shall
         mean the Sponsor and any Affiliated Company.

                  (e) The determination of who is a Highly Compensated Employee,
         including the determination of the Compensation that is considered,
         shall be made in accordance with Code Section 414(q) and applicable
         regulations to the extent permitted thereunder. The Committee, for
         administrative convenience, may establish rules and procedures for
         purposes of identifying Highly Compensated Employees, which rules and
         procedures may result in an Eligible Employee being deemed to be a
         Highly Compensated Employee for purposes of the limitations of Article
         IV and Article VI, whether or not such Eligible Employee is a Highly
         Compensated Employee described in Code Section 414(q).

         2.30 Hour of Service. "Hour of Service" shall mean an hour for which an
Employee is paid or entitled to payment for the performance of duties for the
Sponsor and any Affiliated Company.

         2.31 Investment Manager. "Investment Manager" shall mean the one or
more Investment Managers, if any, that are appointed pursuant to Section 5.15
and who constitute investment managers under Section 3(38) of ERISA.

         2.32 Leased Employee. "Leased Employee" shall mean any person (other
than an Employee of the recipient) who pursuant to an agreement between the
recipient and any other person ("leasing organization") has performed services
for the recipient (or for the recipient and related persons determined in
accordance with Code Section 414(n)(6)) on a substantially full time basis for a
period of at least one (1) year, and such services are performed under the
primary direction or control by 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. A Leased Employee shall not be considered an Employee of
the recipient if Leased Employees do not constitute more than 20 percent of the
recipient's nonhighly compensated workforce and such Leased Employee is covered
by a money purchase pension plan providing (i) a nonintegrated employer
contribution rate of at least ten (10) percent of compensation as defined under
Code Section 415(c)(3); (ii) immediate participation; and (iii) full and
immediate vesting.

         2.33 Leave of Absence.

                  (a) "Leave of Absence" shall mean any personal leave from
         active employment (whether with or without pay) duly authorized by the
         Company under the Company's standard personnel practices. All persons
         under similar circumstances shall be treated alike in the granting of
         such Leaves of Absence. Leaves of Absence may be

                                       10
<PAGE>

         granted by the Company for reasons of health (including temporary
         sickness or short term disability) or public service or for any other
         reason determined by the Company to be in its best interests.

                  (b) In addition to Leaves of Absence as defined in paragraph
         (a) above, the term Leave of Absence shall also mean a Maternity or
         Paternity Leave, as defined herein, but only to the extent and for the
         purposes required under paragraph (c) below. As used herein, "Maternity
         or Paternity Leave" shall mean an absence from work for any period (i)
         by reason of the pregnancy of the Employee, (ii) by reason of the birth
         of a child of the Employee, (iii) by reason of the placement of a child
         with the Employee in connection with the adoption of the child by the
         Employee, or (iv) for purposes of caring for the child for a period
         beginning immediately following the birth or placement referred to in
         clauses (ii) or (iii) above.

                  (c) Subject to the provisions of paragraph (d) below, a
         Maternity or Paternity Leave described in paragraph (b) above shall be
         deemed to constitute an authorized Leave of Absence for purposes of the
         Plan only to the extent consistent with the following rules:

                           (i) For purposes of determining whether a Break in
                  Service has occurred, the Severance Date of a Participant who
                  is absent by reason of a Maternity or Paternity Leave shall
                  not be deemed to occur any earlier than the second anniversary
                  of the date upon which such Maternity or Paternity Leave
                  commences.

                           (ii) The Maternity or Paternity Leave shall be
                  treated as a Leave of Absence solely for purposes of
                  determining whether or not an Employee has incurred a Break in
                  Service. Accordingly, such a Maternity or Paternity Leave
                  shall not result in an accrual of Credited Service for
                  purposes of the vesting provisions of the Plan or for purposes
                  of determining eligibility to participate in the Plan pursuant
                  to the provisions of Article III (except only in determining
                  whether a Break in Service has occurred).

                           (iii) A Maternity or Paternity Leave shall not be
                  treated as a Leave of Absence unless the Employee provides
                  such timely information as the Committee may reasonably
                  require to establish that the absence is for the reasons
                  listed in paragraph (b) above and to determine the number of
                  days for which there was such an absence.

                  (d) Notwithstanding the limitations provided in paragraph (c)
         above, a Maternity or Paternity Leave described in paragraph (b) above
         shall be treated as an authorized Leave of Absence, as described in
         paragraph (a), for all purposes of the Plan to the extent the period of
         absence is one authorized as a Leave of Absence under the Company's
         standard personnel practices and thus is covered by the provisions of
         paragraph (a) above without reference to the provisions of paragraph
         (b) above, provided, however, that the special rule provided under this
         paragraph (d) shall not apply if it would

                                       11
<PAGE>

         result in a Participant who is absent on a Maternity or Paternity Leave
         being deemed to have incurred a Break in Service sooner than under the
         rules set forth in paragraph (c).

         2.34 Matched Deposits. "Matched Deposits" of a Participant shall mean
his or her Deposits (whether Before Tax or After Tax) not in excess of five
percent (5%) of Compensation; except, however, that Matched Deposits shall not
include "catch-up" Before Tax Deposits as described in Section 4.2(e). Matched
Deposits shall participate in allocations of Company Contributions and
Forfeitures.

         2.35 Matching Contributions. "Matching Contributions" shall mean all
amounts (whether in cash or other property, including Company Stock) paid by the
Company pursuant to Sections 5.3(a) and 5.3(b) into the Trust Fund established
and maintained under the provisions of the Plan for the purpose of providing
benefits for Participants and their Beneficiaries.

         2.36 Normal Retirement Age. "Normal Retirement Age" shall mean a
Participant's sixty-fifth (65th) birthday.

         2.37 Participant. "Participant" shall mean any Eligible Employee who
has commenced participation in the Plan pursuant to Article III and who retains
rights under the Plan.

         2.38 Participant Deposits. "Participant Deposits" shall mean all of a
Participant's deposits to the Plan, including After Tax Deposits and Before Tax
Deposits.

         2.39 Period of Severance. "Period of Severance" shall mean the period
of time commencing on an Employee's Severance Date and ending on the Employee's
subsequent Reemployment Commencement Date, if any.

         2.40 Plan. "Plan" shall mean the Allergan, Inc. Savings and Investment
Plan described herein and as amended from time to time.

         2.41 Plan Administrator. Plan Administrator" shall mean the
administrator of the Plan within the meaning of Section 3(16)(A) of ERISA. The
Plan Administrator shall be the Allergan Corporate Benefits Committee whose
members are appointed by the Board of Directors pursuant to the provisions of
Section 9.1 to administer the Plan.

         2.42 Plan Year. "Plan Year" shall mean the calendar year.

         2.43 Reemployment Commencement Date. "Reemployment Commencement Date"
shall mean, in the case of an Employee who incurs a Severance and who is
subsequently reemployed by the Sponsor or an Affiliated Company, the first day
following the Severance on which the Employee is credited with an Hour of
Service for the Sponsor or an Affiliated Company with respect to which he or she
is compensated or entitled to compensation by the Sponsor or an Affiliated
Company. An Employee shall not, for the purpose of determining his or her
Reemployment Commencement Date, be deemed to have commenced employment with an
Affiliated Company prior to the effective date on which such entity becomes an
Affiliated

                                       12
<PAGE>

Company unless the Sponsor shall expressly determine otherwise, and except as is
expressly provided otherwise in the Plan or in resolutions of the Board of
Directors.

         2.44 Rollover Account. "Rollover Account" of a Participant shall be his
or her individual account in the Trust Fund in which are held rollover
contributions made pursuant to Section 4.8.

         2.45 Severance. "Severance" shall mean the termination of an Employee's
employment with the Sponsor or an Affiliated Company by reason of such
Employee's quit, discharge, Disability, death, retirement, or otherwise. For
purposes of determining whether an Employee has incurred a Severance, the
following rules shall apply:

                  (a) An Employee shall not be deemed to have incurred a
         Severance (i) because of his or her absence from employment with the
         Sponsor or an Affiliated Company by reason of any paid vacation or
         holiday period, or (ii) by reason of any Leave of Absence, subject to
         the provisions of paragraph (b) below.

                  (b) For purposes of the Plan, an Employee shall be deemed to
         have incurred a Severance on the earlier of (i) the date on which he or
         she dies, resigns, is discharged, or otherwise terminates his or her
         employment with the Sponsor or an Affiliated Company; or (ii) the date
         on which he or she is scheduled to return to work after the expiration
         of an approved Leave of Absence, if he or she does not in fact return
         to work on the scheduled expiration date of such Leave. In no event
         shall an Employee's Severance be deemed to have occurred before the
         last day on which such Employee performs any services for the Sponsor
         or an Affiliated Company in the capacity of an Employee with respect to
         which he or she is compensated or entitled to compensation by the
         Sponsor or an Affiliated Company.

                  (c) Notwithstanding the foregoing, in the case of a
         Participant who is absent by reason of a Maternity or Paternity Leave,
         the provisions of Section 2.33(c)-(d) shall apply for purposes of
         determining whether such a Participant has incurred a Break in Service
         by reason of such Leave.

         2.46 Severance Date. "Severance Date" shall mean, in the case of any
Employee who incurs a Severance, the day on which such Employee is deemed to
have incurred said Severance as determined in accordance with the provisions of
Section 2.45, provided, however, that the special rules set forth under Section
2.33(c)-(d) shall apply with respect to determining whether a Participant on a
Maternity or Paternity Leave has incurred a Break in Service. In the case of any
Employee who incurs a Severance as provided under Section 2.45 and who is
entitled to a subsequent payment of compensation for reasons other than future
services (e.g., as back pay for past services rendered or as payments in the
nature of severance pay), the Severance Date of such Employee shall be as of the
effective date of the Severance event (e.g., the date of his or her death,
effective date of a resignation or discharge, etc.), and the subsequent payment
of the aforementioned type of post-Severance compensation shall not operate to
postpone the timing of the Severance Date for purposes of the Plan.

                                       13
<PAGE>

         2.47 Sponsor. "Sponsor" shall mean Allergan, Inc., a Delaware
corporation, and any successor corporation or entity.

         2.48 Trust. "Trust" or "Trust Fund" shall mean the trust maintained
pursuant to the Trust Agreement and as described in Section 5.1 hereof, which
shall hold all cash and securities and all other assets of whatsoever nature
deposited with or acquired by the Trustee in its capacity as Trustee hereunder,
together with accumulated net earnings.

         2.49 Trust Agreement. "Trust Agreement" shall mean the agreement
between the Trustee and the Sponsor pursuant to which the Trust is maintained.

         2.50 Trustee. "Trustee" shall mean the individual or entity acting as a
trustee of the Trust Fund.

         2.51 Valuation Date. "Valuation Date" shall mean the date as of which
the Trustee shall determine the value of the assets in the Trust Fund for
purposes of determining the value of each Account, which shall be each business
day in accordance with rules applied in a consistent and uniform basis.

                                       14
<PAGE>

                                  ARTICLE III
                          ELIGIBILITY AND PARTICIPATION

         Each Eligible Employee shall be eligible to participate in the Plan on
his or her Employment Commencement Date. If an Eligible Employee's employment
with the Company terminates after the Employee has become a Participant in the
Plan, the Employee shall become eligible to participate in the Plan immediately
upon his or her Reemployment Commencement Date.

                                       15
<PAGE>

                                   ARTICLE IV
                              PARTICIPANT DEPOSITS

         4.1 Election.

                  (a) Each Eligible Employee may elect to defer the receipt of a
         portion of his or her Compensation and to have the deferred amount
         contributed directly by the Company to the Plan as Before Tax Deposits.
         Before Tax Deposits may be made only by means of payroll deduction.

                  (b) Each Eligible Employee may elect to contribute to the Plan
         a portion of his or her Compensation as After Tax Deposits. After Tax
         Deposits may be made only by means of payroll deduction.

                  (c) The Committee shall prescribe procedures to implement
         automatic enrollment elections, pursuant to which an Eligible Employee
         or, if limited to newly hired Eligible Employees as determined by the
         Committee, shall be deemed to have elected to defer the receipt of
         three percent (3%) of his or her Compensation and to have such deferred
         amount contributed directly by the Company to the Plan as Before Tax
         Deposits if such Eligible Employee fails to change or terminate the
         automatic election for any Plan Year within the time period prescribed
         by the Committee (or, in the case of newly hired Eligible Employee, he
         or she fails to change or terminate the automatic election within 30
         days of his or her hire date). Such procedures shall require that an
         Eligible Employee receive a written notice of explanation of the
         automatic election informing the Eligible Employee of the effective
         date of the automatic election, the automatic deferral percentage and
         his or her right to terminate the automatic election or to change the
         amount of his or her Before Tax Deposits made to the Plan as well as
         the procedures for exercising such rights and the timing for
         implementing a different election. An automatic election under this
         paragraph (c) shall be effective as of the first pay period of the Plan
         Year (or, in the case of newly hired Eligible Employee, the first pay
         period following the 30-day period beginning on his or her date of
         hire) and shall remain in effect until superseded by a subsequent
         election by the Eligible Employee. Amounts contributed directly by the
         Company to the Plan under this paragraph (c) shall be invested in the
         Balanced Fund described in Section 5.5(b) until superseded by a
         subsequent election by the Eligible Employee.

                  (d) Notwithstanding anything in this Section to the contrary,
         a Participant who makes a hardship withdrawal pursuant to Section
         8.1(e) shall not be permitted to make Before Tax Deposits or After Tax
         Deposits to the Plan Notwithstanding anything in this Section to the
         contrary, a Participant who makes a hardship withdrawal pursuant to
         Section 8.1(e) shall not be permitted to make Before Tax Deposits or
         After Tax Deposits to the Plan during the 6-month period (12-month
         period for hardship withdrawals made prior to January 1, 2002)
         beginning as soon as administratively feasible following the date of
         the hardship withdrawal; provided, however, if a Participant made a
         hardship withdrawal during the 2001 calendar year, such Participant
         shall be permitted to make

                                       16
<PAGE>

         Before Tax Deposits or After Tax Deposits as of the earlier of January
         1, 2002 or the end of the 6-month period that begins as soon as
         administratively feasible following the date of the hardship
         withdrawal. In addition, a Participant who makes a withdrawal of After
         Tax Deposits (whether Matched Deposits or non-Matched Deposits)
         pursuant to Section 8.1(a) on or after July 1, 2000 shall not be
         permitted to make any After Tax or and Before Tax Deposits during the
         6-month period beginning as soon as administratively feasible following
         the date of the withdrawal unless the After Tax Deposits can also be
         withdrawn under Section 8.1(d) or the withdrawal is comprised solely of
         After Tax Deposits which are not Matched Deposits and which were
         contributed prior to July 1, 2000.

                  (e) The Committee shall prescribe such procedures, either in
         writing or in practice, and provide such forms as are necessary or
         appropriate for each Participant and each Eligible Employee who will
         become a Participant to make Deposits pursuant to this Article IV.
         However, an election by a Participant shall not be adopted
         retroactively.

         4.2 Amount Subject to Election.

                  (a) Each Participant may elect to contribute a whole
         percentage of his or her Compensation to the Plan as Before Tax
         Deposits not to exceed the lesser of (one hundred percent (100%)
         (twenty percent (20%) for Plan Years beginning prior to January 1,
         2002) when aggregated with the After Tax Deposits contributed by such
         Participant pursuant to paragraph (b) below. Notwithstanding the
         foregoing except to the extent permitted under the catch-up provisions
         of paragraph (e) below and Code Section 414(v), no Participant shall be
         permitted to make Before Tax Deposits to the Plan during any taxable
         year in excess of: (i) $10,500 (or such larger amount as may be
         determined by the Secretary of the Treasury pursuant to Code Section
         402(g), (ii) the Actual Deferral Percentage test limitation set forth
         in Section 4.3, or (iii) the Annual Addition limitation set forth in
         Section 13.1. For purposes of the dollar limitation described in
         preceding clause (i), the Before Tax Deposits of a Participant for any
         taxable year is the sum of all Before Tax Deposits under the Plan and
         all salary reduction amounts under any other qualified cash or deferred
         arrangement (as defined in Code Section 401(k)), a simplified employee
         pension (as defined in Code Section 408(k) and Code Section
         402(h)(1)(B)), a deferred compensation plan under Code Section 457, a
         trust described in Code Section 501(c)(18) and any salary reduction
         amount used to purchase an annuity contract under Code Section 403(b)
         whether or not sponsored by the Company but shall not include any
         amounts properly distributed as excess annual additions.

                  (b) Each Participant may elect to contribute a whole
         percentage of his or her Compensation to the Plan as After Tax Deposits
         not to exceed one hundred percent (100%) (twenty percent (20%) for Plan
         Years beginning prior to January 1, 2002) when aggregated with the
         Before Tax Deposits contributed by such Participant pursuant to
         paragraph (a) above. Notwithstanding the foregoing, no Participant
         shall be permitted to make After Tax Deposits to the Plan during any
         Plan Year in excess of the Actual

                                       17
<PAGE>

         Contribution Percentage test limitation set forth in Section 6.11 or
         the Annual Addition limitation set forth in Section 13.1.

                  (c) Notwithstanding paragraphs (a) and (b), a Participant's
         combined Before Tax Deposits and After Tax Deposits shall not exceed a
         Participant's Compensation net of his or her salary deductions or
         reductions (including but not limited to, federal withholding taxes and
         "FICA" taxes deducted pursuant Code Sections 3102 and 3402,
         respectively, withholding of state taxes, and amounts contributed by
         the Company pursuant to a salary reduction agreement which are
         excludable from an Employee's gross income under Code Sections 125,
         132(f)(4), 402(e)(3), 402(h)(1)(B) and 403(b)) as determined by the
         payroll records of the Sponsor or an Affiliated Company.

                  (d) Notwithstanding paragraphs (a) and (b), a Participant who
         makes a hardship withdrawal of Before Tax Deposits pursuant to Section
         8.1(e) shall: (i) be suspended from electing to contribute a percentage
         of his or her Compensation to the Plan as Before Tax Deposits or After
         Tax Deposits for the time period set forth in Section 8.5 and (ii) not
         make Before Tax Deposits for the taxable year immediately following the
         taxable year of such hardship withdrawal that is in excess of the
         applicable dollar limit under Code Section 402(g) for such immediately
         following taxable year less the amount of such Participant's Before Tax
         Deposits for the taxable year in which such Participant made the
         hardship withdrawal.

                  (e) Each Participant who has attained age 50 before the close
         of the Plan Year may elect to contribute a percentage of his or her
         Compensation to the Plan as "catch-up" Before Tax Deposits in
         accordance with, and subject to the limitations of, Code Section 414(v)
         effective for Plan Years beginning on or after January 1, 2002. Such
         catch-up Before Tax Deposits shall not be taken into account under
         subparagraph (a) above or Section 13.1 or any other provision of the
         Plan implementing the contribution limitations of Code Sections 402(g)
         and 415. Moreover, the Plan shall not be treated as failing to satisfy
         the provisions of the plan implementing the requirements of Code
         Section 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416, as
         applicable, by reason of a Participant electing to contribute catch-up
         Before Tax Deposits to the Plan pursuant to this paragraph.

                  (f) The Committee shall prescribe such procedures, either in
         writing or in practice, as it deems necessary or appropriate regarding
         the maximum amount that a Participant may elect to defer and the timing
         of such an election. These procedures shall apply to all individuals
         eligible to make an election described in Section 4.1. The Committee
         may, at any time during a Plan Year, require the suspension, reduction,
         or recharacterization of Before Tax Deposits or the suspension or
         reduction of After Tax Deposits of any Highly Compensated Employee such
         that the limitations of Section 4.2(a) and (b) are satisfied.

         4.3 Limitation on Compensation Deferrals. With respect to each Plan
Year, Compensation Deferral Contributions by a Participant for the Plan Year
shall not exceed the limitation on contributions by or on behalf of Highly
Compensated Participants under Code

                                       18
<PAGE>

Section 401(k), as provided in this Section. In the event that Compensation
Deferral Contributions under the Plan by or on behalf of Highly Compensated
Participants exceed the limitations of this Section for any reason, either such
excess contributions shall be recharacterized as After Tax Deposits or such
excess contributions, adjusted for any income or loss allocable thereto, shall
be returned to the Participant, as provided in Section 4.5.

                  (a) The Compensation Deferral Contributions by Participants
         for a Plan Year shall satisfy the Actual Deferral Percentage Test set
         forth in (i) below, or, to the extent not precluded by applicable
         regulations, the alternative Actual Deferral Percentage test set forth
         in (ii) below:

                           (i) The average Actual Deferral Percentage of Highly
                  Compensated Participants for the Plan Year shall not be more
                  than the prior Plan Year's average Actual Deferral Percentage
                  of Participants who were not Highly Compensated Employees for
                  the prior Plan Year multiplied by 1.25, or

                           (ii) The average Actual Deferral Percentage of Highly
                  Compensated Participants for the Plan Year shall not be more
                  than the prior Plan Year's Actual Deferral Percentage of
                  Participants who were not Highly Compensated Employees for the
                  prior Plan Year multiplied by 2.0, provided that the average
                  Actual Deferral Percentage of Highly Compensated Participants
                  does not exceed the average Actual Deferral Percentage of
                  Participants who were not Highly Compensated Employees for the
                  prior Plan Year by more than two (2) percentage points (or,
                  for Plan Years prior to the 2002 Plan Year, such lesser
                  percentage as the Secretary of the Treasury shall prescribe to
                  prevent the multiple use of the alternative limitation set
                  forth in this Section 4.3(a)(ii) with respect to any Highly
                  Compensated Participants).

                           (iii) For Plan Years prior to the 2002 Plan Year, the
                  Committee shall determine if the use of the alternative test
                  under (ii) above is available under regulations relating to
                  the multiple use of the alternative limitation, as prescribed
                  by the Secretary of the Treasury under Code Section
                  401(m)(2)(A), in the event the test under (i) above cannot be
                  satisfied. If the Committee determines that the alternative
                  test is not available, either the Actual Deferral Percentage
                  or the Actual Contribution Percentage (as defined in Section
                  6.11) for Highly Compensated Participants eligible to
                  participate in the Plan and a plan of the Company or an
                  Affiliated Company that is subject to the limitations of Code
                  Sections 401 (k) and (m) including, if applicable, the Plan,
                  shall be reduced in accordance with, and to the extent
                  necessary to satisfy, the requirements of regulations issued
                  under Code Section 401(m).

                  (b) Notwithstanding any other provisions of the Plan, for the
         purposes of the limitations of this Section 4.3 and Section 4.5 only,
         the following definitions shall apply:

                           (i) "Actual Deferral Percentage" shall mean, with
                  respect to the group of Highly Compensated Participants and
                  the group of all other Participants for a

                                       19
<PAGE>

                  Plan Year, the ratios calculated separately and to the nearest
                  one-hundredth of one percent for each Participant in such
                  group, as follows:

                                    (1) For a Highly Compensated Participant,
                           the ratio of such Participant's Compensation Deferral
                           Contributions for the current Plan Year to such
                           Participant's Compensation for the current Plan Year;
                           provided, however, that the Actual Deferral
                           Percentage of a Highly Compensated Participant with
                           no Compensation Deferral Contributions made on his or
                           her behalf shall be zero.

                                    (2) For any other Participant, the ratio of
                           such Participant's Compensation Deferral
                           Contributions for the preceding Plan Year to such
                           Participant's Compensation for the preceding Plan
                           Year; provided, however, that the Actual Deferral
                           Percentage of a Participant with no Compensation
                           Deferral Contributions made on his or her behalf
                           shall be zero.

                           To the extent determined by the Committee and in
                  accordance with regulations issued by the Secretary of the
                  Treasury, qualified nonelective contributions on behalf of a
                  Participant that satisfy the requirements of Code Section
                  401(k)(3)(c)(ii) may also be taken into account for the
                  purpose of determining the Actual Deferral Percentage of a
                  Participant.

                           (ii) "Highly Compensated Participant" shall mean for
                  any Plan Year any Participant who is a Highly Compensated
                  Employee. A Participant is a Highly Compensated Employee for a
                  particular Plan Year if he or she meets the definition of a
                  Highly Compensated Employee in effect for that Plan Year.
                  Similarly, a Participant is not a Highly Compensated Employee
                  for a particular Plan Year if he or she does not meet the
                  definition of a Highly Compensated Employee in effect for that
                  Plan Year.

                           (iii) "Participant" shall mean any Eligible Employee
                  who satisfied the requirements under Article III during the
                  Plan Year, whether or not such Eligible Employee has elected
                  to contribute to the Plan for such Plan Year.

                           (iv) "Compensation Deferral Contributions" shall mean
                  amounts contributed to the Plan by a Participant as Before Tax
                  Deposits pursuant to Section 4.2(a), including excess Before
                  Tax Deposits (as defined in Section 4.4(a)) of Highly
                  Compensated Participants but excluding (1) excess Before Tax
                  Deposits of all other Participants that arise solely from
                  Before Tax Deposits made under the Plan or plans of the
                  Company, (2) Before Tax Deposits that are taken into account
                  in the Actual Contribution Percentage test (as defined in
                  Section 6.11) provided that the Actual Deferral Percentage
                  test is satisfied both with and without exclusions of these
                  Before Tax Deposits, and (3) any deferrals properly
                  distributed as excess Annual Additions. Compensation Deferral
                  Contributions may include, at the election of the Company, any
                  Company

                                       20
<PAGE>

                  Contributions which meet the requirements for such inclusion
                  under Code Section 401(k)(3)(C).

                           (v) "Compensation" shall mean compensation as
                  described below:

                                    (1) Compensation means compensation
                           determined by the Company in accordance with the
                           requirements of Code Section 414(s) and the
                           regulations thereunder.

                                    (2) For purposes of this Section 4.3,
                           Compensation may, at the Company's election, exclude
                           amounts which are excludable from a Participant's
                           gross income under Code Section 125 (pertaining to
                           cafeteria plans) and Code Section 402(e)(3)
                           (pertaining to 401(k) salary reductions). The Company
                           may change its election provided such change does not
                           discriminate in favor of Highly Compensated
                           Employees.

                                    (3) Compensation taken into account for any
                           Plan Year shall not exceed $200,000 ($150,000 for
                           Plan Years beginning prior to January 1, 2002), as
                           adjusted for cost-of-living increases in accordance
                           with Code Section 401(a)(17)(B). Any cost-of-living
                           adjustments in effect for a calendar year shall apply
                           to the Plan Year beginning with or within such
                           calendar year.

                  (c) In the event the Plan satisfies the requirements of Code
         Sections 401(k), 401(a)(4) or 410(b) only if aggregated with one or
         more other plans which include arrangements under Code Section 401(k),
         then this Section 4.3 shall be applied by determining the Actual
         Deferral Percentages of Participants as if all such plans were a single
         plan, in accordance with regulations prescribed by the Secretary of the
         Treasury under Code Section 401(k). Any adjustments to the Actual
         Deferral Percentage of Participants who are not Highly Compensated
         Employees for the prior year shall be made in accordance with Notice
         98-1 and any superseding guidance. Plans may be aggregated in order to
         satisfy Code Sections 401(k) only if they have the same Plan Year and
         use the same Actual Deferral Percentage testing method.

                  (d) For the purposes of this Section 4.3, the "Actual Deferral
         Percentage" for any Highly Compensated Participant who is a Participant
         under two or more Code Section 401(k) arrangements of the Company shall
         be determined by taking into account the Highly Compensated
         Participant's compensation under each such arrangement and
         contributions under each such arrangement which qualify for treatment
         under Code Section 401(k), in accordance with regulations prescribed by
         the Secretary of the Treasury under Code Section 401(k). If the
         arrangements have different Plan Years, this paragraph shall be applied
         by treating all such arrangements ending with or within the same
         calendar year as a single arrangement. Notwithstanding the foregoing,
         certain plans shall be treated as separate plans if mandatorily
         disaggregated pursuant to regulations under Code Section 401(k).

                                       21
<PAGE>

                  (e) For purposes of the Actual Deferral Percentage test,
         Compensation Deferral Contributions must be made before the last day of
         the twelve-month period immediately following the Plan Year to which
         such contributions relate.

                  (f) The determination and treatment of Compensation Deferral
         Contributions and the Actual Deferral Percentage of any Participant
         shall satisfy such other requirements as may be prescribed by the
         Secretary of the Treasury.

                  (g) The Committee shall keep or cause to have kept such
         records as are necessary to demonstrate that the Plan satisfies the
         requirements of Code Section 401(k) and (m) and the regulations
         thereunder, in accordance with regulations prescribed by the Secretary
         of the Treasury.

         4.4 Provisions for Return of Excess Before Tax Deposits Over $10,500.

                  (a) In the event that due to error or otherwise, an amount of
         a Participant's Compensation in excess of the $10,500 limitation (after
         application of any necessary adjustment) described in Section 4.2(a) is
         deferred under the Plan in any calendar year pursuant to such
         Participant's Compensation deferral agreement (but without regard to
         amounts deferred under any other plan) the excess Before Tax Deposits,
         if any, together with income allocable to such amount shall be returned
         to the Participant (after withholding applicable federal, state and
         local taxes due on such amounts) on or before the first April 15
         following the close of the calendar year in which such excess
         contribution is made; provided, however, if there is a loss allocable
         to the excess Before Tax Deposits, the amount distributed shall be the
         amount of the excess as adjusted to reflect such loss. Any Company
         Contributions allocated to the Participant's Matched Deposits pursuant
         to Section 6.3(b) which are attributable to any excess Before Tax
         Deposits by a Participant, and any income or loss allocable to such
         Company Contributions, shall either be returned to the Company or
         applied to reduce any future Company Contributions by the Company.

                  (b) The amount of income or loss attributable to any excess
         Before Tax Deposits described in paragraph (a) above shall be equal to
         the sum of the following:

                           (i) The income or loss allocable to the Participant's
                  Before Tax Deposits Account for the Plan Year multiplied by a
                  fraction, the numerator of which is the excess Before Tax
                  Deposits as determined under paragraph (a) above, and the
                  denominator of which is the balance of the Participant's
                  Before Tax Deposits Account as of the last day of the Plan
                  Year, without regard to any income or loss allocable to such
                  Account during the Plan Year; and

                           (ii) The amount of allocable income or loss for the
                  Gap Period using the "safe harbor" method set forth in
                  regulations prescribed by the Secretary of the Treasury under
                  Code Section 402(g). Under the "safe harbor" method, such
                  allocable income or loss is equal to 10% of the amount
                  calculated under Section 4.4(b)(i) above, multiplied by the
                  number of calendar months from the

                                       22
<PAGE>

                  last day of the Plan Year until the date of distribution of
                  the Participant's excess Before Tax Deposits. A distribution
                  on or before the 15th of the month is treated as made on the
                  last day of the preceding month, a distribution after the 15th
                  of the month is treated as made on the first day of the next
                  month.

                  (c) For the purpose of this Section 4.4, "Gap Period" shall
         mean the period between the last day of the Plan Year and the date of
         distribution of any excess Before Tax Deposits.

                  (d) In accordance with procedures as may be established,
         either in writing or in practice, by the Committee, not later than
         March 1 of a calendar year a Participant may submit a claim to the
         Committee in which he or she certifies in writing the specific amount
         of his or her Before Tax Deposits for the preceding calendar year
         which, when added to amounts deferred for such calendar year under
         other plans or arrangements described in Code Sections 401(k), 408(k)
         or 403(b), shall cause the Participant to exceed the $10,500 limitation
         as described in Section 4.2(a) for such preceding calendar year.
         Notwithstanding the amount of the Participant's Before Tax Deposits
         under the Plan for such preceding calendar year, the Committee shall
         treat the amount specified by the Participant in his or her claim as a
         Before Tax Deposit in excess of the $10,500 limitation (after
         application of any necessary adjustment) for such calendar year and
         return it to the Participant in accordance with Section 4.4(a) above. A
         Participant is deemed to notify the Committee of any excess Before Tax
         Deposits that arise by taking into account only those Before Tax
         Deposits made to the Plan and other plans of the Company.

                  (e) Any Before Tax Deposits in excess of the $10,500
         limitation (after application of any necessary adjustment) described in
         Section 4.2(a) which are distributed to a Participant in accordance
         with this Section, shall to the extent required by regulations issued
         by the Secretary of the Treasury be treated as Annual Additions under
         Article XIII for the Plan Year for which the excess Before Tax Deposits
         were made, unless such amounts are distributed no later than the first
         April 15th following the close of the Participant's taxable year.

                  (f) The Committee shall not be liable to any Participant (or
         his or her Beneficiary, if applicable) for any losses caused by a
         mistake in calculating the amount of any Participant's excess Before
         Tax Deposits or the income or losses attributable thereto.

         4.5 Provision for Recharacterization or Return of Excess Deferrals by
Highly Compensated Participants. The provisions of this Section 4.5 shall be
applied after implementation of the provisions of Section 4.4.

                  (a) The Committee shall determine in accordance with the
         procedures set forth in Section 4.3, as soon as is reasonably possible
         following the close of each Plan Year, the extent (if any) to which
         deferral treatment under Code Section 401(k) may not be available for
         Compensation Deferral Contributions on behalf of any Highly Compensated
         Participants. If, pursuant to these determinations by the Committee, a
         Highly Compensated Participant's Compensation Deferral Contributions
         are not eligible

                                       23
<PAGE>

         for tax-deferral treatment then, as determined by the Committee, either
         (i) any excess Compensation Deferral Contributions shall be
         recharacterized as After Tax Deposits in accordance with regulations
         issued under Code Section 401(k), or (ii) any excess Compensation
         Deferral Contributions together with any income or loss allocable
         thereto shall be returned to the Highly Compensated Participant (after
         withholding applicable federal, state, and local taxes due on such
         amounts). Such return or recharacterization shall be made within the
         first two and one-half (2-1/2) months following the close of the Plan
         Year for which such excess deferrals were made, provided however, that
         if any excess deferrals and income or loss allocable thereto are, due
         to error or otherwise, not returned by such date, such amounts as are
         required to be returned shall be returned not later than the end of the
         first Plan Year following the Plan Year for which such excess deferrals
         were made.

                  (b) For purposes of satisfying the Actual Deferral Percentage
         test of Section 4.3(a), the amount of any excess Compensation Deferral
         Contributions by a Highly Compensated Participant shall be determined
         by the Committee by application of a leveling method under which the
         Compensation Deferral Contributions of the Highly Compensated
         Participant who has the highest dollar amount of Compensation Deferral
         Contributions for such Plan Year is reduced to the extent required to
         cause such Highly Compensated Participant's Compensation Deferral
         Contributions to equal the Compensation Deferral Contributions of the
         Highly Compensated Participant with the next highest Compensation
         Deferral Contributions; provided, however, if a lesser amount, when
         added to the total dollar amount already returned under this paragraph
         (b), equals the total excess Compensation Deferral Contributions that
         are required to be returned to enable the Plan to satisfy the Actual
         Deferral Percentage test, the lesser amount shall be returned. This
         process shall be repeated until the Plan satisfies the Actual Deferral
         Percentage test.

                  (c) The amount of income or loss attributable to any excess
         Compensation Deferral Contributions by a Highly Compensated Participant
         for a Plan Year shall be equal to the sum of the following:

                           (i) The income or loss allocable to the Highly
                  Compensated Participant's Compensation Deferral Contribution
                  Accounts for the Plan Year multiplied by a fraction, the
                  numerator of which is the excess Compensation Deferral
                  Contribution as determined under Section 4.3, and the
                  denominator of which is the balance of the Highly Compensated
                  Participant's Compensation Deferral Contribution Accounts as
                  of the last day of the Plan Year without regard to any income
                  or loss allocable to such Accounts during the Plan Year; and

                           (ii) The amount of allocable income or loss for the
                  Gap Period using the "safe harbor" method set forth in the
                  regulations prescribed by the Secretary of the Treasury under
                  Code Section 401(k). Under the "safe harbor" method, such
                  allocable income or loss is equal to 10% of the amount
                  calculated under Section 4.5(c)(i) above, multiplied by the
                  number of calendar months from the last day of the Plan Year
                  until the date of distribution of the Participant's excess

                                       24
<PAGE>

                  Compensation Deferral Contribution. A distribution on or
                  before the 15th of the month is treated as made on the last
                  day of the preceding month, a distribution after the 15th of
                  the month is treated as made on the first day of the next
                  month.

                  (d) For the purpose of this Section 4.5 the following shall
         apply:

                           (i) "Compensation Deferral Contribution Accounts"
                  shall mean the Participant's Before Tax Deposits Account and
                  shall mean any other accounts of the Participant to which
                  Company Contributions has been allocated where such Company
                  Contributions has been included as Compensation Deferral
                  Contributions pursuant to Section 4.3(b)(iv).

                           (ii) "Gap Period" shall mean the period beginning
                  with the last day of the Plan Year and the date of
                  distribution of any excess Compensation Deferral
                  Contributions.

                  (e) For purposes of this Section, the amount of Compensation
         Deferral Contributions by a Participant who is not a Highly Compensated
         Participant for a Plan Year shall be reduced by any Before Tax Deposits
         which have been distributed to the Participant under Section 4.4, in
         accordance with regulations prescribed by the Secretary of the Treasury
         under Code Section 401(k).

                  (f) In the event that the Committee determines that an amount
         to be deferred pursuant to the Compensation deferral agreement provided
         in Section 4.1 would cause Company Contributions under this and any
         other tax-qualified retirement plan maintained by the Company to exceed
         the applicable deduction limitations contained in Code Section 404, or
         to exceed the maximum Annual Addition determined in accordance with
         Article XIII, the Committee may treat such amount in accordance with
         the rules set forth above in Section 4.5(a).

                  (g) The Committee shall not be liable to any Participant (or
         his or her Beneficiary, if applicable) for any losses caused by a
         mistake in calculating the amount of any Participant's excess
         Compensation Deferral Contribution or the income or losses attributable
         thereto.

                  (h) To the extent required by regulations under Code Sections
         401(k) or 415, any excess Compensation Deferral Contributions with
         respect to a Highly Compensated Participant shall be treated as Annual
         Additions under Article XIII for the Plan Year for which the excess
         Compensation Deferral Contributions were made, notwithstanding the
         distribution of such excess in accordance with the provisions of this
         Section.

         4.6 Termination, Change in Rate, or Resumption of Deferrals.

                  (a) A Participant may, at any time, terminate, change the
         rate, or resume Before Tax Deposits or After Tax Deposits in 1%
         increments.

                                       25
<PAGE>

                  (b) The right of a Participant to make Deposits shall cease
         during any Period of Severance.

                  (c) Any termination, change in rate or resumption of Before
         Tax Deposits or After Tax Deposits made by a Participant pursuant to
         paragraph (a) above shall be effective as of the following pay period
         or, if later, as soon as administratively feasible.

         4.7 Character of Deposits. Before Tax Deposits shall be treated as
Company Contributions for purposes of Code Sections 401(k) and 414(h). After Tax
Deposits shall not constitute "qualified voluntary employee contributions" under
Code Section 219 (relating to the deductibility of those amounts).

         4.8 Rollover Contributions.

                  (a) Pursuant to procedures as the Committee may prescribe
         (either in writing or practice), an Eligible Employee may make a Direct
         Rollover Contribution, a Participant Rollover Contribution, or an IRA
         Rollover Contribution to the Plan.

                  (b) A "Direct Rollover Contribution" shall mean a contribution
         by an Eligible Employee which is a direct rollover of an Eligible
         Rollover Distribution from:

                           (i) A qualified plan described in Code Section 401(a)
                  or 403(a) including any portion attributable to after-tax
                  employee contributions which shall be separately accounted for
                  under the Plan;

                           (ii) An annuity contract described in Code Section
                  403(b) but excluding any portion attributable to after-tax
                  employee contributions; or

                           (iii) An eligible plan under Code Section 457(b)
                  which is maintained by a state, political subdivision of a
                  state, or any agency or instrumentality of a state or
                  political subdivision of a state.

                  Notwithstanding the foregoing, a Direct Rollover Contribution
         by an Eligible Employee made prior to January 1, 2002 shall be limited
         to a direct rollover of an Eligible Rollover Distribution from a
         qualified plan described in Code Section 401(a) or 403(a) or a direct
         trustee-to-trustee transfer of assets between two or more such
         qualified plans.

                  (c) A "Participant Rollover Contribution" shall mean a
         contribution by an Eligible Employee which is an Eligible Rollover
         Distribution (excluding any portion attributable to after-tax employee
         contributions) received by the Committee not later than 60 days after
         such distribution was received by the Eligible Employee; provided, such
         Eligible Rollover Distribution is from:

                           (i) A qualified plan described in Code Section 401(a)
                  or 403(a);

                                       26
<PAGE>

                           (ii) An annuity contract described in Code Section
                  403(b); or

                           (iii) An eligible plan under Code Section 457(b)
                  which is maintained by a state, political subdivision of a
                  state, or any agency or instrumentality of a state or
                  political subdivision of a state.

                  Notwithstanding the foregoing, a Participant Rollover
         Contribution by an Eligible Employee made prior to January 1, 2002
         shall be limited to an Eligible Rollover Distribution from a qualified
         plan described in Code Section 401(a) or 403(a).

                  (d) An "IRA Rollover Contribution" shall mean a contribution
         by an Eligible Employee which is a distribution (excluding any portion
         attributable to after-tax employee contributions) from an individual
         retirement account or annuity described in Code Section 408(a) or
         408(b) received by the Committee not later than 60 days after such
         distribution was received by the Eligible Employee or received by the
         Plan through a direct trustee-to-trustee transfer from such individual
         retirement arrangement or annuity. Notwithstanding the foregoing, an
         IRA Rollover Contribution made prior to January 1, 2002 shall be
         limited to a distribution from an individual retirement arrangement or
         annuity that was created solely from a distribution or distributions
         from a qualified plan described in Code Section 401(a) or 403(a).

                  (e) Pursuant to procedures as the Committee may prescribe
         (either in writing or practice), a former Eligible Employee who
         commenced participation in the Plan pursuant to Article III may make a
         Rollover Contribution to the Plan from his or her account in the
         Allergan, Inc. Employee Stock Ownership Plan so long as he or she
         retains rights under the Plan.

                  (f) A Rollover Contribution shall not be considered a
         Participant Deposit.

                  (g) An Eligible Employee's Rollover Contribution made pursuant
         the rules of this Section 4.8 shall be held in a separate Rollover
         Account for the Eligible Employee. A Rollover Account shall not share
         in any allocations of Company Contributions or Forfeitures under
         Section 6.3.

                                       27
<PAGE>

                                   ARTICLE V
                      TRUST FUND AND COMPANY CONTRIBUTIONS

         5.1 General. All contributions made under the Plan and investments made
and property of any kind or character acquired with any such funds or otherwise
contributed, and all income, profits, and proceeds derived therefrom, shall be
held in Trust and shall be held and administered by the Trustee in accordance
with the provisions of the Plan and Trust Agreement.

         5.2 Single Trust. Assets of the Trust shall be held in a separate fund
which shall consist of the Trust Fund. Individual Participant interests in the
Trust Fund shall be reflected in the Accounts maintained for the Participants.
Notwithstanding the foregoing, the Trust Fund shall be treated as a single trust
for purposes of investment and administration, and nothing contained herein
shall require a physical segregation of assets for any fund or for any Account
maintained under the Plan.

         5.3 Company Contributions. Subject to the limitations of Article XIII,
the suspension provisions of Section 8.1 and to the extent that the Company has
current or accumulated profits, the Company shall contribute to the Plan in
accordance with the following rules:

                  (a) The Company shall contribute and allocate Matching
         Contributions on a pay period basis which, when added to Forfeitures
         available after application of Section 6.3, is equal to:

                           (i) 75% of each Participant's Matched Deposits for
                  the pay period which are not in excess of two percent (2%) of
                  such Participant's Compensation.

                           (ii) 50% of each Participant's Matched Deposits for
                  the pay period which are in excess of two percent (2%) of such
                  Participant's Compensation but not in excess of three percent
                  (3%) of such Participant's Compensation.

                           (iii) 25% of each Participant's Matched Deposits for
                  the pay period which are in excess of three percent (3%) of
                  such Participant's Compensation.

                  The Board of Directors, acting upon the advice and direction
         of the Committee, may authorize and direct that Matching Contributions
         (expressed as a percentage of Participants' Matched Deposits as set
         forth above) be changed from time to time from a minimum of 0% to a
         maximum of 100%.

                  (b) As of a date not later than the last day of each Plan
         Year, the Company shall contribute and allocate on behalf of each
         "Eligible Participant," additional Matching Contributions which, when
         added to Forfeitures available after application of Section 6.3, is
         equal to the difference, if any, between the amount of each Eligible
         Participant's Matching Contributions determined under paragraph (a) and
         the amount of such Participant's Matching Contributions if paragraph
         (a) was applied on a Plan Year basis instead of a pay period basis. For
         the purposes of this paragraph (b), the term "Eligible

                                       28
<PAGE>

         Participant" shall include all Participants who are Eligible Employees
         on the first and last business day of such Plan Year and who did not
         incur a Severance during the Plan Year.

                  (c) The Company shall contribute amounts sufficient to satisfy
         the reinstatement requirements of Section 8.7 to the extent Forfeitures
         are insufficient to satisfy the reinstatement requirement of Section
         8.7 and any plan expense requirements of Section 9.11 if so directed
         and at such times as may be determined by the Committee.

         5.4 Form of Company Contributions. The Company's contributions to the
Trust Fund shall be paid in cash, property, or Company Stock as the Company may
from time to time determine.

         5.5 Investment of Trust Assets.

                  (a) The manner in which assets of the Trust will be invested
         shall be chosen by the Committee at its discretion, although the
         Committee may delegate the management to one or more Investment
         Managers appointed pursuant to Section 5.15. Notwithstanding the
         foregoing, Matching Contributions shall be invested in Company Stock
         except to the extent invested pursuant to Section 5.5(e). Employer
         contributions made under the SmithKline Beckman Corporation Savings and
         Investment Plan and transferred to the Plan shall be invested at the
         discretion of the Committee through June 30, 2000.

                  (b) The Committee may establish separate investment funds
         under the Plan, with each fund representing an investment alternative
         available to Participants for the investment of their Accounts as
         provided in Section 5.5(c) and (d) below. Each Participant shall have a
         subaccount under the Plan corresponding to the Participant's interest
         which is allocated to each investment fund. Each such subaccount may be
         valued separately. The Committee may, at its discretion, establish
         alternative investment funds or eliminate any previously established
         funds, including but not limited to the following types of investment
         funds:

                           (i) The Interest Income Fund investing in group
                  annuity contracts with major insurance companies.

                           (ii) The Balanced Fund investing in common stocks,
                  bonds, government securities and similar types of investments.

                           (iii) The Equity Fund investing in a mutual fund
                  which may invest in equity securities, bonds, preferred
                  stocks, and interest-bearing cash investments.

                           (iv) The Company Stock Fund consisting exclusively of
                  Company Stock.

                  Notwithstanding the establishment of separate investment
         funds, up to one hundred percent (100%) of the assets of the Plan may
         be invested in Company Stock.

                                       29
<PAGE>

                  (c) A Participant may elect the investment fund to which his
         or her Before Tax Deposits or After Tax Deposits are invested under the
         Plan or may change such elections at any time; provided, however, that
         any allocations among the investment funds shall be made in 1%
         increments. Any change in investment funds shall be effective as soon
         as administratively feasible. Any investment elections shall be limited
         to the investment funds currently offered by the Committee and
         currently available to Participants pursuant to paragraph (b) above. A
         Participant shall effect such an election by properly completing and
         submitting the form authorized by the Committee for this purpose.

                  (d) A Participant may elect at any time to transfer amounts
         accumulated in his or her Before Tax Deposits Account, After Tax
         Deposits Account, or Rollover Account among any of the investment funds
         currently offered by the Committee and currently available to the
         Participant, provided, however, the total amount transferred shall be
         in increments of 1% of the amount accrued in such accounts. As of July
         1, 2000, the foregoing investment discretion shall be permitted for
         amounts attributable to employer contributions made under the
         SmithKline Beckman Corporation Savings and Investment Plan and
         transferred to the Plan. A Participant shall effect such transfer in
         the manner authorized by the Committee.

                  (e) Notwithstanding the requirement of paragraph (a) above
         that Matching Contributions be invested in the Company Stock Fund, any
         Participant on or after the date he or she attains age 55 may elect
         that (i) all amounts allocated to his or her Company Contribution
         Account which are held in the Company Stock Fund and (ii) any future
         Matching Contributions that may be allocated to his or her Company
         Contribution Account, be invested in any of the investment funds
         currently offered by the Committee and currently available to the
         Participant. A Participant shall make any election, and may change any
         election, at such times and in accordance with the requirements imposed
         by Sections 5.5(c) and (d) above.

                  (f) Amounts invested in any one of the investment funds shall
         not share in gains and losses experienced by any other fund.

                  (g) Notwithstanding the establishment of separate investment
         funds within the Trust, the Trust shall at all times constitute a
         single trust.

                  (h) Notwithstanding anything to the contrary in this Section
         5.5 or Section 4.1 or Section 8.1, the following additional transfer
         and withdrawal restrictions shall apply to all Participants who are
         Insiders. For the purpose of this Section 5.5, the term "Insider" shall
         mean any Participant who is directly or indirectly the beneficial owner
         of more than 10% of any class of any equity security (other than an
         exempted security) of the Sponsor (or the Company) which is registered
         pursuant to Section 12 of the Securities Exchange Act of 1934 (the
         "Exchange Act") or who is a "director" or an "officer" of the Sponsor
         or the Company as those terms are interpreted for the purpose of
         determining persons subject to Section 16 of the Exchange Act.

                                       30
<PAGE>

                           (i) Any Insider who transfers amounts invested in the
                  Company Stock Fund out of such fund and into another fund or
                  withdraws cash in a transaction that results in the
                  liquidation of amounts in the Company Stock Fund (pursuant to
                  Sections 8.1 or 8.13), may not for a period of six months
                  following the Participant's election to so transfer funds,
                  withdraw cash or take a loan, as the case may be, make an
                  election to transfer amounts from another fund into the
                  Company Stock Fund.

                           (ii) Any Insider who transfers amounts invested in a
                  fund other than the Company Stock Fund into the Company Stock
                  Fund, may not for a period of six months following the
                  Participant's election to so transfer funds make an election
                  to (1) transfer amounts from the Company Stock Fund into
                  another fund, (2) withdraw cash or take a loan in a
                  transaction that results in the liquidation of amounts in the
                  Company Stock Fund or (3) utilize the diversification rule of
                  Section 5.12 of the Allergan Inc. Employee Stock Ownership
                  Plan or the provision of any Company plan covered by Rule
                  16b-3 (promulgated pursuant to the Exchange Act) then in
                  existence that would result in the transfer out of a Company
                  equity securities fund.

                  (i) It is intended that to the extent a Participant may direct
         the investment of his or her Accounts under the Plan that the Plan
         constitute a plan described in Section 404(c) of ERISA and the
         regulations thereunder, and neither the Company, Committee, nor any
         fiduciary with respect to the Plan who is employed by the Company shall
         be liable for investment losses sustained by any Participant or
         Beneficiary as a direct and necessary result of the investment
         instructions given by such Participant or Beneficiary. Such fiduciaries
         set forth in the preceding sentence shall be under no duty to question
         the investment direction of the Participant or Beneficiary or to advise
         a Participant or Beneficiary as to the manner in which his or her
         Accounts is to be invested. The fact that an investment option is
         offered shall not be construed to be a recommendation of investment.

         5.6 Irrevocability. The Company shall have no right or title to, nor
interest in, the contributions made to the Trust Fund, and no part of the Trust
Fund shall revert to the Company except that on or after the original Effective
Date funds may be returned to the Company as follows:

                  (a) In the case of a Company Contribution which is made by a
         mistake of fact, at the Company's written request that contribution may
         be returned to the Company within one (1) year after it is made.

                  (b) All Company Contributions contributed to the Trust are
         hereby conditioned upon the Plan satisfying all of the requirements of
         Code Section 401(a). If the Plan does not qualify, at the Company's
         written election the Plan may be revoked and all such contributions may
         be returned to the Company within one year after the date of Internal
         Revenue Service denial of the qualification of the Plan. Upon such a
         revocation

                                       31
<PAGE>

         the affairs of the Plan and Trust shall be terminated and wound up as
         the Company shall direct.

                  (c) All Company Contributions to the Plan are conditioned upon
         the deductibility of those contributions under Code Section 404. To the
         extent a deduction is disallowed, at the Company's written request the
         contribution may be returned to the Company within one year after the
         disallowance.

                  (d) In the event that the Plan is terminated when there are
         amounts remaining in the Suspense Account, the excess funds may revert
         to the Company to the extent provided in Section 13.6.

         5.7 Company, Committee and Trustee Not Responsible for Adequacy of
Trust Fund.

                  (a) The Company, Committee, and the Trustee shall not be
         liable or responsible for the adequacy of the Trust Fund to meet and
         discharge any or all payments and liabilities hereunder. All Plan
         benefits will be paid only from the Trust assets, and neither the
         Company, the Committee nor the Trustee shall have any duty or liability
         to furnish the Trust with any funds, securities or other assets except
         as expressly provided in the Plan.

                  (b) Except as required under the Plan or Trust or under Part 4
         of Subtitle B of Title I of ERISA, the Company shall not be responsible
         for any decision, act or omission of the Trustee, the Committee, or the
         Investment Manager (if applicable), and shall not be responsible for
         the application of any moneys, securities, investments or other
         property paid or delivered to the Trustee.

         5.8 Certain Offers for Company Stock. Notwithstanding any other
provision of the Plan to the contrary, in the event an offer shall be received
by the Trustee (including but not limited to a tender offer or exchange offer
within the meaning of the Securities Exchange Act of 1934, as from time to time
amended and in effect) to acquire any or all shares of Company Stock held by the
Trust (an "Offer"), the discretion or authority to sell, exchange or transfer
any of such shares of Company Stock shall be determined in accordance with the
following rules:

                  (a) The Trustee shall have no discretion or authority to sell,
         exchange or transfer any Company Stock pursuant to an Offer except to
         the extent, and only to the extent, that the Trustee is timely directed
         to do so in writing by each Participant with respect to shares of
         Company Stock that are allocated to such Participant's Accounts.

                  (b) To the extent there remains any residual fiduciary
         responsibility with respect to Company Stock pursuant to an Offer after
         application of paragraph (a) above, the Trustee shall sell, exchange or
         transfer such Company Stock as directed by the Committee or as directed
         by an independent fiduciary if duly appointed by the Sponsor. To the
         extent the Committee or an independent fiduciary is required to
         exercise any residual fiduciary responsibility with respect to an
         Offer, the Committee or independent fiduciary shall take into account
         in exercising its fiduciary judgment, unless it is clearly

                                       32
<PAGE>

         imprudent to do so, directions timely received from Participants, as
         such directions are most indicative of what action is in the best
         interests of Participants. Further, the Committee or independent
         fiduciary, in addition to taking into consideration any relevant
         financial factors bearing on any such decision, shall take into
         consideration any relevant non-financial factors, including, but not
         limited to, the continuing job security of Participants as employees of
         the Sponsor or any Affiliated Company, conditions of employment,
         employment opportunities and other similar matters, and the prospect of
         the Participants and prospective Participants for future benefits under
         the Plan.

                  (c) Upon timely receipt of such instructions, the Trustee
         shall, subject to the provisions of paragraphs (e) and (o) of this
         Section, sell, exchange or transfer pursuant to such Offer, only such
         shares as to which such instructions were given. The Committee shall
         use its best efforts to communicate or cause to be communicated to each
         Participant the consequences of any failure to provide timely
         instructions to the Trustee.

                  (d) In the event, under the terms of an Offer or otherwise,
         any shares of Company Stock tendered for sale, exchange or transfer
         pursuant to such Offer may be withdrawn from such Offer, the Trustee
         shall follow such instructions respecting the withdrawal of such shares
         from such Offer in the same manner and the same proportion as shall be
         timely received by the Trustee from the Participants entitled under
         this paragraph (a) to give instructions as to the sale, exchange or
         transfer of shares pursuant to such Offer.

                  (e) In the event that an Offer for fewer than all of the
         shares of Company Stock held by the Trustee in the Trust shall be
         received by the Trustee, each Participant shall be entitled to direct
         the Trustee as to the acceptance or rejection of such Offer (as set
         forth herein) with respect to the largest portion of such Company Stock
         as may be possible given the total number or amount of shares of
         Company Stock the Plan may sell, exchange or transfer pursuant to the
         Offer based upon the instructions received by the Trustee from all
         other Participants who shall timely instruct the Trustee pursuant to
         this paragraph to sell, exchange or transfer such shares pursuant to
         such Offer, each on a pro rata basis in accordance with the maximum
         number of shares each such Participant would have been permitted to
         direct under paragraph (a) had the Offer been for all shares of Company
         Stock held in the Trust.

                  (f) In the event an Offer is received by the Trustee and
         instructions have been solicited from Participants regarding such
         Offer, and prior to termination of such Offer, another Offer is
         received by the Trustee for the Company Stock subject to the first
         Offer, the Trustee shall inform the Committee of such other Offer and
         the Committee shall use its best efforts under the circumstances to
         solicit instructions from the Participants (i) with respect to
         securities tendered for sale, exchange or transfer pursuant to the
         first Offer, whether to withdraw such tender, if possible, and, if
         withdrawn, whether to tender any Company Stock so withdrawn for sale,
         exchange or transfer pursuant to the second Offer and (ii) with respect
         to Company Stock not tendered for sale, exchange or transfer pursuant
         to the first Offer, whether to tender or not to tender such Company
         Stock for sale, exchange or transfer pursuant to the second Offer. The
         Trustee shall follow all such

                                       33
<PAGE>

         instructions received in a timely manner from Participants in the same
         manner and in the same proportion as provided in paragraph (a) of this
         Section. With respect to any further Offer for any Company Stock
         received by the Trustee and subject to any earlier Offer (including
         successive Offers from one or more existing offers), the Trustee shall
         act in the same manner as described above.

                  (g) With respect to any Offer received by the Trustee, the
         Trustee shall inform the Sponsor of such Offer and the Sponsor shall
         distribute, at its expense, copies of all relevant material including
         but not limited to material filed with the Securities and Exchange
         Commission with such Offer or regarding such Offer, which shall seek
         confidential written instructions from each Participant who is entitled
         to respond to such Offer pursuant to paragraph (a). The identities of
         Participants, the amount of Company Stock allocated to their Accounts,
         and the Compensation of each Participant shall be determined from the
         list of Participants delivered to the Sponsor by the Committee which
         shall take all reasonable steps necessary to provide the Sponsor with
         the latest possible information.

                  (h) The Sponsor shall distribute and/or make available to each
         Participant who is entitled to respond to an Offer pursuant to
         paragraph (a), an instruction form to be used by each such Participant
         who wishes to instruct the Trustee. The instruction form shall state
         that (i) if the Participant fails to return an instruction form to the
         Trustee by the indicated deadline, the Company Stock with respect to
         which he or she is entitled to give instructions shall not be sold,
         exchanged or transferred pursuant to such Offer, (ii) the Participant
         shall be a named fiduciary (as described in paragraph (m) below) with
         respect to all shares of Company Stock for which he or she is entitled
         to give instructions, and (iii) the Company acknowledges and agrees to
         honor the confidentiality of the Participant's instructions to the
         Trustee.

                  (i) Each Participant may choose to instruct the Trustee in one
         of the following two ways: (i) not to sell, exchange or transfer any
         shares of Company Stock for which he or she is entitled to give
         instructions, or (ii) to sell, exchange or transfer all Company Stock
         for which he or she is entitled to give instructions. The Sponsor shall
         follow up with additional mailings and postings of bulletins, as
         reasonable under the time constraints then prevailing, to obtain
         instructions from Participants not otherwise responding to such
         requests for instructions. Subject to paragraph (e), the Trustee shall
         then sell, exchange or transfer shares according to instructions from
         Participants, except that shares for which no instructions are received
         shall not be sold, exchanged or transferred unless directed otherwise
         as provided in paragraph (b) above.

                  (j) The Sponsor shall furnish former Participants who have
         received distributions of Company Stock so recently as to not be
         shareholders of record with the information given to Participants
         pursuant to paragraphs (g), (h) and (i) of this Section. The Trustee
         shall then sell, exchange or transfer shares according to instructions
         from such former Participants, except that shares for which no
         instructions are received shall not be sold, exchanged or transferred.

                                       34
<PAGE>

                  (k) Neither the Company, the Committee nor the Trustee shall
         express any opinion or give any advice or recommendation to any
         Participant concerning the Offer, nor shall they have any authority or
         responsibility to do so.

                  (l) The Trustee shall not reveal or release a Participant's
         instructions to the Company, its officers, directors, employees, or
         representatives. If some but not all Company Stock held by the Trust is
         sold, exchanged, or transferred pursuant to an Offer, the Company, with
         the Trustee's cooperation, shall take such action as is necessary to
         maintain the confidentiality of Participant's records including,
         without limitation, establishment of a security system and procedures
         which restrict access to Participant records and retention of an
         independent agent to maintain such records. If an independent record
         keeping agent is retained, such agent must agree, as a condition of its
         retention by the Sponsor, not to disclose the composition of any
         Participant Accounts to the Company, its officers, directors,
         employees, or representatives. The Company acknowledges and agrees to
         honor the confidentiality of Participants' instructions to the Trustee.

                  (m) Each Participant shall be a named fiduciary (as that term
         is defined in Section 402(a)(2) of ERISA) with respect to Company Stock
         allocated to his or her Accounts under the Plan solely for purposes of
         exercising the rights of a shareholder with respect to an Offer
         pursuant to this Section 5.8 and voting rights pursuant to Section 5.9.

                  (n) To the extent that an Offer results in the sale of Company
         Stock in the Trust, the Committee or the Participants, if so permitted
         under the terms of the Plan, shall instruct the Trustee as to the
         investment of the proceeds of such sale.

                  (o) In the event a court of competent jurisdiction shall issue
         to the Plan, the Committee, the Sponsor or the Trustee an opinion or
         order, which shall, in the opinion of counsel to the Committee, the
         Sponsor or the Trustee, invalidate, in all circumstances or in any
         particular circumstances, any provision or provisions of this Section
         regarding the determination to be made as to whether or not Company
         Stock held by the Trustee shall be sold, exchanged or transferred
         pursuant to an Offer or cause any such provision or provisions to
         conflict with securities laws, then, upon notice thereof to the
         Committee, the Sponsor or the Trustee, as the case may be, such invalid
         or conflicting provisions of this Section shall be given no further
         force or effect. In such circumstances, the Trustee shall continue to
         follow instructions received from Participants, to the extent such
         instructions have not been invalidated by such order or opinion. To the
         extent the Trustee is required by such opinion or order to exercise any
         residual fiduciary responsibility with respect to such Offer, the
         Sponsor shall appoint an independent fiduciary who shall exercise such
         residual fiduciary responsibility as provided in paragraph (b) above
         and shall direct the Trustee as to whether or not Company Stock held by
         the Trustee shall be sold, exchanged or transferred pursuant to such
         Offer.

         5.9 Voting of Company Stock. Notwithstanding any other provision of the
Plan to the contrary, the Trustee shall have no discretion or authority to vote
Company Stock held in the Trust on any matter presented for a vote by the
stockholders of the Company except in

                                       35
<PAGE>

accordance with timely directions received by the Trustee from either the
Committee or Participants, depending on who has the right to direct the voting
of such Company Stock as provided in the following provisions of this Section
5.9.

                  (a) All Company Stock held in the Trust Fund shall be voted by
         the Trustee as the Committee directs in its absolute discretion, except
         as provided in this Section 5.9(a).

                           (i) If the Sponsor has a registration-type class of
                  securities (as defined in Code Section 409(e)(4)), then with
                  respect to all corporate matters, each Participant shall be
                  entitled to direct the Trustee as to the voting of all Company
                  Stock allocated and credited to his or her Accounts.

                           (ii) If the Sponsor does not have a registration-type
                  class of securities, then only with respect to such matters as
                  the approval or disapproval of any corporate merger or
                  consolidation, recapitalization, reclassification,
                  liquidation, dissolution, sale of substantially all assets of
                  trade or business, or such similar transactions as may be
                  prescribed in Code Section 409(e)(4) and the regulations
                  thereunder, each Participant shall be entitled to direct the
                  Trustee as to the voting of all Company Stock allocated and
                  credited to his or her Accounts.

                  (b) To the extent there remains any residual fiduciary
         responsibility with respect to the voting of Company Stock after
         application of paragraph (a) above, the Trustee shall vote such Company
         Stock as directed by the Committee or as directed by an independent
         fiduciary if duly appointed by the Sponsor. To the extent the Committee
         or an independent fiduciary is required to exercise any residual
         fiduciary responsibility with respect to the voting of Company Stock,
         the Committee or independent fiduciary shall take into account in
         exercising its fiduciary judgment, unless it is clearly imprudent to do
         so, directions timely received from Participants, as such directions
         are most indicative of what action is in the best interests of
         Participants. Further, the Committee or independent fiduciary, in
         addition to taking into consideration any relevant financial factors
         bearing on any such decision, shall take into consideration any
         relevant non-financial factors, including, but not limited to, the
         continuing job security of Participants as employees of the Sponsor or
         any Affiliated Company, conditions of employment, employment
         opportunities and other similar matters, and the prospect of the
         Participants and prospective Participants for future benefits under the
         Plan.

                  (c) All Participants entitled to direct such voting shall be
         notified by the Sponsor, pursuant to its normal communications with
         shareholders, of each occasion for the exercise of such voting rights
         within a reasonable time before such rights are to be exercised. Such
         notification shall include all information distributed to shareholders
         either by the Sponsor or any other party regarding the exercise of such
         rights. Such Participants shall be so entitled to direct the voting of
         fractional shares (or fractional interests in shares), provided,
         however, that the Trustee may, to the extent possible, vote the
         combined fractional shares (or fractional interests in shares) so as to
         reflect the aggregate direction of all Participants giving directions
         with respect to fractional shares (or fractional interests in shares).
         To the extent that a Participant shall fail to direct the

                                       36
<PAGE>

         Trustee as to the exercise of voting rights arising under any Company
         Stock credited to his or her Accounts, such Company Stock shall not be
         voted unless the Trustee is directed otherwise as provided in paragraph
         (b) above. The Trustee shall maintain confidentiality with respect to
         the voting directions of all Participants.

                  (d) Each Participant shall be a named fiduciary (as that term
         is defined in Section 402(a)(2) of ERISA) with respect to Company Stock
         for which he or she has the right to direct the voting under the Plan
         but solely for the purpose of exercising voting rights pursuant to this
         Section 5.9 or certain Offers pursuant to Section 5.8.

                  (e) In the event a court of competent jurisdiction shall issue
         an opinion or order to the Plan, the Committee, the Sponsor or the
         Trustee, which shall, in the opinion of counsel to the Committee, the
         Sponsor or the Trustee, invalidate under ERISA, in all circumstances or
         in any particular circumstances, any provision or provisions of this
         Section regarding the manner in which Company Stock held in the Trust
         shall be voted or cause any such provision or provisions to conflict
         with ERISA, then, upon notice thereof to the Committee, the Sponsor or
         the Trustee, as the case may be, such invalid or conflicting provisions
         of this Section shall be given no further force or effect. In such
         circumstances the Trustee shall continue to follow instructions
         received from Participants, to the extent such instructions have not
         been invalidated by such order or opinion. To the extent the Trustee is
         required by such opinion or order to exercise any residual fiduciary
         responsibility with respect to voting, the Sponsor shall appoint an
         independent fiduciary who shall exercise such residual fiduciary
         responsibility as provided in paragraph (b) above and shall direct the
         Trustee as to the manner in which Company Stock held by the Trustee
         shall be voted.

         5.10 Securities Law Limitation. Neither the Committee nor the Trustee
shall be required to engage in any transaction, including without limitation,
directing the purchase or sale of Company Stock, which either determines in its
sole discretion might tend to subject itself, its members, the Plan, the
Company, or any Participant or Beneficiary to a liability under federal or state
securities laws.

         5.11 Distributions. Money and property of the Trust shall be paid out,
disbursed, or applied by the Trustee for the benefit of Participants and
Beneficiaries under the Plan in accordance with directions received by the
Trustee from the Committee. Upon direction of the Committee, the Trustee may pay
money or deliver property from the Trust for any purpose authorized under the
Plan. The Trustee shall be fully protected in paying out money or delivering
property from the Trust from time to time upon written order of the Committee
and shall not be liable for the application of such money or property by the
Committee.

         The Trustee shall not be required to determine or to make any
investigation to determine the identity or mailing address of any person
entitled to benefits hereunder and shall have discharged its obligation in that
respect when it shall have sent checks or other property by first-class mail to
such persons at their respective addresses as may be certified to it by the
Committee.

                                       37
<PAGE>

         5.12 Taxes. If the whole or any part of the Trust, or the proceeds
thereof, shall become liable for the payment of any estate, inheritance, income
or other tax, charge, or assessment which the Trustee shall be required to pay,
the Trustee shall have full power and authority to pay such tax, charge, or
assessment out of any moneys or other property in its hands for the account of
the person whose interests hereunder are so liable, but at least ten (10) days
prior to making any such payment, the Trustee shall mail notice to the Committee
of its intention to make such payment. Prior to making any transfers or
distributions of any of the Trust, the Trustee may require such releases or
other documents from any lawful taxing authority as it shall deem necessary.

         5.13 Trustee Records to be Maintained. The Trustee shall keep accurate
and detailed accounts of all investments, receipts, disbursements, and other
transactions hereunder, and all accounts, books, and records relating thereto
shall be open to inspection and audit at all reasonable times by any person
designated by the Company (subject to the provisions of Section 5.8(k)).

         5.14 Annual Report of Trustee. Promptly following the close of each
Plan Year (or such other period as may be agreed upon between the Trustee and
Committee), or promptly after receipt of a written request from the Company, the
Trustee shall prepare for the Company a written account which will enable the
Company to satisfy the annual financial reporting requirements of ERISA, and
which will set forth among other things all investments, receipts,
disbursements, and other transactions effected by the Trustee during such Plan
Year or during the period from the close of the last Plan Year to the date of
such request. Such account shall also describe all securities and other
investments purchased and sold during the period to which it refers, the cost of
acquisition or net proceeds of sale, the securities and investments held as of
the date of such account, and the cost of each item thereof as carried on the
books of the Trustee. All accounts so filed shall be open to inspection during
business hours by the Company, the Committee, and by Participants and
Beneficiaries of the Plan (subject to the provisions of Section 5.8(k)).

         5.15 Appointment of Investment Manager. From time to time the
Committee, in accordance with Section 9.6 hereof, may appoint one or more
Investment Managers who shall have investment management and control over assets
of the Trust not invested or to be invested in Company Stock. The Committee
shall notify the Trustee of such assets of the appointment of the Investment
Manager. In the event more than one Investment Manager is appointed, the
Committee shall determine which assets shall be subject to management and
control by each Investment Manager and shall also determine the proportion in
which funds withdrawn or disbursed shall be charged against the assets subject
to each Investment Manager's management and control. As shall be provided in any
contract between an Investment Manager and the Committee, such Investment
Manager shall hold a revocable proxy with respect to all securities which are
held under the management of such Investment Manager pursuant to such contract
(except for Company Stock), and such Investment Manager shall report the voting
of all securities subject to such proxy on an annual basis to the Committee.

                                       38
<PAGE>

                                   ARTICLE VI
                            ACCOUNTS AND ALLOCATIONS

         6.1 Participants' Accounts. In order to account for the allocated
interest of each Participant in the Trust Fund, there shall be established and
maintained for each Participant (making such form of contribution) a Before Tax
Deposits Account, an After Tax Deposits Account, a Company Contribution Account,
and a Rollover Account.

         6.2 Allocation of Amounts Contributed by Participants. All After Tax
Deposits and Before Tax Deposits contributed by a Participant shall be allocated
to the separate Account established and maintained for that Participant for such
form of contributions. Such contributions shall be paid by the Company to the
Trustee as soon as the amount can reasonably be identified and separated from
the Company's other assets, but in any event no later than the 15th business day
of the month following the month in which such amounts would otherwise be
payable to the Participant, or such other time provided in applicable
regulations under the Code or ERISA.

         6.3 Allocation of Company Contributions and Forfeitures. Company
Contributions and Forfeitures shall be allocated as follows:

                  (a) Forfeitures shall first be used to restore the Accounts of
         rehired Participants if so required under Section 8.7(c) and shall then
         be allocated to the Company Contribution Accounts of Participants to
         the extent necessary to correct insufficient allocations made to such
         Accounts in prior months discovered during the Plan Year to which such
         Forfeitures are attributable. Any remaining Forfeitures may be applied
         towards plan expenses if so directed by the Committee as provided in
         Section 9.12 or shall be used to reduce contributions made by the
         Company pursuant to Section 5.3.

                  (b) Matching Contributions shall be allocated to the Company
         Contribution Accounts of all Participants who made Matched Deposits at
         such times and in such amounts as provided in Sections 5.3(a) and
         5.3(b).

                  (c) Any other Company Contributions shall be used to restore
         the Accounts of rehired Participants if so required under Section
         8.7(c) and to the extent Forfeitures are unavailable. Any amounts
         remaining may be used to pay Plan expenses if so directed by the
         Committee as provided in Section 9.12.

         The allocations of Company Contributions under this Section 6.3 shall
be made only after any allocations required by Sections 6.8 and 13.4 have been
made.

         6.4 Valuation of Participants' Accounts. Within sixty (60) days after
each Valuation Date the Trustee shall value the assets of the Trust on the basis
of fair market values. Company Stock held by the Trust shall be valued in
accordance with Section 6.5. If separate investment funds are maintained under
the Trust pursuant to Section 5.5(b) then each such fund shall be valued
separately so that gains or losses of the various funds shall not be commingled.
Upon

                                       39
<PAGE>

receipt of these valuations from the Trustee, the Committee shall revalue the
Accounts and subaccounts (as established pursuant to Section 5.5(b)), if any, of
each Participant as of the applicable Valuation Date so as to reflect, among
other things, a proportionate share in any increase or decrease in the fair
market value of the assets in the Trust Fund, determined by the Trustee as of
that date as compared with the value of the assets in the Trust Fund as of the
immediately preceding Valuation Date.

         6.5 Valuation of Company Stock. Company Stock held by the Trust shall
be valued according to the following rules:

                  (a) In the case of Company Stock that is publicly traded on a
         national securities exchange, such stock shall be valued by reference
         to the closing price of such stock on such exchange on the last trading
         day of the month for which such stock is being valued.

                  (b) In the case of Company Stock that is not publicly traded
         on a national securities exchange, such stock shall be valued as of the
         first day of each Plan Year, or such other time as established by the
         Committee, by determining the fair market value of such stock through
         the use of an independent appraiser. Such fair market valuation shall
         be used to determine the valuation of each Participant's Company Stock
         Account on each Valuation Date in such Plan Year pursuant to Section
         6.4.

         6.6 Dividends, Splits, Recapitalizations, Etc. Any Company Stock
received by the Trustee as a stock split, dividend, or as a result of a
reorganization or other recapitalization of the Company shall be allocated in
the same manner as the Company Stock to which it is attributable is then
allocated.

         6.7 Stock Rights, Warrants or Options.

                  (a) In the event any rights, warrants, or options are issued
         on Company Stock held in the Trust Fund, the Trustee shall exercise
         them for the acquisition of additional Company Stock as directed by the
         Committee to the extent that cash is then available in the Trust Fund.

                  (b) Any Company Stock acquired in this fashion shall be
         treated as Company Stock purchased by the Trustee for the net price
         paid and shall be allocated in the same manner as the funds used to
         purchase the Company Stock were or would be allocated under the
         provisions of the Plan. Thus, if the funds used to purchase the stock
         consisted of unallocated Company Contributions, the stock would be
         allocated under the terms of Section 6.3; if the funds used consisted
         of the unallocated net income of the Trust, the stock would be
         allocated as provided in Section 6.4; and if the funds used consisted
         of funds previously allocated to the Accounts, the stock would be
         allocated in the manner in which the Accounts or subaccounts are
         debited and credited.

                  (c) Any rights, warrants, or options on Company Stock which
         cannot be exercised for lack of cash may, as directed by the Committee,
         be sold by the Trustee and

                                       40
<PAGE>

         the proceeds allocated in accordance with the source of the Company
         Stock with respect to which the rights, warrants, or options were
         issued in accordance with rules of paragraph (b) above.

         6.8 Treatment of Accounts Upon Severance. Upon a Participant's
Severance, pending distribution of the Participant's benefit pursuant to the
provisions of Article VIII, the Participant's Accounts shall continue to be
maintained and accounted for in accordance with all applicable provisions of the
Plan, including but not limited to the allocation of Company Contributions and
net income or loss to which the Accounts are entitled under the applicable
provisions of Sections 6.3 and 6.4 as of any Valuation Date or other date
preceding the distribution of the Participant's entire benefit under the Plan.

         6.9 Cash Dividends.

                  (a) All cash dividends paid to the Trustee with respect to
         Company Stock that has been allocated to a Participant's Account as of
         the quarterly date on which the dividend is received by the Trustee
         shall be allocated to the Participant's Account.

                  (b) If a Participant (or Beneficiary) has a current right to a
         distribution in Company Stock pursuant to Article VIII and such stock
         has not yet been re-registered in the name of the Participant (or
         Beneficiary) as of the record date of any dividend on such stock, such
         dividend shall be distributed to the Participant (or Beneficiary).

                  (c) Notwithstanding the provisions of paragraphs (a) and (b)
         above, the Committee may determine, in its discretion, that cash
         dividends on such shares may be used to purchase additional shares of
         Company Stock, or in whatever other manner it deems appropriate.

         6.10 Miscellaneous Allocation Rules.

                  (a) In the event that there is more than one class of Company
         Stock to be allocated to Participants' Accounts, there shall be
         allocated to the Account of each Participant (entitled to share in
         allocations of Company Stock as of any applicable date) the portion of
         each class of Company Stock (to be allocated as of that date) which the
         amount to be allocated to the Account of the Participant bears to the
         total amount to be allocated to the Accounts of all Participants
         entitled to share in such allocation.

                  (b) Allocations of all assets other than Company Stock shall
         be made on the basis of, and expressed in terms of dollar value.
         Allocations of Company Stock shall be on the basis of the number of
         shares of Company Stock (including fractional shares) and valuations,
         as of each Valuation Date, shall be expressed in terms of number of
         shares and dollar value.

                  (c) The Committee and the Trustee shall establish such
         additional accounting procedures as may be necessary for the purpose of
         making the allocations, valuations, withdrawals, and adjustments to
         Participants' Accounts provided for in this Article VI.

                                       41
<PAGE>

         From time to time the Committee and Trustee may modify such additional
         accounting procedures for the purpose of achieving equitable,
         nondiscriminatory, and administratively feasible allocations among the
         Accounts of Participants in accordance with the general concepts of the
         Plan and the provisions of this Article VI.

                  (d) The Company, the Committee and Trustee do not in any
         manner or to any extent whatsoever warrant, guarantee or represent that
         the value of a Participant's Account shall at any time equal or exceed
         the amount previously contributed thereto.

         6.11 Limitations on After Tax Deposits and Company Contributions. With
respect to each Plan Year, After Tax Deposits and Matching Contributions under
the Plan for the Plan Year shall not exceed the limitations by or on behalf of
Highly Compensated Participants under Code Section 401(m), as provided in this
Section. In the event that After Tax Deposits and Matching Contributions under
the Plan by or on behalf of Highly Compensated Participants for any Plan Year
exceed the limitations of this Section for any reason, such excess After Tax
Deposits and Matching Contributions and any income or loss allocable thereto
shall be disposed of in accordance with Section 6.12.

                  (a) The After Tax Deposits by Participants and Matching
         Contributions on behalf of Participants for a Plan Year shall satisfy
         the Actual Contribution Percentage test set forth in (i) below, or, to
         the extent not precluded by applicable regulations, the alternative
         Actual Contribution Percentage test set forth in (ii) below:

                           (i) The Actual Contribution Percentage of Highly
                  Compensated Participants for the Plan Year shall not be more
                  than the prior Plan Year's Actual Contribution Percentage of
                  Participants who were not Highly Compensated Employees for the
                  prior Plan Year multiplied by 1.25, or

                           (ii) The Actual Contribution Percentage of Highly
                  Compensated Participants for the Plan Year shall not be more
                  than the prior Plan Year's Actual Contribution Percentage of
                  Participants who were not Highly Compensated Employees for the
                  prior Plan Year multiplied by 2.0, provided that the Actual
                  Contribution Percentage of Highly Compensated Participants
                  does not exceed the Actual Contribution Percentage of
                  Participants who were not Highly Compensated Employees for the
                  prior Plan Year by more than two (2) percentage points (or ,
                  for Plan Years prior to the 2002 Plan Year, such lesser
                  percentage as the Secretary of the Treasury shall prescribe to
                  prevent the multiple use of the alternative limitation set
                  forth in this Section 6.11(a)(ii) with respect to any Highly
                  Compensated Participants).

                           (iii) If one or more Highly Compensated Employees
                  participate in both a cash or deferred arrangement and a plan
                  subject to the Actual Contribution Percentage test maintained
                  by the Sponsor or an Affiliated Company and the sum of the
                  Actual Deferral Percentage and Contribution Percentage of
                  those Highly Compensated

                                       42
<PAGE>

                  Employees subject to either or both test exceeds the Aggregate
                  Limit, then the Contribution Percentages of those Highly
                  Compensated Employees who also participate in the cash or
                  deferred arrangement shall be reduced (beginning with such
                  Highly Compensated Employee whose Actual Contribution
                  Percentage is the highest) so that the limit is not exceeded.
                  The amount by which each Highly Compensated Employee's
                  Contribution Percentage is reduced shall be treated as an
                  Excess Aggregate Contribution. The Actual Deferral Percentage
                  and Contribution Percentage of the Highly Compensated Employee
                  are determined after any corrections required to meet the
                  Actual Deferral Percentage and Actual Contribution Percentage
                  tests and are deemed to be the maximum permitted under such
                  tests for the Plan Year. For Plan Years prior to the 2002 Plan
                  Year, multiple use does not occur if both the average Actual
                  Deferral Percentage and Actual Contribution Percentage of
                  those Highly Compensated Employees does not exceed 125 percent
                  of the Actual Deferral Percentage and Actual Contribution
                  Percentage of all other Participants.

                  (b) For purposes of this Section 6.11 and Section 6.12 the
         following definitions shall apply:

                           (i) "Actual Contribution Percentage" shall mean the
                  average of the Contribution Percentages, with respect to the
                  group of Highly Compensated Participants and the group of all
                  other Participants for a Plan Year. The "Contribution
                  Percentage" for any Participant shall mean the ratio,
                  calculated separately and to the nearest one-hundredth of one
                  percent for each Participant in such group, determined as
                  follows:

                                    (1) For a Highly Compensated Participant,
                           the ratio of such Participant's After Tax Deposits
                           and Matching Contributions for the current Plan Year
                           to such Participant's Compensation for the current
                           Plan Year; provided, however, that the Contribution
                           Percentage of a Highly Compensated Participant with
                           no After Tax Deposits and Matching Contributions made
                           on his or her behalf shall be zero.

                                    (2) For any other Participant, the ratio of
                           such Participant's After Tax Deposits and Matching
                           Contributions for the preceding Plan Year to such
                           Participant's Compensation for the preceding Plan
                           Year; provided, however, that the Contribution
                           Percentage of a Participant with no After Tax
                           Deposits and Matching Contributions made on his or
                           her behalf shall be zero.

                           The Contribution Percentage, in each case, however,
                  shall not include Matching Contributions that are forfeited
                  either to correct Excess Aggregate Contributions or because
                  the contribution to which they relate are excess Before Tax
                  Deposits, excess After Tax Deposits, or Excess Aggregate
                  Contributions. To the extent determined by the Committee and
                  in accordance with regulations issued by the Secretary of the
                  Treasury under Code Section 401(m)(3), Before Tax Deposits and
                  any qualified nonelective contributions, within the meaning of
                  Code Section 401(m)(4)(C) on behalf of a Participant may also
                  be taken into

                                       43
<PAGE>

                  account for purposes of calculating the Contribution
                  Percentage of a Participant. However, if any Before Tax
                  Deposits are taken into account for purposes of determining
                  Actual Deferral Percentages under Section 4.3 then such Before
                  Tax Deposits shall not be taken into account under this
                  Section 6.11.

                           (ii) "Highly Compensated Participant" shall mean for
                  any Plan Year any Participant who is a Highly Compensated
                  Employee. A Participant is a Highly Compensated Employee for a
                  particular Plan Year if he or she meets the definition of a
                  Highly Compensated Employee in effect for that Plan Year.
                  Similarly, a Participant is not a Highly Compensated Employee
                  for a particular Plan Year if he or she does not meet the
                  definition of a Highly Compensated Employee in effect for that
                  Plan Year.

                           (iii) "Participant" shall mean any Eligible Employee
                  who satisfied the requirements under Article III during the
                  Plan Year whether or not such Eligible Employee has elected to
                  contribute to the Plan for such Plan Year.

                           (iv) "Compensation" shall mean compensation as
                  described below:

                                    (1) Compensation means compensation
                           determined by the Company in accordance with the
                           requirements of Code Section 414(s) and the
                           regulations thereunder.

                                    (2) For purposes of this Section 6.11,
                           Compensation may, at the Company's election, exclude
                           amounts which are excludable from a Participant's
                           gross income under Code Section 125 (pertaining to
                           cafeteria plans) and Code Section 402(e)(3)
                           (pertaining to 401(k) salary reductions). The Company
                           may change its election provided such change does not
                           discriminate in favor of Highly Compensated
                           Employees.

                                    (3) Compensation taken into account for any
                           Plan Year shall not exceed $200,000 ($150,000 for
                           Plan Years beginning prior to January 1, 2002), as
                           adjusted for cost-of-living increases in accordance
                           with Code Section 401(a)(17)(B). Any cost-of-living
                           adjustments in effect for a calendar year shall apply
                           to the Plan Year beginning with or within such
                           calendar year.

                           (v) "Aggregate Limit" shall mean the sum of (1) 125
                  percent of the greater of the average Actual Deferral
                  Percentage of all Non-Highly Compensated Participants for the
                  Plan Year or the Actual Contribution Percentage of Non-Highly
                  Compensated Participants under the Plan subject to Code
                  Section 401(m) for the Plan Year beginning with or within the
                  Plan Year of the cash or deferred arrangement and (2) the
                  lesser of 200% or two plus the lesser of such average Actual
                  Deferral Percentage or Actual Contribution Percentage.
                  "Lesser" is substituted for "greater" in (1) above, and
                  "greater" is substituted for "lesser" after "two plus the" in
                  (2) above if it would result in a larger Aggregate Limit.

                                       44
<PAGE>

                           (vi) "Excess Aggregate Contributions" shall mean,
                  with respect to any Plan Year, the excess of:

                                    (1) The aggregate After Tax Deposits and
                           Matching Contributions taken into account in
                           computing the numerator of the Contribution
                           Percentage actually made on behalf of Highly
                           Compensated Employees for such Plan year, over

                                    (2) The maximum After Tax Deposits and
                           Matching Contributions permitted under the Actual
                           Contribution Percentage test as determined by
                           reducing such Matching Contributions made on behalf
                           of Highly Compensated Employees in order of their
                           Contribution Percentages, beginning with the highest
                           of such percentages.

                           Such determination shall be made after first
                  determining excess Before Tax Deposits pursuant to Sections
                  4.2(a) and 4.3.

                  (c) In the event the Plan satisfies the requirements of Code
         Sections 401(m), 401(a)(4) or 410(b) only if aggregated with one or
         more other plans which include arrangements under Code Section 401(k),
         then this Section 6.11 shall be applied by determining the Contribution
         Percentages of Participants as if all such plans were a single plan.
         Any adjustments to the Contribution Percentages of Participants who are
         not Highly Compensated Employees for the prior year shall be made in
         accordance with Notice 98-1 and any superseding guidance. Plans may be
         aggregated in order to satisfy Code Section 401(m) only if they have
         the same Plan Year and use the same Actual Contribution Percentage
         testing method.

                  (d) For purposes of this Section 6.11, the Contribution
         Percentage for any Highly Compensated Participants who is eligible to
         have After Tax Deposits or Matching Contributions allocated to his or
         her account under two or more plans maintained by the Sponsor or an
         Affiliated Company shall be determined as if the total of such After
         Tax Deposits or Matching Contributions was made under each plan. If a
         Highly Compensated Employee participates in two or more cash or
         deferred arrangements that have different plan years, all cash or
         deferred arrangements that have different plan years, all cash or
         deferred arrangements ending with or within the same calendar year
         shall be treated as a single arrangement. Notwithstanding the
         foregoing, certain plans shall be treated as separate plans if
         mandatorily disaggregated pursuant to regulations under Code Section
         401(m).

                  (e) For purposes of the Actual Contribution Percentage test,
         After Tax Deposits shall be considered to have been made in the Plan
         Year in which contributed to the Trust. Matching Contributions shall be
         considered made for a Plan Year if made no later than the end of the
         twelve-month period beginning on the day after the close of the Plan
         Year.

                                       45
<PAGE>

                  (f) The determination and treatment of the Contribution
         Percentage of any Participant shall satisfy such other requirements as
         may be prescribed by the Secretary of the Treasury.

                  (g) The Committee shall keep or cause to have kept such
         records as are necessary to demonstrate that the Plan satisfies the
         requirements of Code Section 401(m) and the regulations thereunder, in
         accordance with regulations prescribed by the Secretary of the
         Treasury.

         6.12 Provision for Disposition of Excess After Tax Deposits or Matching
Contributions on Behalf of Highly Compensated Participants. After application of
the provisions of Section 4.4 and 4.5, the following provisions shall be
implemented:

                  (a) The Committee shall determine, as soon as is reasonably
         possible following the close of each Plan Year, the extent (if any) to
         which contributions by or on behalf of Highly Compensated Participants
         may cause the Plan to exceed the limitations of Section 6.11 for such
         Plan Year. If, pursuant to the determination by the Committee and as
         required by the leveling method described in paragraph (b) below,
         contributions by or on behalf of a Highly Compensated Participant may
         cause the Plan to exceed such limitations, then the Committee shall
         take the following steps:

                           (i) First, any excess After Tax Deposits that were
                  not matched by Matching Contributions, together with income or
                  loss allocable to such amount (determined in accordance with
                  paragraph (c) below) shall be returned to the Highly
                  Compensated Participant.

                           (ii) Second, if any excess remains after the
                  provisions of (i) above are applied, to the extent necessary
                  to eliminate the excess, Matching Contributions with respect
                  to the Highly Compensated Participant, any corresponding
                  matched After Tax Deposits, and any income or loss allocable
                  thereto, shall either be distributed (if non-forfeitable) to
                  the Highly Compensated Participant or forfeited (to the extent
                  forfeitable under the Plan) on a pro-rata basis. Amounts of
                  excess Matching Contributions forfeited by Highly Compensated
                  Participants under this Section 6.12, including any income or
                  loss allocable thereto, shall be applied to reduce Matching
                  Contributions by the Company or the Affiliated Company that
                  made the Matching Contribution on behalf of the Highly
                  Compensated Participant for the Plan Year for which the excess
                  contribution was made.

                           (iii) If administratively feasible, any amounts
                  distributed pursuant to subparagraphs (i) or (ii) above shall
                  be returned within two and one-half (2-1/2) months following
                  the close of the Plan Year for which such excess After Tax
                  Deposits or Matching Contributions were made, but in any event
                  no later than the end of the first Plan Year following the
                  Plan Year for which the excess After Tax Deposits or Matching
                  Contributions were made. After Tax Deposits and Matching
                  Contributions for any Plan Year shall be made on the basis of
                  the

                                       46
<PAGE>

                  respective portions of such excess After Tax Deposits and
                  Matching Contributions attributable to each Highly Compensated
                  Participant.

                  (b) For purposes of satisfying the Actual Contribution
         Percentage test, the amount of any excess After Tax Deposits or
         Matching Contributions by or on behalf of Highly Compensated
         Participants for a Plan Year under Section 6.11 shall be determined by
         application of a leveling method under which the After Tax Deposits or
         Matching Contributions of the Highly Compensated Participant who has
         the highest dollar amount of After Tax Deposits or Matching
         Contributions for such Plan Year is reduced to the extent required to
         cause such Highly Compensated Participant's After Tax Deposits and
         Matching Contributions to equal the After Tax Deposits and Matching
         Contributions of the Highly Compensated Participant with the next
         highest After Tax Deposits and Matching Contributions; provided,
         however, if a lesser amount, when added to the total dollar amount
         already distributed under this paragraph (b), equals the total excess
         After Tax Deposits and Matching Contributions that are required to be
         distributed to enable the Plan to satisfy the Actual Contribution
         Percentage test, the lesser amount shall be distributed. This process
         shall be repeated until the Plan satisfies the Actual Contribution
         Percentage test.

                  (c) The amount of income or loss attributable to any excess
         After Tax Deposits or Matching Contributions, as determined under this
         Section 6.12 (the "Excess Aggregate Contribution") by a Highly
         Compensated Participant for a Plan Year shall be equal to the sum of
         the following:

                           (i) The income or loss allocable to the Highly
                  Compensated Participant's Excess Aggregate Contribution
                  Accounts for the Plan Year multiplied by a fraction, the
                  numerator of which is the Excess Aggregate Contribution and
                  the denominator of which is the sum of the balance of the
                  Highly Compensated Participant's Excess Aggregate Contribution
                  Accounts without regard to any income or loss allocable to
                  such Accounts during the Plan Year; and

                           (ii) The amount of allocable income or loss for the
                  Gap Period using the "safe harbor" method set forth in
                  regulations prescribed by the Secretary of the Treasury under
                  Code Section 401(m). Under the "safe harbor" method, such
                  allocable income or loss is equal to 10% of the amount
                  calculated under Section 6.12(c)(i) above, multiplied by the
                  number of calendar months from the last day of the Plan Year
                  until the date of distribution of the Participant's excess
                  After Tax Deposits or Matching Contributions. A distribution
                  on or before the 15th of the month is treated as made on the
                  last day of the preceding month, a distribution after the 15th
                  of the month is treated as made on the first day of the next
                  month.

                  (d) For the purpose of this Section 6.12, the following shall
         apply:

                           (i) "Excess Aggregate Contribution Accounts" shall
                  mean the Participant's After Tax Deposits Account and Company
                  Contribution Account.

                                       47
<PAGE>

                           (ii) "Gap Period" shall mean the period between last
                  day of the Plan Year and the date of distribution of any
                  Excess Aggregate Contributions.

                  (e) Any excess After Tax Deposits and/or Matching
         Contributions distributed to a Highly Compensated Participant or
         forfeited by a Highly Compensated Participant in accordance with this
         Section 6.12, shall be treated as Annual Additions under Article XIII
         for the Plan Year for which the excess contribution was made.

                  (f) Neither the Committee nor the Company shall be liable to
         any Participant (or his or her Beneficiary, if applicable) for any
         losses caused by a mistake in calculating the amount of any Excess
         Aggregate Contributions by or on behalf of a Highly Compensated
         Participant and the income or loss allocable thereto.

                                       48
<PAGE>

                                  ARTICLE VII
                            VESTING IN PLAN ACCOUNTS

         7.1 No Vested Rights Except as Herein Provided. No Participant shall
have any vested right or interest to, or any right of payment of, any assets of
the Trust Fund, except as expressly provided in the Plan. Neither the making of
any allocations nor the credit to any Account of a Participant shall vest in any
Participant any right, title, or interest in or to any assets of the Trust Fund.

         7.2 Vesting Schedule.

                  (a) A Participant's interest in his or her Company
         Contribution Account shall vest in accordance with the following
         schedule:

<Table>
<Caption>

                  Years of Credited Service                   Vested Percentage
                  -------------------------                   -----------------
<S>                                                           <C>
                  Less than 3                                         0%
                  3 or more                                         100%
</Table>

                  (b) Notwithstanding the above, a Participant shall become
         fully vested in his or her Company Contribution Account upon the
         occurrence of any of the following events, if such Participant is then
         still an Employee:

                           (i) Attainment of age sixty-two (62);

                           (ii) Death;

                           (iii) Severance due to a Disability; or

                           (iv) Occurrence of a Change in Control pursuant to
                  Section 12.4.

                  (c) Notwithstanding the above, a Participant shall at all
         times be 100% vested in all amounts transferred from the SmithKline
         Beckman Corporation Savings and Investment Plan to the Plan.

         7.3 Vesting of Participant Deposits. A Participant shall be fully
vested at all times in the amounts allocated to his or her Before Tax Deposits
Account, After Tax Deposits Account, and Rollover Account.

                                       49
<PAGE>

                                  ARTICLE VIII
                            PAYMENT OF PLAN BENEFITS

         8.1 Withdrawals During Employment. A Participant may withdraw, once in
any calendar quarter, amounts of at least $500 from his or her Accounts while an
Employee in accordance with the following rules:

                  (a) A Participant may, for any reason, withdraw any portion of
         the amount allocated to his or her After Tax Deposit Account (excluding
         any After Tax Deposits recharacterized as such under Section 4.5). A
         Participant who makes a withdrawal of After Tax Deposits which are also
         Matched Deposits prior to July 1, 2000 shall not receive any Matching
         Contributions pursuant to Section 5.3(a) with respect to any Matched
         Deposits made by such Participant during the six (6) month period
         beginning on the date of any such withdrawal unless the After Tax
         Deposits can also be withdrawn under paragraph (d) below. A Participant
         who makes a withdrawal of After Tax Deposits (whether Matched Deposits
         or non-Matched Deposits) on or after July 1, 2000 shall not be
         permitted to make any After Tax or and Before Tax Deposits during the
         six (6) month period beginning as soon as administratively feasible
         following the date of the withdrawal unless the After Tax Deposits can
         also be withdrawn under paragraph (d) below or the withdrawal is
         comprised solely of After Tax Deposits which are not Matched Deposits
         and which were contributed prior to July 1, 2000.

                  (b) A Participant may, for any reason, withdraw any portion of
         the amount allocated to his or her Rollover Account.

                  (c) After withdrawing all After Tax Deposits pursuant to
         paragraph (a) and all amounts allocated to his or her Rollover Account
         under paragraph (b) above, a Participant with 3 or more years of
         Credited Service may, for any reason, withdraw any portion of the
         amount allocated to his or her Company Contribution Account that was so
         allocated 2 or more years prior to the date of such a withdrawal.

                  (d) On or after the attainment of age 59-1/2, a Participant
         may withdraw any vested portion of the amounts allocated to any of his
         or her Accounts.

                  (e) After withdrawing all amounts permitted pursuant to
         paragraphs (a), (b) (c), and (d) above, a Participant may withdraw
         amounts from his or her Before Tax Deposits Account (excluding any
         earnings attributable to such Account after December 31, 1988) and the
         vested portion of his or her Company Contribution Account, and any
         remaining amount in his or her After Tax Deposits (amounts which were
         recharacterized as After Tax Deposits under Section 4.5 but excluding
         any earnings attributable to recharacterized After Tax Deposits after
         December 31, 1988) upon incurring a hardship as defined in Section 8.5.

                  (f) Except as provided in Section 8.5(c), all withdrawals
         shall be made in cash, except to the extent any of the vested portion
         of a Participant's Account to be

                                       50
<PAGE>

         withdrawn is invested in the Company Stock Fund, then such withdrawal
         may be made in Company Stock at the election of the Participant to the
         extent so invested.

                  (g) Except as provided in paragraphs (a) through (e) above,
         Participants may not receive a distribution of their benefits under the
         Plan prior to termination of employment.

                  (h) Except as provided in Section 8.5(c), all withdrawals
         shall be made to Participants as soon as reasonably practicable
         following the Valuation Date in the month for which a properly
         completed withdrawal request is deemed perfected. All withdrawals shall
         be based on the Account balances of a Participant as of such Valuation
         Date. If a properly completed withdrawal request is received by the
         Plan Administrator during any month and on or before the fifteenth day
         of such month, the withdrawal request shall be deemed perfected in such
         month, otherwise such withdrawal request shall be deemed perfected in
         the immediately following month.

                  (i) Notwithstanding anything to the contrary in this Section
         8.1 or Section 4.1, the additional withdrawal restrictions stated in
         Section 5.5(h) shall apply to all Participants who are Insiders, as
         that term is defined Section 5.5(h).

         8.2 Distributions Upon Termination of Employment or Disability.

                  (a) Subject to the provisions of Section 8.6, if a Participant
         incurs a Severance for any reason (including Disability) other than
         death, all or a portion of such Participant's entire vested portion of
         his or her Accounts under the Plan shall be (i) distributed directly to
         such Participant or (ii) at the election of the Participant,
         distributed as an Eligible Rollover Distribution and paid directly by
         the Trustee to the trustee of an Eligible Retirement Plan.

                  (b) Any distribution made pursuant to paragraph (a) shall be
         paid no more than once in any calendar quarter in amounts of at least
         $500 (or the Participant's entire vested portion of his or her Accounts
         under the Plan if lesser) and shall be made in cash except to the
         extent any of the vested portion of such Participant's Accounts is
         invested in the Company Stock Fund, then, to the extent so invested,
         such distribution may be made in Company Stock at the election of the
         Participant.

                  (c) Notwithstanding the provisions contained in the foregoing
         paragraphs of this Section 8.2 or Section 8.1, any provision which
         restricts or would deny a Participant through the withholding of
         consent or the exercise of discretion by some person or persons other
         than the Participant (and where relevant, other than the Participant's
         spouse) of an alternative form of benefit, in violation of Code Section
         411(d)(6) and the regulation promulgated thereunder, is hereby amended
         by the deletion of the consent and/or discretion requirement.

                  (d) Notwithstanding the provisions contained in the foregoing
         paragraphs of this Section 8.2 or Section 8.1, upon receipt of a
         Qualified Domestic Relations Order, the

                                       51
<PAGE>

         amount payable to an Alternate Payee (as such terms are described in
         Section 15.2) may be distributed to the Alternate Payee as soon as
         administratively feasible.

         8.3 Distribution Upon Death of Participant. In the event of the death
of a Participant, the Participant's benefit under the Plan shall be distributed
to the surviving spouse as Beneficiary (if still alive) unless the Participant
designated another Beneficiary pursuant to Section 8.4. If the Beneficiary is
the surviving spouse of the Participant, he or she may elect to have an Eligible
Rollover Distribution paid directly by the Trustee to the trustee of an Eligible
Retirement Plan. Distributions to the Beneficiary pursuant to this Section 8.3
shall be in the same form as specified in Section 8.2(b) above, as elected by
the Beneficiary. All such distributions shall be made as soon as practicable
after the death of the Participant. A Beneficiary may not elect to defer such a
distribution.

         8.4 Designation of Beneficiary. At any time, and from time to time,
each Participant shall have the unrestricted right to designate the Beneficiary
to receive the portion of his or her death benefit and to revoke any such
designation subject to paragraphs (a) and (b) below. Each such designation shall
be evidenced by a written instrument signed by the Participant and filed with
the Committee.

                  (a) If the Participant is married and designates a Beneficiary
         other than his or her spouse, said designation shall not be honored by
         the Committee unless accompanied by the written consent of said spouse
         to said designation. Such consent (i) must designate a Beneficiary
         which may not be changed without the consent of the spouse (or the
         consent of the spouse expressly permits designation by the Participant
         without any further consent by the spouse), (ii) must acknowledge the
         effect of the designation, and (iii) must be witnessed by a Plan
         representative or a notary public. No consent of such spouse shall be
         necessary if it is established to the satisfaction of a Plan
         representative that the consent required under this paragraph (b)
         cannot or need not be obtained because (i) there is no spouse, (ii) the
         spouse cannot be located, or (iii) there exist such other circumstances
         which, pursuant to regulations under Code Section 417, permit a
         distribution to another Beneficiary. Any consent of a spouse obtained
         pursuant to this paragraph (b) or any determination that the consent of
         the spouse cannot (or need not) be obtained, shall be effective only
         with respect to that spouse. If a Participant becomes married following
         his or her designation of a Beneficiary other than his or her spouse,
         such designation shall be ineffective unless the spousal consent
         requirements of this paragraph are satisfied with respect to such
         spouse (subject, however, to the provisions of Article XV regarding
         Qualified Domestic Relations Orders).

                  (b) If the Participant is married and does not designate a
         Beneficiary, the Participant's spouse shall be his or her Beneficiary
         for purposes of this Section. If the deceased Participant is not
         married and shall have failed to designate a Beneficiary, or if the
         Committee shall be unable to locate the designated Beneficiary after
         reasonable efforts have been made, or if such Beneficiary shall be
         deceased, distribution of the Participant's death benefit shall be made
         by payment of the deceased Participant's entire interest in the Trust
         to his or her personal representative in a single lump-sum payment. In
         the event the deceased Participant is not a resident of California at
         the date of his or

                                       52
<PAGE>

         her death, the Committee, in its discretion, may require the
         establishment of ancillary administration in California. If the
         Committee cannot locate a qualified personal representative of the
         deceased Participant, or if administration of the deceased
         Participant's estate is not otherwise required, the Committee, in its
         discretion, may pay the deceased Participant's interest in the Trust to
         his or her heirs at law (determined in accordance with the laws of the
         State of California as they existed at the date of the Participant's
         death).

         8.5 Hardship Withdrawal Rules. A hardship withdrawal shall be made to a
Participant only if the Committee (or its representative) determines that the
Participant has an immediate and heavy financial need and that a withdrawal from
the Plan is necessary to satisfy such need as set forth in paragraphs (a) and
(b) below.

                  (a) A hardship withdrawal shall be authorized by the Committee
         only if the Committee, based upon the Participant's representation and
         such other facts as are known to the Committee, determines that the
         requested withdrawal is on the account of:

                           (i) Medical expenses described in Code Section 213(d)
                  incurred by the Participant, the Participant's spouse, or any
                  dependents of the Participant (as defined in Code Section
                  152);

                           (ii) The purchase (excluding mortgage payments) of a
                  principal residence for the Participant only;

                           (iii) The payment of tuition and related educational
                  fees for the next twelve (12) months of post-secondary
                  education for the Participant, his or her spouse, children, or
                  dependents;

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

                           (v) Any other situation deemed as immediate and heavy
                  financial needs by the Internal Revenue Service through the
                  publication of revenue rulings, notices, and other documents
                  of general applicability.

                  (b) A hardship withdrawal shall be authorized by the Committee
         only if the Committee, based upon the Participant's representation and
         such other facts as are known to the Committee, determines that all of
         the following conditions are or will be satisfied:

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

                                       53
<PAGE>

                           (ii) The Participant has obtained all distributions,
                  other than hardship withdrawals, and all nontaxable (at the
                  time of the loan) loans from the Plan or any other plan
                  maintained by the Company.

                           (iii) The Participant shall not be permitted to make
                  Before Tax Deposits or After Tax Deposits during the 6-month
                  period (12-month period for hardship withdrawals made prior to
                  January 1, 2002) beginning as soon as administratively
                  feasible following the date of the hardship withdrawal from
                  the Plan or any other plan maintained by the Company.
                  Notwithstanding the foregoing, if a Participant made a
                  hardship withdrawal during the 2001 calendar year, such
                  Participant shall not be permitted to make Before Tax Deposits
                  or After Tax Deposits during the 6-month period beginning as
                  soon as administratively feasible following the date of the
                  hardship withdrawal or January 1, 2002, if later.

                           (iv) The Participant shall not be permitted to make
                  Before Tax Deposits during the Participant's taxable year
                  immediately following the taxable year of the hardship
                  withdrawal that is in excess of the applicable limit under
                  Code Section 402(g) for such immediately following taxable
                  year less the amount of such Participant's Before Tax Deposits
                  for the taxable year in which such Participant made the
                  hardship withdrawal.

                  (c) Notwithstanding the provisions of Section 8.1(f), all
         hardship withdrawals shall be made in cash regardless of the fund from
         which such withdrawal is made. The Committee may, at its discretion,
         establish written procedures whereby Participants may receive an
         estimated prepayment of a hardship withdrawal based on the last
         available valuation of such Participant's Accounts with a reconciling
         adjustment made to such Participant's Accounts after current valuation
         data is available.

         8.6 Distribution Rules. Notwithstanding any other provisions of this
Article VIII of the Plan regarding distributions of Participant's Accounts, the
following additional rules shall apply to all such distributions.

                  (a) In no event shall any benefits under the Plan, including
         benefits upon retirement, Severance, or Disability, be paid (or
         commence to be paid) to a Participant prior to the "Consent Date" (as
         defined herein) unless the Participant consents in writing to the
         payment (or commencement of payment) of such benefits prior to said
         Consent Date. As used herein, the term "Consent Date" shall mean the
         later of (i) the Participant's 62nd birthday, or (ii) the Participant's
         Normal Retirement Age. Notwithstanding the foregoing, the provisions of
         this paragraph shall not apply (i) following the Participant's death,
         or (ii) with respect to a lump sum distribution of the vested portion
         of a Participant's Account if the total amount of such vested portion
         does not exceed $5,000. For purposes of clause (ii), Rollover
         Contributions and the earnings thereon, shall be included in
         determining the value of the vested portion of a Participant's Account
         for distributions made after December 31, 2001 with respect to
         Participants who incur a Severance after December 31, 2001.

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<PAGE>

                  (b) Unless a Participant elects otherwise pursuant to
         paragraph (a) above, distributions of the vested portion of a
         Participant's Accounts shall commence no later than the 60th day after
         the close of the Plan Year in which the latest of the following events
         occurs: (i) the Participant's Normal Retirement Age; (ii) the tenth
         anniversary of the year in which the Participant commenced
         participation in the Plan; or (iii) the termination of the
         Participant's employment with the Company.

                  (c) Notwithstanding paragraphs (a) or (b) above, distributions
         of the entire vested portion of a Participant's Accounts shall be made
         no later than the Participant's Required Beginning Date, or, if such
         distribution is to be made over the life of such Participant or over
         the lives of such Participant and a Beneficiary (or over a period not
         extending beyond the life expectancy of such Participant and
         Beneficiary) then such distribution shall commence no later than the
         Participant's Required Beginning Date. Required Beginning Date shall
         mean:

                           (i) Participants attaining age 70-1/2 prior to 1999:
                  The Required Beginning Date of a Participant who attains age
                  70-1/2 prior to 1999 shall be April 1 of the calendar year
                  immediately following the year in which the Participant
                  attains age 70-1/2; provided, however, that a Participant,
                  other than a Five Percent Owner (as defined in Code Section
                  416(i) and applicable regulations), who attains age 70-1/2 in
                  1996, 1997, or 1998 may elect to defer the Required Beginning
                  Date until April 1 of the calendar year following the later of
                  the calendar year in which the Participant attains age 70-1/2
                  or retires.

                           (ii) Participants attaining age 70-1/2 after 1998:
                  The Required Beginning Date of a Participant who attains age
                  70-1/2 after 1998 shall be April 1 of the calendar year
                  immediately following the later of the calendar year in which
                  the Participant attains age 70-1/2 or retires; provided,
                  however, if such Participant is a Five Percent Owner (as
                  defined in Code Section 416(i) and applicable regulations)
                  with respect to the Plan Year ending in the calendar year in
                  which such Participant attains age 70-1/2, the Required
                  Beginning Date shall be April 1 of the calendar year
                  immediately following the year in which such Participant
                  attains age 70-1/2.

                  (d) Notwithstanding anything to the contrary in the Plan, if a
         Participant dies before distribution of his or her vested benefit has
         begun in accordance with paragraph (c) above, the Participant's vested
         benefit shall be distributed to his or her Beneficiary within five
         years from the date of the Participant's death except that any portion
         of the Account balance meeting the following requirements shall not be
         subject to this rule:

                           (i) A Beneficiary has been designated to receive the
                  Participant's Account balance and such designation is
                  effective at the Participant's death;

                           (ii) The Account balance is paid to the Beneficiary
                  over the Beneficiary's life or over a period not to exceed the
                  Beneficiary's life; and

                                       55
<PAGE>

                           (iii) The payments to the Beneficiary commence within
                  one year of the Participant's death, or, if the Beneficiary is
                  the spouse, before the time the deceased Participant would
                  have attained age 70-1/2.

                  (e) All distributions under the Plan shall be made in
         accordance with the requirements of Code Section 401(a)(9); provided,
         however, that with respect to distributions made for calendar years
         beginning on or after January 1, 2002, 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 on
         January 17, 2001, notwithstanding any provision of the Plan to the
         contrary. This paragraph (e) 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 as may be
         specified in guidance published by the Internal Revenue Service.

                  (f) If it is not administratively practical to calculate and
         commence payments by the latest date specified in the rules of
         paragraphs (b), (c) and (d) above because the amount of the
         Participant's benefit cannot be calculated, or because the Committee is
         unable to locate the Participant (or eligible Beneficiary) after making
         reasonable efforts to do so, the payment shall be made as soon as is
         administratively possible (but not more than 60 days) after the
         Participant (or Beneficiary) can be located and the amount of the
         distributable benefit can be ascertained.

         8.7 Forfeitures.

                  (a) In the event that a distribution of the entire vested
         portion of a Participant's Accounts is made to a Participant due to a
         Severance when he or she is not fully vested in such Accounts, the
         nonvested portion of the Participant's Account(s) shall be forfeited as
         of the Participant's distribution date. A Participant who incurs such a
         Severance when no portion of his or her Accounts are vested shall be
         deemed to have received a distribution pursuant to this paragraph (a)
         as of his or her Severance Date.

                  (b) If a Participant incurs a Severance when partially vested
         in his or her Accounts and does not receive a distribution described in
         paragraph (a), the Participant's Account shall be held by the Trustee
         as provided in Section 6.8 for 90 days at which time, the nonvested
         portion of the Participant's Account(s) shall be forfeited as of the
         last day of the month in which the 90-day period ends.

                  (c) In the event a Participant is rehired by the Company prior
         to the date such Participant incurs five consecutive Breaks in Service,
         the amount so forfeited pursuant to paragraphs (a) and (b) above shall
         be reinstated to the Participant as of his or her Reemployment
         Commencement Date (without regard to any interest or investment
         earnings on such amount).

                  (d) Forfeitures shall be allocated in the manner provided in
         Section 6.3 at such times as determined by the Committee and to the
         extent available shall be used to reduce contributions made by the
         Company pursuant to Section 5.3.

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<PAGE>

         8.8 Valuation of Plan Benefits Upon Distribution. For the purpose of
any distribution of benefits under this Article VIII, the amount of such
distribution shall be based on the value of a Participant's Accounts as of the
Valuation Date in the month in which the application for such distribution is
deemed perfected. If a properly completed distribution application is received
by the Committee during any month and on or before the fifteenth day of such
month, the distribution application shall be deemed perfected in such month,
otherwise such distribution application shall be deemed perfected in the
immediately following month.

         8.9 Lapsed Benefits.

                  (a) In the event that a benefit is payable under the Plan to a
         Participant and after reasonable efforts the Participant cannot be
         located for the purpose of paying the benefit during a period of three
         consecutive years, the Participant shall be presumed dead and the
         benefit shall, upon the termination of that three year period, be paid
         to the Participant's Beneficiary.

                  (b) If any eligible Beneficiary cannot be located for the
         purpose of paying the benefit for the following two years, then the
         benefit shall be forfeited and allocated to the Accounts of the other
         Participants for such Plan Year in accordance with Section 6.3.

                  (c) If a Participant shall die prior to receiving a
         distribution of his or her entire benefit under the Plan (other than a
         Participant presumed to have died as provided above), if after
         reasonable efforts an eligible Beneficiary of the Participant cannot be
         located for the purpose of paying the benefit during a period of five
         consecutive years, the benefit shall, upon expiration of such five-year
         period, be forfeited and reallocated to the Accounts of the other
         Participants in accordance with Section 6.3.

                  (d) For purposes of this Section, the term "Beneficiary" shall
         include any person entitled under Section 8.4 to receive the interest
         of a deceased Participant or deceased designated Beneficiary. It is the
         intention of this provision that during the relevant waiting period
         (two years or five years) the benefit shall be distributed to an
         eligible Beneficiary in a lower priority category under Section 8.4 if
         no eligible Beneficiary in a higher priority category can be located by
         the Committee after reasonable efforts have been made.

                  (e) Notwithstanding the foregoing rules, if after such a
         forfeiture the Participant or an eligible Beneficiary shall claim the
         forfeited benefit, the amount forfeited shall be reinstated (without
         regard to any interest or investment earnings on such amount) and paid
         to the claimant as soon as practical following the claimant's
         production of reasonable proof of his or her identity and entitlement
         to the benefit (determined pursuant to the Plan's normal claim
         procedures under Section 9.8).

                  (f) The Committee shall direct the Trustee with respect to the
         procedures to be followed concerning a missing Participant (or
         Beneficiary), and the Company shall be obligated to contribute to the
         Trust Fund any amounts necessary after the application of

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<PAGE>

         Section 6.3 to pay any reinstated benefit after it has been forfeited
         pursuant to the provisions of this Section.

         8.10 Persons Under Legal Disability.

                  (a) If any payee under the Plan is a minor or if the Committee
         reasonably believes that any payee is legally incapable of giving a
         valid receipt and discharge for any payment due him/her, the Committee
         may have the payment, or any part thereof, made to the person (or
         persons or institution) whom it reasonably believes is caring for or
         supporting the payee, unless it has received due notice of claim
         therefor from a duly appointed guardian or committee of the payee.

                  (b) Any such payment shall be a payment from the Accounts of
         the payee and shall, to the extent thereof, be a complete discharge of
         any liability under the Plan to the payee.

         8.11 Additional Documents.

                  (a) The Committee or the Company may require satisfactory
         proof of any matter under the Plan from or with respect to any
         Employee, Participant, or Beneficiary, and no person shall be entitled
         to receive any benefits under the Plan until the required proof shall
         be furnished.

                  (b) The Committee or Trustee, or both, may require the
         execution and delivery of such documents, papers and receipts as the
         Committee or Trustee may determine necessary or appropriate in order to
         establish the fact of death of the deceased Participant and of the
         right and identity of any Beneficiary or other person or persons
         claiming any benefits under this Article VIII.

                  (c) The Committee or the Trustee, or both, may, as a condition
         precedent to the payment of death benefits hereunder, require an
         inheritance tax release and/or such security as the Committee or
         Trustee, or both, may deem appropriate as protection against possible
         liability for State or Federal death taxes attributable to any death
         benefits.

         8.12 Trustee-to-Trustee Transfers. In the case of any Participant or
Participants who have terminated employment with the Company and all Affiliated
Companies and subsequently become employed by an unrelated successor employer,
the Committee, shall at the request of such Participant or Participants, direct
the Trustee to transfer the assets in the Accounts of such Participant or
Participants directly to the trustee of any retirement plan maintained by such
successor employer or employers in lieu of any distribution described in the
preceding provisions of this Article VIII but only if (i) the retirement plan
maintained by such successor employer is determined to the satisfaction of the
Committee to be qualified under Code Section 401, (ii) the sponsor and trustee
of such plan consent to the transfer, and (iii) such transfer satisfies the
conditions of Section 12.3 hereof.

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<PAGE>

         8.13 Loans to Participants. A Participant may borrow from his or her
Accounts while an Employee in accordance with the following rules:

                  (a) Subject to minimum and maximum loan requirements, a
         Participant may borrow up to 50% of his or her After Tax Deposits
         Account, Rollover Account, the vested portion of his or her Company
         Contribution Account and Before Tax Deposits Account. Only one loan may
         be outstanding to a Participant any time. The minimum loan amount shall
         be $1,000 and the maximum loan amount shall be $50,000. The $50,000
         maximum loan amount shall be reduced by the excess, if any, of the
         highest outstanding balance of loans from the Plan to the Participant
         during the one-year period ending on the day before the loan is made
         over the outstanding balance of loans on the date the loan is made.

                  (b) A loan to a Participant shall be made solely from his or
         her Account(s) and shall be considered an investment directed by the
         Participant. Loan amounts shall be funded from the Participant's
         Accounts as determined under procedures established by the Committee;
         provided, however, that principal repayments shall be credited to the
         Participant's Accounts in the inverse of the order used to fund the
         loan and interest payments shall be credited to the Participant's
         Accounts in direct proportion to the principal repayments.

                  (c) A loan to a Participant shall bear an interest rate equal
         to the prime rate reported in the Wall Street Journal on first business
         day of the month in which the loan is granted (the last business day of
         the previous month for loans made prior to July 1, 2000) plus one
         percent (1%) and shall remain fixed throughout the term of the loan.
         Notwithstanding the preceding sentence, if the Committee determines
         that such rate is not reasonable or otherwise not in accordance with
         applicable requirements under the Code or ERISA, the Committee shall
         set an alternate interest rate at the time that the loan is taken.

                  (d) A loan to a Participant shall have a definite maturity
         date. Loans, other than loans made for the purpose of acquiring the
         principal residence of the Participant, shall be made for a period not
         to exceed five (5) years. Loans made for the purpose of acquiring the
         principal residence of the Participant shall be made for a period not
         to exceed fifteen (15) years.

                  (e) A loan to a Participant shall have a definite repayment
         schedule and shall be amortized on a substantially level basis with
         repayments occurring not less frequently than quarterly.
         Notwithstanding the foregoing, the loan repayments shall be suspended
         during an unpaid Leave of Absence not to exceed one year at which time
         loan repayments shall resume. In the case of a Leave of Absence due to
         qualified military service, loan repayments shall be suspended as
         permitted under Code Section 414(u)(4).

                  (f) A loan to a Participant shall be secured by the vested
         portion of the Participant's Account(s). No more than 50% of the
         Participant's vested Account(s) as determined on the date the loan is
         issued shall be considered by the Plan as security for a

                                       59
<PAGE>

         loan. A Participant who borrows from the Plan hereby agrees that,
         unless expressly provided otherwise in loan documents, any such loan is
         automatically secured by 50% of his or her vested Account(s).

                  (g) A loan to a Participant shall be evidenced by a promissory
         note and/or such other documentation as required by the Committee.

                  (h) A loan to a Participant shall be treated as a distribution
         unless the entire principal amount and any interest accrued thereon is
         repaid within ninety (90) days after the occurrence of a Participant's
         Severance. Absent repayment by the Participant, the Committee shall
         instruct the Trustee to distribute the note to the Participant as part
         of his or her distribution and the Participant's vested Account(s)
         shall be reduced to the extent of such distribution.

                  (i) The Committee shall establish the participant loan program
         and have the duty to manage and administer the participant loan program
         in accordance with the terms and provisions of this Section. The
         Committee shall have, but not by way of limitation, the following
         discretionary powers and authority:

                           (i) To determine the manner in which loan repayments
                  shall occur whether it be through automatic payroll deductions
                  or otherwise.

                           (ii) To determine the amount of loan repayments
                  following suspension due to an unpaid Leave of Absence subject
                  to the requirement that the loan must be repaid by the latest
                  date permitted under paragraph (d).

                           (iii) To establish any fees, including but not
                  limited to application fees and maintenance fees, and the
                  manner in which such fees are collected from the Participant.

                           (iv) To consider only those factors which would be
                  considered in a normal commercial setting by persons in the
                  business of making similar types of loans in establishing the
                  participant loan program. Such factors may include the
                  applicant's credit worthiness and financial need, but may not
                  include any factor which would discriminate against
                  Participants who are not Highly Compensated Employees. Loans
                  shall be made available to all Participants without regard to
                  a Participant's race, color, religion, sex, age or national
                  origin and shall not be made available to Participants who are
                  Highly Compensated Employees in an amount greater than the
                  amount made available to Participants who are not Highly
                  Compensated Employees.

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                                   ARTICLE IX
                          OPERATION AND ADMINISTRATION

         9.1 Appointment of Committee. There is hereby created a committee (the
"Committee") which shall exercise such powers and have such duties in
administering the Plan as are hereinafter set forth. The Board of Directors
shall determine the number of members of such Committee. The members of the
Committee shall be appointed by the Board of Directors and such Board shall from
time to time fill all vacancies occurring in said Committee. The members of the
Committee shall constitute the Named Fiduciaries of the Plan within the meaning
of Section 402(a)(2) of ERISA; provided that solely for purposes of Section 5.8
hereof, Participants shall be Named Fiduciaries with respect to shares of
Company Stock allocated to their respective Accounts and solely for purposes of
Section 5.9, Participants shall be Named Fiduciaries with respect to shares of
Company Stock allocated to their respective Accounts on matters as to which they
are entitled to provide voting directions.

         9.2 Transaction of Business. A majority of the Committee shall
constitute a quorum for the transaction of business. Actions of the Committee
may be taken either by vote at a meeting or in writing without a meeting. All
action taken by the Committee at any meeting shall be by a vote of the majority
of those present at such meeting. All action taken in writing without a meeting
shall be by a vote of the majority of those responding in writing. All notices,
advices, directions and instructions to be transmitted by the Committee shall be
in writing and signed by or in the name of the Committee. In all its
communications with the Trustee, the Committee may, by either of the majority
actions specified above, authorize any one or more of its members to execute any
document or documents on behalf of the Committee, in which event it shall notify
the Trustee in writing of such action and the name or names of its members so
designated and the Trustee shall thereafter accept and rely upon any documents
executed by such member or members as representing action by the Committee until
the Committee shall file with the Trustee a written revocation of such
designation.

         9.3 Voting. Any member of the Committee who is also a Participant
hereunder shall not be qualified to act or vote on any matter relating solely to
himself or herself, and upon such matter his or her presence at a meeting shall
not be counted for the purpose of determining a quorum. If, at any time a member
of the Committee is not so qualified to act or vote, the qualified members of
the Committee shall be reduced below two (2), the Board of Directors shall
promptly appoint one or more special members to the Committee so that there
shall be at least one qualified member to act upon the matter in question. Such
special Committee members shall have power to act only upon the matter for which
they were especially appointed and their tenure shall cease as soon as they have
acted upon the matter for which they were especially appointed.

         9.4 Responsibility of Committee. The authority to control and manage
the operation and administration of the Plan, the general administration of the
Plan, the responsibility for carrying out the Plan and the authority and
responsibility to control and manage the assets of the Trust are hereby
delegated by the Board of Directors to and vested in the Committee, except to
the extent reserved to the Board of Directors, the Sponsor, or the Company.
Subject to the limitations of the Plan, the Committee shall, from time to time,
establish rules for the

                                       61
<PAGE>
performance of its functions and the administration of the Plan. In the
performance of its functions, the Committee shall not discriminate in favor of
Highly Compensated Employees.

         9.5 Committee Powers. The Committee shall have all discretionary powers
necessary to supervise the administration of the Plan and control its
operations. In addition to any discretionary powers and authority conferred on
the Committee elsewhere in the Plan or by law, the Committee shall have, but not
by way of limitation, the following discretionary powers and authority:

                  (a) To designate agents to carry out responsibilities relating
         to the Plan, other than fiduciary responsibilities as provided in
         Section 9.6.

                  (b) To employ such legal, actuarial, medical, accounting,
         clerical, and other assistance as it may deem appropriate in carrying
         out the provisions of the Plan, including one or more persons to render
         advice with regard to any responsibility any Named Fiduciary or any
         other fiduciary may have under the Plan.

                  (c) To establish rules and regulations from time to time for
         the conduct of the Committee's business and the administration and
         effectuation of the Plan.

                  (d) To administer, interpret, construe, and apply the Plan and
         to decide all questions which may arise or which may be raised under
         the Plan by any Employee, Participant, former Participant, Beneficiary
         or other person whatsoever, including but not limited to all questions
         relating to eligibility to participate in the Plan, the amount of
         Credited Service of any Participant, and the amount of benefits to
         which any Participant or his or her Beneficiary may be entitled.

                  (e) To determine the manner in which the assets of the Plan,
         or any part thereof, shall be disbursed.

                  (f) To direct the Trustee, in writing, from time to time, to
         invest and reinvest the Trust Fund, or any part thereof, or to
         purchase, exchange, or lease any property, real or personal, which the
         Committee may designate. This shall include the right to direct the
         investment of all or any part of the Trust in any one security or any
         one type of securities permitted hereunder. Among the securities which
         the Committee may direct the Trustee to purchase are "qualifying
         employer securities" as defined in Code Section 4975(e).

                  (g) Subject to provisions (a) through (d) of Section 10.1, to
         make administrative amendments to the Plan that do not cause a
         substantial increase or decrease in benefit accruals to Participants
         and that do not cause a substantial increase in the cost of
         administering the Plan.

                  (h) To perform or cause to be performed such further acts as
         it may deem to be necessary, appropriate or convenient in the efficient
         administration of the Plan.

                                       62
<PAGE>

         Any action taken in good faith by the Committee in the exercise of
discretionary powers conferred upon it by the Plan shall be conclusive and
binding upon the Participants and their Beneficiaries. All discretionary powers
conferred upon the Committee shall be absolute; provided, however, that all such
discretionary power shall be exercised in a uniform and nondiscriminatory
manner.

         9.6 Additional Powers of Committee. In addition to any discretionary
powers or authority conferred on the Committee elsewhere in the Plan or by law,
such Committee shall have the following discretionary powers and authority:

                  (a) To appoint one or more Investment Managers pursuant to
         Section 5.15 to manage and control any or all of the assets of the
         Trust not invested or to be invested in Company Stock.

                  (b) To designate persons (other than the members of the
         Committee) to carry out fiduciary responsibilities, other than any
         responsibility to manage or control the assets of the Trust;

                  (c) To allocate fiduciary responsibilities among the members
         of the Committee, other than any responsibility to manage or control
         the assets of the Trust;

                  (d) To cancel any such designation or allocation at any time
         for any reason;

                  (e) To direct the voting of any Company Stock or any other
         security held by the Trust subject to Section 9.13 hereof; and

                  (f) To exercise management and control over Plan assets and to
         direct the purchase and sale of Company Stock for the Trust.

         Any action under this Section 9.6 shall be taken in writing, and no
designation or allocation under paragraphs (a), (b) or (c) shall be effective
until accepted in writing by the indicated responsible person.

         9.7 Periodic Review of Funding Policy. At periodic intervals the
Committee shall review the long-run and short-run financial needs of the Plan
and shall determine a funding policy for the Plan consistent with the objectives
of the Plan and the minimum funding standards of ERISA, if applicable. In
determining such funding policy the Committee shall take into account, at a
minimum, not only the long-term investment objectives of the Trust Fund
consistent with the prudent management of the assets thereof, but also the
short-run needs of the Plan to pay benefits. All actions taken by the Committee
with respect to the funding policy of the Plan, including the reasons therefor,
shall be fully reflected in the minutes of the Committee.

         9.8 Claims Procedures. If a Participant believes that he or she is
being denied any rights or benefits under the Plan, such Participant (or his or
her beneficiary or duly appointed representative) may file a claim for benefits
in writing with the Committee. The Committee shall follow the procedures set
forth in this Section in processing a claim for benefits.

                                       63
<PAGE>

                  (a) Within 90 days following receipt by the Committee of a
         claim for benefits and all necessary documents and information, the
         Committee shall furnish the person claiming benefits under the Plan
         ("Claimant") with written notice of the decision rendered with respect
         to such claim. Should special circumstances require an extension of
         time for processing the claim, written notice of the extension shall be
         furnished to the Claimant prior to the expiration of the initial 90 day
         period. The notice shall indicate the special circumstances requiring
         an extension of time and the date by which a final decision is expected
         to be rendered. In no event shall the period of the extension exceed 90
         days from the end of the initial 90 day period.

                  (b) In the case of a denial of the Claimant's claim, the
         written notice of such denial shall set forth (i) the specific reasons
         for the denial, (ii) references to the Plan provisions upon which the
         denial is based, (iii) a description of any additional information or
         material necessary for perfection of the claim (together with an
         explanation why such material or information is necessary), and (iv) an
         explanation of the Plan's appeals procedures.

                  (c) If the Committee does not respond or does not furnish an
         extension notice within 90 days, the Claimant may consider his or her
         claim denied.

         9.9 Appeals Procedures. A Claimant who wishes to appeal the denial of
his or her claim for benefits shall follow the administrative procedures for an
appeal as set forth in this Section and shall exhaust such administrative
procedures prior to seeking any other form of relief.

                  (a) In order to appeal a decision rendered with respect to his
         or her claim for benefits, a Claimant must file an appeal with the
         Committee in writing within 60 days after the date of notice of the
         decision with respect to the claim, or if the claim has neither been
         approved nor denied within the period provided in Section 9.8(a) above,
         then the appeal must be made within 150 days of the date the claim for
         benefits was filed with the Committee.

                  (b) The Claimant may request that his or her appeal be given
         full and fair review by the Committee. The Claimant also may review all
         pertinent documents and submit issues and comments in writing in
         connection with the appeal. The decision of the Committee shall be made
         no later than 60 days after the Claimant has completed his or her
         submission to the Committee of his or her appeal and any documentation
         or other information to be submitted in support of such request. Should
         special circumstances require an extension of time for processing,
         written notice of the extension shall be furnished to the Claimant
         prior to the expiration of the initial 60 day period. The notice shall
         indicate the special circumstances requiring an extension of time and
         the date by which a final decision is expected to be rendered. In no
         event shall the period of the extension exceed 60 days from the end of
         the initial 60 day period.

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<PAGE>

                  (c) The decision on the Claimant's appeal shall be in writing
         and shall include specific reasons for the decision, written in a
         manner calculated to be understood by the Claimant with specific
         reference to the pertinent Plan provisions upon which the decision is
         based.

                  (d) If the Committee does not respond or does not furnish an
         extension notice within 60 days, the Claimant may consider his or her
         appeal denied.

         9.10 Limitation on Liability. Each of the fiduciaries under the Plan
shall be solely responsible for its own acts and omissions and no fiduciary
shall be liable for any breach of fiduciary responsibility resulting from the
act or omission of any other fiduciary or person to whom fiduciary
responsibilities have been allocated or delegated pursuant to Section 9.6,
except as provided in Sections 405(a) and 405(c)(2)(A) or (B) of ERISA. The
Committee shall have no responsibility over assets as to which management and
control has been delegated to an Investment Manager appointed pursuant to
Section 5.15 hereof or as to which management and control has been retained by
the Trustee.

         9.11 Indemnification and Insurance. To the extent permitted by law, the
Company shall indemnify and hold harmless the Committee and each member thereof,
each Trustee, the Board of Directors and each member thereof, and such other
persons as the Board of Directors may specify, from the effects and consequences
of his or her acts, omissions, and conduct in his or her official capacity in
connection with the Plan and Trust. To the extent permitted by law, the Company
may also purchase liability insurance for such persons.

         9.12 Compensation of Committee and Plan Expenses. Members of the
Committee shall serve as such without compensation unless the Board of Directors
shall otherwise determine, but in no event shall any member of the Committee who
is an Employee receive compensation from the Plan for his or her services as a
member of the Committee. All members shall be reimbursed for any necessary
expenditures incurred in the discharge of duties as members of the Committee.
The compensation or fees, as the case may be, of all officers, agents, counsel,
the Trustee or other persons retained or employed by the Committee shall be
fixed by the Committee, subject to approval by the Board of Directors. The
expenses incurred in the administration and operation of the Plan, including but
not limited to the expenses incurred by the members of the Committee in
exercising their duties, shall be paid by the Plan from the Trust Fund, unless
paid by the Company, provided, however, that the Plan and not the Company shall
bear the cost of interest and normal brokerage charges which are included in the
cost of securities purchased by the Trust Fund (or charged to proceeds in the
case of sales). If such expenses are to be paid by the Plan from the Trust Fund,
the Committee may direct the Trustee to use forfeitures and dividends (and to
sell the shares of Company Stock that represent such forfeitures or dividends)
to pay such expenses.

         9.13 Resignation. Any member of the Committee may resign by giving
fifteen (15) days notice to the Board of Directors, and any member shall resign
forthwith upon receipt of the written request of the Board of Directors, whether
or not said member is at that time the only member of the Committee.

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<PAGE>

         9.14 Reliance Upon Documents and Opinions. The members of the
Committee, the Board of Directors, the Company and any person delegated to carry
out any fiduciary responsibilities under the Plan (hereinafter a "delegated
fiduciary"), shall be entitled to rely upon any tables, valuations,
computations, estimates, certificates and reports furnished by any consultant,
or firm or corporation which employs one or more consultants, upon any opinions
furnished by legal counsel, and upon any reports furnished by the Trustee or any
Investment Manager. The members of the Committee, the Board of Directors, the
Company and any delegated fiduciary shall be fully protected and shall not be
liable in any manner whatsoever for anything done or action taken or suffered in
reliance upon any such consultant, or firm or corporation which employs one or
more consultants, Trustee, Investment Manager, or counsel. Any and all such
things done or such action taken or suffered by the Committee, the Board of
Directors, the Company and any delegated fiduciary shall be conclusive and
binding on all Employees, Participants, Beneficiaries, and any other persons
whomsoever, except as otherwise provided by law. The Committee and any delegated
fiduciary may, but are not required to, rely upon all records of the Company
with respect to any matter or thing whatsoever, and may likewise treat such
records as conclusive with respect to all Employees, Participants,
Beneficiaries, and any other persons whomsoever, except as otherwise provided by
law.

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                                   ARTICLE X
                         AMENDMENT AND ADOPTION OF PLAN

         10.1 Right to Amend Plan. The Sponsor, by resolution of the Board of
Directors, shall have the right to amend the Plan and Trust Agreement at any
time and from time to time and in such manner and to such extent as it may deem
advisable, including retroactively, subject to the following provisions:

                  (a) No amendment shall have the effect of reducing any
         Participant's vested interest in the Plan or eliminating an optional
         form of distribution.

                  (b) No amendment shall have the effect of diverting any part
         of the assets of the Plan to persons or purposes other than the
         exclusive benefit of the Participants or their Beneficiaries.

                  (c) No amendment shall have the effect of increasing the
         duties or responsibilities of a Trustee without its written consent.

                  (d) No amendment shall result in discrimination in favor of
         officers, shareholders, or other highly compensated or key employees.

         The Committee shall have the right to amend the Plan, subject to
paragraphs (a) through (d), in accordance with the provisions of Section 9.5(g).

         10.2 Adoption of Plan by Affiliated Companies. Subject to approval by
the Board of Directors and consistent with the provisions of ERISA, an
Affiliated Company may adopt the Plan for all or any specified group of its
Eligible Employees by entering into an adoption agreement in the form and
substance prescribed by the Committee. The adoption agreement may include such
modification of the Plan provisions with respect to such Eligible Employees as
the Committee approves after having determined that no prohibited discrimination
or other threat to the qualification of the Plan is likely to result. The Board
of Directors may prospectively revoke or modify an Affiliated Company's
participation in the Plan at any time and for any or no reason, without regard
to the terms of the adoption agreement, or terminate the Plan with respect to
such Affiliated Company's Eligible Employees and Participants. By execution of
an adoption agreement (each of which by this reference shall become part of the
Plan), the Affiliated Company agrees to be bound by all the terms and conditions
of the Plan.

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                                   ARTICLE XI
                         DISCONTINUANCE OF CONTRIBUTIONS

         In the event the Company decides it is impossible or inadvisable for
business reasons to continue to make contributions under the Plan, it may, by
resolution of the Board of Directors, discontinue contributions to the Plan.
Upon the permanent discontinuance of contributions to the Plan and
notwithstanding any other provisions of the Plan, the rights of Participants
shall become fully vested and nonforfeitable unless replaced by a comparable
plan. The permanent discontinuance of contributions on the part of the Company
shall not terminate the Plan as to the funds and assets then held in the Trust,
or operate to accelerate any payments of distributions to or for the benefit of
Participants or Beneficiaries, and the Trust shall continue to be administered
in accordance with the provisions hereof until the obligations hereunder shall
have been discharged and satisfied.

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                                  ARTICLE XII
                             TERMINATION AND MERGER

         12.1 Right to Terminate Plan. In the event the Board of Directors
decides it is impossible or inadvisable for business reasons to continue the
Plan, then it may, by resolution, terminate the Plan. Upon and after the
effective date of such termination, the Company shall not make any further
contributions under the Plan. Upon the termination or partial termination of the
Plan for any reason, the interest in the Trust of each affected Participant
shall automatically become fully vested unless the Plan is continued after its
termination by conversion of the Plan into a comparable Plan through Plan
amendment or through merger. After the satisfaction of all outstanding
liabilities of the Plan to persons other than Participants and Beneficiaries,
all unallocated assets shall be allocated to the Accounts of Participants to the
maximum extent permitted by law. The Trust Fund may not be fully or finally
liquidated until all assets are allocated to Accounts; alternatively any
unallocated assets may be transferred to another defined contribution plan
maintained by the Sponsor or an Affiliated Company qualified under Code Section
401 where such assets shall be allocated among the accounts of Participants
herein who are participants in such transferee plan. In no event, however, shall
any part of the Plan revert to or be recoverable by the Company, or be used for
or diverted to purposes other than for the exclusive benefit of the Participants
or their Beneficiaries. Notwithstanding the foregoing, amounts held in the 415
Suspense Account may revert to the Company in accordance with Section 13.6.

         12.2 Merger Restriction. Notwithstanding any other provision in the
Plan, the Plan shall not in whole or in part merge or consolidate with, or
transfer its assets or liabilities to, any other plan unless each affected
Participant in the Plan 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 or she would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan had then
terminated).

         12.3 Effect on Trustee and Committee. The Trustee and the Committee
shall continue to function as such for such period of time as may be necessary
for the winding up of the Plan and for the making of distributions in the manner
prescribed by the Board of Directors at the time of termination of the Plan.

         12.4 Effect of Reorganization, Transfer of Assets or Change in Control.

                  (a) In the event of a consolidation or merger of the Company,
         or in the event of a sale and/or any other transfer of the operating
         assets of the Company, any ultimate successor or successors to the
         business of the Company may continue the Plan in full force and effect
         by adopting the same by resolution of its board of directors and by
         executing a proper supplemental or transfer agreement with the Trustee.

                  (b) In the event of a Change in Control (as herein defined),
         all Participants who were Participants on the date of such Change in
         Control shall become 100% vested in any amounts allocated to their
         Company Contribution

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<PAGE>

         Accounts on the date of such Change in Control and in any amounts
         allocated to their Company Contribution Accounts subsequent to the date
         of the Change in Control. Notwithstanding the foregoing, the Board of
         Directors may, at its discretion, amend or delete this paragraph (b) in
         its entirety prior to the occurrence of any such Change in Control. For
         the purpose of this paragraph (b), "Change in Control" shall mean the
         following and shall be deemed to occur if any of the following events
         occur:

                           (i) Any "person," as such term is used in Sections
                  13(d) and 14(d) of the Securities Exchange Act of 1934, as
                  amended (the "Exchange Act") (a "Person"), is or becomes the
                  "beneficial owner," as defined in Rule 13d-3 under the
                  Exchange Act (a "Beneficial Owner"), directly or indirectly,
                  of securities of the Sponsor representing (1) 20% or more of
                  the combined voting power of the Sponsor's then outstanding
                  voting securities, which acquisition is not approved in
                  advance of the acquisition or within 30 days after the
                  acquisition by a majority of the Incumbent Board (as
                  hereinafter defined) or (2) 33% or more of the combined voting
                  power of the Sponsor's then outstanding voting securities,
                  without regard to whether such acquisition is approved by the
                  Incumbent Board;

                           (ii) Individuals who, as of the date hereof,
                  constitute the Board of Directors (the "Incumbent Board"),
                  cease for any reason to constitute at least a majority of the
                  Board of Directors, provided that any person becoming a
                  director subsequent to the date hereof whose election, or
                  nomination for election by the Sponsor's stockholders, is
                  approved by a vote of at least a majority of the directors
                  then comprising the Incumbent Board (other than an election or
                  nomination of an individual whose initial assumption of office
                  is in connection with an actual or threatened election contest
                  relating to the election of the directors of the Sponsor, as
                  such terms are used in Rule 14a-11 of Regulation 14A
                  promulgated under the Exchange Act) shall, for the purposes of
                  the Plan, be considered as though such person were a member of
                  the Incumbent Board of the Sponsor;

                           (iii) The consummation of a merger, consolidation or
                  reorganization involving the Sponsor, other than one which
                  satisfies both of the following conditions:

                                    (1) a merger, consolidation or
                           reorganization which would result in the voting
                           securities of the Sponsor outstanding immediately
                           prior thereto continuing to represent (either by
                           remaining outstanding or by being converted into
                           voting securities of another entity) at least 55% of
                           the combined voting power of the voting securities of
                           the Sponsor or such other entity resulting from the
                           merger, consolidation or reorganization (the
                           "Surviving Corporation") outstanding immediately
                           after such merger, consolidation or reorganization
                           and being held in substantially the same proportion
                           as the ownership in the Sponsor's voting

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<PAGE>

                           securities immediately before such merger,
                           consolidation or reorganization, and

                                    (2) a merger, consolidation or
                           reorganization in which no Person is or becomes the
                           Beneficial Owner, directly or indirectly, of
                           securities of the Sponsor representing 20% or more of
                           the combined voting power of the Sponsor's then
                           outstanding voting securities; or

                           (iv) The stockholders of the Sponsor approve a plan
                  of complete liquidation of the Sponsor or an agreement for the
                  sale or other disposition by the Sponsor of all or
                  substantially all of the Sponsor's assets.

                  Notwithstanding the preceding provisions of this paragraph
         (b), a Change in Control shall not be deemed to have occurred if the
         Person described in the preceding provisions of this paragraph (b) is
         (i) an underwriter or underwriting syndicate that has acquired any of
         the Sponsor's then outstanding voting securities solely in connection
         with a public offering of the Sponsor's securities, (ii) the Sponsor or
         any subsidiary of the Sponsor or (iii) an employee stock ownership plan
         or other employee benefit plan maintained by the Sponsor or an
         Affiliated Company that is qualified under the provisions of the Code.
         In addition, notwithstanding the preceding provisions of this paragraph
         (b), a Change in Control shall not be deemed to have occurred if the
         Person described in the preceding provisions of this paragraph (b)
         becomes a Beneficial Owner of more than the permitted amount of
         outstanding securities as a result of the acquisition of voting
         securities by the Sponsor or an Affiliated Company which, by reducing
         the number of voting securities outstanding, increases the proportional
         number of shares beneficially owned by such Person, provided, that if a
         Change in Control would occur but for the operation of this sentence
         and such Person becomes the Beneficial Owner of any additional voting
         securities (other than through the exercise of options granted under
         any stock option plan of the Sponsor or through a stock dividend or
         stock split), then a Change in Control shall occur.

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<PAGE>

                                  ARTICLE XIII
                            LIMITATION ON ALLOCATIONS

         13.1 General Rule.

                  (a) For Limitation Years beginning on or after January 1,
         2002, the total Annual Additions under the Plan to a Participant's
         Accounts shall not exceed the lesser of:

                           (i) Forty Thousand Dollars ($40,000) as adjusted for
                  increases in the cost-of-living under Code Section 415(d); or

                           (ii) One Hundred Percent (100%) of the Participant's
                  Compensation (as defined in Section 13.5), from the Company
                  for the Limitation Year,

         except to the extent "catch-up" contributions are permitted under
         Section 4.2(e) and Code Section 414(v). Notwithstanding the foregoing
         sentence, the compensation limit set forth in subparagraph (ii) shall
         not apply to any contribution for medical benefits after separation
         from service (within the meaning of Code Section 401(h) or Code Section
         419A(f)(2)) which is otherwise treated as an Annual Addition.

                  (b) For Limitation Years beginning prior to January 1, 2002,
         the total Annual Additions under the Plan to a Participant's Accounts
         shall not exceed the lesser of:

                           (i) Thirty Thousand Dollars ($30,000), as adjusted
                  for increases in the cost-of-living under Code Section 415(d);
                  or

                           (ii) Twenty-five percent (25%) of the Participant's
                  Compensation (as defined in Section 13.5), from the Company
                  for the Limitation Year.

                  (c) For the purpose of this Article XIII, the term "Company"
         shall mean the Sponsor and any Affiliated Company (determined by
         reference to Code Section 415(h)) whether or not such Affiliated
         Company has adopted the Plan pursuant to Section 10.2 and the term
         "Limitation Year" shall mean the Plan Year.

         13.2 Annual Additions. For purposes of Section 13.1, the term "Annual
Additions" shall mean with respect to a Participant, for any Limitation Year
with respect to the Plan, the sum of the amounts described below:

                  (a) All amounts contributed or deemed contributed by the
         Company.

                  (b) All amounts contributed by the Participant.

                  (c) Forfeitures allocated to such Participant.

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<PAGE>

                  (d) Any amounts allocated, after March 31, 1984, to an
         individual medical account as defined in Code Section 415(l)(2)
         established under a pension or annuity plan maintained by the Company.

                  (e) Any amounts allocated for such Plan Year which amounts are
         derived from contributions paid or accrued after December 31, 1985, in
         taxable years ending after such date, which are attributable to post
         retirement medical benefits allocated to the separate account of a key
         employee (as defined in Code Section 419A(d)(3)) under a welfare
         benefit fund (as defined in Code Section 419(e)) maintained by the
         Company.

                  (f) Excess deferral amounts determined pursuant to Sections
         4.5 and 6.12.

                  (g) Excess deferral amounts determined pursuant to Section 4.4
         to the extent such amounts are distributed after the first April 15th
         following the close of the Participant's taxable year.

         Notwithstanding the foregoing, a Participant's Rollover Contributions
shall not be considered an Annual Addition.

         13.3 Other Defined Contribution Plans. If the Company maintains any
other defined contribution plan, then each Participant's Annual Additions under
such defined contribution plan shall be aggregated with the Participant's Annual
Additions under the Plan for the purposes of applying the limitations of Section
13.1.

         13.4 Adjustments for Excess Annual Additions. If as a result of the
allocation of forfeitures, a reasonable error in estimating a Participant's
Compensation, or under other limited facts and circumstances that the
Commissioner of Internal Revenue finds justify the availability of the rules set
forth in Regulation Section 1.415-6(b)(6), the Annual Additions on behalf of any
Participant in a Limitation Year to the Plan and all other defined contribution
plans maintained by the Company exceed the limitation set forth in Section 13.1,
such Participant's Annual Additions for the Plan shall be reduced in the
following order: (i) After Tax Deposits that are not Matched Deposits, (ii)
After Tax Deposits that are Matched Deposits, (iii) Before Tax Deposits that are
not Matched Deposits, (iv) Before Tax Deposits that are Matched Deposits, and
(v) Matching Contributions. The portion of the reduction attributable to
Participant Deposits shall be refunded to the Participants and the balance
attributable to Matching Contributions, if any, shall be held unallocated in a
415 Suspense Account established for the purpose of this Section 13.4 and shall
be used to reduce Company Contributions for the next limitation year (and
succeeding limitation year, as necessary) for all Participants in the Plan. The
415 Suspense Account shall be exhausted before any Company contributions shall
be allocated to the Accounts of Participants.

         13.5 Compensation. For the purpose of this Article XIII, Compensation
shall mean a Participant's earned income, wages, salaries, fees for professional
services, and other amounts received (without regard to whether or not an amount
is paid in cash) for personal services actually rendered in the course of
employment with the Company maintaining the Plan and shall be determined as
described below:

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<PAGE>

                  (a) Compensation shall include to the extent that the amounts
         are includible in gross income (including, but not limited to,
         commissions paid salespeople, compensation for services on the basis of
         a percentage of profits, commissions on insurance premiums, tips,
         bonuses, fringe benefits, and reimbursements or other expense
         allowances under a nonaccountable plan as described in Regulation
         1.62-2(c)).

                  (b) Compensation shall include any elective deferral as
         defined in Code Section 402(g)(3), any amount which is contributed or
         deferred by the Company at the election of the Employee that is
         excludable from an Employee's gross income under Code Sections 125 or
         457 and, for Plan Years beginning on or after January 1, 1998, any
         elective amount that is excludable from an Employee's gross income
         under Code Section 132(f)(4).

                  (c) Compensation shall not include (i) any employer
         contributions to a plan of deferred compensation which are not included
         in the Employee's gross income for the taxable year in which
         contributed, (ii) any distributions from a plan of deferred
         compensation, (iii) any amounts realized from the exercise of a
         non-qualified stock option or when restricted stock or property held by
         the Employee becomes either freely transferable or is no longer subject
         to a substantial risk of forfeiture under Code Section 83 if such
         option, stock, or property was granted to the Employee by the Company,
         (iv) any amounts realized from the sale, exchange, or other disposition
         of stock acquired under a qualified stock option, (v) any contribution
         for medical benefits (within the meaning of Code Section 419(f)(2)
         after termination of employment which is otherwise treated as an Annual
         Addition, and (vi) any amount otherwise treated as an Annual Addition
         under Code Section 415(l)(1).

         13.6 Treatment of 415 Suspense Account Upon Termination. In the event
the Plan shall terminate at a time when all amounts in the 415 Suspense Account
have not been allocated to the Accounts of the Participants, the 415 Suspense
Account amounts shall be applied as follows:

                  (a) The amount in the 415 Suspense Account shall first be
         allocated, as of the Plan termination date, to Participants in
         accordance with the allocation formula applicable to Company
         Contributions provided under Section 6.3.

                  (b) If, after those allocations have been made, any further
         residue funds remain in the 415 Suspense Account, the residue may
         revert to the Company in accordance with applicable provisions of the
         Code, ERISA, and the regulations thereunder.

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                                  ARTICLE XIV
                                 TOP-HEAVY RULES

         14.1 Applicability. Notwithstanding any provision in the Plan to the
contrary, and subject to the limitations set forth in Section 14.6, the
requirements of Sections 14.4 and 14.5 shall apply under the Plan in the case of
any Plan Year in which the Plan is determined to be a Top-Heavy Plan under the
rules of Section 14.3. For the purpose of this Article XIV, the term "Company"
shall mean the Sponsor and any Affiliated Company whether or not such Affiliated
Company has adopted the Plan.

         14.2 Definitions. For purposes of this Article XIV, the following
special definitions and rules shall apply:

                  (a) The term "Key Employee" means any Employee or former
         Employee (including any deceased Employee) who, at any time during the
         Plan Year that includes the Determination Date, was an officer of the
         Company having annual Compensation greater than $130,000 (as adjusted
         under Code Section 416(i)(1) for Plan Years beginning after December
         31, 2002), a Five Percent Owner of the Company, or an One Percent Owner
         of the Company having annual Compensation of more than $150,000.
         Notwithstanding the foregoing, for Plan Years beginning prior to
         January 1, 2002, the term "Key Employee" means any Employee or former
         Employee (including any deceased Employee) who, at any time during the
         Plan Year or any of the four preceding Plan Years, is or was: (i) an
         officer of the Company having an annual Compensation greater than 50%
         of the amount in effect under Code Section 415(b)(1)(A) for the Plan
         Year; provided, however, for such purposes no more than 50 Employees
         (or, if lesser, the greater of three Employees or 10% of the Employees)
         shall be treated as officers; (ii) one of the ten Employees having
         annual Compensation from the Company of more than the limitation in
         effect under Code Section 415(c)(1)(A) and owning (or considered as
         owning within the meaning of Code Section 318) the largest interests in
         the Company; provided, however, if two Employees have the same interest
         in the Company, the Employee having greater annual Compensation from
         the Company shall be treated as having a larger interest; (iii) a Five
         Percent Owner of the Company; or (iv) a One Percent Owner of the
         Company having an annual Compensation from the Company of more than
         $150,000.

                  (b) The term "Five Percent Owner" means any person who owns
         (or is considered as owning within the meaning of Code Section 318)
         more than 5% of the outstanding stock of the Company or stock
         possessing more than 5% of the total combined voting power of all stock
         of the Company.

                  (c) The term "One Percent Owner" means any person who would be
         described in paragraph (b) if "1%" were substituted for "5%" each place
         where it appears therein.

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<PAGE>

                  (d) The term "Non-Key Employee" means any Employee who is not
         a Key Employee.

                  (e) The term "Determination Date" means, with respect to any
         plan year, the last day of the preceding plan year. In the case of the
         first plan year of any plan, the term "Determination Date" shall mean
         the last day of that plan year.

                  (f) The term "Aggregation Group" means (i) each qualified plan
         of the Company in which at least one Key Employee participates or
         participated at any time during the determination period (regardless of
         whether the plan has terminated), and (ii) any other qualified plan of
         the Company which enables a plan described in clause (i) to meet the
         requirements of Code Sections 401(a)(4) or 410. Any plan not required
         to be included in an Aggregation Group under the preceding rules may be
         treated as being part of such group if the group would continue to meet
         the requirements of Code Sections 401(a)(4) and 410 with the plan being
         taken into account.

                  (g) For purposes of determining ownership under paragraphs
         (a), (b) and (c) above, the following special rules shall apply: (i)
         Code Section 318(a)(2)(C) shall be applied by substituting "5%" for
         "50%", and (ii) the aggregation rules of Code Sections 414(b), (c) and
         (m) shall not apply, with the result that the ownership tests of this
         Section 14.2 shall apply separately with respect to each Affiliated
         Company.

                  (h) The terms "Key Employee" and "Non-Key Employee" shall
         include their Beneficiaries, and the definitions provided under this
         Section 14.2 shall be interpreted and applied in a manner consistent
         with the provisions of Code Section 416(i) and the regulations
         thereunder.

                  (i) For purposes of this Article XIV, an Employee's
         Compensation shall be determined in accordance with the rules of
         Section 13.5.

         14.3 Top-Heavy Status.

                  (a) The term "Top-Heavy Plan" means, with respect to any Plan
         Year:

                           (i) Any defined benefit plan if, as of the
                  Determination Date, the present value of the cumulative
                  accrued benefits under the plan for Key Employees exceeds 60%
                  of the present value of the cumulative accrued benefits under
                  the plan for all Employees; and

                           (ii) Any defined contribution plan if, as of the
                  Determination Date, the aggregate of the account balances of
                  Key Employees under the plan exceeds 60% of the aggregate of
                  the account balances of all Employees under the plan.

                  In applying the foregoing provisions of this paragraph (a),
         the valuation date to be used in valuing Plan assets shall be (i) in
         the case of a defined benefit plan, the same date which is used for
         computing costs for minimum funding purposes, and (ii) in the case of

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<PAGE>

         a defined contribution plan, the most recent valuation date within a
         12-month period ending on the applicable Determination Date.

                  (b) Each plan maintained by the Company required to be
         included in an Aggregation Group shall be treated as a Top-Heavy Plan
         if the Aggregation Group is a Top-Heavy Group.

                  (c) The term "Top-Heavy Group" means any Aggregation Group if
         the sum (as of the Determination Date) of (i) the present value of the
         cumulative accrued benefits for Key Employees under all defined benefit
         plans included in the group, and (ii) the aggregate of the account
         balances of Key Employees under all defined contribution plans included
         in the group exceeds 60% of a similar sum determined for all Employees.
         For purposes of determining the present value of the cumulative accrued
         benefit of any Employee, or the amount of the account balance of any
         Employee, such present value or amount shall be increased by the
         aggregate distributions made with respect to the Employee under the
         plan (including a terminated plan which, had it not been terminated,
         would have been aggregated with the plan under Code Section
         416(g)(2)(A)(i)) during the one year period ending on the Determination
         Date. In the case of distributions made for a reason other than
         separation from service, death, or disability, the preceding sentence
         shall be applied by substituting "five year period" for "one year
         period." For Plan Years beginning prior to January 1, 2002, the present
         value of the cumulative accrued benefit of any Employee or the amount
         of the account balance of any Employee shall be increased by the
         aggregate distributions made with respect to the Employee under the
         plan during the five year period ending on the Determination Date. For
         all Plan Years, any rollover contribution or similar transfer initiated
         by the Employee and made after December 31, 1983, to a plan shall not
         be taken into account with respect to the transferee plan for purposes
         of determining whether such plan is a Top-Heavy Plan (or whether any
         Aggregation Group which includes such plan is a Top-Heavy Group).

                  (d) If any individual is a Non-Key Employee with respect to
         any plan for any plan year, but the individual was a Key Employee with
         respect to the plan for any prior plan year, any accrued benefit for
         the individual (and the account balance of the individual) shall not be
         taken into account for purposes of this Section 14.3.

                  (e) If any individual has not performed services for the
         Company at any time during the one year period (five year period for
         Plan Years beginning prior to January 1, 2002) ending on the
         Determination Date, any accrued benefit for such individual (and the
         account balance of the individual) shall not be taken into account for
         purposes of this Section 14.3.

                  (f) In applying the foregoing provisions of this Section, the
         accrued benefit of a Non-Key Employee shall be determined (i) under the
         method, if any, which is used for accrual purposes under all plans of
         the Company and any Affiliated Companies, or (ii) if there is no such
         uniform method, as if such benefit accrued not more rapidly than the
         slowest accrual rate permitted under Code Section 411(b)(1)(C).

                                       77
<PAGE>

                  (g) For all purposes of this Article XIV, the definitions
         provided under this Section 14.3 shall be applied and interpreted in a
         manner consistent with the provisions of Code Section 416(g) and the
         regulations thereunder.

         14.4 Minimum Contributions. For any Plan Year in which the Plan is
determined to be a Top-Heavy Plan, the minimum employer contributions for that
year shall be determined in accordance with the rules of this Section 14.4.

                  (a) Except as provided below, the minimum contribution for
         each Non-Key Employee shall be not less than 3% of his or her
         compensation. Before Tax Deposits shall not be taken into account but
         Matching Contributions as defined in Section 6.11 shall be taken into
         account for purposes of satisfying the minimum contribution
         requirement. Matching Contributions that are used to satisfy the
         minimum contribution requirement shall be treated as matching
         contributions for purposes of the actual contribution percentage test
         and other requirements of Code Section 401(m). For Plan Years beginning
         prior to January 1, 2002, both Before Tax Deposits and Matching
         Contributions as defined in Section 6.11 shall not be taken into
         account for purposes of satisfying the minimum contribution
         requirement.

                  (b) Subject to the following rules of this paragraph (b), the
         percentage set forth in paragraph (a) above shall not be required to
         exceed the percentage at which contributions (including amounts
         deferred under a cash or deferred arrangement under Code Section
         401(k)) are made (or are required to be made) under the Plan for the
         year for the Key Employee for whom the percentage is the highest for
         the year. This determination shall be made by dividing the
         contributions for each Key Employee by so much of his or her total
         compensation for the Plan Year as does not exceed the applicable
         Compensation limit. For purposes of this paragraph (b), all defined
         contribution plans required to be included in an Aggregation Group
         shall be treated as one plan. Notwithstanding the foregoing, the
         exceptions to paragraph (a) as provided under this paragraph (b) shall
         not apply to any plan required to be included in an Aggregation Group
         if the plan enables a defined benefit plan to meet the requirements of
         Code Sections 401(a)(4) or 410.

                  (c) The Participant's minimum contribution determined under
         this Section 14.4 shall be calculated without regard to any Social
         Security benefits payable to the Participant.

                  (d) In the event a Participant is covered by both a defined
         contribution and a defined benefit plan maintained by the Company, both
         of which are determined to be Top-Heavy Plans, the Company shall
         satisfy the minimum benefit requirements of Code Section 416 by
         providing (in lieu of the minimum contribution described in paragraph
         (a) above) a minimum benefit under the defined benefit plan so as to
         prevent the duplication of required minimum benefits hereunder.

                                       78
<PAGE>

         14.5 Minimum Vesting Rules. For any Plan Year in which it is determined
that the Plan is a Top-Heavy Plan, the vesting schedule shall be the vesting
schedule set forth in Section 7.2(a).

         14.6 Noneligible Employees. The rules of this Article XIV shall not
apply to any Employee included in a unit of employees covered by a collective
bargaining agreement between employee representatives and one or more employers
if retirement benefits were the subject of good faith bargaining between such
employee representatives and the employer or employers.

                                       79
<PAGE>

                                   ARTICLE XV
                          RESTRICTION ON ASSIGNMENT OR
                        OTHER ALIENATION OF PLAN BENEFITS

         15.1 General Restrictions Against Alienation.

                  (a) The interest of any Participant or his or her Beneficiary
         in the income, benefits, payments, claims or rights hereunder, or in
         the Trust Fund, shall not in any event be subject to sale, assignment,
         hypothecation, or transfer. Each Participant and Beneficiary is
         prohibited from anticipating, encumbering, assigning, or in any manner
         alienating his or her interest under the Trust Fund, and is without
         power to do so, except as may be permitted in connection with providing
         security for a loan from the Plan to the Participant pursuant to the
         provisions of the Plan as it may be amended from time to time. The
         interest of any Participant or Beneficiary shall not be liable or
         subject to his or her debts, liabilities, or obligations, now
         contracted, or which may hereafter be contracted, and such interest
         shall be free from all claims, liabilities, or other legal process now
         or hereafter incurred or arising. Neither the interest of a Participant
         or Beneficiary, nor any part thereof, shall be subject to any judgment
         rendered against any such Participant or Beneficiary. Notwithstanding
         the foregoing, a Participant's or Beneficiary's interest in the Plan
         may be subject to the enforcement of a Federal tax levy made pursuant
         to Code Section 6331 or the collection by the United States on a
         judgment resulting from an unpaid tax assessment.

                  (b) In the event any person attempts to take any action
         contrary to this Article XV, such action shall be null and void and of
         no effect, and the Company, the Committee, the Trustee and all
         Participants and their Beneficiaries, may disregard such action and are
         not in any manner bound thereby, and they, and each of them, shall
         suffer no liability for any such disregard thereof, and shall be
         reimbursed on demand out of the Trust Fund for the amount of any loss,
         cost or expense incurred as a result of disregarding or of acting in
         disregard of such action.

                  (c) The foregoing provisions of this Section shall be
         interpreted and applied by the Committee in accordance with the
         requirements of Code Section 401(a)(13) and Section 206(d) of ERISA as
         construed and interpreted by authoritative judicial and administrative
         rulings and regulations.

         15.2 Qualified Domestic Relations Orders. The rules set forth in
Section 15.1 above shall not apply with respect to a "Qualified Domestic
Relations Order" as described below.

                  (a) A "Qualified Domestic Relations Order" is a judgment,
         decree, or order (including approval of a property settlement
         agreement) that:

                           (i) Creates or recognizes the existence of an
                  Alternate Payee's right to, or assigns to an Alternate Payee
                  the right to, receive all or a portion of the benefits payable
                  under the Plan with respect to a Participant,

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<PAGE>

                           (ii) Relates to the provision of child support,
                  alimony payments, or marital property rights to a spouse,
                  former spouse, child or other dependent of a Participant,

                           (iii) Is made pursuant to a State domestic relations
                  law (including a community property law), and

                           (iv) Clearly specifies: (A) the name and last known
                  mailing address (if any) of the Participant and the name and
                  mailing address of each Alternate Payee covered by the order
                  (if the Committee does not have reason to know that address
                  independently of the order); (B) the amount or percentage of
                  the Participant's benefits to be paid to each Alternate Payee,
                  or the manner in which the amount or percentage is to be
                  determined; (C) the number of payments or period to which the
                  order applies; and (D) each plan to which the order applies.

                  For purposes of this Section 15.2, "Alternate Payee" means any
         spouse, former spouse, child or other dependent of a Participant who is
         recognized by a domestic relations order as having a right to receive
         all, or a portion of, the benefits payable with respect to the
         Participant.

                  (b) A domestic relations order is not a Qualified Domestic
         Relations Order if it requires:

                           (i) The Plan to provide any type or form of benefit,
                  or any option, not otherwise provided under the Plan;

                           (ii) The Plan to provide increased benefits; or

                           (iii) The payment of benefits to an Alternate Payee
                  that are required to be paid to another Alternate Payee under
                  a previous Qualified Domestic Relations Order.

                  (c) A domestic relations order shall not be considered to fail
         to satisfy the requirements of paragraph (b)(i) above with respect to
         any payment made before a Participant has separated from service solely
         because the order requires that payment of benefits be made to an
         Alternate Payee:

                           (i) On or after the date on which the Participant
                  attains (or would have first attained) his or her earliest
                  retirement age (as defined in Code Section 414(p)(4)(B));

                                       81
<PAGE>

                           (ii) As if the Participant had retired on the date on
                  which such payment is to begin under such order (but taking
                  into account only the present value of accrued benefits and
                  not taking into account the present value of any subsidy for
                  early retirement benefits); and

                           (iii) In any form in which such benefits may be paid
                  under the Plan to the Participant (other than in the form of a
                  joint and survivor annuity with respect to the Alternate Payee
                  and his or her subsequent spouse).

                  Notwithstanding the foregoing, if the Participant dies before
         his or her earliest retirement age (as defined in Code Section
         414(p)(4)(B)), the Alternate Payee is entitled to benefits only if the
         Qualified Domestic Relations Order requires survivor benefits to be
         paid to the Alternate Payee.

                  (d) To the extent provided in any Qualified Domestic Relations
         Order, the former spouse of a Participant shall be treated as a
         surviving Spouse of the Participant for purposes of applying the rules
         (relating to minimum survivor annuity requirements) of Code Sections
         401(a)(11) and 417, and any current spouse of the Participant shall not
         be treated as a spouse of the Participant for such purposes.

                  (e) In the case of any domestic relations order received by
         the Plan, the Committee shall promptly notify the Participant and any
         Alternate Payee named in the order that an order has been received and
         shall provide a copy of the Plan's procedures for determining the
         qualified status of domestic relations orders. An Alternate Payee may
         designate a representative for receipt of copies of notices and plan
         information that are sent to the Alternate Payee with respect to
         domestic relations order. Within a reasonable period after the receipt
         of the order, the Committee shall determine whether the order is a
         Qualified Domestic Relations Order and shall notify the Participant and
         each Alternate Payee of such determination.

                  (f) The Committee shall establish reasonable procedures to
         determine the qualified status of domestic relations orders and to
         administer distributions under Qualified Domestic Relations Orders.
         During any period in which the issue of whether a domestic relations
         order is a Qualified Domestic Relations Order is being determined (by
         the Committee, by a court of competent jurisdiction, or otherwise), the
         Committee shall direct the Trustee to segregate in a separate account
         in the Plan (or in an escrow account) the amounts which would have been
         payable to the Alternate Payee during the period if the order had been
         determined to be a Qualified Domestic Relations Order. If within the 18
         Month Period (as defined below), the order (or modification thereof) is
         determined to be a Qualified Domestic Relations Order, the Committee
         shall direct the Trustee to pay the segregated amounts (plus any
         interest thereon) to the person or persons entitled thereto. However,
         if within the 18 Month Period (i) it is determined that the order is
         not a Qualified Domestic Relations Order, or (ii) the issue as to
         whether the order is a Qualified Domestic Relations Order is not
         resolved, then the Committee shall direct the Trustee to pay the
         segregated amounts (plus any interest thereon) to the person or persons
         who would have been entitled to the amounts if there had been no order
         (assuming such

                                       82
<PAGE>

         benefits were otherwise payable). Any determination that an order is a
         Qualified Domestic Relations Order that is made after the close of the
         18 Month Period shall be applied prospectively only. For purposes of
         this Section 15.2, the "18 Month Period" shall mean the 18 month period
         beginning with the date on which the first payment would be required to
         be made under the domestic relations order.

                                       83
<PAGE>

                                  ARTICLE XVI
                            MISCELLANEOUS PROVISIONS

         16.1 No Right of Employment Hereunder. The adoption and maintenance of
the Plan and Trust shall not be deemed to constitute a contract of employment or
otherwise between the Company and any Employee or Participant, or to be a
consideration for, or an inducement or condition of, any employment. Nothing
contained herein shall be deemed to give any Employee the right to be retained
in the service of the Company or to interfere with the right of the Company to
discharge, with or without cause, any Employee or Participant at any time, which
right is hereby expressly reserved.

         16.2 Effect of Article Headings. Article headings are for convenient
reference only and shall not be deemed to be a part of the substance of this
instrument or in any way to enlarge or limit the contents of any Article.

         16.3 Limitation on Company Liability. Any benefits payable under the
Plan shall be paid or provided for solely from the Plan and the Company assumes
no liability or responsibility therefor.

         16.4 Gender. Masculine gender shall include the feminine and the
singular shall include the plural unless the context clearly indicates
otherwise.

         16.5 Interpretation. The provisions of the Plan shall in all cases be
interpreted in a manner that is consistent with the Plan satisfying (i) the
requirements of Code Section 401(a) and related statutes for qualification as a
defined contribution plan and (ii) the requirements of Code Section 401(k) and
related statutes for qualification as a cash or deferred arrangement.

         16.6 Withholding For Taxes. Any payments from the Trust Fund may be
subject to withholding for taxes as may be required by any applicable federal or
state law.

         16.7 California Law Controlling. All legal questions pertaining to the
Plan which are not controlled by ERISA shall be determined in accordance with
the laws of the State of California and all contributions made hereunder shall
be deemed to have been made in that State.

         16.8 Plan and Trust as One Instrument. The Plan and the Trust Agreement
shall be construed together as one instrument. In the event that any conflict
arises between the terms and/or conditions of the Trust Agreement and the Plan,
the provisions of the Plan shall control, except that with respect to the duties
and responsibilities of the Trustee, the Trust Agreement shall control.

         16.9 Invalid Provisions. If any paragraph, section, sentence, clause or
phrase contained in the Plan shall become illegal, null or void or against
public policy, for any reason, or shall be held by any court of competent
jurisdiction to be incapable of being construed or limited in a manner to make
it enforceable, or is otherwise held by such court to be illegal, null

                                       84
<PAGE>

or void or against public policy, the remaining paragraphs, sections, sentences,
clauses or phrases contained in the Plan shall not be affected thereby.

         16.10 Counterparts. This instrument may be executed in one or more
counterparts each of which shall be legally binding and enforceable.

                                       85
<PAGE>

         IN WITNESS WHEREOF, Allergan, Inc. hereby executes this instrument,
evidencing the terms of the Allergan, Inc. Savings and Investment Plan as
restated this 29th day of November, 2001.

ALLERGAN, INC.

By:         /s/ Eric Brandt
         ---------------------------
         Eric Brandt
         Corporate Vice President

                                       86
<PAGE>

                                   APPENDIX A
           SPECIAL PROVISIONS FOR PUERTO RICO-BASED PAYROLL EMPLOYEES

                                     PART I
                                  INTRODUCTION

         1.1 Effective Date. The effective date of this Appendix A is January 1,
2001.

         1.2 Purpose of Appendix A. The provisions of the Plan shall apply to
all Puerto Rico-based payroll Employees except as specifically provided in this
Appendix A.

                                     PART II
                                   DEFINITIONS

         The Definitions of Article II of the Plan shall apply to all Puerto
Rico-based Employees and shall have the same meaning for the purpose of this
Appendix A except as set forth below:

         2.1 Plan Section 2.17. "Compensation" shall have the same meaning as
set forth in Plan Section 2.17 except that in the case of a Puerto Rico-based
Employee, Compensation shall also include cost of living allowances earned
within Puerto Rico and amounts paid under the Christmas bonus program.

         2.2 Plan Section 2.18. "Credited Service" shall have the same meaning
as set forth in Plan Section 2.18 except that in the case of a Puerto Rico-based
Employee who was employed by the Company at any time prior to the original
Effective Date, for the period prior to January 1, 1989, Credited Service shall
include service, if any, credited to such Employee under the Savings and
Investment Plan for Employees of Subsidiaries of SmithKline Beckman Corporation
Whose Principal Office is Located in Puerto Rico.

         2.3 Plan Section 2.21. For the purpose of this Appendix A only, the
definition of "Eligible Employee" as defined in Plan Section 2.21 shall not
apply and "Eligible Employee" or "Eligible Puerto Rico-based Employee" shall
mean any Puerto Rico-based Employee but shall exclude any non-resident alien of
Puerto Rico and the United States, any Leased Employee, and any Employee covered
by a collective bargaining agreement.

         2.4 Plan Section 2.24. For the purpose of this Appendix A only, the
definition of "Employee" as defined in Plan Section 2.24 shall not apply and
"Employee" or "Puerto Rico-based Employee" shall mean any person who is employed
in any capacity by the Sponsor or any Affiliated Company at its Puerto Rico
locations, any portion of whose income is subject to withholding of income tax
and/or for whom Social Security contribution are made by the Sponsor or an
Affiliated Company except that such term shall not include (i) any individual
who performs services for the Sponsor or an Affiliated Company and who is
classified or paid as an independent contractor as determined by the payroll
records of the Sponsor or an Affiliated Company even if a court or
administrative agency determines that such individual is a common-

<PAGE>

law employee and not an independent contractor and (ii) any individual who
performs services for the Sponsor or an Affiliated Company pursuant to an
agreement between the Sponsor or an Affiliated Company and any other person
including a leasing organization except to the extent such individual is a
Leased Employee.

         2.5 Plan Section 2.34. Notwithstanding the provisions of Plan Section
2.34, "Matched Deposits" of a Puerto Rico-based Participant shall mean his or
her Deposits (whether Before Tax or After Tax) not in excess of six percent (6%)
of Compensation. Matched Deposits shall participate in allocations of Company
Contributions and Forfeitures.

         2.6 Plan Section 2.37. For the purpose of this Appendix A only,
"Participant" as defined in Plan Section 2.37 shall not apply and "Participant"
or "Puerto Rico-based Participant" shall mean a Puerto Rico-based Employee who
is eligible to participate in the Plan and elects to participate in the Plan in
accordance with Plan Section 3.1.

         2.7 Additional Terms. Additional terms shall have the following
meaning:

                  (a) "PR-Code" shall mean the Puerto Rico Internal Revenue Code
         of 1994, as amended. Where the context so requires a reference to a
         particular PR-Code Section shall also refer to any successor provision
         of the PR-Code to such PR-Code Section.

                  (b) "Top One-Third Highly Compensated Employee" shall mean any
         Participant who has Compensation for a Plan Year that is greater than
         the Compensation for such Plan Year of two-thirds (2/3) of all other
         Participants of the same Company.

                                    PART III
                          ELIGIBILITY AND PARTICIPATION

         The provisions of Article III of the Plan shall apply to all Puerto
Rico-based Employees.

                                     PART IV
                              PARTICIPANT DEPOSITS

         The provisions of Article IV of the Plan shall apply to all Puerto
Rico-based Employees except as set forth below:

         4.1 Reserved for Future Modification.

         4.2 Plan Section 4.2. The provisions of Plan Section 4.2 shall apply to
all Puerto Rico-based Employees except as set forth below:

         (a) Notwithstanding the provisions of paragraph (a) of Plan Section
4.2, a Puerto Rico-based Participant may elect to contribute a whole percentage
of his or her Compensation to

                                      A-2
<PAGE>

the Plan as Before Tax Deposits; provided, however, that no Puerto Rico-based
Participant shall be permitted to make Before Tax Deposits to the Plan during
any taxable year in excess of: (i) ten percent (10%) of Compensation up to a
maximum of $8,000, or such larger amount as may be determined by the Puerto Rico
Secretary of the Treasury pursuant to the PR-Code, (ii) the Actual Deferral
Percentage test limitation set forth in Plan Section 4.3 and Section 4.3 of this
Appendix, and (iii) the Annual Addition limitation set forth in Plan Section
13.1.

         (b) The provisions of paragraph (e) of Plan Section 4.2 pertaining to
"catch-up" Before Tax Deposits shall not apply to Puerto Rico-based
Participants.

         4.3 Additional Contribution Deferral Limitation. In addition to the
limitations on Compensation Deferral Contributions set forth in Plan Section
4.3, Compensation Deferral Contributions by a Puerto Rico-based Participant
shall not exceed the limitation on contributions by or on behalf of the Top
One-Third Highly Compensation Employees under PR-Code Section 1165(e), as
provided in this Section 4.3 with respect to each Plan Year. In the event that
Compensation Deferrals Contributions under the Plan by or on behalf of the Top
One-Third Highly Compensated Employees exceed the limitations of this Section
for any reason, such excess contributions shall be recharacterized as After Tax
Deposits or such excess contributions, adjusted for any income or loss allocable
thereto, shall be returned to such Participant, as provided in Plan Section 4.5.

                  (a) The Compensation Deferral Contributions by Participants
         for a Plan Year shall satisfy the Actual Deferral Percentage test under
         the PR-Code as set forth in subparagraph (i) below, or to the extent
         not precluded by applicable regulations, the alternate Actual Deferral
         Percentage test as set forth in (ii) below:

                           (i) The average "Actual Deferral Percentage" for the
                  Top One-Third Highly Compensated Employees shall not be more
                  than the average Actual Deferral Percentage of all non-Top
                  One-Third Highly Compensated Employees multiplied by 1.25, or

                           (ii) The excess of the average Actual Deferral
                  Percentage for the Top One-Third Highly Compensated Employees
                  over the average Actual Deferral Percentage for all non-Top
                  One-Third Highly Compensated Employees shall not be more than
                  two (2) percentage points and the average Actual Deferral
                  Percentage for the Top One-Third Highly Compensated Employee
                  shall not be more than the average Actual Deferral Percentage
                  of all non-Top One-Third Highly Compensated Employees
                  multiplied by 2.0.

                  (b) For the purpose of this Section 4.3 only, the following
         definitions shall apply:

                           (i) "Actual Deferral Percentage" shall mean, with
                  respect to the group of all Top One-Third Highly Compensated
                  Employees and the group of all non-Top One-Third Highly
                  Compensated Employees for a Plan Year, the ratio, calculated
                  separately for each Participant in such group, of the amount
                  of the Participant's Compensation Deferral Contribution for
                  such Plan Year, to such

                                      A-3
<PAGE>

                  Participant's Compensation for such Plan Year, in accordance
                  with regulations prescribed by the Puerto Rico Secretary of
                  the Treasury under PR-Code Section 1165(e). For purposes of
                  computing the Actual Deferral Percentage, an Eligible Employee
                  who would be a Participant but for the failure to make Before
                  Tax Deposits shall be treated as a Participant on whose behalf
                  no Before Tax Deposits are made.

                           (ii) "Participant" shall mean any Eligible Puerto
                  Rico-based Employee who satisfied the requirements under Plan
                  Article III during the Plan Year, whether or not such Eligible
                  Employee elected to contribute to the Plan for such Plan Year.

                           (iii) "Compensation Deferral Contributions" shall
                  mean amounts contributed to the Plan by a Participant as
                  Before Tax Deposits pursuant to Section 4.1 of this Appendix,
                  including any other amounts prescribed under PR-Code Section
                  1165(e) and applicable regulations. To the extent determined
                  by the Committee and in accordance with regulations issued by
                  the Puerto Rico Secretary of the Treasury, matching
                  contributions and qualified nonelective contributions on
                  behalf of a Participant that satisfy the requirements of
                  PR-Code Section 1165(e)(3)(D)(ii) may also be taken into
                  account for the purpose of determining the Actual Deferral
                  Percentage of such Participant.

                           (iv) "Compensation" shall mean compensation as
                  defined in PR-Code Section 1165(e) and applicable regulations.

                  (c) In the event that as of the first day of Plan Year, the
         Plan satisfies the requirements of PR-Code Section 1165(a) only if
         aggregated with one or more other plans which include arrangements
         under PR-Code Section 1165(e), then this Section 4.3 shall be applied
         by determining the Actual Deferral Percentages of Participants as if
         all such plans were a single plan, in accordance with regulations
         prescribed by the Secretary of the Treasury under PR-Code Section
         1165(e). Plans may be considered one plan for purposes of satisfying
         PR-Code Section 1165(e) only if they have the same Plan Year.

                  (d) For the purpose of this Section 4.3, the "Actual Deferral
         Percentage" for any Top One-Third Highly Compensated Employee who is a
         Participant under two or more PR-Code Section 1165(e) arrangements of
         the Company shall be determined by taking into account the Top
         One-Third Highly Compensated Employee's Compensation under each such
         arrangement and contributions under each such arrangement which qualify
         for treatment under PR-Code Section 1165(e) in accordance with
         regulations prescribed by the Puerto Rico Secretary of the Treasury
         under PR-Code Section 1165(e). If the arrangements have different Plan
         Years, this paragraph shall be applied by treating all such
         arrangements ending with or within the same calendar year as a single
         arrangement. Notwithstanding the foregoing, certain plans shall be
         treated as separate plans if mandatorily disaggregated pursuant to
         regulations under Code Section 401(k).

                                      A-4
<PAGE>

                  (e) For purposes of the Actual Deferral Percentage test,
         Compensation Deferral Contributions must be made before the last day of
         the twelve-month period immediately following the Plan Year to which
         such contributions relate.

                  (f) The determination and treatment of Compensation Deferral
         Contributions and the Actual Deferral Percentage of any Participant
         under this Section 4.3 shall satisfy such other requirements as may be
         prescribed by the Puerto Rico Secretary of the Treasury.

                  (g) The Committee shall keep or cause to have kept such
         records as are necessary to demonstrate that the Plan satisfies the
         requirements of PR-Code Section 1165(e) and the regulations thereunder,
         in accordance with regulations prescribed by the Puerto Rico Secretary
         of the Treasury.

         4.4 Plan Section 4.4. The provisions of Plan Section 4.4 entitled
"Provisions for Return of Excess Before Tax Deposits over $10,500" shall be
applied by substituting the dollar limitation contained in Section 4.2 of this
Appendix for the "$10,500 limitation" in each place it appears.

         4.5 Plan Section 4.5. The provisions of Plan Section 4.5 entitled
"Provision for Recharacterization or Return of Excess Deferrals by Highly
Compensated Participants" shall be applied as follows:

                  (a) "Highly Compensated Employee and Top One-Third Highly
         Compensated Employee" shall be substituted for "Highly Compensated
         Employee" in each place it appears.

                  (b) Any reference to Code Sections shall include reference to
         the corresponding PR-Code Section unless the context clearly indicates
         otherwise. For example, references to "Code Section 401(k)" and "Code
         Section 404" shall include references to PR-Code Section 1165(e) and
         PR-Code Section 1023(n), respectively.

         4.6 Reserved for Future Modification.

         4.7 Plan Section 4.7. In addition to the provisions of Plan Section 4.7
entitled "Character of Deposits," Before Tax Deposits shall be treated as
employer contributions for purposes of PR-Code Section 1165(e).

         4.8 Plan Section 4.8. For purposes of Plan Section 4.8, a "Direct
Rollover Contribution" or a "Participant Rollover Contribution" from a
retirement plan qualified under PR-Code Section 1165(a) (unless such plan is
also qualified under Code Section 401(a)) or an "IRA Rollover Contribution" from
a Puerto-Rico individual retirement account or annuity shall not be permitted
under the Plan.

                                      A-5
<PAGE>

                                     PART V
                      TRUST FUND AND MATCHING CONTRIBUTIONS

         The provisions of Article V shall apply to all Puerto Rico-based
Employees except as set forth below:

         5.1 Plan Section 5.3(a). Notwithstanding the provisions of Plan Section
5.3(a) entitled "Company Contributions," the Company shall contribute and
allocate on a pay period basis which, when added to Forfeitures available after
application of Section 6.3 is equal to:

                  (a) 75% of each Participant's Matched Deposits for the pay
         period which are not in excess of two percent (2%) of such
         Participant's Compensation.

                  (b) 50% of each Participant's Matched Deposits for the pay
         period which are in excess of two percent (2%) of such Participant's
         Compensation but not in excess of four percent (4%) of such
         Participant's Compensation.

                  (c) 25% of each Participant's Matched Deposits for the pay
         period which are in excess of four percent (4%) of such Participant's
         Compensation.

         The Board of Directors, acting upon the advice and direction of the
Committee, may authorize and direct that Matching Contributions (expressed as a
percentage of Participants' Matched Deposits as set forth above) be changed from
time to time from a minimum of 0% to a maximum of 100%.

         5.2 Plan Section 5.6. The provisions of Plan Section 5.6 entitled
"Irrevocability" shall be applied by including a corresponding reference to
"PR-Code Section 1165(a)" and "PR-Code Section 1023(n)" in each place "Code
Section 401(a)" and "Code Section 404" appears, respectively

                                     PART VI
                            ACCOUNTS AND ALLOCATIONS

         The provisions of Article VI of the Plan shall apply to all Puerto
Rico-based Employees.

                                    PART VII
                            VESTING IN PLAN ACCOUNTS

         The provisions of Article VII of the Plan shall apply to all Puerto
Rico-based Employees.

                                      A-6
<PAGE>

                                    PART VIII
                            PAYMENT OF PLAN BENEFITS

         The provisions of Article VIII of the Plan shall apply to all Puerto
Rico-based Employees except as set forth below:

         8.1 Plan Section 8.2(a). For purposes of Plan Section 8.2(a), an
Eligible Retirement Plan shall include a Puerto-Rico individual retirement
account or annuity and a retirement plan qualified under PR-Code Section
1165(a).

         8.2 Plan Section 8.4. In addition to the provisions of Plan Section 8.4
entitled "Designation of Beneficiary," the following rules shall apply to a
Participant, as defined in Section 2.6 of this Appendix:

                  (a) In the event a deceased Participant is not a resident of
         Puerto Rico at the date of his or her death, the Committee, in its
         discretion, may require the establishment of ancillary administration
         in Puerto Rico.

                  (b) If the Committee cannot locate a qualified personal
         representative of the deceased Participant, or if administration of the
         deceased Participant's estate is not otherwise required, the Committee,
         in its discretion, may pay the deceased Participant's interest in the
         Trust Fund to his or her heirs at law (determined in accordance with
         the laws of the Commonwealth of Puerto Rico) as they existed at the
         date of the Participant's death.

         8.3 Plan Section 8.6(a). Notwithstanding the provisions of Plan Section
8.6(a) entitled "Distribution Rules," in the case of a Puerto Rico-based
Participant in no event shall any benefits under the Plan, including benefits
upon retirement, Severance, or Disability, be paid (or commence to be paid) to a
participant prior to the "Consent Date" (as defined herein) unless the
Participant consents in writing to the payment (or commencement of payment) of
such benefits prior to said Consent Date. As used herein, the term "Consent
Date" shall mean the later of (i) the Participant's 62nd birthday, or (ii) the
Participant's Normal Retirement Age. Notwithstanding the foregoing, the
provisions of this Paragraph shall not apply (i) following the Participant's
death, or (ii) with respect to a lump sum distribution of the vested portion of
a Participant's Account if the total amount of such vested portion does not
exceed or has never exceeded $3,500.

         8.4 Plan Section 8.6(c). Notwithstanding the provisions of Plan Section
8.6(c) entitled "Distribution Rules," Section 8.3 of this Appendix or Plan
Section 8.6(b), in the case of a Puerto Rico-based Participant distributions of
the entire vested portion of a Participant's Accounts shall be made no later
than the Participant's Required Beginning Date, or, if such distribution is to
be made over the life of such Participant or over the lives of such Participant
and a Beneficiary (or over a period not extending beyond the life expectancy of
such participant and Beneficiary) then such distribution shall commence no later
than the Participant's Required Beginning Date. Required Beginning Date shall
mean:

                                      A-7
<PAGE>

                  (a) For the period prior to January 1, 1989, April 1 of the
         calendar year following the later of the calendar year in which the
         Participant (i) attains age 70-1/2, or (ii) retires; provided, however,
         the foregoing clause (ii) shall not apply with respect to a Participant
         who is a Five Percent Owner (as defined in Code Section 416(i)) at any
         time during the five Plan Year period ending in the calendar year in
         which the Participant attains age 70-1/2. If the Participant becomes a
         Five Percent Owner during any Plan Year subsequent to the five Plan
         Year period referenced above, the Required Beginning Date under this
         Paragraph (a) shall be April 1 of the calendar year following the
         calendar year in which such subsequent Plan year ends.

                  (b) For the period after December 31, 1988, April 1 of the
         calendar year following the calendar year in which the Participant
         attains age 70-1/2; provided, however, if the Participant attains age
         70-1/2 before January 1, 1988 and the Participant was not a Five
         Percent Owner at any time during the Plan Year ending with or within
         the calendar year in which such Participant attains age 66-1/2 or any
         subsequent Plan Year, then this Paragraph (b) shall not apply and the
         Required Beginning Date shall be determined under Paragraph (a) above.

         8.5 Plan Section 8.11(c). The provisions of Plan Section 8.11(c)
entitled "Additional Documents" shall be applied by including reference to
"Puerto Rico" in each place "State or Federal" appears.

         8.6 Plan Section 8.12. The provisions of Plan Section 8.12 entitled
"Trustee-Trustee Transfers" shall be applied by including a corresponding
reference to "PR-Code Section 1165" in each place "Code Section 401" appears.

                                     PART IX
                           PLAN ARTICLES IX THROUGH XV

         The provisions of Articles IX through XV of the Plan shall apply to all
Puerto Rico-based Employees.

                                     PART X
                            MISCELLANEOUS PROVISIONS

         The provisions of Article XVI of the Plan shall apply to all Puerto
Rico-based Employees except as follows:

         10.1 Plan Section 16.5. In addition to the provisions of Plan Section
16.5 entitled "Interpretation," the provisions of the Plan shall be interpreted
in a manner consistent with the Plan satisfying (i) the requirements of PR-Code
Section 1165(a) and related statutes for qualification as a defined contribution
plan and (ii) the requirements of PR-Code Section 1165(e) and related statutes
for qualification as a cash or deferred arrangement to the extent such

                                      A-8
<PAGE>

interpretation would not violate (i) the requirements of Code Section 401(a) and
related statutes for qualification as a defined contribution plan and (ii) the
requirements of Code Section 401(k) and related statutes for qualification as a
cash or deferred arrangement.

         10.2 Plan Section 16.6. In addition to the provisions of Plan Section
16.6 entitled "Withholding for Taxes," any payments from the Trust Fund may be
subject to withholding for taxes as may be required by any applicable Puerto
Rico law.

         10.3 Plan Section 16.7. In addition to the provisions of Plan Section
16.7 entitled "California Law Controlling," the Committee shall determine
whether all legal questions pertaining to the Plan which are not controlled by
ERISA shall be determined in accordance with the laws of the Commonwealth of
Puerto Rico or the laws of the State of California in the case of a Puerto
Rico-based Employee or Participant.

                                      A-9

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