Document:

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                              EMPLOYMENT AGREEMENT

   This Agreement is made as of the 27 day of April, 1999 between SunSource,
Inc., a Delaware corporation (the "Company"), SunSource Corporate Group, Inc., a
Delaware corporation (the "Management Company" and together with the Company,
the "Companies"), and Maurice Andrien (the "Employee").

                                   BACKGROUND

   The Management Company desires to employ the Employee, and the Employee
desires to be employed by the Management Company, upon the terms and conditions
hereinafter set forth. Contemporaneously with this Agreement, the Company, which
is the parent company of the Management Company, is granting to the Employee
under a separate document that is attached hereto (the "1999 Option Grant") an
option to purchase 150,000 shares of Common Stock under the Company's 1998
Equity Compensation Plan (the "1998 Plan").

                                   WITNESSETH:

   NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, each intending
to be legally bound hereby, agree as follows:

1. Definitions.

   For all purposes of this Agreement, the following terms shall have the
meanings specified in this Section unless the context clearly otherwise requires
(other terms are defined elsewhere in this Agreement):

   (a) "Beneficial Owner" and the correlative term "Beneficially Own" are used
herein within the meaning of Rule 13d-3 under the Exchange Act.

   (b) "Board" means the Board of Directors of the Company.

   (c) "Change of Control" means the occurrence of any one of the following
events:

       (i) Any Person other than the management group of Harold J. Cornelius,
   Joseph M. Corvino, Norman V. Edmonson, Max W. Hillman, Donald T. Marshall,
   and John P. McDonnell, becomes a Beneficial Owner, directly or indirectly, of
   securities of the Company representing 20% or more of the voting power of the
   then outstanding securities of the Company.

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       (ii) (A) A transaction is approved in which the stockholders of the
   Company immediately before the transaction will not Beneficially Own in the
   same relative percentages, immediately after the transaction, shares
   entitling such stockholders to 75% or more of all votes to which all
   stockholders of the surviving entity would be entitled in the election of
   directors or other governing persons (excluding any election of directors by
   a separate class vote), or where the members of the Board, immediately prior
   to the transaction, would not, immediately after the transaction, constitute
   a majority of the board of directors of the surviving entity, (B) the sale or
   other disposition of all or substantially all of the assets of the Company,
   SunSource Investments, Inc., or SunSub A Inc., or their respective successors
   in interest or (C) a liquidation or dissolution of the Company, SunSource
   Investments, Inc., or SunSub A Inc., or their respective successors in
   interest; provided, however, that any such action with respect to SunSource
   Investments, Inc. or SunSub A Inc. shall not constitute a change of control
   so long as the Company continues to own, directly or indirectly,
   substantially all of the assets thereof.

       (iii) A majority of the Board shall cease for any reason to consist of
   (A) individuals who on the effective date hereof are serving as directors of
   the Company, or (B) individuals who subsequently become members of the Board
   and whose nomination for election or election to the Board is recommended or
   approved by a majority of the Board.

   (d) "Cause" means, except to the extent specified otherwise by the Board,
that the Employee has: (i) breached any material provision of this Agreement and
does not remedy such breach within 30 days after receiving written notice
specifying the details thereof; (ii) been engaged in fraud, embezzlement, theft,
commission of a felony, proven dishonesty in the course of his employment or
service or deliberate injury to any SunSource Company; or (iii) disclosed any
material Company Information (defined in Section 9(a)) in violation of
Section 9.

   (e) "Common Stock" means the common stock of the Company.

   (f) "Compensation Committee" means the Compensation Committee of the Board.

   (g) "Constructive Termination Without Cause" means a termination of the
Employee's employment by the Employee following the occurrence, without his
prior written consent, of one or more of the following events: (1) a reduction
in the Salary, or a significant diminution in the Fringe Benefits; (2) a
significant diminution in the Employee's duties, responsibilities, titles or
position, including the failure to maintain his status as a member of the Board,
or the assignment to Employee of duties and responsibilities inconsistent with
the title or positions held by the Employee on the date of this Agreement; (3)
the failure of the Company to obtain the unconditional assumption, in writing or
by operation of law, of the Company's obligation to the Employee under this
Agreement by any successor prior to or at the time of a reorganization, merger,
consolidation, disposition of all or substantially all of the assets of the
Company or similar transaction; provided, however, that a Constructive
Termination Without Cause will not take effect unless: (x) the Employee has
delivered written notice to the Board within 60 days after acquiring knowledge
of one

                                        2

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of the events described in this paragraph (g) that provide a basis for
Constructive Termination Without Cause, stating which one of these events has
occurred; (y) within 30 days after receipt of such notice the Company has not
remedied such event and provided the Employee with written notice of such
remedy; and (z) if the Company has not remedied such event within such period
and provided such notice, the Employee has notified the Company in writing that
he is terminating the Employment Term as of a certain date; and provided further
that the failure of the Employee to effect a Constructive Termination Without
Cause as to any one event described in this paragraph (g) will not affect the
Employee's entitlement to effect a Constructive Termination Without Cause as to
any other such event.

   (h) "Disabled" means the Employee's becoming permanently and totally disabled
within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended.

   (i) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

   (j) "Person" is used as defined in Sections 3(a)(9) and 13(d)(3) of the
Exchange Act.

   (k) "SunSource Company" means any one or more of the Company, the Management
Company and any Subsidiary.

   (l) "Subsidiary" shall mean any corporation in which the Company, directly or
indirectly, owns at least 50% of the then outstanding voting securities of such
company entitled to vote generally in an election of such company's directors,
or an unincorporated entity of which the Company, directly or indirectly, owns
at least 50% of the profits or capital interests.

2. Employment.

   The Management Company hereby employs the Employee, and the Employee hereby
accepts employment by the Management Company, upon the terms and conditions set
forth in this Agreement. During the term of employment under this Agreement (the
"Employment Term"), the Employee shall be the President and Chief Executive
Officer of each of the Management Company and the Company and, with respect to
each such SunSource Company, perform such duties as are customarily performed by
the most senior executive officer of a corporation, subject to the supervision
and control of the respective boards of directors thereof. The Employee shall
also be a member of the Board during the Employment Term.

3. Performance.

   The Employee shall devote his entire working time and attention to the
performance of his duties hereunder; provided, however, that the Employee may
serve as a director of (subject to increase by the Board) up to two other
for-profit corporations and one not-for-profit corporation, and the Employee may
make, and assist in, personal investments to the extent that doing so does not
conflict with his duties hereunder.

                                        3

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4. Term.

   Unless otherwise terminated in accordance with Sections 6 or 7, the
Employment Term shall be an initial term of three years from the date of this
Agreement (the "Initial Term") and shall automatically continue thereafter for
successive one-year renewal terms (each a "Renewal Term") unless the Management
Company or the Employee gives the other party at least 45 days' prior written
notice that the then current term shall not be extended.

5. Compensation for Employment.

   (a) The basic annual rate of compensation of the Employee for his employment
services to the Company, the Management Company and the other Subsidiaries
during the Employment Term shall be at least $450,000 or such higher amount as
may be approved by the Board at any time during the Employment Term (the
"Salary"), which the Management Company shall pay to the Employee in accordance
with the Management Company's payroll payment schedule in effect from time to
time. The Board shall not decrease the salary at any time during the Employment
Term.

   (b) In addition to the Salary, during the Employment Term, the Company shall
pay to the Employee a bonus (the "Bonus") for the fiscal year that will end
December 31, 1999 and for each fiscal year thereafter ending December 31 during
the Employment Term (each such year is referred to herein as a "Bonus Year").
The Bonus for 1999 will be $180,000 and will be payable irrespective of the
performance of the Company so long as the Employee does not resign voluntarily
or is not terminated for Cause prior to December 31, 1999. The Bonus for each
year after 1999 (the "Post 1999 Bonus") will be equal to 40% of the Salary in
effect for the Bonus Year as to which the Post 1999 Bonus is paid, and will be
payable upon achievement of the results specified below in this paragraph (b).
Seventy percent of the Post 1999 Bonus will be payable if the Company shall have
earnings before interest, taxes, depreciation and amortization ("EBITDA") for
the related Bonus Year that is at least equal to the EBITDA specified in the
plan for that Bonus Year as approved by the Board. Thirty percent of the Post
1999 Bonus will be payable if the Employee shall have satisfied, in the judgment
of the Compensation Committee, the specific goals that the Compensation
Committee shall have specified for the Employee with respect to the particular
Bonus Year. The Board or the Compensation Committee may award the Employee such
additional bonus amounts as it from time to time may deem appropriate.

   (c) The Company is issuing the 1999 Option Grant to the Employee in
connection with his employment hereunder. In addition, provided the Employee is
employed at that time, starting with the year 2000, the Company shall grant to
the Employee as part of its annual program of option grants to senior executives
in each year of the Employment Term an option to purchase 70,000 shares of
Common Stock under the 1998 Plan (or under any similar plan that may be adopted)
at a price per share equal to the fair market value on the date of grant,
subject to the respective terms generally applicable to options granted to
senior executive officers of the Company in the respective years and otherwise
subject to the terms and conditions of the 1998 Plan (or any such other plan).

                                        4

<PAGE>

   (d) The Company shall pay the Employee $1,000,000 in a single payment within
30 days after a (but not more than one) Change of Control that occurs on or
before the later of (i) the second anniversary of the date hereof or (ii) the
first date as of which the Employee shall have options that are exercisable to
purchase at least 290,000 shares of Common Stock.

   (e) The Management Company shall pay all reasonable out-of-pocket expenses
incurred by the Employee in connection with his move from Montreal to the
Philadelphia area, including (i) expenses of up to $3,000 per month incurred by
the Employee in connection with renting a residence in the Philadelphia area for
up to one year and (ii) any brokerage commissions, transfer taxes and other
costs of the sale (but not including income taxes or recovery of any loss on the
sale), and customary legal and accounting costs relating to his move or this
Agreement. The Company shall also pay the Employee a tax-offset bonus in order
to neutralize the tax impact of any such reimbursements.

   (f) The Management Company shall provide the Employee with the following
benefits (the "Fringe Benefits") during the Employment Term.

       (i) $1,000 per month automobile allowance;

       (ii) four weeks of paid vacation;

       (iii) initiation fee and customary membership dues at a country club of
   the Employee's choice in the Philadelphia area;

       (iv) such other benefits (other than those related to automobiles and
   club memberships) that any Company may provide generally to other senior
   executives of that Company; and

       (v) reimbursement of legitimate business expenses incurred on or prior to
   the date of termination.

6. Termination Without Compensation.

   (a) If the Employee becomes Disabled, the Management Company may terminate
the Employment Term, and the Companies thereafter shall have no further
liability or obligation to the Employee hereunder except as follows: the
Employee shall receive (i) any unpaid Salary and Fringe Benefits that have
accrued through the date of termination; (ii) whatever benefits that he may be
entitled to receive under any then existing disability benefit plans of any
Company that may be included in the Fringe Benefits applicable to the Employee;
(iii) a proportionate amount of any Bonus that would have been due to the
Employee if he were employed for the full Bonus Year during which the Employment
Term was terminated (a "Proportionate Bonus"); (iv) reimbursement of legitimate
and reasonable business expenses incurred on or prior to the date of termination
("Pre-Termination Expenses") and (v) continuation of health care coverage for
the Employee and his

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family for the 12-month period following the date of termination. The Management
Company shall pay any Proportionate Bonus in the year immediately following the
related Bonus Year at the time when it generally pays other bonus payments based
on that Bonus Year. In the event of any dispute as to whether the Employee is
Disabled, the Employee shall submit to a physical examination by a licensed
physician mutually satisfactory to the Management Company and the Employee, the
cost of such examination to be paid by the Management Company, and the
determination of such physician shall be determinative.

   (b) If the Employee dies, the Employment Term shall terminate, and thereafter
the Companies shall not have any further liability or obligation to the
Employee, his executors, administrators, heirs, assigns or any other person
claiming under or through him except that the Employee's estate shall receive
any unpaid Salary and Fringe Benefits that have accrued through the date of
termination, plus a Proportionate Bonus, and reimbursement of any
Pre-Termination Expenses.

   (c) The Management Company may terminate the Employment Term for Cause by
giving the Employee notice of the termination, and thereafter the Companies
shall not have any further liability or obligation to the Employee, except that
the Employee shall receive any unpaid Salary and Fringe Benefits that have
accrued through the date of termination, net of any liabilities that the
Employee may have to any Company, and reimbursement of any Pre-Termination
Expenses.

7. Termination With Compensation.

   (a) The Management Company shall have the right to terminate the Employment
Term without Cause at any time by giving the Employee 45 days' notice of the
termination date. Upon any such termination by the Management Company and also
upon any termination due to the Management Company's decision not to renew the
Initial Term or any Renewal Term under Section 4, for a period of one year
following the termination date, the Management Company shall (i) continue to pay
the Employee the Salary, provide the Employee with Fringe Benefits and provide
the Employee with the customary services of an outplacement firm, (ii) pay the
Employee a Proportionate Bonus, and (iii) have no further liability or
obligation to the Employee hereunder except that the Employee shall receive any
unpaid Salary and Fringe Benefits that have accrued through the date of
termination and reimbursement of any Pre-Termination Expenses.

   (b) The Employee may terminate the Employment Term if there is a Constructive
Termination without Cause, in which case the Management Company and the Employee
shall have the same obligations and rights as are specified in paragraph (a)
above for a termination by the Management Company.

   (c) The Employee shall not be entitled to any compensation under any part of
this Section 7 unless the Employee executes and delivers to the Management
Company after a notice of termination a release in the form of Exhibit "A"
hereto. The parties hereto acknowledge that the payments and Fringe Benefits to
be provided under this Section 7 are to be provided in consideration for the
above-specified release.

                                       6
<PAGE>

8. Inventions, Designs and Product Developments.

   All inventions, innovations, designs, ideas and product developments
(collectively, the "Developments"), developed or conceived by the Employee,
solely or jointly with others, whether or not patentable or copyrightable, at
any time during the Employment Term and that relate to the actual or planned
business activities of the Company and all of the Employee's right, title and
interest therein, shall be the exclusive property of the Company. The Employee
hereby assigns, transfers and conveys to the Company all of his right, title and
interest in and to any and all such Developments. At any time and from time to
time, upon the request of the Company, the Employee shall execute and deliver to
the Company any and all instruments, documents and papers, give evidence and do
any and all other acts that, in the opinion of counsel for the Company, are or
may be necessary or desirable to document such transfer or to enable the Company
to file and prosecute applications for and to acquire, maintain and enforce any
and all patents, trademark registrations or copyrights under United States or
foreign law with respect to any such Developments or to obtain any extension,
validation, re-issue, continuance or renewal of any such patent, trademark or
copyright. The Company will be responsible for the preparation of any such
instruments, documents and papers and for the prosecution of any such
proceedings and will reimburse the Employee for all reasonable expenses incurred
by him in compliance with the provisions of this Section.

9. Confidential Information.

   (a) The Employee will have possession of or access to confidential
information relating to the business of the Company, including writings,
equipment, processes, drawings, reports, manuals, invention records, financial
information, business plans, customer lists, the identity of or other facts
relating to prospective customers, inventory lists, arrangements with suppliers
and customers, computer programs, or other material embodying trade secrets,
customer or product information or technical or business information of the
Company. All such information, other than any information that is in the public
domain through no act or omission of the Employee or which he is authorized to
disclose or required to disclose in connection with legal or administrative
proceedings, is referred to collectively as the "Company Information." During
and after the Employment Term, except in connection with the performance of his
duties under this Agreement, the Employee shall not (i) use or exploit in any
manner the Company Information for himself or any person, partnership,
association, corporation or other entity other than the Company, (ii) remove any
Company Information, or any reproduction thereof, from the possession or control
of the Company or (iii) treat Company Information otherwise than in a
confidential manner.

   (b) All Company Information developed, created or maintained by the Employee,
alone or with others while employed by the Management Company, and all Company
Information maintained by the Employee thereafter, shall remain at all times the
exclusive property of the Company. The Employee shall return to the Company all
Company Information, and reproductions thereof, whether prepared by him or
others, that are in his possession immediately upon request and in any event
upon the completion of his employment by the Company.

                                       7
<PAGE>

10. Agreement Not to Compete

    During the Restricted Period (defined below), the Employee shall not, at any
time within the Territory (defined below), directly or indirectly, engage in, or
have any interest on behalf of itself or others in, any person, firm,
corporation or business (whether as an employee, officer, director, agent,
security holder, creditor, partner, joint venturer, beneficiary under a trust,
investor, consultant or otherwise) that engages within the Territory in any of
the business activities in which the Company's shall have been engaged at any
time during the one year prior to the termination of the Employment Term (the
"Restricted Business"); provided, however, that nothing contained herein shall
prevent or prohibit the Employee from owning of record or beneficially up to 1%
of the stock or equity of any corporation or other business entity engaged in
the Restricted Business if such corporation or other entity is traded on the New
York Stock Exchange, the American Stock Exchange or the NASDAQ National Market.
In addition, during the Restricted Period, the Employee shall not directly or
indirectly solicit or otherwise encourage any of the Company's employees to
terminate their employment with the Company. The "Restricted Period" means the
period during which the Company shall be required to pay the Salary to the
Employee, whether under Section 5 or Section 7, plus an additional one year
after the end of such payments, except that the Restricted Period shall only
include such additional one year if the Employment Term shall have been
terminated by the Management Company for Cause or by the Employee's resignation
under circumstances that do not constitute a Constructive Termination without
Cause. The "Territory" means any part of North America in which the Company
engages in the Restricted Business during the Restricted Period. If a court
determines that the foregoing restrictions are too broad or otherwise
unreasonable under applicable law, including with respect to time or space, the
court is hereby requested and authorized by the parties hereto to revise the
foregoing restriction to include the maximum restrictions allowable under
applicable law. The Employee acknowledges, however, that this Section 10 has
been negotiated by the parties hereto and that the geographical and time
limitations, as well as the limitation on activities, are reasonable in light of
the circumstances pertaining to the business of the Company.

11. Remedies.

    The Employee expressly acknowledges that the remedy at law for any breach of
Sections 8, 9 or 10 will be inadequate and that upon any such breach or
threatened breach, the Company shall be entitled as a matter of right to
injunctive relief in any court of competent jurisdiction, in equity or
otherwise, and to enforce the specific performance of the Employee's obligations
under these provisions without the necessity of proving the actual damage to the
Company or the inadequacy of a legal remedy. The rights conferred upon the
Company by the preceding sentence shall not be exclusive of, but shall be in
addition to, any other rights or remedies which the Company may have at law, in
equity or otherwise.

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<PAGE>

12. Guaranty.

    The Company hereby guarantees the Management Company's performance of this
Agreement.

13. General.

    (a) Governing Law. The terms of this Agreement shall be governed by the laws
of the State of Pennsylvania.

    (b) Company. For purposes of Sections 8, 9, 10 and 11, the term "Company"
shall be deemed to include any Subsidiaries, and to the extent that any of the
provisions thereof impose any obligations on a Subsidiary that is not a party
hereto, the Company shall cause such Subsidiary to comply with such obligations.

    (c) Binding Effect. All of the terms and provisions of this Agreement shall
be binding upon and inure to the benefit and be enforceable by the respective
heirs, representatives, successors (including any successor as a result of a
merger or similar reorganization) and assigns of the parties hereto, except that
the duties and responsibilities of the Employee hereunder are of a personal
nature and shall not be assignable in whole or in part by the Employee.

    (d) Notices. All notices required to be given under this Agreement shall be
in writing and shall be deemed to have been given when personally delivered or
when mailed by registered or certified mail, postage prepaid, return receipt
requested, or when sent by Federal Express or other overnight delivery service,
addressed as follows:

        TO EMPLOYEE:

        At the Employee's residence as provided from time to time by the
        Employee to the Management Company for tax reporting purposes.

        TO THE COMPANY:

        SunSource Corporate Group, Inc.
        3000 One Logan Square
        Philadelphia, PA  19103

    (e) Entire Agreement; Modification. This Agreement and the option agreements
referred to herein constitute the entire agreement of the parties hereto with
respect to the subject matter hereof and supersede all prior agreements or
understandings of the parties regarding these matters, including any prior
agreement between the Employee and the Company or any Subsidiary. Any such prior
agreement is hereby terminated as of the date hereof. This Agreement may not be
modified or amended in any way except in writing by the parties hereto.

                                        9

<PAGE>

    (f) Duration. Notwithstanding the termination of the Employment Term and of
the Employee's employment by the Company, this Agreement shall continue to bind
the parties for so long as any obligations remain under the terms of this
Agreement.

    (g) Waiver. No waiver of any breach of this Agreement shall be construed to
be a waiver as to succeeding breaches. Any waiver must be in writing and signed
by the party granting the waiver.

    (h) Severability. If any provision of this Agreement or application thereof
to anyone under any circumstances is adjudicated to be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect any
other provisions or applications of this Agreement which can be given effect
without the invalid or unenforceable provision or application and shall not
invalidate or render unenforceable such provision in any other jurisdiction.

    (i) Interpretation. Unless the context of this Agreement clearly requires
otherwise, (a) references to the plural include the singular, the singular the
plural, the part the whole, (b) references to any gender include all genders,
(c) "including" has the inclusive meaning frequently identified with the phrase
"but not limited to" and (d) references to "hereunder" or "herein" relate to
this Agreement. The section and other headings contained in this Agreement are
for reference purposes only and shall not control or affect the construction of
this Agreement or the interpretation thereof in any respect.

    (j) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be binding as of the date first written above,
and all of which shall constitute one and the same instrument. Each such copy
shall be deemed an original, and it shall not be necessary in making proof of
this Agreement to produce or account for more than one such counterpart.

    (k) The Employee shall have no duty to mitigate damages by seeking other
employment or other compensation in the event of the termination of the
Employment Term, and any payments due the Employee hereunder will not be offset
in respect of any amount except as expressly provided in this Agreement.

                                       10

<PAGE>

    IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
hereunto duly executed this Agreement as of the day and year first written
above.

                                           SUNSOURCE, INC.

                                           By:___________________________
                                              Name:
                                              Title:

                                           SUNSOURCE CORPORATE GROUP, INC.

                                           By:____________________________
                                               Name:
                                               Title:

                                           _______________________________
                                           MAURICE ANDRIEN

                                       11

<PAGE>

                                                                       EXHIBIT A

                                 FORM OF RELEASE

         NOTE:    YOU SHOULD CONSULT WITH AN ATTORNEY PRIOR TO
                  SIGNING THIS DOCUMENT.

                        FULL WAIVER AND RELEASE OF CLAIMS

                  1. I, Maurice Andrien, in exchange for the compensation
provided under Section 7 of the employment agreement among SunSource, Inc.,
SunSource Corporate Group, Inc. (collectively, the "Companies") and myself dated
[INSERT DATE], to which I would not otherwise be entitled in the amount of
[INSERT AMOUNT OF CONSIDERATION], less applicable federal, state and local tax
deductions, hereby waive any and all Claims (as defined below) which I may have
against the Companies, their parents, subsidiaries, affiliated businesses and
divisions, or their directors, officers, employees, or agents (hereinafter
collectively referred to as "Releasees").

                  2. This Full Waiver and Release of Claims (hereinafter the
"Waiver") applies to any and all past and present claims, suits, damages,
liabilities, demands and causes of action, whether known or unknown, existing or
contingent, or whether at law or equity, arising out of my employment with the
Companies or the termination of that employment but only to the extent that any
of such items relates to any of the following:

                  o   age discrimination under the federal Age Discrimination in
                      Employment Act;

                  o   age discrimination under similar state or local laws; and

                  o   discrimination Claims under federal, state or local laws
                  based on race, color, creed, marital status, veteran status,
                  sex, sexual preference, national origin, citizenship,
                  disability, handicap or religion.

Such released claims, suits, damages, liabilities, demands and causes of action
that are specified above in this Section 2 are referred to herein as "Claims."

This Waiver shall not apply to claims for workers' compensation benefits or
unemployment compensation benefits.

                  3. This Waiver also precludes me from bringing a lawsuit, or
obtaining relief as a result of any charge, lawsuit, or proceeding brought by me
or on my behalf, asserting any Claims against Releasees (or any one of them). In
the event I violate this paragraph, I agree that the affected Releasee(s) shall
be entitled to dismissal of any such lawsuit and that I will be responsible for
the payment of the reasonable attorney's fees and expenses incurred in the
Releasee(s)' defense.

<PAGE>

                                                                       EXHIBIT A

                  4. My last day of work will be _________________, and the
Companies have no obligation to re-employ me in the future.

                  5. I may revoke this Waiver for a period of seven (7) days
following the day I sign it by submitting written notice of my revocation to
[INSERT EMPLOYER REPRESENTATIVE'S NAME AND TITLE] at [INSERT ADDRESS]. This
Waiver shall become effective and enforceable upon expiration of this revocation
period.

                  6. I acknowledge that I have been advised in writing to
consult with an attorney prior to signing this Waiver and that I have been given
twenty-one (21) days to consider this Waiver.

                  7. This Waiver shall be binding upon me and my heirs,
administrators, representatives, executors, and assigns.

                  I HAVE CAREFULLY READ THIS ENTIRE DOCUMENT. I UNDERSTAND THAT
BY SIGNING THIS DOCUMENT, I AM WAIVING ALL CLAIMS RELATING TO MY EMPLOYMENT WITH
THE COMPANIES AND THE TERMINATION OF THAT EMPLOYMENT. I HAVE SIGNED THIS WAIVER
VOLUNTARILY, INTENDING TO BE LEGALLY BOUND.

                  In witness whereof, I have signed this Waiver this

 _____ day of __________________________.

Employee Signature:________________________________

                                        2<PAGE>

                             SPS TECHNOLOGIES, INC.

                      EMPLOYEES SAVINGS AND INVESTMENT PLAN

                                (PLAN NUMBER 004)

                              AMENDED AND RESTATED

                            EFFECTIVE JANUARY 1, 1999

<PAGE>

                             SPS TECHNOLOGIES, INC.

                      EMPLOYEES SAVINGS AND INVESTMENT PLAN

                                (PLAN NUMBER 004)

                              AMENDED AND RESTATED

                            EFFECTIVE JANUARY 1, 1999

                                TABLE OF CONTENTS
                                -----------------
Article                                                                     Page
-------                                                                     ----

              Preamble

     I.       Purpose                                                          3

    II.       Definitions                                                      4

   III.       Participation                                                   30

    IV.       Participant Savings                                             32

     V.       Company Contributions                                           42

    VI.       Investment Provisions                                           48

   VII.       Participants' Accounts                                          50

  VIII.       Distribution and Vesting                                        62

    IX.       Terminated Participants                                         75

     X.       Administration                                                  77

    XI.       The Trust                                                       90

   XII.       Amendment and Termination                                       95

  XIII.       Top Heavy Provisions                                            98

   XIV.       Withdrawals During Employment                                  108

                                        i
<PAGE>

Article                                                                     Page
-------                                                                     ----

    XV.       Loans From The Plan                                            118

   XVI.       General Provisions                                             129

              Schedule A:  ADP and ACP Tests and
                Related Limits on Contributions                              133

              Schedule B:  Determination of Highly
                Compensated Employees                                        163

              Schedule C: Distribution Dates                                 167

              Schedule D:  USERRA Provisions                                 173

              Schedule E:  Participating Subsidiaries                        181

              Schedule F:  Special Provisions                                182

                                       ii
<PAGE>

                     KEY TO INTERNAL REFERENCES IN THIS PLAN

                  2.1 Section

                      (a) Subsection

                          (1) paragraph

                              (A) clause

                                  (i) [not named]

                                      (I) [not named]

<PAGE>

                             SPS TECHNOLOGIES, INC.

                      EMPLOYEES SAVINGS AND INVESTMENT PLAN

                  WHEREAS, SPS Technologies, Inc. (the "Company") adopted the
SPS Technologies, Inc. Exempt Employees Savings and Investment Plan ("EESIP"),
effective August 1, 1979, for certain of its employees; and

                  WHEREAS, the Company adopted the SPS Technologies, Inc.
Non-Exempt Employees Savings and Investment Plan ("NEESIP"),effective July 1,
1984, for certain of its employees; and

                  WHEREAS, EESIP and NEESIP have been amended from time to time,
and were amended and restated, effective January 1, 1989; and

                  WHEREAS, the Company has since merged EESIP with and into
NEESIP, effective December 31, 1998; and

                  WHEREAS, the Company has changed the name of NEESIP to the SPS
Technologies, Inc. Employees Savings and Investment Plan (the "Plan"); and

                  WHEREAS, the Company desires at this time to amend and restate
the Plan, to comply with recent changes to the Internal Revenue Code of 1986 and
the Employee Retirement Income Security Act of 1974, as amended from time to
time;

                  NOW THEREFORE, except as otherwise provided, effective January
1, 1999, the Plan is continued, renamed, amended, and restated as hereinafter
set forth:

<PAGE>

                                    ARTICLE I

                                     PURPOSE
                                     -------

                  1.1 Purpose. SPS Technologies, Inc., desiring to provide
systematically for the payment of benefits to its employees on account of
retirement, death, or total disability, to reward loyalty and service, and to
strengthen the bond between its employees and itself, herewith continues this
plan known as the SPS Technologies, Inc. Employees Savings and Investment Plan.

                  1.2 Type of Plan. For purposes of compliance with section
401(a)(27)(B) of the Internal Revenue Code, this plan shall be designated a
profit sharing plan.

                                       -2-
<PAGE>

                                   ARTICLE II

                                   DEFINITIONS
                                   -----------

                  Except where otherwise clearly indicated by context, the
masculine shall include the feminine and the singular shall include the plural,
and vice-versa.

                  2.1 "Accounts" or "Participant Account" shall mean the
separate entries maintained in the records of the Trustee which represent a
Participant's interest in the Fund.

                      (a) "Salary Redirection Account" means a record separately
maintained for each Participant, accounting for Pre-Tax Salary Redirection
Contributions made by the Participant and the investment performance of such
contributions.

                      (b) "401(k) Account" means a record separately maintained
for each Participant, accounting for elective contributions made by the
Participant, accounting for elective contributions made by the participant to a
C-M Plan while he was participating in that plan and transferred to this Plan as
a result of the merger of the C-M Plans into this Plan, and the investment
performance of such contributions.

                      (c) "C-M Account" means a record separately maintained for
each Participant, accounting for employer contributions made on behalf of the
Participant while he was participating in a C-M Plan and transferred to this
Plan as a result of the merger of the C-M Plans into this Plan, and the
investment performance of such contributions.

                                       -3-
<PAGE>

                      (d) "Voluntary Account" means a record separately
maintained for each Participant, accounting for voluntary employee contributions
made by the Participant to a C-M Plan while he was participating in that plan
and transferred to this Plan as a result of the merger of the C-M Plans into
this Plan, and the investment performance of such contributions. The Voluntary
Account shall be divided into two sub-accounts, which shall be the "pre-1987
account" and the "post-1986 account." All contributions made prior to January 1,
1987 shall be credited to the "pre-1987 account," and all contributions made on
and after January 1, 1987 shall be credited to the "post-1986 account." Gains
and losses shall be allocated to a given sub-account in the proportion that the
amount in that sub-account as of the relevant Valuation Date bears to the total
of the amounts in both sub-accounts as of that Valuation Date.

                      (e) "Rollover Account" means a record separately
maintained for each Participant, accounting for amounts rolled over into the
Fund as provided in Section 4.10, and the investment performance of such
amounts.

                                       -4-
<PAGE>

                      (f) "Company Account" means a record separately maintained
for each Participant, accounting for matching Contributions made by the Company
on behalf of the Participant and the investment performance of such
contributions.

                      (g) "Basic Account" means a record separately maintained
for each Participant, accounting for After-Tax Basic Contributions made by the
Participant and the investment performance of such contributions. The Basic
Account shall be divided into two sub-accounts, which shall be the "pre-1987
account" and the "post-1986 account." All After-Tax Basic Contributions
contributed prior to January 1, 1987 shall be credited to the "pre-1987
account," and all After-Tax Basic Contributions contributed on and after January
1, 1987 shall be credited to the "post-1986 account." Gains and losses on
After-Tax Basic Contributions shall be allocated to a given sub-account in the
proportion that the amount in that sub-account as of the relevant Valuation Date
bears to the total of the amounts in both sub-accounts as of that Valuation
Date.

                      (h) "Supplemental Account" means a record separately
maintained for each Participant, accounting for After-Tax Supplemental
Contributions (if any) made by the Participant and the investment performance of
such contributions. The Supplemental Account shall be divided into two
sub-accounts, which shall be the "pre-1987 account" and the "post-1986 account."
All After-Tax Supplemental Contributions contributed prior to January 1, 1987
shall be credited to the "pre-1987 account," and all After-Tax Supplemental
Contributions contributed on and after January 1, 1987 shall be credited to the
"post-1986 account." Gains and losses on After-Tax Supplemental Contributions
shall be allocated to a given sub-account in the proportion that the amount in
that sub-account as of the relevant Valuation Date bears to the total of the
amounts in both sub-accounts as of that Valuation Date.

                                       -5-
<PAGE>

                      (i) "Salary Redirection Basic Account" means a record
separately maintained for each Participant, accounting for Pre-Tax Salary
Redirection Basic Contributions made by the Participant and the investment
performance of such contributions.

                      (j) "Salary Redirection Supplemental Account" means a
record separately maintained for each Participant, accounting for Pre-Tax Salary
Redirection Supplemental Contributions (if any) made by the Participant and the
investment performance of such contributions.

                  2.2 "ACP Test" shall mean the tests described in Section
A.8(b) of Schedule A.

                  2.3 "ADP Test" shall mean the tests described in Section
A.4(b) of Schedule A.

                  2.4 "Affiliated Company" shall mean:

                      (a) any parent or subsidiary of the Company (or company
under common control with the Company) which is a member of the same controlled
group of corporations (within the meaning of section 1563(a) of the Code) as the
Company;

                                       -6-
<PAGE>

                      (b) any member of an affiliated service group, as
determined under section 414(m) of the Code, of which the Company is a member;

                      (c) any trade or business under common control with the
Company, as determined under section 414(c) of the Code; and

                      (d) any entity required to be aggregated with the Company
pursuant to regulations under section 414(o) of the Code.

                  "50% Affiliated Company" shall mean an Affiliated Company, but
with the phrase "more than 50%" substituted for the phrase "at least 80%" in
section 1563(a) of the Code.

                  2.5 "Annual Additions" shall mean, for any Participant, for
any Limitation Year, the sum of

                      (a) Salary Redirection Savings, Matching Contributions,
and any other employer contributions; and

                      (b) any forfeitures allocated for the Limitation Year to
the Participant's accounts under this Plan and any other defined contribution
plan(s) maintained by the Company or a 50% Affiliated Company.

                                       -7-
<PAGE>

                  Any excess amounts distributed to a Participant under Sections
A.3, A.7, A.11, and A.12 of Schedule A shall be included in determining the
amount of that Participant's Annual Additions for the Limitation Year for which
such amounts are contributed to the Plan.

                  Rollover contributions shall not be included in determining
the amount of a Participant's Annual Additions.

                  Make-up contributions contributed by or on behalf of a
Participant who has returned from military service shall be included in
determining the amount of the Participant's Annual Additions for the Limitation
Year to which the make-up contributions relate (not for the Limitation Year in
which they are actually contributed).

                  2.6 "Board of Directors" shall mean the board of directors of
the Company.

                  2.7 "C-M Plan" means the Cannon-Muskegon Corporation 401(k)
Retirement Savings Plan for Hourly Employees on the Cannon-Muskegon Profit
Sharing Plan, as in effect prior to the Effective Date.

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

                  2.9 "Administrative Committee" or "Retirement Committee" shall
mean the persons appointed by the Board of Directors to supervise the
administration of the Plan, as hereinafter provided.

                                       -8-
<PAGE>

                  2.10 "Company" shall mean SPS Technologies, Inc., a
Pennsylvania corporation and its Participating Subsidiaries.

                  2.11 "Compensation" shall mean, for a given Participant, for a
given Plan Year, the amount(s) which must be reported in the "wages, tips, other
compensation" box on the Form(s) W-2 provided to the Participant by the Company,
increased by elective contributions under sections 125, 402(e)(3), 402(h)(1)(B),
and 403(b) of the Code.

                  For the Plan Year beginning in 1997, a Participant's annual
Compensation shall not be more than $160,000. For Plan Years beginning after
1997, a Participant's annual Compensation shall not be more than the amount set
by section 401(a)(17) of the Code, as adjusted for cost-of-living increases. In
the case of a Plan Year which is less than 12 months long, the dollar limit on
Compensation shall be determined by multiplying the annual limit by a fraction,
the numerator of which is the number of full calendar months in the short Plan
Year and the denominator of which is 12.

                  Until January 1, 1997, if a Participant is a five-percent (5%)
owner of the Company or one of the 10 Highly Compensated Employees who receive
the most pay from the Company and all Affiliated Companies, and if any of such
Participant's family members are also Participants in the Plan, the Participant
and his family member(s) shall be treated as one Participant for purposes of
applying the dollar limit on Compensation described above. If, after the
Compensation of the family members has been added up, the dollar limit on
Compensation has been exceeded, each family member's pro-rata share of the
dollar limit shall be determined, and that share shall be the family member's
Compensation for the Plan Year.

                                       -9-
<PAGE>

                  For the purpose of the preceding paragraph, a Participant's
"family members" are his spouse and his lineal descendants who have not attained
age 19 by the end of the Plan Year in question. The family aggregation rule of
the preceding paragraph shall not apply on or after January 1, 1997.

                  2.12 "Computation Period" shall mean for any employee the
12-month period beginning on the employee's date of employment by the Company or
an Affiliated Company or on any anniversary of such date, and ending on the day
before the anniversary thereof.

                  2.13 "Effective Date" shall mean (except as otherwise set
forth herein) January 1, 1999, the effective date of this amended and restated
Plan. The Plan was originally effective on July 1, 1984 (August 1, 1979 for the
"EESIP").

                                      -10-
<PAGE>

             2.14 "Date of Employment" means the date on which an employee of
the Company or any Subsidiary completes his first Hour of Service.

             2.15 "Date of Reemployment" means the first date following a Period
of Severance that is not credited as Service under the Plan on which an employee
of the Company or any Subsidiary performs an Hour of Service.

             2.16 "Eligible Employee" shall mean any Employee who is entitled to
make Pre-Tax Salary Redirection Contributions and after-tax contributions to get
Matching Contributions for all or any portion of a given Plan Year. An Eligible
Employee shall be included in the ADP Test and ACP Test population for a given
Plan Year regardless of whether he actually makes contributions for that Plan
Year.

             2.17 "Employee" shall mean any person employed by the Company,
including officers, shareholders, or directors who are employees, but excluding
persons covered by a collective bargaining agreement, unless they are covered by
a collective bargaining agreement that specifically provides for their
participation hereunder. Notwithstanding the foregoing sentence, effective
August 1, 1992, employees of the Marango division of The Arnold Engineering Co.
who are covered by a collective bargaining agreement shall be considered
Employees under this Section, and, effective August 1, 1996, employees of the
Sevierville division of The Arnold Engineering Co. who are covered by a
collective bargaining agreement shall be considered Employees under this
Section. The term Employee shall not include any person who is a leased employee
or an independent contractor, whether such person is later determined to be a
common-law employee by the Internal Revenue Service or the courts, or not.

                                      -11-
<PAGE>

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

             2.19 "Excess Deferral" shall mean the amount described in Section
A.2(i) of Schedule A.

             2.20 "Fund" shall mean the fund established for this Plan,
administered under the Trust Agreement, out of which benefits payable under this
Plan shall be paid. Effective January 1, 1995, the Fund shall consist of the
separate Funds, herein described, and any other Funds approved by the Employee
Benefits Committee.

                  (a) Vanguard Windsor Fund is a growth and income stock fund
which seeks long-term growth of capital and income by investing in a portfolio
of common stocks. As a secondary objective, this fund also seeks a reasonable
level of current income.

                                      -12-
<PAGE>

                           (b) Vanguard Wellington Fund is a balanced fund which
is designed to provide conservative investors with a prudent investment program
with the following objectives: (1) conservation of principal; (2) reasonable
income return; and (3) profits without undue risks.

                           (c) Vanguard Primecap Fund is a growth stock fund
which seeks long-term growth of capital by investing principally in a portfolio
of common stocks. Dividend income is incidental.

                           (d) Vanguard International Growth Fund is an
international stock fund which seeks long-term capital growth by investing in
the common stocks of companies based outside of the United States. Dividend
income is incidental.

                           (e) Vanguard Total Bond Market Index Fund is a
intermediate-term bond fund which seeks to match the total return of the Lehman
Brothers Aggregate Bond Index.

                           (f) Vanguard Retirement Savings Trust is an
unsegregated fund, together with the earnings thereon invested primarily in
investment contracts issued by commercial banks and other similar types of fixed
principal investments.

                           (g) Vanguard Small-Cap Index Fund is a fund that
attempts to provide investment results that parallel the performance of the
unmanaged Russell 2000 Small Stock Index (200 small capitalization common
stocks).

                                      -13-
<PAGE>

                           (h) Vanguard 500 Index Fund is a fund that attempts
to provide investment results that parallel the Standard & Poor's 500 Composite
Stock Index.

                           (i) SPS Stock Fund is an unsegregated fund invested
in the common stock of SPS Technologies, Inc.

                  Effective July 1, 1999, the Fund shall also consist of the
following separate Funds:

                           (j) Vanguard U.S. Growth Fund is a large-cap growth
fund that seeks long-term growth of capital by investing in large, high quality,
seasoned U.S. companies with records of exceptional growth and above-average
prospects for future growth.

                           (k) Vanguard Windsor II Fund is a large-cap value
fund that seeks long-term growth of capital and income from dividends by
investing in a diversified group of out-of-favor stocks of large companies. The
stocks generally sell at prices below the overall market average compared to
their dividend income and future return potential.

                  The description of the investment characteristics of each of
these funds, as set forth above, shall not limit or prevent the Trustee, in its
discretion, from holding any portion of a fund in cash or in other forms of
short-term securities.

                  2.21 "Hardship" shall mean, beginning on January 1, 1992, a
Participant's immediate and heavy financial need for funds to:

                                      -14-
<PAGE>

                           (a) pay medical expenses incurred by the Participant
or his spouse or any of his dependents, not reimbursed by insurance or
otherwise, or to obtain medical care (as defined in section 213(d) of the Code)
for the Participant or his spouse or any of his dependents;

                           (b) purchase a principal residence for the
Participant (but not to pay mortgage payments);

                           (c) pay tuition and related educational fees for the
next 12 months of post-secondary education for the Participant or his spouse or
any of his children or dependents;

                           (d) prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of his principal residence;

                           (e) on or after June 1, 1990, to prevent the
incarceration of the Participant; or

                           (f) on or after June 1, 1990, to pay funeral expenses
of a member of the Participant's family.

                  For the purpose of this Section, the term "dependent" shall
have the meaning given to it by section 152 of the Code.

                  The amount of a hardship withdrawal may include the amount
required to pay any federal, state, and local income taxes and penalties that
will result from the hardship withdrawal.

                                      -15-
<PAGE>

             2.22 "Highly Compensated Employee" shall mean, for a given Plan
Year, an employee who is found to be a highly compensated employee within the
meaning of Treas. Reg.ss.1.414(q)-1T for that Plan Year. The determination under
Treas. Reg.ss.1.414(q)-1T shall be made in accordance with Schedule B.

             2.23 "Hour of Service" shall mean an hour for which:

                  (a) an employee is directly or indirectly paid or entitled to
payment by the Company or an Affiliated Company for the performance of
employment duties; or

                  (b) back pay, irrespective of mitigation of damages, is either
awarded or agreed to; or

                  (c) an employee is directly or indirectly paid or entitled to
payment by the Company or an Affiliated Company on account of a period of time
during which no duties are performed due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military duty, or leave of
absence; or

                  (d) an employee is absent from work without pay but receives
Hours of Service under Section 2.43.

             There shall be excluded from the foregoing those periods during
which payments are made or due under a plan maintained solely for the purpose of
complying with applicable workers' compensation, unemployment compensation, or
disability insurance laws. An Hour of Service shall not be credited where an
employee is being reimbursed solely for medical or medically related expenses.

                                      -16-
<PAGE>

             Hours of Service shall be credited in accordance with the rules set
forth in U.S. Department of Labor Reg.ss.2530.200b-2(b) and (c).

             Hours of Service shall be credited for any individual who is
considered a leased employee for purposes of this Plan under section 414(n) of
the Code.

             2.24 "Income" shall mean, until January 1, 1998, the sum of an
employee's Limitation Compensation and his elective deferrals under sections
125, 402(e)(3), 402(h)(1)(B), and 403(b) of the Code. Beginning on January 1
1998, when the definition of Limitation Compensation changes to include elective
deferrals (in accordance with an amendment to section 415(c)(3) of the Code), an
employee's Income shall be his Limitation Compensation.

             2.25 "Employee Benefits Committee" means the committee appointed by
the Board of Directors pursuant to Section 10.3.

             2.26 "Investment Medium" shall mean any fund, contract, obligation,
or other mode of investment selected by the Committee to which a Participant may
direct the investment of the assets of his Accounts.

                                      -17-
<PAGE>

             2.27 "Limitation Compensation" shall mean for any Participant:

                  (a) the Participant's wages, salary, fees for professional
services, and other amounts received for personal services rendered in the
course of employment with the Company or a 50% Affiliated Company, regardless of
whether an amount is paid in cash, including (but not limited to) commissions
paid to salesmen, compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips, bonuses, fringe benefits,
reimbursements, expense allowances, and, after December 31, 1997, elective
contributions under sections 125, 402(e)(3), 402(h)(1)(B), and 403(b) of the
Code; foreign earned income, whether or not excludable from gross income under
section 911 of the Code; taxable amounts received by the Participant through
accident or health insurance for personal injury or sickness or from a
self-insured medical expense reimbursement plan; moving expenses paid or
reimbursed by the Company or a 50% Affiliated Company in excess of any amount
deductible by the Participant; wages or payments in lieu of wages received on
account of absence from work for permanent and total disability; the amount
included in the taxable income of the Participant as a result of the grant of a
non-qualified stock option by the Company or a 50% Affiliated Company; and the
amount includable in the gross income of the Participant as the result of an
election described in section 83(b) of the Code.

                                      -18-
<PAGE>

                  (b) Limitation Compensation shall exclude the following:

                      (1) employer contributions on behalf of an employee to a
simplified employee pension plan;

                      (2) any distributions from a plan of deferred
compensation, except that any amounts received by an employee pursuant to an
unfunded non-qualified plan may be included in the year that such amounts are
included in gross income;

                      (3) amounts realized from the exercise of a non-qualified
stock option or from stock or property which is currently taxable under section
83 of the Code;

                      (4) amounts realized from the sale, exchange, or other
disposition of stock acquired through the exercise of a qualified or incentive
stock option; and

                      (5) other amounts which receive special tax benefits, such
as premiums for group term life insurance to the extent not includable in gross
income, or contributions made by an employer toward the purchase of an annuity
contract described in section 403(b) of the Code.

             2.28 "Limitation Year" shall mean the Plan Year or such other
12-month period as may be designated by the Company.

                                      -19-
<PAGE>

             2.29 "Management Incentive Plan" means the plan maintained by SPS
Technologies, with that name.

             2.30 "Mandatory Benefit Commencement Date" shall mean for any
Participant the date described in Section C.1 of Schedule C.

             2.31 "Matching Contributions" shall mean the amounts contributed to
the Fund by the Company pursuant to Section 5.1.

             2.32 "Normal Retirement Age" shall mean for any Participant age 65.
shall mean the date on which a Participant attains Normal Retirement Age. A
Participant attains age 65 on his 65th birthday.

             2.34 "Participant" shall mean any Employee entitled to and who
elects to participate in this Plan under Section 3.1, and any Employee or former
Employee for whom an Account is maintained under the Plan.

             2.35 "Participating Subsidiary" means any Subsidiary or any
corporation of which SPS Technologies, Inc. owns more than fifty percent (50%)
of the outstanding stock, and which is designated as a Participating Subsidiary
by the Board of Directors, and which elects to participate in the Plan. A
Participating Subsidiary shall be such only as long as such designation and
election remain in effect.

                                      -20-
<PAGE>

             2.36 "Period of Severance" means the period of time commencing
on an Employee's Termination date and ending on the date on which the Employee
again performs an Hour of Service. However, if an Employee is absent from work
by reason of pregnancy, childbirth, or adoption, or for purposes of the care of
such Employee's child immediately after birth or adoption, the 12-consecutive
month period beginning on the first anniversary of the first day of such absence
shall not constitute Period of Severance.

             2.37 "Plan" shall mean the SPS Technologies, Inc. Employees Savings
and Investment Plan (formerly the SPS Technologies, Inc. Non-Exempt Employees
Savings and Investment Plan), as set forth herein and as hereafter amended from
time to time. For purposes of compliance with section 401(a)(27)(B) of the Code,
the Plan is designated a profit sharing plan.

             2.38 "Plan Year" shall mean a 12-month period which shall commence
each January 1st and end on the next following December 31st. The foregoing
notwithstanding, the first Plan Year was the six-month period beginning on July
1, 1984 and ending on December 31, 1984.

             2.39 "Pre-Tax Salary Redirection Contributions" shall mean a
Participant's before-tax savings (including Pre-Tax Salary Redirection Basic
Contributions and Pre-Tax Salary Redirection Supplemental Contributions)
transferred to the Fund as provided in Article IV.

                                      -21-
<PAGE>

             2.40 "Qualified Matching Contributions" shall mean amounts which
are contributed to the Fund by the Company on behalf of non-highly compensated
Participants; which are allocated on the basis of Pre-Tax Salary Redirection
Contributions; which Participants may not elect to receive in cash; and which,
when made, are subject to the distribution and nonforfeitability requirements of
section 401(k) of the Code.

             2.41 "Qualified Nonelective Contributions" shall mean amounts which
are contributed to the Fund by the Company on behalf of non-highly compensated
Eligible Employees; which are allocated on the basis of Compensation; which
Eligible Employees may not elect to receive in cash; and which, when made, are
subject to the distribution and nonforfeitability requirements of section 401(k)
of the Code.

             2.42 "Rollover Savings" shall mean a Participant's distributions
from other qualified retirement plans that have been rolled over into the Fund
as provided in Section 4.10.

             2.43 "Service" means an Employee's period of employment commencing
on his Date of Employment or Date of Reemployment (whichever is applicable) and
ending on his Termination Date. Separate periods of Service shall be aggregated
to determine an Employee's total Service for purposes of this Plan; provided,
however, that the determination of any Employee's total Service shall be subject
to the following rules:

                                      -22-
<PAGE>

                  (a) In the case of a Participant who severs from service by
reason of a quit, retirement, or discharge, and who then performs an Hour of
Service within 12 months of his Termination Date, the Participant's total
Service shall include the Period of Severance from his Termination Date to his
Date of Reemployment.

                  (b) In the case of a Participant who severs from service by
reason of a quit, retirement, or discharge during an absence from service of 12
months or less for a reason other than a quit, retirement, or discharge, and who
then performs an Hour of Service within 12 months of the date on which he was
first absent from service, the Participant's total Service shall include the
Period of Severance.

                  (c) Service shall include the following periods of time:

                      (1) leaves of absence with the consent of the Company and
periods of Total Disability within the period during which right to
reinstatement is provided under the Company's policies, provided that the
Participant returns to active employment from such leave of absence or Total
Disability or becomes eligible to retire under the SPS Technologies, Inc.
Retirement Income Plan, and further provided that all those similarly situated
be treated alike;

                                      -23-
<PAGE>

                      (2) absences due to service in the armed forces to the
extent that the Participant's right to reemployment is protected by law;

                      (3) absences due to layoff if the Participant is recalled
to work within the period during which right to reinstatement is provided under
the Company's policies, and further provided that the Participant returns to
active employment pursuant to such policies; and

                      (4) unpaid leaves of absence under the Family and Medical
Leave Act of 1993 for a period beginning on or after August 5, 1993.

                  (d) Periods of employment by a Subsidiary either before the
Subsidiary becomes a Participating Subsidiary or after the Subsidiary ceases to
be a Participating Subsidiary shall be included as Service under the Plan.

                  (e) Periods of employment by a company either before it
becomes a Subsidiary or after it ceases to be a Subsidiary shall not constitute
Service under the Plan.

                  (f) Periods of Service of less than a whole year shall be
credited at the rate of 1/12th of a year of Service for any month in which an
Hour of Service is credited.

                  (g) Notwithstanding the foregoing, periods of service prior to
January 1, 1976 shall be considered as Service only to the extent that such
periods would have been recognized as "continuous service" as defined and
computed in accordance with the SPS Technologies, Inc. Retirement Income Plan as
it existed on or prior to December 31, 1975.

                                      -24-
<PAGE>

             2.44 "Subsidiary" means:

                  (a) any company which is included within a "controlled group
of corporations" within which SPS Technologies, Inc. is also included, as
determined under Section 1563 of the Code, without regard to Subsections (a)(4)
and (e)(3)(C) of said Section 1563, except that for purposes of Section 7.8,
such determination under Section 1563 shall be made by substituting the phrase
"more than 50%" for the phrase "at least 80%" in Section 1563(a)(1);

                  (b) any other trade or business (whether or not incorporated)
which, based on principles similar to those defining a "controlled group of
corporations" for the purposes of (a) above, and pursuant to Section 414(c) of
the Code, is under common control;

                  (c) any member of an affiliated service group, as determined
under Section 414(m) of the Code, of which SPS Technologies, Inc. is a member;
and

                  (d) any entity required to be aggregated with SPS
Technologies, Inc. under Section 414(o) of the Code.

             2.45 "Termination Date" means the earlier of:

                  (a) the date on which an Employee quits, retires, is
discharged, or dies, or

                                      -25-
<PAGE>

                  (b) the first anniversary of the first day of a period during
which an Employee remains continuously absent from work (with or without pay)
for any reason other than a quit, retirement, discharge, or death.

             2.46 "Total Disability" shall mean a physical or mental condition
of such severity and probable prolonged duration as to entitle the Participant
to disability retirement benefits under the federal Social Security Act.

                  All determinations of Total Disability shall be made on a
uniform and consistent basis applicable to all Employees in similar
circumstances.

             2.47 "Trust" means the trust or trusts held by any Trustee or its
successors, designated by the Board of Directors in accordance with one or more
Trust Agreements between the Company and such Trustee.

             2.48 "Trust Agreement" shall mean the agreement and declaration of
trust executed under this Plan.

             2.49 "Trustee" shall mean the corporate trustee or one or more
individuals collectively appointed and acting under the Trust Agreement.

             2.50 "Unit" means the unit of measure of a Participant's
proportionate interest, if any, in each Fund described in Section 2.20.

                                      -26-
<PAGE>

             2.51 "USERRA" shall mean the Uniformed Services Employment and
Reemployment Rights Act of 1994, as amended from time to time.

             2.52 "Valuation Date" shall mean each business day while the plan
is in effect.

             2.53 "Voluntary Savings" shall mean a Participant's after-tax
savings transferred to the Fund as provided in Article IV.

<PAGE>

                                   ARTICLE III

                                  PARTICIPATION
                                  -------------

                  3.1 Date of Participation.

                      (a) Each person who was participating in the Plan (or any
plan merged into this Plan) immediately prior to the Effective Date and who is
an Employee on the Effective Date shall be a Participant hereunder as of the
Effective Date.

                      (b) Each person who is an Employee as of the Effective
Date (but who is not eligible to participate under Subsection (a)) shall become
eligible to become a Participant as of the Effective Date.

                      (c) Each other Employee shall become eligible to become a
Participant on the first day of any pay period coincident with or next following
his Date of Employment.

                  3.2 Participation Voluntary. Participation in this Plan is
voluntary. An Eligible Employee who does not elect to become a Participant when
he first meets the requirements of this Section may become a Participant at any
later time by following the procedure in Section 3.5.

                  3.3 Participation After Reemployment. A Participant whose
employment is terminated and who is later reemployed as an Employee shall resume
his participation in the Plan as of the Date of his Reemployment, but not
earlier than the first date on which he would otherwise have been eligible to
become a participant had he not terminated his employment.

                                      -27-
<PAGE>

                  3.4 Data. Each Employee shall furnish to the Committee such
data as the Committee may consider necessary for the determination of the
Employee's rights and benefits under the Plan and shall otherwise cooperate
fully with the Committee in the administration of the Plan.

                  3.5 Method of Becoming a Participant. An Eligible Employee,
including one who becomes eligible again under Section 3.3, shall become a
Participant by making written application to participate in the Plan on the
form(s) provided by the administrative Committee. Such Eligible Employee must
apply for participation prior to the beginning of the pay periods for which he
desires to enter the Plan and must make contributions hereunder.

<PAGE>

                                   ARTICLE IV

                               PARTICIPANT SAVINGS

                  4.1 Amount of Participant Contributions.

                      (a) Each Participant shall contribute, at his option, two
percent (2%), three percent (3%), four percent (4%), five percent (5%), or six
percent (6%) of his Base Pay. Such contributions shall be referred to as either
After-Tax Basic Contributions or Pre-Tax Salary Redirection Basic Contributions,
as designated by the Participant in accordance with Section 4.2.

                      (b) If a Participant is making contributions at the
maximum rate of six percent (6%) of his Base Pay, he may also elect to make
additional contributions, the amount of which shall be expressed as a whole
percentage that is one percent (1%) to ten percent (10%) of his Base Pay. Such
contributions shall be referred to as either After-Tax Supplemental
Contributions or Pre-Tax Salary Redirection Supplemental Contributions, as
designated by the Participant in accordance with Section 4.2.

                      (c) All Participant contributions shall be in the form of
Employee-authorized payroll deductions.

                      (d) Notwithstanding any other Subsection of this Section
4.1, if a Participant who is employed by Greer Stop Nut, Inc. or Non-Ferrous
Bolt & Mfg. Co. and is making contributions at the maximum rate of six percent
(6%) of his Base Pay, he may also elect to make additional contributions, solely
in accordance with this Subsection (d), the amount of which shall be expressed
as a whole percentage that is one percent (1%) to fourteen percent (14%) of his
Base Pay. Such contributions will be referred to as either After-Tax
Supplemental Contributions or Pre-Tax Supplemental Contributions, as designated
by the Participant in accordance with Section 4.2.

                                      -28-
<PAGE>

                  4.2 Designation of Participant Contributions.

                      (a) A Participant who contributes two percent (2%) to six
percent (6%) of his Base Pay shall select, on a prospective basis, the whole
percentage of such contributions which the Participant wants designated as (1)
an After-Tax Basic Contribution, representing a contribution on an after-tax
basis, and (2) a Pre-Tax Salary Redirection Basic Contribution, representing a
before-tax contribution as described in Sections 401(k) and 402(e)(3) of the
Code.

                      (b) A Participant who is eligible to and does make
additional contributions of one percent (1%) to ten percent (10%) of his Base
Pay shall select, on a prospective basis, the whole percentage of such
additional contributions which the Participant wants designated as (1) an
After-Tax Supplemental Contribution, representing a contribution on an after-tax
basis, and (2) a Pre-Tax Salary Redirection Supplemental Contribution,
representing a before-tax contribution as described in Sections 401(k) and
402(e)(3) of the Code.

                                      -29-
<PAGE>

                      (c) Effective January 1, 1987, in any one taxable year,
the amount of Pre-Tax Salary Redirection Contributions plus any other elective
deferrals (as defined in Section 402(g)(3) of the Code) allocated to a
Participant's accounts under this Plan and all other plans, contracts, and
arrangements maintained by the Company and Subsidiaries shall in no event exceed
the dollar limit in effect under Section 402(g) of the Code for that taxable
year.

                      (d) Notwithstanding anything in the Plan to the contrary,
After-Tax Supplemental Contributions shall not in any Plan Year exceed the limit
required in order to satisfy the ACP Test.

                      (e) Separate accounting shall be maintained under the Plan
with respect to a Participant's After-Tax Basic Contributions, Pre-Tax Salary
Redirection Basic Contributions, After-Tax Supplemental Contributions, and
Pre-Tax Salary Redirection Supplemental Contributions in the Participant's Basic
Account, Salary Redirection Basic Account, Supplemental Account, and Salary
Redirection Supplemental Account, respectively.

                  4.3  Dollar Limit on Salary Redirection Savings.

                      (a) In any one taxable year, the amount of Salary
Redirection Savings plus any other elective deferrals (as defined in section
402(g)(3) of the Code) allocated to a Participant's accounts under this Plan and
all other plans, contracts, and arrangements maintained by the Company and
Affiliated Companies shall in no event exceed the dollar limit in effect under
section 402(g) of the Code at the beginning of that taxable year ($9,500 for
1997; $10,000 for 1998 and 1999; $10,500 for 2000) or, if applicable, the lesser
amount described in Subsection (b).

                                      -30-
<PAGE>

                      (b) If a Participant is granted a Hardship withdrawal
under Article XIV, his Pre-Tax Salary Redirection Contributions shall be
suspended in accordance with Section 14.2(d). In the taxable year of the
Participant following the year in which the Hardship withdrawal is taken, the
dollar limit on the amount allocable to his Salary Redirection Contribution
Account shall be:

                          (1) the applicable limit under section 402(g) of the
Code for the taxable year following the year in which the Hardship withdrawal is
taken, minus

                          (2) the amount of the Participant's Salary Redirection
Savings for the taxable year in which the Hardship withdrawal is taken.

                  4.4 Change of Contribution Rate.

                      (a) A Participant may change the contribution rate he has
elected under Section 4.1 to any other rate permitted under that Section. Such a
change shall become effective with the first pay period after the date on which
the Committee is notified of the change.

                                      -31-
<PAGE>

                      (b) (1) A Participant who is a Highly Compensated Employee
and whose Pre-Tax Salary Redirection Contributions have been limited in
accordance with Schedule A may change his percentage of contributions more than
once in a six-month period, provided:

                              (A) any such change follows the Administrative
Committee's determination that its earlier required reduction in contribution
rates may be disregarded in whole or in part; and

                              (B) any such change shall become effective with
the first pay period following the date on which a written election is received
by the Administrative Committee.

                          (2) Any change made in accordance with paragraph (1)
does not limit the Administrative Committee's right to require subsequent
reductions in contribution rates of Highly Compensated Employees.

                  4.5 Suspension of Participant Contributions.

                      (a) By filing a written election with the Administrative
Committee, a Participant may elect to suspend his Pre-Tax Salary Redirection
Contributions. Such suspension shall become effective with the first pay period
after the date on which the written election to suspend is received by the
Administrative Committee. Any suspension must be effective for a period of at
least six months.

                                      -32-
<PAGE>

                      (b) Participant contributions shall be suspended
automatically for any pay period in which the Participant does not receive Base
Pay. Participant contributions shall be suspended automatically upon transfer of
the Participant to a Subsidiary which is not a Participating Subsidiary.

                      (c) In order to resume making contributions, a Participant
must follow the procedure outlined in Section 3.5 as though he were a new
Participant.

                      (d) A Participant shall not be permitted to make up
contributions for any period in which his contributions were suspended.

                  4.6 Termination of Participant Contributions. A Participant's
contributions shall terminate effective with the pay period that end immediately
prior to or coincident with the date on which the Participant terminates
employment for any reason, including retirement or death.

                  4.7 Remittance of Contributions. Amounts deducted as Salary
Redirection Savings shall be remitted to the Trustee and/or Insurance Company
for deposit in the Fund as soon as is practicable, but in no event more than 15
business days after the end of the calendar month in which such contributions
were withheld from the Participant's Compensation and shall be allocated to the
Funds as directed by each Participant in accordance with Article VI.

                                      -33-
<PAGE>

                  4.8  Nondiscrimination Testing. The Plan must satisfy the ADP
and ACP Tests set forth in Schedule A as of the last day of each Plan Year.

                  4.9  Excess Deferrals. In a taxable year in which a
Participant has an Excess Deferral, the Excess Deferral shall be treated as
described in Schedule A.

                  4.10 Rollovers to the Plan.

                       (a) With the consent of the Administrative Committee, an
Employee who became a Participant before April 1, 1996 may roll over into the
Fund all or a portion of his interest in any retirement plan of a former
employer that is tax-qualified under Section 401(a) of the Code, except that the
interest being rolled over may not contain nondeductible employee contributions.

                  Any rollover by an Employee who became a Participant before
April 1, 1996 must be completed no later than June 30, 1996. An Employee who
became a Participant before April 1, 1996 may not, under any circumstances, roll
funds over to the Plan after June 30, 1996. The time limit described in
Subsection (d)(1) shall also apply.

                       (b) With the consent of the Administrative Committee, an
Employee who becomes a Participant on or after April 1, 1996 may roll over into
the Fund all or a portion of his interest in any retirement plan of a former
employer that is tax-qualified under Section 401(a) of the Code, except that the
interest being rolled over may not contain nondeductible employee contributions.

                                      -34-
<PAGE>

                  Any such rollover must be completed within 90 days after the
Employee becomes a Participant or, if later, within 30 days after the funds
being rolled over become available for transfer to the Plan. The time limit
described in Subsection (d)(1) shall also apply.

                           (c) Amounts rolled over from another retirement plan
that is tax-qualified under Section 401(a) of the Code shall be credited to the
Participant's Rollover Account.

                           (d) The Trustee shall not accept a distribution from
any other retirement plan that is tax-qualified under Section 401(a) of the Code
unless (1) the distribution being rolled over comes directly from the fiduciary
of the distributing plan, or comes from the Participant, within 60 days after
the Participant receives a distribution from such other tax-qualified retirement
plan; and (2) the distribution being rolled over will not cause the Plan to be a
direct or indirect transferee of a plan to which the survivor annuity
requirements of Sections 401(a)(11) and 417 of the Code apply.

                           (e) Except as specifically provided in this Section,
no Participant shall be permitted to roll over or transfer funds to the Plan
from another qualified retirement plan or trust, from an individual retirement
account or individual retirement annuity, or from an annuity plan.

                  4.11 USERRA Make-Up Contributions. If a Participant has been
absent from work due to military service and he meets the requirements for
coverage under USERRA, he shall have the right to make up the Salary Redirection
Contributions he could have contributed if he had been actively employed by the
Company during his period of military service, as provided in Section D.3 of
Schedule D.

                                      -35-
<PAGE>

                                    ARTICLE V

                              COMPANY CONTRIBUTIONS
                              ---------------------

                  5.1 Matching Contributions.

                      (a) Before January 1, 1999. Subject to the limitations of
Schedule A and the provisions of Schedule F, each month the Company will
contribute out of its accumulated earnings and profits, and pay (or cause to be
paid) to the Trustee and/or Insurance Company, for each Participant (except
those employees of The Arnold Engineering Co. working at the Sevierville
location and covered by a collective bargaining agreement, unless the collective
bargaining agreement specifically provides for their participation
hereunder)(employees of The Arnold Engineering Co., Marengo, Illinois location
are only eligible to receive contributions under this Article V on and after
October 1, 1998) a base amount, which shall be referred to as the Matching
Company Contribution, to be allocated to the Participant's Company Account as
follows:

                          (1) effective January 1, 1997 through December 31,
1997, an amount equal to fifteen percent (15%) of the first six percent (6%) of
the Participant's Compensation that is deferred through Pre-Tax Salary
Redirection Basic Contributions; and

                                      -36-
<PAGE>

                          (2) effective January 1, 1998:

                              (A) an amount equal to fifteen percent (15%) of
the first six percent (6%) of the Participant's Compensation that is deferred
through Pre-Tax Salary Redirection Basic Contributions in any month during the
first through fifth years of the Participant's Service; and

                              (B) an amount equal to twenty percent (20%) of the
first six percent (6%) of the Participant's Compensation that is deferred
through Pre-Tax Salary Redirection Contributions in any month during the sixth
and all subsequent years of the Participant's Service.

                      (b) On and After January 1, 1999. For Plan Years beginning
on and after January 1, 1999, Matching Company Contributions shall be an amount
equal to:

                          (1) fifteen percent (15%) of the first six percent
(6%) of the Participant's Compensation that is deferred through Pre-Tax Salary
Redirection Basic Contributions or After Tax Basic Contributions in any month
during the first through fifth years of the Participant's Service; and

                          (2) twenty-five percent (25%) (twenty percent (20%)
for Employees of The Arnold Engineering Co., Marengo, Illinois location who are
covered by a collective bargaining agreement) of the first six percent (6%) of
the Participant's Compensation that is deferred through Pre-Tax Salary
Redirection Contributions or After Tax Basic Contributions in any month during
the sixth and all subsequent years of the Participant's Service.

                                      -37-
<PAGE>

                      (c) Notwithstanding Subsection (a), a Participant who is
employed by Greer Stop Nut, Inc. ("Greer Participant") shall be allocated a
matching contribution under the Plan solely in accordance with this Subsection
(c), subject to the limitations of Schedule A. For each month the Company will
contribute out of its accumulated earnings and profits and pay (or cause to be
paid) to the Trustee and/or Insurance Company for each Greer Participant a base
amount, which shall be referred to as the Matching Company Contribution, to be
allocated to the Greer Participant's Company Account and to be determined as
follows: one hundred percent (100%) of the first three percent (3%) of the Greer
Participant's After-Tax Basic Contributions and/or Pre-Tax Salary Redirection
Basic Contributions contributed in any month during the Greer Participant's
Service.

                      (d) Notwithstanding any other provision of this Section, a
Participant who directs his current monthly matching contribution to the SPS
Stock Fund, in accordance with Section 6.1 of this Plan, and who has an account
balance in excess of $0 on the last day of the month, shall receive an
additional matching contribution (the "SPS Stock Fund Match") from the Company
equal to fifteen percent (15%) of the amount of the current monthly matching
contribution directed to the SPS Stock Fund, provided, however, that the SPS
Stock Fund Match of a Participant who is employed by Greer Stop Not, Inc. will
be limited to seven and one-half percent (7.5%) of the amount of the matching
contribution directed to the SPS Stock Fund.

                                      -38-
<PAGE>

                      (e) Notwithstanding any other provision of this Section,
Matching Company Contributions for former EESIP Participants are governed by the
terms of that plan as in effect from time to time.

                      (f) If a Participant has been absent from work due to
military service and he meets the requirements for coverage under USERRA, he
shall have the right to make up the Salary Redirection Savings he might have
contributed during his period of military service, as provided in Section D.3 of
Schedule D. If the Participant does make up Salary Redirection Contributions,
the Company shall contribute make-up Matching Contributions, as provided in
Section D.4 of Schedule D.

                  5.2 Remittance of Matching Contributions.

                                      -39-
<PAGE>

                      (a) In the Company's sole discretion, Matching Company
Contributions may be contributed for each month in cash, in Company Stock, or
partially in cash and partially in Company Stock. If Matching Company
Contributions are paid in cash, such contributions shall be remitted to the
Trustee at the same time as Participant After-Tax Contributions, if applicable,
otherwise such contributions will be contributed each month.

                      (b) If the Company makes its contributions in cash, then
such amounts to the extent allocated to the SPS Stock Fund shall be used for the
purchase of shares of stock at the lowest price obtainable. Such shares of stock
may, in the sole discretion of the Trustee, be purchased on a national or
regional securities exchange, from the Company, from the SPS Technologies, Inc.
Retirement Income Plan, or from any other bona fide offeror of such stock, to
the extent allowed by the Code and ERISA.

                  5.3 QNECs and QMACs. If the Committee determines that the Plan
does not satisfy the ADP Test and/or the ACP Test, it may recommend that the
Company make Qualified Nonelective Contributions and/or Qualified Matching
Contributions on behalf of non-highly compensated Eligible Employees. Any such
contributions that the Company makes shall be allocated in accordance with
Section 7.6.

                                      -40-
<PAGE>

                  5.4 Maximum Amount. The total of Matching Contributions,
Qualified Nonelective Contributions, and Qualified Matching Contributions for
any Plan Year shall not exceed the maximum amount which will constitute an
allowable current deduction under the applicable provisions of the Code. All
Company contributions are expressly conditioned upon their deductibility for
federal income tax purposes.

                  5.5 Nondiscrimination Testing. The Plan must satisfy the ACP
Test set forth in Schedule A as of the last day of each Plan Year.

                                      -41-
<PAGE>

                                   ARTICLE VI
                                   ----------

                              INVESTMENT PROVISIONS
                              ---------------------

                  6.1 Investment of Contributions. At the time he elects to
become a Participant under the Plan, each Participant shall select the Funds to
which contributions are to be allocated. The SPS Stock Fund is available for
investment of Matching Contributions only. If the Participant elects to have
such contributions invested in more than one such Fund, he shall designate, in
multiples of twenty-five percent (25%), the portion of such contributions that
shall be invested in each Fund. Effective January 1, 1992, investments may be
made in 10% increments.

                  6.2 Change in Investment Election.

                      (a) Any investment election made by a Participant with
respect to investment of his contributions shall continue in effect until
changed by the Participant.

                      (b) Prior to January 1, 1992, by filing a written election
with the Administrative Committee, a Participant may change his current
investment election as to future contributions, within the limits of Section
4.1, effective with the first pay period following the date that is 14 days
after the date on which the written election to change is received by the
Administrative Committee.

                                      -42-
<PAGE>

                      (c) On or after January 1, 1992, by telephoning the
Trustee in accordance with Plan procedures, a Participant may change his current
investment election as to further contributions, within the limits of Section
4.1, effective with the next contribution.

                      (d) Such conversions may be made not more than once in any
three-month period that begins on January 1st, April 1st, July 1st, or October
1st and must be made in multiples of twenty-five percent (25%) before January 1,
1992 and in multiples of ten percent (10%) on or after January 1, 1995 provided
that prior to January 1, 1992 no more than fifty (50%) of his Company Account
may be allocated to the SPS Stock Fund.

                      (e) Effective July 1, 1999 a Participant may change his
investment election as frequently or infrequently as the Participant so chooses.

                  6.3 Conversion of Past Elections.

                      (a) Prior to January 1, 1992, by filing a written
election, a Participant may convert his investment election with regard to any
sums then in his Salary Redirection Account, effective on the first Valuation
Date following the date that is 14 days after the date on which such written
election to convert is received by the Administrative Committee.

                      (b) On or after January 1, 1992, by telephoning the
Trustee in accordance with Plan Procedures, a Participant may convert his
investment election with regard to any sums then in his Participant Account.
Requests for change made prior to 4:00 p.m. Eastern Time on any business day
shall be processed that day; otherwise, the change shall become effective on the
following business day.

                      (c) Such conversions may be made not more than once in any
three-month period that begins on January 1st, April 1st, July 1st, or October
1st and must be made in multiples of twenty-five percent (25%) before January 1,
1992 and in multiples of ten percent (10%) on or after January 1, 1995 provided
that prior to January 1, 1992 no more than fifty percent (50%) of his Company
Account may be allocated to the SPS Stock Fund.

                      (d) None of the Participant's Basic Account, Salary
Redirection Basic Account, Supplemental Account, Salary Redirection Supplemental
Account, or Rollover Account may be allocated to the SPS Stock Fund.

                                      -43-
<PAGE>

                                   ARTICLE VII

                             PARTICIPANTS' ACCOUNTS
                             ----------------------

                  7.1 Units. In the discretion of the Administrative Committee,
each of the Funds shall be divided into Units of Participation and the interests
of each Participant in each Fund shall be evidenced by the number of Units and
portions thereof in such Fund credited to the Participant's Salary Redirection
Account. Each Unit in a Fund shall have an equal beneficial interest in such
Fund, and none shall have priority or preference over any other. In the absence
of a decision by the Administrative Committee to utilize the Unit method, the
Participant's records shall be maintained on a dollar basis, with credits for
contributions and debits for withdrawals. Each Participant shall share pro rata,
with appropriate debits and credits, in the income, expenses, gains, and losses,
whether realized or not, of each Fund in which he participates.

                  7.2 Valuation of Assets. Each Fund shall be valued by the
Trustee as follows:

                      (a) Investments of each Fund shall be valued at the market
value thereof, as determined by the Trustee on the Valuation Date.

                      (b) Records of valuations of each Fund and of the Units
thereof shall be prepared and preserved by the Trustee in such manner and within
such time after each Valuation Date as may be prescribed by the Administrative
Committee or, in the absence of rules set by the Administrative Committee, as
determined by the Trustee.

                                      -47-

<PAGE>

                  7.3 Valuation of Units. The original Unit of each Fund shall
be one dollar ($1.00). Thereafter, at or as of such dates as may be prescribed
by the Administrative Committee and at such other times as the Trustee may
elect, the value of a Unit in each Fund shall be determined by dividing the
value of such Fund, determined by the Trustee as provided in Section 7.2, by the
total number of outstanding Units in such Fund.

                  7.4 Determination of Number of Units. Each investment of a
Participant in Units in a Fund shall be on the basis of the value of such a Unit
as of the Valuation Date last preceding such investment. Each distribution in
respect of and each conversion of Units in a Fund shall be on the basis of the
value of such a Unit as of the Valuation Date specified according to the type of
distribution or conversion. The number of Units and fractions of Units in each
Fund to be credited or debited to a Participant's account each month shall be
calculated by dividing the monthly sum to be contributed to or paid from such
Fund for such Participant by the value of a Unit of such Fund immediately prior
to such contribution or payment. The number of outstanding Units in such Fund
shall be increased or decreased accordingly.

                  7.5 Cancellation of Units. Upon distribution of the value of
the Participant Account or of any accounts which are a part thereof, a
Participant's Units in the distributed account(s) shall be canceled.

                                      -48-
<PAGE>

                  7.6 Allocation to QNEC and QMAC Accounts.

                      (a) Effective January 1, 2000 Qualified Nonelective
Contributions made in a given Plan Year shall be allocated to QNEC Accounts as
of the last day of the preceding Plan Year. Qualified Nonelective Contributions
shall be allocated to the QNEC Account of each individual who was a non-highly
compensated Eligible Employee in the preceding Plan Year, regardless of his
employment status in the current Plan Year, in the proportion that his
Compensation for the preceding Plan Year bears to the sum of the Compensation of
all non-highly compensated Eligible Employees for the preceding Plan Year.

                      (b) Effective January 1, 2000 Qualified Matching
Contributions made in a given Plan Year shall be allocated to QMAC Accounts as
of the last day of the preceding Plan Year. Qualified Matching Contributions
shall be allocated to the QMAC Account of each individual who was a non-highly
compensated Participant in the preceding Plan Year, regardless of his employment
status in the current Plan Year, in the proportion that his Salary Redirection
Savings for the preceding Plan Year bear to the sum of the Salary Redirection
Savings of all non-highly compensated Participants for the preceding Plan Year.

                                      -49-
<PAGE>

                      (c) Until December 31, 1999 Qualified Nonelective
Contributions shall be allocated to the QNEC Accounts of the Eligible Employees
who are not Highly Compensated Employees in the Plan Year for which the
Qualified Nonelective Contributions are made. Qualified Nonelective
Contributions shall be allocated to the QNEC Account of each such Eligible
Employee in the proportion that his Compensation for the Plan Year bears to the
sum of the Compensation of all such Eligible Employees for the Plan Year.

                      (d) Until December 31, 1999 Qualified Matching
Contributions shall be allocated to the QMAC Accounts of the Participants who
are not Highly Compensated Employees in the Plan Year for which the Qualified
Matching Contributions are made. Qualified Matching Contributions shall be
allocated to the QMAC Account of each such Participant in the proportion that
his Salary Redirection Savings for the Plan Year bears to the sum of the Salary
Redirection Savings of all such Participants for the Plan Year.

                  7.6 Accounting for Allocations. The Committee shall establish
or provide for the establishment of accounting procedures for the purpose of
making the allocations, valuations, and adjustments to Participants' Accounts
provided for in this Article. From time to time such procedures may be modified
for the purpose of achieving equitable and nondiscriminatory allocations among
the Accounts of Participants in accordance with the general concepts of the Plan
and the provisions of this Article.

                                      -50-
<PAGE>

                  7.7 Multiple Use Test. The Plan must satisfy the test set
forth in Section A.12 of Schedule A for each Plan Year.

                  7.8 Maximum Allocation. The provisions of this Section shall
be effective January 1, 1995 and shall be construed to comply with section 415
of the Code and the regulations thereunder.

                      (a) A Participant's Annual Additions shall in no event
exceed the lesser of:

                          (1) $30,000, or

                          (2) twenty-five percent (25%) of such Participant's
Limitation Compensation for the Limitation Year.

                  As provided in Section 2.5, make-up contributions contributed
by or on behalf of a Participant who has returned from military service shall be
included in determining the amount of the Participant's Annual Additions for the
Limitation Year to which the make-up contributions relate (not for the
Limitation Year in which they are actually contributed).

                      (b) If a Participant's Annual Additions would exceed the
amount described in Subsection (a) for a reason described in the first paragraph
of Treas. Reg.ss.1.415-6(b)(6), the Trustee or Insurance Company shall dispose
of the excess amount by taking as many of the following steps as necessary:

                                      -51-
<PAGE>

                          (1) First, After-Tax contribution shall be distributed
to the Participants to the extent required to correct the amount of the
Participant's Annual Additions, or until all After-Tax contributions have been
distributed. Income attributable to the excess After-Tax contributions shall
also be distributed to the Participant.

                          (2) Next, Salary Redirection Contributions shall be
distributed to the Participant to the extent required to correct the amount of
the Participant's Annual Additions, or until all Salary Redirection
Contributions have been distributed. Income attributable to the excess Salary
Redirection Contributions shall also be distributed to the Participant.

                          (2) Finally, to the extent required to correct the
amount of the Participant's Annual Additions, and Matching Contributions shall
be segregated and shall be held in a suspense account until the following
Limitation Year (or succeeding Limitation Years), at which time the money shall
be used to reduce future Matching Contributions to the Plan. Amounts held in the
suspense account shall share in investment gains and losses of the Fund.

                                      -52-
<PAGE>

                      (c) The provisions of this Subsection shall not apply on
or after January 1, 2000. Until January 1, 2000, if in any Limitation Year a
Participant in this Plan is also a participant in one or more defined benefit
plans maintained by the Company or a 50% Affiliated Company, the annual benefit
under the defined benefit plan(s) shall be reduced, if necessary, so that the
sum of the defined benefit and defined contribution fractions (defined below)
does not exceed 1.0 for such Limitation Year.

                          (1) (A) The defined benefit fraction is a fraction,
the numerator of which is the Participant's "projected annual benefit" under the
defined benefit pension plans sponsored by the Company and 50% Affiliated
Companies in which he has participated, determined as of the close of the
limitation years of such plans, and the denominator of which is the lesser of:

                              (i)  1.25 x $90,000 (as adjusted by the Internal
Revenue Service to reflect cost-of-living increases), or

                              (ii) one hundred forty percent (140%) of the
Participant's highest average "pay" over any three consecutive calendar years.

                                      -53-
<PAGE>

                                        (B) For the purpose of this Subsection,
"projected annual benefit" shall mean the annual benefit to which a Participant
would be entitled under the terms of a defined benefit plan if he had continued
employment until his normal retirement date under such plan and if his
compensation for the purpose of such plan had continued at the same rate.

                                        (C) For the purpose of determining the
denominator of the defined benefit fraction, a Participant's "pay" shall be his
annual compensation as defined in Treas. Reg. ss.1.415-2(d).

                                    (2) The defined contribution fraction is a
fraction, the numerator of which is the sum of the Participant's Annual
Additions under all defined contribution plans sponsored by the Company and 50%
Affiliated Companies for all limitation years, and the denominator of which is
the sum of the lesser of the following amounts, determined for each limitation
year of service with the Company or 50% Affiliated Company:

                                        (A) 1.25 x $30,000, or

                                        (B) thirty-five percent (35%) of the
Participant's Limitation Compensation for such limitation year.

                                    (3) (A) A defined benefit plan sponsored by
the Company or a 50% Affiliated Company to which nondeductible employee
contributions are made is considered to be a separate defined contribution plan,
to the extent that the employee contributions constitute annual additions in the
current and prior limitation years.

                                      -54-
<PAGE>

                                        (B) The Annual Additions for any
Limitation Year beginning before January 1, 1987 shall not be recomputed to
treat all of a Participant's own after-tax contributions as Annual Additions.

                           (d) The dollar limitations described in Subsections
(a) and (c) shall be adjusted annually in accordance with section 415(d) of the
Code.

                           (e) The provisions of this Subsection shall not apply
on or after January 1, 2000, the date on which the provisions of Subsection (c)
cease to apply.

                                        (A) The Committee may elect to apply
Subsection (c)(2) with respect to any Limitation Year ending after December 31,
1986 by adjusting the numerator under Subsection (c)(2) by using an alternate
amount for all Limitation Years beginning before January 1, 1987. The adjustment
is to subtract permanently from the numerator of the defined contribution
fraction an amount equal to the product of (i) and (ii):

                                      -55-
<PAGE>

                                                     (i) the sum of the defined
contribution fraction and the defined benefit fraction as of the "determination
date," minus 1.0, times

                                                     (ii) the denominator of the
defined contribution fraction as of the "determination date."

                                        (B) For purposes of clause (A) above,
the "determination date" is December 31, 1986. In addition, the defined benefit
fraction and the defined contribution fraction are computed in accordance with
the limitations set forth in section 415 of the Code, taking into account any
modifications for any accrued benefit that is protected by the provisions of the
Tax Equity and Fiscal Responsibility Act of 1982 or the Tax Reform Act of 1986.

                                        (C) The adjustment described in this
Subsection (e)(2) may be made only if (i) both the defined benefit plan in
question and this Plan were in existence on May 6, 1986; (ii) both plans
satisfied the requirements of section 415 of the Code for the last Limitation
Year beginning before January 1, 1987; and (iii) any accruals in excess of the
limits set forth in section 415 of the Code are reduced. Any changes in the
terms and conditions of the Plan made after May 5, 1986 may not be recognized in
making this adjustment to the defined contribution fraction.

                                      -56-
<PAGE>

                                  ARTICLE VIII

                            DISTRIBUTION AND VESTING
                            ------------------------

                  8.1 General. The interest of each Participant in the Fund
shall be distributed in the manner, in the amount, and at the time provided in
this Article, except as provided in Schedule C, and except in the event of the
termination of the Plan.

                  8.2 Vesting. Each Participant shall at all times have a one
hundred percent (100%)nonforfeitable interest in his Participant Account.

                  8.3 Normal Retirement. A Participant shall have the right to
receive normal retirement benefits on his Normal Retirement Date, if he then
retires. His Accounts, valued in accordance with Section 7.2, shall be
distributed in accordance with the provisions of this Article.

                  8.4 Late Retirement. A Participant who remains in the employ
of the Company beyond his Normal Retirement Date shall participate in the Plan
on the same basis as other Participants. In general, the Participant's Accounts,
valued in accordance with Section 7.2, shall be distributed in accordance with
the provisions of this Article when the Participant actually retires. However,
if the Participant is affected by the distribution rule for five-percent (5%)
owners (set forth in Section C.1(c) of Schedule C) and is still employed by the
Company or an Affiliated Company when he reaches his Mandatory Benefit
Commencement Date, he shall receive benefits in accordance with Section C.2 of
Schedule C; and if the Participant is not a five-percent (5%) owner but attains
age 70 1/2 in 1997, 1998, or 1999, he shall have the special benefit
commencement option described in Section C.1(e) of Schedule C.

                                      -57-
<PAGE>

                  8.5 Death.

                      (a) If a Participant dies while he is employed by the
Company or an Affiliated Company, vested in his Matching Contribution and Profit
Sharing Accounts, his Accounts, valued in accordance with Section 7.2, shall be
paid or applied for the benefit of his beneficiary in accordance with Section
8.7.

                      (b) If a Participant dies after he has terminated his
employment with the Company and all Affiliated Companies, but before he has
received a full distribution of his Accounts, the balance of his Accounts,
valued in accordance with Section 7.2, shall be paid or applied for the benefit
of his beneficiary in accordance with Section 8.7.

                      (c) At the election of the beneficiary, distribution of a
benefit payable under this Section may occur as late as one year after the death
of the Participant.

                                      -58-
<PAGE>

                      (d) In determining the amount of the benefit payable under
this Section, the Participant Account shall first be reduced by any security
interest held by the Plan by reason of a loan taken by the Participant, to the
extent there is outstanding principal and interest.

                      (e) In determining the amount of the benefit payable under
this Section, the deceased Participant's Accounts shall first be reduced by any
security interest held by the Plan by reason of a loan taken by the Participant,
to the extent that there is outstanding principal and interest.

                  8.6 Total Disability.

                      (a) If a Participant suffers a Total Disability prior to
his retirement and his employment is terminated because of such Total
Disability, he shall be entitled to an immediate distribution of his Participant
Account, valued in accordance with Section 7.2. If the value of the
Participant's Accounts is at least $3,500 (at least $5,000, beginning on January
1, 1998), his Accounts shall not be distributed until (1) he consents in writing
to such distribution, or (2) he attains Normal Retirement Age, or (3) he dies.

                      (b) Total Disability shall be determined by the Committee,
which may require such proof of Total Disability as it sees fit.

                                      -59-
<PAGE>

                  8.7 Form of Distribution.

                      (a) At the direction of the Participant (or his
beneficiary or legal representative in the case of death or incapacity), his
Accounts, valued in accordance with Section 7.2, shall be distributed to him in
one of the following forms of payment

                          (1) a single-sum payment; or

                          (2) a nontransferable annuity contract providing fixed
income or fixed period payments, without life contingencies, over a period which
shall not violate any applicable provisions of section 401(a)(9) of the Code.

                      (b) In the event that a retired or terminated vested
Participant fails to make a valid election under this Section, his Accounts
shall be distributed to him in a single-sum payment.

                      (c) At the direction of the Participant (or his
beneficiary or legal representative in the case of death or incapacity),
distribution of the relevant portion of his Participant Account consisting of
the SPS Stock fund or one of the other Funds shall be made under any one of the
options described in Subsection (a), or in the form of Company common stock
(from the SPS Stock Fund) and/or mutual fund shares, to the extent available for
distribution (from the other funds).

                                      -60-
<PAGE>

                      (d) A Participant shall have the right to elect a direct
rollover in accordance with Section 8.10 if he is to receive an "eligible
rollover distribution" (as defined in Section 8.10(c)).

                      (e) Certain Participants shall receive benefits in
accordance with Schedule C.

                  8.8 Valuation for Distribution.

                      (a) For the purposes of paying the amounts to be
distributed to a Participant or his beneficiaries under this Plan, the value of
the Fund and the amount of the Participant's interest shall be determined in
accordance with the provisions of Article VII as of the Valuation Date
coincident with or immediately preceding the date of the payment. There shall be
added to such amount the additional contributions , if any, which have been (or
are to be) allocated to the Participant's Accounts after that Valuation Date.

                      (b) If any distribution is deferred for more than 60 days
after the occurrence of the event triggering the distribution, the Participant
Account shall be valued as of the Valuation Date that occurs at least 30 days
but not more than 60 days before the date on which the Participant Account is
distributed.

                                      -61-
<PAGE>

                      (c) Subsection (a) notwithstanding, for the purpose of
making a minimum distribution under section 401(a)(9) of the Code to a
Participant who is still employed, the Participant's Accounts shall be valued in
accordance with Section C.5 of Schedule C.

                      (d) If, at the time of a distribution, the value of a
Participant's Accounts is at least $3,500 (at least $5,000, beginning on January
1, 1998), the value of his vested interest in those Accounts at any later time
shall be deemed to be at least $3,500 (at least $5,000, beginning] on January 1,
1998 for purposes of determining whether the Participant may be "cashed out".

                                      -62-
<PAGE>

                  8.9 Timing of Distribution.

                      (a) (1) In general, a Participant entitled to receive
benefits under this Article shall commence to receive benefits as soon as
administratively practicable. However, in accordance with applicable law,
benefits shall commence before a Participant's Normal Retirement Date only if
the Participant consents in writing to receive benefits before his Normal
Retirement Date. The Participant's consent shall be valid only if it is given
within 90 days before his benefit commencement date. Such consent shall be given
in the manner prescribed by the Committee.

                          (2) Distribution may be made at any time that is more
than seven days after the Participant has received any required notice(s)
regarding his distribution options (including but not limited to notice of his
right to elect a direct rollover), if the Participant waives his right to the
30-day election period to which he is otherwise entitled.

                      (b) Distribution of a Participant's benefits under this
Plan shall be made or shall commence by his Mandatory Benefit Commencement Date.
Schedule C contains provisions relating to mandatory benefit commencement and to
the special benefit commencement option that is available to certain
Participants.

                                      -63-
<PAGE>

                      (c) Assuming that he has made proper application for his
benefits, a Participant shall begin to receive benefits no later than the later
to occur of:

                          (1) the 60th day after the end of the Plan Year in
which the Participant attains Normal Retirement Age, or

                          (2) the 60th day after the end of the Plan Year in
which the Participant's employment with the Company and all Affiliated Companies
terminates.

                  8.10 Direct Rollover Option.

                       (a) A Participant or a Participant's surviving spouse or
an alternate payee under a qualified domestic relations order (as defined in
section 414(p) of the Code) who is to receive an "eligible rollover
distribution" (as defined in Subsection (c)) may elect to have the amount of
such distribution transferred directly in a direct rollover to an "eligible
retirement plan" (as defined in Subsection (d)).

                       (b) If a Participant or surviving spouse or alternate
payee is to receive an eligible rollover distribution of more than $500, he may
choose to have part of the distribution transferred directly in a direct
rollover to an eligible retirement plan and to have the remainder paid to him.
The amount which is to be transferred must be at least $500.

                                      -64-
<PAGE>

                       (c) (1) For the purpose of this Section, an "eligible
rollover distribution" shall mean a distribution from the Plan that is a
single-sum payment or one of the payments in a series of installment payments
made at least annually over a period of less than 10 years. The dollar amount of
an eligible rollover distribution shall not include the portion of such
distribution that is a required minimum distribution under section 401(a)(9) of
the Code or the portion of such distribution that consists of voluntary
after-tax employee contributions, but shall include earnings on voluntary
after-tax employee contributions.

                           (2) A distribution of less than $200 that would
otherwise be an eligible rollover distribution within the meaning of paragraph
(1) shall not be an eligible rollover distribution if it is reasonable to expect
that all such distributions to the Participant or surviving spouse or alternate
payee from the Plan during the same calendar year will total less than $200.

                       (d) For the purpose of this Section, an "eligible
retirement plan" shall mean:

                           (1) in the case of a Participant or an alternate
payee, one of the following: an individual retirement account or an individual
retirement annuity, a qualified trust if it is part of a defined contribution
plan, or an annuity plan described in section 403(a) of the Code;

                                      -65-
<PAGE>

                           (2) in the case of a Participant's surviving spouse,
an individual retirement account or an individual retirement annuity.

                       (e) (1) The Committee shall provide to the Participant or
surviving spouse or alternate payee an explanation of his right to elect a
direct rollover and the federal tax withholding consequences to him if he does
not elect a direct rollover. The Participant, surviving spouse, or alternate
payee shall then have at least 30 days (but not more than 90 days) in which to
elect a direct rollover.

                           (2) A Participant or surviving spouse or alternate
payee who elects a direct rollover must provide all information that the
Committee may require to complete the direct rollover.

                           (3) A Participant or surviving spouse or alternate
payee who elects a direct rollover with respect to any eligible rollover
distribution that is one in a series of installment payments made at least
annually over a period of less than 10 years shall be deemed to have made the
same election with respect to all subsequent eligible rollover distributions in
the series unless and until he changes his election. A change of election shall
be accomplished by notifying the Administrative Committee of the change in the
manner prescribed by the Administrative Committee.

                                      -66-
<PAGE>

                           (4) A Participant or surviving spouse or alternate
payee who is entitled to elect a direct rollover with respect to all or any
portion of a distribution from the Plan but who does not make any election shall
be deemed to have rejected the direct rollover option.

                  8.11 Beneficiary Designation.

                       (a) Except as provided in Subsection (c), each
Participant shall have the unrestricted right at any time to designate his
beneficiary under the Plan. Such designation shall be made by executing and
filing with the Committee a form provided by the Committee for that purpose.

                       (b) Except as provided in Subsection (c), each
Participant shall have the unrestricted right to revoke and to change, at any
time and from time to time, any beneficiary designations previously made. Such
revocations and/or changes shall be made by executing and filing with the
Committee a form provided by the Committee for that purpose.

                       (c) (1) A married Participant must designate his spouse
as his beneficiary unless:

                                      -67-
<PAGE>

                               (A) the spouse consents in writing not to receive
death benefits under the Plan,

                               (B) the spouse consents in writing to the
specific alternate beneficiary designated by the Participant (if any),

                               (C) the spouse's consent acknowledges its own
effect, and

                               (D) the spouse's consent is witnessed by a Plan
representative or a notary public.

                           (2) A Participant may not change his beneficiary
without the consent of his spouse, unless the original consent of the spouse
expressly permits the Participant to make changes without further consent of the
spouse, or unless the Participant's change is to name his spouse as his
beneficiary.

                       (d) A married Participant is not required to comply with
the consent requirement of Subsection (c) if he establishes to the satisfaction
of a Plan representative that his spouse cannot be located, or if he is legally
separated or has been abandoned (within the meaning of local law) and has a
court order to that effect.

                                      -68-

<PAGE>

                       (e) No designation, revocation, or change of
beneficiaries shall be valid and effective unless and until filed with the
Committee. If no designation is made, or if the beneficiaries named in such
designation predecease the Participant, or if the beneficiaries cannot be
located by the Committee, the interest of the deceased Participant shall be paid
to the Participant's surviving spouse or, if none, to the Participant's estate.

                  8.12 Mailing Address. Benefit payments and notifications
hereunder shall be deemed made when mailed to the last address furnished to the
Committee.

                                      -69-
<PAGE>

                                   ARTICLE IX

                             TERMINATED PARTICIPANTS
                             -----------------------

                  9.1 Treatment of Terminated Participant.

                      (a) Except as provided in Subsection (c), if a terminated
Participant's Accounts are valued at less than $3,500 (less than $5,000,
beginning on August 1, 1998), the Accounts shall be distributed in a single-sum
payment (i.e., "cashed out"), as follows:

                          (1) The Participant shall have the right to elect a
direct rollover in accordance with Section 8.10 if his distribution is an
"eligible rollover distribution" (as defined in Section 8.10(c)). The Committee
shall provide the Participant with a notice of his right to elect a direct
rollover, and the Participant shall then have at least 30 days (but not more
than 90 days) in which to elect a direct rollover.

                          (2) If the Participant does not elect a direct
rollover within his election period (or if his distribution is not an eligible
rollover distribution), his Accounts shall be distributed to him in a single-sum
payment as soon after his termination of employment as is administratively
practicable.

                                      -70-
<PAGE>

                          (3) Distribution under this Subsection may be made at
any time that is more than seven days after the Participant has received the
notice of his right to elect a direct rollover, if the Participant waives his
right to a 30-day election period.

                      (b) If a terminated Participant's Accounts are valued at
$3,500 or more ($5,000 or more, beginning on August 1, 1998), the Accounts shall
be distributed pursuant to Article VIII as if the Participant had continued
employment until his Normal Retirement Date. However, the Participant's Accounts
shall be distributed to him earlier than his Normal Retirement Date if he
requests earlier distribution.

                                      -71-
<PAGE>

                                    ARTICLE X

                                 ADMINISTRATION
                                 --------------

             10.1 Allocation and Delegation of Fiduciary Responsibilities.
Fiduciary responsibilities with respect to the Plan are to be allocated as set
forth in this Article X. A fiduciary shall have only those specific powers,
duties, responsibilities, and obligations as are specifically given him under
this Plan or the Trust Agreement. It is intended that each fiduciary be
responsible for the proper exercise of his own powers, duties, responsibilities,
and obligations under this Plan and/or the Trust Agreement, and a fiduciary
generally shall not be responsible for any act or failure to act of another
fiduciary. The Company shall be the named fiduciary and the plan administrator.
The Company shall have the sole responsibility for establishing the funding
policy of the Plan and for making contributions provided for under Article V.

             10.2 Powers and Responsibilities of the Board of Directors. The
Board of Directors has the following powers and responsibilities:

                  (a) to authorize amendments to the Plan, as set forth in
Article XII;

                  (b) to terminate the Plan, as set forth in Article XII; and

                                     -72-
<PAGE>

                  (c) to appoint and remove members of the Administrative and
Employee Benefits Committees, as set forth in Sections 10.3 and 10.4.

             10.3 Employee Benefits Committee.

                  (a) The Employee Benefits Committee shall consist of at least
three members who shall be appointed by and serve at the pleasure of the Board
of Directors. Vacancies shall be filled by the Board of Directors. Any member of
the Employee Benefits Committee may resign by delivering a written resignation
to the Board of Directors, to become effective upon delivery or at any other
date specified therein.

                  (b) The members of the Employee Benefits Committee shall elect
from their members a chairman and shall appoint a secretary who may, but need
not, be a member of the Employee Benefits Committee. The Employee Benefits
Committee may, in writing, delegate some or all of its powers and
responsibilities as specified in Section 10.3(d) to any other person or entity.

                  (c) The Employee Benefits Committee shall hold meetings upon
such notice, at such times, and at such places as it may determine. The majority
of the members of the Employee Benefits Committee at the time in office shall
constitute a quorum for the transaction of business at all meetings, and a
majority vote of those present at any meeting shall be required for action. The
Employee Benefits Committee may also act by written consent of a majority of its
members.

                                      -73-
<PAGE>

                  (d) The Employee Benefits Committee shall have the following
powers and responsibilities:

                    (1) to establish investment objectives with respect to the
investment of assets which are not held by an Insurance Company;

                    (2) to establish and modify investment performance
standards;

                    (3) to comply with the investment provisions of ERISA;

                    (4) to coordinate any necessary audit process with respect
to reports on financial data;

                    (5) to prepare periodic financial reports to the Board of
Directors which shall show, in reasonable detail, the assets and liabilities of
the Plan, and which shall give an account of the financial operations of the
Plan;

                    (6) to appoint and remove any Insurance Company;

                    (7) to approve any Funds for the investment of Participant
contributions that may be consistent with the objectives of the Plan.

             10.4 Administrative Committee.

                  (a) The Administrative Committee shall consist of at least
three persons who shall be appointed by and serve at the pleasure of the Board
of Directors. Vacancies shall be filled by the Board of Directors. Any member of
the Administrative Committee may resign by delivering a written resignation to
the Board of Directors, to become effective upon delivery or at any other date
specified therein.

                                      -74-

<PAGE>

                  (b) The members of the Administrative Committee shall elect
from their members a chairman and shall appoint a secretary who may, but need
not, be a member of the Administrative Committee. The Administrative Committee
may, in writing, delegate some or all of its powers and responsibilities as set
forth in Section 10.4(d) to any other person or entity.

                  (c) The Administrative Committee shall hold meetings upon such
notice, at such times, and at such places as it may determine. A majority of the
members of the Administrative Committee at the time in office shall constitute a
quorum for the transaction of business at all meetings, and a majority vote of
those present at any meeting shall be required for action. The Administrative
Committee may also act by written consent of a majority of its members.

                  (d) The Administrative Committee shall adopt such rules for
administration of the Plan as it considers desirable, provided they do not
conflict with the Plan. Records of administration of the Plan shall be kept, and
Participants and their beneficiaries may examine records pertaining to their
Participant Accounts. The Administrative Committee shall have discretionary
authority to determine eligibility for participation or benefits and to construe
the terms of the Plan, and shall also have the following powers and
responsibilities:

                                      -75-

<PAGE>

                    (1) to select and terminate the independent auditor required
under ERISA;

                    (2) to follow the claims procedure set forth in Section
10.5;

                    (3) to construe the Plan, correct defects, supply omissions,
and reconcile inconsistencies to the extent necessary to administer the Plan,
with any instructions or interpretation of the Plan made in good faith by the
Administrative Committee to be final and conclusive for all purposes;

                    (4) to comply with any requirements of ERISA with respect to
filing reports with governmental agencies;

                    (5) to provide Employees with any and all information
required by ERISA;

                    (6) to coordinate any necessary audit process with respect
to reports on administration data; and

                    (7) to conduct routine Plan administration.

                  (e) No member of the Administrative Committee shall act or
participate in the action of the Administrative Committee in any matter directly
affecting his own Participant Account and not of general application to all
Participants.

                                      -76-

<PAGE>

             10.5 Claims Procedure.

                  (a) In the event that the Administrative Committee denies, in
whole or in part, a claim for benefits (including a request for a loan or a
Hardship withdrawal) by a Participant or his beneficiary, the Administrative
Committee shall furnish notice of the denial to the claimant, setting forth:

                    (1) the specific reasons for the denial,

                    (2) specific reference to the pertinent Plan provisions on
which the denial is based,

                    (3) a description of any additional information necessary
for the claimant to perfect the claim and an explanation of why such information
is necessary, and

                    (4) appropriate information as to the steps to be taken if
the claimant wishes to submit his claim for review.

                  (b) The notice described in Subsection (a) shall be forwarded
to the claimant within 90 days of the Committee's receipt of the claim;
provided, however, that in special circumstances the Committee may extend the
response period for up to an additional 90 days, in which event it shall notify
the claimant in writing of the extension, and shall specify the reason(s) for
the extension.

                                      -77-

<PAGE>

                  (c) Within 60 days of receipt of a notice of claim denial, a
claimant or his duly authorized representative may petition the Administrative
Committee in writing for a full and fair review of the denial. The claimant or
his duly authorized representative shall have the opportunity to review
pertinent documents and to submit issues and comments in writing to the
Administrative Committee. The Administrative Committee shall review the denial
and shall communicate its decision and the reasons therefor to the claimant in
writing within 60 days of receipt of the petition; provided, however, that in
special circumstances the Administrative Committee may extend the response
period for up to an additional 60 days, in which event it shall notify the
claimant in writing prior to the commencement of the extension.

                  (d) If for any reason the written notice of denial described
in Subsection (a) is not furnished within 90 days of the Committee's receipt of
a claim for benefits, the claim shall be deemed to be denied. Likewise, if for
any reason the written decision on review described in Subsection (c) is not
furnished within the time prescribed, the claim shall be deemed to be denied on
review.

                                      -78-

<PAGE>

             10.6 Qualified Domestic Relations Orders. The Committee shall have
the duty to determine whether any domestic relations order received by the Plan
is a qualified domestic relations order as defined in section 414(p) of the
Code. To the extent provided in a qualified domestic relations order, the former
spouse of a Participant shall be treated as the surviving spouse for purposes of
this Plan, and any other spouse of the Participant shall not have a spouse's
rights under the Plan.

                                      -79-

<PAGE>

             10.7 Indemnification of the Committee.

                  (a) Each Indemnitee (as defined in Subsection (e)) shall be
indemnified and held harmless by the Company for all actions taken by him and
for all failures to take action (regardless of the date of any such action or
failure to take action), to the fullest extent permitted by the law of the
jurisdiction in which the Company is incorporated, against all expense,
liability, and loss (including, without limitation, attorneys' fees, judgments,
fines, taxes, penalties, and amounts paid or to be paid in settlement)
reasonably incurred or suffered by the Indemnitee in connection with any
Proceeding (as defined in Subsection (e)). No indemnification pursuant to this
Section shall be made, however, in any case where (1) the act or failure to act
giving rise to the claim for indemnification is determined by a court to have
constituted willful misconduct or recklessness or (2) there is a settlement to
which the Company does not consent.

                  (b) The right to indemnification provided in this Section
shall include the right to have the expenses incurred by the Indemnitee in
defending any Proceeding paid by the Company in advance of the final disposition
of the Proceeding, to the fullest extent permitted by the law of the
jurisdiction in which the Company is incorporated; provided that, if such law
requires, the payment of such expenses incurred by the Indemnitee in advance of
the final disposition of a Proceeding shall be made only on delivery to the
Company of an undertaking, by or on behalf of the Indemnitee, to repay all
amounts so advanced without interest if it shall ultimately be determined that
the Indemnitee is not entitled to be indemnified under this Section or
otherwise.

                                      -80-

<PAGE>

                  (c) Indemnification pursuant to this Section shall continue as
to an Indemnitee who has ceased to be such and shall inure to the benefit of his
heirs, executors, and administrators.

                  (d) The foregoing right to indemnification shall be in
addition to such other rights as the Indemnitee may enjoy as a matter of law or
by reason of insurance coverage of any kind and is in addition to and not in
lieu of any rights to indemnification to which the Indemnitee may be entitled
pursuant to the by-laws of the Company.

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

                    (1) "Indemnitee" shall mean each person serving as a member
of the Committee (or any other person who is an employee, director, or officer
of the Company or an Affiliated Company) who was or is a party to, or is
threatened to be made a party to, or is otherwise involved in, any Proceeding,
by reason of the fact that he is or was performing administrative functions
under the Plan.

                                      -81-

<PAGE>

                    (2) "Proceeding" shall mean any threatened, pending, or
completed action, suit, or proceeding (including, without limitation, an action,
suit, or proceeding by or in the right of the Company), whether civil, criminal,
administrative investigative, or through arbitration.

             10.8 Employment of Agents. The Investment and Administrative
Committees may retain such counsel and such actuarial, accounting, medical,
clerical, and other services as they may require to comply with all applicable
rules and regulations affecting the Plan. Any consultants, accountants,
actuaries, or attorneys may be the same as those retained by the Company.

             10.9 Reliance on Reports and Certificates. The Investment and
Administrative Committees, the officers and managers and Employees of the
Company, and the Company itself shall be entitled to rely upon all tables,
valuations, certificates, and reports furnished by any duly appointed actuary,
upon all certificates and reports made by the Trustee, or by any duly appointed
accountant, and upon all opinions given by any duly appointed legal counsel.

            10.10 Compensation. Members of the Administrative and Employee
Benefits Committees who are Employees shall not receive any compensation for
their services as such.

                                      -82-

<PAGE>

            10.11 Notifications.

                  (a) All notices, reports, and statements given, made,
delivered, or transmitted to a Participant shall be deemed duly given, made,
delivered, or transmitted when mailed, by such class as the sender may deem
appropriate, with postage prepaid and addressed to the Participant at the
address last appearing on the records of the Company with respect to this Plan.
All notices, directions, or other communications given, made, delivered, or
transmitted by a Participant to the Trustee and/or Company, shall not be deemed
to have been duly given, made, delivered, transmitted, or received unless and
until actually received by the Trustee or by the Company acting upon delegation
from the Trustee and/or Insurance Company.

                  (b) The Trustee and/or the Administrative Committee, or the
Company under delegation from the Trustee, shall, as soon as practicable after
the end of each Plan Year, mail to each Participant a statement setting forth
the account of such Participant in the respective Funds as of the end of such
Plan Year. Such statement shall be deemed to have been accepted as correct
unless written notice to the contrary is received by the Administrative
Committee or Company within 30 days after the mailing of such statement to the
Participant.

                                      -83-

<PAGE>

            10.12 Administrative and Investment Expenses. All brokerage fees,
taxes, and other expenses related to the purchase and sale of securities in a
Fund and all other expenses (including Trustee's fees, investment management
fees, and all other costs and expenses incurred in administering the Plan) shall
be paid out of the Trust to the extent not paid by the Company.

                                      -84-

<PAGE>

                                   ARTICLE XI

                                    THE TRUST
                                    ---------

             11.1 Designation of Trustee. The Board of Directors shall enter
into one or more Trust Agreement or Agreements with one or more Trustees
selected by it in its sole discretion. The Board of Directors shall have the
power to amend the Trust Agreement, remove the Trustee, and designate a
successor Trustee, all as provided in the Trust Agreement. All of the assets of
the Plan shall be held by the Trustee for use in accordance with this Plan in
providing for the benefits hereunder.

             11.2 Fund.

                  (a) The contributions deposited by the Company in the Fund in
accordance with this Plan shall constitute a fund held for the benefit of
Participants and their eligible beneficiaries under and in accordance with this
Plan. Prior to the satisfaction of all liabilities under the Plan in the event
of termination of the Plan, no part of the corpus or income of the Fund shall be
used for or diverted to purposes other than for the exclusive benefit of such
Participants and beneficiaries (including necessary administrative costs),
except as expressly provided hereafter in this Plan and in the Trust Agreement.

                                      -85-

<PAGE>

                  (b) Subsection (a) notwithstanding, in the case of a
contribution made by the Company (1) as a mistake of fact; or (2) for which a
tax deduction is disallowed, in whole or in part, by the Internal Revenue
Service; or (3) which is conditioned upon the initial qualification of the Plan
under section 401(a) of the Code, and an application for determination is made
to the Internal Revenue Service within the time prescribed by law for filing the
Company's tax return for the taxable year in which the Plan was adopted (or such
later date as the Secretary of the Treasury may prescribe), but such initial
qualification cannot be obtained, the Company shall be entitled to a refund of
said contributions.

                  (c) Any refund of contributions described in Subsection (b)
must be made (1) within one year after payment of a contribution made as a
mistake of fact, or (2) within one year after disallowance of the tax deduction,
to the extent of such disallowance, or (3) within one year of the date on which
the initial qualification of the Plan is denied by the Internal Revenue Service,
as the case may be.

             11.3 No Interest in Fund. No person shall have any interest in or
right to any part of the assets or income of the Fund, except to the extent
expressly provided in this Plan and in the Trust Agreement.

                                      -86-

<PAGE>

            11.4 Trustee. The Trustee and the Company may by mutual agreement
arrange for the delegation by the Trustee to the Company or to the Employee
Benefits Committee of any of its functions other than (a) the investment,
valuation, management, and custody of assets; (b) the voting with respect to
securities held by the Trustee; and (c) the purchase and sale or redemption of
securities; provided that the Trust Agreement permits delegation of such
functions in accordance with the foregoing provisions of this Section.

             11.5 Records. The Trustee shall keep full books of account in
accordance with regulations prescribed by the Employee Benefits Committee. The
Trustee shall, at least once during each calendar year, submit to the Employee
Benefits Committee a report on each Fund, which shall include (a) a list of the
investments making up such Fund at the end of the period covered by the report,
showing the valuation placed on each item on the list by the Trustee at the end
of such period, the total of such valuations, and the number of Units in such
Fund outstanding at the end of such period, and (b) a statement of purchases,
sales, and any other investment changes and of income and disbursements since
the last report. Copies of such reports shall be available for inspection at the
principal office of the Company and at such other places as the Employee
Benefits Committee shall specify.

                                      -87-

<PAGE>

             11.6 Operation of the Trust.

                  (a) All assets of the Plan shall be held in a Trust or Trusts
for use in providing the benefits payable under the Plan and paying such
investment expenses as may properly be incurred by the Trustee. The Trust
Agreement may from time to time be amended in the manner herein provided.

                  (b) A copy of the Trust Agreement shall, upon written request
of a Participant, be made available for inspection by him.

                  (c) The Board of Directors may from time to time remove a
Trustee and upon removal or resignation of a Trustee designate a successor
Trustee, and may take such other steps and execute such other instruments as it
may deem necessary or desirable to put this Plan into effect or to carry it out.
Each fiduciary warrants that any directions given, information furnished, or
action taken by it shall be in accordance with provisions of the Plan or the
Trust Agreements, as the case may be, authorizing or providing for such
direction, information, or action.

             11.7 Participant's Representatives. The Trustee shall not be
bound to recognize the authority or agency of any party acting for a Participant
unless and until it receives documentary evidence thereof in form and substance
satisfactory to it and thereafter receives from time to time, as the Trustee may
require, further documentary evidence disclosing the status of any agency.

                                      -88-

<PAGE>

                                   ARTICLE XII
                            AMENDMENT AND TERMINATION

             12.1 Amendment.

                  (a) The Company reserves the right to amend the Plan in whole
or in part, at any time by action of the Board of Directors; provided, however,
that it shall be impossible, except as provided in Section 11.2, for any part of
the corpus or income of the Fund to be used for or diverted to any purpose other
than for the exclusive benefit of Participants and their beneficiaries.

                  (b) Each amendment to the Plan shall be in writing. No
amendment to the Plan shall have the effect of retroactively depriving
Participants of benefits already accrued under the Plan or of reducing a
Participant's vested interest in his Accounts.

             12.2 Termination. The Plan and the Fund forming part of the Plan
may be terminated, or contributions may be completely discontinued, by the
Company at any time by action of the Board of Directors. In the event of a
termination, a partial termination, or a complete discontinuance of
contributions, or in the event that the Company is dissolved, liquidated, or
adjudicated a bankrupt, the interests of the affected Participants, their
estates, and their beneficiaries shall be fully vested. Unless there is a
successor plan (as defined in Treas. Reg. ss.1.401(k)-1(d)(3)), distributions
shall be made in cash or in property or in any combination of cash and property.
When all assets have been paid out by the Trustee, the Fund shall cease.

                                      -89-

<PAGE>

             12.3 Merger. The Plan shall not be merged with or consolidated
with, nor shall its assets and/or liabilities be transferred to, any other
qualified retirement plan unless each Participant would receive a benefit after
such merger, consolidation, or transfer (assuming the Plan then terminated)
which is of actuarial value equal to or greater than the benefit he would have
received from his Accounts if the Plan had been terminated on the day before
such merger, consolidation, or transfer. No amounts shall be transferred to this
Plan which would cause the Plan to be a direct or indirect transferee of a plan
to which the survivor annuity requirements of sections 401(a)(11) and 417 of the
Code apply.

             12.4 Consent to Modifications. A modification which affects the
rights or duties of the Trustee and/or Insurance Company may be made only with
the consent of the Trustee and/or Insurance Company. A modification may affect
Employees participating in this Plan at the time thereof, as well as future
Participants, but may not diminish any Participant Account as of the effective
date of such modification; provided, however, that any and all amendments may be
made which are necessary to (a) qualify or maintain the qualification of the
Plan under the applicable provisions of the Code and (b) meet and continue
meeting the requirements of ERISA.

                                      -90-
<PAGE>

                                  ARTICLE XIII

                              TOP-HEAVY PROVISIONS
                              --------------------

             13.1 General. Effective January 1, 1997, the following provisions
shall automatically apply to the Plan for each Plan Year in which it is a
Top-Heavy Plan (as defined below). This Article shall be construed to comply
with section 416 of the Code and the regulations thereunder.

             13.2 Definitions. The following definitions shall supplement those
set forth in Article II of the Plan:

                  (a) "Aggregation Group" shall mean:

                    (1) each plan (including a frozen plan or a plan which has
been terminated during the 60-month period ending on the Determination Date) of
the Company or an Affiliated Company in which a Key Employee is a participant,

                    (2) each other plan (including a frozen plan or a plan which
has been terminated during the 60-month period ending on the Determination Date)
of the Company or an Affiliated Company which enables any plan in which a Key
Employee participates to meet the requirements of section 401(a)(4) or 410 of
the Code, and

                    (3) each other plan (including a frozen plan or a plan which
has been terminated during the 60-month period ending on the Determination Date)
of the Company or an Affiliated Company which is included by the Committee if
the Aggregation Group, including such a plan, would continue to meet the
requirements of sections 401(a)(4) and 410 of the Code.

                                      -91-

<PAGE>

                  (b) "Determination Date" shall mean the last day of the
preceding Plan Year.

                  (c) "Key Employee" shall mean any Employee or former Employee
who at any time during the 60-month period ending on the Determination Date is
described below. The term Key Employee shall also include the beneficiaries of
such persons. The foregoing notwithstanding, the number of persons described in
Subsection (c)(2) for the entire 60-month period shall be limited to 10.

                    (1) An officer of the Company having Income for a Plan Year
during the 60-month period ending on the Determination Date that is greater than
fifty percent (50%) of the amount in effect under section 415(b)(1)(A) of the
Code for the calendar year in which such Plan Year ends. The number of employees
to be treated as officers shall be no more than 50, or, if less, the greater of:

                        (A) three employees, or

                        (B) ten percent (10%) of the greatest number of
employees, including leased employees within the meaning of section 414(n) of
the Code, employed by the Company and all Affiliated Companies during the
60-month period ending on the Determination Date.

                                      -92-

<PAGE>

                    (2) One of the 10 employees with annual Income greater than
the amount described in section 415(c)(1)(A) of the Code who own (or are
considered as owning, within the meaning of section 318 of the Code) the largest
interests in the Company or any Affiliated Company, provided that such interest
exceeds one-half of one percent (0.5%) of the total share ownership of the
Company or Affiliated Company.

                    (3) A five-percent (5%) owner of the Company.

                    (4) A one-percent (1%) owner of the Company who has annual
Income which, in the aggregate, is in excess of $150,000.

                  The above determinations shall be made in accordance with
section 416(i) of the Code and the regulations thereunder.

                  (d) "Key Employee Ratio" shall mean the ratio for any Plan
Year, calculated as of the Determination Date of such Plan Year, determined by
comparing the amount described in Subsection (d)(1) with the amount described in
Subsection (d)(2) after deducting from each such amount any portion thereof
described in Subsection (d)(3).

                                      -93-

<PAGE>

                    (1) The sum of (A) the present value of all accrued benefits
of Key Employees under all qualified defined benefit plans included in the
Aggregation Group, (B) the balances in all of the accounts of Key Employees
under all qualified defined contribution plans included in the Aggregation
Group, and (C) the amounts distributed from all plans in such Aggregation Group
to or on behalf of any Key Employee during the period of five Plan Years ending
on the Determination Date, except benefits paid on account of death in excess of
the accrued benefit or account balances immediately prior to death.

                    (2) The sum of (A) the present value of all accrued benefits
of all participants under all qualified defined benefit plans included in the
Aggregation Group, (B) the balances in all of the accounts of all participants
under all qualified defined contribution plans included in the Aggregation
Group, and (C) the amounts distributed from all plans in such Aggregation Group
to or on behalf of any participant during the period of five Plan Years ending
on the Determination Date.

                    (3) The sum of (A) all rollover contributions (or
fund-to-fund transfers) to the Plan by an Employee from a plan sponsored by an
employer which is not the Company or an Affiliated Company, (B) any amount that
is included in Subsections (d)(1) and (2) for a person who is a Non-Key Employee
as to the Plan Year of reference but who was a Key Employee as to any earlier
Plan Year, and (C) for Plan Years beginning after December 31, 1984, any amount
that is included in Subsections (d)(1) and (2) for a person who has not
performed any service for the Company during the five-year period ending on the
Determination Date.

                                      -94-

<PAGE>

                    (4) The present value of accrued benefits under all
qualified defined benefit plans included in the Aggregation Group shall be
determined on the basis of the UP- 1984 Mortality Table (Unisex) with no age
setback and an interest rate of eight and one-half percent (8.5%). The value of
proportional subsidies, including subsidized preretirement survivor's benefits,
subsidized early retirement benefits, and optional forms of payment, shall be
ignored in determining the present value of accrued benefits.

                    (5) Solely for the purpose of determining whether the Plan,
or any other plan included in the Required Aggregation Group, is top-heavy, the
accrued benefit of an Employee other than a Key Employee shall be determined
under (A) the method, if any, that uniformly applies for accrual purposes under
all plans maintained by the Company and all Affiliated Companies, or (B) if
there is no such method, as if such benefit accrued not more rapidly than at the
slowest accrual rate permitted under the fractional accrual method of section
411(b)(1)(C) of the Code.

                                      -95-

<PAGE>

                  (e) "Non-Key Employee" shall mean any person who is an
Employee or a former Employee in any Plan Year but who is not a Key Employee as
to that Plan Year. The term Non-Key Employee shall also include the
beneficiaries of such persons.

                  (f) "Required Aggregation Group" shall mean all plans
described in Sections 13.2(a)(1) and (2).

                  (g) "Super Top-Heavy Plan" shall mean each plan in an
Aggregation Group if, as of the applicable Determination Date, the Key Employee
Ratio exceeds ninety percent (90%), determined in accordance with section 416 of
the Code.

                  (h) "Top-Heavy Account" shall mean the Account to which are
credited the minimum Company contributions made under this Article on behalf of
a Non-Key Employee for Plan Years in which the Plan is a Top-Heavy Plan, and
gains and losses thereon. Only Non-Key Employees shall have Top-Heavy Accounts.

                  (i) "Top-Heavy Plan" shall mean each plan in an Aggregation
Group if, as of the applicable Determination Date, the Key Employee Ratio
exceeds sixty percent (60%), determined in accordance with section 416 of the
Code.

                                     -96-

<PAGE>

                  (j) "Top-Heavy Valuation Date" shall mean the most recent
Valuation Date occurring within the 12-month period ending on the Determination
Date.

             13.3 Minimum Contribution for Non-Key Employees.

                  (a) (1) In each Plan Year in which the Plan is a Top-Heavy
Plan, each Participant who is a Non-Key Employee and who is employed by the
Company on the last day of such Plan Year shall receive a total minimum Company
contribution (including forfeitures) under all plans in the Required Aggregation
Group of not less than three percent (3%) of the Participant's annual Limitation
Compensation. (2) Salary Redirection contributions made on behalf of a
Participant in plan years beginning after December 31, 1984 and before January
1, 1989 shall be deemed to be Company contributions for the purpose of this
Subsection. Neither salary reduction contributions nor matching contributions
made on behalf of a Participant in plan years beginning after December 31, 1988
shall be deemed to be Company contributions for the purpose of this Subsection.

                    (3) The minimum Company contribution shall be provided to
each Participant who is a Non-Key Employee employed by the Company on the last
day of the Plan Year, regardless of the number of Hours of Service completed by
the Participant during the Plan Year, and regardless of the Participant's level
of compensation. Minimum Company contributions shall be allocated to Top-Heavy
Accounts.

                                     -97-

<PAGE>

                  (b) The percentage set forth in Subsection (a)(1) shall be
reduced to the percentage at which contributions, including salary Redirection
contributions, matching contributions, and forfeitures, are made (or are
required to be made) for a Plan Year for the Key Employee for whom such
percentage is the highest for that Plan Year. This percentage shall be
determined for each Key Employee by dividing the contribution for such Key
Employee by his Limitation Compensation for the Plan Year. All defined
contribution plans in the Required Aggregation Group shall be treated as one
plan for the purpose of this Section; however, this Section shall not apply to
any plan in the Required Aggregation Group if such plan enables a defined
benefit plan in the group to meet the requirements of section 401(a)(4) or
section 410 of the Code.

                  (c) If the Required Aggregation Group includes both a defined
benefit plan and a defined contribution plan and a Participant who is a Non-Key
Employee employed by the Company on the last day of the Plan Year participates
in both, the Company is not required to provide such Participant with both the
minimum benefit under the defined benefit plan and the minimum contribution
described above. In such event, the Participant shall have the minimum benefit
provided under the defined benefit Top-Heavy Plan.

                                     -98-

<PAGE>

                  (d) The compensation taken into account for the purpose of
determining minimum Company contributions under this Section shall not be more
than the amount in effect under section 401(a)(17) of the Code for the Plan Year
in question.

             13.4 Vesting. If the Plan becomes a Top-Heavy Plan, each
Participant shall continue to be one hundred percent (100%) vested in his
Participant Account.

             13.5 Social Security. For each Plan Year in which it is a Top-Heavy
Plan, the Plan must meet the requirements of this Article without regard to any
Social Security or similar contributions or benefits.

             13.6 Adjustment to Maximum Allocation Limitation.

                  (a) The provisions of this Section shall not apply on or after
January 1, 2000. Until January 1, 2000, for each Plan Year in which the Plan is

                                    (1)     a Super Top-Heavy Plan
         or

                                    (2)     a Top-Heavy Plan and the Board of
Directors does not make the election described in Subsection (b) (and a similar
election has not been made as to another plan in the Aggregation Group), the
1.25 factor in the defined benefit and defined contribution fractions described
in Section 7.8 shall be reduced to 1.0. However, this adjustment shall not apply
to any Participant during any period in which the Participant earns no
additional accrued benefit under any defined benefit plan and has no employer
contributions, forfeitures, or voluntary contributions allocated to his accounts
under any defined contribution plan.

                                      -99-

<PAGE>

                  (b) If, in any Plan Year beginning January 1, 2000, the Plan
is a Top-Heavy Plan but not a Super Top-Heavy Plan and the Required Aggregation
Group includes a defined benefit plan, the Board of Directors may elect to use a
factor of 1.25 in computing the denominator of the defined benefit and defined
contribution fractions described in Section 7.8. In the event of such an
election, the minimum Company contribution described in Section 13.3(a)(1) for
each Non-Key Employee who is not covered by a defined benefit plan shall be
increased from three percent (3%) to four percent (4%), and the minimum benefit
described in Section 13.3(c) for each Non-Key Employee who is covered by a
defined benefit plan shall be the increased minimum benefit provided under the
defined benefit Top-Heavy Plan.

                                     -100-

<PAGE>

                                   ARTICLE XIV

                          WITHDRAWALS DURING EMPLOYMENT
                          -----------------------------

             14.1 General. While he is still employed by the Company or an
Affiliated Company, a Participant may withdraw his interest in the Fund only in
the manner, in the amount, and at the times provided in this Article.

             14.2 Hardship Withdrawals.

                  (a) With the approval of the Committee, a Participant may
withdraw up to the total value of his Salary Redirection Account and his 401(k)
Account in the event of Hardship; provided, however, that he may not withdraw
any amount that constitutes earnings credited to his Salary Redirection Account
after December 31, 1988.

                  (b) A Participant shall apply for a Hardship withdrawal in the
form and manner prescribed by the Committee. The Participant's application shall
represent that the withdrawal is to be made because of Hardship.

                  (c) A withdrawal shall not be permitted under this Section for
any reason not listed in the Plan's definition of Hardship (Section 2.21).

                  (d) The Committee shall approve a Hardship withdrawal only if
the Participant delivers with his withdrawal application a signed statement that
his financial need cannot reasonably be relieved:

                                      -101-

<PAGE>

                    (1) by ceasing to contribute Pre-tax Salary Redirection
Contributions and After-tax Contributions to this Plan;

                    (2) by receiving all distributions (other than Hardship
distributions) and all non-taxable loans available to him from all retirement
plans maintained by the Company and Subsidiaries and any other employer(s);

                    (3) by borrowing from commercial sources on reasonable
commercial terms an amount sufficient to satisfy the need;

                    (4) through reimbursement or compensation by insurance or
otherwise;

                    (5) by liquidation of his assets (including the assets of
his spouse and minor children that are reasonably available to him). A
Participant's financial need cannot reasonably be relieved by one of the methods
listed above if the effect would be to increase the amount of the need.

                  (e) Subsection (d) notwithstanding, the Committee shall not
approve a Hardship withdrawal if it has actual knowledge that the Participant's
financial need can be relieved by one or more of the methods listed in
Subsection (d).

                                     -102-

<PAGE>

             14.3 Withdrawals After Age 59 1/2. A Participant who has attained
age 59 1/2 may withdraw up to the total value of his Salary Redirection and
Supplemental Accounts,401(k) Account, QMAC Account, and QNEC Account. Requests
for such withdrawals shall be made in the manner prescribed by the Committee.

             14.4 Other Withdrawals.

                  (a) A Participant may at any time withdraw any amount from his
Voluntary Account. Requests for withdrawals shall be made in the manner
prescribed by the Committee.

                  (b) (1) A Participant who contributed voluntary contributions
to a C-M Plan prior to January 1, 1987 shall have the choice of (A) making his
withdrawal entirely from either his "pre-1987 account" or his "post-1986
account" (as described in Section 2.1(d)); or (B) making his withdrawal first
from his pre-1987 account, until his entire pre-1987 account has been withdrawn,
and then from his post-1986 account; or (C) making his withdrawal first from his
pre-1987 account, until all principal in his pre-1987 account has been
withdrawn, and then from his post-1986 account.

                    (2) A withdrawal from the pre-1987 account may consist
entirely of principal (that is, the Participant's Voluntary Savings) until all
principal in the pre-1987 account has been withdrawn. Any remainder of the
withdrawal to come from the pre-1987 account shall be taken from earnings and
shall be taxable income to the Participant for the year of the withdrawal.

                                      -103-

<PAGE>

                    (3) A withdrawal from the post-1986 account shall consist of
both principal and taxable earnings. The portion consisting of principal shall
bear the same proportion to the withdrawal from the post-1986 account as the
principal in the post-1986 account bears to the total value of the post-1986
account as of the date of withdrawal.

             14.5 Special Withdrawals.  A Participant may withdraw the total
value of his Accounts in a single sum after a determination by the Committee
that one of the following events has occurred:

                  (a) the termination of the Plan, where there is no successor
plan (as defined in Treas. Reg.ss.1.401(k)-1(d)(3));

                  (b) the sale by the Company of substantially all of its assets
used in a trade or business, if the Participant making the withdrawal begins
employment with the corporation acquiring such assets; or

                                      -104-

<PAGE>

                  (c) the sale by the Company of its interest in a subsidiary,
if the withdrawal is made by a Participant who continues employment with such
subsidiary.

             14.6 Withdrawal of Pledged Amount. No amount that is security for
a loan under Article XV may be withdrawn.

             14.7 Amount and Payment of Withdrawals.

                  (a) The maximum amount available for withdrawal from any
Account shall be determined on the basis of the value of the Account as of the
Valuation Date coincident with or immediately preceding the date on which the
withdrawn amount is paid to the Participant.

                  (b) A Participant may specify the Fund or Funds from which a
withdrawal under this Article is to be made; provided, however, that any payment
of Voluntary Savings shall be made out of the Participant's interest in the
various Funds in proportion to the Participant's share of Voluntary Savings in
such Fund.

                  (c) If a Participant does not specify the Fund or Funds from
which a withdrawal is to be paid, payment shall be made out of the Participant's
interest in the various Funds in proportion to the Participant's share in such
Funds.

                  14.8 Withdrawals from Rollover Account. A Participant may at
any time withdraw any amount from his Rollover Account; provided, however, that
no more than one such withdrawal may be made in any six-month period. Requests
for withdrawals shall be made on forms prescribed by the Administrative
Committee.

                                     -105-

<PAGE>

             14.9 Emergency Withdrawals. Notwithstanding the other provisions of
this Article XIV, a Participant shall have the right at any time to request
withdrawal of all or part of the total value of his Basic Account, Supplemental
Account, and Company Account because of proven financial emergency. For this
purpose, "financial emergency" shall mean a need for financial assistance to
meet obligations with respect to providing primary housing and with respect to
the health, welfare, or education of the Participant or a member of his
immediate family. Withdrawals under this Section are subject to the following
rules:

                  (a) The withdrawal shall be subject to the approval of the
Administrative Committee, both as to the withdrawal itself and the amount
thereof.

                  (b) In granting approvals, the Administrative Committee shall
act in a uniform and nondiscriminatory manner.

                  (c) The withdrawal shall be satisfied first by a withdrawal of
the value of the Participant's After-Tax Supplemental Contributions, then by a
withdrawal of the value of the Participant's After-Tax Basic Contributions, and
finally by a withdrawal of the value of Matching Contributions.

                  (d) No more than one withdrawal may be made under this Section
in any six-month period.

                                     -106-

<PAGE>

            14.10 Withdrawal of After-Tax Contributions and Matching
Contributions. By filing a written request with the Administrative Committee, a
Participant may elect to withdraw certain amounts from his Basic Account,
Supplemental Account, and Company Account, as follows:

                  (a) Withdrawal of up to one hundred percent (100%) of his
After-Tax Supplemental Contributions or, if less, one hundred percent (100%) of
his Supplemental Account. Such a withdrawal shall not result in a Participant's
being prohibited from making Plan contributions.

                  (b) Withdrawal of up to one hundred percent (100%) of the
After-Tax Basic Contributions; provided that if the withdrawal takes place prior
to January 1, 1995, the amount withdrawn was contributed at least 24 months
prior to the date of withdrawal or, if less, one hundred percent (100%) of the
then value of such After-Tax Basic Contributions. Such a withdrawal shall result
in a Participant's being prohibited from making After-Tax Contributions for a
period of six months, but shall not result in a Participant's being prohibited
from making Pre-Tax Salary Redirection Contributions.

                                     -107-

<PAGE>

                  (c) Withdrawal of either fifty percent (50%) or one hundred
percent (100%) of the lesser of (1) the value of the Participant's Company
Account as of the Valuation Date coincident with or immediately preceding the
date that is 24 months prior to the date of withdrawal, or (2) the value of the
Participant's Basic Account on the date of withdrawal. Such a withdrawal is
permissible only when the Participant has elected to withdraw one hundred
percent (100%) of the After-Tax Basic Contributions available for withdrawal
under Subsection (b). In the event of a fifty-percent (50%) withdrawal, the
Participant shall be prohibited from making any After-Tax Contributions for a
period of six months, but he shall not be prohibited from making Pre-Tax Salary
Redirection Contributions.

                  (d) A withdrawal under this Section shall be satisfied first
by a withdrawal of the value of the Participant's After-Tax Supplemental
Contributions, then by a withdrawal of the value of the Participant's After-Tax
Basic Contributions, and finally by a withdrawal of the value of Matching
Contributions.

                  (e) No more than one withdrawal may be made under this Section
in any six-month period.

             14.11 Resumption of Participant Contributions. In order to resume
making contributions, a Participant must follow the procedure outlined in
Section 3.5 as if he were a new Participant. Contributions shall resume at the
percentages in effect prior to suspension unless the Participant has elected
otherwise pursuant to Section 4.4 or 4.5.

                                     -108-

<PAGE>

             14.12  Amount and Payment of Withdrawals.

                  (a) Prior to January 1, 1992, the amount of any withdrawal
shall be determined on the basis of the value of the Participant's account as of
the Valuation Date coincident with or next following the date that is 30 days
after the date on which the written request to withdraw is received by the
Administrative Committee. As of such Valuation Date, an appropriate number of
the Participant's Units (if applicable) shall be canceled. The amounts withdrawn
shall be paid in cash to the Participant as soon after such Valuation Date as is
practicable.

                  (b) On and after January 1, 1992, the amount of any withdrawal
shall be determined on the basis of the Participant's account as of the
Valuation Date on which the written request to withdraw is processed by the
Trustee. As of such Valuation Date, an appropriate number of the participant's
Units (if applicable) shall be canceled. The amounts withdrawn shall be paid in
cash to the Participant as soon after such Valuation Date is practicable.

             14.13  Fund to Be Charged with Withdrawal.

                  (a) A Participant may specify the Fund or Funds from which a
withdrawal under this Article is to be made; provided, however, that any
distribution of After-Tax Contributions made on or after January 1, 1987 shall
be made out of the Participant's interest in the various Funds in proportion to
the Participant's share of After-Tax Contributions in such Funds.

                                     -109-

<PAGE>

                  (b) If a Participant does not specify the Fund or Funds from
which a withdrawal is to be made, distribution shall be made out of the
Participant's interest in the various Funds in proportion to the Participant's
share in such Funds.

             14.14  Withdrawals from Rollover Account. A Participant may
at any time withdraw any amount from his Rollover Account; provided, however,
that no more than one such withdrawal may be made in any six-month period.
Requests for withdrawals shall be made on forms prescribed by the Administrative
Committee.

             14.15  Withdrawals Not Subject to Replacement. A Participant may
not replace any portion of his Accounts withdrawn under this Plan.

                                     -110-

<PAGE>

                                   ARTICLE XV

                               LOANS FROM THE PLAN
                               -------------------

             15.1 Loan Program.

                  (a) The Trustee has established a program under which assets
of the Plan may be loaned to certain individuals. This loan program is
administered by the Administrative Committee in accordance with (1) the
provisions of this Article and (2) any related documents describing procedures
to be followed in the administration of the loan program which have been made a
part of the Plan.

             15.2 Persons Who May Borrow from the Plan.

                  (a) All vested Participants shall be eligible to apply for
loans from the Plan.

                  (b) (1) Beneficiaries of deceased Participants who are
"parties in interest," as that term is defined in section 3(14) of ERISA, shall
be also eligible to apply for loans from the Plan. For the purposes of this
Article, the Accounts of a deceased Participant shall be deemed to belong to the
beneficiary of that deceased Participant.

                      (2) The Administrative Committee shall be under no
obligation to approve the loan application of any beneficiary who is not a paid
employee of the Company.

                                     -111-

<PAGE>

                  (c) If the Company or a Participating Subsidiary is an S
Corporation, no shareholder-employee who owns more than five percent (5%) of the
stock of the Company shall be permitted to apply for a loan. No one who is an
Owner-Employee or a member of the family of an Owner-Employee shall be permitted
to apply for a loan.

                  (d) An individual who is eligible to apply for a loan from the
Plan shall hereinafter be called a "Borrower."

             15.3 Application for and Approval of Loan.

                  (a) All applications for loans shall be made in the manner
prescribed by the Administrative Committee. In his application, the Borrower
shall specify:

                    (1) the amount of the loan being requested, which shall not
be less than the minimum loan amount set forth in Section 15.5(a);

                    (2) the intended use of the loan proceeds;

                    (3) the intended security for the loan; and

                    (4) the intended repayment period, which shall be a period
authorized under Section 15.8(b).

                  (b) The Administrative Committee shall rule upon loan
applications in a uniform and nondiscriminatory manner, taking into
consideration only those factors which would be considered in a normal
commercial setting by an entity in the business of making similar types of
loans. In ruling on a loan application, the Administrative Committee shall not
consider the Borrower's race, color, religion, sex, age, or national origin, but
may consider his credit worthiness, collateral, and financial need.

                                     -112-

<PAGE>

                  (c) The Administrative Committee shall deny a request for a
loan if the intended use of the loan proceeds is to purchase securities.

                  (d) The Administrative Committee shall not approve any loan
which would exceed the maximum amount described in Section 15.5(b). The
Administrative Committee may approve a loan of less than the amount requested in
a Borrower's application.

                  (e) No more than one loan application per Borrower shall be
approved during any Plan Year. In no event shall a Borrower be permitted to have
more than two loans from this Plan outstanding at any time.

                  (f) If a request for a loan is approved, the loan proceeds
shall be paid to the Borrower as of the Valuation Date coincident with or
immediately following the date on which the loan is approved. Any fees or
charges associated with the processing of the loan shall be paid by the
Borrower.

                                     -113-

<PAGE>

                  (g) If a request for a loan is denied, the Borrower may appeal
the denial in the manner described in Section 10.5.

             15.4 Account Attributed to Beneficiary. For the purpose of this
Article, the Participant Account of a deceased Participant shall be deemed to
belong to the beneficiary of that deceased Participant.

             15.5 Amount of Loan.

                  (a) The Plan shall make no loan in an amount less than $1,000.

                  (b) The value of a Borrower's outstanding loans under this
Plan and all other plans qualified under section 401(a) of the Code which are
sponsored by the Company and Affiliated Companies shall not exceed the lesser
of:

                    (1) $50,000 reduced by the excess of (A) the highest
outstanding loan balance during the 12 months before a new loan is made over (B)
the outstanding loan balance on the date of the new loan, or

                    (2) fifty percent (50%) of the value of the Borrower's
vested interest in the Plan, determined as of the Valuation Date as of which the
loan proceeds are paid to the Borrower.

                                     -114-

<PAGE>

                  (c) A loan that is deemed distributed under section 72(p) of
the Code (including interest accrued after the deemed distribution) is
considered outstanding for the purpose of Subsection (b) (1) unless it has been
repaid (for example, by a plan loan offset).

             15.6 Security for Loan.

                  (a) Security for a loan granted pursuant to this Article must
be at least equal to the proceeds of the loan.

                  (b) (1) Not more than fifty percent (50%) of the Borrower's
vested interest in the Plan, valued as of the Valuation Date as of which the
loan proceeds are paid to the Borrower, may be used as security for a loan
granted pursuant to this Article.

                    (2) The amount which is security for the loan shall be
allocated first to the vested portion of the Borrower's Voluntary Account (if
any), then to his Rollover Account, then to his C-M Account (if any), and
finally to his Salary Redirection Account.

                  (c) To the extent that the Administrative Committee determines
that additional security is required, the additional security shall consist of
such collateral as the Administrative Committee and the Borrower mutually agree
upon. The value and liquidity of any additional security shall be such that it
may reasonably be anticipated that, in the event of default, the Plan will not
lose principal and interest.

                                     -115-

<PAGE>

             15.7 Interest Rate. The rate of interest to be charged on a given
loan shall be determined when that loan is approved by the Administrative
Committee, and shall be a rate selected by the Administrative Committee which
the Administrative Committee deems to be commensurate with the interest rates
being charged at that time by financial institutions which are in the business
of making similar types of loans.

             15.8 Installment Note.

                  (a) Each loan shall be evidenced by the Borrower's execution
of a personal installment note. Such note shall be an asset of the Account of
the Borrower.

                  (b) Each personal installment note shall specify the period of
repayment, which shall be up to 60 months from the Valuation Date as of which
the loan proceeds are paid to the Borrower. However, if the purpose of the loan
is to acquire a dwelling unit which is to be used as the principal residence of
the Borrower, the period of repayment may be as long as, but shall not exceed,
180 months.

                  (c) Each personal installment note shall specify the rate of
interest being charged on the loan.

                                     -116-

<PAGE>

             15.9 Repayment of Loan.

                  (a) All loans shall be repaid in equal installments through
payroll deductions or in such other manner as the Administrative Committee may
determine; provided, however, that payments shall be made at least quarterly.
Substantially level amortization of each loan is required over the term of the
loan.

                  (b) A Borrower may repay the outstanding balance of a loan in
a single sum at any time by notifying the Administrative Committee of his intent
to do so and by forwarding to the Administrative Committee payment in full of
the outstanding balance, plus interest accrued to the date of payment.

                  (c) All loans from the Plan shall be nonrenewable.

                  (d) The amount of principal and interest repaid by a Borrower
shall be credited to that Borrower's Accounts as each repayment is made.

            15.10 Default on Loan.

                  (a) Anything in this Plan to the contrary notwithstanding, in
the event that

                    (1) a loan is not repaid by the time the note matures;

                                     -117-

<PAGE>

                    (2) three consecutive installments of principal and/or
interest are not paid;

                    (3) the Borrower dies;

                    (4) the Plan ceases to constitute a qualified plan within
the meaning of section 401(a) of the Code;

                    (5) in a case where repayment of the loan is being
accomplished by payroll deduction, the Borrower's employment with the Company
terminates for any reason, or the Borrower's compensation is discontinued;

                    (6) the Borrower is placed or places himself in bankruptcy;
or

                    (7) any other event occurs which the Administrative
Committee, applying standards which would be used in a normal commercial setting
by an entity in the business of making similar types of loans, judges to be an
event of default or an event which may jeopardize the repayment of the loan, the
full balance of the loan, plus accrued interest, shall immediately become due
and payable unless the Administrative Committee, in its sole discretion, waives
the event of default and makes alternate arrangements to prevent the loss to the
Plan of the balance of the loan, plus interest.

                                     -118-

<PAGE>

                  (b) The Administrative Committee shall give notice of an event
of default described in Subsection (a) to the Borrower who has defaulted on his
loan (or, in the case of default by death, to the estate of the Borrower). If
the balance of the loan and accrued interest are not paid within 30 days after
the date of such notice, the Administrative Committee shall be entitled to
foreclose upon the Borrower's security immediately or at any later time it may
select; provided, however, that the first consideration in selecting a date of
foreclosure shall be to prevent disqualification of the Plan.

            15.11 Foreclosure.

                  (a) When the Administrative Committee forecloses upon a
Borrower's security, it shall first reduce that Borrower's vested interest in
the Plan by the lesser of (1) the full amount of the unpaid balance of the loan,
plus accrued interest (determined as of the date of foreclosure), or (2) the
entire portion of the Borrower's vested interest in the Plan which is security
for the loan.

                  (b) (1) Subsection (a) notwithstanding, in the case of a
Borrower who is a Participant, the Administrative Committee shall in no event
use that Borrower's Salary Redirection Account or 401(k) Account to reduce his
indebtedness unless, as of the date of foreclosure, the Borrower has reached age
59 1/2, retired, terminated his employment with the Company, or suffered a Total
Disability, or is eligible to withdraw his Accounts because one of the events
described in Section 14.5 has occurred. This restriction shall not apply in the
case of foreclosure upon the security of a Borrower who is the beneficiary of a
deceased Participant.

                                     -119-

<PAGE>

                    (2) Subsection (a) notwithstanding, the Administrative
Committee shall not use Matching or Profit Sharing Contributions which were
allocated to the Borrower's Account less than 24 months prior to the date of
foreclosure to reduce that Borrower's indebtedness unless, as of the date of
foreclosure, the Borrower has retired or terminated his employment with the
Company.

                  (c) When the full amoun7t of the unpaid balance of the loan,
plus accrued interest, has been restored to the Plan, any portion of the
Borrower's security which remains shall be released and shall no longer be
security for any loan.

                  (d) Foreclosing upon a Borrower's security shall not operate
as a waiver of the rights of the Administrative Committee, the Company, or the
Plan to pursue additional means of preventing loss to the Plan in the event of
default on a loan.

            15.12 Deemed Distribution. The provisions of Article VIII
notwithstanding, if a Borrower defaults on a loan and the Administrative
Committee is entitled to foreclose upon the Borrower's security, the unpaid
balance of the loan, plus accrued interest, shall be deemed to be immediately
distributed to the Borrower.

                                     -120-

<PAGE>

                                   ARTICLE XVI

                               GENERAL PROVISIONS
                               ------------------

             16.1 No Employment Rights. Neither the action of the Company in
establishing the Plan, nor any provisions of the Plan, nor any action taken by
the Company or by the Committee shall be construed as giving to any employee of
the Company the right to be retained in its employ, or any right to payment
except to the extent of the benefits provided in the Plan to be paid from the
Fund.

             16.2 Source of Benefits. All benefits payable under the Plan shall
be paid or provided for solely from the Fund, and the Company assumes no
liability or responsibility therefor.

             16.3 Governing Law. Except to the extent superseded by ERISA, all
questions pertaining to the validity, construction, and operation of the Plan
shall be determined in accordance with the laws of the state in which the
principal place of business of the Company is located.

             16.4 Spendthrift Clause.

                  (a) No benefit payable at any time under this Plan and no
interest or expectancy herein shall be anticipated, assigned, or alienated by
any Participant or beneficiary, or subject to attachment, garnishment, levy,
execution, or other legal or equitable process, except for:

                                     -121-

<PAGE>

                    (1) an amount necessary to satisfy a federal tax levy made
pursuant to section 6331 of the Code;

                    (2) any benefit payable pursuant to a domestic relations
order which is determined to be a qualified domestic relations order within the
meaning of the Code;

                    (3) an amount that a Participant is ordered or required to
pay to the Plan after August 4, 1997 under a judgment, order, decree, or
settlement agreement that is described in and complies with section
401(a)(13)(C) of the Code.

                  (b) Any attempt to alienate or assign a benefit hereunder,
whether currently or hereafter payable, shall be void. No benefit shall in any
manner be liable for or subject to the debts or liability of any Participant or
beneficiary. If any Participant or beneficiary attempts to or does alienate or
assign his benefit under the Plan or any part thereof, or if by reason of his
bankruptcy or other event happening at any time such benefit would devolve upon
anyone else or would not be enjoyed by him, then the Committee may terminate
payment of such benefit and hold or apply it for the benefit of the Participant
or beneficiary.

                                     -121-

<PAGE>

             16.5 Incapacity. If the Committee deems any Participant or
beneficiary who is entitled to receive payments hereunder to be incapable of
receiving the same by reason of youth, illness, or infirmity or incapacity of
any kind, the Committee may, until a claim is made by a conservator or other
individual who is legally charged with the care of such person, direct the
Trustee to make payments to a relative or friend of such person for such
person's benefit. Thereafter, any benefits to which such person is entitled
shall be paid to the conservator or other individual legally charged with the
care of such person, which shall be a complete discharge to the extent thereof
of any and all liability of the Company, any Committee, the Trustee, and the
Fund with respect to such person.

             16.6 Participation by Subsidiary. With the prior consent of the
Board of Directors, a Participating Subsidiary may adopt this Plan for its
employees by action of its board of directors or other governing body. Each
amendment to the Plan shall be binding on a Participating Subsidiary which has
adopted the Plan, and, by its adoption of the Plan, the Participating Subsidiary
shall be deemed to have appointed the Company, any Committee, and the Trustee as
its exclusive agents to exercise on its behalf all the power and authority
conferred by the Plan and the Trust Agreement upon the Company, the Committee,
and the Trustee, respectively. The authority of the Company, the Committee, and
the Trustee to act as such agents shall continue until the Participating
Subsidiary terminates its participation in the Plan and the benefits payable to
Participants employed (or formerly employed) by the Participating Subsidiary
have been distributed as provided herein. A Participating Subsidiary may
terminate its participation in the Plan at any time by action of its board of
directors or other governing body. If the Participating Subsidiary to be a
Subsidiary, it may no longer participate in the Plan.

             16.7 Withholding. Any Committee and the Trustee shall have the
right to withhold any and all federal, state, and local taxes which may be
withheld in accordance with applicable law.

                                     -122-
<PAGE>

                                   SCHEDULE A

              ADP AND ACP TESTS AND RELATED LIMITS ON CONTRIBUTIONS

                  A.1 Testing Method. The "current year testing method" (as
defined in IRS Notice 98-1) shall be used for the ADP Test and the ACP Test
through 1999. Thereafter, the "prior year testing method" (as defined in IRS
Notice 98-1) shall be used for the ADP test and ACP test.

                  A.2 Definitions. The following definitions shall supplement
those set forth in Article II of the Plan:

                           (a) "ACP of the HCEs" shall mean, for a given Plan
Year, the Actual Contribution Percentage for the group of Eligible Employees who
are Highly Compensated Employees in that Plan Year.

                  For purposes of the multiple use test set forth in Section
A.12, the ACP of the HCEs shall be determined as provided in Section A.12(c).

                           (b) "ACP of the NHCEs" shall mean, for Plan Years
through 1999, the Actual Contribution Percentage for the group of Eligible
Employees who are not Highly Compensated Employees in that Plan Year. Effective
January 1, 2000, ACP of the NHCEs shall mean the Actual Contribution Percentage
for the group of individuals who were non-highly compensated Eligible Employees
in the preceding Plan Year, regardless of the employment status of any
individual in that group in the current Plan Year. Thus, for a given Plan Year,
the ACP of the NHCEs is fixed as of the end of the preceding Plan Year; it is
not adjusted for any ensuing change in any individual's employment status (but
may be adjusted if the Company makes Qualified Matching Contributions and/or
Qualified Nonelective Contributions on behalf of non-highly compensated Eligible
Employees, as provided in Section A.10).

                                     -123-

<PAGE>

                           (c) "Actual Contribution Percentage" shall mean, for
a specific group of Eligible Employees, the average (expressed as a percentage
rounded to the nearer one-hundredth of one percent) of the Individual
Contribution Percentages of the Eligible Employees in the group.

                  Special rules for determining the Actual Contribution
Percentage are set forth in Section A.8(c).

                           (d) "Actual Deferral Percentage" shall mean, for a
specific group of Eligible Employees, the average (expressed as a percentage
rounded to the nearer one-hundredth of one percent) of the Individual Deferral
Percentages of the Eligible Employees in the group.

                  Special rules for determining the Actual Deferral Percentage
are set forth in Section A.4(c).

                                     -124-

<PAGE>

                           (e) "ADP of the HCEs" shall mean, for a given Plan
Year, the Actual Deferral Percentage for the group of Eligible Employees who are
Highly Compensated Employees in that Plan Year.

                  For purposes of the multiple use test set forth in Section
A.12, the ADP of the HCEs shall be determined as provided in Section A.12(c).

                           (f) "ADP of the NHCEs" shall mean, for a given Plan
Year through 1999, the Actual Deferral Percentage for the group of Eligible
Employees who are not Highly Compensated Employees in that Plan Year. Effective
January 1, 2000, ADP of NHCEs shall man the Actual Deferral Percentage for the
group of individuals who were non-highly compensated Eligible Employees in the
preceding Plan Year, regardless of the employment status of any individual in
that group in the current Plan Year. Thus, for a given Plan Year, the ADP of the
NHCEs is fixed as of the end of the preceding Plan Year; it is not adjusted for
any ensuing change in any individual's employment status (but may be adjusted if
the Company makes Qualified Nonelective Contributions and/or Qualified Matching
Contributions on behalf of non-highly compensated Eligible Employees, as
provided in Section A.6).

                                     -125-

<PAGE>

                           (g) "Excess Aggregate Contributions" shall mean, for
a given Highly Compensated Employee, for a given Plan Year, the dollar amount by
which the Highly Compensated Employee's Voluntary Savings and Matching
Contributions must be reduced for the Highly Compensated Employee's Individual
Contribution Percentage to equal the highest permitted Individual Contribution
Percentage for that Plan Year (as described in Section A.9(c)).

                           (h) "Excess Contributions" shall mean, for a given
Highly Compensated Employee, for a given Plan Year, the dollar amount by which
the Highly Compensated Employee's Salary Redirection Savings must be reduced for
the Highly Compensated Employee's Individual Deferral Percentage to equal the
highest permitted Individual Deferral Percentage for that Plan Year (as
described in Section A.5(g)).

                           (i) "Excess Deferral" shall mean the excess of (1)
the amount of Salary Redirection Savings plus any other elective deferrals (as
defined in section 402(g)(3) of the Code) made in an individual's taxable year
pursuant to the individual's election, over (2) the dollar limit in effect under
section 402(g) of the Code for that taxable year ($9,500 for 1997; $10,000 for
1998 and 1999).

                                     -126-

<PAGE>

                           (j) "Individual Contribution Percentage" shall mean
the ratio described in Section A.9.

                           (k) "Individual Deferral Percentage" shall mean the
ratio described in Section A.5.

                  A.3      Return of Excess Deferral.

                           (a)      (1) If a Participant has an Excess Deferral
in any taxable year, he may notify the Committee of the Excess Deferral and
request that all or a portion of such Excess Deferral be returned to him. The
Committee must receive the Participant's notification by the March 1st after the
taxable year of the Participant in which the Excess Deferral occurred.

                                    (2) If a Participant has an Excess Deferral
in any taxable year, taking into account only this Plan and any other cash or
deferred arrangement(s) maintained by the Company and Affiliated Companies, he
shall be deemed to have requested a return of the Excess Deferral, whether he
actually makes the request in accordance with paragraph (1), or not.

                           (b) When a Participant has requested (or is deemed to
have requested) the return of an Excess Deferral, the Committee shall direct the
Trustee to distribute to the Participant either:

                                    (1) the amount of the Excess Deferral
requested under Subsection (a)(1) (or, if less, the portion of such amount that
does not exceed the Participant's Salary Redirection Savings for such year),
plus any income attributable to such amount; or

                                     -127-

<PAGE>

                                    (2) the total amount of the Excess Deferral,
determined by taking into account only this Plan and any other cash or deferred
arrangement(s) maintained by the Company and Affiliated Companies, plus any
income attributable to such amount.

                           (c) An Excess Deferral may be distributed in the
taxable year in which it occurs or after the end of that taxable year, but shall
in no event be distributed later than April 15th of the year after the year in
which it occurs.

                           (d) The Trustee shall determine the income
attributable to an Excess Deferral using any reasonable method that does not
violate section 401(a)(4) of the Code and is also used for allocating income to
Participants' Accounts. Such method shall be applied consistently to all Excess
Deferrals for a given taxable year. Income shall be allocated to an Excess
Deferral solely for the taxable year in which the Excess Deferral occurs (or, in
the case of an Excess Deferral that is distributed in the taxable year in which
it occurs, for the period from the beginning of such taxable year to the date on
which the Excess Deferral is distributed) and not for any period thereafter.

                                     -128-

<PAGE>

                  A.4      Actual Deferral Percentage Test.

                           (a) The Administrative Committee shall cause the ADP
Test to be run as of the last day of each Plan Year that begins after 1986 and
may also cause the ADP Test to be run at any time during a given Plan Year. As
provided in Section A.1, the "current year testing method" shall be used for the
ADP Test through 1999. Effective January 1, 2000 the "prior year testing method"
shall be used.

                           (b) The Plan satisfies the ADP Test at a given point
in time if it satisfies one of the two tests described below.

                                    (1) The Plan satisfies the ADP Test if the
ADP of the HCEs is not more than the ADP of the NHCEs multiplied by 1.25.

                                    (2) The Plan satisfies the ADP Test if:

                                        (A) the ADP of the HCEs does not exceed
the ADP of the NHCEs by more than two percentage points, and

                                        (B) the ADP of the HCEs is not more than
the ADP of the NHCEs multiplied by 2.0.

                                     -129-

<PAGE>

                           (c)      (1) As provided in Section A.2(d), the
Actual Deferral Percentage for a specific group of Eligible Employees is the
average (expressed as a percentage rounded to the nearer one-hundredth of one
percent) of the Individual Deferral Percentages of the Eligible Employees in the
group. In determining the Actual Deferral Percentage, the Committee may treat
this Plan and any other cash or deferred arrangement maintained by the Company
or an Affiliated Company as a single plan.

                                    (2) If this Plan is treated, for purposes of
section 401(a)(4) or 410(b) of the Code, as one plan with any other cash or
deferred arrangement(s) maintained by the Company or an Affiliated Company, this
Plan and the other cash or deferred arrangement(s) shall be treated as one plan
in determining the Actual Deferral Percentage.

                                    (3) Cash or deferred arrangements that are
aggregated under this Subsection must all have the same plan year and must all
use the "current year testing method" (as defined in IRS Notice 98-1) through
1999 and the "prior year testing method" (as defined in IRS Notice 98-1)
thereafter.

                           (d) Subsection (c) notwithstanding, plans (or
portions of plans) that must be disaggregated pursuant to Section A.13 shall in
no event be aggregated.

                                     -130-

<PAGE>

                  A.5      Individual Deferral Percentage.

                           (a) For any Plan Year, an Eligible Employee's
Individual Deferral Percentage is the ratio of:

                                    (1) the Eligible Employee's Salary
Redirection Savings for the Plan Year, to

                                    (2) the Eligible Employee's pay for the Plan
Year; provided, however, that any pay attributable to a period before the
Eligible Employee becomes a Participant shall not be taken into account.

                           (b) For the purpose of determining the denominator of
the Individual Deferral Percentage, an Eligible Employee's "pay" shall be his
Limitation Compensation. An Eligible Employee's pay for any Plan Year (and,
thus, the denominator of the Individual Deferral Percentage) shall not be more
than the amount set by section 401(a)(17) of the Code, as adjusted for
cost-of-living increases.

                           (c) In the case of an Eligible Employee who is a
Highly Compensated Employee, the numerator of the Individual Deferral Percentage
shall include any Excess Deferral made in the Plan Year. In the case of an
Eligible Employee who is not a Highly Compensated Employee, the numerator shall
not include any Excess Deferral.

                                     -131-

<PAGE>

                           (d) As provided in Section A.9(b), all or any portion
of an Eligible Employee's Salary Redirection Contributions for a given Plan Year
may be included in the numerator of the Individual Contribution Percentage,
provided that such contributions satisfy the requirements of Treas. Reg.
ss.1.401(m)-1(b)(5). Any Salary Redirection Contributions that are added to the
numerator of the Individual Contribution Percentage must be subtracted from the
numerator of the Individual Deferral Percentage.

                           (e) All or any portion of the Qualified Nonelective
Contributions and/or Qualified Matching Contributions made on behalf of a
non-highly compensated Eligible Employee for a given Plan Year may be included
in the numerator of the Individual Deferral Percentage, provided that such
contributions satisfy the requirements of Treas. Reg. ss.1.401(k)-1(b)(5). The
dollar amount of Qualified Nonelective Contributions and/or Qualified Matching
Contributions to be added to the numerator of the Individual Deferral Percentage
shall be determined by the Committee. Qualified Nonelective Contributions and/or
Qualified Matching Contributions included in the numerator of the Individual
Deferral Percentage shall in no event be included in the numerator of the
Individual Contribution Percentage.

                                     -132-

<PAGE>

                           (f) If Individual Deferral Percentages of non-highly
compensated Eligible Employees are increased as a result of the inclusion of
Qualified Nonelective Contributions and/or Qualified Matching Contributions, the
ADP of the NHCEs shall also be increased.

                           (g)      (1) For a given Plan Year, the highest
permitted Individual Deferral Percentage is the highest percentage of
Compensation that any Highly Compensated Employee could contribute as Salary
Redirection Contributions without causing the Plan to fail the ADP Test. This
percentage shall be determined in accordance with Treas.
Reg.ss.1.401(k)-1(f)(2).

                                    (2) The highest permitted Individual
Deferral Percentage applies only to Highly Compensated Employees; it does not
apply to non-highly compensated Eligible Employees and shall not affect the
contributions of non-highly compensated Eligible Employees in any way.

                           (h) If in any Plan Year a Highly Compensated Employee
participates in this Plan and in any other cash or deferred arrangement(s) (as
described in section 401(k) of the Code) maintained by the Company or an
Affiliated Company, then, in computing the Individual Deferral Percentage for
such Highly Compensated Employee, this Plan and the other cash or deferred
arrangement(s) shall be treated as one 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 with plan years ending with or
within the same calendar year shall be treated as a single arrangement.

                                     -133-

<PAGE>

                           (i) Subsection (h) notwithstanding, plans (or
portions of plans) that must be disaggregated pursuant to Section A.13 shall in
no event be aggregated.

                  A.6      ADP Test -- Corrective Action.

                           (a) If at any time before the end of a Plan Year the
Committee determines that the Plan does not satisfy the ADP Test, it may reduce
the contribution rates (and, thus, the Individual Deferral Percentages) of one
or more Participants who are Highly Compensated Employees so that the ADP Test
is satisfied. The Administrative Committee shall prescribe such reductions in a
uniform and nondiscriminatory manner.

                           (b)      (1) If the Administrative Committee
determines that the Plan does not satisfy the ADP Test, it may recommend that
the Company make Qualified Nonelective Contributions and/or Qualified Matching
Contributions on behalf of non-highly compensated Eligible Employees. Any such
contributions that the Company makes shall be, for Plan Years through 1999,
allocated in accordance with Section 7.6 and shall be used to increase the ADP
of the NHCEs. For Plan Years after 1999 any such contributions the Company makes
shall be remitted to the Trustee for deposit in the Fund by the last day of the
Plan Year for which the Plan does not satisfy the ADP Test; shall be allocated
as of the last day of the preceding Plan Year in accordance with Section 7.6;
and shall be used to increase the ADP of the NHCEs.

                                     -134-

<PAGE>

                                    (2) As provided in Section A.5(e), Qualified
Nonelective Contributions and/or Qualified Matching Contributions included in
the numerator of the Individual Deferral Percentage to help the Plan satisfy the
ADP Test shall in no event be included in the numerator of the Individual
Contribution Percentage.

                           (c) If, in spite of any corrective action that has
been taken, the Plan does not satisfy the ADP Test as of the last day of a given
Plan Year, Excess Contributions shall be returned as described in Section A.7.

                  A.7      Return of Excess Contributions.

                           (a) If the Plan does not satisfy the ADP Test as of
the last day of a given Plan Year, the Committee shall determine the total
amount of Excess Contributions for that Plan Year, which shall be the sum of the
Excess Contributions of all Highly Compensated Employees. The total amount of
Excess Contributions shall be apportioned among the Highly Compensated Employees
in accordance with Subsection (c) and shall be distributed to the Highly
Compensated Employees in accordance with Subsection (d).

                                     -135-

<PAGE>

                           (b) The total amount of Excess Contributions shall be
determined after determining the amount of Excess Deferrals and before
determining the total amount of Excess Aggregate Contributions.

                           (c) Using the following leveling process, the
Committee shall apportion the total amount of Excess Contributions among the
Highly Compensated Employees.

                                    (1) First, Excess Contributions shall be set
aside for the Highly Compensated Employee with the greatest dollar amount of
Salary Redirection Savings. The amount set aside for this Highly Compensated
Employee shall be an amount which either:

                                        (A) equals the total amount of Excess
Contributions, or

                                        (B) reduces the Highly Compensated
Employee's Salary Redirection Savings to the point at which they equal the
Salary Redirection Savings of the Highly Compensated Employee with the second
greatest dollar amount of Salary Redirection Savings.

                                     -136-

<PAGE>

                                    (2) Next, Excess Contributions shall be set
aside for the two Highly Compensated Employees who then have the greatest dollar
amount of Salary Redirection Savings. An equal amount shall be set aside for
each of these Highly Compensated Employees, until:

                                        (A) the total set aside under paragraph
(1) and this paragraph equals the total amount of Excess Contributions, or

                                        (B) the Salary Redirection Savings of
the two Highly Compensated Employees have been reduced to the point at which
they equal the Salary Redirection Savings of the Highly Compensated Employee
with the third greatest dollar amount of Salary Redirection Savings.

                                    (3) Next, Excess Contributions shall be set
aside for the three Highly Compensated Employees who then have the greatest
dollar amount of Salary Redirection Savings. An equal amount shall be set aside
for each of these Highly Compensated Employees, until:

                                        (A) the total set aside under paragraphs
(1) and (2) and this paragraph equals the total amount of Excess Contributions,
or

                                        (B) the Salary Redirection Savings of
the three Highly Compensated Employees have been reduced to the point at which
they equal the Salary Redirection Savings of the Highly Compensated Employee
with the fourth greatest dollar amount of Salary Redirection Savings.

                                     -137-

<PAGE>

                                    (4) This leveling process shall be repeated
until the Committee has apportioned the total amount of Excess Contributions for
the Plan Year.

                           (d) The Administrative Committee shall direct the
Trustee to distribute to each Highly Compensated Employee the amount of Excess
Contributions set aside for him under Subsection (c), plus any income
attributable thereto. Such amounts shall be distributed no later than the last
day of the Plan Year following the Plan Year in which the Excess Contributions
were contributed to the Plan.

                           (e) Any Matching Contributions which are attributable
to Excess Contributions and which are not Excess Aggregate Contributions shall
be forfeited and shall be used in the future as Matching Contributions.

                           (f) The Trustee shall determine the income
attributable to Excess Contributions using any reasonable method that does not
violate section 401(a)(4) of the Code and is also used for allocating income to
Participants' Accounts. Such method shall be applied consistently to all Excess
Contributions for a given Plan Year. Income shall be allocated to Excess
Contributions solely for the Plan Year in which the Excess Contributions are
contributed to the Plan and not for any period thereafter.

                                     -138-

<PAGE>

                  A.8      Actual Contribution Percentage Test.

                           (a) The Committee shall cause the ACP Test to be run
as of the last day of each Plan Year and may also cause the ACP Test to be run
at any time during a given Plan Year. As provided in Section A.1, the "current
year testing method" shall be used for the ACP Test through 1999. For Plan Years
after 1999, the "prior year testing method" shall be used for the ACP Test.

                           (b) The Plan satisfies the ACP Test at a given point
in time if it satisfies one of the two tests described below.

                                    (1) The Plan satisfies the ACP Test if the
ACP of the HCEs is not more than the ACP of the NHCEs multiplied by 1.25.

                                    (2) The Plan satisfies the ACP Test if:

                                        (A) the ACP of the HCEs does not exceed
the ACP of the NHCEs by more than two percentage points, and

                                        (B) the ACP of the HCEs is not more than
the ACP of the NHCEs multiplied by 2.0.

                                     -139-

<PAGE>

                           (c)      (1) As provided in Section A.2(c), the
Actual Contribution Percentage for a specific group of Eligible Employees is the
average (expressed as a percentage rounded to the nearer one-hundredth of one
percent) of the Individual Contribution Percentages of the Eligible Employees in
the group. In determining the Actual Contribution Percentage, the Committee may
treat this Plan and any other plan maintained by the Company or an Affiliated
Company to which matching contributions and/or voluntary employee contributions
are made as a single plan.

                                    (2) If this Plan is treated, for purposes of
section 401(a)(4) or 410(b) of the Code, as one plan with any other plan(s)
maintained by the Company or an Affiliated Company to which matching
contributions and/or voluntary employee contributions are made, this Plan and
such other plan(s) shall be treated as one plan in determining the Actual
Contribution Percentage.

                                    (3) Plans that are aggregated under this
Subsection must all have the same plan year and must all use the "current year
testing method" (as defined in IRS Notice 98-1) through 1999 and the "prior year
testing method" (as defined in IRS Notice 98-1) thereafter.

                                     -140-

<PAGE>

                           (d) Subsection (c) notwithstanding, plans (or
portions of plans) that must be disaggregated pursuant to Section A.13 shall in
no event be aggregated.

                  A.9      Individual Contribution Percentage.

                           (a) For any Plan Year, an Eligible Employee's
Individual Contribution Percentage is the ratio of:

                                    (1) the Matching Contributions contributed
on behalf of the Eligible Employee for the Plan Year, plus the Eligible
Employee's Voluntary Savings for the Plan Year, to

                                    (2) the Eligible Employee's pay for the Plan
Year; provided, however, that any pay attributable to a period before the
Eligible Employee becomes a Participant shall not be taken into account.

                           (b)      (1) For the purpose of determining the
denominator of the Individual Contribution Percentage, an Eligible Employee's
"pay" shall be his Limitation Compensation. An Eligible Employee's pay for any
Plan Year (and, thus, the denominator of the Individual Contribution Percentage)
shall not be more than the amount set by section 401(a)(17) of the Code, as
adjusted for cost-of-living increases.

                                    (2) All or any portion of an Eligible
Employee's Salary Redirection Savings for a given Plan Year may be included in
the numerator of the Individual Contribution Percentage, provided that such
contributions satisfy the requirements of Treas. Reg. ss.1.401(m)-1(b)(5). If
Salary Redirection Savings are to be added to the numerator of the Individual
Contribution Percentage, the dollar amount to be added shall be determined by
the Committee. Salary Redirection Savings added to the numerator of the
Individual Contribution Percentage must be subtracted from the numerator of the
Individual Deferral Percentage.

                                     -141-

<PAGE>

                                    (3) All or any portion of the Qualified
Matching Contributions and/or Qualified Nonelective Contributions made on behalf
of a non-highly compensated Eligible Employee for a given Plan Year may be
included in the numerator of the Individual Contribution Percentage, provided
that such contributions satisfy the requirements of Treas. Reg.
ss.1.401(m)-1(b)(5). The dollar amount of Qualified Matching Contributions
and/or Qualified Nonelective Contributions to be added to the numerator of the
Individual Contribution Percentage shall be determined by the Committee.
Qualified Matching Contributions and/or Qualified Nonelective Contributions
included in the numerator of the Individual Contribution Percentage shall in no
event be included in the numerator of the Individual Deferral Percentage.

                                    (4) If Individual Contribution Percentages
of non-highly compensated Eligible Employees are increased as a result of the
inclusion of Qualified Matching Contributions and/or Qualified Nonelective
Contributions, the ACP of the NHCEs shall also be increased.

                                     -142-

<PAGE>

                           (c)      (1) For a given Plan Year, the highest
permitted Individual Contribution Percentage is the highest percentage of pay
(as defined in Subsection (b)(1))] that could be contributed as Voluntary
Savings and Matching Contributions by or on behalf of any Highly Compensated
Employee without causing the Plan to fail the ACP Test. This percentage shall be
determined in accordance with Treas. Reg. ss.1.401(m)-1(e)(2).

                                    (2) The highest permitted Individual
Contribution Percentage applies only to Highly Compensated Employees; it does
not apply to non-highly compensated Eligible Employees and shall not affect the
contributions of non-highly compensated Eligible Employees in any way.

                           (d) If in any Plan Year a Highly Compensated Employee
participates in this Plan and in any other plan(s) maintained by the Company or
an Affiliated Company to which matching contributions (as defined in section
401(m)(4)(A) of the Code) and/or voluntary employee contributions are made,
then, in computing the Individual Contribution Percentage for such Highly
Compensated Employee, all matching contributions and voluntary employee
contributions shall be included in the numerator. If a Highly Compensated
Employee participates in two or more such plans that have different plan years,
all plans with plan years ending with or within the same calendar year shall be
treated as a single plan.

                                     -143-

<PAGE>

                           (e) Subsection (d) notwithstanding, plans (or
portions of plans) that must be disaggregated pursuant to Section A.13 shall in
no event be aggregated.

                  A.10     ACP Test -- Corrective Action.

                           (a) If at any time before the end of a Plan Year the
Committee determines that the Plan does not satisfy the ACP Test, it may reduce
the contribution rates (and, thus, the Individual Contribution Percentages) of
one or more Participants who are Highly Compensated Employees so that the ACP
Test is satisfied. The Committee shall prescribe such reductions in a uniform
and nondiscriminatory manner.

                           (b)      (1) If the Committee determines that the
Plan does not satisfy the ACP Test, it may recommend that the Company make
Qualified Matching Contributions and/or Qualified Nonelective Contributions on
behalf of non-highly compensated Eligible Employees. Any such contributions that
the Company makes shall be, for Plan Years through 1999, allocated in accordance
with Section 7.6 and shall be used to increase the ACP of the NHCEs. For Plan
Years after 1999 any such contributions the Company makes shall be remitted to
the Trustee for deposit in the Fund by the last day of the Plan Year for which
the Plan does not satisfy the ACP Test; shall be allocated as of the last day of
the preceding Plan Year in accordance with Section 7.6; and shall be used to
increase the ACP of the NHCEs.

                                     -144-

<PAGE>

                                    (2) As provided in Section A.9(b)(3),
Qualified Matching Contributions and/or Qualified Nonelective Contributions
included in the numerator of the Individual Contribution Percentage to help the
Plan satisfy the ACP Test shall in no event be included in the numerator of the
Individual Deferral Percentage.

                           (c) If, in spite of any corrective action that has
been taken, the Plan does not satisfy the ACP Test as of the last day of a given
Plan Year, the Committee and the Trustee shall dispose of Excess Aggregate
Contributions as described in Section A.11.

                  A.11     Disposition of Excess Aggregate Contributions.

                           (a) If the Plan does not satisfy the ACP Test as of
the last day of a given Plan Year, the Committee shall determine the total
amount of Excess Aggregate Contributions for that Plan Year, which shall be the
sum of the Excess Aggregate Contributions of all Highly Compensated Employees.
The total amount of Excess Aggregate Contributions shall be apportioned among
the Highly Compensated Employees in accordance with Subsection (c) and shall be
disposed of in accordance with Subsection (d).

                                     -145-

<PAGE>

                           (b) The total amount of Excess Aggregate
Contributions shall be determined after determining both the amount of Excess
Deferrals and the total amount of Excess Contributions.

                           (c) Using the following leveling process, the
Committee shall apportion the total amount of Excess Aggregate Contributions
among the Highly Compensated Employees.

                                    (1) First, Excess Aggregate Contributions
shall be set aside for the Highly Compensated Employee with the greatest dollar
amount of Matching Contributions and Voluntary Savings. The amount set aside for
this Highly Compensated Employee shall be an amount which either:

                                        (A) equals the total amount of Excess
Aggregate Contributions, or

                                        (B) reduces the Highly Compensated
Employee's Matching Contributions and Voluntary Savings to the point at which
they equal the Matching Contributions and Voluntary Savings of the Highly
Compensated Employee with the second greatest dollar amount of Matching
Contributions and Voluntary Savings.

                                     -146-

<PAGE>

                                    (2) Next, Excess Aggregate Contributions
shall be set aside for the two Highly Compensated Employees who then have the
greatest dollar amount of Matching Contributions and Voluntary Savings. An equal
amount shall be set aside for each of these Highly Compensated Employees, until:

                                        (A) the total set aside under paragraph
(1) and this paragraph equals the total amount of Excess Aggregate
Contributions, or

                                        (B) the Matching Contributions and
Voluntary Savings of the two Highly Compensated Employees have been reduced to
the point at which they equal the Matching Contributions and Voluntary Savings
of the Highly Compensated Employee with the third greatest dollar amount of
Matching Contributions and Voluntary Savings.

                                    (3) Next, Excess Aggregate Contributions
shall be set aside for the three Highly Compensated Employees who then have the
greatest dollar amount of Matching Contributions and Voluntary Savings. An equal
amount shall be set aside for each of these Highly Compensated Employees, until:

                                     -147-

<PAGE>

                                        (A) the total set aside under paragraphs
(1) and (2) and this paragraph equals the total amount of Excess Aggregate
Contributions, or

                                        (B) the Matching Contributions and
Voluntary Savings of the three Highly Compensated Employees have been reduced to
the point at which they equal the Matching Contributions and Voluntary Savings
of the Highly Compensated Employee with the fourth greatest dollar amount of
Matching Contributions and Voluntary Savings.

                                    (4) This leveling process shall be repeated
until the Committee has apportioned the total amount of Excess Aggregate
Contributions for the Plan Year.

                           (d) The Excess Aggregate Contributions set aside for
a given Highly Compensated Employee, plus any income attributable thereto, shall
be distributed to the Highly Compensated Employee no later than the last day of
the Plan Year following the Plan Year in which the Excess Aggregate
Contributions were contributed to the Plan.

                           (e) The Trustee shall determine the income
attributable to Excess Aggregate Contributions using any reasonable method that
does not violate section 401(a)(4) of the Code and is also used for allocating
income to Participants' Accounts. Such method shall be applied consistently to
all Excess Aggregate Contributions for a given Plan Year. Income shall be
allocated to Excess Aggregate Contributions solely for the Plan Year in which
the Excess Aggregate Contributions are contributed to the Plan and not for any
period thereafter.

                                     -148-

<PAGE>

                  A.12     Multiple Use Test.

                           (a)      (1) In addition to complying with the
limitations imposed by other provisions of this Plan, the Plan must satisfy the
"multiple use" test described in this Section. The Plan satisfies the multiple
use test if the sum of the ADP of the HCEs and the ACP of the HCEs does not
exceed the aggregate limit described in Subsection (b).

                                    (2) For a given Plan Year, the Plan
automatically satisfies the multiple use test unless the Plan both (A) satisfies
the ADP Test by means of the test described in Section A.4(b)(2), and (B)
satisfies the ACP Test by means of the test described in Section A.8(b)(2).

                           (b) The aggregate limit for a given Plan Year is the
greater of the amounts described in paragraphs (1) and (2) below:

                                    (1) This amount is the sum of (A) and (B):

                                        (A) one hundred twenty-five percent
(125%) of the greater of (i) the ADP of the NHCEs or (ii) the ACP of the NHCEs;

         plus

                                     -149-

<PAGE>

                                        (B) two percentage points plus the
lesser of (i) the ADP of the NHCEs or (ii) the ACP of the NHCEs. In no event,
however, shall the amount determined under this clause (B) be more than twice
the lesser of the ADP of the NHCEs or the ACP of the NHCEs.

                                    (2) This amount is the sum of (A) and (B):

                                        (A) one hundred twenty-five percent
(125%) of the lesser of (i) the ADP of the NHCEs or (ii) the ACP of the NHCEs;

         plus

                                        (B) two percentage points plus the
greater of (i) the ADP of the NHCEs or (ii) the ACP of the NHCEs. In no event,
however, shall the amount determined under this clause (B) be more than twice
the greater of the ADP of the NHCEs or the ACP of the NHCEs.

                           (c) For purposes of the multiple use test, the ADP of
the HCEs and the ACP of the HCEs shall be determined after any corrective
distributions of Excess Deferrals, Excess Contributions, and Excess Aggregate
Contributions have been made. The ADP of the HCEs shall be deemed to equal the
highest permitted Individual Deferral Percentage for the Plan Year, and the ACP
of the HCEs shall be deemed to equal the highest permitted Individual
Contribution Percentage for the Plan Year.

                                     -150-

<PAGE>

                           (d) If the Plan does not satisfy the multiple use
test as of the last day of a given Plan Year, the ACP of the HCEs shall be
reduced by the process described in Section A.11.

                  A.13     Disaggregation.

                           (a) Sections A.4, A.5, A.6, and A.7 (ADP Test),
Sections A.8, A.9, A.10, and A.11 (ACP Test), and Section A.12 (multiple use
test) shall be applied separately to the group of Eligible Employees who are
covered by collective bargaining agreements and the group of Eligible Employees
who are not covered by any collective bargaining agreement.

                           (b) If for any Plan Year the Plan is disaggregated
into component plans for purposes of coverage testing under section 410(b) of
the Code, it shall be disaggregated in the same manner for purposes of Sections
A.4, A.5, A.6, and A.7 (ADP Test), Sections A.8, A.9, A.10, and A.11 (ACP Test),
and Section A.12 (multiple use test).

                                     -151-

<PAGE>

                           (c) For any Plan Year, the Plan may be disaggregated
into component plans as described in Treas. Reg. ss.1.410(b)-6(b)(3). If the
Plan is permissively disaggregated in this fashion, each component plan must
separately pass the ADP Test, the ACP Test, and the multiple use test and must
separately satisfy the coverage requirement of section 410(b) of the Code.

                                     -152-

<PAGE>

                                   SCHEDULE B

                  DETERMINATION OF HIGHLY COMPENSATED EMPLOYEES

                  B.1 Introduction. Highly Compensated Employees for a given
Plan Year shall be the employees who are described below. The determination as
to whether an employee is a Highly Compensated Employee shall be made in
accordance with section 414(q) of the Code and the regulations thereunder. The
provisions of this Schedule shall be effective January 1, 1997, and, for the
purpose of determining which employees are Highly Compensated Employees for
1997, such provisions shall be treated as if they were in effect during 1996.

                  B.2 Determination. "Highly Compensated Employee" shall mean
any employee of the Company or an Affiliated Company who:

                      (a) was at any time during either the Determination Year
or the Look-Back Year a five-percent (5%) owner (as defined in section
416(i)(1)(B) of the Code); or

                      (b) (1) was in the Top-Paid Group for the Look-Back Year,
if the Board of Directors has elected to have this condition apply, and (2) had
Income during the Look-Back Year which is in excess of $80,000 (as adjusted for
cost-of-living increases).

                                     -153-

<PAGE>

                  Employees who are non-resident aliens who receive no
U.S.-source income from the Company or any Affiliated Company shall not be
treated as employees for the purpose of this Section.

                  B.3 Definitions. The following definitions shall supplement
those set forth in Article II of the Plan:

                      (a) "Determination Year" shall mean the Plan Year for
which the determination of Highly Compensated Employees is being made.

                      (b) "Look-Back Year" shall mean the 12 months immediately
preceding the first day of the Determination Year.

                      (c) "Top-Paid Group" shall mean the group consisting of
the top twenty percent (20%) of employees of the Company and all Affiliated
Companies for the Look-Back Year, when employees are ranked on the basis of
their Income for the Look-Back Year. Solely for purposes of determining the
number of employees to be included in such group, the following employees shall
not be counted:

                          (1) employees who have not completed six months of
employment by the end of the Look-Back Year;

                          (2) employees who normally work fewer than 17 1/2
hours per week;

                                     -154-

<PAGE>

                          (3) employees who normally work not more than six
months during any year;

                          (4) employees who have not attained age 21 by the end
of the Look-Back Year.

                          (5) employees who are non-resident aliens who receive
no U.S. source of income from the Company or any Subsidiary.

                  Employees covered by a collective bargaining agreement shall
be counted in determining the number of employees to be included in the Top-Paid
Group unless ninety percent (90%) or more of the employees of the Company and
all Affiliated Companies are covered by collective bargaining agreements and
this Plan covers only employees who are not covered by collective bargaining
agreements. In such a case, employees covered by a collective bargaining
agreement shall not be counted in determining the number of employees to be
included in the Top-Paid Group.

                                     -155-

<PAGE>

                  B.4 Highly Compensated Former Employees. For a given
Determination Year, an individual is a Highly Compensated Former Employee if he
separated from service before the first day of the Determination Year and if he
was a Highly Compensated Employee (as determined under Section B.2) during
either (a) the year he separated from service or (b) any Determination Year
ending on or after his 55th birthday.

                                     -156-

<PAGE>

                                   SCHEDULE C

                               DISTRIBUTION DATES

                  C.1      Mandatory Benefit Commencement Date.

                           (a) Distribution of a Participant's benefits under
this Plan shall commence by his Mandatory Benefit Commencement Date.

                           (b) Effective January 1, 1997, unless Subsection (c)
applies, a Participant's Mandatory Benefit Commencement Date shall be the April
1st that follows the later of:

                               (1) the end of the calendar year in which the
Participant attains age 70 1/2, or

                               (2) the end of the calendar year in which the
Participant's employment with the Company and all Affiliated Companies
terminates.

                           (c) Subsection (b) shall not apply in the case of a
Participant who is a five-percent (5%) owner (as defined in section 416(i)(1)(B)
of the Code) during the Plan Year in which he attains age 70 1/2. Such a
Participant's Mandatory Benefit Commencement Date shall be the April 1st that
follows the end of the calendar year in which he attains age 70 1/2, even if he
is still working on that date.

                                     -157-

<PAGE>

                           (d) If a Participant is affected by the distribution
rule for five-percent (5%) owners set forth in Subsection (c) and is still
employed by the Company or an Affiliated Company when he reaches his Mandatory
Benefit Commencement Date, he shall receive benefits in accordance with Section
C.2. Once distribution to a five-percent (5%) owner has commenced, distribution
shall continue even if the Participant ceases to be a five-percent (5%) owner.

                           (e) A Participant who is not a five-percent (5%)
owner and who attains age 70 1/2in 1997, 1998, or 1999 has a special benefit
commencement option. Such a Participant may elect to begin receiving benefit
payments while he is still employed by the Company or an Affiliated Company. A
Participant who makes this election shall receive benefits in accordance with
Section C.3. An election under this Subsection shall be made in the manner
prescribed by the Committee.

                           (f) If distribution to a Participant who is not a
five-percent (5%) owner commenced before the Participant terminated his
employment with the Company and all Affiliated Companies, in accordance with the
provisions of the Plan and applicable law as in effect before January 1, 1997,
distribution shall not be affected by the provisions of Subsection (a), but
shall continue uninterrupted.

                                     -158-

<PAGE>

                  C.2      Benefits Payable to Five-Percent (5%)Owners.

                           (a) If a Participant is affected by the distribution
rule for five-percent (5%) owners (set forth in Section C.1(c)) and is still
employed by the Company or an Affiliated Company when he reaches his Mandatory
Benefit Commencement Date, he shall begin to receive benefits on his Mandatory
Benefit Commencement Date. Payments from his Accounts shall be made in
accordance with the minimum distribution rules of section 401(a)(9) of the Code
unless the Participant makes the election described in Subsection (b).

                           (b)      (1) A Participant whose benefits are to
commence while he is still employed may elect to receive the total balance in
his Accounts in a single-sum payment on his Mandatory Benefit Commencement Date.
Such an election shall be made in the manner prescribed by the Committee and may
be made at any time until the date that is 14 days before the Participant's
Mandatory Benefit Commencement Date.

                                    (2) A Participant who has received a total
distribution under paragraph (1) shall thereafter receive the total balance in
his Accounts at the end of each calendar year (including the calendar year that
contains his Mandatory Benefit Commencement Date) until he retires.

                                     -159-

<PAGE>

                  C.3      Special Benefit Commencement Option.

                           (a) A Participant who is not a five-percent (5%)
owner but who has made the election described in Section C.1(e) shall begin to
receive benefits as soon as administratively practicable after he makes his
election. The Participant shall be treated as if he were a five-percent (5%)
owner, and payments from his Accounts shall be made in accordance with the
minimum distribution rules of section 401(a)(9) of the Code unless he makes the
election described in Subsection (b).

                           (b)      (1) A Participant whose benefits are to
commence while he is still employed may elect to receive the total balance in
his Accounts in a single-sum payment on his benefit commencement date. Such an
election shall be made in the manner prescribed by the Committee and may be made
at any time until the date that is 14 days before the Participant's benefit
commencement date.

                                    (2) A Participant who has received a total
distribution under paragraph (1) shall thereafter receive the total balance in
his Accounts at the end of each calendar year (including the calendar year that
contains his benefit commencement date) until he retires.

                  C.4 Distribution Upon Retirement. Benefit payments under
Section C.2 or C.3 shall continue for so long as the Participant continues his
employment with the Company or an Affiliated Company. When the Participant
retires, the balance remaining in his Accounts shall be distributed to him in a
single-sum payment.

                                     -160-

<PAGE>

                  C.5      Valuation of Accounts.

                           (a) For the purpose of making a minimum distribution
under section 401(a)(9) of the Code to a Participant who is still employed, the
Participant's Accounts shall be valued as follows:

                                    (1) The amount to be distributed on the
Participant's benefit commencement date shall be based on the value of his
Accounts as of the last Valuation Date in the second calendar year preceding the
calendar year that contains his benefit commencement date.

                                    (2) The amount to be distributed by the end
of the calendar year that contains the Participant's benefit commencement date
shall be based on (A) the value of the Participant's Accounts as of the last
Valuation Date in the calendar year preceding the calendar year that contains
the benefit commencement date, minus (B) the amount distributed on the benefit
commencement date.

                                    (3) The amount to be distributed by the end
of each calendar year after the calendar year that contains the Participant's
benefit commencement date shall be based on the value of the Participant's
Accounts as of the last Valuation Date in the preceding calendar year, minus the
distribution for the preceding calendar year.

                                     -161-

<PAGE>

                           (b) The value of the Participant's Accounts
determined under Subsection (a)(1), (2), or (3) shall be increased by any
additional contributions and forfeitures that are allocated to the Accounts
after the relevant Valuation Date, but as of dates that fall within the calendar
year containing the relevant Valuation Date.

                  C.6 Construction. This Schedule shall be construed to comply
with section 401(a)(9) of the Code and the regulations thereunder, and shall be
effective January 1, 1997.

                                     -162-

<PAGE>

                                   SCHEDULE D

                                USERRA PROVISIONS

                  D.1      USERRA Coverage.

                           (a) Certain provisions of this Plan apply only to an
individual who has been absent from work due to military service (either because
he was inducted or because he volunteered for military service) and who is
covered under USERRA. An individual is covered under USERRA if:

                                    (1) he was employed by the Company
immediately before he entered military service and he gave the Company advance
notice of his military service, unless advance notice was prevented by military
necessity or it was impossible or unreasonable, under the circumstances, to give
advance notice;

                                    (2) he has been absent from work due to
military service for five years or less;

                                    (3) he has received an honorable discharge
or otherwise satisfactorily completed his military service;

                                    (4) he reports back to work or applies for
reemployment in a timely fashion, as specified in Subsection (b); and

                                    (5) his reemployment is initiated on or
after December 12, 1994.

                                     -163-

<PAGE>

                           (b) An employee returning from military service has
reported back to work or applied for reemployment in a timely fashion and meets
the requirement of Subsection (a)(4) if:

                                    (1) his period of military service was less
than 31 days (or he was absent due to a fitness exam) and he reports back to
work not later than the first regularly scheduled work period after he has had
an eight-hour break and time for travel back home; or

                                    (2) his period of military service was 31
days to 180 days long and he applies for reemployment not more than 14 days
after he completes military service; or

                                    (3) his period of military service was more
than 180 days long and he applies for reemployment within 90 days after he
completes military service; or

                                    (4) he does not meet the time limit
applicable to him under paragraph (1), (2), or (3) but he reports back to work
or applies for reemployment within a period of time that is "reasonable" within
the meaning of section 4312(e) of USERRA.

                  D.2 Vesting Credit. If an employee has been absent from work
due to military service and he meets the requirements for coverage under USERRA,
he shall be credited with Service toward vesting for his period of military
service.

                                     -164-

<PAGE>

                  D.3      Participant's Make-Up Contributions.

                           (a)      (1) If a Participant has been absent from
work due to military service and he meets the requirements for coverage under
USERRA, he shall have the right to make up the Salary Redirection Contributions
and Voluntary Savings he could have contributed if he had been actively employed
by the Company during his period of military service.

                                    (2) A Participant's make-up Salary
Redirection Contributions may be for the same percentage as provided under the
terms of the Plan of his Projected Pay (as defined in Section D.5).

                                    (3) A Participant's make-up Voluntary
Savings may be for the same percentage as provided under the terms of the Plan
of his Projected Pay.

                           (b) Make-up contributions shall be made pursuant to
an election by the Participant. The election, which shall be made in the manner
prescribed by the Committee, shall specify:

                                    (1) the percentage of his Projected Pay that
the Participant is contributing as make-up Salary Redirection Savings, and

                                     -165-

<PAGE>

                                    (2) the percentage of his Projected Pay that
the Participant is contributing as make-up Voluntary Savings, and

                                    (3) the year to which such make-up
contributions shall relate.

                           (c) Make-up Salary Redirection Contributions and
Voluntary Savings may be deducted from a Participant's current Compensation or
may be paid by the Participant to the Trustee in cash, or both, as the
Participant elects. Make-up contributions must be made within a period that is
three times the length of the Participant's period of military service (not to
exceed five years); such period shall begin on the Participant's reemployment
date.

                           (d)      (1) A Participant may at any time:

                                        (A) change the percentage he is
contributing as make-up Salary Redirection Contributions and/or make-up
Voluntary Savings to any other percentage permitted under Subsection (a), or

                                        (B) stop his make-up contributions.

                                    (2) If make-up contributions are being
deducted from the Participant's current Compensation, any change or cancellation
shall become effective as soon as administratively practicable following the
date on which the Committee receives notice of the change or cancellation.

                                     -166-

<PAGE>

                           (e) Make-up Salary Redirection Savings allocated to a
Participant's Accounts shall in no event exceed the dollar limit on elective
deferrals under section 402(g) of the Code for the prior taxable year of the
Participant to which they relate. If the dollar limit is exceeded with respect
to any prior taxable year, amounts that would otherwise be paid into the Fund as
make-up Salary Redirection Savings shall instead be paid to the Participant in
cash.

                           (f)      (1) Make-up Salary Redirection Savings shall
not be included in any ADP Test unless and until federal law and/or regulations
promulgated by the Internal Revenue Service require their inclusion.

                                    (2) Make-up Voluntary Savings shall not be
included in any ACP Test unless and until federal law and/or regulations
promulgated by the Internal Revenue Service require their inclusion.

                                    (3) As provided in Section 2.5, make-up
Salary Redirection Contributions and Voluntary Savings shall be included in
determining the amount of a Participant's Annual Additions for the Limitation
Year to which they relate (not the Limitation Year in which they are actually
contributed).

                                     -167-

<PAGE>

                  D.4      Make-Up Matching Contributions.

                           (a) As provided in Section D.3, a Participant who has
been absent from work due to military service and who meets the requirements for
coverage under USERRA shall have the right to make up the Salary Redirection
Savings he might have contributed during his period of military service. If the
Participant does make up Salary Redirection Savings, the Company shall
contribute make-up Matching Contributions.

                           (b) A Participant's make-up Salary Redirection
Savings shall be matched at the same rate as the Salary Redirection
Contributions of other Participants for the prior Plan Year to which the make-up
Salary Redirection Contributions relate.

                           (c)      (1) Make-up Matching Contributions shall not
be included in any ACP Test unless and until federal law and/or regulations
promulgated by the Internal Revenue Service require their inclusion.

                                    (2) As provided in Section 2.5, make-up
Matching Contributions shall be included in determining the amount of a
Participant's Annual Additions for the Limitation Year to which they relate (not
the Limitation Year in which they are actually contributed).

                                     -168-

<PAGE>

                  D.5      Projected Pay.

                           (a) For any Participant who has been absent from work
due to military service and who meets the requirements for coverage under
USERRA, "Projected Pay" shall mean the annual rate of pay the Participant would
have received for a given Plan Year of military service if he had been actively
employed by the Company during that Plan Year. If this rate of pay is not
reasonably certain, a Participant's Projected Pay for each Plan Year of military
service shall be the annualized average of the monthly compensation paid to him
by the Company for the 12 months immediately preceding the beginning of his
period of military service (or the annualized average of the monthly
compensation paid to him by the Company for his entire period of employment, if
he was employed for fewer than 12 months before his military service began).

                           (b) A Participant's annual Projected Pay shall not be
more than the amount in effect under section 401(a)(17) of the Code for the Plan
Year to which the Projected Pay relates.

                                     -169-

<PAGE>

                  D.7 Forfeitures. No forfeitures shall be allocated to a
Participant's Account for any Plan Year during which the Participant is absent
from work due to military service, whether the Participant meets the
requirements for coverage under USERRA or not.

                                     -170-

<PAGE>

                                   SCHEDULE E

                           Participating Subsidiaries

                                                     Participation
Subsidiary                                         Commencement Date
----------                                         -----------------

Cannon-Muskegon Corporation                          January 1, 1989

The Arnold Engineering Co.

         Non-union                                   April 1, 1987

         Marengo union employees                     August 1, 1992

         Sevierville union employees                 August 1, 1996

Flexmag Industries, Inc.                             June 14, 1996

Magnetic Technologies Corporation                    January 1, 1998

Lake Erie Design Co., Inc.                           April 1, 1998

Howell Penncraft, Inc.                               July 1, 1998

Greer Stop Nut, Inc.                                 October 1, 1997

Non-Ferrous Bolt & Mfg. Co.                          April 1, 1999

                                     -171-

<PAGE>

                                   SCHEDULE F

                               Special Provisions

                  F.1 Former Magnetic Technologies Corporation Profit Sharing
Plan and Trust Participants -- Optional Form of Benefit. In addition to the form
of payment options contained in Section 8.7(a), an employee who formerly
participated in the Magnetic Technologies Corporation Profit Sharing Plan and
Trust prior to becoming a Participant in this Plan shall be eligible to receive
a distribution of that portion of his Participant Account which was transferred
into this Plan from the Magnetic Technologies Corporation Profit Sharing Plan
and Trust in installment payments over a period certain in monthly, quarterly,
semi-annual, or annual cash installments. The period over which payment is to be
made shall not extend beyond the life expectancy of the Participant and his
designated beneficiary.

                  F.2      Former Lake Erie Design Co., Inc. Retirement Savings
                           Plan Participants -- Normal Form of Benefit.

                           (a)      (1) The "normal form" of benefit for an
unmarried Participant with respect to that portion of his Participant Account
which was transferred into this Plan shall be a single life annuity, with equal
monthly installments payable to the Participant for his lifetime. The single
life annuity shall be the actuarial equivalent of the vested portion of the
balance in the Participant's Accounts.

                                     -172-

<PAGE>

                                    (2) The "normal form" of benefit for a
married Participant with respect to that portion of his Participant Account
which was transferred into this Plan shall be a joint and 50% surviving spouse
annuity (i.e., an annuity for the life of the Participant with monthly
installments payable after the death of the Participant to such Participant's
spouse, if then living, for the life of the spouse, in an amount equal to fifty
percent (50%) of the monthly benefit paid to the Participant during his
lifetime). The joint and 50% surviving spouse annuity shall be the actuarial
equivalent of a single life annuity for the life of the Participant and shall
also be the actuarial equivalent of the vested portion of the balance in the
Participant's Accounts.

                                    (3) A Participant's benefit shall be paid in
his normal form of benefit unless the Participant elects to receive one of the
other forms of benefit available under the Plan. Any such election shall be made
in accordance with the provisions of Subsections (e) through (h).

                           (b)      (1) Death benefits shall be paid to the
designated beneficiary of an unmarried Participant in the form of a single-sum
payment that is equal to the vested portion of the balance in the deceased
Participant's Accounts. Death benefits payable in a single sum shall be
distributed to the beneficiary named by the Participant no later than one year
after the Participant's death.

                                     -173-

<PAGE>

                                    (2) Death benefits shall be paid to the
surviving spouse of a married Participant in the form of an annuity for the life
of the spouse that is the actuarial equivalent of the vested portion of the
balance in the deceased Participant's Accounts. Such benefit shall commence (A)
on the first day of any month on which the Participant could have elected to
receive immediate retirement benefits, but not later than the date that would
have been the Participant's Normal Retirement Date, as elected in writing by the
surviving spouse; or (B) if the Participant dies on or after his Normal
Retirement Date, on the first day of the month following the month in which he
dies.

                           (c)      (1) Subsection (c)(2) notwithstanding, a
married Participant may elect, during the period beginning on the first day of
the Plan Year in which he attains age 35 and ending on the date of his death, to
have death benefits be payable in a single sum to his spouse or to any other
beneficiary, if the Participant's spouse consents in writing in the form and
manner described in Subsection (l).

                                    (2) A married Participant may revoke an
election under this Subsection at any time prior to his death, and may make and
revoke such an election any number of times.

                                    (3) Death benefits payable in a single sum
shall be distributed to the beneficiary named by the Participant no later than
one year after the Participant's death.

                                     -174-

<PAGE>

                                    (4) The Administrative Committee shall
provide the Participant with written information relating to the terms and
conditions of the qualified pre-retirement surviving spouse annuity ("QPSA");
the rules relating to the waiver of the QPSA and the revocation of any waiver;
and the rights of the Participant's spouse with respect to the QPSA. This
information shall be provided:

                                        (A) once during the Plan Year in which
the Participant attains age 32, 33, or 34, or, if later, within a reasonable
period of time after the Participant first begins to participate in the Plan;

                                        (B) in the case of a Participant who
terminates his employment before attaining age 35 and before receiving such
written information, within a reasonable period of time after the Participant's
termination of employment; and

                                        (C) in the case of a Participant to whom
the QPSA has not previously applied, within a reasonable period of time after
such benefit first applies to the Participant.

                           (d)      (1) Annuities payable under this Section
shall be purchased from an insurance company selected by the Administrative
Committee. The terms of any annuity contract purchased and distributed by the
Plan shall comply with the requirements of the Plan.

                                     -175-

<PAGE>

                                    (2) For the purposes of this Section,
"actuarial equivalent" shall mean of equal actuarial value, based upon the
factors and assumptions utilized by the insurance company from which the
[Administrative] Committee will purchase annuity contracts.

                           (e) Not more than 90 days nor less than 30 days
before his benefits are to commence, a Participant shall receive from the
Administrative Committee a written explanation of:

                                    (1) the terms and conditions of his normal
form of benefit;

                                    (2) the Participant's right to waive the
normal form of benefit and the effect of such a waiver;

                                    (3) the rights of the Participant's spouse
with respect to any waiver; and

                                    (4) the Participant's right to revoke an
election to receive an optional form of benefit and the effect of such a
revocation.

                           (f) The date on which the Participant receives the
written explanation described in Subsection (e) marks the beginning of the
Participant's benefit election period. The benefit election period shall run for
at least 30 days but not more than 90 days, except as otherwise provided in
Subsection (j).

                           (g) The Participant may elect to receive an optional
form of benefit at any time during his benefit election period by following the
election procedure prescribed by the Administrative Committee.

                                     -176-

<PAGE>

                           (h) If the Participant has a spouse, his election of
an optional form of benefit shall be given effect only if his spouse consents to
the election in the form and manner described in Subsection (l).

                           (i) A Participant shall have the right to revoke his
election of an optional form of benefit. A revocation may be made at any time
(and any number of times) during the Participant's benefit election period and
may be made without the consent of the Participant's spouse.

                           (j) In general, the benefit election period must run
for at least 30 days before any distribution may be made. However, distribution
may be made or may commence at any time that is more than seven days after the
Participant has received the written explanation described in Subsection (e), if
the Participant elects (with spousal consent, if applicable) to waive his right
to a 30-day benefit election period.

                           (k) The written explanation described in Subsection
(e) may be provided to the Participant after his "annuity starting date" (as
defined in Treas. Reg.ss.1.401(a)-20, Q&A-10). In such a case, the rules of
Subsection (j) shall apply, and the Participant's actual benefit commencement
date shall be after his annuity starting date.

                                     -177-

<PAGE>

                           (l) A married Participant may elect to receive an
optional form of benefit only if:

                                        (A) his spouse consents in writing not
to receive the normal form of benefit and, if applicable, consents in writing to
the specific beneficiary designated by the Participant pursuant to his election;

                                        (B) the spouse's consent acknowledges
its own effect; and

                                        (C) the spouse's consent is witnessed by
a Plan representative or a notary public.

                           (m) A married Participant may elect to waive his
right to a 30-day benefit election period only if his spouse consents in the
form and manner described in Subsection (l).

                           (n) A Participant is not required to comply with the
spousal consent rules if he establishes to the satisfaction of a Plan
representative either that he has no spouse or that his spouse cannot be
located, or if he is legally separated or has been abandoned (within the meaning
of local law) and has a court order to that effect.

                  F.3 Forfeitures from Lake Erie Design Co., Inc. Retirement
Savings Plan. To the extent that assets transferred into this Plan from the Lake
Erie Design Co., Inc. Retirement Savings Plan ("Lake Erie Plan") consist of plan
forfeitures from the Lake Erie Plan, such forfeitures will be used to offset any
required future Company matching contributions for those Participants who had
their account balances transferred into this Plan from the Lake Erie Plan.

                                     -178-

<PAGE>

                  F.4 Vesting in Account Balances of Former Lake Erie Plan
Participants. Each Participant who formerly participated in the Lake Erie Plan
and who had his account balance in the Lake Erie Plan transferred into this Plan
shall be fully vested with respect to any amounts transferred into this Plan.

                  F.5 Employer Matching Provisions for Employees of Howell
Penncraft, Inc. Notwithstanding anything in the Plan to the contrary, commencing
on July 1, 1998 and continuing through December 31, 1998, on behalf of each
employee of Howell Penncraft, Inc., the Company will contribute out of its
accumulated earnings and profits, and pay (or cause to be paid) to the Trustee
and/or Insurance Company for each Participant a base amount, which shall be
referred to as a Matching Company Contribution, to be allocated to the
Participants Company Matching Account an amount as follows:

                           (a) an amount equal to fifteen percent (15%) of the
first six percent (6%) of the Participant's Compensation that is deferred
through Pre-Tax Salary Redirection Contributions contributed in any month during
the first through fifth years of the Participant's Service;

                           (b) an amount equal to twenty percent (20%) of the
first six percent (6%) of the Participant's Compensation that is deferred
through Pre-Tax Salary Redirection Contributions contributed in any month during
the sixth through 10th years of the Participant's Service; and

                                     -179-

<PAGE>

                           (c) an amount equal to twenty-five percent (25%) of
the first six percent (6%) of the Participant's Compensation that is deferred
through Pre-Tax Salary Redirection Contributions contributed in any month during
the 11th and all subsequent years of the Participant's Service.

                  Effective January 1, 1999, each Employee of Howell Penncraft,
Inc. shall be credited with Company Matching Contributions as set forth in
Section 5.1.

                  F.6 Employer Matching Provisions for Employees of Non-Ferrous
Bolt & Mfg. Co. Notwithstanding anything in the Plan to the contrary, commencing
on April 1, 1999, on behalf of each employee of Non-Ferrous Bolt & Mfg. Co., the
Company will contribute out of its accumulated earnings and profits, and pay (or
cause to be paid) to the Trustee and/or Insurance Company for each Participant a
base amount, which shall be referred to as a Matching Company Contribution, to
be allocated to the Participants Company Matching Account an amount equal to
fifty percent (50%) of the first six percent (6%) of the Participant's
Compensation that is deferred through Pre-Tax Salary Redirection Contributions
contributed in any month.

                                     -180-

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