Document:

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                          FULTON FINANCIAL AFFILIATES'
                     401(K) SAVINGS PLAN AND TRUST AGREEMENT

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                                TABLE OF CONTENTS
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<S>                                                                                       <C>
ARTICLE I DEFINITIONS..................................................................   1

ARTICLE II TOP HEAVY AND ADMINISTRATION................................................  15
   Section 2.01 Top Heavy Plan Requirements............................................  15
   Section 2.02 Determination of Top Heavy Status......................................  15
   Section 2.03 Powers and Responsibilities of the Employer............................  18
   Section 2.04 Designation of Administrative Authority................................  19
   Section 2.05 Allocation and Delegation of Responsibilities..........................  19
   Section 2.06 Powers and Duties of the Administrator.................................  19
   Section 2.07 Records and Reports....................................................  20
   Section 2.08 Appointment of Advisors................................................  21
   Section 2.09 Information from Employer..............................................  21
   Section 2.10 Payment of Expenses....................................................  21
   Section 2.11 Majority Actions.......................................................  21
   Section 2.12 Claims Procedure.......................................................  21
   Section 2.13 Claims Review Procedure................................................  22

ARTICLE III ELIGIBILITY................................................................  22
   Section 3.01 Conditions of Eligibility..............................................  22
   Section 3.02 Application for Participation..........................................  23
   Section 3.03 Effective Date of Participation........................................  23
   Section 3.04 Determination of Eligibility...........................................  23
   Section 3.05 Termination of Eligibility.............................................  23
   Section 3.06 Omission of Eligible Employee..........................................  23
   Section 3.07 Inclusion of Ineligible Employee.......................................  24

ARTICLE IV CONTRIBUTION AND ALLOCATION.................................................  24
   Section 4.01 Formula for Determining Employer's Contribution........................  24
   Section 4.02 Participant's Salary Reduction Election................................  25
   Section 4.03 Time of  Payment of Employer's Contribution............................  28
   Section 4.04 Allocation of Contribution and Earnings................................  28
   Section 4.05 Actual Deferral Percentage Tests.......................................  31
   Section 4.06 Adjustment to Actual Deferral Percentage Tests.........................  33
   Section 4.07 Actual Contribution Percentage Tests...................................  34
   Section 4.08 Adjustment to Actual Contribution Percentage Tests.....................  36
   Section 4.09 Maximum Annual Additions...............................................  38
   Section 4.10 Adjustment for Excessive Annual Additions..............................  42
   Section 4.11 Voluntary Contributions................................................  43
   Section 4.12 Investment Funds.......................................................  44
   Section 4.13 Transfers from Qualified Plans.........................................  45
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<S>                                                                                       <C>
ARTICLE V VALUATIONS....................................................................  47
   Section 5.01 Valuation of the Trust Fund.............................................  47
   Section 5.02 Method of Valuation.....................................................  47

ARTICLE VI DETERMINATION AND DISTRIBUTION OF BENEFITS...................................  47
   Section 6.01 Determination of Benefits Upon Retirement...............................  47
   Section 6.02 Determination of Benefits upon Death....................................  48
   Section 6.03 Determination of Benefits in Event of Disability........................  49
   Section 6.04 Determination of Benefits Upon Termination..............................  49
   Section 6.05 Distribution of Benefits................................................  54
   Section 6.06 Distribution of Benefits upon Death.....................................  58
   Section 6.07 Time of Segregation or Distribution.....................................  61
   Section 6.08 Distribution for Minor Beneficiary......................................  62
   Section 6.09 Location of Participant or Beneficiary Unknown..........................  62
   Section 6.10 Advance Distribution for Hardship.......................................  62
   Section 6.11 Limitations on Benefits and Distributions...............................  63
   Section 6.12 Rollovers of Distributions..............................................  64

ARTICLE VII TRUSTEE.....................................................................  65
   Section 7.01 Basic Responsibilities of the Trustee...................................  65
   Section 7.02 Investment Powers and Duties of the Trustee.............................  65
   Section 7.03 Other Powers of the Trustee.............................................  66
   Section 7.04 Duties of the Trustee regarding Payments................................  68
   Section 7.05 Trustee's Compensation and Expenses and Taxes...........................  69
   Section 7.06 Annual Report of the Trustee............................................  69
   Section 7.07 Audit...................................................................  69
   Section 7.08 Resignation, Removal and Succession of Trustee..........................  70
   Section 7.09 Employer Securities and Real Property...................................  71

ARTICLE VIII AMENDMENT, TERMINATION AND MERGERS.........................................  71
   Section 8.01 Amendment...............................................................  71
   Section 8.02 Termination.............................................................  72
   Section 8.03 Merger or Consolidation.................................................  72

ARTICLE IX MISCELLANEOUS................................................................  72
   Section 9.01 Participant's Rights....................................................  72
   Section 9.02 Alienation..............................................................  72
   Section 9.03 Construction of Plan....................................................  73
   Section 9.04 Gender and Number.......................................................  73
   Section 9.05 Legal Action............................................................  73
   Section 9.06 Prohibition against Diversion of Funds..................................  74
   Section 9.07 Bonding.................................................................  74
   Section 9.08 Employer's and Trustee's Protective Clause..............................  74
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<S>                                                                                   <C>
   Section 9.09 Insurer's Protective Clause.........................................  74
   Section 9.10 Receipt and Release for Payments....................................  75
   Section 9.11 Action by the Employer..............................................  75
   Section 9.12 Named Fiduciaries and Allocation of Responsibility..................  75
   Section 9.13 Headings............................................................  76
   Section 9.14 Approval by Internal Revenue Service................................  76
   Section 9.15 Uniformity..........................................................  76

ARTICLE X VETERANS' REEMPLOYMENT RIGHTS.............................................  76
   Section 10.01 In General.........................................................  76
   Section 10.02 Qualified Military Service.........................................  76
   Section 10.03 Crediting Compensation.............................................  77
   Section 10.04 Salary Reduction Contributions.....................................  77
   Section 10.05 Earnings and Forfeitures...........................................  77
   Section 10.06 Crediting Service..................................................  78

ARTICLE XI PARTICIPATING EMPLOYERS..................................................  78
   Section 11.01 Adoption by Other Employees........................................  78
   Section 11.02 Requirements of Participating Employers............................  78
   Section 11.03 Designation of Agent...............................................  79
   Section 11.04 Employee Transfers.................................................  79
   Section 11.05 Participating Employer's Contribution..............................  79
   Section 11.06 Discontinuance of Participation....................................  80
   Section 11.07 Administrator's Authority..........................................  80
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                          FULTON FINANCIAL AFFILIATES'
                     401(K) SAVINGS PLAN AND TRUST AGREEMENT

         This Amended and Restated Fulton Financial Affiliates' 401(k) Savings
Plan and Trust Agreement is hereby adopted, this ____ day of ___________, 2001,
effective as provided herein, as follows:

         WHEREAS, the Employers have heretofore maintained this Plan for the
benefit of eligible Employees; and

         WHEREAS, Fulton Financial Corporation (hereinafter, the "Principal
Employer") wishes to amend said Plan in order to provide for certain changes to
the Plan, and to comply with the provisions of the Internal Revenue Code of
1986, as amended by subsequent statutory changes, and, in so doing, to restate
said Plan in its entirety.

         NOW, THEREFORE, the Plan is hereby amended and restated as set forth
hereinafter. The terms of the restated Plan shall supersede the terms of the
existing Plan as provided in the Effective Date provision hereof. This
restatement shall in all respects be deemed a continuation of the original Plan,
as amended; and the provisions of the original Plan, as so amended, shall
continue in effect until superseded in accordance with the provisions of this
amendment and restatement.

                                    ARTICLE I
                                   DEFINITIONS
                                   -----------

         Section 1.01 "Act" means the Employee Retirement Income Security Act of
         ------------
1974, as it may be amended from time to time.

         Section 1.02 "Administrator" means Fulton Financial Corporation. Fulton
         ------------
Financial Corporation may appoint the Committee under Section 2.04 to assist it
in carrying out its duties as Administrator.

         Section 1.03 "Affiliated Employer" means the Employer and any
         ------------
corporation which is a member of a controlled group of corporations (as defined
in Code section 414(b)) which includes the Employer; any trade or
business.(whether or not incorporated) which is under common control (as defined
in Code section 414(c)) with the Employer; any organization (whether or not
incorporated) which is a member of an affiliated service group (as defined in
Code section 414(m)) which includes the Employer; and any other entity required
to be aggregated with the Employer pursuant to Regulations under Code section
414(o).

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        Section 1.04 "Aggregate Account" means, with respect to each
        ------------
Participant, the value of all accounts maintained on behalf of a Participant,
whether attributable to Employer or Employee contributions, subject to the
provisions of Section 2.02.

        Section 1.05 "Anniversary Date" means December 31st.
        ------------

        Section 1.06 "Beneficiary" means the person to whom the share of a
        ------------
deceased Participant's total account is payable, subject to the restrictions of
Sections 6.02 and 6.06.

        Section 1.07 "Code" means the Internal Revenue Code of 1986, as amended
        ------------
or replaced from time to time.

        Section 1.08 "Compensation" with respect to any Participant means such
        ------------
Participant's regular salary and wages paid by the Employer for a Plan Year, but
excluding overtime, commissions (except, however, commissions paid to Employees
who are registered representatives, mortgage originators and investment
specialists and commissions deferred by such Employees to a plan maintained
under Code section 125 or Code section 401(k) shall not be excluded) and all
bonuses other than nonreoccurring bonuses. Amounts contributed by the Employer
under the within Plan, except for an Employee's Compensation that is deferred
pursuant to Section 4.02, and any non taxable fringe benefits shall not be
considered as Compensation.

         For purposes of this Section, the determination of Compensation shall
be made by including salary reduction contributions made on behalf of an
Employee to a plan maintained under Code section 125.

         Compensation shall be recognized as of an Employee's effective date of
participation pursuant to Section 3.03.

         In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provisions to the contrary, for Plan Years beginning
after December 31, 1988 but before January 1, 1994, Compensation taken into
account in computing Plan benefits for any year shall not exceed $200,000, as
adjusted at the same time and in such manner as permitted under Code section
415(d), except that the dollar increase in effect on January 1 of any calendar
year is effective for years beginning in such calendar year and the first
adjustment to the $200,000 limitation is effective on January 1, 1990. For Plan
Years beginning on or after January 1, 1994, Compensation taken into account in
computing Plan benefits for any year shall not exceed the OBRA `93 annual
compensation limit. The OBRA `93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost-of-living in accordance
with section 401(a)(17)(B) of the Code. The cost-of-living adjustment in effect
for calendar year applies to any period, not exceeding 12 months, over which
Compensation is determined ("determination period") beginning in such calendar
year. If a determination period consists of fewer than 12 months, the OBRA `93
annual compensation limit will be multiplied by a fraction, the numerator

                                                                               2

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of which is the number of months in the determination period, and the
denominator of which is 12.

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

         If Compensation for any prior Plan Year is taken into account in
determining an Employee's benefits for the current year, the Compensation for
such prior year is subject to the applicable annual compensation limit in effect
for that prior year. For this purpose, for determination periods beginning
before the first day of the first Plan Year beginning on or after January 1,
1994, the OBRA `93 annual compensation limit is $150,000.

         Effective for Plan Years beginning after December 31, 1996, the
provisions of family aggregation as described in Code section 401(a)(17)(A)
(which requires a Participant, the spouse of the Participant and any lineal
descendants thereof who have not attained age 19 before the close of the Plan
Year to be treated as a single Participant for purposes of applying the
limitations on Compensation for a Plan Year) shall not apply.

         Section 1.09 "Contract" or "Policy" means a life insurance policy or
         ------------
annuity contract (group or individual) issued by the insurer as elected.

         Section 1.10 "Deferred Compensation" with respect to any Participant
         ------------
means that portion of the Participant's total Compensation which has been
contributed to the Plan in accordance with the Participant's deferral election
pursuant to Section 4.02.

         Section 1.11 "Early Retirement Date" means the first day of the month
         ------------
(prior to the Normal Retirement Date) coinciding with or following the date on
which a Participant or Former Participant attains age 60 and has completed at
least 5 Years of Service with the Employer (Early Retirement Age). A Participant
shall become fully Vested upon satisfying this requirement if still employed at
his Early Retirement Age.

         A Former Participant who terminates employment after satisfying the
service requirement for Early Retirement and who thereafter reaches the age
requirement contained herein shall be entitled to receive his benefits under
this Plan.

         Section 1.12 "Effective Date." The original effective date of this Plan
         ------------
is January 1, 1985. The Plan, as amended and restated herein, is effective as
follows: (a) all provisions required to comply with the Tax Reform Act of 1986
("TRA 1986") shall be effective January 1, 1989, except as otherwise stated in
the Plan or in TRA 1986; (b) all provisions required to comply with the
Uniformed Services Employment and Reemployment Rights Act of 1994 ("USERRA")
shall be effective on December 12, 1994, except as otherwise stated in the Plan
or in USERRA; (c) all provisions required to comply with the General Agreement
on Tariffs and Trade-Uruguay Round Agreements Act of 1994 ("GATT") shall be
effective on January 1, 1995, except as otherwise stated in the Plan or in GATT;
(d) all provisions required to comply with the

                                                                            3

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Small Business Job Protection Act of 1996 ( "SBJPA") shall be effective on
January 1, 1997, except as otherwise stated in the Plan or in SBJPA; (e) all
provisions required to comply with the Taxpayer Relief Act of 1997 ("TRA 1997")
shall be effective on January 1, 1998, except as otherwise stated in the Plan or
in TRA 1997; (f) all provisions required to comply with the Internal Revenue
Service Restructuring and Reform Act of 1998 ("IRRA") shall be effective January
1, 2000 except otherwise stated in the Plan or IRRA; and (g) all other
provisions are effective as originally adopted, as previously amended, or as
otherwise required to comply with applicable statutory, regulatory or ruling
requirements.

         Section 1.13 "Elective Contribution" means the Employer's contributions
         ------------
to the Plan that are made pursuant to the Participant's deferral election
provided in Section 4.02. In addition, any Employer Qualified Non-Elective
Contribution made pursuant to Section 4.06 shall be considered an Elective
Contribution for purposes of the Plan. Any such contributions deemed to be
Elective Contributions shall be subject to the requirements of Sections 4.02(b)
and 4.02(c) and shall further be required to satisfy the discrimination
requirements of Regulation 1.401(k)-l(b)(3), the provisions of which are
specifically incorporated herein by reference.

         Section 1.14 "Eligible Employee" means only the employees listed on the
         ------------
attached Appendix A. Employees who are Participants or who are eligible to
become Participants in the Fulton Financial Corporation Profit Sharing Plan
maintained by the Employer shall not be eligible to participate in this Plan.

         Section 1.15 "Employee" means any person who is employed by the
         ------------
Employer or Affiliated Employer and is listed on Appendix A, but excludes any
person who is an independent contractor. Employee shall include Leased Employees
within the meaning of Code sections 414(n)(2) and 414(o)(2) unless such Leased
Employees are covered by a plan described in Code section 414(n)(5) and such
Leased Employees do not constitute more than 20% of the recipient's non-highly
compensated work force.

         Section 1.16 "Employer" means Lebanon Valley Farmers Bank, Fulton Bank,
         ------------
Lafayette Ambassador Bank, Swineford National Bank, FNB Bank, Hagerstown Trust
Company, and Delaware National Bank. Effective May 1, 2000, "Employer" shall
also mean Fulton Financial Advisors, N.A., and effective January 1, 2001,
"Employer" shall also mean Fulton Financial Corporation. These employers are
Employers only with respect to the Employees listed on Appendix A.

         Section 1.17 "Excess Aggregate Contributions" means, with respect to
         ------------
any Plan Year, the excess of the aggregate amount of the Employer matching
contributions made pursuant to Section 4.01(b) and any qualified non-elective
contributions or elective deferrals taken into account pursuant to Section
4.07(c) on behalf of Highly Compensated Participants for such Plan Year, over
the maximum amount of such contributions permitted under the limitations of
Section 4.07(a).

                                                                             4

<PAGE>

         Section 1.18 "Excess Contributions" means, with respect to a Plan Year,
         ------------
the excess of Elective Contributions made on behalf of Highly Compensated
Participants for the Plan Year over the maximum amount of such contributions
permitted under Section 4.05(a). Excess Contributions shall be treated as an
"annual addition" pursuant to Section 4.09(b).

         Section 1.19 "Excess Deferred Compensation" means, with respect to any
         ------------
taxable year of a Participant, the excess of the aggregate amount of such
Participant's Deferred Compensation and the elective deferrals pursuant to
Section 4.02(f) actually made on behalf of such Participant for such taxable
year, over the dollar limitation provided for in Code section 402(g), which is
incorporated herein by reference. Excess Deferred Compensation shall be treated
as an "annual addition" pursuant to Section 4.09(b).

         Section 1.20 "Family Member" means, with respect to an affected
         ------------
Participant, such Participant's spouse, such Participant's lineal descendants
and ascendants and their spouses, all as described in Code section 414(q)(6)(B).
On and after January 1, 1997, the rules requiring the aggregation of "Family
Members" for Plan purposes shall no longer be applicable.

         Section 1.21 "Fiduciary" means any person who (a) exercises any
         ------------
discretionary authority or discretionary control respecting management of the
Plan or exercises any authority or control respecting management or disposition
of its assets, (b) renders investment advice for a fee or other compensation,
direct or indirect, with respect to any monies or other property of the Plan or
has any authority or responsibility to do so, or (c) has any discretionary
authority or discretionary responsibility in the administration of the Plan,
including, but not limited to, the Trustee, the Employer and its representative
body, and the Administrator.

         Section 1.22 "Fiscal Year" means the Employer's accounting year of 12
         ------------
months commencing on January lst of each year and ending the following December
31st.

         Section 1.23 "Forfeiture" means that portion of a Participant's Account
         ------------
that is not vested, and occurs on the earlier of:

     (a) the distribution of the entire Vested portion of a Participant's
Account, or

     (b) the last day of the Plan Year in which the Participant incurs five (5)
consecutive 1-Year Breaks in Service.

     Furthermore, for purposes of paragraph (a) above, in the case of a
Terminated Participant whose Vested benefit is zero, such Terminated Participant
shall be deemed to have received a distribution of his Vested benefit upon his
termination of employment. Restoration of such amounts shall occur pursuant to
Section 6.04. In addition, the term Forfeiture shall also include amounts deemed
to be Forfeitures pursuant to any other provision of this Plan.

         Section 1.24 "Former Participant" means a person who has been a
         ------------
Participant, but who has ceased to be a Participant for any reason.

                                                                             5

<PAGE>

         Section 1.25 "415 Compensation" means compensation as defined in
         ------------
Section 4.09(d).

         Section 1.26 "414(s) Compensation" with respect to any Employee means
         ------------
his Deferred Compensation plus "415 Compensation" paid during a Plan Year. The
amount of "414(s) Compensation" with respect to any Employee shall include
"414(s) Compensation" during the entire twelve (12) month period ending on the
last day of such Plan Year, except that for Plan Years beginning prior to the
later of January 1, 1992 or the date that is sixty (60) days after the date
final Regulations are issued, "414(s) Compensation" shall only be recognized as
of an Employee's effective date of participation.

         For purposes of this Section, the determination of "414(s)
Compensation" shall be made by including salary reduction contributions made on
behalf of an Employee to a plan maintained under Code section 125.

         "414(s) Compensation" in excess of $200,000 shall be disregarded. Such
amount shall be adjusted at the same time and in such manner as permitted under
Code section 415(d). However, for Plan Years beginning prior to January 1, 1989,
the $200,000 limit shall apply only for Top Heavy Plan Years and shall not be
adjusted.

         Section 1.27 "Highly Compensated Employee" means any employee who: (a)
         ------------
was a five-percent owner (as defined in Code Section 416(i)(1)) at any time
during the year or the preceding year, or (b) for the preceding year had
compensation in excess of $80,000.00 and, if the Employer so elects, was in the
top-paid group for the preceding year. For this purpose, an employee is in the
top-paid group of employees for a year if such employee is in the group
consisting of the top 20% of the employees when ranked on the basis of
compensation paid during such year. The $80,000.00 amount is adjusted at the
same time and in the same manner as under Code section 415(d), except that the
base period is the calendar quarter ending September 30, 1996.

         For this purpose, the applicable year of the Plan for which a
determination is being made is called a determination year and the preceding
12-month period is called a look-back year.

         A highly compensated former employee is based on the rules applicable
to determining Highly Compensated Employee status as in effect for that
determination year, in accordance with Section 1.414(q)-1T, A-4 of the Temporary
Income Tax Regulations and IRS Notice 97-75.

         In determining whether an employee is a Highly Compensated Employee for
years beginning in 1997, the amendments to Code section 414(q) stated above are
treated as having been in effect for years beginning in 1996.

         Section 1.28 "Highly Compensated Former Employee" means a former
         ------------
Employee who had a separation year prior to the "determination year" and was a
Highly Compensated Employee in the year of separation from service or in any
"determination year" after attaining age 55. Notwithstanding the foregoing, an
Employee who separated from service prior to 1987 will be treated as a Highly
Compensated Former Employee only if during the separation year (or year

                                                                             6

<PAGE>

preceding the separation year) or any year after the Employee attains age 55 (or
the last year ending before the Employee's 55th birthday), the Employee either
received "415 Compensation" in excess of $50,000 or was a "five percent owner".
For purposes of this Section, "determination year" and "five percent owner"
shall be determined in accordance with the definition of Highly Compensated
Employee. Highly Compensated Former Employees shall be treated as Highly
Compensated Employees. The method set forth in this Section for determining who
is a "Highly Compensated Former Employee" shall be applied on a uniform and
consistent basis for all purposes for which the Code section 414(q) definition
is applicable.

         Section 1.29 "Highly Compensated Participant" means any Highly
         ------------
Compensated Employee who is eligible to participate in the Plan.

         Section 1.30 "Hour of Service" means (1) each hour for which an
         ------------
Employee is directly or indirectly compensated or entitled to compensation by
the Employer for the performance of duties during the applicable computation
period; (2) each hour for which an Employee is directly or indirectly
compensated or entitled to compensation by the Employer (irrespective of whether
the employment relationship has terminated) for reasons other than performance
of duties (such as vacation, holidays, sickness, jury duty, disability, lay-off,
military duty or leave of absence) during the applicable computation period; (3)
each hour for which back pay is awarded or agreed to by the Employer without
regard to mitigation of damages. These hours will be credited to the Employee
for the computation period or periods to which the award or agreement pertains
rather than the computation period in which the award, agreement or payment is
made. The same Hours of Service shall not be credited both under (1) or (2), as
the case may be, and under (3).

         Notwithstanding the above, (i) no more than 501 Hours of Service are
required to be credited to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not such period
occurs in a single computation period); (ii) an hour for which an Employee is
directly or indirectly paid, or entitled to payment, on account of a period
during which no duties are performed is not required to be credited to the
Employee if such payment is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.

         For purposes of this Section, a payment shall be deemed to be made by
or due from the Employer regardless of whether such payment is made by or due
from the Employer directly, or indirectly through, among others, a trust fund,
or insurer, to which the Employer contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer, or other entity
are for the benefit of particular Employees or are on behalf of a group of
Employees in the aggregate.

         An Hour of Service must be counted for the purpose of determining a
Year of Service, a year of participation for purposes of accrued benefits, a
1-Year Break in Service, and employment commencement date (or reemployment
commencement date). In addition, Hours of

                                                                             7

<PAGE>

Service will be credited for employment with other Affiliated Employers. The
provisions of Department of Labor regulations 2530.200b-2(b) and (c) are
incorporated herein by reference.

         Section 1.31 "Income" means the income allocable to "excess amounts"
         ------------
which shall equal the sum of the allocable gain or loss for the "applicable
computation period" and the allocable gain or loss for the period between the
end of the "applicable computation period" and the date of distribution ("gap
period"). The income allocable to "excess amounts" for the "applicable
computation period" and the "gap period" is calculated separately and is
determined by multiplying the income for the "applicable computation period" or
the "gap period", by a fraction. The numerator of the fraction is the "excess
amount" for the "applicable computation period". The denominator of the fraction
is the total "account balance" attributable to "Employer contributions" as of
the end of the "applicable computation period" or the "gap period", reduced by
the gain allocable to such total amount for the "applicable computation period"
or the "gap period" and increased by the loss allocable to such total amount for
the "applicable computation period" or the "gap period". The provisions of this
Section shall be applied:

          (a)      For purposes of Section 4.02(f), by substituting:

                   (1)    "Excess Deferred Compensation" for "excess amounts";

                   (2)    "taxable year of the Participant" for "applicable
computation period";

                   (3)    "Deferred Compensation" for "Employer contributions";
                          and

                   (4)    "Participant's Elective Account" for "account
balance".

          (b)      For purposes of Section 4.06(a), by substituting:

                   (1)    "Excess Contributions" for "excess amount";

                   (2)    "Plan Year" for "applicable computation period";

                   (3)    "Elective Contributions" for "Employer contributions";
and

                   (4)    "Participant's Elective Account" for "
balance".

          (c)      For purposes of Section 4.08(a), by substituting:

                   (1)    "Excess Aggregate Contributions" for "excess amounts";

                   (2)    "Plan Year" for "applicable computation period";

                   (3)    "Employer matching contributions made pursuant to
Section 4.01(b) and any qualified non-elective contributions or elective
deferrals taken into account pursuant to Section 4.07(c)" for "Employer
contributions"; and

                                                                             8

<PAGE>

                  (4) "Participant's Account" for "account balance".

         In lieu of the "fractional method" described above, a "safe harbor
method" may be used to calculate the allocable Income for the "gap period".
Under such "safe harbor method", allocable Income for the "gap period" shall be
deemed to equal ten percent (10%) of the Income allocable to "excess amounts"
for the "applicable computation period" multiplied by the number of calendar
months in the "gap period". For purposes of determining the number of calendar
months in the "gap period", a distribution occurring on or before the fifteenth
day of the month shall be treated as having been made on the last day of the
preceding month and a distribution occurring after such fifteenth day shall be
treated as having been made on the first day of the next subsequent month.

         Income allocable to any distribution of Excess Deferred Compensation on
or before the last day of the taxable year of the Participant shall be
calculated from the first day of the taxable year of the Participant to the date
on which the distribution is made pursuant to either the "fractional method" or
the "safe harbor method".

         Notwithstanding the above, for "applicable computation periods" which
began in 1987, Income during the "gap period" shall not be taken into account.

         Section 1.32 "Investment Manager" means an entity that (a) has the
         ------------
power to manage, acquire, or dispose of Plan assets and (b) acknowledges
fiduciary responsibility to the Plan in writing. Such entity must be a person,
firm, or corporation registered as an investment adviser under the Investment
Advisers Act of 1940, a bank, or an insurance company.

         Section 1.33 "Key Employee" means an Employee as defined in Code
         ------------
section 416(i) and the Regulations thereunder. Generally, any Employee or former
Employee (as well as each of his Beneficiaries) is considered a Key Employee if
he, at any time during the Plan Year that contains the "Determination Date" or
any of the preceding four (4) Plan Years, has been included in one of the
following categories:

                  (a) an officer of the Employer (as that term is defined within
the meaning of the Regulations under Code section 416) having annual "415
Compensation" greater than 50 percent of the amount in effect under Code section
415(b)(1)(A) for any such Plan Year.

                  (b) one of the ten employees having annual "415 Compensation"
from the Employer for a Plan Year greater than the dollar limitation in effect
under Code section 415(c)(1)(A) for the calendar year in which such Plan Year
ends and owning (or considered as owning within the meaning of Code section 318)
both more than one-half percent interest and the largest interests in the
Employer.

                  (c) a "five percent owner" of the Employer. "Five percent
owner" means any person who owns (or is considered as owning within the meaning
of Code section 318) more than five percent (5%) of the outstanding stock of the
Employer or stock possessing more than five percent (5%) of the total combined
voting power of all stock of the Employer or, in the case

                                                                             9

<PAGE>

of an unincorporated business, any person who owns more than five percent (5%)
of the capital or profits interest in the Employer. In determining percentage
ownership hereunder, employers that would otherwise be aggregated under Code
sections 414(b), (c), (m) and (o) shall be treated as separate employers.

         (d) a "one percent owner" of the Employer having an annual "415
Compensation" from the Employer of more than $150,000. "One percent owner" means
any person who owns (or is considered as owning within the meaning of Code
section 318) more than one percent (1%) of the outstanding stock of the Employer
or stock possessing more than one percent (1%) of the total combined voting
power of all stock of the Employer or, in the case of an unincorporated
business, any person who owns more than one percent (1%) of the capital or
profits interest in the Employer. In determining percentage ownership hereunder,
employers that would otherwise be aggregated under Code sections 414(b), (c),
(m) and (o) shall be treated as separate employers. However, in determining
whether an individual has "415 Compensation" of more than $150,000, "415
Compensation" from each employer required to be aggregated under Code sections
414(b), (c), (m) and (o) shall be taken into account.

         For purposes of this Section, the determination of "415 Compensation"
shall be made by including amounts that would otherwise be excluded from a
Participant's gross income by reason of the application of Code sections 125,
132(f)(4), 402(a)(8), 402(h)(1)(B) and, in the case of Employer contributions
made pursuant to a salary reduction agreement, by including amounts that would
otherwise be excluded from a Participant's gross income by reason of the
application of Code section 403(b).

         Section 1.34 "Late Retirement Date" means the first day of the month
         ------------
coinciding with or next following a Participant's actual Retirement Date after
having reached his Normal Retirement Date.

         Section 1.35 "Leased Employee" means any person (other than an
         ------------
Employee of the recipient) who pursuant to an agreement between the recipient
and any other person ("leasing organization") has performed services for the
recipient (or for th recipient and related persons determined in accordance
with Code section 414(n)(6)) on a substantially full time basis for a period of
at least one year, and such services are performed under the primary direction
or control of the recipient employer. Contributions or benefits provided a
Leased Employee by the leasing organization which are attributable to services
performed for the recipient employer shall be treated as provided by the
recipient employer. A Leased Employee shall not be considered an Employee of the
recipient if:

         (a) such employee is covered by a money purchase pension plan
providing:

                  (1)   a non-integrated employer contribution rate of at least
10% of compensation, as defined in Code section 415(c)(3), but including amounts
contributed pursuant to a salary reduction agreement which are excludable from
the employee's gross income under Code section 125, 402(a)(8), 402(h) or 403(b);

                                                                            10

<PAGE>

                 (2)  immediate participation; and

                 (3)  full and immediate vesting.

             (b) Leased Employees do not constitute more than 20% of the
recipient's non-highly compensated work force.

         Section 1.36 "Month of Service" means a calendar month during any part
         ------------
of which an Employee completed an Hour of Service. Except, however, a
Participant shall be credited with a Month of Service for each month during the
12 month computation period in which he has not incurred a 1-Year Break in
Service.

         Section 1.37 "Non-Elective Contribution" means the Employer's
         ------------
contributions to the Plan excluding, however, contributions made pursuant to the
Participant's deferral election provided for in Section 4.02 and any Qualified
Non-Elective Contribution.

         Section 1.38 "Non-Highly Compensated Participant" means any Participant
         ------------
who is not a Highly Compensated Employee.

         Section 1.39 "Non-Key Employee" means any Employee or former Employee
         ------------
(and his Beneficiaries) who is not a Key Employee.

         Section 1.40 "Normal Retirement Date" means the first day of the month
         ------------
coinciding with or next following the Participant's Normal Retirement Age (65th
birthday). A Participant shall become fully vested in his Account upon attaining
his Normal Retirement Age.

         Notwithstanding the foregoing, the Normal Retirement Date of a
Participant who was a participant in the Delaware Plan on December 31, 1995
shall be the first day of the month coinciding with or next following the
Participant's 62nd birthday.

         Section 1.41 "l-Year Break in Service" means the applicable computation
         ------------
period during which an Employee has not completed more than 500 Hours of Service
with the Employer. Further, solely for the purpose of determining whether a
Participant has incurred a 1-Year Break in Service, Hours of Service shall be
recognized for "authorized leaves of absence" and "maternity and paternity
leaves of absence. Years of Service and 1-Year Breaks in Service shall be
measured on the same computation period.

         "Authorized leave of absence" means an unpaid, temporary cessation from
active employment with the Employer pursuant to an established nondiscriminatory
policy, whether occasioned by illness, military service, or any other reason.

         A "maternity or paternity leave of absence" means, for Plan Years
beginning after December 31, 1984, an absence from work for any period by reason
of the Employee's pregnancy, birth of the Employee's child, placement of a child
with the Employee in connection with the adoption of such child, or any absence
for the purpose of caring for such child for a

                                                                            11

<PAGE>

period immediately following such birth or placement. For this purpose, Hours of
Service shall be credited for the computation period in which the absence from
work begins, only if credit therefore is necessary to prevent the Employee from
incurring a 1-Year Break in Service, or, in any other case, in the immediately
following computation period. The Hours of Service credited for a "maternity or
paternity leave of absence" shall be those which would normally have been
credited but for such absence, or, in any case in which the Administrator is
unable to determine such hours normally credited, eight (8) Hours of Service per
day. The total Hours of Service required to be credited for a "maternity or
paternity leave of absence" shall not exceed 501.

         Section 1.42 "Participant" means any Eligible Employee who participates
         ------------
in the Plan as provided in Sections 3.02 and 3.03, and has not for any reason
become ineligible to participate further in the Plan.

         Section 1.43 "Participant's Account" means the account established and
         ------------
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from the Employer's Non-Elective
Contributions.

         Section 1.44 "Participant's Combined Account" means the total aggregate
         ------------
amount of each Participant's Elective Account and Participant's Account.

         Section 1.45 "Participant's Elective Account" means the account
         ------------
established and maintained by the Administrator for each Participant with
respect to his total interest in the Plan and Trust resulting from the
Employer's Elective Contributions. A separate accounting shall be maintained
with respect to that portion of the Participant's Elective Account attributable
to Elective Contributions pursuant to Section 4.02 and any Employer Qualified
Non-Elective Contributions.

         Section 1.46 "Plan" means this instrument, including all amendments
         -------------
thereto.

         Section 1.47 "Plan Year" means the Plan's accounting year of twelve
(12) months commencing on January lst of each year and ending the following
December 31st.

         Section 1.48 "Pre-Retirement Survivor Annuity" is an immediate annuity
for the life of the Participant's spouse the payments under which must be equal
to the amount of benefit which can be purchased with the accounts of a
Participant used to provide the death benefit under the Plan.

         Section 1.49 "Qualified Non-Elective Contribution" means the Employer's
contributions to the Plan that are made pursuant to Section 4.06. Such
contributions shall be considered an Elective Contribution for the purposes of
the Plan and used to satisfy the "Actual Deferral Percentage" tests.

         In addition, the Employer's contributions to the Plan that are made
pursuant to Section 4.08(g) which are used to satisfy the "Actual Contribution
Percentage" tests shall be considered

                                                                           12

<PAGE>

Qualified Non-Elective Contributions and be subject to the provisions of
Sections 4.02(b) and 4.02(c).

         Section 1.50 "Regulation" means the Income Tax Regulations as
         ------------
promulgated by the Secretary of the Treasury or his delegate, and as amended
from time to time.

         Section 1.51 "Retired Participant" means a person who has been a
         ------------
Participant, but who has become entitled to retirement benefits under the Plan.

         Section 1.52 "Retirement Date" means the date as of which a Participant
         ------------
retires for reasons other than Total and Permanent Disability, whether such
retirement occurs on a Participant's Normal Retirement Date, Early or Late
Retirement Date (see Section 6.01).

         Section 1.53 "Super Top Heavy Plan" means a plan described in Section
         ------------
2.02(b).

         Section 1.54 "Terminated Participant" means a person who has been a
         ------------
Participant, but whose employment has been terminated other than by death, Total
and Permanent Disability or retirement.

         Section 1.55 "Top Heavy Plan" means a plan described in Section
         ------------
2.02(a).

         Section 1.56 "Top Heavy Plan Year" means a Plan Year commencing after
         ------------
December 31, 1983 during which the Plan is a Top Heavy Plan.

         Section 1.57 "Top Paid Group" means the top 20 percent of Employees who
         ------------
performed services for the Employer during the applicable year, ranked according
to the amount of "415 Compensation" (determined for this purpose in accordance
with Section 1.26) received from the Employer during such year. All Affiliated
Employers shall be taken into account as a single employer, and Leased Employees
within the meaning of Code sections 414(n)(2) and 414(o)(2) shall be considered
Employees unless such Leased Employees are covered by a plan described in Code
section 414(n)(5) and are not covered in any qualified plan maintained by the
Employer. Employees who are non-resident aliens and who received no earned
income (within the meaning of Code section 911(d)(2)) from the Employer
constituting United States source income within the meaning of Code section
861(a)(3) shall not be treated as Employees. Additionally, for the purpose of
determining the number of active Employees in any year, the following additional
Employees shall also be excluded; however, such Employees shall still be
considered for the purpose of identifying the particular Employees in the Top
Paid Group:

                 (a) Employees with less than six (6) months of service;

                 (b) Employees who normally work less than 17 1/2 hours per
         week;

                 (c) Employees who normally work less than six (6) months during
         a year; and

                 (d) Employees who have not yet attained age 21.

                                                                            13

<PAGE>

         In addition, if 90 percent or more of the Employees of the Employer are
covered under agreements the Secretary of Labor finds to be collective
bargaining agreements between Employee representatives and the Employer, and the
Plan covers only Employees who are not covered under such agreements, then
Employees covered by such agreements shall be excluded from both the total
number of active Employees as well as from the identification of particular
Employees in the Top Paid Group.

         The foregoing exclusions set forth in this Section shall be applied on
a uniform and consistent basis for all purposes for which the Code section
414(q) definition is applicable.

         Section 1.58 "Total and Permanent Disability" means a physical or
         ------------
mental condition of a Participant resulting from bodily injury, disease, or
mental disorder which renders him incapable of continuing any gainful occupation
and which condition constitutes total disability under the federal Social
Security Acts.

         Section 1.59 "Trustee" means the person or entity named as trustee
         ------------
herein or in any separate trust forming a part of this Plan, and any successors.

         Section 1.60 "Trust Fund" means the assets of the Plan and Trust as the
         ------------
same shall exist from time to time.

         Section 1.61 "Vested" means the nonforfeitable portion of any account
         ------------
maintained on behalf of a Participant.

         Section 1.62 "Voluntary Contribution Account" means the account
         ------------
established and maintained by the Administrator for each Participant with
respect to his total interest in the Plan resulting from the Participant's
nondeductible voluntary contributions made pursuant to Section 4.11.

         Section 1.63 "Year of Service" means the computation period of twelve
         ------------
(12) consecutive months, herein set forth, during which an Employee has at least
1000 Hours of Service.

         For purposes of eligibility for participation, the initial computation
period shall begin with the date on which the Employee first performs an Hour of
Service. The participation computation period beginning after a 1-Year Break in
Service shall be measured from the date on which an Employee again performs an
Hour of Service. The participation computation period shall shift to the Plan
Year which includes the anniversary of the date on which the Employee first
performed an Hour of Service. An Employee who is credited with the required
Hours of Service in both the initial computation period (or the computation
period beginning after a 1-Year Break in Service) and the Plan Year which
includes the anniversary of the date on which the Employee first performed an
Hour of Service, shall be credited with two (2) Years of Service for purposes of
eligibility to participate.

         For vesting purposes, the computation period shall be the Plan Year,
including periods prior to the Effective Date of the Plan.

                                                                            14

<PAGE>

         For all other purposes, the computation period shall be the Plan Year.

         Years of Service with Second National Bank of Nazareth and Penn Argyl
National Bank shall be recognized.

         Years of Service with any Affiliated Employer shall be recognized.

         For eligibility and vesting purposes, Years of Service with Central
Pennsylvania Savings Association, F.A. and Years of Service with Hagerstown
Trust Company prior to January 1, 1995 shall be recognized.

         For eligibility and vesting purposes, Years of Service with Delaware
National Bank prior to January 1, 1996 shall be recognized.

         For eligibility and vesting purposes, Years of Service with Lebanon
Valley Farmers Bank (and its predecessor, Lebanon Valley National Bank) prior to
January 1, 1999 shall be recognized.

                                   ARTICLE II
                          TOP HEAVY AND ADMINISTRATION

         Section 2.01 Top Heavy Plan Requirements
         ------------ ----------------------------

         For any Top Heavy Plan Year, the Plan shall provide the special vesting
requirements of Code section 416(b) pursuant to Section 6.04 of the Plan and the
special minimum allocation requirements of Code section 416(c) pursuant to
Section 4.04 of the Plan.

         Section 2.02 Determination of Top Heavy Status
         ------------ ---------------------------------

                      (a)  This Plan shall be a Top Heavy Plan for any Plan Year
commencing after December 31, 1983 in which, as of the Determination Date, (1)
the Present Value of Accrued Benefits of Key Employees and (2) the sum of the
Aggregate Accounts of Key Employees under this Plan and all plans of an
Aggregation Group, exceeds sixty percent (60%) of the Present Value of Accrued
Benefits and the Aggregate Accounts of all Key and Non-Key Employees under this
Plan and all plans of an Aggregation Group.

         If any Participant is a Non-Key Employee for any Plan Year, but such
Participant was a Key Employee for any prior Plan Year, such Participant's
Present Value of Accrued Benefit and/or Aggregate Account balance shall not be
taken into account for purposes of determining whether this Plan is a Top Heavy
or Super Top Heavy Plan (or whether any Aggregation Group which includes this
Plan is a Top Heavy Group). In addition, for Plan Years beginning after December
31, 1984, if a Participant or Former Participant has not performed any services
for any Employer maintaining the Plan at any time during the five year period
ending on the Determination Date, any accrued benefit for such Participant or
Former Participant shall not be

                                                                            15

<PAGE>

taken into account for the purposes of determining whether this Plan is a Top
Heavy or Super Top Heavy Plan.

         (b) This Plan shall be a Super Top Heavy Plan for any Plan Year
commencing after December 31, 1983 in which, as of the Determination Date, (1)
the Present Value of Accrued Benefits of Key Employees and (2) the sum of the
Aggregate Accounts of Key Employees under this Plan and all plans of an
Aggregation Group, exceeds ninety percent (90%) of the Present value of Accrued
Benefits and the Aggregate Accounts of all Key and Non-Key Employees under this
Plan and all plans of an Aggregation Group.

         (c) Aggregate Account: A Participant's Aggregate Account as of the
Determination Date is the sum of:

             (1) his Participant's Combined Account balance as of the most
recent valuation occurring within a twelve (12) month period ending on the
Determination Date.

             (2) an adjustment for any contributions due as of the Determination
Date. Such adjustment shall be the amount of any contributions actually made
after the valuation date but due on or before the Determination Date, except for
the first Plan Year when such adjustment shall also reflect the amount of any
contributions made after the Determination Date that are allocated as of a date
in that first Plan Year.

             (3) any Plan distributions made within the Plan Year that includes
the Determination Date or within the four (4) preceding Plan Years. However, in
the case of distributions made after the valuation date and prior to the
Determination Date, such distributions are not included as distributions for top
heavy purposes to the extent that such distributions are already included in the
Participant's Aggregate Account balance as of the valuation date.
Notwithstanding anything herein to the contrary, all distributions, including
distributions made prior to January 1, 1984, and distributions under a
terminated plan which if it had not been terminated would have been required to
be included in an Aggregation Group, will be counted. Further, distributions
from the Plan (including the cash value of life insurance policies) of a
Participant's account balance because of death shall be treated as a
distribution for the purposes of this paragraph.

             (4) any Employee contributions, whether voluntary or mandatory.
However, amounts attributable to tax deductible qualified voluntary employee
contributions shall not be considered to be a part of the Participant's
Aggregate Account balance.

             (5) with respect to unrelated rollovers and plan-to-plan transfers
(ones which are both initiated by the Employee and made from a plan maintained
by one employer to a plan maintained by another employer), if this Plan provides
the rollovers or plan-to-plan transfers, it shall always consider such rollovers
or plan-to-plan transfers as a distribution for the purposes of this Section. If
this Plan is the plan accepting such rollovers or plan-to-plan transfers, it
shall not consider such rollovers or plan-to-plan transfers accepted after

                                                                            16

<PAGE>

December 31, 1983 as part of the Participant's Aggregate Account balance.
However, rollovers or plan-to-plan transfers accepted prior to January 1, 1984
shall be considered as part of the Participant's Aggregate Account balance.

             (6) with respect to related rollovers and plan-to-plan transfers
(ones either not initiated by the Employee or made to a plan maintained by the
same employer), if this Plan provides the rollover or plan-to-plan transfer, it
shall not be counted as a distribution for purposes of this Section. If this
Plan is the plan accepting such rollover or plan-to-plan transfer, it shall
consider such rollover or plan-to-plan transfer as part of the Participant's
Aggregate Account balance, irrespective of the date on which such rollover or
plan-to-plan transfer is accepted.

             (7) For the purposes of determining whether two employers are to be
treated as the same employer in (5) and (6) above, all employers aggregated
under Code section 414(b), (c), (m) and (o) are treated as the same employer.

         (d) "Aggregation Group" means either a Required Aggregation Group or a
Permissive Aggregation Group as hereinafter determined.

             (1) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, each plan of the Employer in which a Key Employee
is a participant in the Plan Year containing the Determination Date or any of
the four preceding Plan Years, and each other plan of the Employer which enables
any plan in which a Key Employee participates to meet the requirements of Code
sections 401(a)(4) or 410, will be required to be aggregated. Such group shall
be known as a Required Aggregation Group.

         In the case of a Required Aggregation Group, each plan in the group
will be considered a Top Heavy Plan if the Required Aggregation Group is a Top
Heavy Group. No plan in the Required Aggregation Group will be considered a Top
Heavy Plan if the Required Aggregation Group is not a Top Heavy Group.

             (2) Permissive Aggregation Group: The Employer may also include any
other plan not required to be included in the Required Aggregation Group,
provided the resulting group, taken as a whole, would continue to satisfy the
provisions of Code sections 401(a)(4) and 410. Such group shall be known as a
Permissive Aggregation Group.

         In the case of a Permissive Aggregation Group, only a plan that is part
of the Required Aggregation Group will be considered a Top Heavy Plan if the
Permissive Aggregation Group is a Top Heavy Group. No plan in the Permissive
Aggregation Group will be considered a Top Heavy Plan if the Permissive
Aggregation Group is not a Top Heavy Group.

             (3) Only those plans of the Employer in which the Determination
Dates fall within the same calendar year shall be aggregated in order to
determine whether such plans are Top Heavy Plans.

                                                                            17

<PAGE>

             (4) An Aggregation Group shall include any terminated plan of the
Employer if it was maintained within the last five (5) years ending on the
Determination Date.

         (e) "Determination Date" means (a) the last day of the preceding Plan
Year, or (b) in the case of the first Plan Year, the last day of such Plan Year.

         (f) Present Value of Accrued Benefit: In the case of a defined benefit
plan, the Present Value of Accrued Benefit for a Participant other than a Key
Employee, shall be as determined using the single accrual method used for all
plans of the Employer and Affiliated Employers, or if no such single method
exists, using a method which results in benefits accruing not more rapidly than
the slowest accrual rate permitted under Code section 411(b)(1)(C). The
determination of the Present Value of Accrued Benefit shall be determined as of
the most recent valuation date that falls within or ends with the 12-month
period ending on the Determination Date except as provided in Code section 416
and the Regulations thereunder for the first and second plan years of a defined
benefit plan.

         (g) "Top Heavy Group" means an Aggregation Group in which, as of the
Determination Date, the sum of:

             (1) the Present Value of Accrued Benefits of Key Employees under
all defined benefit plans included in the group, and

             (2) the Aggregate Accounts of Key Employees under all defined
contribution plans included in the group,

exceeds sixty percent (60%) of a similar sum determined for all Participants.

         Section 2.03 Powers and Responsibilities of the Employer
         ------------ -------------------------------------------

             (a) The Principal Employer shall be empowered to appoint and remove
the Trustee and the Administrator from time to time as it deems necessary for
the proper administration of the Plan to assure that the Plan is being operated
for the exclusive benefit of the Participants and their Beneficiaries in
accordance with the terms of the Plan, the Code, and the Act.

             (b) The Principal Employer shall establish a "funding policy and
method", i.e., it shall determine whether the Plan has a short run need for
liquidity (e.g., to pay benefits) or whether liquidity is a long run goal and
investment growth (and stability of same) is a more current need, or shall
appoint a qualified person to do so. The Principal Employer or its delegate
shall communicate such needs and goals to the Trustee, who shall coordinate such
Plan needs with its investment policy. The communication of such a "funding
policy and method" shall not, however, constitute a directive to the Trustee as
to investment of the Trust Funds. Such funding policy and method" shall be
consistent with the objectives of this Plan and with the requirements of Title I
of the Act.

                                                                            18

<PAGE>

             (c) The Principal Employer shall periodically review the
performance of any Fiduciary or other person to whom duties have been delegated
or allocated by it under the provisions of this Plan or pursuant to procedures
established hereunder. This requirement may be satisfied by formal periodic
review by the Principal Employer or by a qualified person specifically
designated by the Principal Employer, through day-to-day conduct and evaluation,
or through other appropriate ways.

         Section 2.04 Designation of Administrative Authority
         ------------ ---------------------------------------

         Fulton Financial Corporation as the Principal Employer may appoint a
committee (the "Committee") to carry on administrative functions of the Plan.
The Committee shall be composed of at least five persons. The Committee shall
choose from among its members a Chairman and a Secretary. The Secretary shall
record the minutes of the meetings of the Committee and shall be responsible for
maintaining the records relating to the Committee's administration of the Plan.
The Committee may act at a meeting or in writing without a meeting. All actions
and decisions of the Committee shall be taken and determined by a majority vote
of the members of the Committee, including actions in writing taken without a
meeting. Any member of the Committee may resign at any time by delivering
written notice to Fulton Financial Corporation, and any member of the Committee
may be removed at any time by Fulton Financial Corporation. Vacancies in the
Committee shall be filled by Fulton Financial Corporation.

         Section 2.05 Allocation and Delegation of Responsibilities
         ------------ ---------------------------------------------

         If more than one person is appointed as Administrator, the
responsibilities of each Administrator may be specified by the Principal
Employer and accepted in writing by each Administrator. In the event that no
such delegation is made by the Principal Employer, the Administrators may
allocate the responsibilities among themselves, in which event the
Administrators shall notify the Principal Employer and the Trustee in writing of
such action and specify the responsibilities of each Administrator. The Trustee
thereafter shall accept and rely upon any documents executed by the appropriate
Administrator until such time as the Principal Employer or the Administrators
file with the Trustee a written revocation of such designation.

         Section 2.06 Powers and Duties of the Administrator
         ------------ --------------------------------------

         The primary responsibility of the Administrator is to administer the
Plan for the exclusive benefit of the Participants and their Beneficiaries,
subject to the specific terms of the Plan. The Administrator shall administer
the Plan in accordance with its terms and shall have the power and discretion to
construe the terms of the Plan and to determine all questions arising in
connection with the administration, interpretation, and application of the Plan.
Any such determination by the Administrator shall be conclusive and binding upon
all persons. The Administrator may establish procedures, correct any defect,
supply any information, or reconcile any inconsistency in such manner and to
such extent as shall be deemed necessary or advisable to carry out the purpose
of the Plan; provided, however, that any procedure, discretionary act,
interpretation or construction shall be done in a nondiscriminatory manner based
upon uniform

                                                                            19

<PAGE>

principles consistently applied and shall be consistent with the intent that the
Plan shall continue to be deemed a qualified plan under the terms of Code
section 401(a), and shall comply with the terms of the Act and all regulations
issued pursuant thereto. The Administrator shall have all powers necessary or
appropriate to accomplish his duties under this Plan.

         The Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the following:

             (a) the discretion to determine all questions relating to the
eligibility of Employees to participate or remain a Participant hereunder and to
receive benefits under the Plan;

             (b) to compute, certify, and direct the Trustee with respect to the
amount and the kind of benefits to which any Participant shall be entitled
hereunder;

             (c) to authorize and direct the Trustee with respect to all
nondiscretionary or otherwise directed disbursements from the Trust;

             (d) to maintain all necessary records for the administration of the
Plan;

             (e) to interpret the provisions of the Plan and to make and publish
such rules for regulation of the Plan as are consistent with the terms hereof;

             (f) to determine the size and type of any Contract to be purchased
from any insurer, and to designate the insurer from which such Contract shall be
purchased;

             (g) to compute and certify to the Employer and to the Trustee from
time to time the sums of money necessary or desirable to be contributed to the
Plan;

             (h) to consult with the Principal Employer and the Trustee
regarding the short and long-term liquidity needs of the Plan in order that the
Trustee can exercise any investment discretion in a manner designed to
accomplish specific objectives;

             (i) to prepare and distribute to Employees a procedure for
notifying Participants and Beneficiaries of their rights to elect joint and
survivor annuities and Pre-Retirement Survivor Annuities as required by the Act
and Regulations thereunder;

             (j) to prepare and implement a procedure to notify Eligible
Employees that they may elect to have a portion of their Compensation deferred
or paid to them in cash;

             (k) to assist any Participant regarding his rights, benefits, or
elections available under the Plan.

         Section 2.07 Records and Reports
         ------------ -------------------

                                                                            20

<PAGE>

         The Administrator shall keep a record of all actions taken and shall
keep all other books of account, records, and other data that may be necessary
for proper administration of the Plan and shall be responsible for supplying all
information and reports to the Internal Revenue Service, Department of Labor,
Participants, Beneficiaries and others as required by law.

         Section 2.08  Appointment of Advisors
         ------------  -----------------------

         The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, and other persons as
the Administrator or the Trustee deems necessary or desirable in connection with
the administration of this Plan.

         Section 2.09  Information from Employer
         ------------  -------------------------

         To enable the Administrator to perform his functions, the Employer
shall supply full and timely information to the Administrator on all matters
relating to the Compensation of all Participants, their Hours of Service, their
Years of Service, their retirement, death, disability, or termination of
employment, and such other pertinent facts as the Administrator may require; and
the Administrator shall advise the Trustee of such of the foregoing facts as may
be pertinent to the Trustee's duties under the Plan. The Administrator may rely
upon such information as is supplied by the Employer and shall have no duty or
responsibility to verify such information.

         Section 2.10  Payment of Expenses
         ------------  -------------------

         All expenses of administration may be paid out of the Trust Fund unless
paid by the Employer. Such expenses shall include any expenses incident to the
functioning of the Administrator, including, but not limited to, fees of
accountants, counsel, and other specialists and their agents, and other costs of
administering the Plan. Until paid, the expenses shall constitute a liability of
the Trust Fund. However, the Employer may reimburse the Trust Fund for any
administration expense incurred. Any administration expense paid to the Trust
Fund as a reimbursement shall not be considered an Employer contribution.

         Section 2.11  Majority Actions
         ------------  ----------------

         Except where there has been an allocation and delegation of
administrative authority pursuant to Section 2.05, if there shall be more than
one Administrator, they shall act by a majority of their number, but may
authorize one or more of them to sign all papers on their behalf.

         Section 2.12  Claims Procedure
         ------------  ----------------

         Claims for benefits under the Plan may be filed with the Administrator
on forms supplied by the Employer. Written notice of the disposition of a claim
shall be furnished to the claimant within 90 days after the application is
filed. In the event the claim is denied, the reasons for the

                                                                              21

<PAGE>

denial shall be specifically set forth in the notice in language calculated to
be understood by the claimant, pertinent provisions of the Plan shall be cited,
and, where appropriate, an explanation as to how the claimant can perfect the
claim will be provided. In addition, the claimant shall be furnished with an
explanation of the Plan's claims review procedure.

         Section 2.13  Claims Review Procedure
         ------------  -----------------------

         Any Employee, former Employee, or Beneficiary of either, who has been
denied a benefit by a decision of the Administrator pursuant to Section 2.12
shall be entitled to request the Administrator to give further consideration to
his claim by filing with the Administrator (on a form which may be obtained from
the Administrator) a request for a hearing. Such request, together with a
written statement of the reasons why the claimant believes his claim should be
allowed, shall be filed with the Administrator no later than 60 days after
receipt of the written notification provided for in Section 2.12. The
Administrator shall then conduct a hearing within the next 60 days, at which the
claimant may be represented by an attorney or any other representative of his
choosing and at which the claimant shall have an opportunity to submit written
and oral evidence and arguments in support of his claim. At the hearing (or
prior thereto upon 5 business days written notice to the Administrator) the
claimant or his representative shall have an opportunity to review all documents
in the possession of the Administrator which are pertinent to the claim at issue
and its disallowance. Either the claimant or the Administrator may cause a court
reporter to attend the hearing and record the proceedings. In such event, a
complete written transcript of the proceedings shall be furnished to both
parties by the court reporter. The full expense of any such court reporter and
such transcripts shall be borne by the party causing the court reporter to
attend the hearing. A final decision as to the allowance of the claim shall be
made by the Administrator within 60 days of receipt of the appeal (unless there
has been an extension of 60 days due to special circumstances, provided the
delay and the special circumstances occasioning it are communicated to the
claimant within the 60 day period). Such communication shall be written in a
manner calculated to be understood by the claimant and shall include specific
reasons for the decision and specific references to the pertinent Plan
provisions on which the decision in based.

                                   ARTICLE III
                                   ELIGIBILITY

         Section 3.01  Conditions of Eligibility
         ------------  -------------------------

         Only Employees listed on Appendix A are eligible to participate in the
Plan. An Employee who is listed on Appendix A who has not yet become a
Participant as of the effective date of this restatement shall become a
Participant as of the earlier of the first day of the Plan Year or the first day
of the seventh month of such Plan Year coinciding with or next following the
date such Employee has completed 1 Year of Service and has attained age 21,
provided said Employee was still employed as of such date (or if not employed on
such date, as of the date of rehire if a 1-Year Break in Service has not
occurred).

                                                                              22

<PAGE>

         Section 3.02  Application for Participation
         ------------  -----------------------------

         In order to become a Participant hereunder, each Eligible Employee
shall make application to the Employer for participation in the Plan and agree
to the terms hereof. Upon the acceptance of any benefits under this Plan, such
Employee shall automatically be deemed to have made application and shall be
bound by the terms and conditions of the Plan and all amendments hereto.

         Section 3.03  Effective Date of Participation
         ------------  -------------------------------

         Refer to Section 3.01 above.

         Section 3.04  Determination of Eligibility
         ------------  ----------------------------

         The Administrator shall determine the eligibility of each Employee for
participation in the Plan based upon information furnished by the Employer. Such
determination shall be conclusive and binding upon all persons, as long as the
same is made pursuant to the Plan and the Act. Such determination shall be
subject to review per Section 2.13.

         Section 3.05  Termination of Eligibility
         ------------  --------------------------

                (a)    In the event a Participant shall go from a classification
of an Eligible Employee to an ineligible Employee, such Former Participant shall
continue to vest in his interest in the Plan for each Year of Service completed
while a noneligible Employee, until such time as his Participant's Account shall
be forfeited or distributed pursuant to the terms of the Plan. Additionally, his
interest in the Plan shall continue to share in the earnings of the Trust Fund.

                (b)    In the event a Participant is no longer a member of an
eligible class of Employees and becomes ineligible to participate but has not
incurred a 1-Year Break in Service, such Employee will participate immediately
upon returning to an eligible class of Employees. If such Participant incurs a
1-Year Break in Service, eligibility will be determined under the break in
service rules of the Plan.

                (c)    In the event an Employee who is not a member of an
eligible class of Employees becomes a member of an eligible class, such Employee
will participate immediately if such Employee has satisfied the minimum age and
service requirements and would have otherwise previously become a Participant.

         Section 3.06  Omission of Eligible Employee
         ------------  -----------------------------

         If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission is
not made until after a contribution by his Employer for the year has been made,
the Employer shall make a subsequent contribution with

                                                                              23

<PAGE>

respect to the omitted Employee in the amount which the said Employer would have
contributed with respect to him had he not been omitted. Such contribution shall
be made regardless of whether or not it is deductible in whole or in part in any
taxable year under applicable provisions of the Code.

         Section 3.07  Inclusion of Ineligible Employee
         ------------  --------------------------------

         If, in any Plan Year, any person who should not have been included as a
Participant in the Plan is erroneously included and discovery of such incorrect
inclusion is not made until after a contribution for the year has been made, the
Employer shall not be entitled to recover the contribution made with respect to
the ineligible person regardless of whether or not a deduction is allowable with
respect to such contribution. In such event, the amount contributed with respect
to the ineligible person shall constitute a Forfeiture (except for Deferred
Compensation which shall be distributed to the ineligible person) for the Plan
Year in which the discovery is made.

                                   ARTICLE IV
                           CONTRIBUTION AND ALLOCATION

         Section 4.01  Formula for Determining Employer's Contribution
         ------------  -----------------------------------------------

         The Employer shall contribute to the Plan:

                (a)    The amount of the total salary reduction elections of all
Participants made pursuant to Section 4.02(a) for the valuation period, which
amount shall be deemed an Employer's Elective Contribution.

                (b)    On behalf of each Participant who is eligible to share in
matching contributions for the Plan Year, a discretionary matching contribution
equal to a percentage of each such Participant's Deferred Compensation, the
exact percentage to be determined each year by the Employer, which amount shall
be deemed an Employer's Non-Elective Contribution. The allocation is made on the
last day of the plan year.

         Except, however, in applying the matching percentage specified above,
only salary reductions up to 3% of Compensation shall be considered.

                (c)    Notwithstanding the foregoing, however, the Employer's
contributions for any Plan Year shall not exceed the maximum amount allowable as
a deduction to the Employer under the provisions of Code section 404. All
contributions by the Employer shall be made in cash or in such property as is
acceptable to the Trustee.

                (d)    Except, however, to the extent necessary to provide the
top heavy minimum allocations, the Employer shall make a contribution even if it
exceeds the amount which is deductible under Code section 404.

                                                                              24

<PAGE>

         Section 4.02  Participant's Salary Reduction Election
         ------------  ---------------------------------------

                (a)    Each Participant may elect to defer his Compensation
which would have been received in the Plan Year, but for the deferral election,
by up to 15%. A deferral election (or modification of an earlier election) may
not be made with respect to Compensation which is currently available on or
before the date the Participant executed such election or, if later, the latest
of the date the Employer adopts this cash or deferred arrangement, or the date
such arrangement first became effective.

         The amount by which compensation is reduced shall be that Participant's
Deferred Compensation and be treated as an Employer Elective Contribution and
allocated to that Participant's Elective Account.

                (b)    The balance in each Participant's Elective Account shall
be fully Vested at all times and shall not be subject to Forfeiture for any
reason.

                (c)    Amounts held in the Participant's Elective Account may
not be distributable earlier than:

                       (1) a Participant's termination of employment, Total and
Permanent Disability, or death;

                       (2) a Participant's attainment of age 59 1/2;

                       (3) the termination of the Plan without the existence at
the time of Plan termination of another defined contribution plan (other than an
employee stock ownership plan as defined in Code section 4975(e)(7)) or the
establishment of a successor defined contribution plan (other than an employee
stock ownership plan as defined in Code section 4975(e)(7)) by the Employer or
an Affiliated Employer within the period ending twelve months after distribution
of all assets from the Plan maintained by the Employer;

                       (4) the date of disposition by the Employer to an entity
that is not an Affiliated Employer of substantially all of the assets (within
the meaning of Code section 409(d)(2)) used in a trade or business of such
corporation if such corporation continues to maintain this Plan after the
disposition with respect to a Participant who continues employment with the
corporation acquiring such assets;

                       (5) the date of disposition by the Employer or an
Affiliated Employer who maintains the Plan of its interest in a subsidiary
(within the meaning of Code section 409(d)(3)) to an entity which is not an
Affiliated Employer but only with respect to a Participant who continues
employment with such subsidiary; or

                       (6) the proven financial hardship of a Participant,
subject to the limitations of Section 6.10.

                                                                              25

<PAGE>

                (d)    In any Plan Year beginning after December 31, 1987, a
Participant's Deferred Compensation made under this Plan and all other plans,
contracts or arrangements of the Employer maintaining this Plan shall not
exceed, during any taxable year, the limitation imposed by Code section 402(g),
as in effect at the beginning of such taxable year. This dollar limitation shall
be adjusted annually pursuant to the method provided in Code section 415(d) in
accordance with Regulations.

                (e)    In the event a Participant has received a hardship
distribution from his Participant's Elective Account pursuant to Section 6.10 or
pursuant to Regulation 1.401(k)-l(d)(2)(iii)(B) from any other plan maintained
by the Employer, then such Participant shall not be permitted to elect to have
Deferred Compensation contributed to the Plan on his behalf for a period of
twelve (12) months following the receipt of the distribution. Furthermore, the
dollar limitation under Code section 402(g) shall be reduced, with respect to
the Participant's taxable year following the taxable year in which the hardship
distribution was made, by the amount of such Participant's Deferred
Compensation, if any, pursuant to this Plan (and any other plan maintained by
the Employer) for the taxable year of the hardship distribution.

                (f)    If a Participant's Deferred Compensation under this Plan
together with any elective deferrals (as defined in Regulation 1.402(g)-l(b))
under another qualified cash or deferred arrangement (as defined in Code section
401(k)), a simplified employee pension (as defined in Code section 408(k)), a
salary reduction arrangement (within the meaning of Code section 3121(a)(5)(D)),
a deferred compensation plan under Code section 457, or a trust described in
Code section 501(c)(18) cumulatively exceed the limitation imposed by Code
section 402(g) (as adjusted annually in accordance with the method provided in
Code section 415(d) pursuant to Regulations) for such Participant's taxable
year, the Participant may, not later than March 1 following the close of his
taxable year, notify the Administrator in writing of such excess and request
that his Deferred Compensation under this Plan be reduced by an amount specified
by the Participant. In such event, the Administrator may direct the Trustee to
distribute such excess amount (and any Income allocable to such excess amount)
to the Participant not later than the first April 15th following the close of
the Participant's taxable year. Distributions in accordance with this paragraph
may be made for any taxable year of the Participant which begins after December
31, 1986. Any distribution of less than the entire amount of Excess Deferred
Compensation and Income shall be treated as a pro rata distribution of Excess
Deferred Compensation and Income. The amount distributed shall not exceed the
Participant's Deferred Compensation under the Plan for the taxable year. Any
distribution on or before the last day of the Participant's taxable year must
satisfy each of the following conditions:

                       (1) the Participant shall designate the distribution as
Excess Deferred Compensation;

                       (2) the distribution must be made after the date on which
the Plan received the Excess Deferred Compensation; and

                                                                              26

<PAGE>

                       (3) the Plan must designate the distribution as a
distribution of Excess Deferred Compensation.

                (g)    Notwithstanding Section 4.02 (f) above, a Participant's
Excess Deferred Compensation shall be reduced, but not below zero, by any
distribution of Excess Contributions pursuant to Section 4.06(a) for the Plan
Year beginning with or within the taxable year of the Participant.

                (h)    At Normal Retirement Date, or such other date when the
Participant shall be entitled to receive benefits, the fair market value of the
Participant's Elective Account shall be used to provide additional benefits to
the Participant or his Beneficiary.

                (i)    All amounts allocated to a Participant's Elective Account
may be treated as a Directed Investment Account pursuant to Section 4.12.

                (j)    Employer Elective Contributions made pursuant to this
Section may be segregated into a separate account for each Participant in a
federally insured savings account, certificate of deposit in a bank or savings
and loan association, money market certificate, or other short-term debt
security acceptable to the Trustee until such time as the allocations pursuant
to Section 4.04 have been made.

                (k)    The Employer and the Administrator shall implement the
salary reduction elections provided for herein in accordance with the following:

                       (1) A Participant may commence making elective deferrals
to the Plan only after first satisfying the eligibility and participation
requirements specified in Article III. However, the Participant must make his
initial salary deferral election within a reasonable time, not to exceed thirty
(30) days, after entering the Plan pursuant to Section 3.03. If the Participant
fails to make an initial salary deferral election within such time, then such
Participant may thereafter make an election in accordance with the rules
governing modifications. The Participant shall make such an election by entering
into a written salary reduction agreement with the Employer and filing such
agreement with the Administrator. Such election shall initially be effective
beginning with the pay period following the acceptance of the salary reduction
agreement by the Administrator, shall not have retroactive effect and shall
remain in force until revoked.

                       (2) A Participant may modify an election during the Plan
Year and concurrently make a new election by filing a written notice with
Administrator. Such notice shall be filed at least 15 days prior to the end of a
calendar quarter and shall take effect on the first day of the following
calendar quarter. Any modification shall remain in force until revoked.

                       (3) A Participant may elect to prospectively revoke his
salary reduction agreement in its entirety at any time during the Plan Year by
providing the Administrator with thirty (30) days written notice of such
revocation (or upon such shorter notice period as may be acceptable to the
Administrator). Such revocation shall become effective as of the beginning of

                                                                              27

<PAGE>

the first pay period coincident with or next following the expiration of the
notice period. Furthermore, the termination of the Participant's employment, or
the cessation of participation for any reason, shall be deemed to revoke any
salary reduction agreement then in effect, effective immediately following the
close of the pay period within which such termination or cessation occurs.

         Section 4.03  Time of Payment of Employer's Contribution
         ------------  ------------------------------------------

         Employer Elective Contributions shall be paid to the Trustee as of the
earliest date on which such contributions can reasonably be segregated from the
Employer's general assets, but in any event by the fifteenth business day of the
month following the month in which such amounts would otherwise have been
payable to the Participant in cash.

         The provisions of Department of Labor regulations 2510.3-102 are
incorporated herein by reference. Furthermore, any additional Employer
contributions which are allocable to the Participant's Elective Account for a
Plan Year shall be paid to the Plan no later than the twelve-month period
immediately following the close of such Plan Year.

         Section 4.04  Allocation of Contribution and Earnings
         ------------  ---------------------------------------

                (a)    The Administrator shall establish and maintain an account
in the name of each Participant to which the Administrator shall credit as of
each Valuation Date all amounts allocated to each such Participant as set forth
herein.

                (b)    The Employer shall provide the Administrator with all
information required by the Administrator to make a proper allocation of the
Employer's contributions for each Valuation Period. Within a reasonable period
of time after the date of receipt by the Administrator of such information, the
Administrator shall allocate such contribution as follows:

                       (1) With respect to the Employer's Elective Contribution
made pursuant to Section 4.01(a), to each Participant's Elective Account in an
amount equal to each such Participant's Deferred Compensation for the period.

                       (2) With respect to the Employer's Non-Elective
Contribution made pursuant to Section 4.01(b), to each Participant's Account in
accordance with Section 4.01(b). The allocation is made on the last day of the
Plan Year.

         Only Participants who have completed a Year of Service during the Plan
Year and are actively employed on the last day of the Plan Year shall be
eligible to share in the matching contribution for the Plan Year. However, those
Participants employed by Lafayette Bank, hired prior to July 1, 1991, who fail
to complete a Year of Service, but are actively employed on the last day of the
Plan Year shall be eligible to share in the matching contribution for the Plan
Year.

                (c)    As of each Anniversary Date any amounts which became
Forfeitures since the last Anniversary Date shall be made available to reinstate
previously forfeited account

                                                                              28

<PAGE>

balances of Former Participants, if any, in accordance with Section 6.04(g). The
remaining Forfeitures, if any, shall be used to reduce the contribution of the
Employer hereunder for the Plan Year in which such Forfeitures occur.

               (d) For any Top Heavy Plan Year, Non-Key Employees not otherwise
eligible to share in the allocation of contributions as provided above, shall
receive the minimum allocation provided for in Section 4.04(g) if eligible
pursuant to the provisions of Section 4.04(i).

               (e) Notwithstanding the foregoing, Participants who are not
actively employed on the last day of the Plan Year due to Retirement (Early,
Normal or Late), Total and Permanent Disability or death shall be treated as
actively employed on the last day of the Plan Year.

               (f) As of each Anniversary Date or other valuation date, before
allocation of Employer contributions pursuant to Section 401(b), any earnings or
losses (net appreciation or net depreciation) of the Trust Fund shall be
allocated in the same proportion that each Participant's and Former
Participant's nonsegregated accounts bear to the total of all Participants' and
Former Participants' nonsegregated accounts as of such date.

               (g) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum of the
Employer's contributions allocated to the Participant's Combined Account of each
Non-Key Employee shall be equal to at least three percent (3%) of such Non-Key
Employee's "415 Compensation" (reduced by contributions and forfeitures, if any,
allocated to each Non-Key Employee in any defined contribution plan included
with this plan in a Required Aggregation Group). However, if (i) the sum of the
Employer's contributions allocated to the Participant's Combined Account of each
Key Employee for such Top Heavy Plan Year is less than three percent (3%) of
each Key Employee's "415 Compensation" and (ii) this Plan is not required to be
included in an Aggregation Group to enable a defined benefit plan to meet the
requirements of Code section 401(a)(4) or 410, the sum of the Employer's
contributions allocated to the Participant's Combined Account of each Non-Key
Employee shall be equal to the largest percentage allocated to the Participant's
Combined Account of any Key Employee. However, in determining whether a Non-Key
Employee has received the required minimum allocation, such Non-Key Employee's
Deferred Compensation and matching contributions needed to satisfy the "Actual
Contribution Percentage" tests pursuant to Section 4.07(a) shall not be taken
into account.

     However, no such minimum allocation shall be required in this Plan for any
Non-Key Employee who participates in another defined contribution plan subject
to Code section 412 providing such benefits included with this Plan in a
Required Aggregation Group.

               (h) For purposes of the minimum allocations set forth above, the
percentage allocated to the Participant's Combined Account of any Key Employee
shall be equal to the ratio of the sum of the Employer's contributions allocated
on behalf of such Key Employee divided by the "415 Compensation" for such Key
Employee.

                                                                              29

<PAGE>

               (i) For any Top Heavy Plan Year, the minimum allocations set
forth above shall be allocated to the Participant's Combined Account of all
Non-Key Employees who are Participants and who are employed by the Employer on
the last day of the Plan Year, including Non-Key Employees who have (1) failed
to complete a Year of Service; and (2) declined to make mandatory contributions
(if required) or, in the case of a cash or deferred arrangement, elective
contributions to the Plan.

               (j) In lieu of the above, in any Plan Year in which a Non-Key
Employee is a Participant in both this Plan and a defined benefit pension plan
included in a Required Aggregation Group which is top heavy, the Employer shall
not be required to provide such Non-Key Employee with both the full separate
defined benefit plan minimum benefit and the full separate defined contribution
plan minimum allocation.

     Therefore, for any Plan Year when the Plan is a Top Heavy Plan, a Non-Key
Employee who is participating in this Plan and a defined benefit plan maintained
by the Employer shall receive a minimum monthly accrued benefit in the defined
benefit plan equal to the product of (1) one-twelfth (1/12th) of "415
Compensation" averaged over the five (5) consecutive "limitation years" (or
actual "limitation years", if less) which produce the highest average and (2)
the lesser of (i) two percent (2%) multiplied by Years of Service when the plan
is top heavy or (ii) twenty percent (20%). Further, the extra minimum allocation
(required by Section 4.09(n) to provide higher limitations) shall not be
provided.

               (k) For the purposes of this Section, "415 Compensation" shall be
limited to $200,000 (unless adjusted in such manner as permitted under Code
section 415(d)). However, for Plan Years beginning prior to January 1, 1989, the
$200,000 limit shall apply only for Top Heavy Plan Years and shall not be
adjusted.

               (l) Notwithstanding anything herein to the contrary, Participants
who terminated employment for any reason during the Plan Year shall share in the
salary reduction contributions made by the Employer for the year of termination
without regard to the Hours of Service credited.

               (m) If a Former Participant is reemployed after five (5)
consecutive 1-Year Breaks in Service, then separate accounts shall be maintained
as follows:

                   (1) one account for nonforfeitable benefits attributable to
pre-break service; and

                   (2) one account representing his status in the Plan
attributable to post-break service.

               (n) Notwithstanding anything to the contrary, for Plan Years
beginning after December 31, 1989, if this is a Plan that would otherwise fail
to meet the requirements of Code sections 401(a)(26), 410(b)(1) or
410(b)(2)(A)(i) and the Regulations thereunder because

                                                                              30

<PAGE>

Employer contributions have not been allocated to a sufficient number or
percentage of Participants for a Plan Year, then the following rules shall
apply:

                   (1) The group of Participants eligible to share in the
Employer's contribution for the Plan Year shall be expanded to include the
minimum number of Participants who would not otherwise be eligible as are
necessary to satisfy the applicable test specified above. The specific
Participants who shall become eligible under the terms of this paragraph shall
be those who are actively employed on the last day of the Plan Year and, when
compared to similarly situated Participants, have completed the greatest number
of Hours of Service in the Plan Year.

                   (2) If after application of paragraph (1) above, the
applicable test is still not satisfied, then the group of Participants eligible
to share in the Employer's contribution for the Plan Year shall be further
expanded to include the minimum number of Participants who are not actively
employed on the last day of the Plan Year as are necessary to satisfy the
applicable test. The specific Participants who shall become eligible to share
shall be those Participants, when compared to similarly situated Participants,
who have completed the greatest number of Hours of Service in the Plan Year
before terminating employment.

                   (3) Nothing in this Section shall permit the reduction of a
Participant's accrued benefit. Therefore any amounts that have previously been
allocated to Participants may not be reallocated to satisfy these requirements.
In such event, the Employer shall make an additional contribution equal to the
amount such affected Participants would have received had they been included in
the allocations, even if it exceeds the amount which would be deductible under
Code section 404. Any adjustment to the allocations pursuant to this paragraph
shall be considered a retroactive amendment adopted by the last day of the Plan
Year.

     Section 4.04  Actual Deferral Percentage Tests
     ------------  --------------------------------

               (a) Maximum Annual Allocation: For each Plan Year beginning after
December 31, 1986, the annual allocation derived from Employer Elective
Contributions to a Participant's Elective Account shall satisfy one of the
following tests:

                   (1) The "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not be more than the "Actual Deferral
Percentage" of the Non-Highly Compensated Participant group multiplied by 1.25,
or

                   (2) The excess of the "Actual Deferral Percentage" for the
Highly Compensated Participant group over the "Actual Deferral Percentage" for
the Non-Highly Compensated Participant group shall not be more than two
percentage points. Additionally, the "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not exceed the "Actual Deferral Percentage"
for the Non-Highly Compensated Participant group multiplied by 2. The provisions
of Code section 401(k)(3) and Regulation 1.401(k)-l(b) are incorporated herein
by reference.

                                                                              31

<PAGE>

     However, for Plan Years beginning after December 31, 1988, in order to
prevent the multiple use of the alternative method described in (2) above and in
Code section 401(m)(9)(A), any Highly Compensated Participant eligible to make
elective deferrals pursuant to Section 4.02 and to make Employee contributions
or to receive matching contributions under this Plan or under any other plan
maintained by the Employer or an Affiliated Employer shall have his actual
contribution ratio reduced pursuant to Regulation 1.401(m)-2, the provisions of
which are incorporated herein by reference.

               (b) For the purposes of this Section "Actual Deferral Percentage"
means, with respect to the Highly Compensated Participant group and Non-Highly
Compensated Participant group for a Plan Year, the average of the ratios,
calculated separately for each Participant in such group, of the amount of
Employer Elective Contributions allocated to each Participant's Elective Account
for such Plan Year, to such Participant's "414(s) Compensation" for such Plan
Year. The actual deferral ratio for each Participant and the "Actual Deferral
Percentage" for each group shall be calculated to the nearest one-hundredth of
one percent for Plan Years beginning after December 31, 1988. Employer Elective
Contributions allocated to each Non-Highly Compensated Participant's Elective
Account shall be reduced by Excess Deferred Compensation to the extent such
excess amounts are made under this Plan or any other plan maintained by the
Employer.

     Effective January 1, 1999, the ADP shall, for Participants who are Highly
Compensated Employees, be the ADP for the current year and shall, for
Participants who are Non-Highly Compensated Employees, also be the ADP for the
current year.

               (c) For the purposes of Sections 4.05(a) and 4.06, a Highly
Compensated Participant and a Non-Highly Compensated Participant shall include
any Employee eligible to make a deferral election pursuant to Section 4.02,
whether or not such deferral election was made or suspended pursuant to Section
4.02.

               (d) For the purposes of this Section and Code sections 401(a)(4),
410(b) and 401(k), if two or more plans which include cash or deferred
arrangements are considered one plan for the purposes of Code section 401(a)(4)
or 410(b) (other than Code section 410(b)(2)(A)(ii) as in effect for Plan Years
beginning after December 31, 1988), the cash or deferred arrangements included
in such plans shall be treated as one arrangement. In addition, two or more cash
or deferred arrangements may be considered as a single arrangement for purposes
of determining whether or not such arrangements satisfy Code sections 401(a)(4),
410(b) and 401(k). In such a case, the cash or deferred arrangements included in
such plans and the plans including such arrangements shall be treated as one
arrangement and as one plan for purposes of this Section and Code sections
401(a)(4), 410(b) and 401(k). For Plan Years beginning after December 31, 1989,
plans may be aggregated under this paragraph (e) only if they have the same plan
year.

     Notwithstanding the above, for Plan Years beginning after December 31,
1988, an employee stock ownership plan described in Code section 4975(e)(7) may
not be combined with

                                                                              32

<PAGE>

this Plan for purposes of determining whether the employee stock ownership plan
or this Plan satisfies this Section and Code sections 401(a)(4), 410(b) and
401(k).

               (e) For the purposes of this Section, if a Highly Compensated
Participant is a Participant under two or more cash or deferred arrangements
(other than a cash or deferred arrangement which is part of an employee stock
ownership plan as defined in Code section 4975(e)(7) for Plan Years beginning
after December 31, 1988) of the Employer or an Affiliated Employer, all such
cash or deferred arrangements shall be treated as one cash or deferred
arrangement for the purpose of determining the actual deferral ratio with
respect to such Highly Compensated Participant. However, for Plan Years
beginning after December 31, 1988, if the cash or deferred arrangements have
different Plan Years, this paragraph shall be applied by treating all cash or
deferred arrangements ending with or within the same calendar year as a single
arrangement.

     Section 4.06  Adjustment to Actual Deferral Percentage Tests
     ------------  ----------------------------------------------

     In the event that the initial allocations of the Employer's Elective
Contributions made pursuant to Section 4.04 do not satisfy one of the tests set
forth in Section 4.05(a) for Plan Years beginning after December 31, 1986, the
Administrator shall adjust Excess Contributions pursuant to the options set
forth below:

               (a) Notwithstanding any other provision of this Plan, excess
contributions, plus any income and minus any loss allocable thereto up to the
last day of the Plan Year, shall be distributed no later than the last day of
each Plan Year to Participants to whose Accounts such excess contributions were
allocated for the preceding Plan Year. If such excess amounts are distributed
more than 2 1/2 months after the last day of the Plan Year in which such excess
amounts arose, a ten percent (10%) excise tax will be imposed on the Employer
maintaining the Plan with respect to such amounts. Such distributions shall be
made to Highly Compensated Employees on the basis of the amount of contributions
by, or on behalf of, each of such Employees, as follows:

                   (1) the contribution of the Highly Compensated Employee with
the highest dollar amount shall be reduced to equal the dollar amount of the
Highly Compensated Employee with the next highest dollar amount of
contributions, such amount being distributed to the Highly Compensated Employee
with the highest dollar amount; and

                   (2) the foregoing reduction and distribution process is
repeated to the extent necessary to distribute the total excess contributions.
Excess contributions shall be treated as Annual Additions under the Plan.

     For each Highly Compensated Participant, the amount of Excess Contributions
is equal to the Elective Contributions on behalf of such Highly Compensated
Participant (determined prior to the application of this paragraph) minus the
amount determined by multiplying the Highly Compensated Participant's actual
deferral ratio (determined after application of this paragraph)

                                                                              33

<PAGE>

by his "414(s) Compensation". However, in determining the amount of Excess
Contributions to be distributed with respect to an affected Highly Compensated
Participant as determined herein, such amount shall be reduced by any Excess
Deferred Compensation previously distributed to such affected Highly Compensated
Participant for his taxable year ending with or within such Plan Year.

                   (3) With respect to the distribution of Excess Contributions
pursuant to (a) above, such distribution:

                       (i)   may be postponed but not later than the close of
the Plan Year following the Plan Year to which they are allocable;

                       (ii)  shall be made first from unmatched Deferred
Compensation and, thereafter, simultaneously from Deferred Compensation which is
matched and matching contributions which relate to such Deferred Compensation.
However, any such matching contributions which are not Vested shall be forfeited
in lieu of being distributed;

                       (iii) shall be adjusted for Income; and

                       (iv)  shall be designated by the Employer as a
distribution of Excess Contributions (and Income).

                   (4) Any distribution of less than the entire amount of Excess
Contributions shall be treated as a pro rata distribution of Excess
Contributions and Income.

                   (5) If the determination and correction of Excess
Contributions of a Highly Compensated Participant whose actual deferral ratio is
determined under the family aggregation rules, then the actual deferral ratio
shall be reduced as required herein, and the Excess Contributions for the family
unit shall be allocated among the Family Members in proportion to the Elective
Contributions of each Family Member that were combined to determine the group
actual deferral ratio. Notwithstanding the foregoing, with respect to Plan Years
beginning prior to January 1, 1990, compliance with the Regulations then in
effect shall be deemed to be compliance with this paragraph.

               (b) Within twelve (12) months after the end of the Plan Year, the
Employer may make a special Qualified Non-Elective Contribution on behalf of
Non-Highly Compensated Participants in an amount sufficient to satisfy one of
the tests set forth in Section 4.05(a). Such contribution shall be allocated to
the Participant's Elective Account of each Non-Highly Compensated Participant in
the same proportion that each Non-Highly Compensated Participant's Compensation
for the year bears to the total Compensation of all Non-Highly Compensated
Participants.

     Section 4.07  Actual Contribution Percentage Tests
     ------------  ------------------------------------

                                                                              34

<PAGE>

               (a) The "Actua1 Contribution Percentage" for Plan Years beginning
after December 31, 1986 for the Highly Compensated Participant group shall not
exceed the greater of:

                   (1) 125 percent of such percentage for the Non-Highly
Compensated Participant group; or

                   (2) the lesser of 200 percent of such percentage for the
Non-Highly Compensated Participant group, or such percentage for the Non-Highly
Compensated Participant group plus 2 percentage points. However, for Plan Years
beginning after December 31, 1988, to prevent the multiple use of the
alternative method described in this paragraph and Code section 401(m)(9)(A),
any Highly Compensated Participant eligible to make elective deferrals pursuant
to Section 4.02 or any other cash or deferred arrangement maintained by the
Employer or an Affiliated Employer and to make Employee contributions or to
receive matching contributions under this Plan or under any other plan
maintained by the Employer or an Affiliated Employer shall have his actual
contribution ratio reduced pursuant to Regulation 1.401(m)-2. The provisions of
Code section 401(m) and Regulations 1.401(m)-l(b) and 1.401(m)-2 are
incorporated herein by reference.

               (b) For the purposes of this Section and Section 4.08, "Actual
Contribution Percentage" for a Plan Year means, with respect to the Highly
Compensated Participant group and Non-Highly Compensated Participant group, the
average of the ratios (calculated separately for each Participant in each group)
of:

                   (1) the sum of Employer matching contributions made pursuant
to Section 4.01(b) on behalf of each such Participant for such Plan Year; to

                   (2) the Participant's "414(s) Compensation" for such Plan
Year.

     Effective January 1, 1999, the ACP shall, for Participants who are Highly
Compensated Employees, be the ACP for the current year and shall, for
Participants who are Non-Highly Compensated Employees, also be the ACP for the
current year.

               (c) For purposes of determining the "Actual Contribution
Percentage" and the amount of Excess Aggregate Contributions pursuant to Section
4.08(d), only Employer matching contributions contributed to the Plan prior to
the end of the succeeding Plan Year shall be considered. In addition, the
Administrator may elect to take into account, with respect to Employees eligible
to have Employer matching contributions pursuant to Section 4.01(b) allocated to
their accounts, elective deferrals (as defined in Regulation 1.402(g)-l(b)) and
qualified non-elective contributions (as defined in Code section 401(m)(4)(C))
contributed to any plan maintained by the Employer. Such elective deferrals and
qualified non-elective contributions shall be treated as Employer matching
contributions subject to Regulation 1.401(m)-l(b)(2) which is incorporated
herein by reference. However, for Plan Years beginning

                                                                              35

<PAGE>

after December 31, 1988, the Plan Year must be the same as the plan year of the
plan to which the elective deferrals and the qualified non-elective
contributions are made.

               (d) For purposes of this Section and Code sections 401(a)(4),
410(b) and 401(m), if two or more plans of the Employer to which matching
contributions, Employee contributions, or both, are made are treated as one plan
for purposes of Code sections 401(a)(4) or 410(b) (other than the average
benefits test under Code section 410(b)(2)(A)(ii) as in effect for Plan Years
beginning after December 31, 1988), such plans shall be treated as one plan. In
addition, two or more plans of the Employer to which matching contributions,
Employee contributions, or both, are made may be considered as a single plan for
purposes of determining whether or not such plans satisfy Code sections
401(a)(4), 410(b) and 401(m). In such a case, the aggregated plans must satisfy
this Section and Code sections 401(a)(4), 410(b) and 401(m) as though such
aggregated plans were a single plan. For Plan Years beginning after December 31,
1989, plans may be aggregated under this paragraph (e) only if they have the
same plan year.

     Notwithstanding the above, for Plan Years beginning after December 31,
1988, an employee stock ownership plan described in Code section 4975(e)(7) may
not be aggregated with this Plan for purposes of determining whether the
employee stock ownership plan or this Plan satisfies this Section and Code
sections 401(a)(4), 410(b) and 401(m).

               (e) If a Highly Compensated Participant is a Participant under
two or more plans (other than an employee stock ownership plan as defined in
Code section 4975(e)(7) for Plan Years beginning after December 31, 1988) which
are maintained by the Employer or an Affiliated Employer to which matching
contributions, Employee contributions, or both, are made, all such contributions
on behalf of such Highly Compensated Participant shall be aggregated for
purposes of determining such Highly Compensated Participant's actual
contribution ratio. However, for Plan Years beginning after December 31, 1988,
if the plans have different plan years, this paragraph shall be applied by
treating all plans ending with or within the same calendar year as a single
plan.

               (f) For purposes of Sections 4.07(a) and 4.08, a Highly
Compensated Participant and Non-Highly Compensated Participant shall include any
Employee eligible to have Employer matching contributions pursuant to Section
4.01(b) (whether or not a deferral election was made or suspended pursuant to
Section 4.02(e)) allocated to his account for the Plan Year.

     Section 4.08  Adjustment to Actual Contribution Percentage Tests
     ------------  --------------------------------------------------

               (a) Notwithstanding any other provisions of this Plan, excess
aggregate contributions, plus any income and minus any loss allocable thereto up
to the date of distribution, shall be forfeited, if forfeitable, or distributed,
of not forfeitable, no later than the last day of each Plan Year to Participants
to whose Accounts such excess aggregate contributions were allocated for the
preceding Plan Year. If such excess aggregate contributions are distributed more
than 2 1/2 months after the last day of the Plan Year in which such excess
amounts arose, a ten percent (10%) excise tax will be imposed on the Employer
maintaining the Plan with respect to such

                                                                              36

<PAGE>

amounts. Such distributions shall be made to Highly Compensated Employees on the
basis of the amount of contributions by, or on behalf of, each of such Employees
as follows:

                   (1) the contribution of the Highly Compensated Employee with
the highest dollar amount shall be reduced to equal the dollar amount of the
Highly Compensated Employee with the next highest amount of contributions, such
amount being distributed to the Highly Compensated Employee with the highest
dollar amount; and

                   (2) the foregoing reduction and distribution process is
repeated to the extent necessary to distribute the total excess aggregate
contributions.

               (b) Any distribution and/or Forfeiture of less than the entire
amount of Excess Aggregate Contributions (and Income) shall be treated as a pro
rata distribution and/or Forfeiture of Excess Aggregate Contributions and
Income. Distribution of Excess Aggregate Contributions shall be designated by
the Employer as a distribution of Excess Aggregate Contributions (and Income).
Forfeitures of Excess Aggregate Contributions shall be treated in accordance
with Section 4.04.

               (c) Excess Aggregate Contributions, including forfeited matching
contributions, shall be treated as Employer contributions for purposes of Code
sections 404 and 415 even if distributed from the Plan.

               (d) For each Highly Compensated Participant, the amount of Excess
Aggregate Contributions is equal to the total Employer matching contributions
made pursuant to Section 4.01(b) and any qualified non-elective contributions or
elective deferrals taken into account pursuant to Section 4.07(c) on behalf of
the Highly Compensated Participant (determined prior to the application of this
paragraph) minus the amount determined by multiplying the Highly Compensated
Participant's actual contribution ratio (determined after application of this
paragraph) by his "414(s) Compensation". The actual contribution ratio must be
rounded to the nearest one-hundredth of one percent for Plan Years beginning
after December 31, 1988. In no case shall the amount of Excess Aggregate
Contribution with respect to any Highly Compensated Participant exceed the
amount of Employer matching contributions made pursuant to Section 4.01(b) and
any qualified non-elective contributions or elective deferrals taken into
account pursuant to Section 4.07(c) on behalf of such Highly Compensated
Participant for such Plan Year.

               (e) The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made after first
determining the Excess Contributions, if any, to be treated as voluntary
Employee contributions due to recharacterization for the plan year of any other
qualified cash or deferred arrangement (as defined in Code section 401(k))
maintained by the Employer that ends with or within the Plan Year.

               (f) If the determination and correction of Excess Aggregate
Contributions of a Highly Compensated Participant whose actual contribution
ratio is determined under the family

                                                                              37

<PAGE>

aggregation rules, then the actual contribution ratio shall be reduced and the
Excess Aggregate Contributions for the family unit shall be allocated among the
Family Members in proportion to the sum of Employer matching contributions made
pursuant to Section 4.01(b) and any qualified non-elective contributions or
elective deferrals taken into account pursuant to Section 4.07(c) of each Family
Member that were combined to determine the group actual contribution ratio.
Notwithstanding the foregoing, with respect to Plan Years beginning prior to
January 1, 1990, compliance with the Regulations then in effect shall be deemed
to be compliance with this paragraph.

               (g) Notwithstanding the above, within twelve (12) months after
the end of the Plan Year, the Employer may make a special Qualified Non-Elective
Contribution on behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy one of the tests set forth in Section 4.07(a). Such
contribution shall be allocated to the Participant's Elective Account of each
Non-Highly Compensated Participant in the same proportion that each Non-Highly
Compensated Participant's Compensation for the year bears to the total
Compensation of all Non-Highly Compensated Participants. A separate accounting
shall be maintained for the purpose of excluding such contributions from the
"Actual Deferral Percentage" tests pursuant to Section 4.05(a).

     Section 4.09  Maximum Annual Additions
     ------------  ------------------------

               (a) Notwithstanding the foregoing, the maximum "annual additions"
credited to a Participant's for any "limitation year" shall equal the lesser of:
(1) $30,000, as adjusted under Code section 415(d) or (2) twenty-five percent
(25%) of the Participant's "415 Compensation" for such "limitation year".

               (b) For purposes of applying the limitations of Code section 415,
"annual additions" means the sum credited to a Participant's accounts for any
"limitation year" of (1) Employer contributions, (2) Employee contributions for
"limitation years" beginning after December 31, 1986, (3) forfeitures, (4)
amounts allocated, after March 31, 1984, to an individual medical account, as
defined in Code section 415(l)(2) which is part of a pension or annuity plan
maintained by the Employer and (5) amounts derived from contributions paid or
accrued after December 31, 1985, in taxable years ending after such date, which
are attributable to post-retirement medical benefits allocated to the separate
account of a key employee (as defined in Code section 419A(d)(3)) under a
welfare benefit plan (as defined in Code section 419(e)) maintained by the
Employer. Except, however, the "415 Compensation" percentage limitation referred
to in paragraph (a)(2) above shall not apply to: (1) any contribution for
medical benefits (within the meaning of Code section 419A(f)(2)) after
separation from service which is otherwise treated as an "annual addition", or
(2) any amount otherwise treated as an "annual addition" under Code section
415(l)(1).

               (c) For purposes of applying the limitations of Code section 415,
the transfer of funds from one qualified plan to another is not an "annual
addition". In addition, the following are not Employee contributions for the
purposes of Section 4.09(b)(2): (1) rollover

                                                                              38

<PAGE>

contributions (as defined in Code sections 402(a)(5), 403(a)(4), 403(b)(8) and
408(d)(3)); (2) repayments of loans made to a Participant from the Plan; (3)
repayments of distributions received by an Employee pursuant to Code section
411(a)(7)(B) (cash-outs); (4) repayments of distributions received by an
Employee pursuant to Code section 411(a)(3)(D) (mandatory contributions); and
(5) Employee contributions to a simplified employee pension excludable from
gross income under Code section 408(k)(6).

               (d) For purposes of applying the limitations of Code section 415,
"415 Compensation" shall include the Participant's wages, salaries, fees for
professional service and other amounts received (without regard to whether or
not an amount is paid in cash) for personal services actually rendered in the
course of employment with an Employer maintaining the Plan to the extent that
the amounts are includable in gross income (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips, bonuses, fringe
benefits, reimbursements, and expense allowances, and in the case of a
Participant who is an Employee within the meaning of Code section 401(c)(1) and
the regulations thereunder, the Participant's earned income (as described in
Code section 401(c)(2) and the regulations thereunder)) paid during the
"limitation year".

     "415 Compensation" shall exclude (1)(A) contributions made by the Employer
to a plan of deferred compensation to the extent that, before the application of
the Code section 415 limitations to the Plan, the contributions are not
includable in the gross income of the Employee for the taxable year in which
contributed, (B) contributions made by the Employer to a plan of deferred
compensation to the extent that all or a portion of such contributions are
recharacterized as a voluntary Employee contribution, (C) Employer contributions
made on behalf of an Employee to a simplified employee pension plan described in
Code section 408(k) to the extent such contributions are excludable from the
Employee's gross income, (D) any distributions from a plan of deferred
compensation regardless of whether such amounts are includable in the gross
income of the Employee when distributed except any amounts received by an
Employee pursuant to an unfunded non-qualified plan to the extent such amounts
are includable in the gross income of the Employee; (2) amounts realized from
the exercise of a non-qualified stock option or when restricted stock (or
property) held by an Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture; (3) amounts realized from the sale,
exchange or other disposition of stock acquired under a qualified stock option;
and (4) other amounts which receive special tax benefits, such as premiums for
group term life insurance (but only to the extent that the premiums are not
includable in the gross income of the Employee), or contributions made by the
Employer (whether or not under a salary reduction agreement) towards the
purchase of any annuity contract described in Code section 403(b) (whether or
not the contributions are excludable from the gross income of the Employee). For
the purposes of this Section prior to January 1, 1998, the determination of "415
Compensation" shall be made by not including amounts that would otherwise be
excluded from a Participant's gross income by reason of the application of Code
sections 125, 402(a)(8), 402(h)(1)(B) and, in the case of Employer contributions
made pursuant to a salary reduction agreement, Code section 403(b).

                                                                              39

<PAGE>

               For purposes of applying the limitations in this Section, (i) for
limitation years beginning after December 31, 1997, Compensation paid or made
available during such limitation year shall include any elective deferral (as
defined in Code section 402(g)(3)), and any amount which is contributed or
deferred by the Employer at the election of the Employee and which is not
includible in the gross income of the Employee by reason of Code sections 125 or
457, and (ii) for limitation years beginning after December 31, 2000,
Compensation paid or made available during such limitation year shall include
any elective amounts not includible in the gross income of the Employee by
reason of Code section 132(f)(4).

               (e) For purposes of applying the limitations of Code section 415,
the "limitation year" shall be the Plan Year.

               (f) The dollar limitation under Code section 415(b)(1)(A) stated
in paragraph (a)(1) above shall be adjusted annually as provided in Code section
415(d) pursuant to the Regulations. The adjusted limitation is effective as of
January 1st of each calendar year and is applicable to "limitation years" ending
with or within that calendar year.

               (g) For the purpose of this Section, all qualified defined
benefit plans (whether terminated or not) ever maintained by the Employer shall
be treated as one defined benefit plan, and all qualified defined contribution
plans (whether terminated or not) ever maintained by the Employer shall be
treated as one defined contribution plan.

               (h) For the purpose of this Section, if the Employer is a member
of a controlled group of corporations, trades or businesses under common control
(as defined by Code section 1563(a) or Code section 414(b) and (c) as modified
by Code section 415(h)), is a member of an affiliated service group (as defined
by Code section 414(m)), or is a member of a group of entities required to be
aggregated pursuant to Regulations under Code section 414(o), all Employees of
such Employers shall be considered to be employed by a single Employer.

               (i) For the purpose of this Section, if this Plan is a Code
section 413(c) plan, all Employers of a Participant who maintain this Plan will
be considered to be a single Employer.

               (j) (1) If a Participant participates in more than one defined
contribution plan maintained by the Employer which have different Anniversary
Dates, the maximum "annual additions" under this Plan shall equal the maximum
"annual additions" for the "limitation year" minus any "annual additions"
previously credited to such Participant's accounts during the "limitation year".

                   (2) if a Participant participates in both a defined
contribution plan subject to Code section 412 and a defined contribution plan
not subject to Code section 412 maintained by the Employer which have the same
Anniversary Date, "annual additions" will be credited to the Participant's
accounts under the defined contribution plan subject to Code section 412 prior
to crediting "annual additions" to the Participant's accounts under the defined
contribution plan not subject to Code section 412.

                                                                              40

<PAGE>

                   (3) If a Participant participates in more than one defined
contribution plan not subject to Code section 412 maintained by the Employer
which have the same Anniversary Date, the maximum "annual additions" under this
Plan shall equal the product of (A) the maximum annual additions" for the
"limitation year" minus any "annual additions" previously credited under
subparagraphs (1) or (2) above, multiplied by (B) a fraction (i) the numerator
of which is the "annual additions" which would be credited to such Participant's
accounts under this Plan without regard to the limitations of Code section 415
and (ii) the denominator of which is such "annual additions" for all plans
described in this subparagraph.

               (k) If an Employee is (or has been) a Participant in one or more
defined benefit plans and one or more defined contribution plans maintained by
the Employer, the sum of the defined benefit plan fraction and the defined
contribution plan fraction for any "limitation year" may not exceed 1.0.

     The provisions of this Subsection 4.09(k) shall be effective until December
31, 1999.

               (l) The defined benefit plan fraction for any "limitation year"
is a fraction, the numerator of which is the sum of the Participant's projected
annual benefits under all the defined benefit plans (whether or not terminated)
maintained by the Employer, and the denominator of which is the lesser of 125
percent of the dollar limitation determined for the "limitation year" under Code
sections 415(b) and (d) or 140 percent of the highest average compensation,
including any adjustments under Code section 415(b).

         Notwithstanding the above, if the Participant was a Participant as of
the first day of the first "limitation year" beginning after December 31, 1986,
in one or more defined benefit plans maintained by the Employer which were in
existence on May 6, 1986, the denominator of this fraction will not be less than
125 percent of the sum of the annual benefits under such plans which the
Participant had accrued as of the close of the last "limitation year" beginning
before January 1, 1987, disregarding any changes in the terms and conditions of
the plan after May 5, 1986. The preceding sentence applies only if the defined
benefit plans individually and in the aggregate satisfied the requirements of
Code section 415 for all "limitation years" beginning before January 1, 1987.

               (m) The defined contribution plan fraction for any "limitation
year" is a fraction, the numerator of which is the sum of the annual additions
to the Participant's Account under all the defined contribution plans (whether
or not terminated) maintained by the Employer for the current and all prior
"limitation years" (including the annual additions attributable to the
Participant's nondeductible Employee contributions to all defined benefit plans,
whether or not terminated, maintained by the Employer, and the annual additions
attributable to all welfare benefit funds, as defined in Code section 419(e),
and individual medical accounts, as defined in Code section 415(l)(2),
maintained by the Employer), and the denominator of which is the sum of the
maximum aggregate amounts for the current and all prior "limitation years" of
service with the Employer (regardless of whether a defined contribution plan was
maintained by the Employer). The maximum aggregate amount in any "limitation
year" is the lesser of 125 percent

                                                                              41

<PAGE>

of the dollar limitation determined under Code sections 415(b) and (d) in effect
under Code section 415(c)(1)(A) or 35 percent of the Participant's Compensation
for such year.

     If the Employee was a Participant as of the end of the first day of the
first "limitation year" beginning after December 31, 1986, in one or more
defined contribution plans maintained by the Employer which were in existence on
May 6, 1986, the numerator of this fraction will be adjusted if the sum of this
fraction and the defined benefit fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the product of (1)
the excess of the sum of the fractions over 1.0 times (2) the denominator of
this fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they would be
computed as of the end of the last "limitation year" beginning before January 1,
1987, and disregarding any changes in the terms and conditions of the Plan made
after May 6, 1986, but using the Code section 415 limitation applicable to the
first "limitation year" beginning on or after January 1, 1987. The annual
addition for any "limitation year" beginning before January 1, 1987 shall not be
recomputed to treat all Employee contributions as annual additions.

          (n) Notwithstanding the foregoing, for any "limitation year" in which
the Plan is a Top Heavy Plan, 100% shall be substituted for 125% in Sections
4.09(l) and 4.09(m) unless the extra minimum allocation is being provided
pursuant to Section 4.04. However, for any "limitation year" in which the Plan
is a Super Top Heavy Plan, 100% shall be substituted for 125% in any event. The
provisions of this Subsection 4.09 (n) shall be effective only until December
31, 1999.

          (o) If the sum of the defined benefit plan fraction and the defined
contribution plan fraction shall exceed 1.0 in any "limitation year" for any
Participant in this Plan, the Administrator shall limit, to the extent
necessary, the "annual additions" to such Participant's accounts for such
"limitation year". If, after limiting the "annual additions" to such
Participant's accounts for the "limitation year", the sum of the defined benefit
plan fraction and the defined contribution plan fraction still exceed 1.0, the
Administrator shall then adjust the numerator of the defined benefit plan
fraction so that the sum of both fractions shall not exceed 1.0 in any
"limitation year" for such Participant.

          (p) Notwithstanding anything contained in this Section to the
contrary, the limitations, adjustments and other requirements prescribed in this
Section shall at all times comply with the provisions of Code section 415 and
the Regulations thereunder, the terms of which are specifically incorporated
herein by reference.

     Section 4.10 Adjustment for Excessive Annual Additions
     ------------ -----------------------------------------

          (a) If, as a result of a reasonable error in estimating a
Participant's Compensation or other facts and circumstances to which Regulation
1.415-6(b)(6) shall be applicable, the "annual additions" under this Plan would
cause the maximum "annual additions" to be exceeded for any Participant, the
Administrator shall (1) return any voluntary Employee

                                                                              42

<PAGE>

contributions credited for the "limitation year" to the extent that the return
would reduce the "excess amount" in the Participant's accounts (2) hold any
"excess amount" remaining after the return of any voluntary Employee
contributions in a "Section 415 suspense account" (3) use the "Section
415-suspense account" in the next "limitation year" (and succeeding "limitation
years" if necessary) to reduce Employer contributions for that Participant if
that Participant is covered by the Plan as of the end of the "limitation year",
or if the Participant is not so covered, allocate and reallocate the "Section
415 suspense account" in the next "limitation year" (and succeeding "limitation
years" if necessary) to all Participants in the Plan before any Employer or
Employee contributions which would constitute "annual additions" are made to the
Plan for such "limitation year" (4) reduce Employer contributions to the Plan
for such "limitation year" by the amount of the "Section 415 suspense account"
allocated and reallocated during such "limitation year".

          (b) For purposes of this Article, "excess amount" for any Participant
for a "limitation year" shall mean the excess, if any, of (1) the "annual
additions" which would be credited to his account under the terms of the Plan
without regard to the limitations of Code section 415 over (2) the maximum
"annual additions" determined pursuant to Section 4.09.

          (c) For purposes of this Section, "Section 415 suspense account" shall
mean an unallocated account equal to the sum of "excess amounts" for all
Participants in the Plan during the "limitation year". The "Section 415 suspense
account" shall not share in any earnings or losses of the Trust Fund.

          (d) The Plan may not distribute "excess amounts", other than voluntary
Employee contributions, to Participants or Former Participants.

     Section 4.11 Voluntary Contributions
     ------------ -----------------------

          (a) Any voluntary Employee contributions prior to the first day of the
Plan Year beginning in 1987 shall be maintained in each Participant's Voluntary
Contribution Account. The balance in each Participant's Voluntary Contribution
Account shall be fully Vested at all times and shall not be subject to
Forfeiture for any reason. No voluntary Employee contributions shall be accepted
hereunder after December 31, 1986.

          (b) A Participant may elect to withdraw his voluntary contributions
from his Voluntary Contribution Account and the actual earnings thereon in a
manner which is consistent with and satisfies the provisions of Section 6.05,
including, but not limited to, all notice and consent requirements of Code
sections 417 and 411(a)(11) and the Regulations thereunder. If the Administrator
maintains sub-accounts with respect to voluntary contributions (and earnings
thereon) which were made on or before a specified date, a Participant shall be
permitted to designate which sub-account shall be the source for his withdrawal.

          (c) At Normal Retirement Date, or such other date when the Participant
or his Beneficiary shall be entitled to receive benefits, the fair market value
of the Voluntary

                                                                              43

<PAGE>

Contribution Account shall be used to provide additional benefits to the
Participant or his Beneficiary.

          (d) All amounts allocated to a Voluntary Contribution Account may be
treated as a Directed Investment Account pursuant to Section 4.12.

     Section 4.12 Investment Funds
     ------------ ----------------

     The Trustee shall allocate assets of the Trust among the following six
Funds:

          (a) The FFA Retirement Fixed Income Fund, which will invest primarily
in medium term, investment grade bonds.

          (b) The Managed Equity Fund, which will invest in a diversified
portfolio of large, medium and small capitalization U.S. stocks and large
capitalization international stocks.

          (c) The Principal Preservation Fund, which will be a money market fund
holding primarily U. S. governmental securities.

          (d) The Fulton Financial Stock Fund, which will invest primarily in
stock of Fulton Financial Corporation but may also hold money market funds. All
acquisitions or dispositions of such stock shall conform with the requirements
of section 407 of ERISA. Each Participant (or Beneficiary of a deceased
Participant) shall be entitled to direct the Trustee to vote all shares of
common stock of Fulton Financial Corporation which are allocated to the Account
of such Participant (or Beneficiary) on any corporate matter on which holders of
such common stock are entitled to vote. In the absence of a direction by a
Participant (or Beneficiary) to vote, the Trustee shall vote shares allocated to
the Account of such Participant (or Beneficiary in accordance with the
requirements of ERISA.

          (e) The Balanced Fund, which shall invest in a balanced portfolio of
common stock and intermediate term fixed income securities.

          (f) The Indexed Equity Fund, which shall invest in a mutual fund which
in turn consists of shares of stock identified in the Standard & Poors stock
index from time to time.

     Effective on and after November 1, 2001, the Trustee shall allocate assets
of the Trust among nine funds, the FFA Retirement Fixed Income Fund, Principal
Preservation Fund, Fulton Financial Stock Fund, and Indexed Equity Fund, as
described above, plus five additional Funds, as follows:

          (a) The J. P. Morgan U. S. Equity Fund, which will invest primarily in
large capitalization, blue chip value stocks.

          (b) The Fidelity Advisor Mid-Cap Stock Fund, which will invest in a
diversified portfolio of medium sized companies stocks.

                                                                              44

<PAGE>

          (c) The Fidelity Advisor Value Strategies Fund, which will invest in a
diversified portfolio of small capitalization stocks.

          (d) The Goldman Sachs International Equity Fund, which will invest in
a diversified portfolio of international large capitalization businesses in
developed countries.

          (e) The FFA Retirement Common Stock Fund, which will invest primarily
in large capitalization, blue chip growth stocks.

     Rules and regulations concerning the investment of Accounts in the Funds,
and transfers between such Funds, may be adopted and amended from time to time
by the Administrator; such rules and regulations shall be communicated by the
Administrator in writing to the Participants.

     A separate Account shall be established for each Participant who has
invested in the Funds. The Account shall not share in Trust Fund earnings, but
it shall be charged or credited as appropriate with the net earnings, gains,
losses and expenses as well as any appreciation or depreciation in market value
during each Plan Year attributable to such account. The maintenance of the
Account is for accounting purposes only, and a segregation of the assets of the
Funds to each Account shall not be required.

     Section 4.13 Transfers from Qualified Plans
     ------------ ------------------------------

          (a) With the consent of the Administrator, amounts may be transferred
from other qualified plans by Participants, provided that the trust from which
such funds are transferred permits the transfer to be made and the transfer will
not jeopardize the tax exempt status of the Plan or create adverse tax
consequences for the Employer. The amounts transferred shall be set up in a
separate account herein referred to as a "Participant's Rollover Account." Such
account shall be fully Vested at all times and shall not be subject to
Forfeiture for any reason.

          (b) Amounts in a Participant's Rollover Account shall be held by the
Trustee pursuant to the provisions of this Plan and may not be withdrawn by, or
distributed to the Participant, in whole or in part, except as provided in
paragraphs (c) and (d) of this Section.

          (c) Except as permitted by Regulations (including Regulation
1.411(d)-4), amounts attributable to elective contributions (as defined in
Regulation 1.401(k)-1(g)(3)), including amounts treated as elective
contributions, which are transferred from another qualified plan in a
plan-to-plan transfer shall be subject to the distribution limitations provided
for in Regulation 1.401(k)-1(d).

          (d) At Normal Retirement Date, or such other date when the Participant
or his Beneficiary shall be entitled to receive benefits, the fair market value
of the Participant's Rollover Account shall be used to provide additional
benefits to the Participant or his Beneficiary. Any distributions of amounts
held in a Participant's Rollover Account shall be made in a manner which is
consistent with and satisfies the provisions of Section 6.05, including, but not
limited to,

                                                                              45

<PAGE>

all notice and consent requirements of Code sections 417 and 411(a)(11) and the
Regulations thereunder. Furthermore, such amounts shall be considered as part of
a Participant's benefit in determining whether an involuntary cash-out of
benefits without Participant consent may be made.

          (e) The Administrator may direct that employee transfers made after a
valuation date be segregated into a separate account for each Participant in a
federally insured savings account, certificate of deposit in a bank or savings
and loan association, money market certificate, or other short term debt
security acceptable to the Trustee until such time as the allocations pursuant
to this Plan have been made, at which time they may remain segregated or be
invested as part of the general Trust Fund, to be determined by the
Administrator.

          (f) All amounts to a Participant's Rollover Account may be treated as
a Directed Investment Account pursuant to Section 4.12.

          (g) For purposes of this Section, the term "qualified plan" shall mean
any tax qualified plan under Code section 401(a). The term "amounts transferred
from other qualified plans" shall mean: (i) amounts transferred to this Plan
directly from another qualified plan; (ii) distributions from another qualified
plan which are eligible rollover distributions and which are either transferred
by the Employee to this Plan within sixty (60) days following his receipt
thereof or are transferred pursuant to a direct rollover; (iii) amounts
transferred to this Plan from a conduit individual retirement account provided
that the conduit individual retirement account has no assets other than assets
which (A) were previously distributed to the Employee by another qualified plan
as a lump-sum distribution (B) were eligible for tax-free rollover to a
qualified plan and (C) were deposited in such conduit individual retirement
account within sixty (60) days of receipt thereof and other than earnings on
said assets; and (iv) amounts distributed to the Employee from a conduit
individual retirement account meeting the requirements of clause (iii) above,
and transferred by the Employee to this Plan within sixty (60) days of his
receipt thereof from such conduit individual retirement account.

          (h) Prior to accepting any transfers to which this Section applies,
the Administrator may require the Participant to establish that the amounts to
be transferred to this Plan meet the requirements of this Section and may also
require the Participant to provide an opinion of counsel satisfactory to the
Employer that the amounts to be transferred meet the requirements of this
Section.

          (i) This Plan shall not accept any direct or indirect transfers (as
that term is defined and interpreted under Code section 401(a)(11) and the
Regulations thereunder) from a defined benefit plan, money purchase plan
(including a target benefit plan), stock bonus or profit sharing plan which
would otherwise have provided for a life annuity form of payment to the
Participant.

          (j) Notwithstanding anything herein to the contrary, a transfer
directly to this Plan from another qualified plan (or a transaction having the
effect of such a transfer) shall only

                                                                              46

<PAGE>

be permitted if it will not result in the elimination or reduction of any
"Section 411(d)(6) protected benefit" as described in Section 8.01.

                                    ARTICLE V
                                   VALUATIONS

     Section 5.01 Valuation of the Trust Fund
     ------------ ---------------------------

     The Administrator shall direct the Trustee, as of each Anniversary Date,
and at such other date or dates deemed necessary by the Administrator, herein
called "valuation date", to determine the net worth of the assets comprising the
Trust Fund as it exists on the "valuation date" prior to taking into
consideration any contribution to be allocated for that Plan Year. In
determining such net worth, the Trustee shall value the assets comprising the
Trust Fund at their fair market value as of the "valuation date" and shall
deduct all expenses for which the Trustee has not yet obtained reimbursement
from the Employer or the Trust Fund.

     Section 5.02 Method of Valuation
     ------------ -------------------

     In determining the fair market value of securities held in the Trust Fund
which are listed on a registered stock exchange, the Administrator shall direct
the Trustee to value the same at the prices they were last traded on such
exchange preceding the close of business on the "valuation date". If such
securities were not traded on the "valuation date", or if the exchange on which
they are traded was not open for business on the "valuation date", then the
securities shall be valued at the prices at which they were last traded prior to
the "valuation date". Any unlisted security held in the Trust Fund shall be
valued at its bid price next preceding the close of business on the "valuation
date", which bid price shall be obtained from a registered broker or an
investment banker. In determining the fair market value of assets other than
securities for which trading or bid prices can be obtained, the Trustee may
appraise such assets itself, or in its discretion, employ one or more appraisers
for that purpose and rely on the values established by such appraiser or
appraisers.

                                   ARTICLE VI
                   DETERMINATION AND DISTRIBUTION OF BENEFITS

     Section 6.01 Determination of Benefits Upon Retirement
     ------------ -----------------------------------------

     Every Participant may terminate his employment with the Employer and retire
for the purposes hereof on his Normal Retirement Date or Early Retirement Date.
Upon such Normal Retirement Date or Early Retirement Date, all amounts credited
to such Participant's Combined Account shall become distributable. However, a
Participant may postpone the termination of his employment with the Employer to
a later date, in which event the participation of such Participant in the Plan,
including the right to receive allocations pursuant to Section 4.04, shall
continue until his Late Retirement Date. Upon a Participant's Retirement Date,
or as soon thereafter as is practicable, the Trustee shall distribute all
amounts credited to such Participant's Combined Account in accordance with
Section 6.05.

                                                                              47

<PAGE>

        Section 6.02    Determination of Benefits upon Death
        ------------    ------------------------------------

                (a)     Upon the death of a Participant before his Retirement

Date or other termination of his employment, all amounts credited to such
Participant's Combined Account shall become fully Vested. The Administrator
shall direct the Trustee, in accordance with the provisions of Sections 6.06 and
6.07, to distribute the value of the deceased Participant's accounts to the
Participant's Beneficiary.

                (b)     Upon the death of a Former Participant, the
Administrator shall direct the Trustee, in accordance with the provisions of
Sections 6.06 and 6.07, to distribute any remaining amounts credited to the
accounts of a deceased Former Participant to such Former Participant's
Beneficiary.

                (c)     The Administrator may require such proper proof of death
and such evidence of the right of any person to receive payment of the value of
the account of a deceased Participant or Former Participant as the Administrator
may deem desirable. The Administrator's determination of death and of the right
of any person to receive payment shall be conclusive.

                (d)     Unless otherwise elected in the manner prescribed in
Section 6.06, the Beneficiary of the death benefit shall be the Participant's
spouse, who shall receive such benefit in the form of a Pre-Retirement Survivor
Annuity pursuant to Section 6.06. Except, however, the Participant may designate
a Beneficiary other than his spouse if:

                        (1)     the Participant and his spouse have validly
waived the Pre-Retirement Survivor Annuity in the manner prescribed in Section
6.06, and the spouse has waived his or her right to be the Participant's
Beneficiary, or

                        (2)     the Participant is legally separated or has been
abandoned (within the meaning of local law) and the Participant has a court
order to such effect (and there is no "qualified domestic relations order" as
defined in Code section 414(p) which provides otherwise), or

                        (3)     the Participant has no spouse, or

                        (4)     the spouse cannot be located.

        In such event, the designation of a Beneficiary shall be made on a form
satisfactory to the Administrator. A Participant may at any time revoke his
designation of a Beneficiary or change his Beneficiary by filing written notice
of such revocation or change with the Administrator. However, the Participant's
spouse must again consent in writing to any change in Beneficiary unless the
original consent acknowledged that the spouse had the right to limit consent
only to a specific Beneficiary and that the spouse voluntarily elected to
relinquish such right. In the event no valid designation of Beneficiary exists
at the time of the Participant's death, the death benefit shall be payable to
his estate.

                                                                              48

<PAGE>

        Section 6.03    Determination of Benefits in Event of Disability
        ------------    ------------------------------------------------

        In the event of a Participant's Total and Permanent Disability prior to
his Retirement Date or other termination of his employment, all amounts credited
to such Participant's Combined Account shall become fully Vested. In the event
of a Participant's Total and Permanent Disability, the Trustee, in accordance
with the provisions of Sections 6.05 and 6.07, shall distribute to such
Participant all amounts credited to such Participant's Combined Account as
though he had retired.

        Section 6.04    Determination of Benefits Upon Termination
        ------------    ------------------------------------------

                (a)     On or before the Anniversary Date coinciding with or
subsequent to the termination of a Participant's employment for any reason other
than death, Total and Permanent Disability or retirement, the Administrator may
direct the Trustee to segregate the amount of the Vested portion of such
Terminated Participant's Combined Account and invest the aggregate amount
thereof in a separate, federally insured savings account, certificate of
deposit, common or collective trust fund of a bank or a deferred annuity. In the
event the Vested portion of a Participant's Combined Account is not segregated,
the amount shall remain in a separate account for the Terminated Participant and
share in allocations pursuant to Section 4.04 until such time as a distribution
is made to the Terminated Participant.

        Distribution of the funds due to a Terminated Participant shall be made
on the occurrence of an event which would result in the distribution had the
Terminated Participant remained in the employ of the Employer (upon the
Participant's death, Total and Permanent Disability, Early or Normal
Retirement). However, at the election of the Participant, the Administrator
shall direct the Trustee to cause the entire Vested portion of the Terminated
Participant's Combined Account to be payable to such Terminated Participant. Any
distribution under this paragraph shall be made in a manner which is consistent
with and satisfies the provisions of Section 6.05, including, but not limited
to, all notice and consent requirements of Code sections 417 and 411(a)(11) and
the Regulations thereunder.

        If the value of a Terminated Participant's Vested benefit derived from
Employer and Employee contributions does not exceed five thousand dollars
($5,000) and has never exceeded five thousand dollars ($5,000) at the time of
any prior distribution, the Administrator shall direct the Trustee to cause the
entire Vested benefit to be paid to such Participant in a single lump sum.

        For purposes of this Section 6.04, if the value of a Terminated
Participant's Vested benefit is zero, the Terminated Participant shall be deemed
to have received a distribution of such Vested benefit.

                (b)     The Vested portion of any Participant's Account shall be
a percentage of the total amount credited to his Participant's Account
determined on the basis of the Participant's number of Years of Service
according to the following schedules:

                                                                              49

<PAGE>

                        (1)     For Employees of Lafayette Bank who were hired
prior to July 1, 1991:

                                Vesting Schedule

           Years of Service                                 Percentage

                   1                                              20%

                   2                                              40%

                   3                                              60%

                   4                                              80%

                   5                                             100%

                        (2)     For all other Employees:

                                Vesting Schedule

           Years of Service                                 Percentage
                  0-4                                              0%

                   5                                             100%

                (c)     Notwithstanding the vesting provided for in paragraph
(b) above, for any Top Heavy Plan Year, the Vested portion of the Participant's
Account of any Participant who has an Hour of Service after the Plan becomes top
heavy shall be a percentage of the total amount credited to his Participant's
Account determined on the basis of the Participant's number of Years of Service
according to the following schedule:

                                Vesting Schedule

           Years of Service                                 Percentage
                  1-2                                              0%

                   3                                             100%

        If in any subsequent Plan Year, the Plan ceases to be a Top Heavy Plan,
the Administrator shall revert to the vesting schedule in effect before this
Plan becomes a Top Heavy Plan. Any such reversion shall be treated as a Plan
amendment pursuant to the terms of the Plan.

                                                                              50

<PAGE>

        (d)     Notwithstanding the vesting schedule above, the Vested
percentage of a Participant's Account shall not be less than the Vested
percentage attained as of the later of the effective date or adoption date of
this amendment and restatement.

        (e)     Notwithstanding the vesting schedule above, upon the complete
discontinuance of the Employer's contributions to the Plan or upon any full or
partial termination of the Plan, all amounts credited to the account of any
affected Participant shall become 100% Vested and shall not thereafter be
subject to Forfeiture.

        (f)     The computation of a Participant's nonforfeitable percentage of
his interest in the Plan shall not be reduced as the result of any direct or
indirect amendment to this Plan. For this purpose, the Plan shall be treated as
having been amended if the Plan provides for an automatic change in vesting due
to a change in top heavy status. In the event that the Plan is amended to change
or modify any vesting schedule, a Participant with at least three (3) Years of
Service as of the expiration date of the election period may elect to have his
nonforfeitable percentage computed under the Plan without regard to such
amendment. If a Participant fails to make such election, then such Participant
shall be subject to the new vesting schedule. The Participant's election period
shall commence on the adoption date of the amendment and shall end 60 days after
the latest of:

                (1)     the adoption date of the amendment,

                (2)     the effective date of the amendment, or

                (3)     the date the Participant receives written notice of the
amendment from the Employer or Administrator.

        (g)     (1)     If any Former Participant shall be reemployed by the
Employer before a 1-Year Break in Service occurs, he shall continue to
participate in the Plan in the same manner as if such termination had not
occurred.

                (2)     If any Former Participant shall be reemployed by the
Employer before five (5) consecutive 1-Year Breaks in Service, and such Former
Participant had received, or was deemed to have received, a distribution of his
entire Vested interest prior to his reemployment, his forfeited account shall be
reinstated only if he repays the full amount distributed to him before the
earlier of five (5) years after the first date on which the Participant is
subsequently reemployed by the Employer or the close of the first period of five
(5) consecutive 1-Year Breaks in Service commencing after the distribution, or
in the event of a deemed distribution, upon the reemployment of such Former
Participant. If a distribution occurs for any reason other than a separation
from service, the time for repayment may not end earlier than five (5) years
after the date of distribution. In the event the Former Participant does repay
the full amount distributed to him, or in the event of a deemed distribution,
the undistributed portion of the Participant's Account must be restored in full,
unadjusted by any gains or losses occurring subsequent to the Anniversary Date
or other valuation date coinciding with or preceding his

                                                                              51

<PAGE>

termination. The source for such reinstatement shall first be any Forfeitures
occurring during the year. If such source is insufficient, then the Employer
shall contribute an amount which is sufficient to restore any such forfeited
Accounts.

                (3)     If any Former Participant is reemployed after a 1-Year
Break in Service has occurred, Years of Service shall include Years of Service
prior to his 1-Year Break in Service subject to the following rules:

                        (i)     If a Former Participant has a 1-Year Break in
Service, his pre-break and post-break service shall be used for computing Years
of Service for eligibility and for vesting purposes only after he has been
employed for one (1) Year of Service following the date of his reemployment with
the Employer;

                        (ii)    Any Former Participant who under the Plan does
not have a nonforfeitable right to any interest in the Plan resulting from
Employer contributions shall lose credits otherwise allowable under (i) above if
his consecutive 1-Year Breaks in Service equal or exceed the greater of (A) five
(5) or (B) the aggregate number of his pre-break Years of Service;

                        (iii)   After five (5) consecutive 1-Year Breaks in
Service, a Former Participant's Vested Account balance attributable to pre-break
service shall not be increased as a result of post-break service;

                        (iv)    If a Former Participant who has not had his
Years of Service before a 1-Year Break in Service disregarded pursuant to (ii)
above completes one (1) Year of Service for eligibility purposes following his
reemployment with the Employer, he shall participate in the Plan retroactively
from his date of reemployment;

                        (v)     If a Former Participant who has not had his
Years of Service before a 1-Year Break in Service disregarded pursuant to (ii)
above completes a Year of Service (a 1-Year Break in Service previously
occurred, but employment had not terminated), he shall participate in the Plan
retroactively from the first day of the Plan Year during which he completes one
(1) Year of Service.

        (h)     A Participant shall be immediately and fully vested in that
portion of his Hagerstown Plan Account that is derived from the Participant's
salary reduction contributions, nondeductible voluntary contributions and
rollover contributions. The vested portion of the Participant's Hagerstown Plan
Account that is derived from employer non-elective contributions shall be a
percentage of such contributions determined on the basis of the Participant's
number of Years of Service according to the following schedule:

                                                                              52

<PAGE>

                                Vesting Schedule

          Years of Service                             Percentage
                  1                                        10%
                  2                                        20%
                  3                                        30%
                  4                                        40%
              5 or more                                   100%

          (i)  A Participant shall be immediately and fully vested in that
portion of his Central Penn Plan Account that is derived from the Participant's
salary reduction contributions and rollover contributions. The vested portion of
the Participant's Central Penn Plan Account that is derived from employer
matching contributions and employer non-elective contributions shall be a
percentage of such contributions determined on the basis of the Participant's
number of Years of Service according to the following schedule:

                                Vesting Schedule

          Years of Service                             Percentage
                  0                                         0%
                  1                                         0%
                  2                                         0%
                  3                                        20%
                  4                                        40%
              5 or more                                   100%

          (j)  A Participant shall be immediately and fully vested in that
portion of his Delaware Plan Account that is derived from the Participant's
salary reduction contributions. The vested portion of the Participant's Delaware
Plan Account that is derived from employer matching contributions and employer
discretionary contributions shall be determined under Subsections 6.04(b) and
(c).

          (k)  A Participant shall be fully and immediately vested in that
portion of his Lebanon Valley Plan Account which is derived from the
Participant's salary reduction contributions and rollovers. The vested portion
of the Participant's Lebanon Valley Plan Account

                                                                           53

<PAGE>

that is derived from employer matching contributions shall be based upon the
Participant's Years of Service for vesting purposes, and shall be determined
under the following schedule:

                                Vesting Schedule

          Years of Service                             Percentage

             Less than 3                                    0%

                  3                                        20%

                  4                                        40%

              5 or more                                   100%

     Section 6.05   Distribution of Benefits
     ------------   ------------------------

          (a)

                    (1)  Unless otherwise elected as provided below, a
Participant who is married on the "annuity starting date" and who does not die
before the "annuity starting date" shall receive the value of all of his
benefits in the form of a joint and survivor annuity. The joint and survivor
annuity is an annuity that commences immediately and shall be equal in value to
a single life annuity. Such joint and survivor benefits following the
Participant's death shall continue to the spouse during the spouse's lifetime at
a rate equal to 50% of the rate at which such benefits were payable to the
Participant. This joint and 50% survivor annuity shall be considered the
designated qualified joint and survivor annuity and automatic form of payment
for the purposes of this Plan. However, the Participant may elect to receive a
smaller annuity benefit with continuation of payments to the spouse at a rate of
seventy-five percent (75%) or one hundred percent (100%) of the rate payable to
a Participant during his lifetime, which alternative joint and survivor annuity
shall be equal in value to the automatic joint and 50% survivor annuity. An
unmarried Participant shall receive the value of his benefit in the form of a
life annuity. Such unmarried Participant, however, may elect in writing to waive
the life annuity. The election must comply with the provisions of this Section
as if it were an election to waive the joint and survivor annuity by a married
Participant, but without the spousal consent requirement. The Participant may
elect to have any annuity provided for in this Section distributed upon the
attainment of the "earliest retirement age" under the Plan. The "earliest
retirement age" is the earliest date on which, under the Plan, the Participant
could elect to receive retirement benefits.

                    (2)  Any election to waive the joint and survivor annuity
must be made by the Participant in writing during the election period and be
consented to by the Participant's spouse. If the spouse is legally incompetent
to give consent, the spouse's legal guardian, even if such guardian is the
Participant, may give consent. Such election shall designate a Beneficiary (or a
form of benefits) that may not be changed without spousal consent (unless the
consent of the spouse expressly permits designations by the Participant without
the requirement of further consent by the spouse). Such spouse's consent shall
be irrevocable and must acknowledge the

                                                                              54

<PAGE>

effect of such election and be witnessed by a Plan representative or a notary
public. Such consent shall not be required if it is established to the
satisfaction of the Administrator that the required consent cannot be obtained
because there is no spouse, the spouse cannot be located, or other circumstances
that may be prescribed by Regulations. The election made by the Participant and
consented to by his spouse may be revoked by the Participant in writing without
the consent of the spouse at any time during the election period. The number of
revocations shall not be limited. Any new election must comply with the
requirements of this paragraph. A former spouse's waiver shall not be binding on
a new spouse.

               (3)  The election period to waive the joint and survivor annuity
shall be the 90 day period ending on the "annuity starting date."

               (4)  For purposes of this Section, the "annuity starting date"
means the first day of the first period for which an amount is paid as an
annuity, or, in the case of a benefit not payable in the form of an annuity, the
first day on which all events have occurred which entitle the Participant to
such benefit.

               (5)  With regard to the election, the Administrator shall provide
to the Participant no less than 30 days and no more than 90 days before the
"annuity starting date" a written explanation of:

                    (i)   the terms and conditions of the joint and survivor
annuity, and

                    (ii)  the Participant's right to make, and the effect of, an
election to waive the joint and survivor annuity, and

                    (iii) the right of the Participant's spouse to consent to
any election to waive the joint and survivor annuity, and

                    (iv)  the right of the Participant to revoke such election,
and the effect of such revocation.

     Notwithstanding the foregoing period for providing the written explanation,
the Administrator may provide the written explanation after the Annuity Starting
Date. In such case, the explanation period shall not end before the 30th day
after the date on which the explanation is provided. The Administrator may
permit a Participant to elect (with any applicable spousal consent) to waive any
requirement that the written explanation be provided at least 30 days before the
Annuity Starting Date (or waive the 30 day requirement) if the distribution
commences more than seven days after the explanation is provided.

          (b)  In the event a married Participant duly elects pursuant to
paragraph (a)(2) above not to receive his benefit in the form of a joint and
survivor annuity, or if such Participant is not married, in the form of a life
annuity, the Administrator, pursuant to the election of the

                                                                           55

<PAGE>

Participant, shall direct the Trustee to distribute to a Participant or his
Beneficiary any amount to which he is entitled under the Plan in one or more of
the following methods:

               (1)  one lump-sum payment in cash;

               (2)  Payments over a period certain in monthly, quarterly,
semiannual, or annual cash installments. In order to provide such installment
payments, the Administrator may (A) segregate the aggregate amount thereof in a
separate, federally insured savings account, certificate of deposit in a bank or
savings and loan association, money market certificate or other liquid
short-term security or (B) purchase a nontransferable annuity contract for a
term certain (with no life contingencies) providing for such payment. The period
over which such payment is to be made shall not extend beyond the Participant's
life expectancy (or the life expectancy of the Participant and his designated
Beneficiary).

               (3)  Purchase of or providing an annuity. However, such
annuity may not be in any form that will provide for payments over a period
extending beyond either the life of the Participant (or the lives of the
Participant and his designated Beneficiary) or the life expectancy of the
Participant (or the life expectancy of the Participant and his designated
Beneficiary).

          (c)  The present value of a Participant's joint and survivor annuity
derived from Employer and Employee contributions may not be paid without his
written consent if the value exceeds, or has ever exceeded, five thousand
dollars ($5,000) at the time of any prior distribution. Further, the spouse of a
Participant must consent in writing to any immediate distribution. If the value
of the Participant's benefit derived from Employer and Employee contributions
does not exceed five thousand dollars ($5,000) and has never exceeded five
thousand dollars ($5,000) at the time of any prior distribution, the
Administrator may immediately distribute such benefit without such Participant's
consent. No distribution may be made under the preceding sentence after the
"annuity starting date" unless the Participant and his spouse consent in writing
to such distribution. Any written consent required under this paragraph must be
obtained not more than 90 days before commencement of the distribution and shall
be made in a manner consistent with Section 6.05(a)2.

          (d)  Any distribution to a Participant who has a benefit which
exceeds, or has ever exceeded, five thousand dollars ($5,000) at the time of any
prior distribution shall require such Participant's consent if such distribution
commences prior to the later of his Normal Retirement Age or age 62. With regard
to this required consent:

               (l)  No consent shall be valid unless the Participant has
received a general description of the material features and an explanation of
the relative values of the optional forms of benefit available under the Plan
that would satisfy the notice requirements of Code section 417.

                                                                           56

<PAGE>

               (2)  The Participant must be informed of his right to defer
receipt of the distribution. If a Participant fails to consent, it shall be
deemed an election to defer the commencement of payment of any benefit. However,
any election to defer the receipt of benefits shall not apply with respect to
distributions which are required under Section 6.05(e).

               (3)  Notice of the rights specified under this paragraph shall be
provided no less than 30 days and no more than 90 days before the "annuity
starting date".

               (4)  Written consent of the Participant to the distribution must
not be made before the Participant receives the notice and must not be made more
than 90 days before the "annuity starting date".

               (5)  No consent shall be valid if a significant detriment is
imposed under the Plan on any Participant who does not consent to the
distribution.

          (e)  Notwithstanding any provision in the Plan to the contrary, the
distribution of a Participant's benefits made on or after January 1, 1985,
whether under the Plan or through the purchase of an annuity contract, shall be
made in accordance with the following requirements and shall otherwise comply
with Code section 401(a)(9) and the Regulations thereunder (including Regulation
1.401(a)(9)-2), the provisions of which are incorporated herein by reference:

               (1)  Distributions to Participants. The benefit of a Participant
                    -----------------------------
who is a Five-Percent Owner must be distributed or commence to be distributed no
later than the first day of April following the calendar year in which the
Participant reaches age 70 1/2. The benefit of a Participant who is not a
Five-Percent Owner must be distributed or commence to be distributed by the
later of (i) the Participant's retirement, or (ii) the first day of April
following the calendar year in which the Participant reaches age 70 1/1/2. A
Participant is treated as a Five-Percent Owner for purposes of this Section if
the Participant is a Five-Percent Owner as defined in Code section 416 at any
time during the Plan Year ending with or within the calendar year in which such
owner attains age 70 1/1/2. Once a distribution commences to a Five-Percent
Owner under this Section, the distribution must continue notwithstanding the
fact that the Participant may cease to be a Five-Percent Owner in a subsequent
year.

               (2)  Distributions to a Participant and his Beneficiaries shall
only be made in accordance with the incidental death benefit requirements of
Code section 401(a)(9)(G) and the Regulations thereunder.

     Additionally, for calendar years beginning before 1989, distributions may
also be made under an alternative method which provides that the then present
value of the payments to be made over the period of the Participant's life
expectancy exceeds fifty percent (50%) of the then present value of the total
payments to be made to the Participant and his Beneficiaries.

          (f)  For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse (other than in the case of a life
annuity) may, at the election of the Participant

                                                                           57

<PAGE>

or the Participant's spouse, be redetermined in accordance with Regulations. The
election, once made, shall be irrevocable. If no election is made by the time
distributions must commence, then the life expectancy of the Participant and the
Participant's spouse shall not be subject to recalculation. Life expectancy and
joint and last survivor expectancy shall be computed using the return multiples
in Tables V and VI of Regulation 1.72-9.

               (g) Subject to the spouse's right of consent afforded under the
Plan, the restrictions imposed by this Section shall not apply if a Participant
has, prior to January 1, 1984, made a written designation to have his retirement
benefit paid in an alternative method acceptable under Code section 401(a) as in
effect prior to the enactment of the Tax Equity and Fiscal Responsibility Act of
1982.

               (h) All annuity Contracts under this Plan shall be
non-transferable when distributed. Furthermore, the terms of any annuity
Contract purchased and distributed to a Participant or spouse shall comply with
all of the requirements of the Plan.

               (i) If a distribution is made at a time when a Participant is not
fully Vested in his Participant's Account and the Participant may increase the
Vested percentage in such account:

                   (1) a separate account shall be established for the
Participant's interest in the Plan as of the time of the distribution; and

                   (2) at any relevant time, the Participant's Vested portion of
the separate account shall be equal to an amount ("X") determined by the
formula:

                      X equals P(AB plus (R x D)) - (R x D)

         For purposes of applying the formula: P is the Vested percentage at the
relevant time, AB is the account balance at the relevant time, D is the amount
of distribution, and R is the ratio of the account balance at the relevant time
to the account balance after distribution.

     Section 6.06  Distribution of Benefits upon Death
     ------------  -----------------------------------

               (a) Unless otherwise elected as provided below, a Vested
Participant who dies before the annuity starting date and who has a surviving
spouse shall have his death benefit paid to his surviving spouse in the form of
a Pre-Retirement Survivor Annuity. The Participant's spouse may direct that
payment of the Pre-Retirement Survivor Annuity commence within a reasonable
period after the Participant's death. If the spouse does not so direct, payment
of such benefit will commence at the time the Participant would have attained
the later of his Normal Retirement Age or age 62. However, the spouse may elect
a later commencement date. Any distribution to the Participant's spouse shall be
subject to the rules specified in Section 6.06(g).

               (b) Any election to waive the Pre-Retirement Survivor Annuity
before the Participant's death must be made by the Participant in writing during
the election period and shall require the spouse's irrevocable consent in the
same manner provided for in Section 6.05(a)(2).

                                                                              58

<PAGE>

Further, the spouse's consent must acknowledge the specific nonspouse
Beneficiary. Notwithstanding the foregoing, the nonspouse Beneficiary need not
be acknowledged, provided the consent of the spouse acknowledges that the spouse
has the right to limit consent only to a specific Beneficiary and that the
spouse voluntarily elects to relinquish such right.

               (c) The election period to waive the Pre-Retirement Survivor
Annuity shall begin on the first day of the Plan Year in which the Participant
attains age 35 and end on the date of the Participant's death. An earlier waiver
(with spousal consent) may be made provided a written explanation of the
Pre-Retirement Survivor Annuity is given to the Participant and such waiver
becomes invalid at the beginning of the Plan Year in which the Participant turns
age 35. In the event a Vested Participant separates from service prior to the
beginning of the election period, the election period shall begin on the date of
such separation from service.

               (d) With regard to the election, the Administrator shall provide
each Participant within the applicable period, with respect to such Participant
(and consistent with Regulations), a written explanation of the Pre-Retirement
Survivor Annuity containing comparable information to that required pursuant to
Section 6.05(a)(5). For the purposes of this paragraph, the term "applicable
period" means, with respect to a Participant, whichever of the following periods
ends last:

                   (1) The period beginning with the first day of the Plan Year
in which the Participant attains age 32 and ending with the close of the Plan
Year preceding the Plan Year in which the Participant attains age 35;

                   (2) A reasonable period after the individual becomes a
Participant. For this purpose, in the case of an individual who becomes a
Participant after age 32, the explanation must be provided by the end of the
three-year period beginning with the first day of the first Plan Year for which
the individual is a Participant;

                   (3) A reasonable period ending after the Plan no longer fully
subsidizes the cost of the Pre-Retirement Survivor Annuity with respect to the
Participant;

                   (4) A reasonable period ending after Code section 401(a)(11)
applies to the Participant; or

                   (5) A reasonable period after separation from service in the
case of a Participant who separates before attaining age 35. For this purpose,
the Administrator must provide the explanation beginning one year before the
separation from service and ending one year after such separation.

               (e) If the value of the Pre-Retirement Survivor Annuity derived
from Employer and Employee contributions does not exceed $5,000 and has never
exceeded $5,000 at the time of any prior distribution, the Administrator shall
direct the immediate distribution of such amount to the Participant's spouse. No
distribution may be made under the preceding sentence after the annuity starting
date unless the spouse consents in writing. If the value

                                                                              59

<PAGE>

exceeds, or has ever exceeded, $5,000 at the time of any prior distribution, an
immediate distribution of the entire amount may be made to the surviving spouse,
provided such surviving spouse consents in writing to such distribution. Any
written consent required under this paragraph must be obtained not more than 90
days before commencement of the distribution and shall be made in a manner
consistent with Section 6.05(a)(2).

               (f) (1) In the event the death benefit is not paid in the form of
a Pre-Retirement Survivor Annuity, it shall be paid to the Participant's
Beneficiary by either of the following methods, as elected by the Participant
(or if no election has been made prior to the Participant's death, by his
Beneficiary), subject to the rules specified in Section.6.06(g):

                       (i)  One lump-sum payment in cash;

                       (ii) Payment in monthly, quarterly, semi-annual, or
annual cash installments over a period to be determined by the Participant or
his Beneficiary. After periodic installments commence, the Beneficiary shall
have the right to direct the Trustee to reduce the period over which such
periodic installments shall be made, and the Trustee shall adjust the cash
amount of such periodic installments accordingly.

                   (2) In the event the death benefit payable pursuant to
Section 6.02 is payable in installments, then, upon the death of the
Participant, the Administrator may direct the Trustee to segregate the death
benefit into a separate account, and the Trustee shall invest such segregated
account separately, and the funds accumulated in such account shall be used for
the payment of the installments.

               (g) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant made on or after January 1, 1985
shall be made in accordance with the following requirements and shall otherwise
comply with Code section 401(a)(9) and the Regulations thereunder. If the death
benefit is paid in the form of a Pre-Retirement Survivor Annuity, then
distributions to the Participant's surviving spouse must commence on or before
the later of: (1) December 31st of the calendar year immediately following the
calendar year in which the Participant died; or (2) December 31st of the
calendar year in which the Participant would have attained age 70 1/2. If it is
determined pursuant to Regulations that the distribution of a Participant's
interest has begun and the Participant dies before his entire interest has been
distributed to him, the remaining portion of such interest shall be distributed
at least as rapidly as under the method of distribution selected pursuant to
Section 6.05 as of his date of death. If a Participant dies before he has begun
to receive any distributions of his interest under the Plan or before
distributions are deemed to have begun pursuant to Regulations (and
distributions are not to be made in the form of a Pre-Retirement Survivor
Annuity), then his death benefit shall be distributed to his Beneficiaries by
December 31/st/ of the calendar year in which the fifth anniversary of his date
of death occurs.

     However, the 5-year distribution requirement of the preceding paragraph
shall not apply to any portion of the deceased Participant's interest which is
payable to or for the benefit of a

                                                                              60

<PAGE>

designated Beneficiary. In such event, such portion may, at the election of the
Participant (or the Participant's designated Beneficiary), be distributed over
the life of such designated Beneficiary (or over a period not extending beyond
the life expectancy of such designated Beneficiary) provided such distribution
begins not later than December 31st of the calendar year immediately following
the calendar year in which the Participant died. However, in the event the
Participant's spouse (determined as of the date of the Participant's death) is
his Beneficiary, the requirement that distributions commence within one year of
a Participant's death shall not apply. In lieu thereof, distributions must
commence on or before the later of: (1) December 31st of the calendar year
immediately following the calendar year in which the Participant died; or (2)
December 31st of the calendar year in which the Participant would have attained
age 70 1/2. If the surviving spouse dies before distributions to such spouse
begin, then the 5-year distribution requirement of this Section shall apply as
if the spouse was the Participant.

               (h) For purposes of Section 6.06(g), the election by a designated
Beneficiary to be excepted from the 5-year distribution requirement must be made
no later than December 31/st/ of the calendar year following the calendar year
of the Participant's death. Except, however, with respect to a designated
Beneficiary who is the Participant's surviving spouse, the election must be made
by the earlier of: (1) December 31st of the calendar year immediately following
the calendar year in which the Participant died or, if later, the calendar year
in which the Participant would have attained age 70 1/2, or (2) December 31st of
the calendar year which contains the fifth anniversary of the date of the
Participant's death. An election by a designated Beneficiary must be in writing
and shall be irrevocable as of the last day of the election period stated
herein. In the absence of an election by the Participant or a designated
Beneficiary, the 5-year distribution requirement shall apply.

               (i) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse (other than in the case of a life
annuity) may, at the election of the Participant or the Participant's spouse, be
redetermined in accordance with Regulations. The election, once made, shall be
irrevocable. If no election is made by the time distributions must commence,
then the life expectancy of the Participant and the Participant's spouse shall
not be subject to recalculation. Life expectancy and joint and last survivor
expectancy shall be computed using the return multiples in Tables V and VI of
Regulation 1.72-9.

               (j) Subject to the spouse's right of consent afforded under the
Plan, the restrictions imposed by this Section shall not apply if a Participant
has, prior to January 1, 1984, made a written designation to have his death
benefits paid in an alternative method acceptable under Code section 401(a) as
in effect prior to the enactment of the Tax Equity and Fiscal Responsibility Act
of 1982.

     Section 6.07  Time of Segregation or Distribution
     ------------  -----------------------------------

     Except as limited by Sections 6.05 and 6.06, whenever the Trustee is to
make a distribution or to commence a series of payments on or as of an
Anniversary Date, the distribution may be made or begun on such date or as soon
thereafter as is practicable, but in no

                                                                              61

<PAGE>

event later than 180 days after the Anniversary Date. However, unless a Former
Participant elects in writing to defer the receipt of benefits (such election
may not result in a death benefit that is more than incidental), the payment of
benefits shall begin not later than the 60th day after the close of the Plan
Year in which the latest of the following events occurs: (a) the date on which
the Participant attains the earlier of age 65 or the Normal Retirement Age
specified herein; (b) the 10th anniversary of the year in which the Participant
commenced participation in the Plan; or (c) the date the Participant terminates
his service with the Employer.

     Section 6.08  Distribution for Minor Beneficiary
     ------------  ----------------------------------

     In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal guardian,
or if none, to a parent of such Beneficiary or a responsible adult with whom the
Beneficiary maintains his residence, or to the custodian for such Beneficiary
under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted
by the laws of the state in which said Beneficiary resides. Such a payment to
the legal guardian, custodian or parent of a minor Beneficiary shall fully
discharge the Trustee, Employer, and Plan from further liability on account
thereof.

     Section 6.09  Location of Participant or Beneficiary Unknown
     ------------  ----------------------------------------------

     In the event that all, or any portion, of the distribution payable to a
Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain unpaid
solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such Participant
or his Beneficiary, the amount so distributable shall be treated as a Forfeiture
pursuant to the Plan. In the event a Participant or Beneficiary is located
subsequent to his benefit being reallocated, such benefit shall be restored.

     Section 6.10  Advance Distribution for Hardship
     ------------  ---------------------------------

               (a) The Administrator, at the election of the Participant, shall
direct the Trustee to distribute to any Participant in any one Plan Year up to
the lesser of 100% of his Participant's Elective Account valued as of the last
Anniversary Date or other valuation date or the amount necessary to satisfy the
immediate and heavy financial need of the Participant. Any distribution made
pursuant to this Section shall be deemed to be made as of the first day of the
Plan Year or, if later, the valuation date immediately preceding the date of
distribution, and the Participant's Elective Account shall be reduced
accordingly. Withdrawal under this Section shall be authorized only if the
distribution is on account of:

                   (1) Medical expenses described in Code section 213(d)
incurred by the Participant, his spouse, or any of his dependents (as defined in
Code section 152);

                   (2) The purchase (excluding mortgage payments) of a principal
residence for the Participant;

                                                                              62

<PAGE>

                   (3) Payment of tuition for the next semester or quarter of
post-secondary education for the Participant, his spouse, children, or
dependents; or

                   (4) The need to prevent the eviction of the Participant from
his principal residence or foreclosure on the mortgage of the Participant's
principal residence.

               (b) No distribution shall be made pursuant to this Section unless
the Administrator, based upon the Participant's representation and such other
facts as are known to the Administrator, determines that all of the following
conditions are satisfied:

                   (1) The distribution is not in excess of the amount of the
immediate and heavy financial need of the Participant;

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

                   (3) The Plan, and all other plans maintained by the Employer,
provide that the Participant's elective deferrals and voluntary Employee
contributions will be suspended for at least twelve (12) months after receipt of
the hardship distribution; and

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

               (c) Notwithstanding the above, for Plan Years beginning after
December 31, 1988, distributions from the Participant's Elective Account
pursuant to this Section shall be limited solely to the Participant's Deferred
Compensation and any income allocable thereto credited to the Participant's
Elective Account as of December 31, 1988.

               (d) Any distribution made pursuant to this Section shall be made
in a manner which is consistent with and satisfies the provisions of Section
6.05, including, but not limited to, all notice and consent requirements of Code
sections 417 and 411(a)(11) and the Regulations thereunder.

     Section 6.11  Limitations on Benefits and Distributions
     ------------  -----------------------------------------

         All rights and benefits, including elections, provided to a Participant
in this Plan shall be subject to the rights afforded to any "alternate payee"
under a "qualified domestic relations order." Furthermore, a distribution to an
"alternate payee" shall be permitted if such distribution is authorized by a
"qualified domestic relations order," even if the affected Participant has not
reached the "earliest retirement age" under the Plan. For the purposes of this
Section, "alternate

                                                                              63

<PAGE>

payee," "qualified domestic relations order" and "earliest retirement age" shall
have the meaning set forth under Code section 414(p).

     Section 6.12  Rollovers of Distributions
     ------------  --------------------------

               (a) With respect to distributions made on or after January 1,
1993, and notwithstanding any provision of this Plan to the contrary that would
otherwise limit a Distributee's election under this Section, a Distributee may
elect, at the time and in the manner prescribed by the Plan Administrator, to
have any portion of an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan specified by the Distributee in a Direct Rollover. If
less than 100% of an Eligible Rollover Distribution is to be paid in a Direct
Rollover, the amount of the Direct Rollover must be at least $500.00.

               (b) An election to make or not to make a Direct Rollover with
respect to payments which are part of a series of payments shall apply to all
subsequent payments unless a new election is made with respect to subsequent
payments. A Distributee shall be permitted at any time to change, with respect
to subsequent payments, a previous election to make or not to make a Direct
Rollover.

               (c) A Direct Rollover may not be made to more than one Eligible
Retirement Plan.

               (d) If a Distributee fails to make an election before the
deadline established by the Plan Administrator, the Eligible Rollover
Distribution shall be distributed as if a Direct Rollover election had not been
made. The deadline established by the Plan Administrator shall be no more
restrictive for the Distributee than the deadline applicable to a revocation of
the form of benefit elected by the Distributee.

               (e) For the purposes of this section 6.12, the following
definitions shall apply:

                   (1) Eligible Rollover Distribution. An Eligible Rollover
                       ------------------------------
Distribution is any distribution or all of any portion of the balance to the
credit of the Distributee, except that an Eligible Rollover Distribution does
not include (A) any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or joint life expectancies)
of the Distributee and the Distributee's designated Beneficiary or for a
specified period of ten years or more, (B) any distribution to the extent such
distribution is required under section 401(a)(9) of the Code, and (C) the
portion of any distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect to
Employer securities). Notwithstanding this paragraph (a), effective January 1,
2000, "Eligible Rollover Distribution" excludes hardship withdrawals as defined
in Code section 401(k)(2)(B)(i)(IV), which are attributable to the Participant's
elective contributions under Treas. Reg. Section 1.401(k)-1(d)(2)(ii).

                                                                              64

<PAGE>

                   (2) Eligible Retirement Plan. An Eligible Retirement Plan is
                       ------------------------
an individual retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the Code, an
annuity plan described in section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code, that accepts the Distributee's Eligible
Rollover Distribution. However, in the case of an Eligible Rollover Distribution
to the surviving Spouse, an Eligible Retirement Plan is an individual retirement
account or individual retirement annuity.

                   (3) Distributee. A Distributee includes an Employee or former
                       -----------
Employee. In addition, the Employee's or former Employee's surviving Spouse and
the Employee's or former Employee's surviving Spouse who is the alternate payee
under a qualified domestic relations order, as defined in Code section 414(p),
are Distributees with regard to the interest of the Spouse or former Spouse.

                   (4) Direct Rollover. A Direct Rollover is a payment by the
                       ---------------
Plan to the Eligible Retirement Plan specified by the Distributee.

                                   ARTICLE VII
                                     TRUSTEE

     Section 7.01  Basic Responsibilities of the Trustee
     ------------  -------------------------------------

     The Trustee shall have the following categories of responsibilities:

               (a) Consistent with the "funding policy and method" determined by
the Employer, to invest, manage, and control the Plan assets subject, however,
to the direction of an Investment Manager if the Trustee should appoint such
manager as to all or a portion of the assets of the Plan;

               (b) At the direction of the Administrator, to pay benefits
requited under the Plan to be paid to Participants, or, in the event of their
death, to their Beneficiaries;

               (c) To maintain records of receipts and disbursements and furnish
to the Employer and/or Administrator for each Plan Year a written annual report
per Section 7.06; and

               (d) If there shall be more than one Trustee, they shall act by a
majority of their number, but may authorize one or more of them to sign papers
on their behalf.

     Section 7.02  Investment Powers and Duties of the Trustee
     ------------  -------------------------------------------

               (a) The Trustee shall invest and reinvest the Trust Fund to keep
the Trust Fund invested without distinction between principal and income and in
such securities or property, real or personal, wherever situated, as the Trustee
shall deem advisable, including, but not limited to, stocks, common or
preferred, bonds and other evidences of indebtedness or ownership, and real
estate or any interest therein. The Trustee shall at all times in making

                                                                              65

<PAGE>

investments of the Trust Fund consider, among other factors, the short and
long-term financial needs of the Plan on the basis of information furnished by
the Employer. In making such investments, the Trustee shall not be restricted to
securities or other property of the character expressly authorized by the
applicable law for trust investments; however, the Trustee shall give due regard
to any limitations imposed by the Code or the Act so that at all times the Plan
may qualify as a qualified Profit Sharing Plan and Trust.

               (b) The Trustee may employ a bank or trust company pursuant to
the terms of its usual and customary bank agency agreement, under which the
duties of such bank or trust company shall be of a custodial, clerical and
record-keeping nature.

               (c) The Trustee may from time to time with the consent of the
Employer transfer to a common, collective, or pooled trust fund maintained by
any corporate Trustee or any affiliate of any corporate Trustee, all or such
part of the Trust Fund as the Trustee may deem advisable, and such part or all
of the Trust Fund so transferred shall be subject to all the terms and
provisions of the common, collective, or pooled trust fund which contemplate the
commingling for investment purposes of such trust assets with trust assets of
other trusts. The Trustee may, from time to time with the consent of the
Employer, withdraw from such common, collective, or pooled trust fund all or
such part of the Trust Fund as the Trustee may deem advisable.

     Section 7.03  Other Powers of the Trustee
     ------------  ---------------------------

     The Trustee, in addition to all powers and authorities under common law,
statutory authority, including the Act, and other provisions of the Plan, shall
have the following powers and authorities, to be exercised in the Trustee's sole
discretion:

               (a) To purchase, or subscribe for, any securities or other
property and to retain the same. In conjunction with the purchase of securities,
margin accounts may be opened and maintained;

               (b) To sell, exchange, convey, transfer, grant options to
purchase, or otherwise dispose of any securities or other property held by the
Trustee, by private contract or at public auction. No person dealing with the
Trustee shall be bound to see to the application of the purchase money or to
inquire into the validity, expediency, or propriety of any such sale or other
disposition, with or without advertisement;

               (c) To vote upon any stocks, bonds, or other securities; to give
general or special proxies or powers of attorney with or without power of
substitution; to exercise any conversion privileges, subscription rights or
other options, and to make any payments incidental thereto; to oppose, or to
consent to, or otherwise participate in, corporate reorganizations or other
changes affecting corporate securities, and to delegate discretionary powers,
and to pay any assessments or charges in connection therewith; and generally to
exercise any of the powers of an owner with respect to stocks, bonds,
securities, or other property;

                                                                              66

<PAGE>

               (d) To cause any securities or other property to be registered in
the Trustee's own name or in the name of one or more of the Trustee's nominees,
and to hold any investments in bearer form, but the books and records of the
Trustee shall at all times show that all such investments are part of the Trust
Fund;

               (e) To borrow or raise money for the purposes of the Plan in such
amount, and upon such terms and conditions, as the Trustee shall deem advisable;
and for any sum so borrowed, to issue a promissory note as Trustee, and to
secure the repayment thereof by pledging all, or any part, of the Trust Fund;
and no person lending money to the Trustee shall be bound to see to the
application of the money lent or to inquire into the validity, expediency, or
propriety of any borrowing;

               (f) To keep such portion of the Trust Fund in cash or cash
balances as the Trustee may, from time to time, deem to be in the best interests
of the Plan, without liability for interest thereon;

               (g) To accept and retain for such time as the Trustee may deem
advisable any securities or other property received or acquired as Trustee
hereunder, whether or not such securities or other property would normally be
purchased as investments hereunder;

               (h) To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all other instruments that may
be necessary or appropriate to carry out the powers herein granted;

               (i) To settle, compromise, or submit to arbitration any claims,
debts, or damages due or owing to or from the Plan, to commence or defend suits
or legal or administrative proceedings, and to represent the Plan in all suits
and legal and administrative proceedings;

               (j) To employ suitable agents and counsel and to pay their
reasonable expenses and compensation, and such agent or counsel may or may not
be agent or counsel for the Employer;

               (k) To apply for and procure from responsible insurance
companies, to be selected by the Administrator, as an investment of the Trust
Fund such annuity, or other Contracts (on the life of any Participant) as the
Administrator shall deem proper; to exercise, at any time or from time to time,
whatever rights and privileges may be granted under such annuity, or other
Contracts; to collect, receive, and settle for the proceeds of all such annuity
or other Contracts as and when entitled to do so under the provisions thereof;

               (l) To invest funds of the Trust in time deposits or savings
accounts bearing a reasonable rate of interest in the Trustee's bank;

               (m) To invest in Treasury Bills and other forms of United States
government obligations;

                                                                              67

<PAGE>

               (n) To sell, purchase and acquire put or call options if the
options are traded on and purchased through a national securities exchange
registered under the Securities Exchange Act of 1934, as amended, or, if the
options are not traded on a national securities exchange, are guaranteed by a
member firm of the New York Stock Exchange;

               (o) To deposit monies in federally insured savings accounts or
certificates of deposit in banks or savings and loan associations;

               (p) To pool all or any of the Trust Fund, from time to time, with
assets belonging to any other qualified employee pension benefit trust created
by the Employer or an affiliated company of the Employer, and to commingle such
assets and make joint or common investments and carry joint accounts on behalf
of this Plan and such other trust or trusts, allocating undivided shares or
interests in such investments or accounts or any pooled assets of the two or
more trusts in accordance with their respective interests; and

               (q) To do all such acts and exercise all such rights and
privileges, although not specifically mentioned herein, as the Trustee may deem
necessary to carry out the purposes of the Plan.

               (r) Directed Investment Account. The powers granted to the
Trustee shall be exercised in the sole fiduciary discretion of the Trustee.
However, if Participants are so empowered by the Administrator, each Participant
may direct the Trustee to separate and keep separate all or a portion of his
share of his account; and further each Participant is authorized and empowered,
in his sole and absolute discretion, to give directions to the Trustee in such
form as the Trustee may require concerning the investment of the Participant's
Directed Investment Account, which directions must be followed by the Trustee
subject, however, to restrictions on payment of life insurance premiums. Neither
the Trustee nor any other persons including the Administrator or otherwise shall
be under any duty to question any such direction of the Participant or to review
any securities or other property, real or personal, or to make any suggestions
to the Participant in connection therewith, and the Trustee shall comply as
promptly as practicable with directions given by the Participant hereunder. Any
such direction may be of a continuing nature or otherwise and may be revoked by
the Participant at any time in such form as the Trustee may require. The Trustee
may refuse to comply with any direction from the Participant in the event the
Trustee, in its sole and absolute discretion, deems such directions improper by
virtue of applicable law. The Trustee shall not be responsible or liable for any
loss or expense which may result from the Trustee's refusal or failure to comply
with any directions from the Participant. Any costs and expenses related to
compliance with the Participant's directions shall be borne by the Participant's
Directed Investment Account.

     Section 7.04  Duties of the Trustee regarding Payments
     ------------  ----------------------------------------

     At the direction of the Administrator, the Trustee shall, from time to
time, in accordance with the terms of the Plan, make payments out of the Trust
Fund. The Trustee shall not be responsible in any way for the application of
such payments.

                                                                              68

<PAGE>

     Section 7.05  Trustee's Compensation and Expenses and Taxes
     ------------  ---------------------------------------------

     The Trustee shall be paid such reasonable compensation as shall from time
to time be agreed upon in writing by the Employer and the Trustee. An individual
serving as Trustee who already receives full-time pay from the Employer shall
not receive compensation from the Plan. In addition, the Trustee shall be
reimbursed for any reasonable expenses, including reasonable counsel fees
incurred by it as Trustee. Such compensation and expenses shall be paid from the
Trust Fund unless paid or advanced by the Employer. All taxes of any kind and
all kinds whatsoever that may be levied or assessed under existing or future
laws upon, or in respect of, the Trust Fund or the income thereof, shall be paid
from the Trust Fund.

     Section 7.06  Annual Report of the Trustee
     ------------  ----------------------------

     Within a reasonable period of time after the later of the Anniversary Date
or receipt of the Employer's contribution for each Plan Year, the Trustee shall
furnish to the Employer and Administrator a written statement of account with
respect to the Plan Year for which such contribution was made setting forth:

               (a) the net income, or loss, of the Trust Fund;

               (b) the gains, or losses, realized by the Trust Fund upon sales
or other disposition of the assets;

               (c) the increase, or decrease, in the value of the Trust Fund;

               (d) all payments and distributions made from the Trust Fund; and

               (e) such further information as the Trustee and/or Administrator
deems appropriate. The Employer, forthwith upon its receipt of each such
statement of account, shall acknowledge receipt thereof in writing and advise
the Trustee and/or Administrator of its approval or disapproval thereof. Failure
by the Employer to disapprove any such statement of account within thirty (30)
days after its receipt thereof shall be deemed an approval thereof. The approval
by the Employer of any statement of account shall be binding as to all matters
embraced therein as between the Employer and the Trustee to the same extent as
if the account of the Trustee had been settled by judgment or decree in an
action for a judicial settlement of its account in a court of competent
jurisdiction in which the Trustee, the Employer and all persons having or
claiming an interest in the Plan were parties; provided, however, that nothing
herein contained shall deprive the Trustee of its right to have its accounts
judicially settled if the Trustee so desires.

     Section 7.07  Audit
     ------------  -----

     (a) If an audit of the Plan's records shall be required by the Act and the
regulations thereunder for any Plan Year, the Administrator shall direct the
Trustee to engage on behalf of all Participants an independent qualified public
accountant for that purpose. Such

                                                                              69

<PAGE>

accountant shall, after an audit of the books and records of the Plan in
accordance with generally accepted auditing standards, within a reasonable
period after the close of the Plan Year, furnish to the Administrator and the
Trustee a report of his audit setting forth his opinion as to whether any
statements, schedules or lists that are required by Act Section 103 or the
Secretary of Labor to be filed with the Plan's annual report, are presented
fairly in conformity with generally accepted accounting principles applied
consistently. All auditing and accounting fees shall be an expense of and may,
at the election of the Administrator, be paid from the Trust Fund.

               (b) If some or all of the information necessary to enable the
Administrator to comply with Act Section 103 is maintained by a bank, insurance
company, or similar institution, regulated and supervised and subject to
periodic examination by a state or federal agency, it shall transmit and certify
the accuracy of that information to the Administrator as provided in Act Section
103(b) within one hundred twenty (120) days after the end of the Plan Year or by
such other date as may be prescribed under regulations of the Secretary of
Labor.

     Section 7.08  Resignation, Removal and Succession of Trustee
     ------------  -----------------------------------------------

               (a) The Trustee may resign at any time by delivering to the
Employer, at least thirty (30) days before its effective date, a written notice
of his resignation.

               (b) The Employer may remove the Trustee by mailing by registered
or certified mail, addressed to such Trustee at his last known address, at least
thirty (30) days before its effective date, a written notice of his removal.

               (c) Upon the death, resignation, incapacity, or removal of any
Trustee, a successor may be appointed by the Employer; and such successor, upon
accepting such appointment in writing and delivering same to the Employer,
shall, without further act, become vested with all the estate, rights, powers,
discretions, and duties of his predecessor with like respect as if he were
originally named as a Trustee herein. Until such a successor is appointed, the
remaining Trustee or Trustees shall have full authority to act under the terms
of the Plan.

               (d) The Employer may designate one or more successors prior to
the death, resignation, incapacity, or removal of a Trustee. In the event a
successor is so designated by the Employer and accepts such designation, the
successor shall, without further act, become vested with all the estate, rights,
powers, discretions, and duties of his predecessor with the like effect as if he
were originally named as Trustee herein immediately upon the death, resignation,
incapacity, or removal of his predecessor.

               (e) Whenever any Trustee hereunder ceases to serve as such, he
shall furnish to the Employer and Administrator a written statement of account
with respect to the portion of the Plan Year during which he served as Trustee.
This statement shall be either (i) included as part of the annual statement of
account for the Plan Year required under Section 7.06 or (ii) set forth in a
special statement. Any such special statement of account should be rendered to
the Employer no later than the due date of the annual statement of account for
the Plan Year. The

                                                                              70

<PAGE>

procedures set forth in Section 7.06 for the approval by the Employer of annual
statements of account shall apply to any special statement of account rendered
hereunder and approval by the Employer of any such special statement in the
manner provided in Section 7.06 shall have the same effect upon the statement as
the Employer's approval of an annual statement of account. No successor to the
Trustee shall have any duty or responsibility to investigate the acts or
transactions of any predecessor who has rendered all statements of account
required by Section 7.06 and this subparagraph.

     Section 7.09  Employer Securities and Real Property
     ------------  -------------------------------------

     The Trustee shall be empowered to acquire and hold "qualifying Employer
securities" and "qualifying Employer real property," as those terms are defined
in the Act, provided, however, that the Trustee shall not be permitted to
acquire any qualifying Employer securities or qualifying Employer real property
if, immediately after the-acquisition of such security or property, the fair
market value of all qualifying Employer securities and qualifying Employer real
property held by the Trustee hereunder should amount to more than 100% of the
fair market value of all the assets in the Trust Fund.

                                  ARTICLE VIII
                       AMENDMENT, TERMINATION AND MERGERS

     Section 8.01  Amendment
     ------------  ---------

               (a) Fulton Financial Corporation shall have the sole right to
amend the Plan, subject to the limitations of this Section, and any such
amendment shall be binding on each Employer without further act or deed.

               (b) No amendment to the Plan shall be effective if it authorizes
or permits any part of the Trust Fund (other than such part as is required to
pay taxes and administration expenses) to be used for or diverted to any purpose
other than for the exclusive benefit of the Participants or their Beneficiaries
or estates; or causes any reduction in the amount credited to the account of any
Participant; or causes or permits any portion of the Trust Fund to revert to or
become property of the Employer.

               (c) Except as permitted by Regulations, no Plan amendment or
transaction having the effect of a Plan amendment (such as a merger, plan
transfer or similar transaction) shall be effective if it eliminates or reduces
any "Section 411(d)(6) protected benefit" or adds or modifies conditions
relating to "Section 411(d)(6) protected benefits" the result of which is a
further restriction on such benefit unless such protected benefits are preserved
with respect to benefits accrued as of the later of the adoption date or
effective date of the amendment. "Section 411(d)(6) protected benefits" are
benefits described in Code section 411(d)(6)(A), early retirement benefits and
retirement-type subsidies, and optional forms of benefit.

                                                                              71

<PAGE>

     Section 8.02  Termination
     ------------  -----------

               (a) The Employer shall have the right at any time to terminate
the Plan by delivering to the Trustee and Administrator written notice of such
termination. Upon any full or partial termination, all amounts credited to the
affected Participants' Combined Accounts shall become 100% Vested as provided in
Section 6.04 and shall not thereafter be subject to forfeiture, and all
unallocated amounts shall be allocated to the accounts of all Participants in
accordance with the provisions hereof.

               (b) Upon the full termination of the Plan, the Employer shall
direct the distribution of the assets of the Trust Fund to Participants in a
manner which is consistent with and satisfies the provisions of Section 6.05.
Distributions to a Participant shall be made in cash or through the purchase of
irrevocable nontransferable deferred commitments from an insurer. Except as
permitted by Regulations, the termination of the Plan shall not result in the
reduction of "Section 411(d)(6) protected benefits" in accordance with Section
8.01(c).

     Section 8.03  Merger or Consolidation
     ------------  -----------------------

     This Plan and Trust may be merged or consolidated with, or its assets
and/or liabilities may be transferred to any other plan and trust only if the
benefits which would be received by a Participant of this Plan, in the event of
a termination of the plan immediately after such transfer, merger or
consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation, and such transfer, merger or consolidation does not otherwise
result in the elimination or reduction of any "Section 411(d)(6) protected
benefits" in accordance with Section 8.01(c).

                                   ARTICLE IX
                                  MISCELLANEOUS

     Section 9.01  Participant's Rights
     ------------  --------------------

     This Plan shall not be deemed to constitute a contract between the Employer
and any Participant or to be a consideration or an inducement for the employment
of any Participant or Employee. Nothing contained in this Plan shall be deemed
to give any Participant or Employee the right to be retained in the service of
the Employer or to interfere with the right of the Employer to discharge any
Participant or Employee at any time regardless of the effect which such
discharge shall have upon him as a Participant of this Plan.

     Section 9.02  Alienation
     ------------  ----------

               (a) Subject to the exceptions provided below, and except as
otherwise provided in Code section 401(a)(13)(C), no benefit which shall be
payable out of the Trust Fund to any person (including a Participant or his
Beneficiary) shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, or charge, and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the
same shall

                                                                              72

<PAGE>

be void; and no such benefit shall in any manner be liable for, or subject to,
the debts, contracts, liabilities, engagements, or torts of any such person, nor
shall it be subject to attachment or legal process for or against such person,
and the same shall not be recognized by the Trustee, except to such extent as
may be required by law.

                (b)     This provision shall not apply to the extent a
Participant or Beneficiary is indebted to the Plan, as a result of a loan from
the Plan. At the time a distribution is to be made to or for a Participant's or
Beneficiary's benefit, such proportion of the amount distributed as shall equal
such loan indebtedness shall be paid by the Trustee to the Trustee or the
Administrator, at the direction of the Administrator, to apply against or
discharge such loan indebtedness. Prior to making a payment, however, the
Participant or Beneficiary must be given written notice by the Administrator
that such loan indebtedness is to be so paid in whole or part from his
Participant's Combined Account. If the Participant or Beneficiary does not agree
that the loan indebtedness is a valid claim against his vested Participant's
Combined Account, he shall be entitled to a review of the validity of the claim
in accordance with procedures provided in Sections 2.12 and 2.13.

                (c)     This provision shall not apply to a "qualified domestic
relations order" defined in Code section 414(p), and those other domestic
relations orders permitted to be so treated by the Administrator under the
provisions of the Retirement Equity Act of 1984. The Administrator shall
establish a written procedure to determine the qualified status of domestic
relations orders and to administer distributions under such qualified orders.
Further, to the extent provided under a "qualified domestic relations order", a
former spouse of a Participant shall be treated as the spouse or surviving
spouse for all purposes under the Plan.

        Section 9.03    Construction of Plan
        ------------    --------------------

        This Plan and Trust shall be construed and enforced according to the Act
and the laws of the Commonwealth of Pennsylvania, other than its laws respecting
choice of law, to the extent not preempted by the Act.

        Section 9.04    Gender and Number
        ------------    -----------------

        Wherever any words are used herein in the masculine, feminine or neuter
gender, they shall be construed as though they were also used in another gender
in all cases where they would so apply, and whenever any words are used herein
in the singular or plural form, they shall be construed as though they were also
used in the other form in all cases where they would so apply.

        Section 9.05    Legal Action
        ------------    ------------

         In the event any claim, suit, or proceeding is brought regarding the
Trust and/or Plan established hereunder to which the Trustee or the
Administrator may be a party, and such claim, suit, or proceeding is resolved in
favor of the Trustee or Administrator, they shall be entitled to be reimbursed
from the Trust Fund for any and all costs, attorney's fees, and other expenses
pertaining thereto incurred by them for which they shall have become liable.

                                                                              73

<PAGE>

        Section 9.06    Prohibition against Diversion of Funds
        ------------    --------------------------------------

                (a)     Except as provided below and otherwise specifically
permitted by law, it shall be impossible by operation of the Plan or of the
Trust, by termination of either, by power of revocation or amendment, by the
happening of any contingency, by collateral arrangement or by any other means,
for any part of the corpus or income of any trust fund maintained pursuant to
the Plan or any funds contributed thereto to be used for, or diverted to,
purposes other than the exclusive benefit of Participants, Retired Participants,
or their Beneficiaries.

                (b)     In the event the Employer shall make an excessive
contribution under a mistake of fact pursuant to Act Section 403(c)(2)(A), the
Employer may demand repayment of such excessive contribution at any time within
one (1) year following the time of payment and the Trustees shall return such
amount to the Employer within the one (1) year period. Earnings of the Plan
attributable to the excess contributions may not be returned to the Employer but
any losses attributable thereto must reduce the amount so returned.

        Section 9.07    Bonding
        ------------    -------

        Every Fiduciary, except a bank or an insurance company, unless exempted
by the Act and regulations thereunder, shall be bonded in an amount not less
than 10% of the amount of the funds such Fiduciary handles; provided, however,
that the minimum bond shall be $1,000 and the maximum bond, $500,000. The amount
of funds handled shall be determined at the beginning of each Plan Year by the
amount of funds handled by such person, group, or class to be covered and their
predecessors, if any, during the preceding Plan Year, or if there is no
preceding Plan Year, then by the amount of the funds to be handled during the
then current year. The bond shall provide protection to the Plan against any
loss by reason of acts of fraud or dishonesty by the Fiduciary alone or in
connivance with others. The surety shall be a corporate surety company (as such
term is used in Act Section 412(a)(2)), and the bond shall be in a form approved
by the Secretary of Labor. Notwithstanding anything in the Plan to the contrary,
the cost of such bonds shall be an expense of and may, at the election of the
Administrator, be paid from the Trust Fund or by the Employer.

        Section 9.08    Employer's and Trustee's Protective Clause
        ------------    ------------------------------------------

        Neither the Employer nor the Trustee, nor their successors, shall be
responsible for the validity of any Contract issued hereunder or for the failure
on the part of the insurer to make payments provided by any such Contract, or
for the action of any person which may delay payment or render a Contract null
and void or unenforceable in whole or in part.

        Section 9.09    Insurer's Protective Clause
        ------------    ---------------------------

        Any insurer who shall issue Contracts hereunder shall not have any
responsibility for the validity of this Plan or for the tax or legal aspects of
this Plan. The insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee, and shall have no duty to
see to the application of any funds paid to the Trustee, nor be required to
question any

                                                                              74

<PAGE>

actions directed by the Trustee. Regardless of any provision of this Plan, the
insurer shall not be required to take or permit any action or allow any benefit
or privilege contrary to the terms of any Contract which it issues hereunder, or
the rules of the insurer.

        Section 9.10    Receipt and Release for Payments
        ------------    --------------------------------

        Any payment to any Participant, his legal representative, Beneficiary,
or to any guardian or committee appointed for such Participant or Beneficiary in
accordance with the provisions of the Plan, shall, to the extent thereof, be in
full satisfaction of all claims hereunder against the Trustee and the Employer,
either of whom may require such Participant, legal representative, Beneficiary,
guardian or committee, as a condition precedent to such payment, to execute a
receipt and release thereof in such form as shall be determined by the Trustee
or Employer.

        Section 9.11    Action by the Employer
        ------------    ----------------------

        Whenever the Employer under the terms of the Plan is permitted or
required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.

        Section 9.12    Named Fiduciaries and Allocation of Responsibility
        ------------    --------------------------------------------------

        The "named Fiduciaries" of this Plan are (1) the Principal Employer, (2)
the Administrator and (3) the Trustee. The named Fiduciaries shall have only
those specific powers, duties, responsibilities, and obligations as are
specifically given them under the Plan. In general, the Employer shall have the
sole responsibility for making the contributions provided for under Section
4.01; and shall have the sole authority to appoint and remove the Trustee and
the Administrator; to formulate the Plan's "funding policy and method"; and to
amend or terminate, in whole or in part, the Plan. The Administrator shall have
the sole responsibility for the administration of the Plan, which responsibility
is specifically described in the Plan. The Trustee shall have the sole
responsibility of management of the assets held under the Trust, except those
assets, the management of which has been assigned to an Investment Manager, who
shall be solely responsible for the management of the assets assigned to it, all
as specifically provided in the Plan. Each named Fiduciary warrants that any
directions given, information furnished, or action taken by it shall be in
accordance with the provisions of the Plan, authorizing or providing for such
direction, information or action. Furthermore, each named Fiduciary may rely
upon any such direction, information or action of another named Fiduciary as
being proper under the Plan, and is not required under the Plan to inquire into
the propriety of any such direction, information or action. It is intended under
the Plan that each named Fiduciary shall be responsible for the proper exercise
of its own powers, duties, responsibilities and obligations under the Plan. No
named Fiduciary shall guarantee the Trust Fund in any manner against investment
loss or depreciation in asset value. Any person or group may serve in more than
one Fiduciary capacity. In the furtherance of their responsibilities hereunder,
the "named Fiduciaries" shall be empowered to interpret the Plan and Trust and
to resolve ambiguities, inconsistencies and omissions, which findings shall be
binding, final and conclusive.

                                                                              75

<PAGE>

        Section 9.13    Headings
        ------------    --------

        The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.

        Section 9.14    Approval by Internal Revenue Service
        ------------    ------------------------------------

                (a)     Notwithstanding anything herein to the contrary,
contributions to this Plan are conditioned upon the initial qualification of the
Plan under Code section 401. If the Plan receives an adverse determination with
respect to its initial qualification, then the Plan may return such
contributions to the Employer within one year after such determination, provided
the application for the determination is made by the time prescribed by law for
filing the Employer's return for the taxable year in which the Plan was adopted,
or such later date as the Secretary of the Treasury may prescribe.

                (b)     Notwithstanding any provisions to the contrary, except
Sections 3.06, 3.07, and 4.01(d), any contribution by the Employer to the Trust
Fund is conditioned upon the deductibility of the contribution by the Employer
under the Code and, to the extent any such deduction is disallowed, the Employer
may, within one (1) year following the disallowance of the deduction, demand
repayment of such disallowed contribution and the Trustee shall return such
contribution within one (1) year following the disallowance. Earnings of the
Plan attributable to the excess contribution may not be returned to the
Employer, but any losses attributable thereto must reduce the amount so
returned.

        Section 9.15    Uniformity
        ------------    ----------

        All provisions of this Plan shall be interpreted and applied in a
uniform, nondiscriminatory manner. In the event of any conflict between the
terms of this Plan and any Contract purchased hereunder, the Plan provisions
shall control.

                                    ARTICLE X
                          VETERANS' REEMPLOYMENT RIGHTS

        Section 10.01   In General
        -------------   ----------

        Contributions, benefits and service credit with respect to Qualified
Military Service shall be provided in accordance with this Article and Code
section 414(u), notwithstanding any provision of the Plan to the contrary.

        Section 10.02   Qualified Military Service
        -------------   --------------------------

        For purposes of this Article, the term "Qualified Military Service"
means any service in the "uniformed services" (as defined in Chapter 43 of Title
38 of the United States Code) by any Employee if such Employee is entitled to
reemployment rights under such Chapter with respect to such service.

                                                                              76

<PAGE>

     Section 10.03 Crediting Compensation
     ------------- ----------------------

     An Employee who is in Qualified Military Service shall be treated as
receiving compensation from the Employer during such period of Qualified
Military Service equal to:

          (a)  the compensation the Employee would have received during such
period if the Employee were not in Qualified Military Service, determined based
on the rate of pay the Employee would have received from the Employer but for
absence during the period of Qualified Military Service; or

          (b)  if the compensation the Employee would have received during such
period was not reasonably certain, the Employee's average compensation from the
Employer during the 12-month period immediately preceding the Qualified Military
Service (or, if shorter, the period of employment immediately preceding the
Qualified Military Service).

     Section 10.04 Salary Reduction Contributions
     ------------- ------------------------------

          (a)  Subject to Section 10.04(b), any Employee who has performed
Qualified Military Service and who is entitled to the benefits of Chapter 43 of
Title 38 of the United States Code shall be permitted to make additional salary
reduction contributions under the Plan during the period which begins on the
Employee's reemployment date with the Employer and has the same length as the
lesser of:

               (1) the product of 3 and the period of Qualified Military Service
which resulted in such rights; and

               (2) 5 years.

          (b)  The maximum amount of salary reduction contributions that an
Employee shall be permitted to make pursuant to Section 10.04(a) shall be the
amount of salary reduction contributions that the Employee would have been
permitted to make under the Plan in accordance with the limitations of Sections
402(g), 404(a) and 415 of the Code during the period of Qualified Military
Service if the Employee had continued to be employed by the Employer during such
period and had received compensation in accordance with Section 10.3 above. The
amount of salary reduction contributions determined under the preceding sentence
shall be reduced by any salary reduction contributions actually made by the
Employee to the Plan during the period of Qualified Military Service.

     Section 10.05 Earnings and Forfeitures
     ------------- ------------------------

     Nothing in this Article X shall be construed as requiring:

          (a)  any crediting of earnings to an Employee with respect to any
contribution before such contribution is actually made; or

                                                                              77

<PAGE>

               (b) the allocation of any forfeiture with respect to the period
of an Employee's Qualified Military Service.

          Section 10.06  Crediting Service
          -------------  -----------------

               (a) An Employee reemployed by the Employer in accordance with
Chapter 43 of Title 38 of the United States Code shall be treated as not having
incurred a Break in Service with the Employer by reason of such Employee's
period of Qualified Military Service.

               (b) Upon reemployment by the Employer in accordance with Chapter
43 of Title 38 of the United States Code, an Employee's period of Qualified
Military Service shall be deemed service with the Employer for purposes of
determining the vested percentage of the Employee's Account.

                                   ARTICLE XI
                             PARTICIPATING EMPLOYERS

          Section 11.01  Adoption by Other Employees
          -------------  ---------------------------

         Notwithstanding anything herein to the contrary, with the consent of
the Principal Employer and Trustee, any other corporation or entity, whether an
affiliate or subsidiary or not, may adopt this Plan and all of the provisions
hereof, and participate herein and be known as a Participating Employer, by a
properly executed document evidencing said intent and will of such Participating
Employer.

          Section 11.02  Requirements of Participating Employers
          -------------  ---------------------------------------

               (a) Each such Participating Employer shall be required to use the
same Trustee as provided in this Plan.

               (b) The Trustee may, but shall not be required to, commingle,
hold and invest as one Trust Fund all contributions made by Participating
Employers, as well as all increments thereof. However, the assets of the Plan
shall, on an ongoing basis, be available to pay benefits to all Participants and
Beneficiaries under the Plan without regard to the Employer or Participating
Employer who contributed such assets.

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

               (d) All rights and values forfeited by termination of employment
shall inure only to the benefit of the Participants of the Employer or
Participating Employer by which the

                                                                              78

<PAGE>

forfeiting Participant was employed, except if the Forfeiture is for an Employee
whose Employer is an Affiliated Employer, then said Forfeiture shall inure to
the benefit of the Participants of those Employers who are Affiliated Employers.
Should an Employee of one ("First") Employer be transferred to an associated
("Second") Employer which is an Affiliated Employer, such transfer shall not
cause his account balance (generated while an Employee of "First" Employer) in
any manner, or by any amount to be forfeited. Such Employee's Participant
Combined Account balance for all purposes of the Plan, including length of
service, shall be considered as though he had always been employed by the
"Second" Employer and as such had received contributions, forfeitures, earnings
or losses, and appreciation or depreciation in value of assets totaling amount
so transferred.

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

     Section 11.03 Designation of Agent
     ------------- --------------------

     Each Participating Employer shall be deemed to be a part of this Plan;
provided, however, that with respect to all of its relations with the Trustee
and Administrator for the purpose of this Plan, each Participating Employer
shall be deemed to have designated irrevocably the Principal Employer as its
agent. Unless the context of the Plan clearly indicates the contrary, the word
"Employer" shall be deemed to include each Participating Employer as related to
its adoption of the Plan.

     Section 11.04 Employee Transfers
     ------------- ------------------

     It is anticipated that an Employee may be transferred between Participating
Employers, and in the event of any such transfer, the Employee involved shall
carry with him his accumulated service and eligibility. No such transfer shall
effect a termination of employment hereunder, and the Participating Employer to
which the Employee is transferred shall thereupon become obligated hereunder
with respect to such Employee in the same manner as was the Participating
Employer from whom the Employee was transferred.

     Section 11.05 Participating Employer's Contribution
     ------------- -------------------------------------

     Any contribution subject to allocation during each Plan Year shall be
allocated only among those Participants of the Employer or Participating
Employer making the contribution, except if the contribution is made by an
Affiliated Employer, in which event such contribution shall be allocated among
all Participants of all Participating Employers who are Affiliated Employers in
accordance with the provisions of this Plan. On the basis of the information
furnished by the Administrator, the Trustee shall keep separate books and
records concerning the affairs of each Participating Employer hereunder and as
to the accounts and credits of the Employees of each Participating Employer. The
Trustee may, but need not, register Contracts so

                                                                              79

<PAGE>

as to evidence that a particular Participating Employer is the interested
Employer hereunder, but in the event of an Employee transfer from one
Participating Employer to another, the employing Employer shall immediately
notify the Trustee thereof.

     Section 11.06 Discontinuance of Participation
     ------------- -------------------------------

     Any Participating Employer shall be permitted to discontinue or revoke its
participation in the Plan. At the time of any such discontinuance or revocation,
satisfactory evidence thereof and of any applicable conditions imposed shall be
delivered to the Trustee. The Trustee shall thereafter transfer, deliver and
assign Contracts and other Trust Fund assets allocable to the Participants of
such Participating Employer to such new Trustee as shall have been designated by
such Participating Employer, in the event that it has established a separate
pension plan for its Employees provided, however, that no such transfer shall be
made if the result is the elimination or reduction of any "Section 411(d)(6)
protected benefits" in accordance with Section 8.01(c). If no successor is
designated, the Trustee shall retain such assets for the Employees of said
Participating Employer pursuant to the provisions of Article VII hereof. In no
such event shall any part of the corpus or income of the Trust as it relates to
such Participating Employer be used for or diverted for purposes other than for
the exclusive benefit of the Employees of such Participating Employer.

     Section 11.07 Administrator's Authority
     ------------- -------------------------

     The Administrator shall have authority to make any and all necessary rules
or regulations, binding upon all Participating Employers and all Participants,
to effectuate the purpose of this Article.

     IN WITNESS WHEREOF, this Plan has been executed the day and year first
above written.

                               FULTON FINANCIAL CORPORATION

                               By: ____________________________________________

                               Attest: ________________________________________

                               FULTON FINANCIAL ADVISORS, N.A.
                               (Successor to Fulton Bank, effective May 1, 2000)
                               Trustee,

                               By: ____________________________________________

                               Attest: ________________________________________

                                                                              80<PAGE>

                         THE DROVERS AND MECHANICS BANK
                              SALARY DEFERRAL PLAN

                              ORIGINALLY EFFECTIVE
                                  JULY 1, 1986

                        AS AMENDED AND RESTATED EFFECTIVE
                                  JULY 1, 1989

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>                                                                                  <C>
ARTICLE I DEFINITIONS.................................................................1
   Section 1.1. References............................................................1
   Section 1.2. Compensation..........................................................1
   Section 1.3. Dates.................................................................4
   Section 1.4. Employee..............................................................5
   Section 1.5. Employer..............................................................7
   Section 1.6. Fiduciaries...........................................................7
   Section 1.7. Participant/Beneficiary...............................................8
   Section 1.8. Participant Accounts..................................................8
   Section 1.9. Plan..................................................................9
   Section 1.10. Service..............................................................9
   Section 1.11. Trust...............................................................11

ARTICLE II PARTICIPATION.............................................................11
   Section 2.1. Eligibility Service..................................................11
   Section 2.2. Plan Participation...................................................11
   Section 2.3. Termination of Participation.........................................12
   Section 2.4. Re-Participation (Break In Service Rules)............................12

ARTICLE III ALLOCATIONS TO PARTICIPANT ACCOUNTS......................................13
   Section 3.1. General Provisions...................................................13
   Section 3.2. Profit Sharing Contributions.........................................14
   Section 3.3. Qualified Non-Elective Contributions.................................14
   Section 3.4. Employee 401(k) Elective Deferral Contributions......................15
   Section 3.5. Employee Nondeductible Contributions.................................17
   Section 3.6. Employer Matching Contributions......................................17
   Section 3.7. Rollover/Transfer Contributions......................................18
   Section 3.8. Allocation of Investment Results.....................................19

ARTICLE IV PAYMENT OF PARTICIPANT ACCOUNTS...........................................19
   Section 4.1. Vesting Service Rules................................................19
   Section 4.2. Vesting of Participant Accounts......................................20
   Section 4.3. Payment of Participant Accounts......................................24
   Section 4.4. In-Service Payments..................................................28
   Section 4.5. Distributions under Domestic Relations Orders........................29

ARTICLE V ADDITIONAL QUALIFICATION RULES.............................................30
   Section 5.1. Limitations on Allocations under Code Section 415....................30
   Section 5.2. Control of Trades or Businesses by Owner-Employee....................36
   Section 5.3. Joint and Survivor Annuity Requirements..............................37
   Section 5.4. Distribution Requirements............................................43
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                  <C>
   Section 5.5. Top Heavy Provisions..................................................49
   Section 5.6. Limitations and Conditions Regarding Contributions under
        Code Sections 402(g), 401(k) and 401(m).......................................53
   Section 5.7. Deductible Voluntary Employee Contributions...........................63

ARTICLE VI ADMINISTRATION OF THE PLAN.................................................63
   Section 6.1. Fiduciary Responsibility..............................................63
   Section 6.2. Plan Administrator....................................................64
   Section 6.3. Claims Procedure......................................................66
   Section 6.4. Trust Fund............................................................66

ARTICLE VII AMENDMENT AND TERMINATION OF PLAN.........................................67
   Section 7.1. Right to Discontinue and Amend........................................67
   Section 7.2. Amendments............................................................67
   Section 7.3. Protection of Benefits in Case of Plan Merger.........................68
   Section 7.4. Termination of Plan...................................................69

ARTICLE VIII MISCELLANEOUS PROVISIONS.................................................69
   Section 8.1. Exclusive Benefit - Non-Reversion.....................................69
   Section 8.2. Inalienability of Benefits............................................70
   Section 8.3. Employer-Employee Relationship........................................70
   Section 8.4. Binding Agreement.....................................................70
   Section 8.5. Separability..........................................................70
   Section 8.6. Construction..........................................................70
   Section 8.7. Copies of Plan........................................................70
   Section 8.8. Interpretation........................................................71
</TABLE>

                                                                              ii

<PAGE>

                         The Drovers And Mechanics Bank
                              Salary Deferral Plan

         This amended and restated plan, executed on the date indicated at the
end hereof, is made effective as of July 1, 1989, except as provided otherwise
in Section 1.3(c), by The Drovers and Mechanics Bank, a Corporation, with its
principal office located in York, PA.

                              W I T N E S S E T H :

         WHEREAS, effective July 1, 1986, the employer established the plan for
its employees and desires to continue to maintain a permanent qualified plan in
order to provide its employees and their beneficiaries with financial security
in the event of retirement, disability or death; and

         WHEREAS, it is desired to amend said plan;

         NOW THEREFORE, the premises considered, the original plan is hereby
replaced by this amended and restated plan, and the following are the provisions
of the qualified plan of the employer as restated herein; provided, however,
that each employee who was previously a participant shall remain a participant,
and no employee who was a participant in the plan before the date of amendment
shall receive a benefit under this amended plan which is less than the benefit
he was then entitled to receive under the plan as of the day prior to the
amendment.

                                   ARTICLE I
                                   DEFINITIONS

         Section 1.1. References
         ------------ ----------

         (a) Code means the Internal Revenue Code of 1986, as it may be amended
from time to time.

         (b) ERISA means the Employee Retirement Income Security Act of 1974, as
             -----
amended.

         Section 1.2. Compensation
         ------------ ------------

         (a) Compensation means, except as provided in paragraph (b) hereof, any
             ------------
earnings reportable as W-2 wages for Federal income tax withholding purposes and
earned income, plus elective contributions, for the plan year.

         Elective contributions are amounts excludible from the employee's gross
income and contributed by the employer, at the employee's election to:

               (1) A cafeteria plan (excludible under Code Section 125);

<PAGE>

         (2) A Code Section 401(k) arrangement (excludible under Code Section
402(a)(8));

         (3) A simplified employee pension (excludible under Code Section
402(h)); or

         (4) A tax sheltered annuity (excludible under Code Section 403(b)).

     "Earned Income" means net earnings from self-employment in the trade or
business with respect to which the employer has established the plan, provided
that personal services of the individual are a material income producing factor.
Net earnings shall be determined without regard to items excluded from gross
income and the deductions allocable to those items. Net earnings shall be
determined after the deduction allowed to the self-employed individual for all
contributions made by the employer to a qualified plan and, for plan years
beginning after December 31, 1989, the deduction allowed to the self-employed
under Code Section 164(f) for self-employment taxes.

     Any reference in this plan to compensation shall be a reference to the
definition in this Section 1.2, unless the plan reference specifies a
modification to this definition. The plan administrator shall take into account
only compensation actually paid by the employer for the relevant period. A
compensation payment includes compensation by the employer through another
person under the common paymaster provisions in Code Sections 3121 and 3306.
Compensation from an employer which is not a participating employer under this
plan shall be excluded.

     (b) Exclusions From Compensation - Notwithstanding the provisions of
         ----------------------------
paragraph 1.2(a), the following types of remuneration shall be excluded from the
participant's compensation:

         No exclusions from compensation.

     (c) Limitations on Compensation -
         ---------------------------

         (1) Compensation Dollar Limitation - For any plan year beginning after
             ------------------------------
December 31, 1993, the plan administrator shall take into account only the first
$150,000 (or beginning January 1, 1995, such larger amount as the Commissioner
of Internal Revenue may prescribe) of any participant's compensation for
determining all benefits provided under the plan. For any plan year beginning
after December 31, 1988 but before January 1, 1994, the plan administrator shall
take into account only the first $200,000 (or for plan years after December 31,
1989 but before January 1, 1994, such larger amount as the Commissioner of
Internal Revenue may prescribe) of any participant's compensation for
determining all benefits provided under the plan. The compensation dollar
limitation for a plan year shall be the limitation amount in effect on January 1
of the calendar year in which the plan year begins. For any plan year beginning
before January 1, 1989, the compensation dollar limitation (but not the family
aggregation requirement described in the next paragraph) applies only if the
plan is top-heavy for such plan

                                                                               2

<PAGE>

year or operates as a deemed top-heavy plan for such plan year. If the plan
should determine compensation on a period of time that contains fewer than 12
calendar months (such as for a short plan year), the annual compensation dollar
limitation shall be an amount equal to the compensation dollar limitation for
the plan year multiplied by the ratio obtained by dividing the number of full
months in the period by 12.

         (2) Application of Compensation Limitation to Certain Family Members -
             ----------------------------------------------------------------
The compensation dollar limitation applies to the combined compensation of the
employee and of any family member aggregated with the employee under Code
Section 414(q)(6) who is either (A) the employee's spouse, or (B) the employee's
lineal descendant under the age of 19. If, for a plan year, the combined
compensation of the employee and such family members who are participants
entitled to an allocation for that plan year exceeds the compensation dollar
limitation, compensation for each such participant, for purposes of the
contribution and allocation provisions of Article III, means his adjusted
compensation.

     Adjusted compensation is the amount which bears the same ratio to the
compensation dollar limitation as the effected participant's compensation
(without regard to the compensation dollar limitation) bears to the combined
compensation of all the effected participants in the family unit. If the plan
uses permitted disparity, the plan administrator first shall determine the
integration level of each effected family member participant using actual
compensation. The total of the effected participants' compensations equal to or
less than the applicable integration levels may not exceed the compensation
dollar limitation. The combined excess compensation of the effected participants
in the family unit may not exceed the compensation dollar limitation minus the
amount determined under the preceding sentence. If the combined excess
compensation exceeds this limitation, the plan administrator will prorate the
limitation on the excess compensation among the effected participants in the
family unit in proportion to each such individual's actual compensation minus
his integration level.

     (d) Compensation for Nondiscrimination Test - For purposes of determining
         ---------------------------------------
whether the plan discriminates in favor of highly compensated employees,
compensation means compensation as defined in this Section 1.2, except that the
employer will not give effect to any exclusion from compensation specified in
Section 1.2(b). Notwithstanding the above, the employer may elect to exclude
from this nondiscrimination definition of compensation any items of compensation
excludible under Code Section 414(s) and the applicable Treasury regulations,
provided such adjusted definition conforms to the nondiscrimination requirements
of those regulations.

     (e) Compensation for Compliance with Section 5.6 - For purposes of
         --------------------------------------------
conducting the actual deferral percentage test or the average contribution
percentage test, compensation means compensation as defined in Section 1.2(a)
for the entire plan year.

                                                                               3

<PAGE>

     Section 1.3. Dates
     ------------ -----

     (a) Accounting Date means the dates on which investment results are
         ---------------
allocated to participants' accounts:

     December 31, March 31, June 30 and September 30 are investment allocation
dates.

     (b) Allocation Date means the date(s) on which any contribution is
allocated to participants' accounts as follows:

     Qualified non-elective contributions shall be allocated as of the last day
of the plan year.

     Employee contributions (whether elective deferrals or nondeductible) shall
be allocated on the date of receipt by the plan.

     Employer matching contributions shall be allocated as of the date employee
contributions subject to matching are received and allocated.

     The allocation period applicable to a particular employer matching
         -----------------
contribution allocation date shall be the period commencing as of the day
following the immediately previous allocation date and ending on the particular
allocation date. For the purpose of a participant's contribution made pursuant
to a salary reduction election for an incentive bonus, the allocation period
shall be the date the incentive bonus is otherwise paid to the employees and
compensation for the allocation period shall mean the incentive bonus
compensation.

     (c) The Effective Date of the plan is July 1, 1986.
             --------------

     The effective date of this amendment and restatement is July 1, 1989;
provided, however that the plan provisions required to comply with the Tax
Reform Act of 1986 (TRA `86), the Omnibus Budget Reconciliation Act of 1986
(OBRA `86), the Omnibus Budget Reconciliation Act of 1987 (OBRA `87), and the
Technical and Miscellaneous Revenue Act of 1988 (TAMRA) shall generally be
effective on the first day of the plan year beginning after December 31, 1988,
except as specified otherwise in this plan or in TRA `86, OBRA `86, OBRA `87 or
TAMRA. The plan provisions required to comply with the 1989 Revenue
Reconciliation Act shall generally be effective on the first day of the plan
year beginning after December 31, 1989, except as specified otherwise in this
plan or in said Act.

     Notwithstanding anything herein to the contrary, the provisions noted below
shall become effective on the alternate effective date indicated. If the
alternate effective date is subsequent to the effective date of this amendment,
the prior provisions of the plan shall continue in effect until such alternate
effective date.

                                                                               4

<PAGE>

Reference                                        Alternate Effective Date
---------                                        ------------------------

Section 4.2(b)  Forfeitures                      January 1, 1992

Section 4.3(b)  IRA Rollover/Plan Transfer       January 1, 1993

     (d) Plan Entry Date means the participation date(s) specified in Article
         ---------------
II.

     (e) Plan Year means the 12-consecutive month period beginning on January 1
         ---------
and ending on December 31.

     (f) Limitation Year (for purposes of limitations on benefits and
         ---------------
contributions under Code Section 415) means the plan year.

     Section 1.4. Employee
     ------------ --------

     (a)

         (1) Employee means any person employed by the employer, including an
owner-employee or other self-employed individual (as defined in paragraph (3)).
The term employee shall include any employee of the employer maintaining the
plan or of any other employer required to be aggregated with such employer under
Code Sections 414(b), (c), (m) or (o). The term employee shall also include any
leased employee deemed to be an employee of any employer as provided in Code
Sections 414(n) or (o) and as defined in paragraph (2).

         (2) Leased Employee means an individual (who otherwise is not an
             ---------------
employee of the employer) who, pursuant to a leasing agreement between the
employer and any other person, has performed services for the employer (or for
the employer and any persons related to the employer within the meaning of Code
Section 144(a)(3)) on a substantially full time basis for at least one year and
who performs services historically performed by employees in the employer's
business field. If a leased employee is treated as an employee by reason of this
Section 1.4(a)(2), compensation from the leasing organization which is
attributable to services performed for the employer shall be considered as
compensation under the plan. Contributions or benefits provided a leased
employee by the leasing organization which are attributable to services
performed for the employer shall be treated as provided by the employer.

     Safe harbor plan exception - The plan shall not treat a leased employee as
an employee if the leasing organization covers the employee in a safe harbor
plan and, prior to application of this safe harbor plan exception, 20% or less
of the employer's employees (other than highly compensated employees) are leased
employees. A safe harbor plan is a money purchase pension plan providing
immediate participation, full and immediate vesting, and a nonintegrated
contribution formula equal to at least 10% of the employee's compensation
without regard to employment by the leasing organization on a specified date.
The safe harbor plan must

                                                                               5

<PAGE>

determine the 10% contribution on the basis of compensation as defined in Code
Section 415(c)(3) plus elective contributions.

         (3) Owner-Employee/Self Employed Individual - Owner-employee means a
             ---------------------------------------
self-employed individual who is a sole proprietor, (if the employer is a sole
proprietorship) or who is a partner (if the employer is a partnership) owning
more than 10 percent of either the capital or profits interest of the
partnership. Self-employed individual means an individual who has earned income
for the taxable year from the trade or business for which the plan is
established, or who would have had earned income but for the fact that the trade
or business had no net profits for the taxable year.

     (b) Highly Compensated Employee means an employee who, during the plan year
         ---------------------------
or during the preceding 12-month period:

         (1) is a more than 5% owner of the employer (applying the constructive
ownership rules of Code Section 318, and applying the principles of Code Section
318, for an unincorporated entity);

         (2) has compensation in excess of $75,000 (as adjusted by the
Commissioner of Internal Revenue for the relevant year);

         (3) has compensation in excess of $50,000 (as adjusted by the
Commissioner of Internal Revenue for the relevant year) and is part of the
top-paid 20% group of employees (based on compensation for the relevant year);
or

         (4) has compensation in excess of 50% of the dollar amount prescribed
in Code Section 415(b)(1)(A) (relating to defined benefit plans) and is an
officer of the employer.

     If the employee satisfies the definition in clause (2), (3) or (4) in the
plan year but did not satisfy clause (2), (3) or (4) during the preceding
12-month period and does not satisfy clause (1) in either period, then the
employee is a highly compensated employee only if he is one of the 100 most
highly compensated employees for the plan year. The number of officers taken
into account under clause (4) shall not exceed the greater of 3 or 10% of the
total number (after application of the Code Section 414(q) exclusions) of
employees, but no more than 50 officers. If no employee satisfies the
compensation requirement in clause (4) for the relevant year, the highest paid
officer will be treated as satisfying clause (4) for that year.

     The term highly compensated employee also includes any former employee who
separated from service (or has a deemed separation from service, as determined
under Treasury regulations) prior to the plan year, performs no service for the
employer during the plan year, and was a highly compensated employee either for
the separation year or any plan year ending on or after his 55th birthday. If
the former employee's separation from service occurred before January 1, 1987,
he is a highly compensated employee only if he satisfied clause (1) of this
Section 1.4(b) or received compensation in excess of $50,000 during the year of
his separation from service (or the prior year), or during any year ending after
his 54th birthday.

                                                                               6

<PAGE>

     For purposes of determining who is a highly compensated employee under this
Section 1.4(b), compensation means compensation as defined in Section 1.2,
except that any exclusions from compensation specified in Section 1.2 (b) shall
not apply. The plan administrator shall make the determination of who is a
highly compensated employee, including the determinations of the number and
identity of the top paid 20% group, the top 100 paid employees, the number of
officers includible in clause (4) and the relevant compensation, consistent with
Code Section 414(q) and regulations issued under that Code Section. The employer
may make a calendar year election to determine the highly compensated employees
for the plan year, as prescribed by Treasury regulations. A calendar year
election must apply to all plans and arrangements of the employer.

     For purposes of applying any nondiscrimination test required under the plan
or Code, in a manner consistent with applicable Treasury regulations, the plan
administrator will treat a highly compensated employee and all family members (a
spouse, a lineal ascendant or descendant, or a spouse of a lineal ascendant or
descendant) as a single highly compensated employee, but only if the highly
compensated employee is a more than 5% owner or is one of the 10 highly
compensated employees with the greatest compensation for the plan year. This
aggregation rule applies to a family member even if that family member is a
highly compensated employee without family aggregation.

     Section 1.5. Employer
     ------------ --------

     Employer means The Drovers and Mechanics Bank or any successor entity by
merger, purchase, consolidation, or otherwise; or an organization affiliated
with the employer which may assume the obligations of this plan with respect to
its employees by becoming a party to this plan. Another employer whether or not
it is affiliated with the sponsor employer may adopt this plan to cover its
employees by filing with the sponsor employer a written resolution adopting the
plan, upon which the sponsor employer shall indicate its acceptance of such
employer as an employer under the plan. Each such employer shall be deemed to be
the employer only as to persons who are on its payroll.

     The following employer has adopted this plan and has been accepted by the
sponsor employer on or before the date this amendment is executed:

          Participating Employer                  EIN
          ----------------------                  ---
    Drovers Settlement Services, LLC         23-3039923

     Section 1.6. Fiduciaries
     ------------ -----------

     (a) Named Fiduciary means the person or persons having fiduciary
         ---------------
responsibility for the management and control of plan assets.

                                                                               7

<PAGE>

     (b) Plan administrator means the person or persons appointed by the named
         ------------------
fiduciary to administer the plan.

     (c) Trustee means the trustee named in the trust agreement executed
         -------
pursuant to this plan, or any duly appointed successor trustee.

     (d) Investment Manager means a person or corporation other than the trustee
         ------------------
appointed for the investment of plan assets.

     Section 1.7. Participant/Beneficiary
     ------------ -----------------------

     (a) Participant means an eligible employee of the employer who becomes a
member of the plan pursuant to the provisions of Article II, or a former
employee who has an accrued benefit under the plan.

     (b) Beneficiary means a person designated by a participant who is or may
become entitled to a benefit under the plan. A beneficiary who becomes entitled
to a benefit under the plan remains a beneficiary under the plan until the
trustee has fully distributed his benefit to him. A beneficiary's right to (and
the plan administrator's, or a trustee's duty to provide to the beneficiary)
information or data concerning the plan shall not arise until he first becomes
entitled to receive a benefit under the plan.

     Section 1.8. Participant Accounts
     ------------ --------------------

     (a) Profit Sharing Account means the balance of the separate account
         ----------------------
derived from profit sharing employer contributions, including forfeitures (if
any) (if so provided under Section 3.2).

     (b) Qualified Non-elective Contribution Account means the balance of the
         -------------------------------------------
separate account derived from employer's qualified non-elective contributions
(if so provided under Section 3.3).

     (c) Employee 401(k) Elective Deferral Account means the balance of the
         -----------------------------------------
separate account derived from the participant's elective deferrals (if so
provided under Section 3.4).

     (d) Employee Nondeductible Contribution Account means the balance of the
         -------------------------------------------
separate account derived from the participant's non-deductible employee
contributions (if so provided under Section 3.5).

     (e) Employer Matching Contribution Account means the balance of the
         --------------------------------------
separate account derived from employer's matching contributions (if so provided
under Section 3.6).

     (f) Rollover/Transfer Account means the balance of the separate account
         -------------------------
derived from rollover contributions and/or transfer contributions (if so
provided under Section 3.7).

                                                                               8

<PAGE>

     (g) Recharacterized Funds Account means the balance of the separate account
         -----------------------------
derived from recharacterized amounts treated as being contributed by the
participant (if so provided under Section 3.5(c)).

     (h) Accrued Benefit means the total of the participant's account balances
         ---------------
as of the accounting date falling on or before the day on which the accrued
benefit is being determined.

     Section 1.9. Plan
     ------------ ----

     Plan means The Drovers And Mechanics Bank Salary Deferral Plan as set forth
herein and as it may be amended from time to time.

     Section 1.10. Service
     ------------- -------

     (a) Service means any period of time the employee is in the employ of the
         -------
employer, including any period the employee is on an unpaid leave of absence
authorized by the employer under a uniform, nondiscriminatory policy applicable
to all employees. Separation from service means that the employee no longer has
an employment relationship with the employer.

     (b)

         (1) Hour of Service means:
             ---------------

            (A) Each hour for which an employee is paid, or entitled to payment,
for the performance of duties for the employer. These hours shall be credited to
the employee for the computation period in which the duties are performed; and

            (B) Each hour for which an employee is paid, or entitled to payment,
by the employer on account of a period of time during which no duties are
performed (irrespective of whether the employment relationship has terminated)
due to vacation, holiday, illness, incapacity (including disability), layoff,
jury duty, military duty or leave of absence. No more than 501 hours of service
shall be credited under this paragraph for any single continuous period (whether
or not such period occurs in a single computation period). An hour of service
shall not be credited to an employee under this paragraph if the employee is
paid, or entitled to payment, under a plan maintained solely for the purpose of
complying with applicable worker's compensation or unemployment compensation or
disability insurance laws. Hours under this paragraph shall be calculated and
credited pursuant to Section 2530.200b-2 of the Department of Labor Regulations
which are incorporated herein by this reference; and

            (C) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the employer. The same hours of
service shall not be credited both under paragraph (A) or paragraph (B), as the
case may be, and under this paragraph (C). These hours shall be credited to the
employee for the computation period or periods to which the award or agreement
pertains rather than the computation period in which the award, agreement or
payment is made.

                                                                               9

<PAGE>

     Hours of service shall be determined on the basis of actual hours for which
an employee is paid or entitled to payment. The above provisions shall be
construed so as to resolve any ambiguities in favor of crediting employees with
hours of service.

         (2) Solely for purposes of determining whether a break in service for
participation and vesting purposes has occurred in a computation period, an
individual who is absent from work for maternity or paternity reasons shall
receive credit for the hours of service which would otherwise have been credited
to such individual but for such absence, or in any case in which such hours
cannot be determined, 8 hours of service per day of such absence. For purposes
of this paragraph, an absence from work for maternity or paternity reasons means
an absence (A) by reason of the pregnancy of the individual, (B) by reason of a
birth of a child of the individual, (C) by reason of the placement of a child
with the individual in connection with the adoption of such child by such
individual, or (D) for purposes of caring for such child for a period beginning
immediately following such birth or placement. The hours of service credited
under this paragraph shall be credited: (A) in the computation period in which
the absence begins if the crediting is necessary to prevent a break in service
in that period, or (B) in all other cases, in the following computation period.

         (3) Hours of service shall be credited for employment with other
members of an affiliated service group (under Code Section 414(m)), a controlled
group of corporations (under Code Section 414(b)), or a group of trades or
businesses under common control (under Code Section 414(c)), of which the
adopting employer is a member. Hours of service shall also be credited for any
leased employee who is considered an employee for purposes of this plan under
Code Section 414(n) or Code Section 414(o).

     (c)

         (1) Year of Service means a 12-consecutive month computation period
             ---------------
during which the employee completes the required number of hours of service with
the employer as specified in Sections 2.1 or 4.1.

         (2) Predecessor Service - If the employer maintains the plan of a
             -------------------
predecessor employer, service with such predecessor employer shall be treated as
service for the employer. If the employer does not maintain the plan of a
predecessor employer, then service as an employee of a predecessor employer
shall not be considered as service under the plan, except as noted below:

             - No credit for predecessor service.

     Service as an employee of a predecessor employer shall be considered as
service for the employer hereunder for the purposes of applying the limitations
on benefits and allocations under Code Section 415.

                                                                              10

<PAGE>

     (d) Break in Service (or One Year Break in Service) means a 12-consecutive
         ----------------
month computation period during which a participant or former participant does
not complete the specified number of hours of service with the employer as set
forth in Sections 2.1(b) and 4.1(b).

     Section 1.11. Trust
     ------------- -----

     (a) Trust means the qualified trust created under the employer's plan.
         -----

     (b) Trust Fund means all property held or acquired by the plan.
         ----------

                                   ARTICLE II
                                  PARTICIPATION

     Section 2.1. Eligibility Service
     ------------ -------------------

     (a) Eligibility Year of Service means an eligibility computation period
         ---------------------------
during which the employee completes at least 1,000 hours of service with the
employer.

     (b) One Year Break in Service means for the purposes of this Article II an
         -------------------------
eligibility computation period during which the participant or former
participant does not complete more than 500 hours of service with the employer.

     (c) Eligibility Computation Period - The initial eligibility computation
         ------------------------------
period shall be the 12-consecutive month period beginning with the day on which
the employee first performs an hour of service with the employer (employment
commencement date).

     Succeeding eligibility computation periods shall coincide with the plan
year, beginning with the first plan year which commences prior to the first
anniversary of the employee's employment commencement date regardless of whether
the employee is credited with the required number of hours of service during the
initial eligibility computation period. An employee who is credited with the
required number of hours of service in both the initial eligibility computation
period and the first plan year which commences prior to the first anniversary of
the employee's employment commencement date shall be credited with two years of
service for purposes of eligibility to participate.

     Section 2.2. Plan Participation
     ------------ ------------------

     (a) Eligibility
         -----------

         (1) Age/service requirements - An employee who is a member of the
             ------------------------
eligible class of employees shall be eligible for plan participation after he
has satisfied the following participation requirements:

             (A) Completion of 1 year of service, and

                                                                              11

<PAGE>

             (B) Attainment of age 21.

         (2) Eligible class of employees - All employees of the employer shall
             ---------------------------
be eligible to be covered under the plan; provided, however, that leased
employees who are considered employees under the plan shall not be eligible for
participation, unless such exclusion would cause the plan to fail to satisfy the
participation test or the coverage test of Code Section 410 or the
nondiscrimination requirements of Code Section 401(a)(4).

     (b) Entry Date - An eligible employee shall participate in the plan on the
         ----------
earlier of the January 1, April 1, July 1, or October 1 entry date coinciding
with or immediately following the date on which he has met the age and service
requirements. If an employee who is not a member of the eligible class of
employees becomes a member of the eligible class, such employee shall
participate immediately, if he has satisfied the age and service requirements
and would have otherwise previously become a participant.

     Section 2.3. Termination of Participation
     ------------ ----------------------------

     A participant shall continue to be an active participant of the plan so
long as he is a member of the eligible class of employees and he does not incur
a one-year break in service due to termination of employment. He shall become an
inactive participant when he incurs a one-year break in service due to
termination of employment, or at the end of the plan year during which he ceases
to be a member of the eligible class of employees. He shall cease participation
completely upon the later of his receipt of a total distribution of his
nonforfeitable account balance(s) under the plan or the forfeiture of the
nonvested portion of the account balance(s).

     Section 2.4. Re-Participation (Break In Service Rules)
     ------------ -----------------------------------------

     (a) Vested Participant - A former participant who had a nonforfeitable
         ------------------
right to all or a portion of his account balance derived from employer
contributions at the time of his termination from service shall become a
participant immediately upon returning to the employ of the employer, if he is a
member of the eligible class of employees.

     (b) Nonvested Participant - In the case of a former participant who did not
         ---------------------
have any nonforfeitable right to his account balance derived from employer
contributions at the time of his termination from service, years of service
before a period of consecutive one-year breaks in service shall not be taken
into account in computing service if the number of consecutive one-year breaks
in service in such period equals or exceeds the greater of 5 or the aggregate
number of years of service before such breaks in service. Such aggregate number
of years of service shall not include any years of service disregarded under the
preceding sentence by reason of prior breaks in service.

     If such former participant's years of service before termination from
service are disregarded pursuant to the preceding paragraph, he shall be
considered a new employee for eligibility purposes. If such former participant's
years of service before termination from service may not be disregarded pursuant
to the preceding paragraph, he shall participate immediately

                                                                              12

<PAGE>

upon returning to the employ of the employer, if he is a member of the eligible
class of employees.

     (c) Return to Eligible Class - If a participant becomes an inactive
         ------------------------
participant, because he is no longer a member of the eligible class of
employees, but does not incur a break in service; such inactive participant
shall become an active participant immediately upon returning to the eligible
class of employees. If such participant incurs a break in service, eligibility
shall be determined under the re-participation rules in paragraphs (a) and (b)
above.

                                   ARTICLE III
                       ALLOCATIONS TO PARTICIPANT ACCOUNTS

     Section 3.1. General Provisions
     ------------ ------------------

     (a) Maintenance of Participant Accounts - The plan administrator shall
         -----------------------------------
maintain separate accounts covering each participant under the plan as herein
described. Such accounts shall be increased by contributions, reallocation of
forfeitures (if any), investment income, and market value appreciation of the
fund. They shall be decreased by market value depreciation of the fund,
forfeiture of nonvested amounts, benefit payments, withdrawals and expenses.

     (b) Amount and Payment of Employer Contribution
         -------------------------------------------

         (1) Amount of Contribution - For each plan year, the employer
             ----------------------
contribution to the plan shall be the amount which is determined under the
provisions of this Article; provided, however, that the employer may not make a
contribution to the plan for any plan year to the extent the contribution would
exceed the participants' maximum permissible amounts under Code Section 415.
Further, the employer contribution shall not exceed the maximum amount
deductible under Code Section 404.

     The employer contributes to this plan on the conditions that its
contribution is not due to a mistake of fact and that the Internal Revenue
Service will not disallow the deduction for its contribution. The trustee, upon
written request from the employer, shall return to the employer the amount of
the employer's contribution made due to a mistake of fact or the amount of the
employer's contribution disallowed as a deduction under Code Section 404. The
trustee shall not return any portion of the employer's contribution under the
provisions of this paragraph more than one year after the earlier of: (A) The
date on which the employer made the contribution due to a mistake of fact; or
(B) The time of disallowance of the contribution as a deduction, and then, only
to the extent of the disallowance. The trustee will not increase the amount of
the employer contribution returnable under this Section for any earnings
attributable to the contribution, but the trustee will decrease the employer
contribution returnable for any losses attributable to it. The trustee may
require the employer to furnish whatever evidence it deems necessary to confirm
that the amount the employer has requested be returned is properly returnable
under ERISA.

                                                                              13

<PAGE>

         (2) Payment of Contribution - The employer shall make its contribution
             -----------------------
to the plan within the time prescribed by the Code or applicable Treasury
regulations. Subject to the consent of the trustee, the employer may make its
contribution in property rather than in cash, provided the contribution of
property is not a prohibited transaction under the Code or ERISA.

     (c) Limitations and Conditions - Notwithstanding the allocation procedures
         --------------------------
set forth in this Article, the allocations to participants' accounts shall be
limited or modified to the extent required to comply with the provisions of
Article V (limitations on allocations under Code Section 415, related employer
provisions under Code Section 414 and top-heavy provisions under Code Section
416).

     In any limitation year in which the allocation to one or more participants'
accounts would be in excess of the limitations on allocations under Code Section
415, the annual additions under this plan will be reduced to the extent
necessary to comply with such limitations first. If any further reduction is
required, the annual additions or benefits under any other plan which the
employer also sponsors will then be reduced with respect to such participants.

     Section 3.2. Profit Sharing Contributions
     ------------ ----------------------------

     Profit sharing employer contributions shall not be made under this plan and
no amount shall be credited to the profit sharing account. Any employer
contributions which are not employer matching contributions shall be made as
qualified non-elective contributions that are nonforfeitable when made. In any
plan year in which the plan is top-heavy (as defined in Section 5.5(e)(2)), the
top-heavy minimum benefit requirement shall be met as provided in Section 3.3.

     Section 3.3. Qualified Non-Elective Contributions
     ------------ ------------------------------------

     The employer may make qualified non-elective contributions on behalf of
either the non-highly compensated active participants or all active participants
that are sufficient to satisfy either the actual deferral percentage test or the
average contribution percentage test, or both, pursuant to regulations under the
Code in lieu of distributing excess contributions as provided in Section
5.6(b)(2) of the plan, or excess aggregate contributions as provided in
Subsection 5.6(c)(2) of the plan.

     Qualified non-elective contributions are contributions (other than profit
sharing contributions or employer matching contributions) which are made by the
employer and allocated to participants' qualified non-elective contribution
accounts and any forfeitures which are so applied that the participants may not
elect to receive in cash until distributed from the plan; that are
nonforfeitable when made; and that are distributable only in accordance with the
distribution provisions that are applicable to elective deferrals and qualified
matching contributions.

     (a) Amount of Contribution - The amount of such contributions for each plan
         ----------------------
year shall be an amount determined by the employer, in its sole discretion,
after the plan administrator has determined the amount needed to satisfy test
requirements, the test or tests to be satisfied

                                                                              14

<PAGE>

with such contributions, and the classification of active participants (all or
only the non-highly compensated) to receive the contribution.

     (b) Allocation of Contribution -
         --------------------------

         (1) Allocation of such contributions shall be made under one of the
following methods to either all active participants or all non-highly
compensated active participants as determined by the plan administrator for the
plan year:

             (A) In the ratio which each eligible participant's compensation for
the plan year bears to the total compensation of all eligible participants for
such plan year.

             (B) In the ratio which each eligible participant's compensation not
in excess of a specified dollar amount for the plan year bears to the total
compensation of all eligible participants not in excess of such specified dollar
amount for such plan year. The plan administrator shall set the specified dollar
amount at the level necessary to enable the plan to satisfy the test or tests
being met through the contribution.

             (C) The contribution shall be allocated to those non-highly
compensated employees earning the least compensation during the plan year as
needed to enable the plan to meet the test requirements the contribution is
being used to meet.

         (2) Top-Heavy Plan Years - In any plan year in which this plan is
             --------------------
top-heavy (as defined in Section 5.5(e)(2)), the allocation of the contribution
shall be adjusted as necessary to comply with the top-heavy minimum benefit
requirements. The qualified non-elective contribution allocated to each
participant's account shall not be less than an amount equal to 3.0 % of his
compensation or the largest percentage of employer contribution and forfeiture
allocated on behalf of any key employee for that year, whichever is less.

     Section 3.4. Employee 401(k) Elective Deferral Contributions
     ------------ -----------------------------------------------

     (a) Amount of Contribution - The employer shall contribute each plan year
         ----------------------
on behalf of each active participant who elects salary deferral a sum equal to
the amount which the participant has elected to defer under a salary reduction
arrangement or under a cash or deferred arrangement. The contribution shall be
credited to the participant's employee 401(k) elective deferral account.

     (b) Salary Reduction Election
         -------------------------

         (1) Availability of Election - An active participant may effect a
             ------------------------
salary reduction agreement with the employer under which an employer
contribution will be made to the plan on behalf of such participant only if he
elects to reduce his compensation or to forgo an increase in his compensation.
The amount of salary deferral may range from 0.0% to 15.0% of compensation paid
for the payroll period. This limitation shall not apply to incentive bonus
compensation.

                                                                              15

<PAGE>

     The plan administrator may limit the amount of salary reduction at any
time, if he determines that such limitation is necessary to meet Internal
Revenue Service requirements for a .qualified cash or deferred arrangement"
under Code Section 401(k) and regulations issued pursuant thereto and as set
forth in Section 5.6.

         (2) Election Procedures - A written notice of a participant's salary
             -------------------
reduction election shall be given to the employer and to the Plan administrator
in such manner as may be required by the plan administrator. The notice shall be
given at least 15 days before the January 1, April 1, July 1, or October 1 on
which it is to be effective. However, in no event shall such notice be given or
be effective before the adoption of the employee 401(k) election deferral
contribution provision under the plan. A participant electing salary reduction
will be deemed to desire to continue at the same rate, unless he notifies the
plan administrator at least 15 days before the applicable date of his desire to
change the amount of salary reduction. The revised election shall be effective
on the applicable date. A salary reduction may be discontinued at any time upon
15 days notice in the required manner. A participant who has declined or
suspended salary reduction may elect salary reduction at a subsequent election
date by notification to the plan administrator in the manner as provided under
this paragraph.

     A separate written notice shall be given to the employer and to the plan
administrator with respect to a participant's salary reduction election for an
incentive bonus. The notice shall be given at least 5 days before the payment of
the incentive bonus to which it relates. A new election shall be required prior
to each such incentive bonus. A salary reduction election with respect to an
incentive bonus shall not alter a participant's prior existing salary reduction
agreement made with respect to all forms of compensation other than incentive
bonus compensation. The plan administrator may limit the amount of the incentive
bonus which may be deferred, although such limitation shall not be less than
15.0% of the incentive bonus.

     However, if a participant receives a hardship distribution, his right to
elect a salary reduction shall be suspended for 12 months after the receipt of
such distribution. Further, the participant may not elect a salary reduction for
his taxable year immediately following the taxable year of the hardship
distribution in excess of the applicable limit under Code Section 402(g) for
such taxable year less the amount of such participant's salary reduction for the
taxable year of the hardship distribution.

         (3) Conditions - The participant's salary reduction election shall
             ----------
apply only to compensation which becomes currently available to the employee
after the effective date of the election. The employer shall apply the salary
reduction election to all of the participant's compensation (and to increases in
compensation), unless the participant's salary reduction election specifies that
the election is to be limited to certain compensation.

     (c) Cash or Deferred Election - No contribution shall be made under this
         -------------------------
plan pursuant to a cash or deferred election. All elective deferrals shall be
made under a salary deferral election.

                                                                              16

<PAGE>

     Section 3.5. Employee Nondeductible Contributions
     ------------ ------------------------------------

     Employee nondeductible contributions are not permitted under this plan and
no amount shall be credited to the employee nondeductible contribution account.
A participant may not treat his excess contributions as an amount distributed to
him and then contributed by him to the plan as an employee nondeductible
contribution as described in Section 5.6(b)(3).

     Section 3.6. Employer Matching Contributions
     ------------ -------------------------------

     Employer matching contributions shall be made under the provisions of this
Section. Such contributions shall be credited to the employer matching
contribution account.

     (a) Qualified Matching Contributions - The employer matching contribution
         --------------------------------
shall be treated as a qualified matching contribution. A qualified matching
contribution means matching contributions which are subject to the distribution
and nonforfeitability requirements under Code Section 401(k) when made.

     The plan administrator shall determine for each plan year whether and to
what extent qualified matching contributions will be used to satisfy the actual
deferral percentage test, pursuant to regulations under the Code in lieu of
distributing excess contributions as provided in Section 5.6(b)(2) of the plan.
Qualified matching contributions which are determined to be excess aggregate
contributions shall be distributed in accordance with Section 5.6.

     (b) Contributions Subject to Matching - Employer matching contributions
         ---------------------------------
shall be made with respect to any contributions made under a salary reduction
agreement to the extent provided below. The contributions shall be credited to
the employer matching contribution account of each eligible participant.

     (c) Conditions for Allocation - An active participant shall be eligible for
         -------------------------
an allocation of an employer matching contribution as of an allocation date,
provided that he satisfies the following conditions:

         (1) He made a contribution which is subject to matching during the
current plan year.

     (d) Allocation Formula - The employer matching contribution and any
         ------------------
applicable forfeitures shall be equal to the employer matching, percentage
applied to the participant's contributions for the current plan year which are
subject to matching; provided that a participant's contributions in excess of
6.0% of his compensation for the allocation period shall be disregarded for
purposes of allocating the employer matching contributions.

     The employer matching percentage shall be equal to 50%.

     (e) Forfeitures of Excess Aggregate Contributions - Excess aggregate
         ---------------------------------------------
contributions which are determined under the average contribution percentage
test and which are attributed to

                                                                              17

<PAGE>

employer matching contributions shall be distributed in the following plan year.
No such contribution shall be forfeited except as required to comply with Code
Section 401(a)(4). Such forfeitures shall occur as of the last day of the plan
year and shall be used to reduce administrative expenses.

     Section 3.7. Rollover/Transfer Contributions
     ------------ -------------------------------

     (a) Rollover Contributions - A participant may contribute to his
         ----------------------
rollover/transfer account any amounts which he previously received either as a
lump sum distribution (as defined in Code Section 402(d)(4)) or within one
taxable year as a distribution from another qualified plan on account of
termination of that plan provided that:

         (1) He transferred such distribution to an Individual Retirement
Account or Annuity within sixty (60) days after receipt, or

         (2) He transferred such distribution to this plan within sixty (60)
days after receipt.

     Before accepting a rollover contribution, the trustee may require an
employee to furnish satisfactory evidence that the proposed transfer is in fact
a "rollover contribution" which the Code permits an employee to make to a
qualified plan.

     (b) Transfer Contributions - With the consent of the plan administrator,
         ----------------------
the participant may have funds transferred directly to this plan from another
qualified plan. Consent shall not be given if the optional forms of payment to
which the funds are subject under the prior plan are not properly disclosed by
the prior plan or cannot be accommodated by this plan and trust.

     Further, this plan shall not accept any direct or indirect transfers (in a
transfer after December 31, 1984) from a defined benefit plan, money purchase
plan (including a target benefit plan), stock bonus or profit sharing plan which
would otherwise have provided for a life annuity form of payment to the
participant.

     (c) Contributions Before Plan Entry Date - An employee, (who is in the
         ------------------------------------
eligible class of employees) prior to satisfying the plan's eligibility
conditions, may make a rollover or transfer contribution to the plan to the same
extent and in the same manner as a participant. If an employee makes a rollover
or transfer contribution to the plan before satisfying the plan's eligibility
conditions, the plan administrator and trustee will treat the employee as a
participant for all purposes of the plan, except the employee is not a
participant for purposes of contributions or forfeitures under the plan until he
actually becomes a participant in the plan. If the employee has a separation
from service prior to becoming a participant, the trustee will distribute his
rollover or transfer contribution account to him.

     (d) Distribution - The rollover/transfer account shall be subject to
         ------------
distribution in the same manner as an employer-derived contribution. Withdrawals
may be made from a

                                                                              18

<PAGE>

rollover/transfer account under the terms and conditions of Section 4.4 if this
plan permits any such in-service withdrawals.

     To the extent that a distribution is attributable to a direct transfer from
another qualified plan, the Joint and Survivor Requirements of Section 5.3 shall
be met as if the distribution were being made from such prior plan.

     Section 3.8. Allocation of Investment Results
     ------------ --------------------------------

     (a) General Allocation Procedures - Investment income and market value
         -----------------------------
appreciation or depreciation shall be allocated to each account of each
participant who has accrued benefits in proportion to the respective account
balances on each accounting date. For this purpose, each account balance shall
be equal to the average balance for the period commencing on the day following
the prior accounting date and ending on the current accounting date.

     (b) Investment Elections - A participant may elect to have all of his
         --------------------
accounts invested in such investment fund or combination of investment funds as
may be established by the trustee and made available for the benefit of
participants; provided, however, that in no event may the participant direct
that any portion of his account(s) be invested in collectibles (as defined in
Code Section 408(m). A participant's investment election shall not apply to any
portion of any account which may be invested in a participant loan sub-account
established under Section 4.4. The investment results shall be allocated to the
participant's account(s) based upon earnings and losses on the participant's
share in such investment fund or funds. Participant investment elections shall
be made in accordance with the plan's administrative procedures. An election
must be made at least 30 days before the accounting date.

                                   ARTICLE IV
                         PAYMENT OF PARTICIPANT ACCOUNTS

     Section 4.1. Vesting Service Rules
     ------------ ---------------------

     (a) Vesting Year of Service means a vesting computation period during which
         -----------------------
the employee completes at least 1,000 hours of service with the employer. All of
an employee's years of service with the employer shall be counted to determine
the nonforfeitable percentage in the employee's account balance(s) derived from
employer contributions, except:

         (1) Years of service disregarded under the break in service rules in
paragraph (d) below. (Post-ERISA break in service rules)

         (2) Years of service before the effective date of ERISA if such service
would have been disregarded under the break in service rules of the prior plan
in effect from time to time before such date. For this purpose, break in service
rules are rules which result in the loss of prior vesting or benefit accruals,
or which deny an employee eligibility to participate, by reason

                                                                              19

<PAGE>

of separation or failure to complete a required period of service within a
specified period of time. (Pre-ERISA break in service rules)

     (b) One Year Break in Service means for the purposes of this Article IV a
         -------------------------
vesting computation period during which the participant or former participant
does not complete more than 500 hours of service with the employer.

     (c) Vesting Computation Period means the 12-consecutive month period
         --------------------------
coinciding with the plan year.

     (d) Break in Service Rules
         ----------------------

         (1) Vested Participant - A former participant who had a nonforfeitable
             ------------------
right to all or a portion of his account balance(s) derived from employer
contributions at the time of his termination from service shall retain credit
for all vesting years of service prior to a break in service.

         (2) Nonvested Participant - In the case of a former participant who did
             ---------------------
not have any nonforfeitable right to his account balance(s) derived from
employer contributions at the time of his termination from service, years of
service before a period of consecutive one-year breaks in service shall not be
taken into account in computing service if the number of consecutive one-year
breaks in service in such period equals or exceeds the greater of 5 or the
aggregate number of years of service before such breaks in service. Such
aggregate number of years of service shall not include any years of service
disregarded under the preceding sentence by reason of prior breaks in service.

         (3) Vesting for Pre-Break and Post-Break Accounts - In the case of a
             ---------------------------------------------
participant who has 5 or more consecutive one-year breaks in service, all years
of service after such breaks in service shall be disregarded for the purpose of
vesting the employer-derived account balance(s) that accrued before such breaks
in service. Whether or not such participant's pre-break service counts in
vesting the post-break employer-derived account balance(s) shall be determined
according to the rules set forth in sub-paragraphs (1) and (2) above. Separate
accounts shall be maintained for each of the participant `s pre-break and
post-break employer-derived account balance(s). All accounts shall share in the
investment earnings and losses of the fund.

     Section 4.2. Vesting of Participant Accounts
     ------------ -------------------------------

     (a) Determination of Vesting
         ------------------------

         (1) Normal Retirement - A participant's right to his account balance(s)
             -----------------
shall be 100% vested and nonforfeitable upon the attainment of 65, the normal
retirement age. If the employer enforces a mandatory retirement age, the normal
retirement age shall be the lesser of the mandatory age or the age specified
herein.

                                                                              20

<PAGE>

         (2) Late Retirement - If a participant remains employed after his
             ---------------
normal retirement age, his account balance(s) shall remain 100% vested and
nonforfeitable. Such participant shall continue to receive allocations to his
account as he did before his normal retirement age.

         (3) Early Retirement - In the case of a participant who has attained
             ----------------
age 59 1/2 before his normal retirement age, the participant's right to his
account balance(s) shall be 100% vested and nonforfeitable. Such participant may
retire before his normal retirement age without the consent of the employer and
receive payment of benefits from the plan. If a participant separates from
service before satisfying the age requirement for early retirement, the
participant shall be entitled to elect an early retirement benefit upon
satisfaction of such age requirement.

         (4) Disability - If a participant separates from service due to
             ----------
disability, such participant's right to his account balance(s) as of his date of
disability shall be 100% vested and nonforfeitable. Disability means inability
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months. The permanence and degree of such impairment shall be
supported by medical evidence. Notwithstanding such definition, a participant
who is eligible for Social Security disability benefits shall automatically
satisfy the definition of disability. Disability shall be determined by the plan
administrator after consultation with a physician chosen by the administrator.
In the administration of this section, all employees shall be treated in a
uniform manner in similar circumstances.

         (5)

             (A) Death - In the event of the death of a participant who has an
                 -----
accrued benefit under the plan, (whether or not he is an active participant),
100% of the participant's account balance(s) as of the date of death shall be
paid to his surviving spouse; except that, if there is no surviving spouse, or
if the surviving spouse has already consented in a manner which is (or conforms
to) a qualified election under the joint and survivor annuity provisions of Code
Section 417(a) and regulations issued pursuant thereto and as set forth in
Section 5.3, then such balance(s) shall be paid to the participant's designated
beneficiary.

             (B) Beneficiary Designation - Subject to the spousal consent
                 -----------------------
requirements of Section 5.3, the participant shall have the right to designate
his beneficiaries, including a contingent death beneficiary, and shall have the
right at any time to change such beneficiaries. The designation shall be made in
writing on a form signed by the participant and supplied by and filed with the
plan administrator. If the participant fails to designate a beneficiary, or if
the designated person or persons predecease the participant, "beneficiary" shall
mean the spouse, children, parents, brothers and sisters, or estate of the
participant, in the order listed.

                                                                              21

<PAGE>

         (6) Termination From Service - If a participant separates from the
             ------------------------
service of the employer other than by retirement, disability or death, his
vested interest in his accounts shall be equal to the account balance multiplied
by the vesting percentage determined below:

             (A) Profit Sharing Account - No profit sharing account is provided
                 ----------------------
under this plan.

             (B) Employer Matching Contribution Account - The vesting percentage
                 --------------------------------------
applicable to the participant's employer matching contribution account shall be
determined as follows:

        100% immediate vesting on the date of participation in the plan.

             (C) Other Accounts - The participant shall always be 100% vested in
                 --------------
his following accounts: employee 401(k) elective deferral account; employee
nondeductible contribution account; employer matching contribution account, if
the contributions are being treated as qualified matching contributions under
Section (3.6); qualified non-elective contribution account; rollover/transfer
account and recharacterized funds account. The accrued benefit in such accounts
shall be nonforfeitable.

     (b) Forfeitures
         -----------

         (1) Time of Forfeiture - If a participant terminates employment before
             ------------------
his account balances derived from employer contributions are fully vested, the
nonvested portion of his accounts shall be forfeited on the earlier of:

             (A) The last day of the vesting computation period in which the
participant first incurs 5 consecutive one-year breaks in service, or

             (B) The date the participant receives his entire vested accrued
benefit.

         (2) Cash Distributions and Restoration
             ----------------------------------

             (A) Cashout Distribution - If an employee terminates service and
                 --------------------
the value of his vested account balances derived from employer and employee
contributions are not greater than $3,500, the employee shall receive a
distribution of the value of the entire vested portion of such account balances
and the nonvested portion will be treated as a forfeiture. For purposes of this
section, if the value of an employee's vested account balances is zero, he shall
be deemed to have received a distribution of such vested account balances. An
employee's vested account balance shall not include accumulated deductible
employee contributions within the meaning of Code Section 72(o)(5)(B) for plan
years beginning prior to January 1, 1989.

         If an employee terminates service and the value of his vested account
balances exceeds $3,500, he may elect to receive the value of his vested account
balances after such termination as provided in Section 4.3. The nonvested
portion shall be treated as a forfeiture as of the date of

                                                                              22

<PAGE>

distribution. If the employee elects to have distributed less than the entire
vested portion of the account balances derived from employer contributions, the
part of the nonvested portion that will be treated as a forfeiture is the total
nonvested portion multiplied by a fraction, the numerator of which is the amount
of the distribution attributable to employer contributions and the denominator
of which is the total value of the vested employer-derived account balances.

             (B) Restoration of Accounts - If an employee receives a cashout
                 -----------------------
distribution pursuant to this section and resumes employment covered under this
plan before he incurs 5 consecutive one-year breaks in service, his
employer-derived account balances shall each be restored to the amount on the
date of distribution, if he repays to the plan the full amount of the
distribution attributable to employer contributions before the earlier of 5
years after the first date on which he is subsequently re-employed by the
employer, or the date he incurs 5 consecutive one-year breaks in service
following the date of the distribution. If an employee is deemed to receive a
distribution pursuant to this Section 4.2(b)(2), and he resumes employment
covered under this plan before he incurs 5 consecutive one-year breaks in
service, upon the reemployment of such employee his employer-derived account
balances will be restored to the amount on the date of such deemed distribution.

     Any amount required to restore such forfeitures shall be deducted from
forfeitures (including forfeitures of excess aggregate contributions) occurring
in the plan year of restoration. If forfeitures are insufficient for the
restoration, the employer may make a contribution to the plan for such plan year
to satisfy the restoration. However, by the end of the plan year following the
plan year of restoration, sufficient forfeitures or employer contributions shall
be credited to the account to satisfy the restoration.

     (c) Disposition of Forfeitures
         --------------------------

         (1) Profit Sharing Account - No profit sharing account is provided
             ----------------------
under this plan.

         (2) Employer Matching Contribution Account - Employer matching
             --------------------------------------
contributions are not subject to forfeiture.

     (d) Withdrawal of Employee Nondeductible Contributions - No forfeitures
         --------------------------------------------------
shall occur solely as a result of an employee's withdrawal of employee
nondeductible contributions.

     (e) Unclaimed Benefits
         ------------------

         (1) Forfeiture - The plan does not require the trustee or the plan
             ----------
administrator to search for, or to ascertain the whereabouts of, any participant
or beneficiary. At the time the participant's or beneficiary's benefit becomes
distributable under the plan, the plan administrator, by certified or registered
mail addressed to his last known address of record, shall notify any participant
or beneficiary that he is entitled to a distribution under this plan. If the
participant or beneficiary fails to claim his distributive share or make his
whereabouts known in writing to the plan administrator within twelve months from
the date of mailing of the notice, the plan

                                                                              23

<PAGE>

administrator shall treat the participant's or beneficiary's unclaimed payable
accrued benefit as forfeited and shall reallocate such forfeiture in accordance
with paragraph (c). A forfeiture under this paragraph shall occur at the end of
the notice period or, if later, the earliest date applicable Treasury
regulations would permit the forfeiture. These forfeiture provisions apply
solely to the participant's or beneficiary's accrued benefit derived from
employer contributions.

         (2) Restoration - If a participant or beneficiary who has incurred a
             -----------
forfeiture of his accrued benefit under the provisions of this subsection makes
a claim, at any time, for his forfeited accrued benefit, the plan administrator
shall restore the participant's or beneficiary's forfeited accrued benefit to
the same dollar amount as the dollar amount of the accrued benefit forfeited,
unadjusted for any gains or losses occurring after the date of the forfeiture.
The plan administrator shall make the restoration during the plan year in which
the participant or beneficiary makes the claim from forfeitures occurring in
that plan year. If forfeitures are insufficient for the restoration, the
employer shall make a contribution to the plan to satisfy the restoration. The
plan administrator shall direct the trustee to distribute the participant's or
beneficiary's restored accrued benefit to him not later than 60 days after the
close of the plan year in which the plan administrator restores the forfeited
accrued benefit.

     Section 4.3. Payment of Participant Accounts
     ------------ -------------------------------

     (a) Time of Payment
         ---------------

         (1) Commencement of Benefits - Unless the participant elects otherwise,
             ------------------------
distribution of benefits shall begin no later than the 60th day after the latest
of the close of the plan year in which:

             (A) The participant attains age 65 (or the plan's normal retirement
age, if earlier);

             (B) Occurs the 10th anniversary of the year in which the
participant commenced participation in the plan; or

             (C) the participant terminates service with the employer, (i.e.
late retirement).

         (2) Payment Upon Retirement, Disability, or Death - Subject to the
             ---------------------------------------------
provisions set forth in Section 4.3(a)(1), in the Joint and Survivor
Requirements of Section 5.3 and in the Distribution Requirements of Section 5.4,
if the participant terminates employment due to retirement, disability or death,
his account(s) shall be paid as soon as administratively possible after the
occurrence of the event creating the right to a distribution.

         (3) Payment Upon Other Termination of Employment - Subject to the
             --------------------------------------------
provisions set forth in Section 4.3(a)(1), in the Joint and Survivor
Requirements of Section 5.3, and in the Distribution Requirements of Section
5.4, if the participant terminates employment

                                                                              24

<PAGE>

other than by retirement, disability or death, his account(s) shall be paid as
soon as administratively possible after the date of severance of employment.

     Nevertheless, the participant may elect to have paid his employee 401(k)
elective deferral account and employee nondeductible contribution account as
soon as administratively possible.

         (4) Notwithstanding the foregoing, the failure of a participant (and
spouse where the spouse's consent is required) to consent to a distribution
while a benefit is immediately distributable, within the meaning of Section
5.3(c), shall be deemed to be an election to defer commencement of payment of
any benefit sufficient to satisfy this section.

     (b) Optional Form(s) of Payment - A participant or beneficiary may elect to
         ---------------------------
receive distribution of his account(s) in one of the optional forms of payment
outlined below, provided that such distribution complies with the Distribution
Requirements of Section 5.4 and the Joint and Survivor Requirements of Section
5.3. However, the Joint and Survivor Requirements other than the provisions of
Section 5.3(c) and (f) shall not apply to a distribution unless a life annuity
of any type is elected by the participant or unless this plan is, with respect
to the participant, a direct or indirect transferee of a defined benefit plan,
money purchase pension plan (including a target benefit plan), or a stock bonus
or profit sharing plan which would otherwise have provided for a qualified joint
and survivor life annuity as the normal form of payment to the participant.

     The participant or beneficiary shall file a written request for benefits
     with the plan administrator before payments will commence. If a participant
fails to elect a form of payment, the trustee shall pay the benefit in
installment payments (or as a joint and survivor annuity payments if the
requirements of Section 5.3 apply) which meet the requirements of Section 5.4.

         Optional forms of payment include:
         ---------------------------------

         (1) A lump sum payment - If the vested accrued benefit is no more than
             ------------------
$3,500, benefits shall automatically be paid in a lump sum.

     A lump sum benefit payment may be made in cash from the fund or by
distribution of assets in kind, provided that the participant or beneficiary
agrees to such distribution in kind and the trustee determines a current fair
market value of the assets to be distributed.

         (2) Installment payments over a period of years which meets the
             --------------------
Distribution Requirements of Section 5.4. Installment payments may be made in
cash from the fund or by distribution of an annuity term certain contract.

         (3) A life annuity of any type issued by an insurance company on the
             --------------
life of the participant or beneficiary for such amount as the vested account(s)
will purchase, provided that the Joint and Survivor Annuity Requirements of
Section 5.3 and the Distribution Requirements of Section 5.4 are met.

                                                                              25

<PAGE>

         (4) IRA Rollover /Plan Transfer - If required for plan qualification by
             ---------------------------
Code Section 401(a)(31), the optional forms of payment shall include a direct
transfer of the vested accrued benefit to an individual retirement account or
annuity qualified under Code Section 408, to an annuity plan qualified under
Code Section 403(a) or to another qualified plan with the amount equal to any
employee nondeductible contributions being paid directly to the participant.

     (c) General Payment Provisions
         --------------------------

         (1) All distributions due to be made under this plan shall be made on
the basis of the amount to the credit of the participant as of the accounting
date coincident with or immediately preceding the occurrence of the event
calling for a distribution.

     Such amount shall be adjusted with respect to the investment results
attributable thereto which accrue during the period following such accounting
date until the last day of the plan year quarter preceding the actual
distribution date.

     If a distributable event occurs after an allocation date and before
allocations have been made to the account of the participant, the distribution
shall also include the amounts allocable to the account as of such allocation
date.

         (2) If any person entitled to receive benefits hereunder is physically
or mentally incapable of receiving or acknowledging receipt thereof, and if a
legal representative has been appointed for him, the plan administrator may
direct the benefit payment to be made to such legal representative.

         (3) Each optional form of benefit provided under the plan shall be made
available to all participants on a nondiscriminatory basis. The plan may not
retroactively reduce or eliminate optional forms of benefits and any other Code
Section 411(d)(6) protected benefits. Any reduction or elimination of optional
forms of benefits shall apply only to benefits accrued after the effective date
of such change.

         (4) Any annuity contract distributed herefrom shall be
nontransferrable. The terms of any such annuity contract purchased and
distributed by the plan shall comply with the requirements of this plan. The
ownership of the annuity contract shall reside with the participant. Any
dividend, refund or recovery on an annuity contract shall be credited to the
participant or beneficiary for whom the annuity contract was purchased.

     (d) Eligible Rollover Distributions - Effective for distributions made on
         -------------------------------
or after January 1, 1993, notwithstanding the optional forms of payment listed
in Section 4.3(b), a distributee may elect, at the time and in the manner
prescribed by the plan administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover.

         (1) Eligible Rollover Distribution - An eligible rollover distribution
             ------------------------------
is any distribution of all or any portion of the balance to the credit of the
distributee, except that an

                                                                              26

<PAGE>

eligible rollover distribution does not include: any distribution that is one of
a series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under Code Section
401(a)(9) and the portion of any distribution that is not includible in gross
income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).

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

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

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

     (e) Payment Election Procedures - As described in Section 5.3(c), an
         ---------------------------
account balance in excess of $3,500 shall not be immediately distributed without
the consent of the participant. The participant shall receive the notice
required under Regulation Section 1.411(a)-11(c) no less than 30 days and no
more than 90 days before the annuity starting date with respect to the
distribution. Effective for distributions made on or after January 1, 1993, for
any distribution in excess of $200, the plan administrator shall give the
participant notice of his eligible rollover distribution rights. The participant
shall receive such notice in the same time period as the 411 notice is required
to be provided. Effective for distributions made on or after January 1, 1994, if
a distribution is one to which Code Sections 401(a)(11) and 417 do not apply,
such distribution may commence less than 30 days after the 411 notice is given,
provided that:

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

         (2) The participant, after receiving the notice, affirmatively elects a
distribution.

                                                                              27

<PAGE>

     Section 4.4. In-Service Payments
     ------------ -------------------

     (a) Withdrawals - A participant may withdraw amounts from his account(s)
before his separation from service only under the circumstances and only to the
extent provided below.

     The Joint and Survivor Requirements of Section 5.3 shall not apply to a
withdrawal (except for the provisions of Section 5.3(c) and (f)) unless this
plan is, with respect to the participant, a direct or indirect transferee of a
defined benefit plan, money purchase pension plan (including a target benefit
plan), or a stock bonus or profit sharing plan which would otherwise have
provided for a qualified joint and survivor life annuity as the normal form of
payment to the participant.

     Hardship Withdrawals from Employee 401(k) Elective Deferral Account
     -------------------------------------------------------------------

         (1) Availability of Withdrawal Privilege - A participant who has a
             ------------------------------------
financial hardship may request a withdrawal from his employee 401(k) elective
deferral account, subject to the consent of the plan administrator and subject
to the limitations and conditions set forth herein.

         (2) Amount of Withdrawal - The amount which an eligible participant may
             --------------------
withdraw from his account shall not exceed the cumulative amount of his 401(k)
salary deferral contributions. Earnings thereon may not be withdrawn.

         (3) Request for Withdrawal - The participant's request to withdraw must
             ----------------------
be made in writing to the plan administrator and shall be subject to his
consent. The basis for the plan administrator's consenting to or refusing to
consent to the participant's request shall be demonstrated financial hardship of
the participant.

     Hardship Withdrawals
     --------------------

     For the purpose of this Section 4.4, a distribution will be made on account
of hardship if the distribution is necessary in light of immediate and heavy
financial need of the participant. A distribution based upon financial hardship
cannot exceed the amount required to meet the immediate financial need created
by the hardship and not reasonably available from other resources of the
participant. The determination of the existence of financial hardship and the
amount required to be distributed to meet the need created by the hardship must
be made in accordance with uniform and non-discriminatory standards established
by the plan administrator under these plan provisions.

     An immediate and heavy financial need may be determined to exist under
certain facts and circumstances including the following: (1) expenses incurred
or necessary for medical care described in Code Section 213(d) of the employee,
the employee's spouse, children, or dependents; (2) the purchase (excluding
mortgage payments) of a principal residence for the employee; (3) payment of
tuition and related educational fees for the next twelve months of
post-secondary education for the employee, the employee's spouse, children or
dependents; or (4) the

                                                                              28

<PAGE>

need to prevent the eviction of the employee from, or a foreclosure on the
mortgage of, the employee's principal residence.

     A distribution will be considered as necessary to satisfy an immediate and
heavy financial need of the employee only if:

         1. The employee has obtained all distributions, other than hardship
distributions, and all nontaxable loans under all plans maintained by the
employer;

         2. All plans maintained by the employer provide that the employee's
elective deferrals (and employee nondeductible contributions) will be suspended
for twelve months after the receipt of the hardship distribution;

         3. The distribution is not in excess of the amount of an immediate and
heavy financial need (including amounts necessary to pay any federal, state or
local income taxes or penalties reasonably anticipated to result from the
distribution); and

         4. All plans maintained by the employer provide that the employee may
not make elective deferrals for the employee's taxable year immediately
following the taxable year of the hardship distribution in excess of the
applicable limit under Code Section 402(g) for such taxable year less the amount
of such employee's elective deferrals for the taxable year of the hardship
distribution.

     (b) Participant Loans - No participant loans shall be permitted under this
         -----------------
plan.

     Section 4.5. Distributions under Domestic Relations Orders
     ------------ ---------------------------------------------

     Nothing contained in this plan prevents the trustee, in accordance with the
direction of the plan administrator, from complying with the provisions of a
qualified domestic relations order (as defined in Code Section 414(p)).

     A distribution will not be made to an alternate payee until the participant
attains (or would have attained) his earliest retirement age. For this purpose,
earliest retirement age means the earlier of: (1) the date on which the
participant is entitled to a distribution under this plan; or (2) the later of
the date the participant attains age 50 or the earliest date on which the
participant could begin receiving benefits under this plan if the participant
separated from service.

     Nothing in this Section gives a participant a right to receive distribution
at a time otherwise not permitted under the plan nor does it permit the
alternate payee to receive a form of payment not otherwise permitted under the
plan.

     The plan administrator shall establish reasonable procedures to determine
the qualified status of a domestic relations order. Upon receiving a domestic
relations order, the plan administrator promptly will notify the participant and
any alternate payee named in the order, in

                                                                              29

<PAGE>

writing, of the receipt of the order and the plan's procedures for determining
the qualified status of the order. Within a reasonable period of time after
receiving the domestic relations order, the plan administrator shall determine
the qualified status of the order and shall notify the participant and each
alternate payee, in writing, of its determination. The plan administrator shall
provide notice under this paragraph by mailing to the individual's address
specified in the domestic relations order, or in a manner consistent with
Department of Labor regulations.

     If any portion of the participant's nonforfeitable accrued benefit is
payable during the period the plan administrator is making its determination of
the qualified status of the domestic relations order, the plan administrator
shall make a separate accounting of the amounts payable. If the plan
administrator determines the order is a qualified domestic relations order
within 18 months of the date amounts first are payable following receipt of the
order, it shall direct the trustee to distribute the payable amounts in
accordance with the order. If the plan administrator does not make its
determination of the qualified status of the order within the 18-month
determination period, it shall direct the trustee to distribute the payable
amounts in the manner the plan would distribute if the order did not exist and
will apply the order prospectively if it later determines the order is a
qualified domestic relations order.

     To the extent it is not inconsistent with the provisions of the qualified
domestic relations order, the plan administrator may direct the trustee to
invest any partitioned amount in a segregated subaccount or separate account and
to invest the account in Federally insured, interest-bearing savings account(s)
or time deposit(s) (or a combination of both), or in other fixed income
investments. A segregated subaccount remains a part of the trust, but it alone
shares in any income it earns, and it alone bears any expense or loss it incurs.
The trustee will make any payments or distributions under this section by
separate benefit checks or other separate distribution to the alternate
payee(s).

                                   ARTICLE V
                         ADDITIONAL QUALIFICATION RULES

     Section 5.1. Limitations on Allocations under Code Section 415
     ------------ -------------------------------------------------

     (a) Single Plan Limitations
         -----------------------

         (1) If the participant does not participate in, and has never
participated in another qualified plan maintained by the employer or a welfare
benefit fund, as defined in Code Section 419(e) maintained by the employer, or
an individual medical account, as defined in Code Section 415(1)(2), maintained
by the employer, which provides an annual addition as defined in Section
5.1(d)(1), the amount of annual additions which may be credited to the
participant's account for any limitation year will not exceed the lesser of the
maximum permissible amount or any other limitation contained in this plan. If
the employer contribution that would otherwise be contributed or allocated to
the participant's account would cause the annual additions for the limitation
year to exceed the maximum permissible amount, the amount contributed or
allocated

                                                                              30

<PAGE>

will be reduced so that the annual additions for the limitation year will equal
the maximum permissible amount.

         (2) Prior to determining the participant's actual compensation for the
limitation year, the employer may determine the maximum permissible amount for a
participant on the basis of a reasonable estimation of the participant's
compensation for the limitation year, uniformly determined for all participants
similarly situated.

         (3) As soon as is administratively feasible after the end of the
limitation year, the maximum permissible amount for the limitation year will be
determined on the basis of the participant's actual compensation for the
limitation year.

         (4) If pursuant to Section 5.1(a)(3) or as a result of either the
allocation of forfeitures or a reasonable error in determining the amount of
elective deferrals that may be made with respect to a participant, there is an
excess amount, the excess will be disposed of as follows:

             (A) Any employee nondeductible contributions (and any gain
attributable thereto), to the extent they would reduce the excess amount, will
be returned to the participant.

             (B) If after the application of paragraph (A) an excess amount
still exists, any elective deferrals, (and any gain attributable thereto), to
the extent they would reduce the excess amount, will be distributed to the
participant.

             (C) If after the application of paragraph (B) an excess amount
still exists, the excess amount shall be allocated and reallocated to the profit
sharing account or qualified non-elective contribution account of the other
participants in the plan to the extent permissible under the limitations of this
Section 5.1.

             (D) If after the application of paragraph (C) an excess amount
still exists, the excess amount will be held unallocated in a suspense account.
The suspense account will be applied to reduce future employer contributions for
all active participants in the next limitation year, and each succeeding
limitation year if necessary.

             (E) If a suspense account is in existence at any time during a
limitation year pursuant to this Section 5.1(a)(4), it will not participate in
the allocation of the trust's investment gains and losses. If a suspense account
is in existence at any time during a particular limitation year, all amounts in
the suspense account must be allocated and reallocated to participants' accounts
before any employer, elective deferral or employee nondeductible contributions
may be made to the plan for that limitation year. Excess amounts may not be
distributed to participants or former participants.

     (b) Combined Limitations - Other Defined Contribution Plan
         --------------------

                                                                              31

<PAGE>

         (1) This Subsection applies if, in addition to this plan, the
participant is covered under another qualified defined contribution plan
maintained by the employer, a welfare benefit fund, as defined in Code Section
419(e) maintained by the employer, or an individual medical account, as defined
in Code Section 415(1)(2), maintained by the employer, which provides an annual
addition as defined in Section 5.1(d)(1), during any limitation year. The annual
additions which may be credited to a participant's account under this plan for
any such limitation year will not exceed the maximum permissible amount reduced
by the annual additions credited to a participant's account under the other
plans and welfare benefit funds for the same limitation year. If the annual
additions with respect to the participant under other defined contribution plans
and welfare benefit funds maintained by the employer are less than the maximum
permissible amount and the employer contribution that would otherwise be
contributed or allocated to the participant's account under this plan would
cause the annual additions for the limitation year to exceed this limitation,
the amount contributed or allocated will be reduced so that the annual additions
under all such plans and funds for the limitation year will equal the maximum
permissible amount. If the annual additions with respect to the participant
under such other defined contribution plans and welfare benefit funds in the
aggregate are equal to or greater than the maximum permissible amount, no amount
will be contributed or allocated to the participant's account under this plan
for the limitation year.

         (2) Prior to determining the participant's actual compensation for the
limitation year, the employer may determine the maximum permissible amount for a
participant in the manner described in Section 5.1(a)(2).

         (3) As soon as is administratively feasible after the end of the
limitation year, the maximum permissible amount for the limitation year will be
determined on the basis of the participant's actual compensation for the
limitation year.

         (4) If, pursuant to Section 5.1(b)(3) or as a result of the allocation
of forfeitures, a participant's annual additions under this plan and such other
plans would result in an excess amount for a limitation year, the excess amount
will be deemed to consist of the annual additions last allocated, except that
annual additions attributable to a welfare benefit fund or individual medical
account will be deemed to have been allocated first regardless of the actual
allocation date.

         (5) If an excess amount was allocated to a participant on an allocation
date of this plan which coincides with an allocation date of another plan, the
excess amount will be disposed of in the manner provided in Section 3.1(c).

         (6) Any excess amount attributed to this plan will be disposed of in
the manner described in Section 5.1(a)(4).

     (c) Combined Limitations - Other Defined Benefit Plan
         --------------------

                                                                              32

<PAGE>

     If the employer maintains, or at any time maintained, a qualified defined
benefit plan covering any participant in this plan, the sum of the participant's
defined benefit plan fraction and defined contribution plan fraction will not
exceed 1.0 in any limitation year. Any excess amounts shall be disposed of in
the manner provided in Section 3.1(c). Any excess amount attributed to this plan
will be disposed of in the manner described in Section 5.1(a)(4).

     (d) Definitions (Code Section 415 Limitations)
         -----------

         (1) Annual Additions - The sum of the following amounts credited to a
             ----------------
participant's account for the limitation year:

             (A) employer contributions,

             (B) employee contributions,

             (C) forfeitures, and

             (D) amounts allocated, after March 31, 1984, to an individual
medical account, as defined in Code Section 415(l)(2), which is part of a
pension or annuity plan maintained by the employer are treated as annual
additions to a defined contribution plan. Also amounts derived from
contributions paid or accrued after December 31, 1985, in taxable years ending
after such date, which are attributable to post-retirement medical benefits,
allocated to the separate account of a key employee, as defined in Code Section
419A(d)(3), under a welfare benefit fund, as defined in Code Section 419(e),
maintained by the employer are treated as annual additions to a defined
contribution plan.

     For this purpose, any excess amount applied under Section 5.1(a)(4) or
(b)(6) in the limitation year to increase the accounts of participants who did
not have an excess amount or to reduce employer contributions will be considered
annual additions for such limitation year.

         (2) Compensation - A participant's earned income and any earnings
             ------------
reportable as W-2 wages for Federal income tax withholding purposes as described
in Section 1.2(a).

     For limitation years beginning after December 31, 1991, for purposes of
applying the limitations of this Section 5.1, compensation for a limitation year
is the compensation actually paid or includible in gross income during such
limitation year.

     Notwithstanding the preceding sentence, compensation for a participant in a
defined contribution plan who is permanently and totally disabled (as defined in
Code Section 22(e)(3)) is the compensation such participant would have received
for the limitation year if the participant had been paid at the rate of
compensation paid immediately before becoming permanently and totally disabled;
such imputed compensation for the disabled participant may be taken into account
only if the participant is not a highly compensated employee (as defined in Code
Section 414(q)) and contributions made on behalf of such participant are
nonforfeitable when made.

                                                                              33

<PAGE>

         (3) Defined Benefit Fraction - A fraction, the numerator of which is
             ------------------------
the sum of the participant's projected annual benefits under all the defined
benefit plans (whether or not terminated) maintained by the employer, and the
denominator of which is the lesser of 125 percent of the dollar limitation
determined for the limitation year under Code Sections 415(b) and (d) or 140
percent of the highest average compensation, including any adjustments under
Code Section 415(b).

     Notwithstanding the above, if the participant was a participant as of the
first day of the first limitation year beginning after December 31, 1986, in one
or more defined benefit plans maintained by the employer which were in existence
on May 6, 1986, the denominator of this fraction will not be less than 125
percent of the sum of the annual benefits under such plans which the participant
had accrued as of the close of the last limitation year beginning before January
1, 1987, disregarding any changes in the terms and conditions of the plan after
May 5, 1986. The preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Code Section 415
for all limitation years beginning before January 1, 1987.

         (4) Defined Contribution Dollar Limitation - $30,000 or if greater,
             --------------------------------------
one-fourth of the defined benefit dollar limitation set forth in Code Section
415(b)(1) as in effect on January 1 of each calendar year with respect to the
limitation year ending with or within such calendar year.

         (5) Defined Contribution Fraction - A fraction, the numerator of which
             -----------------------------
is the sum of the annual additions to the participant's account under all the
defined contribution plans (whether or not terminated) maintained by the
employer for the current and all prior limitation years (including the annual
additions attributable to the participant's nondeductible employee contributions
to all defined benefit plans, whether or not terminated, maintained by the
employer, and the annual additions attributable to all welfare benefit funds, as
defined in Code Section 419(e), and individual medical accounts, as defined in
Code Section 415(l)(2), maintained by the employer), and the denominator of
which is the sum of the maximum aggregate amounts for the current and all prior
limitation years of service with the employer (regardless of whether a defined
contribution plan was maintained by the employer). The maximum aggregate amount
in any limitation year is the lesser of 125 percent of the dollar limitation
determined under Code Sections 415(b) and (d) in effect under Code Section
415(c)(1)(A) or 35 percent of the participant's compensation for such year.

     If the employee was a participant as of the end of the first day of the
first limitation year beginning after December 31, 1986, in one or more defined
contribution plans maintained by the employer which were in existence on May 6,
1986, the numerator of this fraction will be adjusted if the sum of this
fraction and the defined benefit fraction would otherwise exceed 1.0 under the
terms of this plan. Under the adjustment, an amount equal to the product of (1)
the excess of the sum of the fractions over 1.0 times (2) the denominator of
this fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they would be
computed as of the end of the last limitation year beginning before January 1,

                                                                              34

<PAGE>

1987, and disregarding any changes in the terms and conditions of the plan made
after May 5, 1986, but using the Code Section 415 limitation applicable to the
first limitation year beginning on or after January 1, 1987.

     The annual addition for any limitation year beginning before January 1,
1987, shall not be recomputed to treat all employee contributions as annual
additions.

         (6)  Employer - For purposes of this Section 5.1, employer shall mean
              --------
the employer that adopts this plan, and all members of a controlled group of
corporations (as defined in Code Section 414(b) as modified by Section 415(h)),
all commonly controlled trades or businesses (as defined in Code Section 414(c)
as modified by Section 415(h)) or affiliated service groups (as defined in Code
Section 414(m)) of which the adopting employer is a part, and any other entity
required to be aggregated with the employer pursuant to regulations under Code
Section 414(o).

         (7)  Excess Amount - The excess of the participant's annual additions
              -------------
for the limitation year over the maximum permissible amount.

         (8)  Highest Average Compensation - The average compensation for the
              ----------------------------
three consecutive years of service with the employer that produces the highest
average. A year of service with the employer is the 12-consecutive month period
coinciding with the plan year.

         (9)  Limitation Year - A calendar year, or the 12-consecutive month
              ---------------
period coinciding with the plan year, unless the employer adopts another
12-consecutive month period by means of a written resolution. All qualified
plans maintained by the employer must use the same limitation year. If the
limitation year is amended to a different 12-consecutive month period, the new
limitation year must begin on a date within the limitation year in which the
amendment is made.

         (10) Maximum Permissible Amount - The maximum annual addition that may
              --------------------------
be contributed or allocated to a participant's account under the plan for any
limitation year shall not exceed the lesser of:

             (A) the defined contribution dollar limitation as defined in
Subsection (d)(4); or

             (B) 25 percent of the participant's compensation for the limitation
year.

     The compensation limitation referred to in (B) shall not apply to any
contribution for medical benefits (within the meaning of Code Section 401(h) or
Code Section 419A(f)(2)) which is otherwise treated as an annual addition under
Code Section 415(l)(1) or 419A(d)(2).

     If a short limitation year is created because of an amendment changing the
limitation year to a different 12-consecutive month period, the maximum
permissible amount will not exceed the defined contribution dollar limitation
multiplied by the following fraction:

                                                                              35

<PAGE>

                  Number of months in the short limitation year
                  ---------------------------------------------

                                       12

         (11) Projected Annual Benefit - The annual retirement benefit (adjusted
              ------------------------
to an actuarially equivalent straight life annuity if such benefit is expressed
in a form other than a straight life annuity or qualified joint and survivor
annuity) to which the participant would be entitled under the terms of the plan
assuming:

             (A) the participant will continue employment until normal
retirement age under the plan (or current age, if later); and

             (B) the participant's compensation for the current limitation year
and all other relevant factors used to determine benefits under the plan will
remain constant for all future limitation years.

     Section 5.2. Control of Trades or Businesses by Owner-Employee
     ------------ -------------------------------------------------

     If this plan provides contributions or benefits for one or more
owner-employees who control both the business for which this plan is established
and one or more other trades or businesses, this plan and the plan established
for other trades or businesses must, when looked at as a single plan, satisfy
Code Sections 401(a) and (d) for the employees of this and all other trades or
businesses.

     If the plan provides contributions or benefits for one or more
owner-employees who control one or more other trades or businesses, the
employees of the other trades or businesses must be included in a plan which
satisfies Code Sections 401(a) and (d) and which provides contributions and
benefits not less favorable than those provided for owner-employees under this
plan.

     If an individual is covered as an owner-employee under the plans of two or
more trades or businesses which are not controlled and the individual controls a
trade or business, then the contributions or benefits of the employees under the
plan of the trades or businesses which are controlled must be as favorable as
those provided for him under the most favorable plan of the trade or business
which is not controlled.

     For purposes of the preceding paragraphs, an owner-employee, or two or more
owner-employees, will be considered to control a trade or business if the
owner-employee, or two or more owner-employees together:

         (1)  own the entire interest in an unincorporated trade or business; or

         (2)  in the case of a partnership, own more than 50 percent of either
the capital interest or the profits interest in the partnership.

                                                                              36

<PAGE>

     For purposes of the preceding sentence, an owner-employee, or two or more
owner-employees shall be treated as owning any interest in a partnership which
is owned, directly or indirectly, by a partnership which such owner-employee, or
such two or more owner-employees, are considered to control within the meaning
of the preceding sentence.

     Section 5.3. Joint and Survivor Annuity Requirements
     ------------ ---------------------------------------

     The provisions of this Section 5.3 shall apply to any participant who is
credited with at least one hour of service with the employer on or after August
23, 1984, and such other participants as provided in Paragraph (g). However,
with respect to any participant meeting the conditions of Section 5.3(f), only
Section 5.3(c) and (f) shall apply.

     (a) Qualified Joint and Survivor Annuity - Unless an optional form of
         ------------------------------------
benefit is selected pursuant to a qualified election within the 90-day period
ending on the annuity starting date, a married participant's vested account
balance will be paid in the form of a qualified joint and survivor annuity and
an unmarried participant's vested account balance will be paid in the form of a
life annuity with a ten year guaranteed period. The participant may elect to
have such annuity distributed upon attainment of the earliest retirement age
under the plan.

     (b) Qualified Preretirement Survivor Annuity - Unless an optional form of
         ----------------------------------------
benefit has been selected within the election period pursuant to a qualified
election, if a participant dies before the annuity starting date, the
participant's vested account balance shall be applied toward the purchase of an
annuity for the life of the surviving spouse. The surviving spouse may elect to
have such annuity distributed within a reasonable period after the participant's
death.

     (c) Restrictions on Immediate Distributions - If the value of a
         ---------------------------------------
participant's vested account balance derived from employer and employee
contributions exceeds (or at the time of any prior distribution exceeded)
$3,500, and the account balance is immediately distributable, the participant
and the participant's spouse (or where either the participant or the spouse has
died, the survivor) must consent to any distribution of such account balance.
The consent of the participant and the participant's spouse shall be obtained in
writing within the 90-day period ending on the annuity starting date. The
annuity starting date is the first day of the first period for which an amount
is paid as an annuity or any other form. The plan administrator shall notify the
participant and the participant's spouse of the right to defer any distribution
until the participant's account balance is no longer immediately distributable.
Such notification shall include a general description of the material features,
and an explanation of the relative values of, the optional forms of benefit
available under the plan in a manner that would satisfy the notice requirements
of Code Section 417(a)(3), and shall be provided no less than 30 days and no
more than 90 days prior to the annuity starting date.

     Notwithstanding the foregoing, only the participant need consent to the
commencement of a distribution in the form of a qualified joint and survivor
annuity while the account balance is immediately distributable. Furthermore, if
payment in the form of a qualified joint and survivor annuity is not required
with respect to the participant pursuant to Paragraph (f) of this Subsection

                                                                              37

<PAGE>

5.3, only the participant need consent to the distribution of an account balance
that is immediately distributable. Neither the consent of the participant nor
the participant's spouse shall be required to the extent that a distribution is
required to satisfy Code Section 401(a)(9) or Section 415. In addition, upon
termination of this plan if the plan does not offer an annuity option (purchased
from a commercial provider) and if the employer or any entity within the same
controlled group as the employer does not maintain another defined contribution
plan (other than an employee stock ownership plan as defined in Code Section
4975(e)(7)), the participant's account balance may, without the participant's
consent, be distributed to the participant. However, if any entity within the
same controlled group as the employer maintains another defined contribution
plan (other than an employee stock ownership plan as defined in Code Section
4975(e)(7)), the participant's account balance will be transferred, without the
participant's consent, to the other plan if the participant does not consent to
an immediate distribution.

     An account balance is immediately distributable if any part of the account
balance could be distributed to the participant (or surviving spouse) before the
participant attains (or would have attained if not deceased) the later of normal
retirement age or age 62.

     (d) Definitions (Code Section 417 Requirements)
         -----------

         (1) Election Period - The period which begins on the first day of the
             ---------------
plan year in which the participant attains age 35 and ends on the date of the
participant's death. If a participant separates from service prior to the first
day of the plan year in which age 35 is attained, with respect to the account
balance as of the date of separation, the election period shall begin on the
date of separation.

         (2) Pre-age 35 Waiver - A participant who will not yet attain age 35 as
             -----------------
of the end of any current plan year may make a special qualified election to
waive the qualified preretirement survivor annuity for the period beginning on
the date of such election and ending on the first day of the plan year in which
the participant will attain age 35. Such election shall not be valid unless the
participant receives a written explanation of the qualified preretirement
survivor annuity in such terms as are comparable to the explanation required
under Paragraph (e)(1). Qualified preretirement survivor annuity coverage will
be automatically reinstated as of the first day of the plan year in which the
participant attains age 35. Any new waiver on or after such date shall be
subject to the full requirements of this Subsection 5.3.

         (3) Earliest Retirement Age - The earliest date on which, under the
             -----------------------
plan, the participant could elect to receive retirement benefits.

         (4) Qualified Election - A waiver of a qualified joint and survivor
             ------------------
annuity or a qualified preretirement survivor annuity. Any waiver of a qualified
joint and survivor annuity or a qualified preretirement survivor annuity shall
not be effective unless: (a) the participant's spouse consents in writing to the
election; (b) the election designates a specific beneficiary, including any
class of beneficiaries or any contingent beneficiaries, which may not be changed
without spousal consent (or the spouse expressly permits designations by the
participant without

                                                                              38

<PAGE>

any further spousal consent); (c) the spouse's consent acknowledges the effect
of the election; and (d) the spouse's consent is witnessed by a plan
representative or notary public. Additionally, a participant's waiver of the
qualified joint and survivor annuity shall not be effective unless the election
designates a form of benefit payment which may not be changed without spousal
consent (or the spouse expressly permits designations by the participant without
any further spousal consent). If it is established to the satisfaction of a plan
representative that there is no spouse or that the spouse cannot be located, a
waiver will be deemed a qualified election.

     Any consent by a spouse obtained under this provision (or establishment
that the consent of a spouse may not be obtained) shall be effective only with
respect to such spouse. A consent that permits designations by the participant
without any requirement of further consent by such spouse must acknowledge that
the spouse has the right to limit consent to a specific beneficiary, and a
specific form of benefit where applicable, and that the spouse voluntarily
elects to relinquish either or both of such rights. A revocation of a prior
waiver may be made by a participant without the consent of the spouse at any
time before the commencement of benefits. The number of revocations shall not be
limited. No consent obtained under this provision shall be valid unless the
participant has received notice as provided in Paragraph (e).

         (5) Qualified Joint and Survivor Annuity - An immediate annuity for the
             ------------------------------------
life of the participant with a survivor annuity for the life of the spouse which
is not less than 50 percent and not more than 100 percent of the amount of the
annuity which is payable during the joint lives of the participant and the
spouse and which is the amount of benefit which can be purchased with the
participant's vested account balance. The percentage of the survivor annuity
under the plan shall be 50% (unless a different percentage is elected by the
participant).

         (6) Spouse (Surviving Spouse) - The spouse or surviving spouse of the
             -------------------------
participant, provided that a former spouse will be treated as the spouse or
surviving spouse and a current spouse will not be treated as the spouse or
surviving spouse to the extent provided under a qualified domestic relations
order as described in Code Section 414(p).

         (7) Annuity Starting Date - The first day of the first period for which
             ---------------------
an amount is paid as an annuity or any other form.

         (8) Vested Account Balance - The aggregate value of the participant's
             ----------------------
vested account balances derived from employer and employee contributions
(including rollovers), whether vested before or upon death, including the
proceeds of insurance contracts, if any, on the participant's life. The
provisions of this Subsection 5.3 shall apply to a participant who is vested in
amounts attributable to employer contributions, employee contributions (or both)
at the time of death or distribution.

     (e) Notice Requirements
         -------------------

         (1) In the case of a qualified joint and survivor annuity, the plan
administrator shall no less than 30 days and no more than 90 days prior to the
annuity starting date provide

                                                                              39

<PAGE>

each participant a written explanation of: (i) the terms and conditions of a
qualified joint and survivor annuity; (ii) the participant's right to make and
the effect of an election to waive the qualified joint and survivor annuity form
of benefit; (iii) the rights of a participant's spouse; and (iv) the right to
make, and the effect of, a revocation of a previous election to waive the
qualified joint and survivor annuity.

         (2) In the case of a qualified preretirement survivor annuity as
described in Paragraph (b) of this Subsection, the plan administrator shall
provide each participant within the applicable period for such participant a
written explanation of the qualified preretirement survivor annuity in such
terms and in such manner as would be comparable to the explanation provided for
meeting the requirements of Paragraph (e)(1) applicable to a qualified joint and
survivor annuity.

     The applicable period for a participant is whichever of the following
periods ends last: (i) the period beginning with the first day of the plan year
in which the participant attains age 32 and ending with the close of the plan
year preceding the plan year in which the participant attains age 35; (ii) a
reasonable period ending after the individual becomes a participant; (iii) a
reasonable period ending after Paragraph (e)(3) ceases to apply to the
participant; (iv) a reasonable period ending after this Subsection 5.3 first
applies to the participant. Notwithstanding the foregoing, notice must be
provided within a reasonable period ending after separation from service in the
case of a participant who separates from service before attaining age 35.

     For purposes of applying the preceding paragraph, a reasonable period
ending after the enumerated events described in (ii), (iii) and (iv) is the end
of the two-year period beginning one year prior to the date the applicable event
occurs, and ending one year after that date. In the case of a participant who
separates from service before the plan year in which he attains age 35, notice
shall be provided within the two-year period beginning one year prior to
separation and ending one year after separation. If such a participant
thereafter returns to employment with the employer, the applicable period for
such participant shall be redetermined.

         (3) Notwithstanding the other requirements of this Paragraph (e), the
respective notices prescribed by this Paragraph need not be given to a
participant if (1) the plan "fully subsidizes" the costs of a qualified joint
and survivor annuity or qualified preretirement survivor annuity, and (2) the
plan does not allow the participant to waive the qualified joint and survivor
annuity or qualified preretirement survivor annuity and does not allow a married
participant to designate a nonspouse beneficiary. For purposes of this
Subparagraph (e)(3), a plan fully subsidizes the costs of a benefit if no
increase in cost, or decrease in benefits to the participant may result from the
participant's failure to elect another benefit.

     (f) Safe Harbor Rules
         -----------------

     This Paragraph (f) shall apply to a participant in a profit-sharing plan,
and to any distribution, made on or after the first day of the first plan year
beginning after December 31,

                                                                              40

<PAGE>

1988, from or under a separate account attributable solely to accumulated
deductible employee contributions, as defined in Code Section 72(o)(5)(B), and
maintained on behalf of a participant in a money purchase pension plan,
(including a target benefit plan) if the following conditions are satisfied: (1)
the participant does not or cannot elect payments in the form of a life annuity;
and (2) on the death of a participant, the participant's vested account balance
will be paid to the participant's surviving spouse, but if there is no surviving
spouse, or if the surviving spouse has consented in a manner conforming to a
qualified election, then to the participant's designated beneficiary. The
surviving spouse may elect to have distribution of the vested account balance
commence within the 90-day period following the date of the participant's death.
The account balance shall be adjusted for gains or losses occurring after the
participant's death in accordance with the provisions of the plan governing the
adjustment of account balances for other types of distributions. This Paragraph
(f) shall not be operative with respect to a participant in a profit-sharing
plan if the plan is a direct or indirect transferee of a defined benefit plan,
money purchase plan, a target benefit plan, stock bonus, or profit-sharing plan
which is subject to the survivor annuity requirements of Code Section 401(a)(11)
and section 417. If this Paragraph (f) is operative, then the provisions of this
Subsection 5.3, other than Paragraphs (c) and (g) shall be inoperative.

         (1) The participant may waive the spousal death benefit described in
this Paragraph (f) at any time provided that no such waiver shall be effective
unless it satisfies the conditions of Paragraph (d)(4) (other than the
notification requirement referred to therein) that would apply to the
participant's waiver of the qualified preretirement survivor annuity.

         (2) For purposes of this Paragraph (f), vested account balance shall
mean, in the case of a money purchase pension plan or a target benefit plan, the
participant's separate account balance attributable solely to accumulated
deductible employee contributions within the meaning of Code Section
72(o)(5)(B). In the case of a profit-sharing plan, vested account balance shall
have the same meaning as provided in Paragraph (d)(8).

     (g) Transitional Rules
         ------------------

         (1) Any living participant not receiving benefits on August 23, 1984,
who would otherwise not receive the benefits prescribed by the previous
Paragraphs of this Subsection 5.3 must be given the opportunity to elect to have
the prior Paragraphs of this Subsection apply if such participant is credited
with at least one hour of service under this plan or a predecessor plan in a
plan year beginning on or after January 1, 1976, and such participant had at
least 10 years of vesting service when he or she separated from service.

         (2) Any living participant not receiving benefits on August 23, 1984,
who was credited with at least one hour of service under this plan or a
predecessor plan on or after September 2, 1974, and who is not otherwise
credited with any service in a plan year beginning on or after January 1, 1976,
must be given the opportunity to have his or her benefits paid in accordance
with Subparagraph (4).

                                                                              41

<PAGE>

         (3) The respective opportunities to elect (as described in
Subparagraphs (1) and (2)) must be afforded to the appropriate participants
during the period commencing on August 23, 1984, and ending on the date benefits
would otherwise commence to said participants.

         (4) Any participant who has elected pursuant to Subparagraph (2) and
any participant who does not elect under Subparagraph (1) or who meets the
requirements of Subparagraph (1) except that such participant does not have at
least 10 years of vesting service when he or she separates from service, shall
have his or her benefits distributed in accordance with all of the following
requirements if benefits would have been payable in the form of a life annuity:

             (A) Automatic joint and survivor annuity - If benefits in the form
                 ------------------------------------
of a life annuity become payable to a married participant who:

                 (i)   begins to receive payments under the plan on or after
normal retirement age; or

                 (ii)  dies on or after normal retirement age while still
working for the employer; or

                 (iii) begins to receive payments on or after the qualified
early retirement age; or

                 (iv)  separates from service on or after attaining normal
retirement age (or the qualified early retirement age) and after satisfying the
eligibility requirements for the payment of benefits under the plan and
thereafter dies before beginning to receive such benefits;

then such benefits will be received under this plan in the form of a qualified
joint and survivor annuity, unless the participant has elected otherwise during
the election period. The election period must begin at least 6 months before the
participant attains qualified early retirement age and end not more than 90 days
before the commencement of benefits. Any election hereunder will be in writing
and may be changed by the participant at any time.

             (B) Election of early survivor annuity - A participant who is
                 ----------------------------------
employed after attaining the qualified early retirement age will be given the
opportunity to elect, during the election period, to have a survivor annuity
payable on death. If the participant elects the survivor annuity, payments under
such annuity must not be less than the payments which would have been made to
the spouse under the qualified joint and survivor annuity if the participant had
retired on the day before his or her death. Any election under this provision
will be in writing and may be changed by the participant at any time. The
election period begins on the later of (1) the 90th day before the participant
attains the qualified early retirement age, or (2) the date on which
participation begins, and ends on the date the participant terminates
employment.

                                                                              42

<PAGE>

             (C) For purposes of this Subparagraph (4), qualified early
retirement age is the latest of:

                 (i)   the earliest date, under the plan, on which the
participant may elect to receive retirement benefits;

                 (ii)  the first day of the 120th month beginning before the
participant reaches normal retirement age; or

                 (iii) the date the participant begins participation.

     Further, for purposes of this Subparagraph (4), a qualified joint and
survivor annuity is an annuity for the life of the participant with an survivor
annuity for the life of the spouse as described in Paragraph (d)(5).

     (h) Loans - If required under Section 4.4(b)(1)(A) of the plan, a
         -----
participant must obtain the consent of his spouse, if any, to use his account
balances as security for a loan. Spousal consent shall be obtained no earlier
than the beginning of the 90-day period that ends on the date on which the loan
is to be so secured. The consent must be in writing, must acknowledge the effect
of the loan, and must be witnessed by a plan representative or notary public.
Such consent shall thereafter be binding with respect to the consenting spouse
or any subsequent spouse with respect to that loan. A new consent shall be
required if the account balances are used for renegotiation, extension, renewal,
or other revision of the loan.

     Once a valid spousal consent has been obtained in compliance with this
provision, then, notwithstanding any other provision of this plan, the portion
of the participant's vested account balances used as a security interest held by
the plan by reason of a loan outstanding to the participant shall be taken into
account for purposes of determining the amount of the account balances payable
at the time of death or distribution, but only if the reduction is used as
repayment of the loan. If less than 100% of the participant's vested account
balances (determined without regard to the preceding sentence) is payable to the
surviving spouse, then the account balances shall be adjusted by first reducing
the vested account balances by the amount of the security used as repayment of
the loan, and then determining the benefit payable to the surviving spouse.

     Section 5.4. Distribution Requirements
     ------------ -------------------------

     Subject to Subsection 5.3 Joint and Survivor Annuity Requirements, the
requirements of this Subsection 5.4 shall apply to any distribution of a
participant's interest and will take precedence over any inconsistent provisions
of this plan. Unless otherwise specified, the provisions of this Subsection
apply to calendar years beginning after December 31, 1984.

     All distributions required under this Subsection shall be determined and
made in accordance with the proposed regulations under Code Section 401(a)(9),
including the minimum distribution incidental benefit requirement of Section
1.401(a)(9)-2 of the Proposed Regulations.

                                                                              43

<PAGE>

     (a) Required Beginning Date - The entire interest of a participant must be
         -----------------------
distributed or begin to be distributed no later than the participant's required
beginning date.

     (b) Limits on Distribution Periods - As of the first distribution calendar
         ------------------------------
year, distributions, if not made in a single-sum, may only be made over one of
the following periods (or a combination thereof):

         (1) the life of the participant;

         (2) the life of the participant and a designated beneficiary;

         (3) a period certain not extending beyond the life expectancy of the
participant; or

         (4) a period certain not extending beyond the joint and last survivor
expectancy of the participant and a designated beneficiary.

     (c) Determination of Amount to Be Distributed Each Year - If the
         ---------------------------------------------------
participant's interest is to be distributed in other than a single sum, the
following minimum distribution rules shall apply on or after the required
beginning date.

         (1) Individual Account -
             ------------------

             (A) If a participant's benefit is to be distributed over (1) a
period not extending beyond the life expectancy of the participant or the joint
life and last survivor expectancy of the participant and the participant's
designated beneficiary or (2) a period not extending beyond the life expectancy
of the designated beneficiary, the amount required to be distributed for each
calendar year, beginning with distributions for the first distribution calendar
year, must at least equal the quotient obtained by dividing the participant's
benefit by the applicable life expectancy.

             (B) For calendar years beginning before January 1, 1989, if the
participant's spouse is not the designated beneficiary, the method of
distribution selected must assure that at least 50% of the present value of the
amount available for distribution is paid within the life expectancy of the
participant.

             (C) For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with distributions for the first
distribution calendar year shall not be less than the quotient obtained by
dividing the participant's benefit by the lesser of (1) the applicable life
expectancy or (2) if the participant's spouse is not the designated beneficiary,
the applicable divisor determined from the table set forth in Q&A-4 of Section
1.401(a)(9)-2 of the Proposed Regulations. Distributions after the death of the
participant shall be distributed using the applicable life expectancy in
Paragraph (c)(1)(A) above as the relevant divisor without regard to Proposed
Regulations Section 1.401(a)(9)-2.

                                                                              44

<PAGE>

             (D) The minimum distribution required for the participant's first
distribution calendar year must be made on or before the participant's required
beginning date. The minimum distribution for other calendar years, including the
minimum distribution for the distribution calendar year in which the employee's
required beginning date occurs, must be made on or before December 31 of that
distribution calendar year.

         (2) Other Forms - If the participant's benefit is distributed in the
             -----------
form of an annuity purchased from an insurance company, distributions thereunder
shall be made in accordance with the requirements of Code Section 401(a)(9) and
the proposed regulations thereunder.

     (d) Death Distribution Provisions
         -----------------------------

         (1) Distribution beginning before death - If the participant dies after
             -----------------------------------
distribution of his or her interest has begun, the remaining portion of such
interest will continue to be distributed at least as rapidly as under the method
of distribution being used prior to the participant's death.

         (2) Distribution beginning after death - If the participant dies before
             ----------------------------------
distribution of his or her interest begins, distribution of the participant's
entire interest shall be completed by December 31 of the calendar year
containing the fifth anniversary of the participant's death except to the extent
that an election is made to receive distributions in accordance with (A) or (B)
below:

             (A) If any portion of the participant's interest is payable to a
designated beneficiary, distributions may be made over the life or over a period
certain not greater than the life expectancy of the designated beneficiary
commencing on or before December 31 of the calendar year immediately following
the calendar year in which the participant died;

             (B) If the designated beneficiary is the participant's surviving
spouse, the date distributions are required to begin in accordance with (A)
above shall not be earlier than the later of (i) December 31 of the calendar
year immediately following the calendar year in which the participant died and
(ii) December 31 of the calendar year in which the participant would have
attained age 70 1/2.

     If the participant has not made an election pursuant to this Paragraph
(d)(2) by the time of his or her death, the participant's designated beneficiary
must elect the method of distribution no later than the earlier of (1) December
31 of the calendar year in which distributions would be required to begin under
this Paragraph, or (2) December 31 of the calendar year which contains the fifth
anniversary of the date of death of the participant. If the participant has no
designated beneficiary, or if the designated beneficiary does not elect a method
of distribution, distribution of the participant's entire interest must be
completed by December 31 of the calendar year containing the fifth anniversary
of the participant's death.

                                                                              45

<PAGE>

         (3) For purposes of Paragraph (d)(2) above, if the surviving spouse
dies after the participant, but before payments to such spouse begin, the
provisions of Paragraph (d)(2) with the exception of paragraph (B) therein,
shall be applied as if the surviving spouse were the participant.

         (4) For purposes of this Paragraph (d), any amount paid to a child of
the participant will be treated as if it had been paid to the surviving spouse
if the amount becomes payable to the surviving spouse when the child reaches the
age of majority.

         (5) For the purposes of this Paragraph (d), distribution of a
participant's interest is considered to begin on the participant's required
beginning date (or, if Subparagraph (3) above is applicable, the date
distribution is required to begin to the surviving spouse pursuant to
Subparagraph (2) above). If distribution in the form of an annuity irrevocably
commences to the participant before the required beginning date, the date
distribution is considered to begin is the date distribution actually commences.

     (e) Definitions (Code Section 401(a)(9) Requirements)
         -----------

         (1) Applicable Life Expectancy - The life expectancy (or joint and last
             --------------------------
survivor expectancy) calculated using the attained age of the participant (or
designated beneficiary) as of the participant's (or designated beneficiary's)
birthday in the applicable calendar year reduced by one for each calendar year
which has elapsed since the date life expectancy was first calculated. If life
expectancy is being recalculated, the applicable life expectancy shall be the
life expectancy as so recalculated. The applicable calendar year shall be the
first distribution calendar year, and if life expectancy is being recalculated
such succeeding calendar year.

         (2) Designated Beneficiary - The individual who is designated as the
             ----------------------
beneficiary under the plan in accordance with Code Section 401(a)(9) and the
proposed regulations thereunder.

         (3) Distribution Calendar Year - A calendar year for which a minimum
             --------------------------
distribution is required. For distributions beginning before the participant's
death, the first distribution calendar year is the calendar year immediately
preceding the calendar year which contains the participant's required beginning
date. For distributions beginning after the participant's death, the first
distribution calendar year is the calendar year in which distributions are
required to begin pursuant to Paragraph (d) above.

         (4) Life Expectancy - Life expectancy and joint and last survivor
             ---------------
expectancy are computed by use of the expected return multiples in Tables V and
VI of Section 1.72-9 of the Income Tax Regulations.

     Unless otherwise elected by the participant (or spouse, in the case of
distributions described in Paragraph (d)(2)(B) above) by the time distributions
are required to begin, life expectancies shall be recalculated annually. Such
election shall be irrevocable as to the

                                                                              46

<PAGE>

participant (or spouse) and shall apply to all subsequent years. The life
expectancy of a nonspouse beneficiary may not be recalculated.

         (5) Participant's Benefit -
             ---------------------

             (A) The account balance as of the last valuation date in the
calendar year immediately preceding the distribution calendar year (valuation
calendar year) increased by the amount of any contributions or forfeitures
allocated to the account balance as of dates in the valuation calendar year
after the valuation date and decreased by distributions made in the valuation
calendar year after the valuation date.

             (B) Exception for second distribution calendar year. For purposes
of Subparagraph (5)(A) above, if any portion of the minimum distribution for the
first distribution calendar year is made in the second distribution calendar
year on or before the required beginning date, the amount of the minimum
distribution made in the second distribution calendar year shall be treated as
if it had been made in the immediately preceding distribution calendar year.

         (6) Required Beginning Date - The required beginning date of a
             -----------------------
participant is the first day of April of the calendar year following the
calendar year in which the participant attains age 70 1/2.

             (A) The required beginning date of a participant who attains age 70
1/2 before January 1, 1988, shall be determined in accordance with (i) or (ii)
below.

                 (i)  Non-5-percent owners. The required beginning date of a
participant who is not a 5-percent owner is the first day of April of the
calendar year following the calendar year in which the later of retirement or
attainment of age 70 1/2 occurs.

                 (ii) 5-percent owners. The required beginning date of a
participant who is a 5-percent owner during any year beginning after December
31, 1979, is the first day of April following the later of :

                      a. the calendar year in which the participant attains age
70 1/2; or

                      b. the earlier of the calendar year with or within which
ends the plan year in which the participant becomes a 5-percent owner, or the
calendar year in which the participant retires.

     The required beginning date of a participant who is not a 5-percent owner
who attains age 70 1/2 during 1988 and who has not retired as of January 1,
1989, is April 1, 1990.

             (B) 5-percent owner. A participant is treated as a 5-percent owner
for purposes of this Paragraph (e) if such participant is a 5-percent owner as
defined in Code Section 416(i) (determined in accordance with Section 416 but
without regard to whether the plan is top-

                                                                              47

<PAGE>

heavy) at any time during the plan year ending with or within the calendar year
in which such owner attains age 66 1/2 or any subsequent plan year.

                        (C)     Once distributions have begun to a 5-percent
owner under this Paragraph, they must continue to be distributed, even if the
participant ceases to be a 5-percent owner in a subsequent year.

        (f)     Transitional Rule
                -----------------

                (1)     Notwithstanding the other requirements of this Section
5.4 and subject to the requirements of Section 5.3, Joint and Survivor Annuity
Requirements, distribution on behalf of any employee, including a 5-percent
owner, may be made in accordance with all of the following requirements
(regardless of when such distribution commences).

                        (A)     The distribution by the trust is one which would
not have disqualified such trust under Code Section 401(a)(9) as in effect prior
to amendment by the Deficit Reduction Act of 1984.

                        (B)     The distribution is in accordance with a method
of distribution designated by the employee whose interest in the trust is being
distributed or, if the employee is deceased, by a beneficiary of such employee.

                        (C)     Such designation was in writing, was signed by
the employee or the beneficiary, and was made before January 1, 1984.

                        (D)     The employee had accrued a benefit under the
plan as of December 31, 1983.

                        (E)     The method of distribution designated by the
employee or the beneficiary specifies the time at which distribution will
commence, the period over which distributions will be made, and in the case of
any distribution upon the employee's death, the beneficiaries of the employee
listed in order of priority.

        A distribution upon death will not be covered by this transitional rule
unless the information in the designation contains the required information
described above with respect to the distributions to be made upon the death of
the employee.

                (2)     For any distribution which commences before January 1,
1984, but continues after December 31, 1983, the employee, or the beneficiary,
to whom such distribution is being made, will be presumed to have designated the
method of distribution under which the distribution is being made if the method
of distribution was specified in writing and the distribution satisfies the
requirements in this Paragraph.

                (3)     If a designation is revoked any subsequent distribution
must satisfy the requirements of Code Section 401(a)(9) and the proposed
regulations thereunder. If a

                                                                              48

<PAGE>

designation is revoked subsequent to the date distributions are required to
begin, the trust must distribute by the end of the calendar year following the
calendar year in which the revocation occurs the total amount not yet
distributed which would have been required to have been distributed to satisfy
Code Section 401(a)(9) and the proposed regulations thereunder, but for the Code
Section 242(b)(2) election. For calendar years beginning after December 31,
1988, such distributions must meet the minimum distribution incidental benefit
requirements in Section 1.401(a)(9)-2 of the Proposed Regulations. Any changes
in the designation will be considered to be a revocation of the designation.
However, the mere substitution or addition of another beneficiary (one not named
in the designation) under the designation will not be considered to be a
revocation of the designation, so long as such substitution or addition does not
alter the period over which distributions are to be made under the designation,
directly or indirectly (for example, by altering the relevant measuring life).
In the case in which an amount is transferred or rolled over from one plan to
another plan, the rules in Proposed Regulation Section 1.401(a)(9)-1 Q&A J-2 and
Q&A J-3 shall apply.

        Section 5.5.    Top Heavy Provisions
        -----------     --------------------

        (a)     Application of Provisions - If the plan is or becomes top-heavy
                -------------------------
in any plan year beginning after December 31, 1983, the provisions of Subsection
5.5 will supersede any conflicting provisions in the plan.

        (b)     Minimum Allocation
                ------------------

                (1)     Except as otherwise provided in (3) and (4) below, the
employer contributions and forfeitures allocated on behalf of any participant
who is not a key employee shall not be less than the lesser of three percent of
such participant's compensation or in the case where the employer has no defined
benefit plan which designates this plan to satisfy Code Section 401, the largest
percentage of employer contributions and forfeitures, as a percentage of the key
employee's compensation which may be taken into account under Section 1.2(c),
allocated on behalf of any key employee for that year. For this purpose, amounts
contributed to the key employee's employee 401(k) elective deferral account
shall be included as allocations on his behalf for that year. The minimum
allocation is determined without regard to any Social Security contribution.
This minimum allocation shall be made even though, under other plan provisions,
the participant would not otherwise be entitled to receive an allocation, or
would have received a lesser allocation for the year because of (i) the
participant's failure to complete 1,000 hours of service (or any equivalent
provided in the plan), or (ii) the participant's failure to make mandatory
employee contributions to the plan, or (iii) compensation less than a stated
amount.

                (2)     For purposes of computing the minimum allocation,
compensation shall mean compensation as defined in Section 1.2(a) of the plan.

                (3)     The provision in (1) above shall not apply to any
participant who was not employed by the employer on the last day of the plan
year.

                                                                              49

<PAGE>

                (4)     The provision in (1) above shall not apply to any
participant to the extent the participant is covered under any other plan or
plans of the employer and the employer has provided in Section 3.2 or 3.3 that
the minimum allocation or benefit requirement applicable to top-heavy plans will
be met in the other plan or plans. If this plan is intended to meet the minimum
allocation or benefit requirement applicable to another plan or plans, the
employer shall so provide in Section 3.2 or 3.3, as appropriate.

                (5)     The minimum allocation required (to the extent required
to be nonforfeitable under Code Section 416(b)) may not be forfeited under Code
Section 411(a)(3)(B) or 411(a)(3)(D).

        (c)     Adjustments in Code Section 415 Limits - If the plan is
                --------------------------------------
top-heavy, the defined benefit fraction and the defined contribution fraction
shall be computed by applying a factor of 1.0 (instead of 1.25) to the
applicable dollar limits under Code Section 415(b)(1)(A) and 415(c)(1)(A) for
such year, unless the plan meets both the following conditions:

                (1)     Such plan would not be a top-heavy plan if "90%" were
substituted for "60%" in the top-heavy tests; and

                (2)     The minimum employer contribution percentage under
paragraph (b) is 4 percent instead of 3 percent.

        However, the reduced Code Section 415 factor of 1.0 shall not apply
under a top-heavy plan with respect to any individual so long as there are no
employer contributions, forfeitures, or voluntary employee non-deductible
contributions allocated to such individual.

        (d)     Minimum Vesting Schedules - For any plan year in which this plan
                -------------------------
is top-heavy, the following minimum vesting schedule shall automatically apply
to the plan, if this schedule is more liberal than the schedule(s) provided in
Section 4.2(a)(6).

                 Year of Service                             Vesting Percentage
                 ---------------                             ------------------

                    0-1 Year                                         0%
                        2                                           20%
                        3                                           40%
                        4                                           60%
                        5                                           80%
                 6 or more Years                                    100%

        The minimum vesting schedule shall apply to all benefits within the
meaning of Code Section 411(a)(7) except those attributable to employee
contributions, including benefits accrued before the effective date of Code
Section 416 and benefits accrued before the plan became top-heavy. Further, no
decrease in a participant's nonforfeitable percentage may occur in the event the
plan's status as top-heavy changes for any plan year, and the provisions of
Section 7.2(d) shall

                                                                              50

<PAGE>

apply. However, this Section does not apply to the account balances of any
employee who does not have an hour of service after the plan has initially
become top-heavy and such employee's account balance attributable to employer
contributions and forfeitures will be determined without regard to this Section.

        (e)     Definitions     (Code Section 416 Requirements)
                -----------

                (1)     Key Employee - Any employee or former employee (and the
                        ------------
beneficiaries of such employee) who at any time during the determination period
was an officer of the employer if such individual's annual compensation exceeds
50 percent of the dollar limitation under Code Section 415(b)(1)(A), an owner
(or considered an owner under Code Section 318) of one of the ten largest
interests in the employer if such individual's compensation exceeds 100 percent
of the dollar limitation under Code Section 415(c)(1)(A), a 5-percent owner of
the employer, or a 1-percent owner of the employer who has an annual
compensation of more than $150,000. Annual compensation means compensation as
defined in Code Section 415(c)(3), but including amounts contributed by the
employer pursuant to a salary reduction agreement which are excludable from the
employee's gross income under Code Section 125, Section 402(a)(8), Section
402(h) or Section 403(b). The determination period is the plan year containing
the determination date and the four (4) preceding plan years.

        The determination of who is a key employee will be made in accordance
with Code Section 416(i)(1) and the regulations thereunder.

                (2)     Top-Heavy Plan - For any plan year beginning after
                        --------------
December 31, 1983, this plan is top-heavy if any of the following conditions
exists:

                        (A)     If the top-heavy ratio for this plan exceeds 60
percent and this plan is not part of any required aggregation group or
permissive aggregation group of plans.

                        (B)     If this plan is a part of a required aggregation
group of plans but not part of a permissive aggregation group and the top-heavy
ratio for the group of plans exceeds 60 percent.

                        (C)     If this plan is a part of a required aggregation
group and part of a permissive aggregation group of plans and the top-heavy
ratio for the permissive aggregation group exceeds 60 percent.

                (3)     Top-Heavy Ratio -
                        ---------------

                        (A) If the employer maintains one or more defined
contribution plans (including any Simplified Employee Pension Plan) and the
employer has not maintained any defined benefit plan which during the 5-year
period ending on the determination date(s) has or has had accrued benefits, the
top-heavy ratio for this plan alone or for the required or permissive
aggregation group as appropriate is a fraction, the numerator of which is the
sum of the account balances of all key employees as of the determination date(s)
(including any part of any account

                                                                              51

<PAGE>

balance distributed in the 5-year period ending on the determination date(s)),
and the denominator of which is the sum of all account balances (including any
part of any account balance distributed in the 5-year period ending on the
determination date(s)), both computed in accordance with Code Section 416 and
the regulations thereunder. Both the numerator and denominator of the top-heavy
ratio are increased to reflect any contribution not actually made as of the
determination date, but which is required to be taken into account on that date
under Code Section 416 and the regulations thereunder.

                        (B)     If the employer maintains one or more defined
contribution plans (including any Simplified Employee Pension Plan) and the
employer maintains or has maintained one or more defined benefit plans which
during the 5-year period ending on the determination date(s) has or has had any
accrued benefits, the top-heavy ratio for any required or permissive aggregation
group as appropriate is a fraction, the numerator of which is the sum of account
balances under the aggregated defined contribution plan or plans for all key
employees, determined in accordance with (A) above, and the present value of
accrued benefits under the aggregated defined benefit plan or plans for all key
employees as of the determination date(s), and the denominator of which is the
sum of the account balances under the aggregated defined contribution plan or
plans for all participants, determined in accordance with (A) above, and the
present value of accrued benefits under the defined benefit plan or plans for
all participants as of the determination date(s), all determined in accordance
with Code Section 416 and the regulations thereunder. The accrued benefits under
a defined benefit plan in both the numerator and denominator of the top-heavy
ratio are increased for any distribution of an accrued benefit made in the
five-year period ending on the determination date.

                        (C)     For purposes of (A) and (B) above the value of
account balances and the present value of accrued benefits will be determined as
of the most recent valuation date that falls within or ends with the 12-month
period ending on the determination date, except as provided in Code Section 416
and the regulations thereunder for the first and second plan years of a defined
benefit plan. The account balances and accrued benefits of a participant (1) who
is not a key employee but who was a key employee in a prior year, or (2) who has
not been credited with at least one hour of service with any employer
maintaining the plan at any time during the 5-year period ending on the
determination date will be disregarded. The calculation of the top-heavy ratio,
and the extent to which distributions, rollovers, and transfers are taken into
account will be made in accordance with Code Section 416 and the regulations
thereunder. Deductible employee contributions will not be taken into account for
purposes of computing the top-heavy ratio. When aggregating plans the value of
account balances and accrued benefits will be calculated with reference to the
determination dates that fall within the same calendar year.

        The accrued benefit of a participant other than a key employee shall be
determined under (1) the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by the employer, or (2) if
there is no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of Code Section
411(b)(1)(C).

                                                                              52

<PAGE>

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

          (5)  Required Aggregation Group - (1) Each qualified plan of the
               --------------------------
employer in which at least one key employee participates or participated at any
time during the determination period (regardless of whether the plan has
terminated), and (2) any other qualified plan of the employer which enables a
plan described in (1) to meet the requirements of Code Sections 401(a)(4) or
410.

          (6)  Determination Date - For any plan year subsequent to the first
               ------------------
plan year, the last day of the preceding plan year. For the first plan year of
the plan, the last day of that year.

          (7)  Valuation Date - The last day of the plan year shall be the date
               --------------
as of which account balances or accrued benefits are valued for purposes of
calculating the top-heavy ratio.

          (8)  Present Value - Present value shall be based only on the interest
               -------------
and mortality rates specified in the employer's defined benefit plan.

          (9)  Non-Key Employee - Any employee who is not a key employee.
               ----------------
Non-key employees include employees who are former key employees.

  Section 5.6. Limitations and Conditions Regarding Contributions under Code
  --------------------------------------------------------------------------
Sections 402(g), 401(k) and 401(m).
----------------------------------

  (a)

          (1)  Limit Maximum Amount of Elective Deferrals under Code Section
               -------------------------------------------------------------
402(g). No participant shall be permitted to have elective deferrals made under
------
this plan, or any other qualified plan maintained by the employer, during any
taxable year, in excess of the dollar limitation contained in Code Section
402(g) in effect at the beginning of such taxable year.

          (2)  Distribution of Excess Elective Deferrals. A participant may
               -----------------------------------------
assign to this plan any excess elective deferrals made during a taxable year of
the participant by following the claim procedure set forth in Subsection (a)(3).
Also, the employer may notify this plan on behalf of a participant who has
excess deferrals for the taxable year calculated by taking into account only
elective deferrals under the plans maintained by the employer.

     Notwithstanding any other provision of the plan, excess elective deferrals,
plus any income and minus any loss allocable thereto, shall be distributed no
later than April 15 to any participant to whose account excess elective
deferrals were assigned for the preceding year and for whom excess elective
deferrals have been claimed for such taxable year.

                                                                           53

<PAGE>

          (3)  Claims - The participant's claim shall be in writing; shall be
               ------
submitted to the plan administrator no later than March 1; shall specify the
participant's excess deferral amount for the preceding calendar year; and shall
be accompanied by the participant's written statement that if such amounts are
not distributed, such excess deferral amount, when added to amounts deferred
under other plans or arrangements described in Code Sections 401(k), 408(k),
457, or 403(b), exceeds the limit imposed on the participant by Code Section
402(g) for the year in which the deferral occurred.

          (4)  Definitions (Code Section 402(g) Limitations)
               -----------

               (A)  Elective Deferrals shall mean any employer contributions
                    ------------------
made to the plan at the election of the participant, in lieu of cash
compensation, and shall include contributions made pursuant to a salary
reduction agreement or other deferral mechanism. With respect to any taxable
year, a participant's elective deferral is the sum of all employer contributions
made on behalf of such participant pursuant to an election to defer under any
qualified cash or deferred arrangement as described in Code Section 401(k), any
simplified employee pension cash or deferred arrangement as described in Section
402(h)(1)(B), any eligible deferred compensation plan under Section 457, any
plan as described under Section 501(c)(18), and any employer contributions made
on the behalf of a participant for the purchase of an annuity contract under
Section 403(b) pursuant to a salary reduction agreement. Elective deferrals
shall not include any deferrals properly distributed as excess annual additions.

              (B)   Excess Elective Deferrals shall mean those elective
                    -------------------------
deferrals that are includible in a participant's gross income under Code Section
402(g) to the extent such participant's elective deferrals for a taxable year
exceed the dollar limitation under such Code Section. Excess elective deferrals
shall be treated as annual additions under the plan, unless such amounts are
distributed no later than the first April 15 following the close of the
participant's taxable year.

          (5)  Determination Of Income Or Loss - Excess elective deferrals shall
               -------------------------------
be adjusted for any income or loss for the participant's taxable year. The
income or loss allocable to excess elective deferrals is the income or loss
allocable to the participant's employee 401(k) elective deferral account for the
taxable year multiplied by a fraction, the numerator of which is such
participant's excess elective deferrals for the year and the denominator is the
participant's account balance attributable to elective deferrals without regard
to any income or loss occurring during such taxable year.

     (b)

          (1)  Actual Deferral Percentage Test - The actual deferral percentage
               -------------------------------
(hereinafter "ADP") for participants who are highly compensated employees for
each plan year and the ADP for participants who are non-highly compensated
employees for the same plan year must satisfy one of the following tests: 1) The
ADP for participants who are highly compensated employees for the plan year
shall not exceed the ADP for participants who are non-highly

                                                                           54

<PAGE>

compensated employees for the same plan year multiplied by 1.25; or 2) The ADP
for participants who are highly compensated employees for the plan year shall
not exceed the ADP for participants who are non-highly compensated employees for
the same plan year multiplied by 2.0, provided that the ADP for participants who
are highly compensated employees does not exceed the ADP for participants who
are non-highly compensated employees by more than two (2) percentage points.

               (A)  Special Rules Applying to ADP Test
                    ----------------------------------

                    (i)   The ADP for any participant who is a highly
compensated employee for the plan year and who is eligible to have elective
deferrals (and qualified non-elective contributions or qualified matching
contributions, or both, to the extent treated as elective deferrals for purposes
of the ADP test) allocated to his or her accounts under two or more arrangements
described in Code Section 401(k), that are maintained by the employer, shall be
determined as if such elective deferrals (and, to the extent taken into account,
such qualified non-elective contributions or qualified matching contributions,
or both) were made under a single arrangement. If a highly compensated employee
participates in two or more cash or deferred arrangements that have different
plan years, all cash or deferred arrangements ending with or within the same
calendar year shall be treated as a single arrangement. Notwithstanding the
foregoing, certain plans shall be treated as separate if mandatorily
disaggregated under regulations under Code Section 401(k).

                    (ii)  In the event that this plan satisfies the requirements
of Code Sections 401(k), 401(a)(4), or 410(b) only if aggregated with one or
more other plans, or if one or more other plans satisfy the requirements of such
sections only if aggregated with this plan, then this Section 5.6(b)(1) shall be
applied by determining the ADP of employees as if all such plans were a single
plan. For plan years beginning after December 31, 1989, plans may be aggregated
in order to satisfy Code Section 401(k) only if they have the same plan year.

                    (iii) For purposes of determining the ADP of a participant
who is a 5-percent owner or one of the ten most highly-paid highly compensated
employees, the elective deferrals (and qualified non-elective contributions or
qualified matching contributions, or both, to the extent treated as elective
deferrals for purposes of the ADP test) and compensation of such participant
shall include the elective deferrals (and, to the extent taken into account,
qualified non-elective contributions and qualified matching contributions, or
both) and compensation for the plan year of family members (as defined in Code
Section 414(q)(6)). Family members, with respect to such highly compensated
employees, shall be disregarded as separate employees in determining the ADP
both for participants who are non-highly compensated employees and for
participants who are highly compensated employees.

                    (iv)  For purposes of determining the ADP test, elective
deferrals, qualified non-elective contributions and qualified matching
contributions must be made before the last day of the twelve-month period
immediately following the plan year to which contributions relate. An elective
deferral shall be taken into account only if it relates to

                                                                           55

<PAGE>

compensation that either (a) would have been received by the participant in the
plan year but for the deferral election, or (b) is attributable to services
performed by the participant in the plan year and would have been received by
the participant within 2 1/2 months after the last day of the plan year but for
the deferral election.

                    (v)   The plan administrator shall maintain records
sufficient to demonstrate satisfaction of the ADP test and the amount of
qualified non-elective contributions or qualified matching contributions, or
both, used in such test.

                    (vi)  Qualified non-elective contributions may be taken into
account as elective deferrals only to the extent needed to meet the ADP test.
Qualified matching contrib utions may be taken into account only to the extent
such contributions are not needed to meet the average contribution percentage
test unless it is the intention of the plan administrator to test all qualified
non-elective and matching contributions under the ADP test.

                    (vii) The determination and treatment of the ADP amounts of
any participant shall satisfy such other requirements as may be prescribed by
the Secretary of the Treasury.

               (B)  Actual Deferral Percentage shall mean, for a specified group
                    --------------------------
of participants for a plan year, the average of the ratios (calculated
separately for each participant in such group) of (1) the amount of employer
contributions actually paid over to the trust on behalf of such participant for
the plan year to (2) the participant's compensation as defined in Section
1.2(e). Employer contributions on behalf of any participant shall include: (1)
any elective deferrals made pursuant to the participant's deferral election,
including excess elective deferrals of highly compensated employees, but
excluding (a) excess elective deferrals of nonhighly compensated employees that
arise solely from elective deferrals made under the plan or plans of this
employer and (b) elective deferrals that are taken into account in the average
contribution percentage test (provided the ADP test is satisfied both with and
without exclusion of these elective deferrals); and (2) at the election of the
employer, qualified non-elective contributions and qualified matching
contributions. For purposes of computing actual deferral percentages, an
employee who would be a participant but for the failure to make elective
deferrals shall be treated as a participant on whose behalf no elective
deferrals are made. Amounts distributed under Section 5.1(a)(4)(B) shall not be
included in the calculation.

          (2)  Distribution Of Excess Contributions - Notwithstanding any other
               ------------------------------------
provision of this plan, excess contributions, plus any income and minus any loss
allocable thereto, shall be distributed no later than the last day of each plan
year to participants to whose accounts such excess contributions were allocated
for the preceding plan year. If such excess amounts are distributed more than 2
1/2 months after the last day of the plan year in which such excess amounts
arose, a ten (10) percent excise tax will be imposed on the employer maintaining
the plan with respect to such amounts. Such distributions shall be made to
highly compensated employees on the basis of the respective portions of the
excess contributions attributable to each of such employees. Excess
contributions of participants who are subject to the family member

                                                                           56

<PAGE>

aggregation rules shall be allocated among the family members in proportion to
the elective deferrals (and amounts treated as elective deferrals) of each
family member that is combined to determine the combined ADP.

     Excess contributions (including the amounts recharacterized) shall be
treated as annual additions under the plan.

               (A)  Determination of Income or Loss - Excess contributions shall
                    -------------------------------
be adjusted for any income or loss for the plan year. The income or loss
allocable to excess contributions is the income or loss allocable to the
participant's employee 401(k) elective deferral account (and, if applicable, the
qualified non-elective contribution account or the qualified employer matching
contribution account or both) for the plan year multiplied by a fraction, the
numerator of which is such participant's excess contributions for the year and
the denominator is the participant's account balance(s) attributable to elective
deferrals (and qualified non-elective contributions or qualified matching
contributions, or both, if any of such contributions are included in the ADP
test) without regard to any income or loss occurring during such plan year.

               (B)  Accounting for Excess Contributions - Excess contributions
                    -----------------------------------
shall be distributed from the participant's employee 401(k) elective deferral
account and qualified employer matching contribution account (if applicable) in
proportion to the participant's elective deferrals and qualified matching
contributions (to the extent used in the ADP test) for the plan year. Excess
contributions shall be distributed from the participant's qualified non-elective
contribution account only to the extent that such excess contributions exceed
the balance in the participant's employee 401(k) elective deferral account and
employer matching contribution account.

               (C)  Excess Contributions shall mean, with respect to any plan
                    --------------------
year, the excess of: 1) The aggregate amount of employer contributions actually
taken into account in computing the ADP of highly compensated employees for such
plan year, over 2) The maximum amount of such contributions permitted by the ADP
test (determined by reducing contributions made on behalf of highly compensated
employees in order of the ADPs, beginning with the highest of such percentages).

     Such determination shall be made after first determining excess elective
deferrals pursuant to Section 5.6(a).

          (3)  Recharacterization - A participant may treat his or her excess
               ------------------
contributions as an amount distributed to the participant and then contributed
by the participant to the plan as an employee nondeductible contribution.
Recharacterized amounts will remain nonforfeitable and subject to the same
distribution requirements as elective deferrals. Therefore, such recharacterized
amounts shall be held in a recharacterized funds account which shall be invested
and otherwise accounted for in the same manner as an employee 401(k) elective
deferral account but which shall be subject to the ADP test. Amounts may not be
recharacterized by a highly compensated employee to the extent that such amount
in combination with other employee

                                                                           57

<PAGE>

nondeductible contributions made by that employee would exceed any stated limit
under the plan on employee nondeductible contributions.

     Recharacterization must occur no later than two and one-half months after
the last day of the plan year in which such excess contributions arose and is
deemed to occur no earlier than the date the last highly compensated employee is
informed in writing of the amount recharacterized and the consequences thereof.
Recharacterized amounts will be taxable to the participant for the participant's
tax year in which the participant would have received them in cash under a cash
or deferred arrangement.

     (c)

               (1) Limitations on Employee Contributions and Matching
                   --------------------------------------------------
Contributions Under Code Section 401(m) - The average contribution percentage
---------------------------------------
(hereinafter "ACP") for participants who are highly compensated employees for
each plan year and the ACP for participants who are non-highly compensated
employees for the same plan year must satisfy one of the following tests: 1) The
ACP for participants who are highly compensated employees for the plan year
shall not exceed the ACP for participants who are non-highly compensated
employees for the same plan year multiplied by 1.25; or 2) The ACP for
participants who are highly compensated employees for the plan year shall not
exceed the ACP for participants who are non-highly compensated employees for the
same plan year multiplied by two (2), provided that the ACP for participants who
are highly compensated employees does not exceed the ACP for participants who
are non-highly compensated employees by more than two (2) percentage points.

                   (A) Special Rules For Limitations Under Code Section 401(m)-
                       -------------------------------------------------------

                       (i)  Multiple Use: If one or more highly compensated
employees are subject to both the ADP test and the ACP test and the sum of the
ADP and ACP of those highly compensated employees subject to either or both
tests exceeds the aggregate limit, then either the ADP or the ACP of those
highly compensated employees who are subject to both tests will be reduced
(beginning with such highly compensated employee whose percentage is the
highest) so that the limit is not exceeded. The plan administrator shall
determine whether the ADP or the ACP for the plan will be reduced for the plan
year. The amount by which each highly compensated employee's percentage is
reduced shall be treated as either an excess contribution or an excess aggregate
contribution, as appropriate. The ADP and ACP of the highly compensated
employees are determined after any corrections required to meet the ADP and ACP
tests. Multiple use does not occur if both the ADP and ACP of the highly
compensated employees does not exceed 1.25 multiplied by the ADP and ACP of the
non-highly compensated employees.

                       (ii) For purposes of this Section 5.6(c) (1), the
contribution percentage for any participant who is a highly compensated employee
and who is eligible to have contribution percentage amounts allocated to his or
her account under two or more plans

                                                                              58

<PAGE>

described in Code Section 401(a), or arrangements described in Code Section
401(k) that are maintained by the employer, shall be determined as if the total
of such contribution percentage amounts were made under each plan. If a highly
compensated employee participates in two or more cash or deferred arrangements
that have different plan years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single arrangement.
Notwithstanding the foregoing, certain plans shall be treated as separate if
mandatorily disaggregated under regulations under Code Section 401(m).

                       (iii)  In the event that this plan satisfies the
requirements of Code Sections 401(m), 401(a)(4) or 410(b) only if aggregated
with one or more other plans, or if one or more other plans satisfy the
requirements of such sections only if aggregated with this plan, then this
Section 5.6(c)(1) shall be applied by determining the contribution percentage of
employees as if all such plans were a single plan. For plan years beginning
after December 31, 1989, plans may be aggregated in order to satisfy Code
Section 401(m) only if they have the same plan year.

                       (iv)   For purposes of determining the contribution
percentage of a participant who is a five-percent owner or one of the ten most
highly-paid highly compensated employees, the contribution percentage amounts
and compensation of such participant shall include the contribution percentage
amounts and compensation for the plan year of family members (as defined in Code
Section 414(q)(6)). Family members, with respect to highly compensated
employees, shall be disregarded as separate employees in determining the
contribution percentage both for participants who are non-highly compensated
employees and for participants who are highly compensated employees.

                       (v)    For purposes of determining the contribution
percentage test, employee contributions are considered to have been made in the
plan year in which contributed to the trust. Matching contributions and
qualified non-elective contributions will be considered made for a plan year if
made no later than the end of the twelve-month period beginning on the day after
the close of the plan year.

                       (vi)   The plan administrator shall maintain records
sufficient to demonstrate satisfaction of the ACP test and the amount of
qualified non-elective contributions or qualified matching contributions, or
both, used in such test.

                       (vii)  Employee 401(k) elective deferral contributions
may be taken into account; however, the ADP test shall be met before any
elective deferrals are used in the ACP test and the elective deferrals needed to
meet the ADP test shall not be used to meet the ACP test. Qualified non-elective
contributions shall be taken into account to the extent such contributions are
not used to meet the ADP test.

                       (viii) The determination and treatment of the
contribution percentage of any participant shall satisfy such other requirements
as may be prescribed by the Secretary of the Treasury.

                                                                              59

<PAGE>

                   (B) Definitions: (Code Section 401(m) Limitations)
                       -----------

                       (i)    Aggregate Limit shall mean the sum of (i) 125
                              ---------------
percent of the greater of the ADP of the non-highly compensated employees for
the plan year or the ACP of non-highly compensated employees under the plan
subject to Code Section 401(m) for the plan year beginning with or within the
plan year of the 401(k) plan and (ii) the lesser of 200% or two plus the lesser
of such ADP or ACP. "Lesser" is substituted for "greater" in (i) above, and
"greater" is substituted for "lesser" after "two plus the" in (ii) if it would
result in a larger aggregate limit.

                       (ii)   Average Contribution Percentage shall mean the
                              -------------------------------
average of the contribution percentages of the eligible participants in a group.

                       (iii)  Contribution Percentage shall mean the ratio
                              -----------------------
(expressed as a percentage) of the participant's contribution percentage amounts
to the participant's compensation as defined in Section 1.2(e).

                       (iv)   Contribution Percentage Amounts shall mean the sum
                              -------------------------------
of the employee nondeductible contributions, employer matching contributions and
employee 401(k) elective deferrals (to the extent not taken into account for
purposes of the ADP test) made under the plan on behalf of the participant for
the plan year. Such contribution percentage amounts shall not include matching
contributions that are forfeited either to correct excess aggregate
contributions or because the contributions to which they relate are excess
deferrals, excess contributions, or excess aggregate contributions. Qualified
non-elective contributions may be included in the contribution percentage
amounts. Employee 401(k) elective deferrals may also be used in calculating the
contribution percentage amounts so long as the ADP test is met before the
elective deferrals are used in the ACP test and the ADP test continues to be met
following the exclusion of those elective deferrals that are used to meet the
ACP test. Amounts distributed under Section 5.1(a)(4)(A) and (B) shall not be
included in the calculation.

                       (v)    Eligible Participant shall mean any employee who
                              --------------------
is eligible to make an employee nondeductible contribution, or an elective
deferral (if the employer takes such contributions into account in the
calculation of the contribution percentage), or to receive an employer matching
contribution (including forfeitures). If an employee nondeductible contribution
is required as a condition of participation in the plan, any employee who would
be a participant in the plan if such employee made such a contribution shall be
treated as an eligible participant on behalf of whom no employee contributions
are made.

                       (vi)   Employee Nondeductible Contribution (or employee
                              -----------------------------------
contribution) shall mean any contribution made under Section 3.5 to the plan by
or on behalf of a participant that is included in the participant's gross income
in the year in which made and that is maintained under a separate account to
which earnings and losses are allocated.

                                                                              60

<PAGE>

                       (vii) Matching Contribution shall mean an employer
                             ---------------------
contribution made to this or any other defined contribution plan on behalf of a
participant on account of an employee nondeductible contribution made by such
participant, or on account of a participant's elective deferral, under a plan
maintained by the employer.

         (2) Distribution of Excess Aggregate Contributions - Notwithstanding
             ----------------------------------------------
any other provision of this plan, excess aggregate contributions, plus any
income and minus any loss allocable thereto, shall be forfeited, if forfeitable,
or if not forfeitable, distributed no later than the last day of each plan year
to participants to whose accounts such excess aggregate contributions were
allocated for the preceding plan year. Excess aggregate contributions of
participants who are subject to the family member aggregation rules shall be
allocated among the family members in proportion to the employee nondeductible
contributions and matching contributions (or amounts treated as matching
contributions) of each family member that is combined to determine the combined
ACP. If such excess aggregate contributions are distributed more than 2 1/2
months after the last day of the plan year in which such excess amounts arose, a
ten (10) percent excise tax will be imposed on the employer maintaining the plan
with respect to those amounts. Excess aggregate contributions shall be treated
as annual additions under the plan.

             (A) Determination of Income or Loss - Excess aggregate
                 -------------------------------
contributions shall be adjusted for any income or loss for the plan year. The
income or loss allocable to excess aggregate contributions is the income or loss
allocable to the participant's employee nondeductible contribution account,
employer matching contribution account (if any, and if all amounts therein are
not used in the ADP test) and, if applicable, qualified non-elective
contribution account and employee 401(k) elective deferral account for the plan
year multiplied by a fraction, the numerator of which is such participant's
excess aggregate contributions for the year and the denominator is the
participant's account balance(s) attributable to contribution percentage amounts
without regard to any income or loss occurring during such plan year.

             (B) Forfeitures of Excess Aggregate Contributions - Forfeitures of
                 ---------------------------------------------
excess aggregate matching contributions may either be reallocated to the
accounts of non-highly compensated employees or applied to reduce employer
contributions, as provided in Section 3.6(e).

             (C) Accounting for Excess Aggregate Contributions - Excess
                 ---------------------------------------------
aggregate contributions shall be forfeited, if forfeitable or distributed on a
pro-rata basis from the participant's employee nondeductible contribution
account and employer matching contribution account (and, if applicable, the
participant's qualified non-elective contribution account or employee 401(k)
elective deferral account, or both).

             (D) Excess Aggregate Contributions shall mean, with respect to any
                 ------------------------------
plan year, the excess of: 1) The aggregate contribution percentage amounts taken
into account in computing the numerator of the contribution percentage actually
made on behalf of highly compensated employees for such plan year, over 2) The
maximum contribution percentage amounts permitted by the ACP test (determined by
reducing contributions made on behalf of

                                                                              61

<PAGE>

highly compensated employees in order of their contribution percentages
beginning with the highest of such percentages).

     Such determination shall be made after first determining excess elective
deferrals pursuant to Section 5.6(a) and then determining excess contributions
pursuant to Section 5.6(b)(2).

     (d) Top-Heavy Requirements - Neither elective deferrals nor any matching
         ----------------------
contributions will be taken into account for the purpose of satisfying the
minimum top-heavy contribution requirement. However, qualified non-elective
contributions may be taken into account for this purpose as provided in Section
3.2(c)(2) or 3.3(b)(2), as appropriate.

     (e) Restrictions on Payment of Certain Accounts - Elective deferrals,
         -------------------------------------------
qualified non-elective contributions, and qualified matching contributions, and
income allocable to each are not distributable to a participant or his
beneficiary in accordance with such person's election, earlier than upon
separation from service, death, or disability.

     Such account balances may also be distributed upon:

               (A) Termination of the plan without the establishment of another
defined contribution plan, other than an employee stock ownership plan (as
defined in Code Section 4975(e) or 409) or a simplified employee pension plan
(as defined in Code Section 408(k)).

               (B) The disposition by a corporation to an unrelated corporation
of substantially all of the assets (within the meaning of Code Section
409(d)(2)) used in a trade or business of such corporation if such corporation
continues to maintain this plan after the disposition, but only with respect to
employees who continue employment with the corporation acquiring such assets.

               (C) The disposition by a corporation to an unrelated entity of
such corporation's interest in a subsidiary (within the meaning of Code Section
409(d)(3)) if such corporation continues to maintain this plan, but only with
respect to employees who continue employment with such subsidiary.

               (D) The attainment of age 59 1/2.

               (E) The hardship of the participant as described in Section
4.4(a).

     All distributions that may be made pursuant to one or more of the foregoing
distributable events are subject to the spousal and participant consent
requirements as described in Section 5.3(c). In addition, distributions after
March 31, 1988, that are triggered by any of the first three events enumerated
above must be made in a lump sum.

                                                                              62

<PAGE>

     Section 5.7. Deductible Voluntary Employee Contributions
     -----------  -------------------------------------------

     The plan administrator will not accept deductible employee contributions
which are made for a taxable year beginning after December 31, 1986.
Contributions made prior to that date will be maintained in a separate account
which will be nonforfeitable at all times. The account will share in the gains
and losses of the trust in the same manner as described in Section 3.8 of the
plan. No part of the deductible voluntary contribution account will be used to
purchase life insurance. Subject to Section 5.3, Joint and Survivor Requirements
(if applicable), the participant may withdraw any part of the deductible
voluntary contribution account by making a written application to the plan
administrator.

                                   ARTICLE VI
                           ADMINISTRATION OF THE PLAN

     Section 6.1. Fiduciary Responsibility
     -----------  ------------------------

     (a) Fiduciary Standards - A fiduciary shall discharge his duties with
         -------------------
respect to a plan solely in the interest of the

participants and beneficiaries and -

     For the exclusive purpose of providing benefits to participants and their
beneficiaries and defraying reasonable expenses of administering the plan;

     With the care, skill, prudence, and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a like character and with
like aims;

     By diversifying the investments of the plan so as to minimize the risk of
large losses, unless under the circumstances it is clearly prudent not to do so;
and

     In accordance with the documents and instruments governing the plan insofar
as such documents and instruments are consistent with the provisions of ERISA.

     (b) Allocation of Fiduciary Responsibility
         --------------------------------------

         (1) It is intended to allocate to each fiduciary, either named or
otherwise, the individual responsibility for the prudent execution of the
functions assigned to him. None of the allocated responsibilities or any other
responsibilities shall be shared by two or more fiduciaries unless specifically
provided for in the plan.

         (2) When one fiduciary is required to follow the directions of another
fiduciary, the two fiduciaries shall not be deemed to share such responsibility.
Instead, the responsibility of the fiduciary giving the directions shall be
deemed to be his sole responsibility and the responsibility of the fiduciary
receiving directions shall be to follow those directions insofar as such
instructions on their face are proper under applicable law.

                                                                              63

<PAGE>

          (3) Any person or group of persons may serve in more than one
fiduciary capacity with respect to this plan.

          (4) A fiduciary under this plan may employ one or more persons,
including independent accountants, attorneys and actuaries to render advice with
regard to any responsibility such fiduciary has under the plan.

     (c)  Indemnification by Employer - Unless resulting from the gross
          ---------------------------
negligence, willful misconduct or lack of good faith on the part of a fiduciary
who is an officer or employee of the employer, the employer shall indemnify and
save harmless such fiduciary from, against, for and in respect of any and all
damages, losses, obligations, liabilities, liens, deficiencies, costs and
expenses, including without limitation, reasonable attorney's fees and other
costs and expenses incident to any suit, action, investigation, claim or
proceedings suffered in connection with his acting as a fiduciary under the
plan.

     (d)  Named Fiduciary - The person or persons named by the employer as
          ---------------
having fiduciary responsibility for the management and control of plan assets
shall be known as the "named fiduciary" hereunder. Such responsibility shall
include the appointment of the plan administrator (Section 6.2(a)), the trustee
(Section 6.4(a)) and the investment manager (Section 6.4(b)), and the deciding
of benefit appeals (Section 6.3).

     Section 6.2. Plan Administrator
     -----------  ------------------

     (a)  Appointment of Plan Administrator - The named fiduciary shall appoint
          ---------------------------------
a plan administrator who may be an individual or an administrative committee
consisting of no more than five members. Vacancies occurring upon resignation or
removal of a plan administrator or a committee member shall be filled promptly
by the named fiduciary. Any administrator may resign at any time by giving
notice of his resignation to the named fiduciary, and any administrator may be
removed at any time by the named fiduciary. The named fiduciary shall review at
regular intervals the performance of the administrator(s) and shall re-evaluate
the appointment of such administrator(s). After the named fiduciary has
appointed the administrator and has received a written notice of acceptance, the
fiduciary responsibility for administration of the plan shall be the
responsibility of the plan administrator or administrative committee.

     (b)  Duties and Powers of Plan Administrator - The plan administrator shall
          ---------------------------------------
have the following duties and discretionary powers and such other duties and
discretionary powers as relate to the administration of the plan:

          (1) To determine in a non-discriminatory manner all questions relating
to the eligibility of employees to become participants.

          (2) To determine in a non-discriminatory manner eligibility for
benefits and to determine and certify the amount and kind of benefits payable to
participants.

          (3) To authorize all disbursements from the fund.

                                                                              64

<PAGE>

                (4)     To appoint or employ any independent person to perform
necessary plan functions and to assist in the fulfillment of administrative
responsibilities as he deems advisable, including legal and actuarial counsel.

                (5)     When appropriate, to select an insurance company and
annuity contracts which, in his opinion, will best carry out the purposes of the
plan.

                (6)     To construe and interpret any ambiguities in the plan
and to make, publish, interpret, alter, amend or revoke rules for the regulation
of the plan which are consistent with the terms of the plan and with ERISA.

                (7)     To prepare and distribute, in such manner as determined
to be appropriate, information explaining the plan.

        (c)     Allocation of Fiduciary Responsibility Within Administrative
                ------------------------------------------------------------
Committee - If the plan administrator is an administrative committee, the
---------
committee shall choose from its members a chairman and a secretary. The
committee may allocate responsibility for those duties and powers listed in
Section 6.2(b)(1) and (2) (except determination of qualification for disability
retirement) and other purely ministerial duties to one or more members of the
committee. The committee shall review at regular intervals the performance of
any committee member to whom fiduciary responsibility has been allocated and
shall re-evaluate such allocation of responsibility. After the committee has
made such allocations of responsibilities and has received written notice of
acceptance, the fiduciary responsibilities for such administrative duties and
powers shall then be considered as the responsibilities of such committee
member(s).

        (d)     Miscellaneous Provisions
                ------------------------

                (1)     Administrative Committee Actions - The actions of such
                        --------------------------------
committee shall be determined by the vote or other affirmative expression of a
majority of its members. Either the chairman or the secretary may execute any
certificate or other written direction on behalf of the committee. A member of
the committee who is a participant shall not vote on any question relating
specifically to himself. If the remaining members of the committee, by majority
vote thereof, are unable to come to a determination of any such question, the
named fiduciary shall appoint a substitute member who shall act as a member of
the committee for the special vote.

                (2)     Expenses - The plan administrator shall serve without
                        --------
compensation for service as such. All reasonable expenses of the plan
administrator shall be paid by the employer or from the fund.

                (3)     Examination of Records - The plan administrator shall
                        ----------------------
make available to any participant for examination during business hours such of
the plan records as pertain only to the participant involved.

                                                                              65

<PAGE>

                (4)     Information to the Plan Administrator - To enable the
                        -------------------------------------
plan administrator to perform the administrative functions, the employer shall
supply full and timely information to the plan administrator on all participants
as the plan administrator may require.

        Section 6.3.    Claims Procedure
        ------------    ----------------

        (a)     Notification - The plan administrator shall notify each
                ------------
participant in writing of his determination of benefits. If the plan
administrator denies any benefit, such written denial shall include:

                -  The specific reasons for denial;
                -  Reference to provisions on which the denial is based;
                -  A description of and reason for any additional information
                   needed to process the claim; and
                -  An explanation of the claims procedure.

        (b)     Appeal - The participant or his duly authorized representative
                ------
may:

                - Request a review of the participant's case in writing to the
                  named fiduciary; - Review pertinent documents; - Submit issues
                  and comments in writing.

        The written request for review must be submitted no later than 60 days
after receiving written notification of denial of benefits.

        (c)     Review - The named fiduciary must render a decision no later
                ------
than 60 days after receiving the written request for review, unless
circumstances make it impossible to do so; but in no event shall the decision be
rendered later than 120 days after the request for review is received.

        Section 6.4.    Trust Fund
        -----------     ----------

        (a)     Appointment of Trustee - The named fiduciary shall appoint a
                ----------------------
trustee for the proper care and custody of all funds, securities and other
properties in the trust, and for investment of plan assets (or for execution of
such orders as it receives from an investment manager appointed for investment
of plan assets). The duties and powers of the trustee shall be set forth in a
trust agreement executed by the employer, which is incorporated herein by
reference. The named fiduciary shall review at regular intervals the performance
of the trustee and shall re-evaluate the appointment of such trustee. After the
named fiduciary has appointed the trustee and has received a written notice of
acceptance of its responsibility, the fiduciary responsibility with respect to
the proper care and custody of plan assets shall be considered as the
responsibility of the trustee. Unless otherwise allocated to an investment
manager, the fiduciary

                                                                              66

<PAGE>

responsibility with respect to investment of plan assets shall likewise be
considered as the responsibility of the trustee.

        (b)     Appointment of Investment Manager - The named fiduciary may
                ---------------------------------
appoint an investment manager who is other than the trustee, which investment
manager may be a bank or an investment advisor registered with the Securities
and Exchange Commission under the Investment Advisors Act of 1940. Such
investment manager, if appointed, shall have sole discretion in the investment
of plan assets, subject to the funding policy. The named fiduciary shall review
at regular intervals no less frequently than annually, the performance of such
investment manager and shall re-evaluate the appointment of such investment
manager. After the named fiduciary has appointed an investment manager and has
received a written notice of acceptance of its responsibility, the fiduciary
responsibility with respect to investment of plan assets shall be considered as
the responsibility of the investment manager.

        (c)     Funding Policy - The named fiduciary shall determine and
                --------------
communicate in writing to the fiduciary responsible for investment of plan
assets the funding policy for the plan. The funding policy shall set forth the
plan's short-range and long-range financial needs, so that said fiduciary may
coordinate the investment of plan assets with the plan's financial needs.

        (d)     Valuation of the Fund - The fund shall be valued by the trustee
                ---------------------
on the first day of each plan year and as of any interim allocation date
determined by the plan administrator. The valuation shall be made on the basis
of the current fair market value of all property in the fund.

                                  ARTICLE VII
                        AMENDMENT AND TERMINATION OF PLAN

        Section 7.1.    Right to Discontinue and Amend
        -----------     ------------------------------

        It is the expectation of the employer that it will continue this plan
indefinitely and make the payments of its contributions hereunder, but the
continuance of the plan is not assumed as a contractual obligation of the
employer and the right is reserved by the employer, at any time, to reduce,
suspend or discontinue its contributions hereunder.

        Section 7.2.    Amendments
        -----------     ----------

        Except as herein limited, the employer shall have the right to amend
this plan at any time to any extent that it may deem advisable. Such amendment
shall be stated in writing. It shall be authorized by action of the board of
directors under the corporate bylaws if the employer is a corporation, by action
of the agreement of the partners as required under the partnership agreement if
the employer is a partnership, or by action of the sole proprietor if the
employer is a sole proprietorship. The authorization of an employer's board of
directors shall designate the person to execute the amendment.

        The employer's right to amend the plan shall be limited as follows:

                                                                              67

<PAGE>

        (a)     No amendment shall increase the duties or liabilities of the
plan administrator, the trustee, or other fiduciary without their respective
written consent.

        (b)     No amendments shall have the effect of vesting in the employer
any interest in or control over any contracts issued pursuant hereto or any
other property in the fund.

        (c)     No amendment to the plan shall be effective to the extent that
it has the effect of decreasing a participant's accrued benefit. Notwithstanding
the preceding sentence, a participant's account balance may be reduced to the
extent permitted under Code Section 412(c)(8). For purposes of this paragraph, a
plan amendment which has the effect of decreasing a participant's account
balance or eliminating an optional form of benefit, with respect to benefits
attributable to service before the amendment shall be treated as reducing an
accrued benefit. Furthermore, if the vesting schedule of a plan is amended, in
the case of an employee who is a participant as of the later of the date such
amendment is adopted or the date it becomes effective, the nonforfeitable
percentage (determined as of such date) of such employee's right to his
employer-derived accrued benefit will not be less than his percentage computed
under the plan without regard to such amendment.

        (d)     No amendment to the vesting schedule adopted by the employer
hereunder shall deprive a participant of his vested portion of his employer
contribution accounts to the date of such amendment. If the plan's vesting
schedule is amended, or the plan is amended in any way that directly or
indirectly affects the computation of the participant's nonforfeitable
percentage or if the plan is deemed amended by an automatic change to or from a
top-heavy vesting schedule, each participant with at least 3 years of service
with the employer may elect, within a reasonable period after the adoption of
the amendment or change, to have the nonforfeitable percentage computed under
the plan without regard to such amendment or change. For participants who do not
have at least one hour of service in any plan year beginning after December 31,
1988, "5 years of service" shall be substituted for "3 years of service" in the
preceding sentence. The period during which the election may be made shall
commence with the date the amendment is adopted or deemed to be made and shall
end on the latest of:

                (1)     60 days after the amendment is adopted;

                (2)     60 days after the amendment becomes effective; or

                (3)     60 days after the participant is issued written notice
of the amendment by the employer or plan administrator.

        Section 7.3.    Protection of Benefits in Case of Plan Merger
        -----------     ---------------------------------------------

        In the event of a merger or consolidation with, or transfer of assets to
any other plan, each participant will receive a benefit immediately after
such merger, consolidation or transfer (if the plan then terminated) which is at
least equal to the benefit the participant was entitled to immediately before
such merger, consolidation or transfer (if the plan had terminated).

                                                                              68

<PAGE>

        Section 7.4.    Termination of Plan
        -----------     -------------------

        (a)     When Plan Terminates - This plan shall terminate upon the
                --------------------
happening of any of the following events: legal adjudication of the employer as
bankrupt; a general assignment by the employer to or for the benefit of its
creditors; the legal dissolution of the employer; or termination of the plan by
the employer.

        (b)     Allocation of Assets - Upon termination, partial termination or
                --------------------
complete discontinuance of employer contributions, the account balance(s) of
each affected participant who is an active participant or who is not an active
participant but has neither received a complete distribution of his vested
accrued benefit nor incurred five one-year breaks in service shall be 100%
vested and nonforfeitable. The amount of the fund assets shall be allocated to
each participant, subject to provisions for expenses of administration of the
liquidation, in the ratio that such participant's account(s) bears to all
accounts. If a participant under this plan has terminated his employment at any
time after the first day of the plan year in which the employer made his final
contribution to the plan, and if any portion of any account of such terminated
participant was forfeited and reallocated to the remaining participants, such
forfeiture shall be reversed and the forfeited amount shall be credited to the
account of such terminated participant.

                                  ARTICLE VIII
                            MISCELLANEOUS PROVISIONS

        Section 8.1.    Exclusive Benefit - Non-Reversion
        -----------     ---------------------------------

        The plan is created for the exclusive benefit of the employees of the
employer and shall be interpreted in a manner consistent with its being a
qualified plan as defined in Section 401(a) of the Internal Revenue Code and
with ERISA. The corpus or income of the trust may not be diverted to or used for
other than the exclusive benefit of the participants or their beneficiaries
(except for defraying reasonable expenses of administering the plan).

        Notwithstanding the above, a contribution paid by the employer to the
trust may be repaid to the employer under the following circumstances:

        (a)     Any contribution made by the employer because of a mistake of
fact must be returned to the employer within one year of the contribution.

        (b)     In the event the deduction of a contribution made by the
employer is disallowed under Code Section 404, such contribution (to the extent
disallowed) must be returned to the employer within one year of the disallowance
of the deduction.

        (c)     If the Commissioner of Internal Revenue determines that the plan
is not initially qualified under the Internal Revenue Code, any contribution
made incident to that initial qualification by the employer must be returned to
the employer within one year after the date the initial qualification is denied,
but only if the application for the qualification is made by the time

                                                                              69

<PAGE>

prescribed by law for filing the employer's return for the taxable year in which
the plan is adopted, or such later date as the Secretary of the Treasury may
prescribe.

     Section 8.2. Inalienability of Benefits
     ------------ --------------------------

     No benefit or interest available hereunder including any annuity contract
distributed herefrom shall be subject to assignment or alienation, either
voluntarily or involuntarily. The preceding sentence shall also apply to the
creation, assignment, or recognition of a right to any benefit payable with
respect to a participant pursuant to a domestic relations order, unless such
order is determined to be a qualified domestic relations order as defined in
Code Section 414(p), or any domestic relations order entered before January 1,
1985. A loan made to a participant and secured by his nonforfeitable account
balance(s) under Section 4.4(b) will not be treated as an assignment or
alienation and such securing account balance(s) shall be subject to attachment
by the plan in the event of default.

     Section 8.3. Employer-Employee Relationship
     ------------ ------------------------------

     This plan is not to be construed as creating or changing any contract of
employment between the employer and its employees, and the employer retains the
right to deal with its employees in the same manner as though this plan had not
been created.

     Section 8.4. Binding Agreement
     ------------ -----------------

     This plan shall be binding on the heirs, executors, administrators,
successors and assigns as such terms may be applicable to any or all parties
hereto, and on any participants, present or future.

     Section 8.5. Separability
     ------------ ------------

     If any provision of this plan shall be held invalid or unenforceable, such
invalidity or unenforceability shall not affect any other provision hereof and
this plan shall be construed and enforced as if such provision had not been
included.

     Section 8.6. Construction
     ------------ ------------

     The plan shall be construed in accordance with the laws of the state in
which the employer was incorporated (or is domiciled in the case of an
unincorporated employer) and with ERISA.

     Section 8.7. Copies of Plan
     ------------ --------------

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

                                                                              70

<PAGE>

     Section 8.8. Interpretation
     ------------ --------------

     Wherever appropriate, words used in this plan in the singular may include
the plural or the plural may be read as singular, and the masculine may include
the feminine.

     IN WITNESS WHEREOF, the Employer has caused this Plan to be executed this
______ day of _________________________, 2002.

                                        EMPLOYER:

                                        THE DROVERS AND MECHANICS BANK

                                        By:_____________________________________

                                              Title:_____________________

                                                                              71

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