Document:

EXHIBIT 10.50
                                                                   -------------

                               GUIDANT CORPORATION

                             RESTRICTED STOCK GRANT

      This Restricted Stock Grant ("Restricted Stock Grant") has been granted
effective ___ (the "Date of Grant"), by Guidant Corporation, an Indiana
corporation, with its principal offices in Indianapolis, Indiana (the
"Company"), to

________________________________________________________________________________
                                   ("Grantee")

Upon the Date of Grant, the fair market value of a share of Common Stock of the
Company was _______.

                                    RECITALS

      Under the Guidant Corporation 1998 Stock Plan ("1998 Plan"), the Company's
Management Development and Compensation Committee of the Board of Directors (the
"Committee") has determined the form of this Restricted Stock Grant and selected
the Grantee, an Eligible Person, to receive this Restricted Stock Grant and the
shares of Common Stock that are subject hereto. The applicable terms of the 1998
Plan are incorporated in this Restricted Stock Grant by reference, including the
definition of terms contained in the 1998 Plan.

                             RESTRICTED STOCK GRANT

      In accordance with the terms of the 1998 Plan, the Committee has made this
Restricted Stock Grant and concurrently has issued or transferred to the Grantee
shares of Common Stock upon the following terms and conditions:

      SECTION 1. Number of Shares. The number of shares of Common Stock issued
or transferred under this Restricted Stock Grant is _______________.

      SECTION 2. Rights of the Grantee as Shareholder. The Grantee, as the owner
of the shares of Common Stock issued or transferred pursuant to this Restricted
Stock Grant, is entitled to all the rights of a shareholder of the Company,
including the right to vote, the right to receive dividends payable either in
stock or in cash, and the right to receive shares in any recapitalization of the
Company, subject, however, to the restrictions stated in this Restricted Stock
Grant. If the Grantee receives any additional shares by reason of being the
holder of the shares of Common Stock issued or transferred under this Restricted
Stock Grant or of the additional shares previously distributed to the Grantee,
all of the additional shares shall be subject to the provisions of this
Restricted Stock Grant. Initially, the shares of Common Stock will be held in an
account maintained with the processor under the 1998 Plan (the "Account"). At
the discretion of the Company, the Company may provide the Grantee with a
certificate for the shares, which would bear a legend as described in Section 7.

<PAGE>

      SECTION 3. Restriction Period. The period of restriction ("Restriction
Period") for the shares of Common Stock issued under this Restricted Stock Grant
shall commence on the Date of Grant and expire on ____; [provided that the
Restriction Period may expire earlier with respect to all or part of the shares
if Performance Vesting Criteria as follows are satisfied: _______________. ] In
addition, the Restriction Period shall expire earlier as to all shares of Common
Stock issued under this Restricted Stock Grant upon the earliest of (i) the date
of death of the Grantee, (ii) the date of qualifying disability of the Grantee,
(iii) the date on which the Grantee becomes a Retired Employee (as defined
below), or (iv) upon the occurrence of a Change of Control of the Company, as
set forth in Section 9 of the 1998 Plan.

      A Retired Employee shall be a person whose employment with the Company has
terminated upon or after the earlier of (i) the day upon which the person's age
plus years of service with the Company, including any predecessor company,
equals 80, (ii) the day the person has attained at least 55 years of age and has
at least 10 years of service with the Company, including any predecessor
company, (iii) the day the person attained 65 years of age or (iv) as the
Committee otherwise shall determine.

      SECTION 4. Conditions During Restriction Period. During the entire
Restriction Period the following conditions must continue to be satisfied:

      a.    the employment of the Grantee with the Company must not terminate
            for any reason.

      b.    the Grantee must not, voluntarily or involuntarily, sell, assign,
            transfer, pledge, or otherwise dispose of the shares of Common Stock
            issued or transferred pursuant to this Restricted Stock Grant; and

      c.    the Grantee must not exercise any appraisal rights with respect to
            the shares of Common Stock issued or transferred pursuant to this
            Restricted Stock Grant that are otherwise available under any
            provisions of the Indiana Business Corporation Law.

For purposes of this Restricted Stock Grant, the Company will determine when
employment terminates. A Grantee's employment will not be deemed to have
terminated if the Grantee goes on military leave, medical leave or other bona
fide leave of absence, if the leave was approved by the Company in writing and
if continued crediting of employment is required by applicable law, the
Company's policies or the terms of Grantee's leave; provided that vesting dates
may be adjusted in accordance with the Company's policies or the terms of
Grantee's leave.

      SECTION 5. Consequences of Failure to Satisfy Conditions. The following
shall be the consequences of Grantee's failure to satisfy the conditions in
Section 4 during the Restriction Period:

      a.    If the condition in Section 4.a is not satisfied, either by act of
            the Grantee or otherwise, (i) the Grantee will forfeit the shares of
            Common Stock

                                      -2-
<PAGE>

            issued or transferred pursuant to this Restricted Stock Grant, (ii)
            the Grantee will assign, transfer, and deliver the certificates or
            any other evidence of ownership of such shares to the Company, (iii)
            all interest of the Grantee in such shares shall terminate and (iv)
            the Grantee shall cease to be a shareholder with respect to such
            shares.

      b.    Any attempted sale, assignment, transfer, pledge or other
            disposition of the shares of Common Stock issued or transferred
            pursuant to this Restricted Stock Grant in violation of the
            condition in Section 4.b, whether voluntary or involuntary, shall be
            ineffective and the Company (i) shall not be required to transfer
            the shares, (ii) may impound any certificates for the shares or
            otherwise restrict Grantee's account and (iii) hold the certificates
            until the expiration of the Restriction Period.

      c.    Any attempted exercise of appraisal rights in violation of the
            condition in Section 4.c shall be ineffective and the Company may
            disregard any purported notice of exercise of appraisal rights by
            the Grantee during the Restriction Period with respect to the shares
            of Common Stock issued or transferred pursuant to this Restricted
            Stock Grant.

      SECTION 6. Lapse of Restrictions. At the end of the Restriction Period, if
the condition specified in Section 4.a has been satisfied during the Restriction
Period, all restrictions shall terminate on the related shares, and the Grantee
shall be entitled to transfer the shares from the Account or receive
certificates without the legend prescribed in Section 7. However, in the event
of an attempted violation of the condition specified in Section 4.b, the Company
shall be entitled to delay transfers or withhold delivery of any of the
certificates if, and for so long as, in the judgment of the Company's counsel,
the Company would incur a risk of liability to any party to whom such shares
were purported to be sold, transferred, pledged or otherwise disposed.

      SECTION 7. Legend on Certificates. Any certificate evidencing ownership of
shares of Common Stock issued or transferred pursuant to this Restricted Stock
Grant that is delivered during the Restriction Period shall bear the following
legend on the back side of the certificate:

      These shares have been issued or transferred subject to a Restricted Stock
      Grant and are subject to substantial restrictions, including but not
      limited to, a prohibition against transfer, either voluntary or
      involuntary, a waiver of any appraisal rights, and a provision requiring
      transfer of these shares to Guidant Corporation (the "Company") without
      any payment in the event of termination of the employment of the
      registered owner, all as more particularly set forth in a Restricted Stock
      Grant, a copy of which is on file with the Company.

At the discretion of the Company, the Company may hold the shares of Common
Stock issued or transferred pursuant to this Restricted Stock Grant in an
Account as described in Section 2, otherwise hold them in escrow during the
Restriction Period, or issue a certificate to the Grantee bearing the legend set
forth above.

                                      -3-
<PAGE>

      SECTION 8. Specific Performance of the Grantee's Covenants. By accepting
this Restricted Stock Grant and the issuance and delivery of the shares of
Common Stock pursuant to this Restricted Stock Grant, the Grantee acknowledges
that the Company does not have an adequate remedy in damages for the breach by
the Grantee of the conditions and covenants set forth in this Restricted Stock
Grant and agrees that the Company is entitled to and may obtain an order or a
decree of specific performance against the Grantee issued by any court having
jurisdiction.

      SECTION 9. Employment with the Company. Nothing in this Restricted Stock
Grant or in the 1998 Plan shall confer upon the Grantee the right to continued
employment with the Company.

      SECTION 10. Section 83(b) Election. If the Grantee makes an election
pursuant to Section 83(b) of the Internal Revenue Code, the Grantee shall
promptly (but in no event after thirty (30) days from grant) file a copy of such
election with the Company, and cash payment for taxes shall be made at the time
of such election.

      SECTION 11. Withholding Tax. Before the Company removes restrictions on
transfer from the Account or delivers a certificate for shares of Common Stock
issued or transferred pursuant to this Restricted Stock Grant that bears no
legend or otherwise delivering shares free from restriction, the Grantee shall
be required to pay to the Company the amount of federal, state or local taxes,
if any, required by law to be withheld ("Withholding Obligation"). Subject to
any subsequent Committee determination, the Company will withhold the number of
shares required to satisfy any Withholding Obligation, and provide to Grantee a
net balance of shares ("Net Shares") unless the Company receives notice not less
than five (5) days before any Withholding Obligation arises that Grantee intends
to deliver funds necessary to satisfy the Withholding Obligation in such manner
as the Company may establish or permit. Notwithstanding any such notice, if
Grantee has not delivered funds within fifteen (15) days of after the
Withholding Obligation arises, the Company may elect to deliver Net Shares.

      SECTION 12. Notices and Payments. Any notice to be given by the Grantee
under this Restricted Stock Grant shall be in writing and shall be deemed to
have been given only upon receipt by the Treasurer of the Company at 111
Monument Circle, 29th Floor, Indianapolis, IN 46204, or at such address as may
be communicated in writing to the Grantee from time to time. Any notice or
communication by the Company to the Grantee under this Restricted Stock Grant
shall be in writing and shall be deemed to have been given if mailed or
delivered to the Grantee at the address listed in the records of the Company or
at such address as specified in writing to the Company by the Grantee.

      SECTION 13. Waiver. The waiver by the Company of any provision of this
Restricted Stock Grant shall not operate as, or be construed to be, a waiver of
the same or any other provision of this Restricted Stock Grant at any subsequent
time for any other purpose.

      SECTION 14. Termination or Modification of Restricted Stock Grant. This
Restricted Stock Grant shall be irrevocable except that the Company shall have
the right under Section 11(e) of the 1998 Plan to revoke this Restricted Stock
Grant at any time during the

                                      -4-
<PAGE>

Restriction Period if it is contrary to law or modify this Restricted Stock
Grant to bring it into compliance with any valid and mandatory law or government
regulation. Upon request in writing by the Company, the Grantee will tender any
certificates for amendment of the legend or for change in the number of shares
of Common Stock issued or transferred as the Company deems necessary in light of
the amendment of this Restricted Stock Grant. In the event of revocation of this
Restricted Stock Grant pursuant to the foregoing, the Company may give notice to
the Grantee that the shares of Common Stock are to be assigned, transferred and
delivered to the Company as though the Grantee's employment with the Company
terminated on the date of the notice.

      SECTION 15. Section Headings. The section headings in this Restricted
Stock Grant are for convenience of reference only and shall not be deemed a part
of, or germane to, the interpretation or construction of this Restricted Stock
Grant.

      SECTION 16. Determinations by Committee. Determinations by the Committee
shall be final and conclusive with respect to the interpretation of the 1998
Plan and this Restricted Stock Grant.

      SECTION 17. Governing Law. The validity and construction of this
Restricted Stock Grant shall be governed by the laws of the State of Indiana.

      IN WITNESS WHEREOF, the Company has caused this Restricted Stock Grant to
be executed and granted in Indianapolis, Indiana.

                                                GUIDANT CORPORATION

                                                By:
                                                   _____________________________

                                       -5-EXHIBIT 10.51
                                                                   -------------

                          THE GUIDANT EMPLOYEE SAVINGS
                            AND STOCK OWNERSHIP PLAN

                           January 1, 2003 Restatement

<PAGE>

                                TABLE OF CONTENTS
                                -----------------

                                                                            Page

ESTABLISHMENT AND PURPOSE......................................................1

ARTICLE I.   DEFINITIONS.......................................................2
      1.01.  Definitions.......................................................2

ARTICLE II.  ELIGIBILITY......................................................13
      2.01.  General..........................................................13
      2.02.  Special Status Employees.........................................13
      2.03.  Year of Eligibility Service......................................13
      2.04.  Hour of Service..................................................13
      2.05.  Special Rules for Crediting Hours of Service.....................14
      2.06.  Reemployment.....................................................15

ARTICLE III. NON-ESOP CONTRIBUTIONS...........................................15
      3.01.  Salary Reduction Contributions...................................15
      3.02.  Election of Salary Reduction Contributions.......................15
      3.03.  Limitations on Salary Reduction Contributions....................16
      3.04.  Return of Excess Deferrals and Excess Salary Reduction
             Contributions....................................................18
      3.05.  Nonforfeitability of Contributions...............................20
      3.06.  Employer Contributions...........................................20
      3.07.  Contributions Not Recoverable by Employer........................24
      3.08.  Return of Employer Contributions.................................24
      3.09.  Rollover Contributions...........................................24
      3.10.  Hardship Distributions Under Other Plans.........................25

ARTICLE IV.  LIMITATIONS ON ANNUAL ADDITIONS..................................25
      4.01.  Basic Limitation.................................................25
      4.02.  Definitions......................................................26
      4.03.  Preclusion of Excess Annual Additions............................27
      4.04.  Disposal of Excess Annual Additions..............................27
      4.05.  Other Defined Contribution Plans.................................27

ARTICLE V.   INVESTMENT PROVISIONS............................................27
      5.01.  Investment Options--Salary Reduction Contributions and Rollover
             Contributions....................................................27
      5.02.  Change of Investment Directions..................................28
      5.03.  Failure to Make Investment Direction.............................28
      5.04.  Direction To Invest in Two or More Funds.........................28
      5.05.  Transfers Between Funds..........................................29
      5.06.  Company Stock Fund...............................................29
      5.07.  Trustee's Investment Discretion..................................29
      5.08.  Transferred Participant Loans....................................30

ARTICLE VI.  PARTICIPANTS' ACCOUNTS...........................................30

<PAGE>

      6.01.  Separate Accounts................................................30
      6.02.  Accounting for Units Under Investment Funds......................31
      6.03.  Value of Units...................................................32
      6.04.  Units Credited To Participant Accounts...........................32

ARTICLE VII. HARDSHIP WITHDRAWALS FROM SALARY REDUCTION CONTRIBUTIONS
             ACCOUNTS.........................................................32
      7.01.  Withdrawals......................................................32

ARTICLE VIII. WITHDRAWALS FROM NON-SALARY REDUCTION CONTRIBUTION
              ACCOUNTS........................................................34
      8.01.  Voluntary Withdrawals............................................34
      8.02.  Categories of Contributions......................................34
      8.03.  Restrictions Applicable to Participants with Less Than Five
             Years of Service.................................................35
      8.04.  General Provisions Applicable to Withdrawals.....................36

ARTICLE IX.  RESTRICTIONS ON WITHDRAWALS......................................36
      9.01.  Restrictions Upon Number of Withdrawals..........................36
      9.02.  Notice Requirements for Withdrawals..............................36

ARTICLE X.   PAYMENTS UPON TERMINATION OF EMPLOYMENT..........................37
      10.01. Terms of Payment.................................................37
      10.02. Beneficiary and Payment Upon Death...............................44
      10.03. Inability To Locate Payee........................................46
      10.04. Qualified Domestic Relations Orders..............................46

ARTICLE XI. METHODS OF PAYING WITHDRAWALS AND PAYMENTS........................46
      11.01. Payment from Company Stock Fund..................................46
      11.02. Optional Direct Rollover.........................................47

ARTICLE XII. ADMINISTRATION...................................................47
      12.01. Administrative Committee.........................................47
      12.02. Appointment, Resignation, and Organization of Committees.........47
      12.03. Powers and Duties of the Employee Benefits Committee.............49

ARTICLE XIII. TITLE TO ASSETS AND MANAGEMENT OF FUNDS.........................51
      13.01. Fund Advisory Committee..........................................51
      13.02. Trustee..........................................................51

ARTICLE XIV. MISCELLANEOUS PROVISIONS.........................................52
      14.01. Nonalienation....................................................52
      14.02. Spendthrift Provision............................................53
      14.03. Nonguarantee.....................................................53
      14.04. Indemnification of Certain Fiduciaries...........................53
      14.05. Payments from the end............................................54
      14.06. Employment Rights................................................55
      14.07. Voting Rights....................................................55
      14.08. Tender Offers....................................................55

                                      -ii-

<PAGE>

      14.09. Governing Law....................................................57
      14.10. Merger or Consolidation..........................................57
      14.11. Transfer from Affiliate..........................................57
      14.12. Reorganization...................................................58
      14.13. Loans to Participants............................................58
      14.14. Transfer From Sulzer Medica USA Retirement Plan..................59
      14.15. Transfer From EVT Plan...........................................60
      14.16. Transfer From InControl Plan.....................................61
      14.17. Transfer From CTS Plan...........................................61
      14.18. Transfer From DVI Plan...........................................61

ARTICLE XV.  AMENDMENT OR TERMINATION.........................................61
      15.01. Internal Revenue Approval, ERISA Compliance......................61
      15.02. Modification and Termination.....................................61
      15.03. Termination of Participation by Subsidiaries and Affiliate.......62
      15.04. Distribution on Termination......................................63

ARTICLE XVI. AGENT FOR SERVICE OF PROCESS.....................................63

ARTICLE XVII. TOP HEAVY PLAN..................................................63
      17.01. General Rule.....................................................63
      17.02. Top-Heavy Plan...................................................63
      17.03. Definitions......................................................64
      17.04. Requirements Applicable if Plan is Top-Heavy.....................66

ARTICLE XVIII. PAYSOP ACCOUNT.................................................67
      18.01. Transfer of Assets...............................................67
      18.02. Investment In the Company Stock Fund.............................67
      18.03. Withdrawal of PAYSOP Accounts....................................67
      18.04. Distribution of PAYSOP Accounts..................................67
      18.05. Qualified Domestic Relations Orders..............................68

ARTICLE XIX. ESOP PROVISIONS..................................................68
      19.01. Introduction.....................................................68
      19.02. Definitions......................................................69
      19.03. Eligibility......................................................69
      19.04. Employer Contributions...........................................69
      19.05. Payment to Trustee...............................................74
      19.06. Limits on Annual Additions.......................................75
      19.07. Limits on Employer Contributions.................................76
      19.08. Vesting and Forfeitures..........................................77
      19.09. ESOP Accounts....................................................77
      19.10. Payment of Dividends.............................................77
      19.11. ESOP Shares Fund.................................................78
      19.12. Exempt Loan Provisions...........................................79
      19.13. Distribution of ESOP Accounts....................................84
      19.14. Withdrawal and Diversification Rights............................84

                                      -iii-

<PAGE>

      19.15. Voting and Tendering of Company Securities.......................85
      19.16. Election Regarding Dividends.....................................85

ARTICLE XX. AMENDMENT OF THE PLAN FOR EGTRRA..................................86
      20.01. Adoption and Effective Date of Amendment.........................86
      20.02. Supersession of Inconsistent Provisions..........................86
      20.03. Limitation on Contributions......................................86
      20.04. Increase In Compensation Limit...................................87
      20.05. Modification of Top-Heavy Rules..................................87
      20.06. Direct Rollovers of Plan Distributions...........................89
      20.07. Rollovers Disregarded in Involuntary Cash-Outs...................89
      20.08. Repeal of Multiple Use Test......................................90
      20.09. Elective Deferrals:  Contribution Limitation.....................90
      20.10. Catch-Up Contributions...........................................90
      20.11. Suspension Period Following Hardship Distribution................90

ARTICLE XXI. MINIMUM DISTRIBUTION REQUIREMENTS................................90
      21.01. General Rules....................................................90
      21.02. Time and Manner of Distribution..................................91
      21.03. Required Minimum Distributions During Participant's Lifetime.....92
      21.04. Required Minimum Distributions After Participant's Death.........92
      21.05. Election of Five Year Rule.......................................94
      21.06. Definitions......................................................94

                                      -iv-

<PAGE>

              THE GUIDANT EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN
                               (2003 Restatement)

                            ESTABLISHMENT AND PURPOSE
                            -------------------------

          Guidant Corporation (the "Company") hereby amends and restates The
Guidant Employee Savings and Stock Ownership Plan ("Plan"), which was originally
effective as of January 1, 1995. Except as otherwise specified in the Plan, the
effective date of this amendment and restatement is January 1, 2003. The purpose
of the Plan is to help the Company's eligible employees, and the eligible
employees of its subsidiary and affiliated companies that adopt the Plan, to
provide additional security for their retirement by (1) affording those
employees the means of making regular savings and (2) providing Employer
Contributions invested in stock of Guidant Corporation as an incentive to
enhance their individual performance and the performance of Guidant Corporation.

          The Plan contains an employee stock ownership plan (the "ESOP"), which
is designed to invest exclusively in qualifying employer securities. The
non-ESOP portion of the Plan (the "Profit-Sharing Plan") is intended to be a
profit-sharing plan that is qualified under Code section 401(a), with a cash or
deferred arrangement qualified under Code section 401(k). The ESOP is intended
to be a stock bonus plan and an employee stock ownership plan qualified under
Code sections 401(a) and 4975(e)(7) and described in ERISA section 407(d)(6).
The Profit-Sharing Plan and the ESOP together are designed to constitute a
single plan under Treasury Regulation ss. 1.414(1)-l(b)(1). The Plan is also
designed to satisfy the requirements of ERISA. The Trust Fund maintained under
the Plan is intended to be tax-exempt under Code section 501(a).

          Guidant Corporation was previously a wholly-owned subsidiary of Eli
Lilly and Company. All of the stock of Guidant Corporation was distributed to
the shareholders of Eli Lilly and Company in a tax-free reorganization within
the meaning of Code section 368(a)(1)(D). Following adoption of this Plan,
employees of Guidant Corporation and its affiliates who were participating in
The Lilly Employee Savings Plan had their ESOP and PAYSOP accounts in The Lilly
Employee Savings Plan transferred to this Plan. In addition, the Advanced
Cardiovascular Systems, Inc. Employee Savings Plan, the Cardiac Pacemakers, Inc.
Employee Savings Plan, and the Origin Medsystems, Inc. Employee Savings Plan
were merged into this Plan, and all employees who were participating in those
plans now participate in this Plan. The Employees' 401(k) Plan of Devices for
Vascular Intervention, Inc. will be merged into this Plan as soon as practicable
after March 31, 2003. To the extent the accounts of employees who were
participating in The Lilly Employee Savings Plan or an affiliate plan were
transferred to or merged into this Plan, any beneficiary designation or any
other applicable agreement, elections, or consents that participants, spouses,
or beneficiaries validly executed under those plans shall be honored by this
Plan, to the extent not inconsistent with this Plan and unless otherwise
required by law.

          The Plan, as amended from time to time, shall be known as "The Guidant
Employee Savings and Stock Ownership Plan." The rights to benefits of any
employee whose employment terminated prior to the effective date of this
restatement or any subsequent

<PAGE>

amendment shall be determined solely by the provisions of the Plan in effect at
the time of termination of employment, unless the Plan expressly provides
otherwise.

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

          1.01.   Definitions.
                  -----------

               (a)  The following words and phrases shall have the following
          meanings unless a different meaning is plainly required by the
          context:

                    (1)  Base Earnings. The term "Base Earnings" means base pay
               on, or converted to, a monthly basis, provided that in no event
               shall base earnings include amounts paid as commissions or sales
               bonuses. Base earnings shall include base pay that would have
               been paid to the Participant during the Plan Year in the absence
               of a salary reduction agreement but are excluded from gross
               income pursuant to Code section 125, 132(f) or 402(g). For a
               Participant's initial year of participation in the Plan, Base
               Earnings will be recognized for the entire Plan Year.

                    Notwithstanding any other provision of the Plan to the
               contrary, except for purposes of Section 3.01, the Base Earnings
               of each Participant taken into account under the Plan in any Plan
               Year shall not exceed $150,000, as adjusted for increases in the
               limitation pursuant to Code section 401 (a)(17)(B).

                    (2)  Base Earnings Plus Commissions. The term "Base Earnings
               Plus Commissions" means, with respect to a Participant for a
               period, the sum of the Participant's Base Earnings for the period
               plus any amounts paid to the Participant as sales commissions
               during the period. For this purpose, "sales commissions" means
               sales commissions (whether revenue based, unity based, or
               otherwise) and sales bonuses (whether quarterly, monthly, annual,
               percentage to revenue, unit, or otherwise) to which a Participant
               is entitled due to the sale of an Employer's products by the
               Participant. Base Earnings Plus Commissions shall include any
               Base Earnings or sales commissions that would have been paid to a
               Participant during a Plan Year in the absence of a salary
               reduction agreement but are excluded from gross income pursuant
               to Code section 125, 132(f) or 402(g). For a Participant's
               initial year of participation in the Plan, Base Earnings Plus
               Commissions will be recognized for the entire Plan Year.

                    Notwithstanding any other provision of the Plan to the
               contrary, except for purposes of Section 3.01, the Base Earnings
               Plus Commissions of each Participant taken into account under the
               Plan in any Plan Year shall not exceed $150,000, as adjusted for
               increases in the limitation pursuant to Code section
               401(a)(17)(B).

                                       -2-

<PAGE>

                    (3)  Board of Directors. The term "Board of Directors" means
               the Board of Directors of the Company.

                    (4)  Code. The term "Code" means the Internal Revenue Code
               of 1986, as amended from time to time, and interpretive rules and
               regulations.

                    (5)  Company. The term "Company" means Guidant Corporation.

                    (6)  Disabled Employee. The term "Disabled Employee" means
               an Employee who is unable to perform the material duties of his
               regular occupation with the Employer in the same salary grade
               that is commensurate with the Employee's education, training, and
               experience; provided that the inability results from an injury or
               illness that requires the Employee to be under the care of a
               licensed physician; and provided further that the inability is
               not attributable to intentionally self-inflicted injuries
               (whether sane or insane), or to active participation in a riot.
               The term "Disability" means the condition that causes the
               Employee to become a Disabled Employee.

                    (7)  Employee. The term "Employee" means a person

                         (A)  Who

                              (i)   is a citizen of the United States, but not a
                         resident of the Commonwealth of Puerto Rico, employed
                         by an Employer, or

                              (ii)  is a citizen or resident of the United
                         States, designated by the Company as an international
                         service employee, employed by a Qualified Subsidiary
                         and as to whom no contributions under a funded plan of
                         deferred compensation are being provided by any person
                         other than the Company with respect to the remuneration
                         paid to such person by the Qualified Subsidiary; and

                         (B)  who receives regular compensation from an Employer
                    or Qualified Subsidiary that the Employer or Qualified
                    Subsidiary initially reports on a federal wage and tax
                    statement (Form W-2); and

                         (C)  who is not a member of a recognized
                    collective-bargaining unit, unless there is a
                    collective-bargaining agreement making the Plan applicable
                    to members of that unit.

                         (D)  The term "Employee" also means a person, who, in
                    addition to meeting the requirement of Section
                    1.01(a)(7)(C),

                                       -3-

<PAGE>

                              (i)    is not a citizen of the United States;

                              (ii)   is not a resident of the Commonwealth
                         of Puerto Rico;

                              (iii)  is employed by an Employer or an affiliate
                         (as defined in Section 1.01(a)(26)(A)(ii)); and

                              (iv)   has been selected for participation in the
                         Plan by the Salary Committee of the Company or its
                         designee.

                         (E)  The term "Employee" also means a Leased Employee
                    who is an employee of Eli Lilly and Company providing
                    services to the Company, but does not include any other
                    Leased Employees.

                         (F)  The term "Employee" also means a person who, in
                    addition to meeting the requirement of Section
                    1.01(a)(7)(C),

                              (i)    is a resident of the Commonwealth of Puerto
                         Rico;

                              (ii)   is employed by an Employer and classified
                         as a global service employee; and

                              (iii)  receives regular compensation from the
                         Employer through a payroll in the United States.

                         (G)  The term "Employee" also means a person who, in
                    addition to meeting the requirement of Section
                    1.01(a)(7)(C),

                              (i)   is not a citizen or permanent resident of
                         the United States;

                              (ii)   is eligible to participate in one or more
                         employee benefit plans maintained by an Employer or
                         Qualified Subsidiary (other than the Plan); and

                              (iii)   receives regular compensation from an
                         Employer or Qualified Subsidiary through a payroll in
                         the United States for services performed in the United
                         States, that the Employer or Qualified Subsidiary
                         initially reports on a federal wage and tax statement
                         (Form W-2).

                    A person who meets the requirements of Section 1.01(a)
               (7)(A)(ii), (B), and (C), or a person who meets the requirements
               of Section

                                       -4-

<PAGE>

               1.01(a)(7)(D) and is not employed by an Employer, shall be deemed
               to be an Employee of the Company for purposes of the Plan.

                    (8)  Employee Benefits Committee. The term "Employee
               Benefits Committee" means the committee established pursuant to
               Section 12.01 to administer the Plan.

                    (9)  Employer. The term "Employer" means the Company and any
               subsidiary and affiliated company specifically designated by the
               Board of Directors as such for the purposes of this Plan,
               provided that the subsidiary or affiliated company adopts this
               Plan by resolution of its own board of directors. A subsidiary or
               affiliated company shall cease to be an Employer as of the date
               on which the subsidiary or affiliated company ceases to be a
               member of the controlled group (within the meaning of Code
               section 414(b) or 414(c)) of which the Company is a member.

                    (10) Employer Contribution. The term "Employer Contribution"
               means the Minimum Matching Contributions, Additional Matching
               Contributions, and Basic Contributions that an Employer makes to
               the Profit-Sharing Plan pursuant to Section 3.06 or to the ESOP
               pursuant to Section 19.04, any forfeitures that are allocated to
               Participants' Accounts pursuant to Section 3.06 or 19.04, and any
               employer contributions made under a Prior Savings Plan that are
               transferred to or merged into this Plan.

                    (11) ERISA. The term "ERISA" means the Employee Retirement
               Income Security Act of 1974, as amended from time to time, and
               interpretive rules and regulations.

                    (12) Excess Salary Reduction Contribution. The term "Excess
               Salary Reduction Contribution" means, with respect to any
               Participant, that portion of the amount that he has elected to
               have contributed to the Profit-Sharing Plan as a Salary Reduction
               Contribution pursuant to Section 3.02 but that exceeds the actual
               deferral percentage limitations described in Section 3.03(a).

                    (13) Fund Advisory Committee. The term "Fund Advisory
               Committee" means the committee established pursuant to Section
               13.01.

                    (14) Leased Employee. The term "Leased Employee" means any
               person who is not an employee of the Company (including, for
               purposes of this paragraph, an affiliate of the Company) and who
               provides services to the Company, provided that (i) the services
               are provided pursuant to an agreement between the Company and any
               other person ("leasing organization"); (ii) the person has
               performed the services for the Company on a substantially
               full-time basis for a period of at least 1 year; and (iii) the
               services are performed under the primary direction and

                                       -5-

<PAGE>

               control of the Company; provided that, an individual shall not be
               considered a Leased Employee of the Company if (i) the employee
               is covered by a money purchase plan maintained by the leasing
               organization providing: (1) a nonintegrated employer contribution
               rate of at least 10 percent 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, 132(f),
               402(a)(8), 402(h) or 403(b), (2) immediate participation, and (3)
               full and immediate vesting; and (ii) leased employees do not
               constitute more than 20 percent of the Company's non-highly
               compensated workforce.

                    (15) Normal Retirement Age. The term "Normal Retirement Age"
               means age 65.

                    (16) Participant. The term "Participant" means an Employee
               who has satisfied the requirements of Article IL

                    (17) Participant's Account. The term "Participant's Account"
               means the sum of the amounts credited to the Participant at the
               time of reference in each of the categories listed in Section
               6.01.

                         (A)  The portion of a Participant's Account that is
                    attributable to contributions made under the Profit- Sharing
                    Plan, including a Participant's Profit-Sharing Account (or
                    similar account) in a Prior Savings Plan that is transferred
                    to or merged into this Plan, and earnings thereon, shall be
                    referred to as the Participant's "Profit-Sharing Account."

                         (B)  The portion of a Participant's Account that
                    reflects a Participant's interest in the ESOP, including a
                    Participant's ESOP Account (or similar account) in a Prior
                    Savings Plan that is transferred to or merged into this
                    Plan, shall be referred to as the Participant's "ESOP
                    Account."

                         (C)  The portion of a Participant's Account that
                    represents amounts from a Participant's PAYSOP Account (or
                    similar account) in a Prior Savings Plan transferred to or
                    merged into this Plan, and earnings thereon, shall be
                    referred to as the Participant's "PAYSOP Account."

                    (18) Plan. The term "Plan" means the Guidant Employee
               Savings and Stock Ownership Plan as modified or amended from time
               to time as herein provided. The Plan shall comprise both a
               profit-sharing plan described in Code section 401(a) with a cash
               or deferred arrangement described in Code section 401(k) (the
               "Profit-Sharing Plan") and a stock bonus plan and employee stock
               ownership plan described in Code sections

                                       -6-

<PAGE>

               401(a) and 4975(e)(7) and section 407(d)(6) of ERISA (the
               "ESOP"). The ESOP shall be known as the "Guidant Corporation
               Common Stock Fund."

                    (19)  Plan Fiduciary. The term "Plan Fiduciary" means the
               following:

                         (A)  The Board of Directors, but only to the extent
                    that the Board of Directors appoints Plan Fiduciaries or
                    performs other functions with respect to the Plan that are
                    identified in ERISA as fiduciary functions. The Board of
                    Directors shall not be a "Plan Fiduciary" to the extent that
                    it makes decisions regarding the design of the Plan or
                    performs other settlor functions with respect to the Plan.

                         (B)  Any Investment Manager appointed pursuant to
                    Section 13.02(d).

                         (C)  The Employee Benefits Committee and the Fund
                    Advisory Committee.

                         (D)  Any Trustee.

                    A person or entity shall be a Plan Fiduciary only with
               respect to the duties allocated to him or it under the terms of
               the Plan and only to the extent that those duties are identified
               by ERISA as fiduciary functions.

                    (20) Plan Year. The term "Plan Year" means the calendar
               year.

                    (21) Prior Savings Plan. The term "Prior Savings Plan" shall
               mean the Lilly Employee Savings Plan, the Advanced Cardiovascular
               Systems, Inc. Employee Savings Plan, the Cardiac Pacemakers, Inc.
               Employees Savings Plan, the Origin Medsystems, Inc. Employees
               Savings Plan, or the Employees' 401(k) Plan of Devices for
               Vascular Intervention, Inc., as amended from time to time.

                    (22) Qualified Subsidiary. The term "Qualified Subsidiary"
               means a corporation other than an Employer that is either

                         (A)  A foreign corporation not less than ten percent
                    (10%) of the voting stock of which is owned, directly or
                    through one or more subsidiaries, by the Company, but only
                    if the Company has entered into an agreement under Code
                    section 3121(l) or the corresponding provisions of any
                    subsequent revenue law that applies to the foreign
                    corporation and that agreement remains in effect, or,

                         (B)  A domestic corporation not less than 80 percent of
                    the voting stock of which is owned by the Company, 95
                    percent or

                                       -7-

<PAGE>

                    more of the gross income of which, for the three-year period
                    immediately preceding the close of the taxable year (or for
                    such part of such period during which the corporation was in
                    existence), was derived from sources without the United
                    States, and 90 percent or more of the gross income of which
                    for such period (or such part) was derived from the active
                    conduct of a trade or business.

                    (23) Retirement. The term "Retirement" or "Retire" means a
               Participant's termination of employment with the Employer after:

                         (A)  The Participant has attained Normal Retirement
                    Age;

                         (B)  The Participant has attained age 55 and completed
                    ten years of Service; or

                         (C)  With respect to a Participant who is eligible for
                    transition benefits under The Guidant Retirement Plan, the
                    sum of the Participant's full years of age and years of
                    Service equals or exceeds 80.

                    (24) Rollover Contribution. The term "Rollover Contribution"
               means a contribution made to the Profit-Sharing Plan pursuant to
               Section 3.09.

                    (25) Salary Reduction Contribution. The term "Salary
               Reduction Contribution" means a contribution made by an Employer
               (or, in the case of a Leased Employee treated as an Employee
               under Section 1.01(a)(7)(E), the contribution made by Eli Lilly
               and Company) on behalf of an Employee pursuant to Section 3.01
               and any salary reduction contributions made under a Prior Savings
               Plan on behalf of a Participant that are transferred to this
               Plan.

                    (26) Service. The term "Service" means employment that is
               credited under the Plan in accordance with the following rules:

                         (A)  Employers for Whom Service Is Credited. Service
                    means periods of employment with:

                              (i)    an Employer;

                              (ii)   any member of a controlled group of
                         corporations (within the meaning of Code section
                         414(b), (c), (m), or (o) of which an Employer is a
                         member (hereinafter referred to as an "affiliate");

                              (iii)  a Qualified Subsidiary;

                                       -8-

<PAGE>

                              (iv)   any corporation that is a predecessor
                         corporation of an Employer, or a corporation merged,
                         consolidated, or liquidated into an Employer or a
                         predecessor of an Employer, or a corporation,
                         substantially all of the assets of which have been
                         acquired by an Employer, if the Employer maintains a
                         plan of such a predecessor corporation. If the Employer
                         does not maintain a plan maintained by such a
                         predecessor, periods of employment with the
                         predecessor shall be credited as Service only to the
                         extent required under regulations prescribed by the
                         Secretary of the Treasury pursuant to Code section
                         414(a)(2); and

                              (v)    for Participants who began participation in
                         the Plan before January 1, 1996, periods of employment
                         that are counted as Service under a Prior Savings Plan.

                              (vi)   for Participants who began participation in
                         the Plan on January 1, 1998 and who, as of December 31,
                         1997, were employees of Endovascular Technologies,
                         Inc., periods of employment that counted as service
                         under the 401(k) Savings Plan For Employees of
                         Endovascular Technologies, Inc.

                              (vii)  for Participants who began participation in
                         the Plan on January 1, 1999, and who, as of December
                         31, 1998, were employees of InControl, Inc., periods of
                         employment that counted as service under the InControl
                         401(k) Plan.

                              (viii) for Participants who began participation in
                         the Plan on May 1, 1999, and who, as of April 30, 1999,
                         were employees of Intermedics, Inc., periods of
                         employment that counted as service under the Sulzer
                         Medica USA Retirement Plan.

                              (ix)   for Participants who began participation in
                         the Plan on January 1, 2000, and who, as of December
                         31, 1999, were employees of CardioThoracic Systems,
                         periods of employment that counted as service under the
                         CardioThoracic Systems 401(K) Savings Plan.

                    Notwithstanding the foregoing, an Employee may receive
               credit for periods of employment with an affiliate or predecessor
               corporation in addition to that which is required under
               regulations prescribed by the Secretary of the Treasury pursuant
               to Code section 414(a)(2), or for periods of employment with
               prior employers, provided that the Employee

                                       -9-

<PAGE>

               Benefits Committee specifically so determines and records its
               decision in writing.

                         (B)  Periods Credited. An Employee shall receive credit
                    for Service under the Plan from the date he is first
                    credited with an hour of Service to the date his employment
                    is severed. In no event shall an Employee receive credit
                    more than once for the same period of Service. Except as
                    otherwise provided in Section 1.01(a) (26)(F) with regard to
                    leaves of absence, an Employee's employment shall be severed
                    on the earlier of the date on which he Retires, is
                    discharged, resigns, or dies, or the first anniversary of
                    his first date of absence for any reason other than
                    retirement, discharge, resignation, or death. A Disabled
                    Employee's employment shall be severed on the first
                    anniversary of the date on which he becomes disabled.

                    An Employee shall receive credit for Service, and shall not
               be deemed to have severed from employment, during, by way of
               illustration but not by way of limitation, the following:

                              (i)    any period of unpaid leave for military
                         service in the armed forces of the United States
                         required to be credited by law; provided, however, that
                         the Employee returns to employment within the period
                         his reemployment rights are protected by law;

                              (ii)   any period of unpaid family or medical
                         leave required to be credited by law; provided,
                         however, that the Employee returns to employment at the
                         expiration of the leave;

                              (iii)  any unpaid absence from work during which
                         no duties are performed due to the pregnancy of the
                         Employee, the birth of a child of the Employee, the
                         placement of a child with the Employee in connection
                         with the adoption of the child by the Employee or the
                         caring for a child for a period immediately following
                         birth or placement, but only to the extent required by
                         law;

                              (iv)   any other period as specified by the
                         Employee Benefits Committee in writing or as required
                         by law.

                         (C)  Reemployment Within 12 Months. Notwithstanding the
                    foregoing, in the event that an Employee's Service is
                    severed but he is reemployed within the 12 consecutive

                                      -10-

<PAGE>

                    month period commencing on the date of severance, the period
                    of severance shall constitute Service.

                         (D)  Measurement of Service. Service shall be measured
                    in years and days. A period of 365 days of Service shall
                    constitute one Year of Service. All periods of service shall
                    be aggregated for purposes of this Section.

                         (E)  One Year Period of Severance. A one year period of
                    severance shall occur if employment is severed and the
                    Employee is not reemployed within the 12 consecutive month
                    period commencing on the date of severance.

                         (F)  Leaves of Absence. An Employee shall receive
                    credit for Service for all purposes under the Plan during a
                    leave of absence in accordance with the provisions of
                    Section 1.01(a)(26)(B) and the following rules:

                              (i)    Unpaid Leaves. An Employee shall receive
                         credit for Service under the Plan during the period of
                         an unpaid leave, other than a Special Educational Leave
                         as provided in Section 1.01(a)(26)(F)(iii), only in
                         accordance with Section 1.01(a)(26)(B). The employment
                         of an Employee who fails to return to employment shall
                         be deemed severed, and credit for Service shall cease,
                         as of the first anniversary of the Employee's first
                         date of absence for the leave, unless employment is
                         earlier severed by reason of the Employee's
                         Retirement, discharge, resignation, or death. Where
                         such an Employee's period of leave is authorized to
                         extend beyond the period for which Service is credited
                         under Section 1.01(a)(26)(B), the Employee shall not
                         be deemed to have terminated employment for purposes of
                         payments upon termination of employment under Article X
                         until the date upon which the authorized leave period
                         expires and the Employee fails to return to employment.

                              (ii)   Paid Leaves. An Employee shall receive
                         credit for Service under the Plan during the period of
                         any paid leave of absence. The employment of an
                         Employee who fails to return to employment as of the
                         date specified for the termination of the paid leave
                         shall be severed, and credit for Service shall cease,
                         as of the first anniversary of the date specified for
                         the termination of the leave, unless employment is
                         earlier severed by reason of the Employee's retirement,
                         discharge, resignation, or death. Such an Employee
                         shall be deemed to have terminated employment

                                      -11-

<PAGE>

                         for purposes of payments upon termination of
                         employment under Article X as of the date credit for
                         Service ceases.

                              (iii)  Special Educational Leaves. An Employee who
                         does not return to employment as of the date specified
                         for the termination of the Special Educational Leave
                         shall be governed by the provisions for unpaid leave in
                         Section 1.01(a)(26)(F)(i). An Employee who returns to
                         employment as of the date specified for the termination
                         of the Special Educational Leave shall receive credit
                         for Service under the Plan for the entire period of the
                         Special Educational Leave.

                         (G)  Crediting of Service for Leased Employees. An
                    individual who is a Leased Employee shall receive credit for
                    Service under the Plan during any period in which the
                    individual is a Leased Employee.

                    (27) Shares. The term "Shares" means shares of Guidant
               Corporation common stock.

                    (28) Split. The term "Split" means September 25, 1995, the
               date as of which Guidant Corporation ceased to be a member of the
               controlled group of corporations that includes Eli Lilly and
               Company.

                    (29) Trust. The term "Trust" means a trust created by and
               under any Trust Agreement.

                    (30) Trust Agreement. The term "Trust Agreement" means an
               agreement provided for in Article XIII, as that agreement may be
               modified from time to time.

                    (31) Trustee. The term "Trustee" means the trustee or the
               co-trustees under a Trust Agreement and any successor trustee or
               co-trustees hereafter designated under the terms of any Trust
               Agreement.

                    (32) Unit of Participation or Unit. The term "Unit of
               Participation" or "Unit" means the unit of measure of a
               Participant's proportionate interest in one of the unsegregated
               funds described in Article V.

                    (33) Value Determination Date. The term "Value Determination
               Date" means the date as of which the value of each Unit in each
               Fund shall be determined.

               (b)  Gender. Words used in the masculine gender shall be
          construed to include the feminine gender, where appropriate, and vice
          versa.

                                      -12-

<PAGE>

                            ARTICLE II. ELIGIBILITY
                            -----------------------

          2.01.  General.
                 -------

          An Employee shall be eligible to participate in the Plan for all
purposes upon commencement of employment with an Employer.

          2.02.  Special Status Employees.
                 ------------------------

          Notwithstanding the provisions of Section 2.01, an Employee who is
classified as a special status Employee shall not be eligible to participate in
the Plan and to have Salary Reduction Contributions contributed to the
Profit-Sharing Plan on his behalf until the first day of the month following his
completion of one year of eligibility service. An Employee shall be considered a
special status Employee if his employment status is temporary or seasonal, he is
a part-time Employee regularly scheduled to work fewer than 20 hours per week,
or his employment status is otherwise inconsistent with regular employment
status.

          2.03.  Year of Eligibility Service.
                 ---------------------------

          A special status Employee shall be credited with a year of eligibility
service at the end of an eligibility computation period if he completes 1,000
hours of service in that eligibility computation period. An eligibility
computation period shall be the 12 consecutive month period beginning on the
first date on which a special status Employee is employed and completes one hour
of service and each 12 consecutive month period thereafter; provided, however,
that if the Employee's employment is terminated and during such 12 consecutive
month period he does not complete more than 500 hours of service, but he is
subsequently reemployed, subsequent eligibility computation periods shall be
measured by reference to his date of reemployment.

          2.04.  Hour of Service.
                 ----------------

          A special status Employee shall receive credit for 1 hour of service
for each hour:

               (a)  for which the Employee is directly or indirectly compensated
          by, or entitled to compensation from, any employer described in
          Section 1.01(a)(26)(A);

               (b)  for which back pay, irrespective of mitigation of damages,
          has been awarded or agreed to by such an employer;

               (c)  for which he is paid or entitled to payment by such an
          employer, but during which no duties are performed due to vacation,
          holiday, illness, incapacity (including Disability), layoff, jury duty
          or leave of absence; provided, however, that no credit shall be given
          for periods for which payment is made solely to comply with worker's
          compensation, unemployment compensation, or disability insurance laws
          or for payments that solely reimburse an Employee for medical or
          medically-related expenses incurred by the Employee; and

                                      -13-

<PAGE>

               (d)  during which the Employee is absent from work and during
          which no duties are performed due to the pregnancy of the Employee,
          the birth of a child of the Employee, the placement of a child with
          the Employee in connection with the adoption of the child by the
          Employee, or the caring for a child for the period immediately
          following birth or placement.

          2.05.  Special Rules for Crediting Hours of Service.
                 --------------------------------------------

          Credit for hours of service under Section 2.04 will be provided in
accordance with the following special rules:

               (a)  The number of hours with which an Employee is credited for
          reasons described in Section 2.04(c) (or the number of hours to which
          an award of, or agreement to pay, back pay for a period described
          under that Section applies) shall be determined in accordance with
          Department of Labor regulations ss. 2530.200b-2; provided, however,
          that in no event shall more than 501 hours of service be credited for
          any single continuous period during which the Employee performs no
          duties but for which he is entitled to credit under Section 2.04(c).

               The number of hours with which an Employee is credited for
          reasons described in Section 2.04(d) shall be the number of hours that
          normally would have been credited to the Employee but for the absence
          or, if the Employee Benefits Committee is unable to determine the
          number of these hours, 8 hours per day of such absence; provided,
          however, that in no event shall more than 501 hours of service be
          credited for any single continuous period during which the Employee
          performs no duties but for which he is entitled to credit under
          Section 2.04(d).

               (b)  Hours of service described in Section 2.04(a) shall be
          credited to the eligibility computation period in which the duties are
          performed. The eligibility computation period to which hours of
          service described in Section 2.04(b) or (c) are credited shall be
          determined in accordance with Department of Labor regulations ss.
          2530.200b-2.

               Hours of service described in Section 2.04(d) shall be credited
          to the eligibility computation period in which an absence described in
          Section 2.04(d) begins if, as of the date the absence begins, the
          Employee has completed less than 501 hours of service; in any other
          case, those hours shall be credited to the next eligibility
          computation period.

               (c)  In addition to credit for hours described in Section
          2.04(a), (b), (c), and (d), an Employee shall receive credit for hours
          of service for any period of military service in the Armed Forces of
          the United States, and for any period of family or medical leave,
          required to be credited by law.

               (d)  during which the Employee is absent from work and during
          which no duties are performed due to the pregnancy of the Employee,
          the birth of a child of the Employee, the placement of a child with
          the Employee in connection with

                                      -14-

<PAGE>

          the adoption of the child by the Employee, or the caring for a child
          for the period immediately following birth or placement.

          2.06.  Reemployment.
                 ------------

          A former Participant who is reemployed by an Employer shall be
eligible to participate in the Plan again upon the date of his reemployment.

                      ARTICLE III. NON-ESOP CONTRIBUTIONS
                      -----------------------------------

          3.01.  Salary Reduction Contributions.
                 ------------------------------

               (a)  Each Participant hired before October 1, 2000, may elect
          that his Employer shall contribute to the Profit-Sharing Plan on his
          behalf a Salary Reduction Contribution in an amount equal to a stated
          whole percentage of his Base Earnings Plus Commissions.

               (b)  Each Participant hired or rehired on or after October 1,
          2000, shall have 3% of his Base Earnings Plus Commissions contributed
          on his behalf to the Profit-Sharing Plan as Salary Reduction
          Contributions until and unless he elects, in accordance with the
          procedures within the time period prescribed by the Employee Benefits
          Committee, to have a different percentage, or 0%, contributed on his
          behalf to the Profit-Sharing Plan as a Salary Reduction Contribution.
          The automatic Salary Reduction Contributions will begin with the first
          payroll of the first month that begins at least 60 days after the
          Participant becomes a Participant.

               (c)  If the Participant is eligible to make a deferral election
          under The Guidant Excess Benefit Plan-Savings for a Plan Year, the
          Participant's Salary Reduction Contribution for the Plan Year shall
          not be more than 16 percent of the Participant's Base Earnings Plus
          Commissions for the Plan Year. If a Participant is not eligible to
          participate in The Guidant Excess Benefit Plan--Savings for a Plan
          Year, the Participant's Salary Reduction Contribution for the Plan
          Year shall not be more than 75 percent of Base Earnings Plus
          Commissions for the Plan Year.

               (d)  Each Participant's Salary Reduction Contributions shall be
          paid by the Employer to the Trustee no less frequently than monthly,
          and the Participant's Base Earnings Plus Commissions for that month
          shall be reduced by an identical amount.

               (e)  A Participant shall be required to have Salary Reduction
          Contributions made on his behalf in a Plan Year in order to receive an
          allocation of Matching Contributions or Additional Matching
          Contributions.

          3.02.  Election of Salary Reduction Contributions.
                 ------------------------------------------

               (a)  Each Participant electing to have his Employer contribute a
          Salary Reduction Contribution on his behalf with respect to a Plan
          Year shall designate

                                      -15-

<PAGE>

          (at such time and in such manner as prescribed by the Employee
          Benefits Committee) the percentage of his Base Earnings Plus
          Commissions (within the limits stated in Section 3.01) to be
          contributed and authorize the Employer to reduce his Base Earnings
          Plus Commissions by that amount, to take effect as soon as
          administratively practicable. A Participant who elects not to have any
          Salary Reduction Contributions made to the Profit-Sharing Plan on his
          behalf or who wishes to change the amount of Salary Reduction
          Contributions made to the Profit-Sharing Plan on his behalf may change
          his election at any time in accordance with procedures prescribed by
          the Employee Benefits Committee, to take effect as soon as
          administratively practicable.

               (b)  Notwithstanding any other provisions of this Plan, a
          Participant who is credited with Service because of a period of
          service in the uniformed services of the United States may elect,
          before or after the period of service, to contribute to the Profit
          Sharing PIan the Salary Reduction Contributions that would have been
          made on the Participant's behalf pursuant to Section 3.01 had he
          remained actively working for an Employer throughout that period of
          military service ("make-up contributions"). The amount of make-up
          contributions shall be determined based on the Participant's Base
          Earnings Plus Commissions immediately prior to the period of military
          service and the terms of the Plan in effect at that time. Any make-up
          contributions shall be limited as provided in Section 3.03 with
          respect to the Plan Year to which the contributions relate rather than
          the Plan Year in which the make-up contributions are made. Any make-up
          contributions pursuant to this Section shall be made during the period
          beginning on the date of reemployment, the duration of which is the
          lesser of three times the period of absence or 5 years. Investment
          earnings and losses on make-up contributions shall be credited
          commencing with the date the contribution is made. Make-up
          contributions shall be treated as "annual additions" for purposes of
          Article IV with respect to the Plan Year to which the contributions
          relate rather than the Plan Year in which they are paid to the trust.

          3.03.  Limitations on Salary Reduction Contributions.
                 ---------------------------------------------

               (a)  For Plan Years beginning on or after January 1, 1997,
          notwithstanding anything in the Plan to the contrary, in no event may
          the Salary Reduction Contributions made on behalf of all eligible
          highly compensated Employees with respect to any Plan Year result in
          an actual deferral percentage for that group of Employees that exceeds
          the greater of (1) or (2) below, where:

                    (1)  is an amount equal to 125 percent of the actual
               deferral percentage for the Plan Year being tested for all
               Employees eligible to participate in the Plan other than eligible
               highly compensated Employees; and

                    (2)  is an amount equal to the lesser of (1) the sum of the
               actual deferral percentage for the Plan Year being tested for all
               Employees eligible to participate in the Plan other than eligible
               highly compensated

                                      -16-

<PAGE>

               Employees and 2 percent, or (2) 200 percent of the actual
               deferral percentage for the Year being tested for all Employees
               eligible to participate in the Plan other than eligible highly
               compensated Employees.

               By the foregoing provision, the Employee Benefits Committee has
          elected to use the actual deferral percentage for Employees other than
          highly compensated Employees for the Plan Year being tested rather
          than the preceding Plan Year, recognizing that the election may not be
          changed for Plan Years after 1997 except as provided by the Secretary
          of the Treasury. In determining the actual deferral percentage for a
          group for a Plan Year, all "eligible Employees" shall be taken into
          account. For this purpose, "eligible Employee" for a Plan Year is any
          Employee who is directly or indirectly eligible to make a Salary
          Reduction Contribution for all or a portion of the Plan Year and
          includes an Employee who would be eligible to make a Salary Reduction
          Contribution but did not make any because he failed to make an
          election pursuant to Section 3.01, his contributions were suspended on
          account of a withdrawal pursuant to Section 3.10 or 7.01, or because
          the Salary Reduction Contribution would cause the limitation of
          Article IV to be exceeded.

               (b)  For purposes of this Article III, the following terms shall
          have the following meanings:

                    (1)  "Highly compensated Employee" shall mean, with respect
               to any Plan Year:

                         (A)  An Employee who performs service for the Company
                    or an affiliate during the Plan Year and is described in one
                    or both of the following groups:

                              (i)    An Employee who is a 5 percent owner, as
                         defined in Code section 416(i)(l)(B), at any time
                         during the Plan Year or the preceding Plan Year; or

                              (ii)   An Employee who received compensation in
                         excess of $80,000 (as adjusted pursuant to Code section
                         415(d)) during the preceding Plan Year.

                         (B)  For purposes of this definition of highly
                    compensated Employee, the term "compensation" means
                    compensation within the meaning of Code section 415(c)(3),
                    including elective or salary reduction contributions to a
                    cafeteria plan, cash or deferred arrangement, simplified
                    employee pension, or tax-sheltered annuity.

                    (2)  "Actual deferral percentage" with respect to any
               specified group of Employees for a Plan Year shall mean the
               average of the actual deferral ratios (calculated separately for
               each Employee in the group) of

                                      -17-

<PAGE>

                         (A)  the amount of Salary Reduction Contributions paid
                    to the Profit-Sharing Plan on behalf of each such Employee
                    for the Plan Year, to

                         (B)  the Employee's compensation, determined using a
                    definition of compensation that is nondiscriminatory within
                    the meaning of Code section 414(s), for the Plan Year or
                    such other period as is permitted under Treasury Regulations
                    ss. 1.401(k)-1(g)(2)(i) (provided that the section 414(s)
                    definition of compensation used and the period over which
                    compensation is determined is applied uniformly to all
                    Employees for the Plan Year).

                    If any highly compensated Employee is a Participant under
               two (2) or more qualified cash or deferred arrangements (as
               defined in Code section 401(k)) of the Employer or an affiliate,
               for purposes of determining the actual deferral percentage for
               any such Employee, all such qualified cash or deferred
               arrangements shall be treated as a single qualified cash or
               deferred arrangement.

               (c)  In the event that it is determined prior to the first day of
          any Plan Year or during the course of any Plan Year that the amount of
          Salary Reduction Contributions elected by the highly compensated
          Employees to be contributed to the Profit-Sharing Plan would cause the
          actual deferral percentage limitations described in Section 3.03(a) to
          be exceeded, then the Salary Reduction Contribution elected by each
          highly compensated Employee shall be reduced to the extent necessary
          to meet such limitations in such manner as the Employee Benefits
          Committee, in its sole discretion, determines.

               (d)  Notwithstanding anything in the Plan to the contrary, a
          Participant's Salary Reduction Contribution to the Profit-Sharing Plan
          for any calendar year may not exceed the limitation imposed by Code
          section 402(g)(1) (as adjusted pursuant to Code section 402(g)(5)),
          reduced to the extent required by Section 7.01(b)(2)(D).

               (e)  Notwithstanding the foregoing, the actual deferral
          percentage limitations described in Section 3.03(a) may be satisfied
          by combining the Salary Reduction Contributions under the
          Profit-Sharing Plan with the salary reduction contributions under any
          other plan maintained by a member of a controlled group of
          corporations (as defined in Section 1.01(a)(26)(A)(ii)) of which an
          Employer is a member, to the extent required or permitted under Code
          section 401(k).

          3.04.  Return of Excess Deferrals and Excess Salary Reduction
                 ------------------------------------------------------
Contributions.
-------------

               (a)  If a Participant's elective deferrals (as defined in Code
          section 402(g)(3)) for the Participant's taxable year under this
          Profit-Sharing Plan or under any other plan in which the Participant
          has participated during the taxable

                                      -18-

<PAGE>

          year exceed the limit imposed by Code section 402(g), the following
          rules shall apply to such excess deferrals:

                    (1)  Not later than the first February 1 following the close
               of the taxable year, the Participant may allocate to the
               Profit-Sharing Plan all or any portion of the Participant's
               excess deferrals for the taxable year (provided that the amount
               of the excess deferrals allocated to the Profit-Sharing Plan
               shall not exceed the amount of the Participant's Salary Reduction
               Contributions to the Profit-Sharing Plan for the Plan Year ending
               in the taxable year that have not been withdrawn or distributed),
               and may notify the Employee Benefits Committee, in writing, of
               the amount allocated to the Profit-Sharing Plan.

                    (2)  As soon as practicable, but in no event later than the
               first April 15 following the close of the taxable year, the
               Profit-Sharing Plan shall distribute to the Participant any
               excess deferrals allocated to the Profit-Sharing Plan and any
               income attributable to that amount. The distribution described in
               this Section 3.04(a)(2) shall be made notwithstanding any other
               provision of the Plan.

               (b)  After any excess deferrals (and income attributable thereto)
          have been allocated to the Profit-Sharing Plan and distributed in
          accordance with Section 3.04(a), if the actual deferral percentage for
          the Plan Year of those Participants who are highly compensated
          Employees exceeds the applicable limit imposed by Section 3.03(a), the
          amount of the Excess Salary Reduction Contributions (determined in
          accordance with Code section 401(k)(8)(B)), and any income
          attributable to those contributions, shall be distributed before the
          end of the following Plan Year to Participants who are highly
          compensated Employees, on the basis of the respective portions of the
          Excess Salary Reduction Contributions allocated to each Participant as
          described in this Section 3.04(b). The distribution described in this
          Section 3.04(b) shall be made notwithstanding any other provision of
          the Plan. The amount of the Excess Salary Reduction Contributions to
          be distributed under this Section 3.04(b) for a Plan Year with respect
          to a Participant shall be reduced by any excess deferrals previously
          distributed from the Plan to the Participant for the Plan Year.

               The amount of Excess Salary Reduction Contributions shall be
          determined, allocated, and distributed as follows:

                    (1)  First, the actual deferral ratio of the highly
               compensated Employee with the highest actual deferral ratio shall
               be reduced to the extent necessary to satisfy the actual deferral
               percentage test or cause the ratio to equal the actual deferral
               ratio of the highly compensated Employee with the next highest
               ratio. Second, this process shall be repeated until the actual
               deferral percentage ratio test is satisfied.

                                      -19-

<PAGE>

                    (2)  The total dollar amount of Excess Salary Reduction
               Contributions determined under Section 3.04(b)(1) shall be
               allocated among highly compensated Employees by reducing the
               Salary Reduction Contributions of the highly compensated Employee
               with the highest dollar amount of Salary Reduction Contributions
               until (A) the total amount of the Excess Salary Reduction
               Contributions have been allocated or (B) his remaining Salary
               Reduction Contributions are equal in dollar amount to the Salary
               Reduction Contributions of the highly compensated Employee with
               the next highest dollar amount. This process shall be repeated
               until all Excess Salary Reduction Contributions are allocated.
               The Excess Salary Reduction Contributions allocated to a highly
               compensated Employee, together with all income attributable to
               them, shall be distributed to him within one year after the end
               of the Plan Year for which the contributions were made.

               (c)  Amounts distributed under Sections 3.04(a) and (b) shall be
          deemed to have been made from that portion of the Participant's Salary
          Reduction Contributions not eligible for a Minimum Matching
          Contribution or for an Additional Matching Contribution, to the extent
          that the Participant has unmatched Salary Reduction Contributions for
          the Plan Year. Notwithstanding the provisions of Section 3.06(a), in
          the event that a distribution of matched Salary Reduction
          Contributions is required, the Minimum Matching Contribution or
          Additional Matching Contribution amount related to the distributed
          Salary Reduction Contribution amount shall be forfeited.

          3.05.  Nonforfeitability of Contributions.
                 ----------------------------------

          A Participant shall be fully vested at all times in his Salary
Reduction Contributions and any accumulated earnings thereon.

          3.06.  Employer Contributions.
                 ----------------------

               (a)  Matching Contributions.
                    ----------------------

                    (1) Minimum Matching Contributions. Except as otherwise
               provided in this Section 3.06, an Employer shall contribute to
               the Profit-Sharing Plan on behalf of its Employees for each month
               an amount equal to 50 percent of its Employees' Salary Reduction
               Contributions for that month; provided, however, that in no event
               shall Minimum Matching Contributions be made with respect to (1)
               Salary Reduction Contributions that exceed 6 percent of an
               Employee's Base Earnings Plus Commissions for the month, (2)
               Salary Reduction Contributions that exceed the limit set forth in
               Section 3.03(d); (3) Excess Salary Reduction Contributions; or
               (4) Salary Reduction Contributions attributable to Catch-Up
               Contributions under Section 20.10. If an Employee's Salary
               Reduction Contributions stop before the end of a Plan Year
               because they reached the dollar limitation applicable to the
               Employee under federal tax law, then his

                                      -20-

<PAGE>

               Employer shall make a true-up Minimum Matching Contribution on
               behalf of the Employee for the month in which his Salary
               Reduction Contributions stop and for each month after that month
               through the last month of the Plan Year. The true-up Minimum
               Matching Contribution made for a month shall be equal to the
               difference, if any, between (A) 50 percent of the Employee's
               total Salary Reduction Contributions (other than those
               attributable to Catch-Up Contributions under Section 20.10) for
               the Plan Year to date that are not in excess of 6 percent of the
               Employee's Base Earnings Plus Commissions for the Plan Year to
               date, and (B) the Minimum Matching Contributions previously made
               for the Participant for the Plan Year (including any true-up
               Minimum Matching Contributions).

                    Notwithstanding any of the foregoing, in no event shall
               Minimum Matching Contributions be made to the extent that those
               contributions would cause the contribution percentage limit set
               forth in Section 3.06(d) to be exceeded. An Employer shall make
               its Minimum Matching Contributions on a monthly basis. The
               Minimum Matching Contributions made by an Employer on behalf of
               an Employee participating in the Plan shall be allocated to the
               Employee's Profit-Sharing Account.

                    (2)  Additional Matching Contributions. In the discretion of
               the Board of Directors, and except as otherwise provided in this
               Section 3.06, each Employer shall make an Additional Matching
               Contribution to the Profit-Sharing Plan for the Plan Year in an
               amount, as is determined by the Board of Directors, in proportion
               to the Salary Reduction Contributions made for the Plan Year on
               behalf of, or by, their respective Employees who are
               participating in the Plan as of the first day of the last month
               of the Plan Year, who Retire during the Plan Year, or who die
               during the Plan Year while actively employed and participating in
               the Plan provided, however, that in no event shall Additional
               Matching Contributions be made with respect to (1) Salary
               Reduction Contributions that exceed 6 percent of a Participant's
               Base Earnings Plus Commissions, (2) Salary Reduction
               Contributions that exceed the limit set forth in Section 3.03(d),
               above, or (3) Excess Salary Reduction Contributions; (4) Salary
               Reduction Contributions attributable to Catch-Up Contributions
               under Section 20.10; and provided further that in no event shall
               Additional Matching Contributions be made to the extent that such
               contributions would cause the contribution percentage limit set
               forth in Section 3.06(d) to be exceeded. An Employer's Additional
               Matching Contributions for any Plan Year shall become due for
               payment to the Trustee of the Company Stock Fund on the last day
               of the Plan Year and shall be paid to the Trustee by the Employer
               within the period of time prescribed by law to permit a federal
               income tax deduction with respect to the Plan Year for such
               contributions. The Additional Matching Contributions made by an
               Employer on behalf of an Employee participating in the Plan shall
               be allocated to the Employee's Profit-Sharing Account.

                                      -21-

<PAGE>

               (b)  Basic Contributions. In the discretion of the Board of
          Directors, and except as otherwise provided in this Section 3.06, an
          Employer shall contribute to the Profit-Sharing Plan on behalf of each
          of its Employees participating in the Plan an amount equal to a
          percentage, determined annually by the Board of Directors prior to the
          end of each Plan Year, of each Employee's Base Earnings. An Employer
          shall make its Basic Contributions on a monthly basis. The Basic
          Contribution made by an Employer on behalf of an Employee
          participating in the Plan shall be allocated to the Employee's
          Profit-Sharing Account.

               (c)  Forfeitures. Forfeitures attributable to Matching
          Contributions that arise under the Plan shall be allocated to
          Participants' Profit-Sharing Accounts on the basis of their Salary
          Reduction Contributions for any Plan Year in which the Employers have
          elected to make Minimum Matching Contributions and Additional Matching
          Contributions to the Profit-Sharing Plan rather than to the ESOP.
          Forfeitures attributable to Basic Contributions shall be allocated to
          Participants' Profit-Sharing Accounts on the basis of their Base
          Earnings for any Plan Year in which the Employers have elected to make
          Basic Contributions to the Profit-Sharing Plan rather than to the
          ESOP. Forfeitures allocated in this manner shall be treated as
          Minimurh Matching Contributions, Additional Matching Contributions, or
          Basic Contributions, whichever is applicable, and shall be allocated
          to Participants' Profit-Sharing Accounts in the manner described in
          Section 3.06(a) or (b), above. The forfeiture allocations described in
          this Section 3.06(c) shall reduce, dollar for dollar, the amount of
          the Minimum Matching Contributions, Additional Matching Contributions,
          or Basic Contributions that otherwise would be allocated to the
          Participant pursuant to Section 3.06(a) or (b).

               (d)  Limits on Employer Contributions.
                    --------------------------------

                    (1)  Minimum Matching and Additional Matching Contributions
               to the Profit-Sharing Plan for any Plan Year shall satisfy the
               contribution percentage test in Code section 401(m)(2) and the
               regulations thereunder, including Treasury Regulations ss.
               1.401(m)-l(b) or any successor provision. Minimum Matching
               Contributions and Additional Matching Contributions forfeited by
               a Participant under Section 3.04(c), above, with respect to a
               Plan Year shall not be taken into account in determining whether
               Employer Contributions for that Participant satisfy the
               contribution percentage test for that Plan Year. Notwithstanding
               anything to the contrary in this Article III, if the contribution
               percentage of those Participants who are highly compensated
               Employees (as defined in Section 3.03) exceeds the limit imposed
               by Code section 401(m), the following rules shall apply:

                         (A)  The amount of the excess aggregate contributions
                    (determined in accordance with Code section 401(m)(6)(B))
                    for the Plan Year, and any income attributable to those
                    contributions, shall

                                      -22-

<PAGE>

                    be distributed (or, if forfeitable, shall be forfeited)
                    before the end of the following Plan Year.

                         (B)  Any distribution in accordance with Section
                    3.06(d)(1)(A), shall be made to Participants who are highly
                    compensated Employees on the basis of the respective
                    portions of the excess aggregate contributions allocated to
                    each Participant. The total dollar amount of excess
                    aggregate contributions shall be allocated to some or all
                    highly compensated Employees by reducing first the
                    contributions of the highly compensated Participant with the
                    highest dollar amount of contributions until (i) the total
                    amount of excess aggregate contributions has been allocated
                    or (ii) his remaining contributions are equal in dollar
                    amount to the contributions of the highly compensated
                    Employee with the next highest dollar amount. This process
                    shall be repeated until all excess aggregate contributions
                    are allocated.

                    (2)  The determination of the amount of excess aggregate
               contributions under Section 3.06(d)(1) for any Plan Year shall be
               made after first determining the excess deferrals under Section
               3.04(a), and then determining the Excess Salary Reduction
               Contributions under Section 3.04(b).

               (e)  Contributions of Shares. The Employers may, at their
          election, make all or any part of any mum Matching Contribution,
          Additional Matching Contribution, or Basic Contribution to the
          Profit-Sharing Plan in Shares rather than in cash. The Shares so
          contributed shall have a fair market value equal to the amount of such
          Minimum Matching Contribution, Additional Matching Contribution, or
          Basic Contribution (or portion thereof). The fair market value of a
          Share shall be the mean between the highest and lowest quoted selling
          price per share for a 100 Share lot on the composite tape of New York
          Stock Exchange issues on the date of payment to the Trustee.

               (f)  Contributions to the ESOP. The Employers may, at their
          election, make a Minimum Matching Contribution, Additional Matching
          Contribution, or Basic Contribution to the ESOP pursuant to Section
          19.04 in lieu of all or a portion of the Minimum Matching
          Contribution, Additional Matching Contribution, or Basic Contribution
          otherwise required under this Section 3.06. The amount of the Minimum
          Matching Contribution, Additional Matching Contribution, or Basic
          Contribution otherwise required to be made pursuant to this Section
          3.06(a) or (b) with respect to a Participant shall be reduced, dollar
          for dollar, by the value of any Shares (or the amount of any cash)
          allocated to the Participant's ESOP Account by reason of a Minimum
          Matching Contribution, Additional Matching Contribution, or Basic
          Contribution to the ESOP for the Plan Year. The value of the Shares
          that are allocated to a Member's ESOP Account for any Plan Year shall
          be determined in accordance with Sections 19.04 and 19.13.

                                      -23-

<PAGE>

               (g)  Deductibility. All Minimum Matching Contributions,
          Additional Matching Contributions, and Basic Contributions to the
          Profit-Sharing Plan are conditioned on the deductibility of the
          contributions under Code section 404 for the taxable year with respect
          to which the contributions were made.

               (h)  Qualified Nonelective Contributions. Any Employer who was
          required to make, but did not make, a Catch-Up Contribution on behalf
          of an eligible Employee pursuant to Section 20.10 for the 2002 Plan
          Year, shall make a qualified nonelective contribution ("QNEC") to the
          Plan on behalf of the Employee by December 31, 2003. The amount of the
          QNEC shall be equal to the amount of the Catch-Up Contribution that
          was required to be made, but was not made, plus any positive earnings
          that would have accrued on the Catch-Up Contribution from the date it
          was required to be made through the date the QNEC is made to the Plan.
          The QNEC made on behalf of an Employee shall be allocated to the
          Employee's Participant's Account and shall be considered a Catch-Up
          Contribution for all Plan purposes, except that an Employee may not
          withdraw it solely on account of a hardship.

          3.07.  Contributions Not Recoverable by Employer. The Trustee shall
hold the contributions received by it under Section 3.06 for the respective
Participants subject to the provisions of the Plan. No such contribution shall
be recoverable by the Employers, except as provided in Section 3.08.

          3.08.  Return of Employer Contributions.
                 --------------------------------

          In the event that an Employer Contribution made pursuant to Section
3.06

               (a)  is made under a mistake of fact, or

               (b)  is disallowed as a deduction under Code section 404 for the
          taxable year with respect to which it was made, the contribution
          shall, at the option of the Employer, be returned to the Employer
          within 1 year after the payment of the contribution or the
          disallowance of the deduction (to the extent disallowed), whichever is
          applicable. The amount returned shall not be increased to reflect any
          investment earnings, but shall be decreased to reflect any losses. If
          the amount returned to the Employer would cause the balance of any
          Participant's Account to be less than the balance would have been had
          the returned contribution never been made, the amount to be returned
          shall be limited to prevent the loss.

          3.09.  Rollover Contributions.
                 ----------------------

          Subject to the approval of the Employee Benefits Committee and any
administrative procedures that the Employee Benefits Committee may prescribe,
Rollover Contributions to the Profit-Sharing Plan will be accepted from or on
behalf of an Employee that constitute:

               (a)  all or part of an "Eligible Rollover Distribution" (as
          defined in Code section 402(c)) from a qualified plan; or

                                      -24-

<PAGE>

               (b)  a distribution from an individual retirement account or
          annuity described in Code section 408(d)(3)(A)(ii).

Rollover Contributions will not be accepted in a form other than cash. All
Rollover Contributions made to the Profit-Sharing Plan on behalf of an Employee
shall be allocated to the Rollover Contributions portion of the Employee's
Profit-Sharing Account. For purposes of Section 8.02(a), that portion of a
Participant's Account attributable to amounts transferred to this Plan from the
CardioThoracic Systems 401(K) Savings Plan, that are attributable to that plan,
are considered Rollover Contributions.

          3.10.  Hardship Distributions Under Other Plans.
                 ----------------------------------------

          Notwithstanding anything in this Plan to the contrary, the following
provisions shall apply with regard to any Participant who receives a hardship
distribution under the Employees' 401(k) Plan of Devices For Vascular
Intervention, Inc., the 401(k) Savings Plan For Employees of Endovascular
Technologies, the InControl 401(k) Plan, or the CardioThoracic Systems 401(K)
Savings Plan:

               (a)  A Participant's right to elect to have his Employer
          contribute Salary Reduction Contributions on his behalf to the
          Profit-Sharing Plan shall be suspended for a period of 12 months after
          the Participant's receipt of a hardship distribution under the
          Employees' 401(k) Plan of Devices For Vascular Intervention, Inc., the
          401(k) Savings Plan For Employees of Endovascular Technologies, the
          InControl 401(k) Plan, or the CardioThoracic Systems 401(K) Savings
          Plan; and

               (b)  For the Participant's taxable year immediately following
          the taxable year of the Participant's receipt of a hardship
          distribution under the Employees' 401(k) Plan of Devices For Vascular
          Intervention, Inc., the 401(k) Savings Plan For Employees of
          Endovascular Technologies, the InControl 401(k) Plan, or the
          CardioThoracic Systems 401(K) Savings Plan, a Participant may not
          elect to have his Employer contribute Salary Reduction Contributions
          on his behalf to the Profit-Sharing Plan in excess of the applicable
          limit under Code section 402(g) for such taxable year less the amount
          of the Participant's Salary Reduction Contributions in the taxable
          year of the hardship distribution.

                  ARTICLE IV. LIMITATIONS ON ANNUAL ADDITIONS
                  -------------------------------------------

          4.01.  Basic Limitation.
                 ----------------

          Subject to the adjustments set forth in this Article IV, the maximum
aggregate annual addition to a Participant's Profit-Sharing Account in any
limitation year shall in no event exceed the lesser of:

               (a)  $30,000 (as adjusted to reflect increases in that limitation
          pursuant to Code section 415(d)); or

                                      -25-

<PAGE>

               (b)  25 percent of the amount of a Participant's compensation for
          the limitation year.

          4.02.  Definitions.
                 -----------

               (a)  For purposes of Article IV, the term "annual addition" shall
          mean the sum for any limitation year of the following amounts:

                    (1)  Salary Reduction Contributions;

                    (2)  Employer Contributions to the Profit-Sharing Plan;

                    (3)  Forfeitures if allocated to the Participants'
               Profit-Sharing Accounts;

                    (4)  Contributions allocated to an individual medical
               account (within the meaning of Code section 415(1)) that is part
               of a pension or annuity plan, provided that this Section
               4.02(a)(4) shall not be taken into account in applying Sections
               4.01(b) and 19.06(a)(2); and

                    (5)  Contributions attributable to post-retirement medical
               benefits that are allocated to the separate account of a Key
               Employee (within the meaning of Code section 419A(d)(3)), under a
               welfare benefit fund (within the meaning of Code section 419(e))
               maintained by an Employer; provided that this Section 4.02(a)(5)
               shall not be taken into account in applying Sections 4.01(b) and
               19.06(a)(2).

               Amounts allocated to a Participant's ESOP Account shall be
          treated as annual additions, and shall be subject to the limits on
          annual additions, to the extent provided in Section 19.06. A
          Participant's Excess Salary Reduction Contributions (distributed under
          Section 3.04(b)) and excess aggregate contributions (distributed or
          forfeited in accordance with Section 3.06(d)) shall be treated as
          annual additions; a Participant's excess deferral amounts (distributed
          in accordance with Section 3.04(a)) shall not be treated as annual
          additions. A Participant's Rollover Contributions made pursuant to
          Section 3.09 shall not be treated as annual additions.

               (b)  For purposes of this Article IV, the term "compensation"
          shall mean the Participant's wages within the meaning of Code section
          3401 (without regard to any rule under Code section 3401 that limits
          amounts included in wages based on the nature or location of the
          employment) and all other payments for which the Employer is required
          to furnish the Participant with a written statement under Code
          sections 6041(d) and 6051(a)(3). "Compensation" also includes amounts
          that would have been paid to the Employee during the Plan Year in the
          absence of a salary redirection agreement but are excluded from gross
          income pursuant to Code section 125, 132(f), 457, or 402(g).

                                      -26-

<PAGE>

               (c)  For purposes of this Article IV, the term "limitation year"
          or "year" means the calendar year.

          4.03.  Preclusion of Excess Annual Additions.
                 -------------------------------------

          The Employee Benefits Committee may establish those procedures that it
deems necessary and appropriate to monitor compliance with Article IV during a
limitation year. If, during the course of a limitation year, the Employee
Benefits Committee determines, with respect to a Participant, that no additional
contributions may be made and credited to the Participant's Account during the
year without exceeding the limitations prescribed in Article IV for the year,
then no further contributions shall be made or credited to the Participant's
Account during the year.

          4.04.  Disposal of Excess Annual Additions.
                 -----------------------------------

          In the event that the limitations with respect to annual additions
prescribed in this Section are exceeded with respect to any Participant, the
following rules shall apply. If the excess arises as a consequence of the
crediting of forfeitures to the Participant's Account, or a reasonable error in
estimating the Participant's compensation, the excess shall be held in a
suspense account and reallocated among all the Participants' Profit-Sharing
Accounts in the limitation year succeeding the year in which the excess arose.
If such excess arises as a consequence of a reasonable error in determining the
amount of Salary Reduction Contributions that may be made with respect to the
Participant, that excess shall be distributed. Distributed excess Salary
Reduction Contribution amounts shall be deemed to be unmatched to the extent
that the Participant has unmatched Salary Reduction Contributions for the Plan
Year; excess Salary Reduction Contributions eligible for a Minimum Matching
Contribution or an Additional Matching Contribution shall be distributed only to
the extent permitted under the nondiscrimination rules of Code section
401(a)(4).

          4.05.  Other Defined Contribution Plans.
                 --------------------------------

          All defined contribution plans (including voluntary employee
contribution accounts in a defined benefit plan and key employee accounts under
a welfare benefit plan described in Code section 419, as well as Employer
contributions allocated to an IRA) of the Employer (including, for purposes of
this Section, an affiliate of the Employer), whether or not terminated, will be
treated as one defined contribution plan for purposes of the limitations under
Code section 415(c).

                        ARTICLE V. INVESTMENT PROVISIONS
                        --------------------------------

          5.01.  Investment Options--Salary Reduction Contributions and Rollover
                 ---------------------------------------------------------------
Contributions.
-------------

          A Participant may at any time or from time to time, by direction to,
and in a manner prescribed by, the Employee Benefits Committee, direct that any
or all of his Salary Reduction Contributions and Rollover Contributions made
after his election becomes effective shall be invested, subject to Section 5.04,
in one or more of the investment fund options ("Funds") that the Fund Advisory
Committee may designate from time to time by written

                                      -27-

<PAGE>

addendum to this Plan. The respective assets of each Fund will be accounted for
separately from those of each other Fund and will be invested in the manner
prescribed in the Addendum. A Participant may make an investment election with
respect to his Rollover Contributions that is separate and different from his
investment election with respect to his Salary Redirection Contributions.

          The Employee Benefits Committee shall implement a Participant's
investment directions in accordance with the terms of this Article V, except
that the Committee may decline to implement any investment direction to the
extent that the investment direction would, if implemented, result in a
transaction (a) that is expressly excluded from protection under ERISA section
404(c), (b) that is a prohibited transaction under ERISA section 406 or Code
section 4975, (c) that would generate income that would be taxable to the Plan,
or (d) that would otherwise violate applicable federal law.

          The Fund Advisory Committee, in its discretion, may change or
terminate the existing investment Funds or establish additional investment Funds
at any time by amending the written addendum to the Plan. However, any
investment Fund that is not an investment company registered under the
Investment Company Act of 1940 shall be managed by an Investment Manager (within
the meaning of ERISA section 3(38)) appointed by the Fund Advisory Committee.
The selection of investment Fund choices and the administration of Plan
investments are intended to comply with the requirements of ERISA section
404(c). To the extent the requirements of ERISA section 404(c) are satisfied,
neither the Employee Benefits Committee, the Fund Advisory Committee, the
Trustee, nor any other Plan Fiduciary, shall be responsible for any losses
resulting from a Participant's individual selection of investment Fund choices.

          5.02.  Change of Investment Directions.
                 -------------------------------

          Subject to such rules as the Employee Benefits Committee from time to
time may establish, a Participant may change his direction for the investment of
his Salary Reduction Contributions at any time. Any direction by a Participant
for the investment of such funds shall be deemed to be a continuing direction
until changed by the Participant.

          5.03.  Failure to Make Investment Direction.
                 ------------------------------------

          If a Participant fails to give directions to the Employee Benefits
Committee for investment of his Rollover Contributions, they shall be invested
in the same manner as his Salary Reduction Contributions. If a Participant fails
to give directions to the Employee Benefits Committee for investment of his
Salary Reduction Contributions, they shall be invested in the Near Term Horizon
Portfolio.

          5.04.  Direction To Invest in Two or More Funds.
                 ----------------------------------------

          If a Participant directs the investment of his Salary Reduction
Contributions in more than one of the Funds described in Section 5.01, the
amount of the contributions invested monthly in any one Fund shall be not less
than 1 percent of his total monthly Salary Reduction Contributions (rounded to
the nearest penny).

                                      -28-

<PAGE>

          5.05.  Transfers Between Funds.
                 -----------------------

          Subject to such rules as the Employee Benefits Committee from time to
time may establish, a Participant may direct that all or any part of his Units
in any one or more of the Funds described in Section 5.01 be converted to Units
in one or more of the other of such Funds.

          5.06.  Company Stock Fund.
                 ------------------

               (a)  Employer Contributions to the Plan shall be invested in a
          Fund held in Trust and consisting of Shares (commonly known as "the
          Company Stock Fund"). Except as provided in Sections 5.06(b) and (c),
          below, a Participant shall not be entitled to have the Employer
          Contributions that are credited to his Participant's Account and any
          earnings attributable thereto invested in any Fund other than the
          Company Stock Fund. The Trustee shall purchase Shares for the Company
          Stock Fund in the open market or by private purchase, including
          purchase from the Company. Any such purchase from the Company shall be
          at a price per share not in excess of the mean between the highest and
          lowest quoted selling price per share for a 100 Share lot on the
          composite tape of New York Stock Exchange issues on the date of
          purchase by the Trustee.

               (b)  A Participant who has retired shall be entitled to transfer
          all or a portion of his Participant's Account invested in the Company
          Stock Fund to one or more of the Funds described in Section 5.01.
          Similarly, a Beneficiary of a Deceased Participant shall be entitled
          to transfer all or a portion of the Participant's Account invested in
          the Company Stock Fund to one or more of the Funds described in
          Section 5.01. An election to transfer amounts from the Company Stock
          Fund to another Fund or Funds shall be made in accordance with Section
          5.05. An amount transferred from the Company Stock Fund to another
          Fund or Funds pursuant to this Section 5.06 shall subsequently be
          subject to the same rules governing reinvestment as the rules that
          apply under this Article V to the reinvestment of Salary Reduction
          Contributions.

               (c)  A Participant who has attained age 50 and has completed at
          least 10 Years of Service may diversify his ESOP Account in accordance
          with Section 19.14(b) of this Plan.

               (d)  Valuations of Shares that are not readily tradable on an
          established market will be made by an independent appraiser who meets
          requirements similar to the requirements of the regulations prescribed
          under Code section 170(a)(1).

          5.07.  Trustee's Investment Discretion.
                 -------------------------------

          Except for the ESOP Shares Fund under the Company Stock Fund, any
Trustee in its sole discretion may, to the extent that it is prudent to do so,
maintain all or a part of the assets of any fund in cash or short term
government or corporate obligations (other than obligations of an Employer or a
Qualified Subsidiary). The Trustee shall not be liable for interest on the part
of the assets of any fund that it is authorized to hold in cash pursuant to the
authority granted herein.

                                      -29-

<PAGE>

          The Trustee may maintain the assets of the ESOP Shares Fund in cash
only to the extent provided in Article XIX.

          Income from investments in each fund shall be reinvested in the same
fund.

          5.08.  Transferred Participant Loans.
                 -----------------------------

          To the extent that outstanding Participant loans under a Prior Savings
Plan or the Endovascular Technologies, Inc. 401(k) Savings Plan, the InControl
401(k) Plan, the Sulzer Medica USA Retirement Plan, or the CardioThoracic
Systems 401(K) Savings Plan are transferred to or merged into this Plan, those
loans shall be treated as investments of the Profit-Sharing Accounts of the
Participant to whom they relate, subject to the terms and conditions of the plan
under which they were made. Participant loan repayments shall be invested in
accordance with the Participant's investment election currently in effect for
Salary Reduction Contributions.

                       ARTICLE VI. PARTICIPANTS' ACCOUNTS
                       ----------------------------------

          6.01.  Separate Accounts.
                 -----------------

          The Employee Benefits Committee shall maintain a separate
Participant's Account for each Participant, showing separately the following:

               (a)  Salary Reduction Contributions. The Participant's Salary
          Reduction Contributions to the Plan, including amounts attributable to
          salary reduction contributions under a Prior Savings Plan or the
          Endovascular Technologies, Inc. 401(k) Savings Plan, the InControl
          401(k) Plan, the Sulzer Medica USA Retirement Plan, or the
          CardioThoracic Systems 401(K) Savings Plan transferred to or merged
          into this Plan, and the earnings thereon;

               (b)  Employee Contributions. The Participant's after-tax employee
          contributions under a Prior Savings Plan or another qualified
          retirement plan that are transferred to or merged into this Plan, and
          any earnings thereon;

               (c)  Employer Contributions. The Employer Contributions to the
          Profit-Sharing Plan on behalf of the Participant, including amounts
          attributable to employer contributions under a Prior Savings Plan or
          another qualified retirement plan that are transferred to or merged
          into this Plan, and the earnings thereon;

               (d)  Rollover Contributions. The Participant's Rollover
          Contributions to the Plan, including amounts attributable to rollover
          contributions under a Prior Savings Plan or another qualified
          retirement plan that are transferred to or merged into this Plan, and
          the earnings thereon;

               (e)  ESOP Pre-Split Matching Account. The Participant's ESOP
          Account under a Prior Savings Plan that is transferred or merged into
          this Plan, and the earnings thereon;

                                      -30-

<PAGE>

               (f)  Company Matching Account (formerly the ESOP Post-Split
          Matching Account). The amounts allocated to the Participant by reason
          of Employer Minimum Matching Contributions and Additional Matching
          Contributions and Exempt Loan payments under the ESOP, and the
          earnings thereon;

               (g)  Retirement ESOP Account (formerly the ESOP Basic
          Contribution Account). The amounts allocated to the Participant by
          reason of Employer Basic Contributions and Exempt Loan payments under
          the ESOP, and the earnings thereon; and

               (h)  PAYSOP Account. The amounts transferred from the
          Participant's PAYSOP Account in a Prior Savings Plan that is
          transferred to or merged into this Plan, and the earnings thereon.

               (i)  Intermedics Matching Account. The amounts (including both
          contributions and attributable earnings) transferred from the
          Participant's Matching Contribution Account in the Sulzer Medica USA
          Retirement Plan and merged into this Plan.

               (j)  EVT Qualified Matching Account. The amounts (including both
          contributions and attributable earnings) transferred from the
          Participant's qualified matching contribution account in the
          Endovascular Technologies, Inc. 401(k) Savings Plan and merged into
          this Plan.

          A Participant's Profit-Sharing Account shall comprise the amounts
described in Section 6.01(a) through (d), above.

          A Participant's ESOP Account shall comprise the amounts described in
Section 6.01(e) through (g), above.

          A Participant's ESOP Pre-Split Matching Account, Intermedics Matching
Account and EVT Qualified Matching Account comprise his Prior Company Account.

          6.02.  Accounting for Units Under Investment Funds.
                 -------------------------------------------

          In addition to the separate accounting required by Section 6.01, the
Employee Benefits Committee shall maintain a separate account for each
Participant that shows his proportionate interest in the funds described in
Article V. A Participant's proportionate interest in each Fund shall be
represented by "Units of Participation," also called "Units." The Employee
Benefits Committee shall assign Units of Participation in the Company Stock Fund
to any Suspense Account (as defined in Section 19.02(e)) maintained pursuant to
Section 19.12, based on the Suspense Account's proportionate interest in the
Company Stock Fund at the time of the determination.

                                      -31-

<PAGE>

          6.03.  Value of Units.
                 --------------

          Subject to reasonable materiality standards adopted by the Employee
Benefits Committee, the Employee Benefits Committee shall determine the value of
a Unit in each Fund on a daily basis. That value will be determined by dividing
the sum of uninvested cash and the fair market value of securities (redemption
value in the case of United States Savings Bonds and principal plus accrued
interest in the case of investment contracts) as determined by the Employee
Benefits Committee, by the total number of Units of the Fund.

          6.04.  Units Credited To Participant Accounts.
                 --------------------------------------

          The number of Units credited to a Participant under any Fund in each
month shall be calculated by dividing the sum of his Salary Reduction
Contributions or the Employer Contributions allocated to him under the Fund by
the value of the Unit on the last Value Determination Date prior to the date on
which the Trustee receives payment of the contributions.

                     ARTICLE VII. HARDSHIP WITHDRAWALS FROM
                     --------------------------------------
                     SALARY REDUCTION CONTRIBUTIONS ACCOUNTS
                     ---------------------------------------

          7.01.  Withdrawals.
                 -----------

          A Participant may withdraw a portion of monies accruing from his
Salary Reduction Contributions and, if applicable, his salary redirection
contributions under the Endovascular Technologies, Inc. 401(k) Savings Plan, the
InControl 401(k) Plan, the Sulzer Medica USA Retirement Plan or the
CardioThoracic Systems 401(K) Savings Plan transferred to this Plan, in
accordance with the following rules:

               (a)  An application for withdrawal shall be made in accordance
          with procedures prescribed for that purpose by the Employee Benefits
          Committee.

               (b)  Hardship withdrawals shall be approved only in those cases
          where the requirements of Sections 7.01(b)(1) and (b)(2), below, are
          satisfied.

                    (1)  Hardship withdrawals shall be approved only if needed
               on account of one of the following:

                         (A)  medical expenses described in Code section 213(d)
                    incurred by, or amounts necessary to obtain such medical
                    care for, the Participant, the Participant's spouse, or any
                    dependent of the Participant (as defined in Code section
                    152);

                         (B)  Purchase (excluding mortgage payments) of a
                    principal residence for the Participant;

                         (C)  Payment of tuition, related educational fees, and
                    room and board expenses for the next 12 months of
                    post-secondary education for the Participant or his spouse,
                    children, or dependents (as defined in Code section 152);

                                      -32-

<PAGE>

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

                         (E)  Payment of funeral expenses incurred by the
                    Participant, the Participant's spouse, or any dependent of
                    the Participant (as defined in Code section 152), provided
                    that the Employee Benefits Committee determines, on a
                    case-by-case basis and in view of all relevant facts and
                    circumstances, that these expenses create an immediate and
                    heavy financial need.

               The Employee Benefits Committee may require any and all
          documentation that it deems necessary, and any such documentation
          shall be provided by the Participant in a timely fashion. The decision
          of the Employee Benefits Committee shall be final in all cases.

                    (2)  A hardship withdrawal that satisfies Section 7.01(b)(1)
               shall be approved only if all of the following requirements also
               are satisfied:

                         (A)  The withdrawal is not in excess of the amount
                    necessary to discharge the expense (or expenses) listed in
                    Section 7.01(b)(1) above (plus the reasonably anticipated
                    amount of any tax attributable to the amount of the
                    withdrawal);

                         (B)  The Participant has obtained all distributions,
                    other than hardship distributions, and all nontaxable loans
                    currently available under all plans maintained by the
                    controlled group (as defined in Section 1.01(a)(26)(A)(ii))
                    of which the Employer is a member;

                         (C)  The Participant's contributions, elective or
                    otherwise, under this Plan and any other plan maintained by
                    the controlled group (as defined in Section
                    1.01(a)(26)(A)(ii)) of which the Employer is a member, and
                    the Participant's right to make further hardship withdrawals
                    under this Section or withdrawals under Article VIII, shall
                    be suspended for the 12-period following receipt of the
                    withdrawal; and

                         (D)  For the Participant's taxable year immediately
                    following the taxable year of the withdrawal, the limitation
                    set forth in Code section 402(g) shall be reduced for this
                    Plan and all other plans maintained by the controlled group
                    (as defined in Section 1.01(a)(26)(A)(ii)) of which the
                    Employer is a member by the amount of the Participant's
                    elective contributions made under such plans in the taxable
                    year of the withdrawal.

                                      -33-

<PAGE>

                    (3)  The amount of the withdrawal shall be deducted from the
               Participant's Account, and the remaining portion of the Account
               shall then become the total value of the Participant's Account.

                    (4)  Withdrawals shall be made in cash only. Withdrawals
               shall be made on a pro rata basis from all the investment Funds
               described in Section 5.01 in which the Participant's Salary
               Reduction Contributions are then invested.

                    (5)  In no event shall the amount of the withdrawal exceed
               100 percent of (i) the Participant's Salary Reduction
               Contributions and (ii) any earnings on those contributions
               accrued prior to January 1, 1989 (less any amount described in
               this sentence that have been previously withdrawn from the
               Participant's Account).

               (c)  A Participant may withdraw monies accruing from his Salary
          Reduction Contributions Account only after he has withdrawn all
          amounts that he is eligible to withdraw pursuant to Article VIII.

                   ARTICLE VIII. WITHDRAWALS FROM NON-SALARY
                   -----------------------------------------
                         REDUCTION CONTRIBUTION ACCOUNTS
                         -------------------------------

          8.01.  Voluntary Withdrawals.
                 ---------------------

          A Participant may, by request in accordance with the procedures
prescribed by the Employee Benefits Committee, make withdrawals of his interest
under the Plan, other than hardship withdrawals governed by Article VII, upon
the conditions specified in this Article VIII.

          8.02.  Categories of Contributions.
                 ---------------------------

          Subject to such rules as the Employee Benefits Committee may from time
to time prescribe, a Participant may make a withdrawal in any amount, and such
amount may include all or any portion of any of the following categories of
contributions; provided, however, that withdrawals shall be deemed to be made in
the following order:

               (a)  First, a Participant may withdraw the portion of his
          Profit-Sharing Account attributable to Employee Contributions and
          Rollover Contributions, and earnings thereon, as described in Sections
          6.01(b) and 6.01(d);

               (b)  Second, a Participant may withdraw his vested interest in
          his PAYSOP Account, and the earnings thereon, as described in Section
          6.01(h), to the extent that those amounts accrued prior to June 1,
          1998;

               (c)  Third, a Participant may withdraw his vested interest
          (determined in accordance with Section 10.01) in the portion of his
          ESOP Pre-Split Matching Account that is attributable to Employer
          Contributions, and earnings thereon, as described in Section 6.01(e),
          to the extent that those amounts accrued prior to June 1, 1998;

                                      -34-

<PAGE>

               (d)  Fourth, a Participant may withdraw his vested interest
          (determined in accordance with Section 10.01) in the portion of his
          Company Matching Account that is attributable to Employer
          Contributions, and earnings thereon, as described in Section 6.01(f),
          to the extent that those amounts accrued prior to June 1, 1998;

               (e)  Fifth, a Participant may withdraw amounts from his
          Intermedics Matching Account, as described in Section 6.01(i), to the
          extent that those amounts accrued prior to May 1, 1999;

               (f)  Sixth, a Participant who has attained age 59 1/2 may
          withdraw his vested interest (determined in accordance with Section
          10.01) in the portion of his PAYSOP Account, and the earnings thereon,
          as described in Section 6.01(h); his vested interest (determined in
          accordance with Section 10.01) in the portion of his Profit Sharing
          Account that is attributable to Employer Contributions, other than
          Basic Contributions made under this Plan, and earnings thereon, as
          described in Section 6.01(c); his vested interest (determined in
          accordance with Section 10.01) in the portion of his ESOP Pre-Split
          Matching Account that is attributable to Employer Contributions, and
          earnings thereon, as described in Section 6.01(e); and his vested
          interest (determined in accordance with Section 10.01) and the portion
          of his Company Matching Account that is attributable to Employer
          Contributions, and earnings thereon, as described in Section 6.01(f);
          to the extent that those amounts accrued after May 31, 1998;

               (g)  Seventh, a Participant who has attained age 59 1/2 may
          withdraw his vested interest in his Salary Reduction Contributions
          Account, as described in Section 6.01(a), without regard to hardship;
          and

               (h)  Eighth, a Participant who has attained age 59 1/2 may
          withdraw his vested interest (determined in accordance with Section
          10.01) in the portion of his Profit-Sharing Account that is
          attributable to Basic Contributions made under this Plan, and his
          Retirement ESOP Account that is attributable to Basic Contributions
          made under this Plan, as described in Sections 3.06(b) and 3.06(f).

          8.03.  Restrictions Applicable to Participants with Less Than Five
                 -----------------------------------------------------------
Years of Service.
----------------

                    (a)  In no event shall the amount of a withdrawal pursuant
               to Section 8.01 by any Participant who has completed less than 5
               years of Service as of the date of withdrawal include any
               matching contributions that have not been held in the Trust for
               at least the 24 month period prior to the date of the withdrawal.

                    (b)  In the event of a withdrawal by a Participant who has
               completed less than 5 years of Service of the portion of his
               Participant's Account that is attributable to Employer
               Contributions, pursuant to Section 8.02(b) or 8.02(c) and prior
               to 5 consecutive One Year Periods of Severance, the portion of
               those Employer Contributions that are not withdrawn shall be
               accounted for separately

                                      -35-

<PAGE>

               until the Participant incurs 5 consecutive One Year Periods of
               Severance. The Participant's vested interest in those Employer
               Contributions at any time shall be the Participant's vested
               percentage times the sum of the remaining Employer Contributions
               and all prior distributions of Employer Contributions, minus all
               prior distributions of Employer Contributions.

          8.04.  General Provisions Applicable to Withdrawals.
                 --------------------------------------------

                    (a)  The date on which the Employee Benefits Committee
               receives a Participant's request for payment shall be the
               applicable Value Determination Date for the amount that is
               withdrawn under any paragraph of Section 8.02.

                    (b)  The amount of a withdrawal shall be deducted from the
               Participant's Account and the remaining portion of that account
               shall then become the total value of the Participant's Account.

                    (c)  Withdrawals shall be made in cash only, except for
               withdrawals from the Company Stock Fund under Section 11.01. The
               withdrawals shall be made on a pro rata basis from all of the
               investment Funds in which the amounts withdrawn are then
               invested.

                    ARTICLE IX. RESTRICTIONS ON WITHDRAWALS
                    ---------------------------------------

          9.01.  Restrictions Upon Number of Withdrawals.
                 ---------------------------------------

                    (a)  Subject to such rules as the Employee Benefits
               Committee may from time to time prescribe, a Participant may make
               no more than one (1) withdrawal pursuant to either Article VII or
               Article VIII in any Plan Year.

                    (b)  If a Participant has a hardship as defined in Section
               7.01(b), and the amount available for the Participant to withdraw
               under Article VIII is insufficient to satisfy the hardship, then
               for purposes of Section 9.01(a), the Participant shall be treated
               as taking one withdrawal if he simultaneously requests to
               withdraw (1) pursuant to Article VIII, the maximum amount
               available for him to withdraw under that Article; and (2)
               pursuant to Article VII, the remaining amount required to satisfy
               the hardship.

          9.02.  Notice Requirements for Withdrawals.
                 -----------------------------------

          With respect to withdrawals under Article VII and Article VIII, no
less than 30 days and no more than 90 days before the date as of which the
withdrawal occurs (or within any other period permissible under applicable law),
the Employee Benefits Committee shall furnish the Participant with a general
written explanation of the form in which the withdrawal will be made, the effect
on his Participant's Account of the Participant's taking such a withdrawal, and
any other information the Employee Benefits Committee deems material to the
Participant's request. No request for a withdrawal shall be valid unless it is
made after receipt of the written explanation. The Participant may waive the
requirement that the withdrawal occur at least 30 days after receipt of the
written explanation. The Participant's written request for a withdrawal

                                      -36-

<PAGE>

shall be deemed to be the Participant's consent to the distribution of the
withdrawn amounts and, if applicable, a waiver of the 30 day notice requirement.
Distribution of the withdrawal shall be made as soon as practicable after the
expiration of the 30-day period following the Participant's receipt of the
written explanation or, if applicable, as soon as practicable after the
Participant waives the 30-day period.

               ARTICLE X. PAYMENTS UPON TERMINATION OF EMPLOYMENT
               --------------------------------------------------

          10.01. Terms of Payment.
                 ----------------

               (a)  General. Upon termination of employment, a Participant, or,
          in a proper case, his designated beneficiary or legal representative,
          shall be entitled to payment from his Participant's Account in
          accordance with the following terms and conditions:

                    (1)  Resignation or Dismissal. Upon resignation or
               dismissal, a Participant shall be entitled to payment from his
               Participant's Account as follows:

                         (A)  Amount of Payment. A Participant who resigns or is
                    dismissed from employment and who has completed 5 years of
                    Service as of such date shall be entitled to the entire
                    value of his Participant's Account. A Participant shall
                    always be 100 percent vested in his Rollover Contributions
                    Account. A Participant who has completed less than 5 years
                    of Service shall be entitled to the value of his Salary
                    Reduction Contributions and Employee Contributions to the
                    Plan, plus the value of his salary reduction contributions
                    and qualified matching contributions made under the
                    Endovascular Technologies, Inc. 401(k) Savings Plan
                    transferred to this Plan, plus the value of any amounts
                    transferred from the CardioThoracic Systems 401(K) Savings
                    Plan to the Plan, plus his vested interest in the value of
                    the Employer Contributions credited to his Participant's
                    Account. Such vested interest shall be determined by a
                    percentage equal to 20 percent for each full year of
                    Service.

                         (B)  Time and Method of Payment. Subject to Section
                    10.01(b)(1) and Section 10.01(d), payment shall be made in a
                    lump sum as soon as practicable following the Participant's
                    resignation or dismissal. Notwithstanding Section 8.03(b),
                    any amount in which the Participant is not vested shall be
                    forfeited immediately. Forfeitures arising under the
                    preceding sentence shall be used to reduce Employer
                    Contributions as provided in Section 3.06 or 19.04, or shall
                    be used to reduce administrative expenses as provided in
                    Section 12.02(n). If a Participant who is less than 100
                    percent vested is reemployed before the earlier of (i) the
                    date on which he incurs 5 consecutive One Year Periods of
                    Severance, or

                                      -37-

<PAGE>

                    (ii) 5 years after the date of his reemployment, the balance
                    of his Participant's Account as of the date of distribution,
                    unadjusted for any subsequent gains and losses, shall be
                    restored to him. If the present value of any Participant's
                    vested accrued benefit exceeds $5,000, and the Participant
                    does not consent to the distribution, then forfeiture of the
                    Participant's non-vested interest in the value of the
                    Employer Contributions credited to his Participant's Account
                    shall be postponed until the Participant incurs 5
                    consecutive One Year Periods of Severance.

                         (C)  Valuation of the Participant's Account. The value
                    of a Participant's Account shall be determined as of the
                    date on which the Employee Benefits Committee (or its
                    designee) receives the Participant's request for payment.

                         (D)  Payment Not Treated as Withdrawal. Payment upon
                    termination of employment shall not be treated as a
                    withdrawal for purposes of Articles VII and VIII.

                    (2)  Retirement and Disability. Except as otherwise provided
               in Section 10.01(b)(1)(B), if the value of a Participant's vested
               accrued benefit exceeds $5,000, then, upon Retirement or upon
               becoming a Disabled Employee, the Participant, or his legal
               representative may elect payment under options (A), (B), or (C)
               of Section 10.01(a)(3) below, with respect to any portion of his
               benefit under the Plan that has accrued under this Plan, a Prior
               Savings Plan, or another qualified retirement plan that has
               merged into this Plan. The Participant's election of one or more
               payment options shall be made pursuant to procedures prescribed
               by the Employee Benefits Committee. Upon becoming a Disabled
               Employee, Retirement, or death while employed by an Employer, a
               Participant shall be fully vested in the value of his entire
               Participant's Account regardless of the number of years of
               Service he has completed.

                    (3)  Payment Options. Payment upon Retirement or Disability
               shall be made under one of the following options:

                         (A)  Lump Sum. Payment of the entire Participant's
                    Account with the value of the Participant's Account to be
                    calculated as of the date on which the Employee Benefits
                    Committee (or its designee) receives a Participant's request
                    for payment. Payment under this option (A) may be made at
                    any time not later than the late date of payment permitted
                    by Section 10.01(b)(1).

                         (B)  Installment Payments of All or Part of the
                    Account.

                                      -38-

<PAGE>

                              (i)    Substantially equal annual, semi-annual,
                         quarterly, or monthly payments of the value of a
                         specified proportion of Units held at the date of
                         Retirement or Disability, the proportion to be not less
                         than 10 percent per year of the Units held at the date
                         of Retirement or Disability. The value of the specified
                         proportion of the Participant's Account to be paid to
                         the Participant shall be calculated as of the date of
                         each payment.

                              (ii)   Lump-sum payment of any part or all of the
                         value of the Participant's Account, with any balance of
                         the Participant's Account to be paid at later dates.
                         For the purpose of making the initial lump-sum payment
                         under this Section 10.01(a)(3)(B)(ii), the value of the
                         Participant's Account shall be calculated as of the
                         date on which the Employee Benefits Committee (or its
                         designee) receives the Participant's request for
                         payment. For the purpose of making any subsequent
                         payments under this Section 10.01(a)(3)(B)(ii), the
                         value of the Participant's Account shall be calculated
                         as of the date of each payment.

                              (iii)  A Participant who has elected payment under
                         Section 10.01(a)(3)(B)(i) or (ii), above, may request
                         any number of additional payments during a Plan Year in
                         amounts specified by the Participant. In addition, a
                         Participant who has elected payment under this Section
                         10.01(a)(3)(B) may elect at any time to accelerate the
                         payment of all remaining payments into a single
                         lump-sum payment. For purposes of making additional or
                         accelerated payments, the value of the Participant's
                         Account shall be calculated as of the date on which the
                         Employee Benefits Committee receives the Participant's
                         request for payment.

                         (C)  Fixed Amount Installment Payments. Substantially
                    equal annual, semi-annual, quarterly, or monthly payments of
                    an amount specified by the Participant, with payments
                    continuing until the Participant's Account is exhausted. A
                    Participant who has elected payment under this Section
                    10.01(a)(3)(C) may request any number of additional payments
                    during a Plan Year in amounts specified by the Participant.
                    In addition, a Participant who has elected payment under
                    this Section 10.01(a)(3)(C) may elect at any time to
                    accelerate the payment of all remaining payments into a
                    single lump-sum payment. For purposes of making additional
                    or accelerated payments, the value of the Participant's
                    Account shall be calculated as of the date on which the
                    Employee Benefits Committee receives the Participant's
                    request for payment.

                                      -39-

<PAGE>

                    (4)  Information Relevant to Payment Options.
                         ---------------------------------------

                         (A)  Notice. No less than 30 days and no more than 90
                    days before the date benefits are to commence, the Employee
                    Benefits Committee shall furnish to each Participant who is
                    eligible to receive a distribution under Section 10.01(a)(1)
                    information as applicable regarding: the Participant's right
                    to defer receipt of the distribution, the material features
                    and relative values of the optional forms of benefits under
                    the Plan, and the Participant's right to make (and the
                    effect of) an election to receive benefits in a particular
                    form.

                         (B)  Waiver of Notice. If the 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 notice
                    required under Treasury Regulation ss. 1.411(a)-11(c) is
                    given, provided that all of the following requirements are
                    satisfied:

                              (i)    The Employee Benefits Committee or its
                         designee 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);

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

                    (5) Living Trust.  A Participant who Retires or who becomes
               a Disabled Employee as described in Section 10.01(a)(2), may
               elect that distributions to be made to the Participant shall
               instead be made directly to a revocable grantor trust (a "living
               trust"), provided that such election is revocable and is in
               accordance with such other rules as may be prescribed by the
               Employee Benefits Committee, and provided that the trustee of the
               living trust files a written acknowledgment with the Employee
               Benefits Committee that the living trust has no enforceable right
               in, or to, any benefit payment that has not yet been made.

               (b)  Time and Form of Payment.
                    ------------------------

                    (1)  Time of Payment.
                         ---------------

                         (A)  General. Upon termination of a Participant's
                    Service, payment shall be made, or in the case of a payment
                    option requiring periodic payment, payment shall commence,
                    as soon thereafter as practicable; provided, however, that
                    if the present value of any Participant's vested accrued
                    benefit exceeds $5,000, no immediate distribution shall be
                    made without the consent of the

                                      -40-

<PAGE>

                    Participant. Except as provided below, in no event shall
                    payment be made or payments commence later than the
                    "required beginning date."

                              (i)    For purposes of this Section, "required
                         beginning date" means, with respect to a Participant
                         who is not a 5 percent owner as described in Code
                         section 416 and who did not reach 70 1/2 before January
                         1, 1997, April 1 of the calendar year following the
                         later of (a) the calendar year in which the
                         Participant attains age 70 1/2 or (b) the calendar year
                         in which the Participant retires. With respect to a
                         Participant who is a 5 percent owner as described in
                         Code section 416 or any Participant who reaches age 70
                         1/2 before January 1, 1997, "required beginning date"
                         means April 1 of the calendar year following the
                         calendar year in which the Participant reaches age 70
                         1/2.

                              (ii)   Notwithstanding the provisions of this
                         Section, "required beginning date" means, with respect
                         to a Participant's accrued benefit under the
                         Endovascular Technologies, Inc. 401(k) Savings Plan
                         transferred to this Plan ("EVT Plan Benefits") or under
                         the Employees' 401(k) Plan of Devices for Vascular
                         Intervention, Inc. transferred to this Plan ("DVI Plan
                         Benefits") with respect to a Participant who is not a 5
                         percent owner as described in Code section 416 and who
                         did not reach age 70 1/2 before January 1, 2000, April
                         1 of the calendar year following the later of (a) the
                         calendar year in which the Participant attains age 70
                         1/2 or (b) the calendar year in which the Participant
                         retires. With respect to a Participant who reaches age
                         70 1/2 on or after January 1, 1997, but before January
                         1, 2000, the Participant's "required beginning date"
                         means April 1 of the calendar year following the
                         calendar year in which the Participant reaches age 70
                         1/2 unless the Participant elects with his spouse's
                         consent to defer commencement of his EVT Plan benefits
                         or his DVI Plan Benefits, whichever is applicable,
                         until a date no later than April 1 of the calendar year
                         following the calendar year in which he retires. With
                         respect to a Participant who is a 5 percent owner as
                         described in Code section 416 or any Participant who
                         reached age 70 1/2 before January 1, 1997, "required
                         beginning date" means April 1 of the calendar year
                         following the calendar year in which the Participant
                         reaches age 70 1/2.

                              (iii)  Further, also notwithstanding the
                         provisions of this Section, "required beginning date"
                         means, with

                                      -41-

<PAGE>

                         respect to a Participant's accrued benefit under the
                         CardioThoracic Systems 401(K) Savings Plan transferred
                         to this Plan ("CTS Plan Benefits"), with respect to a
                         Participant who is not a 5 percent owner as described
                         in Code section 416 and who did no reach age 70 1/2
                         before January 1, 2002, April I of the calendar year
                         following the later of (a) the calendar year in which
                         the Participant attains age 70 1/2 or (b) the calendar
                         year in which the Participant retires. With respect to
                         a Participant who is a 5 percent owner as described in
                         Code section 416 or any Participant who reaches age 70
                         1/2 before January 1, 2002, "required beginning date"
                         means April 1 of the calendar year in which the
                         Participant reaches age 70 1/2.

                         (B)  Retirement and Disability. If a Participant's
                    Service terminates as a result of his Retirement or
                    permanent Disability, the Participant may defer payment or
                    the commencement of payments until any day thereafter;
                    provided, that if the Participant wishes to defer payment or
                    commencement of payment beyond his required beginning date
                    as specified in Section 10.01(b)(1)(A), above, the
                    Participant shall withdraw, pursuant to Section 10.01(b)(3),
                    at least an amount sufficient to satisfy the required
                    distribution rules of Code section 401(a)(9) with respect to
                    each year for which such a distribution is required. For
                    purposes of the preceding sentence, a Participant who does
                    not make an affirmative election to commence distribution
                    will be deemed to have elected to defer distribution.
                    Notwithstanding all of the foregoing, if the present value
                    of the Participant's vested accrued benefit does not exceed
                    $5,000, the Participant's vested accrued benefit will be
                    distributed in a lump sum as soon as practicable after
                    termination of Service.

                    (2)  Restriction Relating to Form of Payment. In no event
               shall any form of payment hereunder provide (i) for payment of
               benefits over a period longer than the life of the Participant,
               the lives of the Participant and his beneficiary, the life
               expectancy of the Participant, or the joint life expectancies of
               the Participant and his beneficiary, or (ii) for payment of
               benefits pursuant to any schedule under the Plan unless the
               schedule satisfies the incidental benefit requirement at Code
               section 401(a)(9)(G). For purposes of Section
               10.01(b)(1)(B)(2)(i), the Participant may elect whether or not
               his life expectancy and/or the life expectancy of his spouse (but
               not of any other beneficiary) will be recalculated annually.
               Notwithstanding any other provisions of the Plan, distributions
               under the Plan should be made in accordance with Code section
               401(a)(9) and the regulations thereunder, including the minimum
               distribution incidental benefit requirement of proposed Treasury
               Regulation ss. 1.401(a)(9)-2. With respect to distributions under
               the Plan made for calendar years

                                      -42-

<PAGE>

               beginning on or after January 1, 2002, the Plan will apply the
               minimum distribution requirements of Code section 401(a)(9) in
               accordance with the regulations under Code section 401(a)(9) that
               were proposed on January 17, 2001, notwithstanding any provision
               of the Plan to the contrary. This provision shall continue in
               effect until the end of the last calendar year beginning before
               the effective date of final regulations under Code section
               401(a)(9) or such other date as may be specified in guidance
               published by the Internal Revenue Service.

                    (3)  Withdrawals Prior to Commencement of Distribution. If a
               Participant has Retired or become a Disabled Employee and has
               elected to defer commencement of the distribution of his
               Participant's Account, the Participant shall be entitled to make
               withdrawals from time to time from his Participant's Account
               before the distribution of his Participant's Account commences.
               For purposes of the preceding sentence, a Participant who has not
               affirmatively elected to commence distribution will be deemed to
               have elected to defer distribution. If the beneficiary of a
               Participant who died while actively employed, or of a Participant
               who died after Retiring or becoming a Disabled Employee, has
               elected to defer commencement of the distribution of the vested
               portion of the Participant's Account pursuant to Section
               10.02(a), the beneficiary shall also be entitled to make periodic
               withdrawals from the vested portion of the Participant's Account
               before the distribution of the vested portion of the
               Participant's Account commences. Any withdrawal under this
               Section 10.01(b)(3) shall be subject to the rules prescribed in
               Articles VIII and IX of the Plan; provided, however, that a
               Participant's withdrawal under this Section 10.01(b)(3) may
               include Salary Reduction Contributions and earnings thereon, and
               provided further that neither Section 8.03(b) nor 9.01 shall
               apply to a withdrawal under this Section 10.01(b)(3). Any
               withdrawal under this Section 10.01(b)(3) on or after January 1,
               2004 may be made during the 60-day period beginning on the date
               the Participant Retired, became a Disabled Employee or died,
               whichever is applicable, only if the amount remaining in the
               Participant's or beneficiary's Plan accounts after the withdrawal
               is at least $5,000.

               (c)  Transfer to Affiliate. Notwithstanding the foregoing
          provisions of this Section 10.01, if a Participant's employment with
          an Employer is terminated, but he is transferred from employment with
          an Employer to employment with any affiliate designated by the
          Employee Benefits Committee, the Participant may elect, in accordance
          with uniform rules prescribed by the Committee, that his Participant's
          Account under the Plan shall be transferred by the Trustee to the
          trust under the savings plan maintained by the affiliate, provided
          that the affiliate's plan is a plan intended to meet the requirements
          for qualification under Code section 401(a) and that the trust is a
          trust intended to be exempt from tax under Code section 501(a).

                                      -20-

<PAGE>

               (d)  Distribution of Benefits to Certain Particinants in Case of
          Sale or other Disposition of Assets or Stock. A Participant who,

                    (1)  as a result of a sale or other disposition of assets or
               stock, terminates employment with an Employer or Qualified
               Subsidiary and immediately becomes employed by, and performs the
               same or substantially the same duties for, a successor employer
               (hereinafter, the "Successor Employer") that is not a member of
               the controlled group of corporations (within the meaning of Code
               section 414(b), (c), (m), or (o)) that includes the Employer
               (hereinafter, the "controlled group"), and

                    (2)  is not reemployed by a member of the controlled group
               upon his termination of employment with the Successor Employer,
               shall be eligible to receive a benefit pursuant to this Section
               10.01, subject to the following rules:

                         (A)  If the Employee has not attained Normal Retirement
                    Age at the time he becomes employed by the Successor
                    Employer, he shall receive any benefit for which he is
                    eligible pursuant to Section 10.01(a)(1) in a lump sum as
                    soon as practicable following his termination of employment
                    with the Successor Employer.

                         (B)  If the Employee has attained Normal Retirement Age
                    at the time he becomes employed by the Successor Employer,
                    he shall receive a benefit pursuant to this Section 10.01;
                    provided that, solely for purposes of determining the time
                    of payment, his termination of employment with an Employer
                    or Qualified Subsidiary shall not be deemed to occur until
                    the date of his termination of employment with the Successor
                    Employer.

          10.02. Beneficiary and Payment Upon Death.
                 ----------------------------------

               (a)  Beneficiary. Upon the death of a Participant while actively
          employed or upon his death after his Retirement, his becoming a
          Disabled Employee, his resignation, or his discharge, but prior to the
          receipt of any benefits under the Plan, the vested portion of the
          Participant's Account, determined as of the date of his death, shall
          be distributed to his beneficiary. Notwithstanding the preceding
          sentence, if the beneficiary of a deceased Participant is the
          Participant's spouse, as specified below, such spousal beneficiary,
          upon filing a written election with the Employee Benefits Committee,
          may have payment made or payments commence at any date not later than
          December 31 of the calendar year in which the Participant would have
          attained age 70 1/2 (or December 31 of the calendar year following the
          calendar year in which the Participant died, if that is later). All
          other beneficiaries, upon filing a written election with the Employee
          Benefits Committee, (1) may have payment made on a date not later than
          December 31 of the calendar year containing the fifth anniversary of
          the date of the Participant's death or (2) if the beneficiary is a
          designated beneficiary as that

                                      -44-

<PAGE>

          term is described in Code section 401(a)(9)(E), may have payment made
          or payments commence at any date not later than December 31 of the
          calendar year following the calendar year in which the Participant
          died. The value of the Participant's Account shall be determined in
          such cases as of the date payment is made or payments commence. The
          sole beneficiary of a Participant who is married on the date of his
          death shall be the spouse to whom he is then married unless the
          Participant and his spouse have given their written notarized consent,
          in accordance with rules prescribed by the Employee Benefits
          Committee, to the designation of another beneficiary or beneficiaries.
          The beneficiary or beneficiaries of any other Participant shall be the
          person or persons designated by the Participant in a written notice
          filed with the Employee Benefits Committee, in accordance with rules
          prescribed by the Committee, designating a beneficiary or
          beneficiaries. A beneficiary may designate his own beneficiary by
          filing with the Employee Benefits Committee a written notice
          designating, in accordance with rules prescribed by the Committee, a
          beneficiary. If a beneficiary who survives the Participant dies before
          having received all benefits due under the Plan, and the beneficiary
          has not designated his own beneficiary, then any remaining benefits
          shall be paid to the estate of the deceased beneficiary. A
          Participant, but not a beneficiary, may designate a trust as his
          beneficiary by filing with the Employee Benefits Committee a written
          notice designating, in accordance with rules prescribed by the
          Committee, such trust beneficiary; provided, however, that a married
          Participant may designate a trust as his beneficiary only if the
          Participant and his spouse have given their written, notarized consent
          to the designation as specified above.

               (b)  Change of Beneficiary; Receipt. A Participant may from time
          to time change or cancel any beneficiary designation; provided,
          however, that any change or cancellation that diminishes the rights of
          the person who is the Participant's spouse as of the date that the
          change or cancellation is purported to be effective shall not be
          effective without the written consent of the Participant's spouse. No
          designation or change or cancellation of a designation of
          beneficiaries shall be effective unless received by the Employee
          Benefits Committee, in a form satisfactory to it, and in no event
          shall it be effective before the day of such receipt.

               (c)  Effect of Designation. The designation of a beneficiary
          under the Plan, including the deemed designation of a Participant's
          spouse as his sole beneficiary pursuant to Section 10.02(a), shall be
          controlling over any testamentary or other disposition. In case of
          doubt as to the right of any person claiming to be a beneficiary,
          distribution shall be made to the Participant's surviving spouse;
          provided, however, that if it is established to the satisfaction of
          the Employee Benefits Committee that there is no surviving spouse,
          payment shall be made to the Participant's estate. Any distribution
          pursuant to the preceding sentence shall discharge the Employee
          Benefits Committee, the Trustees, the Company, and the Employers from
          any further liability with respect to distribution of the
          Participant's Account.

                                      -45-

<PAGE>

               (d)  Form of Payment. If the Participant dies before distribution
          of his benefits begins, distribution to a beneficiary pursuant to
          Section 10.02(a) shall be made in the form elected by the beneficiary
          from among the options described in Section 10.01(a)(3). Effective
          December 1, 2003, notwithstanding the preceding sentence, if the value
          of a Participants vested Account on the Participant's death does not
          exceed $5,000, distribution to the beneficiary pursuant to Section
          10.02(a) shall be made in a single lump sum payment as soon as
          administratively practicable after the death of the Participant. If
          the Participant dies after distribution of his benefits has begun,
          distribution to a beneficiary pursuant to Section 10.02(a) hereof
          shall be made in the form in which the Participant is receiving
          distribution at the time of his death or, at the election of the
          beneficiary, in a lump sum.

          10.03. Inability To Locate Payee.
                 -------------------------

          If reasonable efforts have been made during a 12 month period to
locate a Participant or beneficiary to whom a distribution is due, and if the
Participant or beneficiary cannot be located in spite of these efforts, the
Employee Benefits Committee, after the expiration of the 12 month period, may
direct that the balance remaining in the Participant's Account be forfeited and
allocated to all of the other Participants' Accounts in the manner described in
Section 3.06(c). If the Participant or beneficiary whose Participant's Account
is forfeited in accordance with the preceding sentence subsequently makes a
valid claim for the Participant's Account, the Participant's Employer shall
restore the Participant's Account. The amount restored shall be the value of the
Participant's Account as of the date of forfeiture, exclusive of any earnings
after that date.

          10.04. Qualified Domestic Relations Orders.
                 -----------------------------------

          Notwithstanding any other provisions of the Plan, in the event that a
qualified domestic relations order, as defined in Code section 414(p), is
received by the Employee Benefits Committee, benefits shall be payable in
accordance with that order and with Code section 414(p). Payment may be made at
any time specified in the order, irrespective of whether the Participant has
reached the "earliest retirement age" as defined in Code section 414(p).

             ARTICLE XI. METHODS OF PAYING WITHDRAWALS AND PAYMENTS
             ------------------------------------------------------

          11.01. Payment from Company Stock Fund.
                 -------------------------------

          Upon written request made at any time prior to payment, a Participant
or former Participant, or, in a proper case, a designated beneficiary or legal
representative, may receive payment in cash, or in Shares, or in a combination
of any of these, provided that he shall not be entitled to receive in Shares any
amount greater in value than the value represented by the Units that are being
withdrawn by the Participant from the Company Stock Fund. The value of the
Participant's Units in the Company Stock Fund shall be calculated as of the date
on which the Employee Benefits Committee receives the Participant's request for
payment from the Fund. The Employee Benefits Committee shall direct the Trustee
to fulfill any such request, but the Committee may not direct the issuance of
partial Shares upon any request.

                                      -46-

<PAGE>

          This Section 11.01 shall apply to withdrawals under Article VIII and
Section 19.14 and to distributions under Article X and Section 19.13.

          11.02. Optional Direct Rollover.
                 ------------------------

          A Participant, a beneficiary who is a surviving spouse of a
Participant, or an alternate payee who is a spouse or a former spouse of a
Participant, may elect to have any portion of a payment or withdrawal that is an
"Eligible Rollover Distribution" as defined in Code section 402(c)(4) paid to an
"Eligible Retirement Plan" as defined in Code section 402(c)(8)(B) in a direct
rollover; provided that with respect to a beneficiary who is a surviving spouse,
an "Eligible Retirement Plan" shall be as defined in regulations issued by the
Internal Revenue Service under Code section 402. An election under this Section
shall be made in the form and at the time prescribed by the Employee Benefits
Committee, shall specify the eligible retirement plan to which the withdrawal
amount is to be paid, and shall be subject to such rules as the Employee
Benefits Committee may establish.

          This Section 11.02 shall apply to withdrawals under Article VII,
Article VIII, and Section 19.14 of the Plan, and to distributions under Article
X and Section 19.13 of the Plan.

                          ARTICLE XII. ADMINISTRATION
                          ---------------------------

          12.01. Administrative Committee.
                 ------------------------

          The Plan shall be administered by an Employee Benefits Committee that
shall consist of not less than 5 nor more than 15 members appointed by the Board
of Directors or its designee. The Employee Benefits Committee shall be the "Plan
Administrator" for purposes of ERISA.

          12.02. Appointment, Resignation, and Organization of Committees.
                 --------------------------------------------------------

               (a)  Employee Benefits and Fund Advisory Committees. The
          provisions of this Section 12.02 apply to the Employee Benefits
          Committee established pursuant to Section 12.01 and the Fund Advisory
          Committee established pursuant to Section 13.01.

               (b)  Appointed by Board of Directors. The exact number of members
          of each of the committees, the members thereof, and their respective
          terms of office shall be designated from time to time by the Board of
          Directors or its designee.

               (c)  Acceptance and Resignation. Upon becoming a member of one of
          the respective committees, the member shall file an acceptance of his
          appointment in writing with the Board of Directors or its designee and
          with the Secretary of the committee. Any member of either of such
          committees may resign by submitting a written resignation to the Board
          of Directors or its designee and the Secretary of the applicable
          committee, effective upon the date specified in the instrument of
          resignation.

                                      -47-

<PAGE>

               (d)  Officers. The Board of Directors or its designee shall
          appoint for each committee one of its members as Chairman and one of
          its members as Secretary and may also appoint such other officers as
          it deems necessary.

               (e)  Notice to Trustee. The Secretary or an Assistant Secretary
          of the Company shall, from time to time, notify the Trustee of the
          appointment of members of the respective committees and of any other
          person or persons authorized and designated to act on behalf of the
          respective committees, together with specimens of the signature of
          each of such persons, and for all purposes hereunder the Trustee shall
          be conclusively entitled to rely upon the identity and authority of
          the Secretary or Assistant Secretary and the members constituting the
          respective committees and of such other person or persons as disclosed
          by such certificate.

               (f) No Compensation. No member of either committee shall receive
          any compensation for his services as a member.

               (g)  Manner of Acting. A majority of the members of each
          committee shall constitute a quorum for the transaction of business,
          and all resolutions or other actions of the committee at any meeting
          shall be by vote of a majority of those present at the meeting,
          provided, however, that any action required or permitted to be taken
          at any meeting of the committee may be taken without a meeting, if
          prior to the action a written consent thereto is signed by a majority
          of the members of the committee and the written consent is filed with
          the minutes of the committee.

               (h)  Meetings. Each committee shall hold meetings at such time,
          places, and upon such notice as its members may from time to time
          determine. Each committee shall maintain accurate records of actions
          taken at its meetings.

               (i)  Delegations of Authority by Committee. Either committee may,
          in its discretion, delegate authority to any other person or persons
          to act on behalf of the committee, including, without limitation, the
          right to make any determination or to sign checks, warrants, and other
          instruments incidental to the operation of the Plan or to the making
          of any payment specified therein.

               (j)  Employment of Counsel. Each committee is authorized to
          employ counsel and such actuarial or clerical services as it may
          require in carrying out the provisions of the Plan.

               (k)  Allocation of Responsibilities Between Committees. The
          committees, by mutual agreement, in writing, may allocate to either of
          the committees any duty or responsibility that is not expressly
          assigned to either of the committees by the provisions of the Plan.
          Any allocation so made shall be fully effective to assign the duty or
          responsibility to the designated committee as though the allocation
          had been made expressly by provisions of the Plan.

                                      -48-

<PAGE>

               (l)  Records and Reports. Each committee shall maintain adequate
          records for accounting valuation purposes and shall deliver to the
          Company or to all Employers making contributions under the Plan an
          annual report showing the status of the Fund established pursuant to
          the Plan.

               (m)  Standard of Conduct. The members of each committee shall
          discharge their duties 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.

               (n)  Costs and Expenses. The costs and expenses of administering
          the Plan, including, but not limited to, legal fees, accountant's
          fees, reasonable compensation for any Investment Manager and the
          Trustee, and the expenses of the Fund Advisory Committee and the
          Employee Benefits Committee in the performance of their duties
          relating to the operation of the Plan, shall be paid for by the Plan,
          except to the extent their are paid by the Company. The Fund Advisory
          Committee may establish guidelines for the allocation of any such
          administrative costs and expenses to the Fund. Forfeitures that are
          not allocated to Participants' Accounts or used to repay an Exempt
          Loan in accordance with other provisions of the Plan shall be used to
          pay administrative expenses for which the Plan is liable.

          12.03. Powers and Duties of the Employee Benefits Committee.
                 ----------------------------------------------------

               (a)  Rules and Rights. Subject to the provisions of the Plan and
          to such restrictions as the Board of Directors or its designee may
          adopt, the Employee Benefits Committee may establish rules for the
          transaction of its business and the administration of the Plan.
          Subject to such provisions and restrictions, the Employee Benefits
          Committee shall have the authority to determine, in its complete
          discretion, all questions relating to the interpretation of the terms
          and provisions of the Plan and all other questions arising under the
          Plan or in connection with the administration of the Plan, including
          without limitation the right to remedy possible ambiguities,
          inconsistencies, or omissions by general rule or particular decision.
          All rules, interpretations, determinations, and decisions of the
          Committee or of the Board of Directors or its designee in respect to
          any matter or question under the Plan shall be final, conclusive, and
          binding upon all persons having or claiming to have any interest in or
          under the Plan including, but not by way of limitation, all Employees,
          retired Employees, deferred benefit employees, contingent
          beneficiaries, spouses, dependent children, alternate payees, and any
          other person. The Committee shall determine Base Earnings, Base
          Earnings Plus Commissions, years of Service, and years of
          participation and make any finding of fact necessary for the
          determination of any right or any benefit payable under the Plan.

                                      -49-

<PAGE>

               (b)  Checking Account. To facilitate payments to Participants who
          are making withdrawals, the Employee Benefits Committee may establish
          and maintain one or more checking accounts in the name of the Plan.

               (c)  Claims Procedures. Each Participant or his beneficiary must
          claim any benefit to which he believes he is entitled under this Plan
          in accordance with procedures established by the Employee Benefits
          Committee.

               The Employee Benefits Committee will decide a claim within 90
          days of the date on which the claim is filed, unless special
          circumstances require a longer period for adjudication and the
          claimant is notified in writing, prior to the expiration of the 90-day
          period, of the reasons for an extension of time; provided, however,
          that no extensions will be permitted beyond 90 days after the
          expiration of the initial 90-day period. If the Employee Benefits
          Committee fails to notify the claimant of its decision to grant or
          deny a claim within the time specified by this paragraph, the claim
          will be deemed to have been denied and the review procedure described
          below will become available to the claimant.

          If a claim is denied, the claimant must receive a written notice
          stating:

                    (1)  The specific reason for the denial

                    (2)  A specific reference to the Plan provision on which the
               denial is based;

                    (3)  A description of additional information necessary for
               the claimant to perfect his claim, and an explanation of why such
               material is necessary; and

                    (4)  An explanation of the Plan's claim review procedures.
               The claimant will have 60 days to request in writing a review of
               the denial of his claim by the Employee Benefits Committee, which
               shall provide a full and fair review. The claimant may review
               pertinent documents, and he may submit issues and comments in
               writing. The decision by the Employee Benefit Committee with
               respect to the review will be given within 60 days after receipt
               of the request, unless special circumstances require an
               extension. In no event will the decision be delayed beyond 120
               days after receipt of the request for review. The decision will
               be written in a manner calculated to be understood by the
               claimant, and it will include specific reasons on which the
               decision is based and refer to the specific Plan provisions on
               which the denial is based.

               The Employee Benefits Committee shall promulgate such additional
          rules and procedures for processing claims as it deems advisable or as
          may be required by regulations issued pursuant to ERISA.

                                      -50-

<PAGE>

             ARTICLE XIII. TITLE TO ASSETS AND MANAGEMENT OF FUNDS
             -----------------------------------------------------

          13.01. Fund Advisory Committee.
                 -----------------------

          A Fund Advisory Committee consisting of not less than 3 nor more than
12 members shall be appointed by the Board of Directors or its designee. In
addition to the other responsibilities assigned to it in the Plan, the Fund
Advisory Committee shall advise the respective Trustee of the investment
objectives of the Trust and of any changes or modifications therein. The
foregoing shall not relieve the Trustee from the sole responsibility for the
Investment of the Trust Fund under its control. The Fund Advisory Committee
shall be responsible for providing investment-related information to
Participants and beneficiaries. The Fund Advisory Committee shall be subject to
the procedures and rules set forth in Section 12.02.

          13.02. Trustee.
                 -------

               (a)  Appointment of Trustees. The Fund Advisory Committee shall
          appoint one or more individuals, banks, or trust companies as Trustees
          to hold, pursuant to one or more Trusts, all contributions made
          pursuant to the Plan and all other assets of the Plan. Each Trustee
          shall serve at the pleasure of the Fund Advisory Committee and shall
          have such rights, powers, and duties as are contained in the Trust
          Agreement by which it or he is appointed, and as the same may be
          amended.

               Execution of the Trust Agreement by the Trustee shall be evidence
          of the Trustee's acceptance of its fiduciary capacity with respect to
          the Fund created by the applicable Trust Agreement to the allocation
          of fiduciary responsibilities, obligations, and duties contained in
          the Plan and the applicable Trust Agreement.

               (b)  Management of Assets. All assets of the Plan shall be held
          in trust by the Trustee for use in providing the benefits of the Plan.
          Each Trustee shall have the sole responsibility, subject to Section
          13.02(d), for the investment of the funds held pursuant to the
          applicable Trust. In the event that a contribution by an Employer is
          made under circumstances described in Section 3.08, the Employer shall
          be entitled to have the contribution returned on the conditions stated
          in the Section. In addition, the proceeds of an Exempt Loan (or
          Financed Shares purchased with such proceeds), and earnings thereon,
          may be used to repay an Exempt Loan under the circumstances described
          in Article X1X. Except as provided in the preceding two sentences, no
          part of the corpus or income of any Trust shall be used for or
          diverted to purposes other than the exclusive benefit of Participants,
          retired Participants, and spouses and other beneficiaries of the
          Participants under the Plan.

               (c)  Investment Standards. All contributions made under this Plan
          shall be delivered to the Trustee and shall be held, invested, and
          reinvested as hereinafter set forth and in accordance with the
          provisions of the Trust Agreement. Investments shall consist only of
          those in which a prudent man familiar with the objectives of the Plan
          and using care, skill, prudence, and

                                      -51-

<PAGE>

          diligence would invest in the conduct of an enterprise of a like
          character and with like aims, diversifying the investments so as to
          minimize the risk of market losses; provided, however, that investment
          in the Company Stock Fund as provided by the Plan may be made without
          any limitation on the percentage of the total fair market value of the
          trust fund or any Participant's Account that is so invested.

               (d)  Investment Responsibility. Each Trustee shall have sole
          responsibility for investment of the applicable Trust unless the Fund
          Advisory Committee appoints an Investment Manager and allocates
          control and management of all or any portion of the assets held in the
          Trust to the Investment Manager. The Investment Manager shall be an
          investment adviser registered under the Investment Advisers Act of
          1940, a bank as defined in that Act, or an insurance company that is
          qualified to manage the assets of employee benefit plans under the
          laws of more than one state. An Investment Manager shall acknowledge
          in writing its appointment as a fiduciary of the Plan and shall serve
          until a proper resignation is receivell by the Fund Advisory
          Committee, or until it is removed or replaced by the Fund Advisory
          Committee.

               (e)  Responsibility of Investment Manager. An Investment Manager
          shall have sole investment responsibility for that portion of the
          assets of the Plan that it has been appointed to manage, and no other
          Plan Fiduciary or any Trustee shall have any responsibility for the
          investment of any of the assets, the management of which has been
          delegated to an Investment Manager, or liability for any loss to, or
          diminution in value of, the assets of the Plan resulting from any
          action directed, taken, or omitted by an Investment Manager. The Board
          of Directors, the committees, and the Trustee shall be under no duty
          to question the direction or lack of direction of any Investment
          Manager, but shall act, and shall be fully protected in acting, in
          accordance with each such direction. The investment responsibility of
          an Investment Manager shall not include responsibility for lending
          securities held in one or more of the Funds.

               (f)  Securities Lending. The right to lend securities, if any, in
          each of the Funds is expressly reserved to the Trustee that is the
          custodian of the Fund or portion thereof. The Trustee may, with the
          consent of the Fund Advisory Committee, lend securities held in one or
          more of the Funds.

                     ARTICLE XIV. MISCELLANEOUS PROVISIONS
                     -------------------------------------

          14.01. Nonalienation.
                 -------------

          No Employee, retired Employee, or other person shall have any right or
power, by draft, assignment, or otherwise, to mortgage, pledge, or otherwise
encumber in advance any interest in or portion of the assets held pursuant to
any Trust or to give any order in advance upon any Trustee therefore and every
attempted draft, assignment, or other disposition thereof shall be absolutely
void except to the extent permitted under Code section 401(a)(13) and the
regulations thereunder.

                                      -52-

<PAGE>

          14.02. Spendthrift Provision.
                 ---------------------

          Except as otherwise provided in this Section, the funds held pursuant
to any Trust shall not be liable in any way, whether by process of law or
otherwise, for the debts or other obligations of any Employee, retired Employee,
or other person. Unless expressly permitted by this Section benefits payable
under this Plan shall not be subject, in any manner, to anticipation,
alienation, sale, transfer, or assignment by the Employee, and any attempt to do
so shall be void. Notwithstanding the foregoing, the Plan Fiduciaries are
expressly authorized to comply with a qualified domestic relations order
pursuant to Section 10.04; to permit the use of Participant's Account as
security for a loan pursuant to Section 14.13; and to off-set a Participant's
Accounts against an amount that the Participant is ordered or required to pay to
the Plan pursuant to Code section 401(a)(13)(C).

          14.03. Nonguarantee.
                 ------------

          Plan Fiduciaries; Employers; and employees, officers, and directors of
the Employers and the Plan Fiduciaries, shall not be held or deemed in any
manner to guarantee the Plan against loss or depreciation.

          14.04. Indemnification of Certain Fiduciaries.
                 --------------------------------------

               (a)  Persons Entitled to Indemnification. Any person who is a
          member of the Employee Benefits Committee, the Fund Advisory
          Committee, the Board of Directors, and any employee of the Company or
          of any subsidiary or affiliated company who acts in a fiduciary
          capacity or any other capacity pursuant to the terms of the Plan,
          shall be indemnified by the Company against any and all liability and
          reasonable expense that may be incurred by either of them in
          connection with, or resulting from, any claim, action, suit, or
          proceeding (whether actual or threatened; civil, criminal,
          administrative, or investigative; or in connection with any appeal
          relating thereto) in which any of such persons may become involved as
          a party or otherwise by reason of acting in a fiduciary capacity or by
          reason of any action taken or not taken in such capacity whether or
          not such person continued to be a fiduciary at the time such liability
          or expense is incurred; provided such person acted in good faith, in
          what he reasonably believed to have been in the best interest of the
          Plan or the Employers, as the case may be, and, in addition, in any
          criminal action or proceeding, had no reasonable cause to believe that
          his conduct was unlawful.

               (b)  Definition. As used in this Section 14.04, the terms
          "liability" and "expense" shall include, but shall not be limited to,
          attorneys' fees and disbursements, and amounts of judgments, fines, or
          penalties against, and amounts paid in settlement by, such persons.

               (c)  Effect of Termination of Proceeding. The termination of any
          claim, action, suit, or proceeding, civil or criminal, by judgment,
          settlement (whether with or without court approval), or conviction, or
          upon a plea of guilty

                                      -53-

<PAGE>

          or of nolo contendere, or its equivalent, shall not create a
          presumption that the person did not meet the standards of conduct set
          forth in Section 14.04(a).

               (d)  Persons Successful on the Merits. Any person described in
          Section 14.04(a), who has been wholly successful, on the merits or
          otherwise, with respect to any claim, action, suit, or proceeding of
          the character described therein shall be entitled to indemnification
          as of right.

               (e)  Persons Not Successful on the Merits. Except as provided in
          Section 14.04(d), any indemnification hereunder shall be made at the
          discretion of the Company, but only if (i) the Board of Directors,
          acting by a quorum consisting of directors who are not parties to, or
          who have been wholly successful with respect to, such claim, action,
          suit, or proceeding, shall find that the director, officer, or
          employee has met the standards of conduct set forth in Section
          14.04(a) or (ii) independent legal counsel (who may be regular counsel
          of the Company) shall deliver to it their written opinion that the
          person has met those standards.

               (f)  Indemnification on Less Than All Claims or Issues.
          If several claims, issues, or matters of action are involved, any such
          person may be entitled to indemnification as to some matters even
          though he is not so entitled as to others.

               (g)  Advance of Costs. The Company may advance expenses to, or
          where appropriate may, at its expense, undertake the defense of, any
          such person upon receipt of an undertaking by or on behalf of the
          person to repay the expenses if it should ultimately be determined
          that he is not entitled to indemnification under this Section 14.04.

               (h)  Application of Indemnification Provisions. The provisions of
          this Section 14.04 shall be applicable to claims, actions, suits, or
          proceedings made or commenced after December 31, 1975, whether arising
          from acts or omissions to act occurring before or after such date.

               (i)  Indemnification Not Exclusive. The rights of indemnification
          provided hereunder shall be in addition to any rights to which any
          person concerned may otherwise be entitled by contract or as a matter
          of law, and shall inure to the benefit of the heirs, executors, and
          administrators of any such person.

          14.05. Payments from the end.
                 ---------------------

          All payments of benefits as provided in this Plan shall be made solely
out of, and to the extent of, the assets held in Trust, and no Employer shall be
liable, directly or indirectly, for the payment of any benefits provided in this
Plan, nor shall any Employer be liable for any deficiency existing at any time
in any Trust.

                                      -54-

<PAGE>

          14.06. Employment Rights.
                 -----------------

          The establishment or continuance of the Plan shall not be construed as
conferring any legal rights upon any Employee or any person for a continuation
of employment, nor shall it interfere with the right of an Employer to discharge
any Employee or deal with him without regard to the existence of the Plan.

          14.07. Voting Rights.
                 -------------

               (a)  The Company Stock Fund. Before each annual or special
          meeting of the stockholders of the Company, the Employee Benefits
          Committee shall cause to be sent to each Participant, and to the
          beneficiary of each deceased Participant, a form requesting
          confidential instructions to the Trustee of the Company Stock Fund on
          how to vote the number of Shares represented by the Units in the
          Company Stock Fund credited to each such Participant or beneficiary.
          Upon receipt of such instructions the Trustee shall vote the Shares as
          instructed. Instructions received from individual Participants and
          beneficiaries by the Trustee shall be held in the strictest confidence
          and shall not be divulged or released to any person, including
          officers or employees of the Company. The Fund Advisory Committee
          shall review the sufficiency of procedures established to safeguard
          the confidentiality of Participants and beneficiaries and shall
          monitor compliance with those procedures. For the purpose of voting
          Shares allocated to their Participants' Accounts, Participants and
          beneficiaries shall be "named fiduciaries" within the meaning of ERISA
          section 403(a)(1).

               (b)  Unvoted and Unallocated Shares. The Trustee shall have the
          right to vote, in person or by proxy, at its discretion, any Shares
          for which voting instructions shall not have been received. This
          Section 14.07(b) shall apply to Shares held unallocated in a Suspense
          Account under the ESOP as well as to Shares that are allocated to
          Participants' Accounts.

               (c)  Other Funds. Voting rights, if any, with respect to
          securities in each of the funds other than the Company Stock Fund are
          delegated to the Trustee or the Investment Manager that has the
          investment responsibility with respect to each such Fund or portion
          thereof, unless the Fund Advisory Committee has expressly reserved
          such voting rights to the Trustee that is the custodian of the Fund or
          portion thereof for which the Investment Manager has the investment
          responsibility.

          14.08. Tender Offers.
                 -------------

               (a)  General Rule. In the event of a tender offer by any party
          other than the Company for Shares, or in the event of any similar
          attempt to effect a change in control of the Company (as hereinafter
          defined) by sale or exchange of Shares, the Trustee of the Company
          Stock Fund shall cause to be sent to each Participant, and to the
          beneficiary of each deceased Participant, a form requesting
          confidential instructions to it as to whether the Shares represented
          by the Units in

                                      -55-

<PAGE>

          the Company Stock Fund credited to each such Participant or
          beneficiary should be tendered pursuant to the offer or sold or
          exchanged pursuant to any similar attempt to effect a change in
          control. A Participant shall have the right to instruct the Trustee
          with respect to all Units credited to him, whether or not he is 100
          percent vested. At or prior to the time the Trustee causes a request
          for instructions to be sent to each Participant and the beneficiary of
          each deceased Participant, it shall distribute or cause to be
          distributed to each such Participant and beneficiary copies of any
          materials required to be distributed by the Securities and Exchange
          Commission or by any other appropriate regulatory body in connection
          with the tender offer or similar attempt to effect a change in
          control. Upon receipt of instructions from a Participant or
          beneficiary, the Trustee shall tender or retain the Shares as
          instructed. Instructions received from individual Participants and
          beneficiaries by the Trustee shall be held in the strictest confidence
          and shall not be divulged or released to any person, including
          officers or employees of the Company. The Board of Directors shall
          appoint an independent fiduciary to review the sufficiency of
          procedures established to safeguard the confidentiality of
          Participants and beneficiaries and to monitor compliance with those
          procedures. For the purpose of tendering Shares allocated to their
          Participants' Accounts, Participants and beneficiaries shall be "named
          fiduciaries" within the meaning of ERISA section 403.

               (b)  Undirected and Unallocated Shares. The Trustee shall tender
          or take other action pursuant to Section 14.08(a) only pursuant to a
          Participant's or beneficiary's written instructions and shall not be
          entitled to assume that failure to receive written instructions from a
          Participant or beneficiary indicates a particular instruction from the
          Participant or beneficiary. Accordingly, in the case of any Shares
          with respect to which the Trustee has not received instructions, after
          its due diligence to do so, the Trustee shall act in such manner as
          it, in its sole discretion, determines. This Section 14.08(b) shall
          apply to Shares held unallocated in a Suspense Account under the ESOP
          as well as to Shares that are allocated to Participants' Accounts.

               (c)  Change in Control. For purposes of this Section 14.08, a
          change in control of the Company shall mean the accumulation by any
          individual, firm, corporation, or other entity (other than the Company
          or any subsidiary thereof or by any employee benefit plan maintained
          by the Company or such a subsidiary), singly or in combination with
          any associates or affiliates, of the beneficial ownership of more than
          20 percent of the outstanding shares of capital stock of the Company
          authorized to be issued from time to time under the Company's
          certificate of incorporation.

               (d)  Tender Offer Proceeds Fund. Any proceeds from the sale of
          Shares pursuant to Section 14.08(a) shall be held in a Tender Offer
          Proceeds Fund. Pending instructions from the Fund Advisory Committee,
          that Fund shall be invested in such manner as the Trustee of the
          Company Stock Fund, in its sole discretion, determines.

                                      -56-

<PAGE>

          14.09. Governing Law.
                 -------------

          The Plan shall be administered and construed under ERISA and the
internal laws of the State of Indiana (to the extent not preempted by federal
law) and ERISA.

          14.10. Merger or Consolidation.
                 -----------------------

          In case of any merger or consolidation of this Plan or the assets of
the Plan with, or transfer of the assets or liabilities of the Plan to, any
other Plan, the terms of the merger, consolidation, or transfer shall be such
that each Participant would (if the Plan then terminated) receive a benefit
immediately after the merger, consolidation or transfer that is equal to or
greater than the benefit he would have been entitled to receive immediately
before the merger, consolidation, or transfer (if the Plan had then terminated).

          14.11. Transfer from Affiliate.
                 -----------------------

          In the case of a Participant who was transferred to employment with an
Employer from employment with

               (a)  Any affiliate designated by the Employee Benefits Committee;

               (b)  Eli Lilly and Company, Advanced Cardiovascular Systems,
          Inc., Cardiac Pacemakers, Inc., Origin Medsystems, Inc., or Devices
          for Vascular Intervention, Inc. (the "Prior Employers"); or

               (c)  Any other company designated by the Employee Benefits
          Committee, the Trust shall accept a transfer of such Participant's
          account under the savings plan maintained by such affiliate, Prior
          Employer, or by such other company (as the case may be); provided that
          such savings plan is a plan intended to meet the requirements for
          qualification under Code section 401(a) and that the trust maintained
          pursuant thereto is a trust intended to be exempt from tax under Code
          section 501(a). In the case of a Participant whose account under a
          Prior Savings Plan is transferred to the Trust, the following rules
          shall apply:

                    (1)  Any optional form of benefit (within the meaning of
               Code section 411(d)(6)) that is available under a Prior Savings
               Plan with respect to the transferred amount immediately before
               the transfer shall be available under the Plan with respect to
               such amount following the transfer.

                    (2)  To the extent required by applicable law, the amount
               transferred, and the earnings accrued thereon following the
               transfer, shall be separately accounted for under the Plan and
               allocated to the Participant's Account pursuant to Section 6.01.

                    (3)  To the extent required by Code sections 401(a)(11) and
               417, any requirements imposed by Code sections 401(a)(11) and 417
               with respect to the transferred amount immediately before the
               transfer shall

                                      -57-

<PAGE>

               continue to apply to such amount (and the earnings thereon)
               following the transfer.

          14.12. Reorganization.
                 --------------

          The voting provisions of Sections 14.07 and 14.08 shall have no
application with respect to any offer to exchange stock of Guidant Corporation
for shares of Eli Lilly and Company held hereunder. Pursuant to Section
19.11(a), the Trustee shall accept any such offer and shall have no discretion
to hold any shares of Eli Lilly and Company after the exchange is completed.

          14.13. Loans to Participants.
                 ---------------------

          A Participant may obtain a loan from the Plan as provided in this
Section.

          (a)  To obtain a loan, a Participant must apply to the Employee
     Benefits Committee or its designee for the loan. The Employee Benefits
     Committee or its designee will have the sole responsibility for determining
     whether or not to grant a Plan loan. The Employee Benefits Committee will
     establish written guidelines with respect to application procedures,
     minimum amounts of loans, frequency of loans, and other conditions,
     limitations, and procedures.

          (b)  The amount of a loan to a Participant may not be less than $1,000
     and may not exceed the least of the following:

               (1)  $50,000, reduced by the excess, if any, of

                    (A)  the highest outstanding balance of loans from the Plan
               to the Participant during the one-year period ending on the day
               before the date on which the loan is made, over

                    (B)  the outstanding balance of loans from the Plan to the
               Participant on the date on which the loan is made; or

               (2)  one-half of the value of that portion of the Participant's
          vested Accounts not invested in the Company Stock Fund.

          For purposes of the limitations imposed by this Section, loans from
     any other plan of the Employer or a Related Employer will be treated as a
     loan from the Plan.

          (c)  Each loan will provide for a definite term and repayment
     schedule. The maximum period of repayment will not exceed 5 years.

          (d)  The outstanding balance of a loan must be repaid by level
     payments through payroll deduction, by a single payment of the entire
     balance, or according to other procedures established by the Employee
     Benefits Committee in

                                      -58-

<PAGE>

     written guidelines. Except as otherwise permitted by the Secretary of the
     Treasury, the written guidelines will require that a loan must be repaid no
     less frequently than in substantially equal quarterly payments over the
     term of the loan. Notwithstanding the preceding provisions of this Section
     and in accordance with Code section 414(u), an individual's loan repayments
     may be suspended for any period during which the individual is performing
     service in the uniformed services.

          (e) A Plan loan will be in default upon the failure by the Participant
     to repay the loan in accordance with the provisions of Sections 14.13(c)
     and (d). If default occurs, the Employee Benefits Committee will foreclose
     on, sell, or otherwise dispose of the security for the loan at the time and
     in the manner determined by the Employee Benefits Committee.

          (f)  A loan will be evidenced by a promissory note and will bear
     interest at a reasonable rate determined by the Employee Benefits
     Committee. The rate will be commensurate with the prevailing interest rate
     charged on similar commercial loans under similar circumstances.

          (g)  A loan will be secured by a security interest in up to 50 percent
     of the value of the Participant's vested Participant's Account.

          (h)  The Employee Benefits Committee will make its determinations
     under this Section such that (1) loans are available to all Participants on
     a reasonably equivalent basis; and (2) the loan program does not
     discriminate in favor of Participants who are highly compensated Employees
     (as defined in Section 3.03).

          (i)  For purposes of crediting earnings to Participant's Accounts, a
     loan will be deemed a distribution from a Participant's Account and from
     particular Funds within a Participant's Account, as established by the
     Employee Benefits Committee in its written guidelines. That Participant's
     Account will share in applicable Fund earnings at a proportionately reduced
     rate and will be credited with accrued interest and principal repayments on
     the loan.

          (j)  If a Participant is married, his vested Account exceeds $5,000,
     and any portion of his vested Account includes amounts that must be paid in
     the form of a joint and survivor annuity absent his spouse's consent, the
     Participant's spouse must consent to the use of the Participant's vested
     Account as security for the loan. The consent must be obtained no earlier
     than the beginning of the 90-day period that ends on the date on which the
     loan is so secured, be in writing, be irrevocable, acknowledge the effect
     of the loan, and be witnessed by a Plan representative or notary public.

          14.14. Transfer From Sulzer Medica USA Retirement Plan. As soon as
practicable after May 1, 1999, the Trust shall accept a transfer from the trust
for the Sulzer Medica USA Retirement Plan ("Sulzer Plan") of amounts
representing the account balances in

                                      -59-

<PAGE>

the Sulzer Plan of those individuals who, as of the date of the transfer, are
Employees. In the case of an Employee whose account balance under the Sulzer
Plan is transferred to the Trust pursuant to the preceding sentence, the
following rules shall apply:

               (a)  Any optional form of benefit (within the meaning of Code
          section 411(d)(6)) that is available under the Sulzer Plan with
          respect to the transferred amount immediately before the transfer
          shall be available under the plan with respect to that amount
          following the transfer.

               (b)  To the extent required by applicable law, the amount
          transferred with respect to a Participant, and the earning accrued
          thereon following the transfer, shall be separately accounted for
          under the Plan and allocated to the Participant's Account under this
          Plan.

               (c)  To the extent required by Code sections 401(a)(11) and 417,
          any requirements imposed by those Code sections with respect to the
          transferred amounts shall continue to apply to those amounts (and the
          earnings thereon) following the transfer.

          14.15. Transfer From EVT Plan. As of June 1, 2000, the Trust shall
accept a transfer from the trust for the Endovascular Technologies, Inc. 401(k)
Savings Plan ("EVT Plan") of amounts representing the account balances in the
EVT Plan of those individuals who, as of the date of the transfer, are
Employees. In the case of an Employee whose account balance under the EVT Plan
is transferred to the Trust pursuant to the preceding sentence, the following
rules apply:

               (a)  Any optional form of benefit (within the meaning of Code
          section 411(d)(6)) that is available under the EVT Plan with respect
          to the transferred amount immediately before the transfer shall be
          available under the Plan with respect to that amount following the
          transfer.

               (b)  To the extent required by applicable law, the amount
          transferred with respect to a Participant, and the earnings accrued
          thereon following the transfer, shall be separately accounted for
          under the Plan and allocated to the Participant's Account under this
          Plan.

               (c)  To the extent required by Code sections 401(a)(11) and 417,
          any requirements imposed by those Code sections with respect to the
          transferred amounts shall continue to apply to those amounts (and the
          earnings thereon) following the transfer.

                                      -60-

<PAGE>

          14.16. Transfer From InControl Plan. As of August 1, 2002, the Trust
shall accept a transfer from the trust for the InControl, Inc. 401(k) Plan (the
"InControl Plan") of amounts representing all of the assets of the InControl
Plan. Amounts credited to the accounts of an individual under the InControl Plan
shall be credited to a corresponding Participant's Account for that individual
under the Plan. To the extent required by applicable law, an amount transferred
with respect to an individual, and the earnings accrued thereon following the
transfer will be separately accounted for under the Plan.

          14.17. Transfer From CTS Plan. As soon as practicable after September
30, 2002, the Trust shall accept a transfer from the trust for CardioThoracic
Systems 401(K) Savings Plan ("CTS Plan") of amounts representing all of the
assets of the CTS Plan. Amounts credited to the accounts of an individual under
the DVI Plan shall be credited to a corresponding Participant Account for that
individual under the Plan. To the extent required by applicable law, an amount
transferred with respect to an individual, and the earnings accrued thereon
following the transfer, will be separately accounted for under the Plan. Amounts
transferred from the CTS Plan to this Plan as described in this Section are
fully vested at all times.

          14.18. Transfer From DVI Plan. As soon as practicable after March 31,
2003, the Trust shall accept a transfer from the trust for the Employees 401(k)
Plan of Devices for Vascular Intervention, Inc. (the "DVI Plan") of amounts
representing all of the assets of the DVI Plan. Amounts credited to the accounts
of an individual under the DVI Plan shall be credited to a corresponding
Participant's Account for that individual under the Plan. To the extent required
by applicable law, an amount transferred, with respect to an individual, and the
earnings accrued thereon following the transfer, will be separately accounted
for under the Plan.

                      ARTICLE XV. AMENDMENT OR TERMINATION
                      ------------------------------------

          15.01. Internal Revenue Approval, ERISA Compliance.
                 -------------------------------------------

          The Plan is designed to qualify under Code section 401(a) and other
applicable provisions of the Code and to comply with ERISA. The Company through
action of its Board of Directors may make any modifications or amendments to the
Plan that are necessary or appropriate to qualify or maintain the Plan as a plan
meeting the requirements of Section 401(a) or any other applicable provisions of
the Code, ERISA, or other laws, regulations, or rulings.

          15.02. Modification and Termination.
                 ----------------------------

               (a)  By Board of Directors. It is the Company's expectation that
          the Plan will continue indefinitely, but the Company, by resolution of
          the Board of Directors, reserves the right to amend or modify the Plan
          in any respect or to terminate it in whole or in part. Any such
          termination or modification shall be effective at such date as the
          Company, by resolution of the Board of Directors, may determine. A
          modification that affects the rights or duties of any Trustee may be
          made only with the consent of that Trustee. Upon such an amendment,
          the affected Trustee shall be furnished with a certified copy thereof.
          The Plan may be amended retroactively, in the discretion of the Board
          of Directors. Notwithstanding the above, the accrued benefit of a
          Participant shall not be

                                      -61-

<PAGE>

          decreased by an amendment to the Plan, other than an amendment
          described in Code section 412(c)(8) or in ERISA section 4281.

               (b)  Delegation of Amending Authority. The Board of Directors
          delegates to the Employee Benefits Committee the power to amend the
          Plan, pursuant to a written instrument filed with the important papers
          of the Company, for the limited purposes specified in Sections
          1.01(a)(26)(A), 1.01(a)(26)(B)(iv), and 3.01. When acting in
          accordance with the delegation of authority provided in this Section
          15.02(b), the Employee Benefits Committee shall be acting in a settlor
          capacity, and not as a fiduciary of the Plan.

               (c)  Effect of Termination or Modification on Employers. Any
          action taken by the Board of Directors or its designee under Section
          15.02(a) above in terminating or modifying the Plan, or any decision
          made by the Company to discontinue further contributions that results
          in a termination of the Plan, shall be effective similarly to
          terminate or modify the Plan as to all subsidiary and affiliated
          companies that, at the effective date of such action, are included
          within the definition of "Employer" as set out in Article I.

          15.03. Termination of Participation by Subsidiaries and Affiliate
                 ----------------------------------------------------------

                    (1)  Right To Terminate. There is hereby separately reserved
               to each subsidiary or affiliated company of the Company that has
               been designated by the Company and that has adopted this Plan by
               resolution of its own board of directors (and which company by
               reason of such action is included within the definition of
               "Employer" under Article I), the right to terminate its
               participation in this Plan by action of its board of directors.

                    (2)  Effect on Participants in Event of Termination. Upon
               the effective date of any termination by any Employer, all
               Employees of that Employer who are not, or do not thereupon
               become, Employees of another Employer shall cease thereafter to
               be Employees or Participants under the Plan, but all such
               employees who have been Participants in the Plan and who cease to
               be Employees or Participants under the Plan as above provided
               shall be treated as though they had a minimum of 5 years of
               Service under the Plan and shall be entitled to such rights of
               payment of Participants' Accounts as are available under Article
               X to Participants having at least 5 years of Service.

                    (3)  Effect on Participants Where Plan Continued After
               Termination. Notwithstanding the foregoing, if a subsidiary or
               affiliated company shall terminate its participation as an
               Employer in the Plan but shall continue the Plan, with
               appropriate amendments, or adopt a substantially similar plan,
               the withdrawal from the Plan by that Employer shall not be
               regarded as a termination of the Plan so far as such Employer and
               its Employees are concerned. In that event the rights of those
               Employees and their beneficiaries shall be governed in accordance
               with

                                      -62-

<PAGE>

               the provisions of the Plan, as appropriately amended, and
               continued, or of the substantially similar plan so adopted by
               that company as if no withdrawal from the Plan had taken place,
               provided, however, that if an employee of the subsidiary or
               affiliated company is not eligible to continue participation in
               the Plan as so continued by that company but continues to meet
               the definition of "Employee" contained in Sections
               1.01(a)(7)(A)(ii), (B), (C), and (D), his participation hereunder
               shall not be interrupted by the withdrawal of that company, and
               his rights and the rights of his beneficiaries shall continue to
               be governed in accordance with the provisions of this Plan.

                    (b)  When Employer Is a "Qualified Subsidiary" upon
               Effective Date of Termination. Termination of, or withdrawal
               from, this Plan by an Employer shall not constitute a termination
               of this Plan if on the effective date of the termination or
               withdrawal the Employer is a Qualified Subsidiary as defined in
               Article I and all of the Employees of that Employer who are then
               participating in this Plan meet the definition of "Employee"
               contained in Sections 1.01(a)(7)(A)(ii), (B), (C), and (D). In
               that event, the rights of the Employees of the Employer and the
               rights of their beneficiaries shall continue to be governed in
               accordance with the provisions of this Plan, and the
               participation of those Employees in this Plan shall not be
               interrupted.

          15.04. Distribution on Termination.
                 ---------------------------

          In the event of the complete or partial termination of the Plan or the
complete discontinuance of contributions thereto, the assets then held in the
Trust on behalf of affected Participants, after provision for payment of
expenses of liquidation, shall be fully vested and distributable in accordance
with the provisions of Section 10.01; provided, however, that, in the event the
Employer has established or maintains another defined contribution plan (other
than an employee ownership plan as defined in Code section 4975(e)(7)), the
Salary Reduction Contributions (and the earnings thereon) in a Participant's
Account shall not be distributed unless the Participant has met the withdrawal
requirements in Section 7.01 or 8.01.

                   ARTICLE XVI. AGENT FOR SERVICE OF PROCESS
                   -----------------------------------------

          The agent for the service of legal process is the Secretary of the
Company.

                          ARTICLE XVII. TOP HEAVY PLAN
                          ----------------------------

          17.01. General Rule.
                 ------------

          The Plan shall meet the requirements of this Article XVII in the event
that the Plan is or becomes a Top-Heavy Plan.

          17.02. Top-Heavy Plan.
                 --------------

               (a)  Subject to the aggregation rules set forth in Section
          17.02(b), the Plan shall be considered a Top-Heavy Plan pursuant to
          Code section 416(g) in

                                      -63-

<PAGE>

          any Plan Year if, as of the Determination Date, the present value of
          the cumulative accounts of all Key Employees exceeds 60 percent of the
          value of the cumulative accounts of all of the Employees as of that
          Determination Date, excluding former Key Employees and excluding any
          Employee who has not performed services for the Employer during the 5
          consecutive Plan Year period ending on the Determination Date, but
          taking into account in computing the ratio any distributions made
          during the 5 consecutive Plan Year period ending on the Determination
          Date. For purposes of the above ratio, the account of a Key Employee
          shall be counted only once each Plan Year, notwithstanding the fact
          that an individual may be considered a Key Employee for more than one
          reason in any Plan Year.

               (b)  Aggregation and Coordination with Other Plans. For purposes
          of determining whether the Plan is a Top-Heavy Plan and for purposes
          of meeting the requirements of this Article XVII, the Plan shall be
          aggregated and coordinated with other qualified plans in a Required
          Aggregation Group and may be aggregated or coordinated with other
          qualified plans in a Permissive Aggregation Group. If a Required
          Aggregation Group that includes the Plan is Top-Heavy, this Plan shall
          be considered a Top-Heavy Plan. If a Permissive Aggregation Group that
          includes the Plan is not Top-Heavy, this Plan shall not be a Top-Heavy
          Plan.

          17.03. Definitions.
                 -----------

          For the purpose of determining whether the Plan is Top-Heavy, the
following definitions shall apply:

               (a)  Determination Date and Valuation Dates. The term
          "Determination Date" shall mean, in the case of any Plan Year, the
          last day of the preceding Plan Year. The value of an individual's
          account shall be determined as of the Valuation Date and shall include
          any contribution actually made after the Valuation Date but on or
          before the Determination Date. The term "Valuation Date" means the
          most recent Value Determination Date defined in Section 1.01(a)(33)
          occurring within a twelve (12) month period ending on the
          Determination Date.

               (b)  Key Employee. An individual shall be considered a Key
          Employee if he is an Employee or former Employee who at any time
          during the current Plan Year or any of the 4 preceding Plan Years:

                    (1)  was an officer of the Employer who has annual
               compensation from the Employer in the applicable Plan Year in an
               amount greater than 50 percent of the amount in effect under Code
               section 415(b)(1)(A) for the Plan Year; provided, however, that
               the number of individuals treated as Key Employees by reason of
               being officers shall not exceed the lesser of 50 or 10 percent of
               all Employees, and provided further that, for purposes of
               determining the number of officers,

                                      -64-

<PAGE>

               individuals disregarded under Code section 414(q)(8) may be
               disregarded here, and provided further, that if the number of
               individuals treated as officers is limited to 50, the individuals
               treated as Key Employees shall be those who, while officers,
               received the greatest annual Compensation in the applicable Plan
               Year and any of the 4 preceding Plan Years (without regard to the
               limitation set forth in Code section 401(a)(17)); or

                    (2)  was one of the 10 Employees owning or considered as
               owning the largest interests in the Employer who has annual
               Compensation from the Employer in the applicable Plan Year in
               excess of the dollar limitation under Code section 415(c)(1)(A)
               as increased under Code section 415(d); or

                    (3)  was a more than 5 percent owner of the Employer; or

                    (4)  was a more than 1 percent owner of the Employer whose
               annual Compensation from the Employer in the applicable Plan Year
               exceeded $150,000.

          For purposes of determining who is a Key Employee, ownership shall
mean ownership of the outstanding stock of the Employer or of the total combined
voting power of all stock of the Employer, taking into account the constructive
ownership rules of Code section 318, as modified by Code section 416(i)(1).

          For purposes of Section 17.03(b)(1) but not for purposes of 17.03(b)
(2), (3) and (4)--except for purposes of determining Compensation under Section
17.03(b)(4)--the term "Employer" shall include any entity aggregated with an
Employer pursuant to Code section 414(b), (c) or (m).

          For purposes of Section 17.03(b)(2), an Employee (or former Employee)
who has some ownership interest is considered to be one of the top 10
owners unless at least 10 other Employees (or former Employees) own a greater
interest than that Employee (or former Employee); provided that if an Employee
has the same ownership interest as another Employee, the Employee having greater
annual Compensation from the Employer is considered to have the larger ownership
interest.

               (c)  Non-Key Employee. The term "Non-Key Employee" shall mean any
          Employee who is a Participant and who is not a Key Employee.

               (d)  Beneficiary. Whenever the term "Key Employee," "former Key
          Employee," or "Non-Key Employee" is used in this Article XVII, it
          includes the beneficiary or beneficiaries of that individual. If an
          individual is a Key Employee by reason of the foregoing sentence as
          well as a Key Employee in his own right, both the value of his
          inherited benefit and the value of his own account will be considered
          his Participant's Account for purposes of determining whether the Plan
          is a Top-Heavy Plan.

                                      -65-

<PAGE>

               (e)  Compensation and Compensation Limitation. For purposes of
          this Article XVII except as otherwise specifically provided, the term
          "Compensation" has the same meaning as in Section 4.02(b).

               (f)  Required Aggregation Group. The term "Required Aggregation
          Group" shall mean all other qualified defined benefit and defined
          contribution plans maintained by the Employer in which a Key Employee
          participates, and each other plan of the Employer that enables any
          plan in which a Key Employee participates to meet the requirements of
          Code section 401(a)(4) or 410(b).

               (g)  Permissive Aggregation Group. The term "Permissive
          Aggregation Group" shall mean all other qualified defined benefit and
          defined contribution plans maintained by the Employer that meet the
          requirements of Code sections 401(a)(4) and 410(b) when considered
          with a Required Aggregation Group.

          17.04. Requirements Applicable if Plan is Top-Heavy.
                 --------------------------------------------

          In the event the Plan is determined to be Top-Heavy for any Plan Year,
the following requirements shall apply:

               (a)  Minimum Allocation.
                    ------------------

                    (1)  In the case of a Non-Key Employee who is covered under
               this Plan but does not participate in any qualified defined
               benefit plan maintained by the Employer, the Minimum Allocation
               of contributions plus forfeitures allocated to the Participant's
               Account of each such Non-Key Employee who has not separated from
               service at the end of a Plan Year in which the Plan is Top-Heavy
               shall equal the lesser of 3 percent of Compensation for the Plan
               Year or the largest percentage of Compensation (including Salary
               Reduction Contributions) provided on behalf of any Key Employee
               for the Plan Year. The minimum Allocation provided hereunder may
               not be suspended or forfeited under Code section 411(a)(3)(B) or
               411(a)(3)(D). The Minimum Allocation shall be made for a Non-Key
               Employee for each Plan Year in which the Plan is Top-Heavy, even
               if he has not completed a year of Service in the Plan Year or if
               he has declined to elect to have Salary Reduction Contributions
               made on his behalf.

                    (2)  A Non-Key Employee who is covered under this Plan and
               under a qualified defined benefit plan maintained by the Employer
               shall be entitled to the Minimum Allocation under this Plan.

                    (3)  No amount of a Non-Key Employee's Salary Reduction
               Contributions, Minimum Matching Contributions, or Additional
               Matching Contributions shall be treated as part of the Non-Key
               Employee's Minimum Allocation.

                                      -66-

<PAGE>

               (b)  Ton-Heavy Vesting Schedule. The nonforfeitable percentage of
          a Participant's interest shall be determined in accordance with the
          vesting schedule provided under Section 10.01(a)(1)(A).

                         ARTICLE XVIII. PAYSOP ACCOUNT
                         -----------------------------

          18.01. Transfer of Assets.
                 ------------------

               (a)  Any PAYSOP Accounts maintained under the Prior Savings Plans
          on behalf of Participants who participated in those Prior Savings
          Plans shall be transferred to this Plan. The assets transferred from a
          PAYSOP Account with respect to a Participant shall be allocated to the
          Participant's PAYSOP Account in this Plan pursuant to Section 6.01.
          Accounting for amounts in a Participant's PAYSOP Account, including
          the earnings thereon, shall be separate from amounts attributable to
          Salary Reduction Contributions, Employer Contributions, and Employee
          Contributions to the Plan.

               (b)  A Participant shall be fully vested at all times in his
          PAYSOP Account and any accumulated earnings thereon.

               (c)  The transfer of a Participant's PAYSOP Account to the Plan
          shall not be treated as an annual addition for purposes of Article IV
          of the Plan.

          18.02. Investment In the Company Stock Fund.
                 ------------------------------------

          Each Participant's PAYSOP Account shall be invested in the Company
Stock Fund. A Participant shall not be entitled to have his PAYSOP Account and
any earnings attributable thereto invested in any Fund other than the Company
Stock Fund, except as provided in Sections 5.06(b) and (c).

          18.03. Withdrawal of PAYSOP Accounts.
                 -----------------------------

          Except as provided in Section 8.02, a Participant may not withdraw any
portion of his PAYSOP Account, or the earnings attributable thereto, prior to
his retirement, death, Disability, or other termination of employment with the
Company and its affiliates.

          18.04. Distribution of PAYSOP Accounts.
                 -------------------------------

               (a)  Upon a Participant's Retirement, death, Disability, or other
          termination of employment with the Company and its affiliates, the
          Participant (or, if applicable, the Participant's beneficiary) shall
          be entitled to receive a distribution of his PAYSOP Account at the
          same time and in the same manner as he receives a distribution of the
          other portions of his Participant's Account under Article X; provided,
          however, that for purposes of Article X, a Participant's entire PAYSOP
          Account shall be deemed to be part of the Participant's "post-1986
          account." A Participant shall not be entitled to elect a time or
          method of distribution, or to designate a beneficiary, with respect to
          his PAYSOP Account

                                      -67-

<PAGE>

          that is different from the time and method of distribution and
          beneficiary that are applicable to the other portions of his post-1986
          account.

               (b)  For purposes of determining, pursuant to Article X, whether
          a Participant's vested accrued benefit exceeds $5,000, the
          Participant's PAYSOP Account shall not be considered separately, but
          shall be included with the other portions of his Participant's
          Account.

               (c)  A Participant or beneficiary may elect, pursuant to Article
          XI, to receive the distribution of the Participant's PAYSOP Account in
          Shares rather than in cash; provided, however, that the Trustee shall
          distribute fractional Shares in cash rather than in common stock.

               (d)  A retired Participant who has elected to defer commencement
          of the distribution of his Participant's Account may make periodic
          withdrawals from his PAYSOP Account pursuant to Section 10.01(b)(3).

          18.05. Qualified Domestic Relations Orders.
                 -----------------------------------

          If any portion of a Participant's PAYSOP Account is subject to a
qualified domestic relations order, that amount shall be paid in accordance with
Section 10.04. Notwithstanding the provisions of Section 18.03 and Code section
409(d), payments may be made from a Participant's PAYSOP Account to an alternate
payee under a qualified domestic relations order even if the Participant has not
terminated his employment with the Company and its affiliates, and even if part
or all of the Shares in the Participant's PAYSOP Account has not become eligible
for distribution to the Participant under Code section 409(d). Except to the
extent otherwise provided in the qualified domestic relations order, any
distribution to an alternate payee under this Section 18.05 shall be derived
from Shares in the order in which such Shares were allocated to the
Participant's PAYSOP Account, beginning with the Shares that were most recently
allocated to the Participant's PAYSOP Account.

                          ARTICLE XIX. ESOP PROVISIONS
                          ----------------------------

          19.01. Introduction.
                 ------------

          This Article XIX shall be known as the "ESOP". The ESOP permits the
Trustee to borrow amounts to finance the purchase of Shares, and provides for
the investment of Employer Contributions, and the earnings thereon, in Shares,
so that Participants will have an opportunity to become shareholders of the
Company. The effective date of the ESOP shall be January 1, 1995.

          The Company intends that the Profit-Sharing Plan and the ESOP together
shall constitute a single plan under Treasury Regulation ss. 1.414(1)-l(b)(l).
Accordingly, the provisions set forth in the other sections of the Plan shall
apply to the ESOP in the same manner as those provisions apply to the
Profit-Sharing Plan, except to the extent that those provisions are by their
terms inapplicable to the ESOP, or to the extent that they are inconsistent with
the specific provisions set forth below in this Article XIX.

                                      -68-

<PAGE>

          19.02. Definitions.
                 -----------

          The following words and phrases, as used in this Section XIX, shall
have the following meanings unless a different meaning is plainly required by
the context:

               (a)  "ESOP Account" shall mean the portion of a Participant's
          Account that reflects a Participant's or beneficiary's interest in the
          ESOP.

               (b)  "ESOP Shares Fund" shall mean the portion of the Company
          Stock Fund that is maintained for the investment of the ESOP assets.
          The ESOP Shares Fund shall include both ESOP assets that are allocated
          to Participants' and beneficiaries' ESOP Accounts and ESOP assets that
          are held unallocated in a Suspense Account.

               (c)  "Exempt Loan" shall mean a loan, loan guarantee, or other
          extension of credit to the ESOP from an individual or entity that is a
          "party in interest" within the meaning of ERISA section 3(14) or a
          "disqualified person" within the meaning of Code section 4975(e)(2),
          provided that the proceeds of the extension of credit are used by the
          Trustee to finance the purchase of Shares or to repay an Exempt Loan
          in accordance with Section 19.12.

               (d)  "Financed Shares" shall mean Shares purchased with the
          proceeds of an Exempt Loan and held in a Suspense Account. The term
          shall not include Shares that have been released from a Suspense
          Account and allocated to the ESOP Accounts of Participants or
          beneficiaries in accordance with Section 19.12.

               (e)  "Suspense Account" shall mean an account to which Shares
          purchased with the proceeds of an Exempt Loan (and earnings
          attributable to those Shares) shall be allocated until the Shares and
          earnings are released from suspense and allocated to the ESOP Accounts
          of Participants or beneficiaries in accordance with Section 19.12.

          19.03. Eligibility.
                 -----------

          An Employee shall become a Participant in the ESOP on the effective
date of the ESOP, provided that such Employee is a Participant in the Plan on
that date. Any other Employee shall become a Participant in the ESOP as of the
date on which the Employee becomes a Participant in the Plan.

          19.04. Employer Contributions.
                 ----------------------

               (a)  Matching Contributions.
                    ----------------------

                    (1)  Minimum Matching Contributions. Except as otherwise
               provided in this Section 19.04, an Employer shall contribute to
               the ESOP on behalf of its Employees for each month an amount
               sufficient to provide each Employee with an allocation of Shares
               equal to 50 percent of the Employee's Salary Reduction
               Contributions for that month; provided,

                                      -69-

<PAGE>

               however, that in no event shall Minimum Matching Contributions be
               made with respect to (1) Salary Reduction Contributions that
               exceed 6 percent of a Participant's Base Earnings Plus
               Commissions for the month; (2) Salary Reduction Contributions
               that exceed the limit set forth in Section 3.03(d); (3) Excess
               Salary Reduction Contributions; or (4) Salary Reduction
               Contributions attributable to Catch-Up Contributions under
               Section 20.10. If an Employee's Salary Reduction Contributions
               stop before the end of a Plan Year because they reach the dollar
               limitation applicable to the Employee under federal tax law, then
               his Employer shall make a true-up Minimum Matching Contribution
               on behalf of the Employee for the month in which his Salary
               Reductions stop and for each month after that month through the
               last month of the Plan Year. The true-up Minimum Matching
               Contribution shall be sufficient to provide the Employee with an
               allocation of Shares equal to the difference, if any, between (A)
               50 percent of the Employee's total Salary Reduction Contributions
               (other than those attributable to Catch-Up Contributions under
               Section 20.10) for the Plan Year to date that are not in excess
               of 6 percent of the Employee's Base Earnings Plus Commissions for
               the Plan Year to date, and (b) the Minimum Matching Contributions
               previously made for the Employee for the Plan Year (including any
               true-up Minimum Matching Contributions).

                    Notwithstanding any of the foregoing, in no event shall
               Minimum Matching Contributions be made to the extent that those
               contributions would cause the contribution percentage limit set
               forth in Section 19.07 to be exceeded. An Employer shall make its
               Minimum Matching Contributions on a monthly basis. The Minimum
               Matching Contributions made by an Employer on behalf of an
               Employee participating in the Plan shall be allocated to the
               Employee's ESOP Account.

                    (2)  Additional Matching Contributions. In the discretion of
               the Board of Directors or its designee, and except as otherwise
               provided in this Section 19.04, each Employer shall make an
               Additional Matching Contribution to the ESOP for a Plan Year in
               such amount as is determined by the Board of Directors or its
               designee, but not in excess of an amount sufficient to provide
               its Employees with an allocation of Shares equal to 50 percent of
               the Employee's Salary Reduction Contributions, including Salary
               Reduction Contributions made under an Employer Savings Plan, made
               for the Plan Year. An Additional Matching Contribution shall be
               made only on behalf of Employees who are participating in the
               Plan as of the first day of the last month of the Plan Year, who
               Retired during the Plan Year, or who died during the Plan Year
               while actively employed and participating in the Plan; provided,
               however, that in no event shall Additional Matching Contributions
               be made with respect to (1) Salary Reduction Contributions that
               exceed 6 percent of a Participant's Base Earnings Plus
               Commissions; (2) Salary Reduction Contributions that exceed the
               limit set forth in Section 3.03(d); (3) Excess Salary Reduction

                                      -70-

<PAGE>

               Contributions; or (4) Salary Reduction Contributions attributable
               to Catch-Up Contributions under Section 20.10; and provided
               further that in no event shall Additional Matching Contributions
               be made to the extent that such contributions would cause the
               contribution percentage limit set forth in Section 19.07 to be
               exceeded. An Employer's Additional Matching Contributions for any
               Plan Year shall become due for payment to the Trustee of the
               Company Stock Fund on the last day of the Plan Year and shall be
               paid to the Trustee by the Employer within the period of time
               prescribed by law to permit a federal income tax deduction with
               respect to the Plan Year for those contributions. The Additional
               Matching Contributions made by an Employer on behalf of an
               Employee participating in the Plan shall be allocated to the
               Employee's ESOP Account.

               (b)  Basic Contributions. In the discretion of the Board of
          Directors or its designee, and except as otherwise provided in this
          Section 19.04, an Employer shall contribute to the ESOP on behalf of
          each of its Employees participating in the Plan an amount sufficient
          to provide each Employee with an allocation of Shares equal to a
          percentage, determined annually by the Board of Directors or its
          designee prior to the beginning of each Plan Year, of each Employee's
          Base Earnings. An Employer shall make its Basic Contributions on a
          monthly basis. The Basic Contribution made by an Employer on behalf of
          an Employee participating in the Plan shall be allocated to the
          Employee's ESOP Account.

               (c)  Forfeitures. Except as otherwise provided in Section
          19.04(d)(3), below, forfeitures attributable to Matching Contributions
          that arise under the Plan shall be allocated to Participants' ESOP
          Accounts on the basis of their Salary Reduction Contributions for any
          Plan Year in which the Employers have elected to make Minimum Matching
          Contributions and Additional Matching Contributions to the ESOP rather
          than to the Profit-Sharing Plan. Forfeitures attributable to Basic
          Contributions shall be allocated to Participants' ESOP Accounts on the
          basis of their Base Earnings for any Plan Year in which the Employers
          have elected to make Basic Contributions to the ESOP rather than to
          the Profit-Sharing Plan. Forfeitures allocated in this manner shall be
          treated as Minimum Matching Contributions, Additional Matching
          Contributions, or Basic Contributions, whichever is applicable, and
          shall be allocated to Participants' ESOP Accounts in the manner
          described in Section 19.04(a) or (b), above. The forfeiture
          allocations described in this Section 19.04(c)(3) shall reduce, dollar
          for dollar, the amount of the Minimum Matching Contributions,
          Additional Matching Contributions, or Basic Contributions, that
          otherwise would be allocated to the Participant pursuant to Section
          19.04(a) or (b).

               (d)  Exempt Loan Contributions.
                    -------------------------

                    (1)  Contribution Requirements. For each Plan Year (or
               portion thereof) during which there are Financed Shares in a
               Suspense Account, the Employer Contributions to the ESOP shall
               not be less than an amount

                                      -71-

<PAGE>

               that is sufficient, when aggregated with dividend payments
               described in Section 19.10(a), to pay any currently maturing
               obligations under any Exempt Loan. The Employer Contributions
               under this Section 19.04(d) shall be paid in cash to the extent
               necessary to provide the ESOP with cash sufficient to pay any
               currently maturing obligations under any Exempt Loan, and shall
               be paid in two or more installments during the Plan Year to the
               extent necessary to permit the Trustee to meet the payment
               schedule for any Exempt Loan. The Employer Contributions
               described in this Section 19.04(d) shall be made without regard
               to whether the Employer Contributions exceed the current or
               accumulated earnings and profits of the Employers.

                    (2)  Allocations. The value of the Shares released from a
               Suspense Account and allocated to a Participant's ESOP Account by
               reason of an Exempt Loan payment made pursuant to this Section
               19.04(d) for any Plan Year (including the portion of the Exempt
               Loan payment that is attributable to dividends as described in
               Section 19.10(a)) shall determine whether the Minimum Matching
               Contributions, Additional Matching Contributions, and Basic
               Contributions for the Plan Year are sufficient to provide
               eligible Participants with allocations whose value is at least as
               great as the amounts determined under Sections 19.04(a) and (b).

                    (3)  Forfeitures. Forfeitures shall not be used to repay an
               Exempt Loan. For each Plan Year (or portion thereof) during which
               there are Financed Shares in a Suspense Account, forfeitures
               shall be applied in the manner described in Section 19.12 to
               replace dividends that are used to repay an Exempt Loan or to
               provide additional allocations to Participants. To the extent
               that forfeitures are not required to be used for either of the
               foregoing purposes under the provisions of Section 19.12, they
               shall be used to pay administrative expenses in accordance with
               Section 12.02(n).

               (e)  Contributions of Shares. Except as provided in Section
          19.04(d)(1), the Employers may, at their election, make all or any
          part of any Minimum Matching Contribution, Additional Matching
          Contribution, or Basic Contributions to the ESOP in Shares rather than
          in cash. The Shares so contributed shall have a fair market value
          equal to the amount of the Minimum Matching Contribution, Additional
          Matching Contribution, or Basic Contribution (or portion thereof). The
          fair market value of a Share shall be the mean between the highest and
          lowest quoted selling price per share for a 100 Share lot on the
          composite tape of New York Stock Exchange issues on the date of
          payment to the Trustee.

               (f)  Contributions to the Profit-Sharing Plan. The Employers may,
          at their election, make a Minimum Matching Contribution, Additional
          Matching Contribution, or Basic Contribution to the Profit-Sharing
          Plan pursuant to Section 3.06 in lieu of all or a portion of the
          Minimum Matching Contribution, Additional

                                      -72-

<PAGE>

          Matching Contribution, or Basic Contribution otherwise required under
          this Section 19.04; provided that the Employers may not make a Minimum
          Matching Contribution, Additional Matching Contribution, or Basic
          Contribution to the Profit-Sharing Plan in lieu of any Minimum
          Matching Contribution, or Additional Matching Contribution, or Basic
          Contribution that is required to repay an Exempt Loan as described in
          Section 19.04(d). The amount of the Minimum Matching Contribution,
          Additional Matching Contribution, or Basic Contribution otherwise
          required to be made pursuant to Section 19.04(a) or (b) with respect
          to a Participant shall be reduced, dollar for dollar, by the amount of
          any Minimum Matching Contribution, Additional Matching Contribution,
          or Basic Contribution that is allocated to the Participant's
          Profit-Sharing Account for the Plan Year.

               (g)  Deductibility. All Minimum Matching Contributions,
          Additional Matching Contributions, and Basic Contributions to the ESOP
          are conditioned on the deductibility of the contributions under Code
          section 404 for the taxable year with respect to which the
          contributions were made.

               (h)  Transfer of Shares from Profit-Sharing Accounts or PAYSOP
                    ---------------------------------------------------------
          Accounts.
          --------

                    (1)  Transfers at Election of Committee. The Fund Advisory
               Committee may, at its election, direct the Trustee to transfer
               from the Profit-Sharing Plan to the ESOP any portion of the
               Company Stock Fund that is attributable to Employer
               Contributions, and earnings thereon, credited to Participants`
               Profit-Sharing Accounts prior to the date of the transfer, or any
               portion of the Company Stock Fund that is credited to
               Participants' PAYSOP Accounts prior to the date of the transfer.
               Any Shares transferred in accordance with this Section 19.04(h)
               shall be held in the ESOP Shares Fund and shall be credited to
               the ESOP Accounts of those Participants and beneficiaries from
               whose Profit-Sharing Accounts or PAYSOP Accounts the Shares were
               transferred. Any shares transferred from a Participant's or
               beneficiary's PAYSOP Account to his ESOP Account shall continue
               to be accounted for separately after the transfer, and shall
               remain subject to the special rules set forth in Article XVIII.

                    (2)  Effect of Transfers. Any Shares transferred in
               accordance with this Section 19.04(h) shall not be considered
               "annual additions" under Section 19.06, and shall not be taken
               into account in determining the contribution percentage of any
               Participant under Section 19.07.

               (i)  Contributions Not Recoverable by Employer. The Trustee shall
          hold the contributions received by it under this Section 19.04 for the
          respective Participants subject to the provisions of the Plan. No such
          contribution shall be recoverable by the Employers, except as provided
          in Section 19.04(j).

               (j)  Return of Employer Contributions. In the event that an
          Employer Contribution made pursuant to this Section 19.04

                                      -73-

<PAGE>

                    (1)  is made under a mistake of fact, or

                    (2)  is disallowed as a deduction under Code section 404 for
               the taxable year with respect to which it was made, the
               contribution shall, at the option of the Employer, be returned to
               the Employer within 1 year after the payment of the contribution
               or the disallowance of the deduction (to the extent disallowed),
               whichever is applicable; provided, however, that an Employer may
               not recover from the Plan any contribution that has been used to
               repay an Exempt Loan. The amount returned shall not be increased
               to reflect any investment earnings, but shall be decreased to
               reflect any losses. If the amount returned to an Employer would
               cause the balance of any Participant's Account to be less than
               the balance would have been had the returned contribution never
               been made, the amount to be returned shall be limited to prevent
               the loss.

          19.05. Payment to Trustee.
                 ------------------

               (a)  Matching Contributions.
                    ----------------------

                    (1)  Minimum Matching Contributions. Except as provided in
               Section 19.05(c), an Employer's Minimum Matching Contributions
               shall become due for payment to the Trustee of the Company Stock
               Fund at the end of each month during the Plan Year.

                    (2)  Additional Matching Contributions. Except as provided
               in Section 19.05(c), an Employer's Additional Matching
               Contributions for any Plan Year shall become due for payment to
               the Trustee of the Company Stock Fund on the last day of the Plan
               Year and shall be paid to the Trustee by the Employer within the
               period of time prescribed by law to permit a Federal income tax
               deduction with respect to that Plan Year for those contributions.

               (b)  Basic Contributions. Except as provided in Section 19.05(c),
          an Employer's Basic Contributions shall become due for payment to the
          Trustee of the Company Stock Fund at the end of each month during the
          Plan Year.

               (c)  Exempt Loan Payments. Any Minimum Matching Contribution,
          Additional Matching Contribution, or Basic Contribution made pursuant
          to Section 19.04(d) shall be paid to the Trustee of the Company Stock
          Fund in time to permit the Trustee to satisfy any currently maturing
          obligation under any Exempt Loan. The Employers may, at their
          election, make all or any portion of such Minimum Matching
          Contribution, Additional Matching Contribution, or Basic Contribution
          (or direct the Trustee to use all or any portion of the dividends
          described in Section 19.10(a)) in time to permit the Trustee to
          pre-pay all or a portion of any obligation under an Exempt Loan, to
          the extent that such prepayment may be made without penalty to the
          ESOP.

                                      -74-

<PAGE>

          19.06. Limits on Annual Additions.
                 --------------------------

               (a)  Limits on Additions to ESOP Accounts. The annual addition to
          a Participant's ESOP Account in any limitation year, when combined
          with the annual addition to a Participant's account under the
          Profit-Sharing Plan and under all other defined contribution plans
          described in Section 4.05, may not exceed the lesser of:

                    (1)  $30,000 (as adjusted for increases in the limitation
               pursuant to Code section 415(d)); or

                    (2)  25 percent of a Participant's compensation (as defined
               in Section 4.02(b)) for the limitation year.

               (b)  Annual Additions.
                    ----------------

                    (1)  The term "annual addition" as used in Section 19.06(a)
               means Employer Contributions allocated to the Participant's ESOP
               Account during a limitation year. Except as provided in Section
               19.06(c), the term "annual addition" also includes any Employer
               Contributions of principal and interest used to repay an Exempt
               Loan for the limitation year. For purposes of the immediately
               preceding sentence, the amount of the annual addition shall be
               determined by reference to the amount of the Employer
               Contribution used to repay an Exempt Loan rather than by
               reference to the value of the Shares released from a Suspense
               Account and allocated to a Participant's ESOP Account for the
               limitation year.

                    (2)  The term "annual addition" shall not include any
               dividend paid with respect to Shares that are held in a Suspense
               Account or allocated to a Participant's ESOP Account. The term
               "annual addition" also shall not include the value of any Shares
               that are allocated to a Participant's ESOP Account in accordance
               with Section 19.12, below, in order to replace any dividends that
               are used to make payments on an Exempt Loan.

               (c)  Special Rules for Exempt Loan Payments. If no more than
          one-third of the Employer Contributions for a limitation year that are
          deductible under Code section 404(a)(9) are allocated to Participants
          who are highly compensated Employees (within the meaning of Code
          section 414(q)), the limitation imposed by this Section 19.06 shall
          not apply to:

                    (1)  Forfeitures of Shares that were acquired with the
               proceeds of an Exempt Loan as described in Code section
               404(a)(9)(A), or

                    (2)  Employer Contributions that are deductible under Code
               section 404(a)(9)(B) and that are charged against a Participant's
               Account.

                                      -75-

<PAGE>

               (d)  Applicability of General Rules. Except to the extent
          otherwise provided above, the provisions of Article IV shall apply for
          purposes of determining the limits on annual additions under this
          Section 19.06.

          19.07. Limits on Employer Contributions.
                 --------------------------------

               (a)  Contribution Limits. Minimum Matching and Additional
          Matching Contributions to the ESOP for any Plan Year shall satisfy the
          contribution percentage test in Code section 401(m)(2), including the
          rules of Treasury Regulations ss. 1.401(m)-1(b) or any successor
          provision. Minimum Matching Contributions and Additional Matching
          Contributions forfeited by a Participant under Section 3.04(c), with
          respect to a Plan Year shall not be taken into account in determining
          whether Employer Contributions to the ESOP for that Participant
          satisfy the contribution percentage test for that Plan Year.
          Notwithstanding anything to the contrary in this Article XIX, if the
          contribution percentage of those Participants who are highly
          compensated Employees (as defined in Section 3.03) exceeds the limit
          imposed by Code section 401(m), the following rules shall apply:

                    (1)  The amount of the excess aggregate contributions
               (determined in accordance with Code section 4.01(m)(6)(B) for the
               Plan Year, and any income attributable to those contributions,
               shall be distributed (or, if forfeitable, shall be forfeited)
               before the end of the following Plan Year.

                    (2)  Any distribution in accordance with Section 19.07(a)
               (1), above, shall be made to Participants who are highly
               compensated Employees on the basis of the respective portions of
               the excess aggregate contributions allocated to each such
               Participant. Effective for Plan Years beginning on or after
               January 1, 1997, the total dollar amount of excess aggregate
               contributions shall be allocated to some or all highly
               compensated Employees by reducing first the contributions of the
               highly compensated Participant with the highest dollar amount of
               contributions until (A) the total amount of excess aggregate
               contributions has been allocated, or (B) his remaining
               contributions are equal in dollar amount to the contributions of
               the highly compensated Employee with the next highest dollar
               amount. This process shall be repeated until all excess aggregate
               contributions have been allocated.

                    (3)  Distributions required under this Section 19.07(a)
               shall be made notwithstanding any other provision of the Plan.

               (b)  Treatment of Exempt Loan Payments. To the extent that an
          Employer Contribution is used to repay an Exempt Loan as described in
          Section 19.04(d), a Participant's contribution ratio for a Plan Year
          shall be determined by reference to the amount of the Employer
          Contribution that is made with respect to the Participant rather than
          by reference to the value of the Shares that are released

                                      -76-

<PAGE>

          from a Suspense Account and allocated to the Participant's ESOP
          Account by reason of the Employer Contribution.

               (c)  Separate Testing. The determination of the amount of excess
          aggregate contributions under Section 19.07(a), for any Plan Year
          shall be made without regard to any Employer Contributions allocated
          to a Participant's Profit-Sharing Account for the Plan Year.

          19.08. Vesting and Forfeitures.
                 -----------------------

               (a)  Vested Percentage. A Participant's vested interest in the
          Employer Contributions and earnings thereon allocated to his ESOP
          Account shall be determined in accordance with Section 10.01.

               (b)  Forfeitures. A Participant who is not 100 percent vested in
          all amounts allocated to his ESOP Account shall forfeit the nonvested
          portion of his ESOP Account in accordance with the rules prescribed by
          Section 10.01(a). Shares that were allocated to the Participant's ESOP
          Account from a Suspense Account as provided in Section 19.12 shall be
          forfeited only after all other assets allocated to the Participant's
          ESOP Account have been forfeited. If the Participant subsequently
          returns to employment with the Company or an affiliate before he
          incurs five consecutive One Year Periods of Severance, his ESOP
          Account shall be restored if he satisfies the requirements of Section
          10.01(a).

          19.09. ESOP Accounts.
                 -------------

          A separate account shall be established for each Participant, known
individually as the ESOP Account and collectively as the ESOP Accounts. A
Participant's ESOP Account shall be comprised of his ESOP Pre-Split Matching
Account, his Company Match Account (formerly the ESOP Post-Split Matching
Account), and his Retirement ESOP Account (formerly the ESOP Basic Contributions
Account), maintained in accordance with the rules set forth in Article VI.

          19.10. Payment of Dividends.
                 --------------------

               (a)  Exempt Loan Payments. The Fund Advisory Committee may direct
          the Trustee to use any cash dividend, except cash dividends with
          respect to shares held in Participants' ESOP Pre-Split Matching
          Accounts, to make payments on an Exempt Loan, provided that the cash
          dividend is paid with respect to Shares that are held by the ESOP on
          the record date for the dividend. This Section 19.10(a) shall apply
          both to dividends paid with respect to Shares that are allocated to a
          Participant's or beneficiary's ESOP Account and to dividends paid with
          respect to Shares that are held in a Suspense Account. In addition, to
          the extent allowed by law, and as directed by the Fund Advisory
          Committee, this Section 19.10(a) shall apply to dividends paid with
          respect to Shares in Participants' ESOP Pre-Split Matching
          Contribution Accounts.

                                      -77-

<PAGE>

               (b)  Replacement of Dividends on Allocated Shares. To the extent
          that any dividend is paid with respect to Shares that are allocated to
          an ESOP Account, and the dividend is used to make a payment on an
          Exempt Loan in accordance with Section 19.10(a), Shares with a fair
          market value not less than the amount of the dividend shall be
          allocated to the ESOP Account for the Plan Year for which the dividend
          would have been allocated to the ESOP Account.

               (c)  Other Dividends. To the extent that any cash dividend is
          paid with respect to Shares that are allocated to a Participant's or
          beneficiary's ESOP Account on the record date for the dividend, and
          the dividend is not used to make a payment on an Exempt Loan in
          accordance with Section 19.10(a), the dividend shall be taken into
          account in determining the value of a Unit of Participation in the
          Company Stock Fund as described in Article VI except as otherwise
          provided in Section 19.16.

          19.11. ESOP Shares Fund.
                 ----------------

               (a)  Investment in Shares. Employer Contributions allocated to a
          Participant's or beneficiary's ESOP Account shall be credited entirely
          to the ESOP Shares Fund. The ESOP is designed to invest exclusively in
          qualifying employer securities, as defined in Code section 4975(e)(8).
          Accordingly, the ESOP Shares Fund shall consist solely of Shares
          except as provided in Section 19.11(c). The Trustee shall purchase
          such Shares required as a result of dividends and other distributions
          received with respect to Shares (other than dividends used to repay an
          Exempt Loan in accordance with Section 19.10) or distributed in
          accordance with Section 19.16 in the open market or by private
          purchase, including purchase from the Company.

               (b)  Purchase From the Company. Any purchase of Shares from the
          Company shall be at a price per share not in excess of the mean
          between the highest and lowest quoted selling price per share for a
          100 Share lot on the composite tape of New York Stock Exchange issues
          on the date of purchase by the Trustee. Dividends and other
          distributions received with respect to Shares (other than dividends
          used to repay an Exempt Loan in accordance with Section 19.10) or
          distributed in accordance with Section 19.16 and Employer
          Contributions made in cash shall be invested in Shares as soon as
          practicable, except as otherwise provided in this Article XIX.

               (c)  Short-Term Investments. Nothing in this Section 19.11 or in
          Section 19.12 shall be construed to prevent the Trustee from retaining
          in cash or cash equivalents or other short-term investments (i) the
          proceeds of any Exempt Loan, until such proceeds are used to acquire
          Shares, or to repay all or any portion of an Exempt Loan; (ii) cash
          dividends received on Shares held in the ESOP Shares Fund, until such
          dividends are applied to repay an Exempt Loan, invested in Shares, or
          distributed in accordance with Section 19.16; and (iii) such other
          amounts as may be required for the proper administration of the Trust.

                                      -78-

<PAGE>

          19.12. Exempt Loan Provisions.
                 ----------------------

               (a)  Authority To Obtain or Modify an Exempt Loan. The Trustee,
          acting in accordance with a resolution of the Board of Directors, at
          the direction of the Fund Advisory Committee, or at the direction of
          corporate officers authorized by the Board of Directors, may obtain an
          Exempt Loan from time to time to finance the acquisition of Shares or
          to refinance a prior Exempt Loan. An Exempt Loan shall be primarily
          for the benefit of Participants of the ESOP and their beneficiaries
          and shall satisfy the conditions set forth in this Section 19.12. The
          Trustee, acting in accordance with a resolution of the Board of
          Directors, at the direction of the Fund Advisory Committee, or at the
          direction of corporate officers authorized by the Board of Directors,
          may extend or renew an Exempt Loan, or may otherwise modify the terms
          of the Exempt Loan, provided that the Exempt Loan, as extended,
          renewed, or otherwise modified, continues to satisfy the conditions
          set forth in this Section 19.12.

               (b)  Terms of the Exempt Loan. An Exempt Loan shall bear a
          reasonable rate of interest, shall be for specific term, and shall not
          be payable on demand except in the event of default. Any collateral
          pledged to the lender by the Trustee shall consist only of the
          Financed Shares purchased with the proceeds of the Exempt Loan, or
          Financed Shares purchased with the proceeds of a prior Exempt Loan
          that is being refinanced; provided that this sentence shall not be
          construed to prevent the Company from guaranteeing repayment of the
          Exempt Loan. Any pledge of Financed Shares shall provide for the
          release of the Shares so pledged as the Trustee makes payments on the
          Exempt Loan and allocates the Shares to Participants' ESOP Accounts.
          Under the terms of the Exempt Loan, the lender shall have no recourse
          against assets of the ESOP except with respect to (i) the Financed
          Shares pledged to secure the Exempt Loan, (ii) Employer Contributions
          (other than contributions of Shares) that are made to the ESOP to meet
          its obligations under the Exempt Loan, and (iii) earnings attributable
          to the Financed Shares or to the investment of the Employer
          Contributions.

               (c)  Use of Loan Proceeds. The Trustee shall use the proceeds of
          an Exempt Loan, within a reasonable time after their receipt by the
          ESOP, only for one or more of the following purposes: (i) to acquire
          Shares; (ii) to repay the Exempt Loan; or (iii) to repay a prior
          Exempt Loan. Until the proceeds of an Exempt Loan are used as
          described in the preceding sentence, the Trustee may invest such
          proceeds in cash or cash equivalents or other short-term investments
          in accordance with Section 19.11(c). The Trustee shall pay no more
          than "adequate consideration" (within the meaning of ERISA section
          3(18)) for any Shares acquired with the proceeds of an Exempt Loan.

               (d)  Suspense Account. Financed Shares acquired by the ESOP with
          the proceeds of an Exempt Loan shall be allocated to a Suspense
          Account. The Financed Shares shall be released from the Suspense
          Account only as the Trustee makes payments on the Exempt Loan and
          shall be allocated to the ESOP Accounts of Participants or
          beneficiaries who are eligible under Section 19.04 to

                                      -79-

<PAGE>

          receive an allocation of Employer Contributions or who are eligible
          under Section 19.10 to receive an allocation to replace dividends that
          were used to repay the Exempt Loan. The number of Financed Shares to
          be released from the Suspense Account in each Plan Year for allocation
          to ESOP Accounts shall be determined according to the method set forth
          in Section 19.12(d)(1), unless the Fund Advisory Committee expressly
          provides that the method set forth in Section 19.12(d)(2) shall apply
          with respect to a particular Exempt Loan.

                    (1)  General Rule. The number of Financed Shares held in the
               Suspense Account immediately before the release for the current
               Plan Year shall be multiplied by a fraction, the numerator of
               which is the amount of principal and interest paid on the Exempt
               Loan for that Plan Year, and the denominator of which is the sum
               of the numerator plus the total payments of principal and
               interest on the Exempt Loan projected to be made for all future
               Plan Years. The number of future Plan Years under the Exempt Loan
               shall be determined without regard to possible extensions or
               renewal periods, and the interest to be paid in future Plan Years
               shall be computed by using the interest rate in effect as of the
               end of the current Plan Year.

                    (2)  Special Rule. The Fund Advisory Committee, acting in
               accordance with a resolution of the Board of Directors, may
               direct at the time the Exempt Loan is obtained (or the terms of
               the Exempt Loan may provide) that Financed Shares will be
               released from the Suspense Account based solely on the ratio that
               the payments of principal for each Plan Year bear to the total
               principal amount of the Exempt Loan. This method may be used only
               to the extent that the following conditions are satisfied: (i)
               the Exempt Loan provides for annual payments of principal and
               interest at a cumulative rate that is not less rapid at any time
               than level annual payments of such amounts for 10 years; (ii)
               interest included in any payment on the Exempt Loan is
               disregarded only to the extent that it would be determined to be
               interest under standard loan amortization tables; and (iii) the
               entire duration of the Exempt Loan repayment period does not
               exceed 10 years, even in the event of a renewal, extension, or
               refinancing of the Exempt Loan.

               (e)  Repayment of Exempt Loan. The payments of principal and
          interest on an Exempt Loan (other than payments made pursuant to
          Section 19.12(g), by reason of a default) shall be made by the Trustee
          (as directed by the Fund Advisory Committee) only from Employer
          Contributions to the ESOP (other than contributions of Shares), from
          earnings attributable to such Employer Contributions, and from any
          dividends received by the Trust on the Shares held by the ESOP
          (including earnings on such dividends), except for dividends received
          on Shares held in Participants' ESOP Pre-Split Matching Accounts. The
          Trustee shall account separately for such Employer Contributions,
          earnings, and dividends until the Exempt Loan is repaid. To the extent
          that dividends on Shares are used to repay the Exempt Loan in
          accordance with Section 19.10, such

                                      -80-

<PAGE>

          dividends shall be used first to repay the principal amount of the
          Exempt Loan; dividends shall be used to pay interest on the Exempt
          Loan only to the extent that the aggregate amount of the dividends
          used to repay the Exempt Loan in any Plan Year exceeds the amount of
          the principal payment due on the Exempt Loan for that Plan Year.

               (f)  Allocations to ESOP Accounts. The Shares that are released
          from a Suspense Account in any Plan Year shall be allocated to
          Participants' and beneficiaries' ESOP Accounts as follows:

                    (1)  Each Participant's or beneficiary's ESOP Account shall
               be credited with

                         (A)  Shares whose fair market value (determined as of
                    the date of allocation to the ESOP Account, based upon the
                    mean between the highest and lowest quoted selling price per
                    share for a 100-Share lot on the composite tape of New York
                    Stock Exchange issues) equals the value of the cash
                    dividends used to repay an Exempt Loan, to the extent that
                    the dividends were paid with respect to the Shares allocated
                    to the Participant's or beneficiary's ESOP Account for the
                    Plan Year; and

                         (B)  Shares whose fair market value (determined as of
                    the date of allocation to the ESOP Account, based upon the
                    mean between the highest and lowest quoted selling price per
                    share for a 100-Share lot on the composite tape of New York
                    Stock Exchange issues) equals the value of the Employer
                    Contribution that the Participant is eligible to receive
                    under the ESOP for the Plan Year (reduced by the amount of
                    any Employer Contribution that the Participant has received
                    or is entitled to receive under the Profit-Sharing Plan for
                    the Plan Year, and by the amount of any Employer
                    Contribution that is allocated directly to the Participant's
                    ESOP Account for the Plan Year).

          The order of allocation of Shares pursuant to this Section 19.12(f)(1)
          shall be determined by the Board of Directors or its designee or the
          Fund Advisory Committee.

                    (2)  Any Shares remaining after the allocations described in
               Section 19.12(f)(1) shall be used to provide an additional
               Employer Contribution for the Plan Year, calculated by increasing
               the Additional Matching Contribution percentage under Section
               19.04(a)(2) to the extent necessary to provide for the allocation
               of such Shares to Participants' ESOP Accounts.

          Except as provided in the following paragraph, the Shares released
from a Suspense Account for any Plan Year shall be allocated to Participants'
and beneficiaries' ESOP

                                      -81-

<PAGE>

Accounts on (or as soon as practicable after) the allocation date for the
Minimum Matching Contribution, Additional Matching Contribution, Basic
Contribution, or dividend to which the released Shares are attributable. In no
event shall Shares released from a Suspense Account be allocated as of a date
later than the end of the Plan Year in which the Exempt Loan payment is made.

          If the Trustee uses an Employer Contribution to make a payment on an
Exempt Loan after the end of a Plan Year but on or before the time prescribed in
Code section 404(a)(6), the Fund Advisory Committee may direct that some or all
of the Shares released from a Suspense Account by reason of the payment shall be
applied to satisfy the Employer Contribution obligation for the Plan Year
preceding the Plan Year in which the payment is made, and that the Shares so
applied shall be allocated to Participants' ESOP Accounts as of the end of that
preceding Plan Year.

          If the Shares released from a Suspense Account in any Plan Year are
not sufficient to provide the allocations described in Section 19.12(F)(1)(A) or
(B), the Employers shall make an additional contribution to the ESOP in an
amount sufficient to complete such allocations. The total amount of any
forfeitures arising pursuant to Section 10.01(a) for a Plan Year, to the extent
that those forfeitures have not previously been allocated to a Participant's or
beneficiary's account or used to repay an Exempt Loan, shall be treated as part
of the additional contribution described in the preceding sentence. An
additional contribution made in order to provide the allocation described in
Section 19.12(f)(1)(A), shall be treated as a dividend; an additional
contribution made in order to provide the allocation described in Section
19.12(f)(1)(B), shall be treated as an Employer Contribution, in accordance with
Section 19.04(d).

               (g)  Requirements in the Event of Default. In the event of
          default on the Exempt Loan, the value of the ESOP assets transferred
          in satisfaction of the Exempt Loan shall not exceed the amount of the
          default. If the lender is a party in interest (as defined in ERISA
          section 3(14)) or a disqualified person (as defined in Code section
          4975(e)(2)), the Exempt Loan shall provide for a transfer of ESOP
          assets on default only upon and to the extent of the failure of the
          ESOP to meet the payment schedule of the Exempt Loan; provided that a
          party in interest or disqualified person shall not be considered a
          "lender" for the purposes of this sentence solely because such party
          in interest or disqualified person guaranteed the Exempt Loan.

               (h)  Put Options. Except as provided in this Section 19.12(h), no
          employer security acquired with the proceeds of an Exempt Loan shall
          be subject to a put, call, or other option, or to a buy-sell or
          similar arrangement, while it is held by and when it is distributed
          from the ESOP. If an employer security acquired with the proceeds of
          an Exempt Loan is not publicly traded when distributed, or if it is
          subject to a trading limitation when distributed, the security shall
          be subject to a put option that permits the Participant or beneficiary
          to resell the security to the Company during the 15-month period
          following the distribution of the security. The provisions of this
          Section 19.12(h) shall apply

                                      -82-

<PAGE>

          whether or not the ESOP is an employee stock ownership plan at the
          time the security is held or distributed.

               (i)  Multiple Exempt Loans.
                    ---------------------

                    (1)  Amortization and Share Release. If there is more than
               one Exempt Loan outstanding, the Fund Advisory Committee shall
               direct the Trustee either (A) to amortize each Exempt Loan
               separately, or (B) to aggregate the principal and interest
               payments calculated separately with respect to two or more
               outstanding Exempt Loans and to amortize the Exempt Loans so
               aggregated as if they were a single Exempt Loan. If the Fund
               Advisory Committee elects to amortize two or more outstanding
               Exempt Loans as if they were a single Exempt Loan, the Fund
               Advisory Committee shall aggregate the Financed Shares purchased
               with the proceeds of each Exempt Loan to determine the number of
               Shares released from the Suspense Account and allocated to
               Participants' and beneficiaries' ESOP Accounts for any year with
               respect to the aggregated Exempt Loans.

                    (2)  Share Allocation. The Fund Advisory Committee may
               allocate the Shares purchased with each Exempt Loan in proportion
               to the payments of principal and interest made with respect to
               that Exempt Loan, or the Fund Advisory Committee may direct the
               Trustee to allocate the Shares purchased with one Exempt Loan
               more rapidly than the Shares purchased with another Exempt Loan;
               provided, however, that the Fund Advisory Committee's method of
               attributing the Shares allocated for a given year to a particular
               Exempt Loan shall not affect the number of Shares released from
               the Suspense Account and allocated for that year, which number
               shall be determined in accordance with Section 19.12(d), and as
               provided in Section 19.12(i)(1).

                    (3)  Eligible Collateral. To the extent permitted by
               applicable law, the Fund Advisory Committee may, from time to
               time, determine the number of Financed Shares remaining in the
               Suspense Account that are pledged (or that are eligible to be
               pledged) as collateral for a particular Exempt Loan; provided,
               however, that the number of Financed Shares that are pledged (or
               eligible to be pledged) as collateral for a particular Exempt
               Loan shall not exceed the number of Financed Shares that would be
               pledged (or eligible to be pledged) if the Fund Advisory
               Committee had allocated the Shares purchased with each Exempt
               Loan in proportion to the payments of principal and interest made
               with respect to the Exempt Loan. When the Fund Advisory Committee
               makes a determination described in this Section 19.12(i)(3), the
               Fund Advisory Committee shall communicate the number of Financed
               Shares pledged (or eligible to be pledged) as collateral for a
               particular Exempt Loan to the Trustee, and the Trustee may rely
               on such communications.

                                      -83-

<PAGE>

          19.13. Distribution of ESOP Accounts.
                 -----------------------------

               (a)  General Rule. Upon a Participant's Retirement, death,
          Disability, or other termination of employment with the Company and
          its affiliates, the Participant (or, if applicable, the Participant's
          beneficiary) shall be entitled to receive a distribution of the vested
          portion of his ESOP Account at the same time and in the same manner as
          he receives a distribution of the other portions of his Participant's
          Account under Article X. A Participant shall not be entitled to elect
          a time or method of distribution, or to designate a beneficiary, with
          respect to his ESOP Account that is different from the time and method
          of distribution and beneficiary that are applicable to the other
          portions of his Participant's Account.

               (b)  Cash-Outs. For purposes of determining, pursuant to Article
          X, whether a Participant's vested accrued benefit exceeds $5,000, the
          Participant's ESOP Account shall not be considered separately, but
          shall be included with the other portions of his Participant's
          Account.

               (c)  Distributions in Shares. A Participant or beneficiary may
          elect, pursuant to Article XI, to receive the distribution of the
          Participant's ESOP Account in Shares rather than in cash; provided
          that the Trustee shall distribute fractional shares in cash rather
          than in Shares.

               (d)  Post-Retirement Withdrawals. A Retired Participant who has
          elected to defer commencement of the distribution of his Participant's
          Account may make periodic withdrawals from his ESOP Account pursuant
          to Section 10.01(b)(3).

          19.14. Withdrawal and Diversification Rights.
                 -------------------------------------

               (a)  Withdrawals. A Participant may withdraw his Employer
          Contributions (and earnings thereon) from his ESOP Account subject to
          the same rules as apply to withdrawals of Employer Contributions (and
          earnings thereon) from the Participant's Account under Article VIII. A
          Participant may elect to receive any withdrawal described in this
          Section 19.14(a) in the form of Shares rather than in cash.

               (b)  Diversification. In accordance with procedures established
          by the Employee Benefits Committee, a Participant who,has attained 50
          years of age and has 10 or more Years of Service may elect at any time
          during a Plan Year to diversify his ESOP Account by investing his ESOP
          Account and the earnings thereon in the investment funds established
          pursuant to Section 5.01 under the following schedule: (a) a
          Participant aged 50-54 may diversify a cumulative total of 25 percent
          of the value of his ESOP Account; (b) a Participant aged 55-59 may
          diversify a cumulative total of 50 percent of the value of his ESOP
          Account; (c) a Participant aged 60 or older may diversify a cumulative
          total of 75 percent of the value of his ESOP Account.

                                      -84-

<PAGE>

          19.15. Voting and Tendering of Company Securities.
                 ------------------------------------------

          A Participant shall be entitled to vote or tender the Shares allocated
to his ESOP Account in accordance with the rules set forth in Sections 14.07 and
14.08.

          19.16. Election Regarding Dividends.
                 ----------------------------

          Notwithstanding any other provision of the Plan to the contrary,
effective June 1, 2003, to the extent that any cash dividend is paid with
respect to Shares that are allocated to a Participant's or beneficiary's ESOP
Account on the ex-date for the dividend (as defined in Section 19.16(c)(8)), and
the dividend is not used to make a payment on an Exempt Loan, the dividend shall
be subject to the election described in this Section.

               (a)  Election to Receive or Reinvest Dividend. The Participant or
          beneficiary to whose ESOP account the Shares are allocated as of the
          dividend ex-date may elect to have 100% of the cash dividend with
          respect to those Shares either (1) distributed from the Plan and paid
          to him, or (2) retained by the Plan and invested as provided in
          Section 19.11. A Participant or beneficiary may make or change an
          election at any time in the manner prescribed by the Employee Benefits
          Committee, and any election made will remain in effect until the
          Participant or beneficiary changes it. The election in effect on the
          ex-date for a dividend will apply to that dividend. If no election is
          in effect on the ex-date for a dividend, the Participant or
          beneficiary will be deemed to have elected to have the dividend
          retained by the Plan and invested as provided in Section 19.11.

               (b)  Receipt of Dividends. If a Participant or beneficiary elects
          to have a cash dividend distributed from the Plan and paid to him, a
          check in the amount of the dividend will be mailed to him by United
          States mail as soon as administratively feasible after the payable
          date for the dividend.

               (c)  Dividends 100% Vested. A Participant or beneficiary is 100%
          vested in any cash dividend that is subject to the election described
          in this Section.

               (d)  Treatment of Dividends. Cash dividends subject to the
          election described in this Section are treated as follows:

                    (1)  Spousal Consent not Required. A Participant or
               beneficiary need not obtain his spouse's consent to an election
               described in this Section.

                    (2)  No Offset Against Required Distributions. Dividends
               distributed from the Plan and paid to a Participant or
               beneficiary pursuant to an election under this Section shall not
               reduce the amount of any distribution required to be paid under
               Code section 401(a)(9).

                    (3)  No Rollovers. Dividends distributed from the Plan and
               paid to a Participant or

                                      -85-

<PAGE>

               beneficiary pursuant to the Participant's or beneficiary's
               election under this Section are not considered eligible rollover
               distributions under Code section 402(f)(2)(A).

                    (4)  Offset Against Hardship Withdrawals. Dividends
               distributed from the Plan and paid to a Participant pursuant to
               the Participant's election under this Section shall reduce the
               amount of any withdrawal paid under Article VII between the
               dividend ex-date and the payable date for the dividend.

                    (5)  Consideration of Dividends. Dividends subject to the
               elections described in this Section shall not be considered
               annual additions, Salary Reduction Contributions, or elective
               deferrals.

                    (6)  Deceased Participants. A Participant's election will be
               deemed to be an election to have all cash dividends retained by
               the Plan and invested as provided in Section 19.11 beginning on
               the date of his death and ending on the date'his beneficiary
               changes it.

                    (7)  Compliance With Code Section 404(k). The provisions of
               this Section comply with Code section 404(k), and the provisions
               shall be construed accordingly.

                    (8)  Dividend Ex-Date. The dividend ex-date with respect to
               a dividend is the date that is two business days prior to the
               record date for the dividend.

                  ARTICLE XX. AMENDMENT OF THE PLAN FOR EGTRRA
                  --------------------------------------------

          20.01. Adoption and Effective Date of Amendment.
                 ----------------------------------------

          This Article XX is adopted to reflect certain provisions of the
Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA"). This
Article is intended as good faith compliance with the requirements of EGTRRA and
is to be construed in accordance with EGTRRA and guidance issued thereunder.
Except as otherwise provided, this Article shall be effective as of the first
day of the first Plan Year beginning after December 31, 2001.

          20.02. Supersession of Inconsistent Provisions.
                 ---------------------------------------

          This Section shall supersede the provisions of the Plan to the extent
those provisions are inconsistent with the provisions of this Article.

          20.03. Limitation on Contributions.
                 ---------------------------

               (a)  Effective Date. This Section shall be effective for
          limitation years beginning after December 31, 2001.

               (b)  Maximum Annual Addition. Except to the extent permitted
          under Section 20.10 and Code section 414(v), if applicable, the annual
          addition that may

                                      -86-

<PAGE>

          be contributed or allocated to a Participant's account under the Plan
          for any limitation year shall not exceed the lesser of:

                    (1)  $40,000, as adjusted for increases in the
               cost-of-living under Code section 415(d), or

                    (2)  100 percent of the Participant's compensation, within
               the meaning of Code section 415(c)(3), for the limitation year.
               For purposes of this Article XX, the term "compensation" shall
               mean the Participant's wages within the meaning of Code section
               3401 (without regard to any rule under Code section 3401 that
               limits amounts included in wages based on the nature or location
               of the employment) and all other payments for which the Employer
               is required to furnish the Participant with a written statement
               under Code sections 6041(d) and 6051(a)(3). "Compensation" also
               includes amounts that would have been paid to the Employee during
               the Plan Year in the absence of a salary redirection agreement
               but are excluded from gross income pursuant to Code section 125,
               132(f), 457, or 402(g).

                    The compensation limit referred to in this paragraph shall
               not apply to any contribution for medical benefits after
               separation from service (within the meaning of Code sections
               401(h) or 419A(f)(2)), which is otherwise treated as an annual
               addition.

          20.04. Increase In Compensation Limit.
                 ------------------------------

          The annual compensation of each Participant taken into account in
determining allocations for any Plan Year beginning after December 31, 2001,
shall not exceed $200,000, as adjusted for cost-of-living increases in
accordance with Code section 401(a)(17)(B). Annual compensation means
compensation during the Plan Year or such other consecutive 12-month period over
which compensation is otherwise determined under the Plan (the determination
period). The cost-of-living adjustment in effect for a calendar year applies to
annual compensation for the determination period that begins with or within such
calendar year.

          20.05. Modification of Top-Heavy Rules.
                 -------------------------------

               (a)  Effective Date. This Section shall apply for purposes of
          determining whether the Plan is a top-heavy Plan under Code section
          416(g) for Plan Years beginning after December 31, 2001, and whether
          the Plan satisfies the minimum benefits requirements of Code section
          416(c) for those years. This Section 20.05 amends Article XVII of the
          Plan.

               (b)  Determination of Top-Heavy Status.
                    ---------------------------------

                    (1)  Key Employee. "Key employee" means any Employee or
               former Employee (including any deceased Employee) who at any time
               during the Plan Year that includes the determination date was an
               officer of the Employer having annual compensation greater than
               $130,000 (as

                                      -87-

<PAGE>

               adjusted under Code section 416(i)(1) for Plan Years beginning
               after December 31, 2002), a 5-percent owner of the Employer, or a
               1-percent owner of the Employer having annual compensation of
               more than $150,000. For this purpose, annual compensation means
               compensation within the meaning of Code section 415(c)(3). The
               determination of who is a key employee will be made in accordance
               with Code section 416(i)(1) and the applicable regulations and
               other guidance of general applicability issued thereunder.

                    (2)  Determination of Present Values and Amounts. This
               Section 20.05(b)(2) shall apply for purposes of determining the
               present values of accrued benefits and the amounts of account
               balances of Employees as of the determination date.

                         (A)  Distributions During Year Ending on the
                    Determination Date. The present values of accrued benefits
                    and the amounts of account balances of an Employee as of the
                    determination date shall be increased by the distributions
                    made with respect to the Employee under the Plan and any
                    plan aggregated with the Plan under Code section 416(g)(2)
                    during the 1-year period ending on the determination date.
                    The preceding sentence shall also apply to distributions
                    under a terminated plan which, had it not been terminated,
                    would have been aggregated with the Plan under Code section
                    416(g)(2)(A)(i). In the case of a distribution made for a
                    reason other than separation from service, death, or
                    disability, this provision shall be applied by substituting
                    5-year period for 1-year period.

                         (B)  Employees Not Performing Services During Year
                    Ending on the Determination Date. The accrued benefits and
                    accounts of any individual who has not performed services
                    for the Employer during the l-year period ending on the
                    determination date shall not be taken into account.

                    (3)  Minimum Benefits.
                         ----------------

                         (A)  Matching Contributions. Employer matching
                    contributions shall be taken into account for purposes of
                    satisfying the minimum contribution requirements of Code
                    section 416(c)(2) and the Plan. The preceding sentence shall
                    apply with respect to matching contributions under the Plan
                    or, if the Plan provides that the minimum contribution
                    requirement shall be met in another plan, such other plan.
                    Employer matching contributions that are used to satisfy the
                    minimum contribution requirements shall be treated as
                    matching contributions for purposes of the actual
                    contribution percentage test and other requirements of Code
                    section 401(m).

                                      -88-

<PAGE>

                         (B)  Contributions Under Other Plans. Non-key Employees
                    who participate in the Guidant Retirement Plan ("Retirement
                    Plan") will receive the product of the Employee's
                    Compensation (as defined in the Retirement Plan) for the
                    Testing Period and the lesser of 2 percent per Year of
                    Minimum Benefit Service (as defined in the Retirement Plan)
                    or 20 percent. For purposes of this Section, "Compensation",
                    "Testing Period" and "Year of Minimum Benefit Service" will
                    have the meaning assigned to them in the Retirement Plan.

          20.06. Direct Rollovers of Plan Distributions.
                 --------------------------------------

               (a)  Effective Date. This Section 20.06 shall apply to
          distributions made after December 31, 2001.

               (b)  Modification of Definition of Eligible Retirement Plan. For
          purposes of the direct rollover provisions in Section 11.02, an
          "eligible retirement plan" shall also mean an annuity contract
          described in Code section 403(b) and an eligible plan under Code
          section 457(b), which is maintained by a state, political subdivision
          of a state, or any agency or instrumentality of a state or political
          subdivision of a state and which agrees to separately account for
          amounts transferred into such plan from this Plan. The definition of
          "eligible retirement plan" shall also apply in the case of a
          distribution to a surviving spouse, or to a spouse or former spouse
          who is the alternate payee under a qualified domestic relation order,
          as defined in Code section 414(p).

               (c)  Modification of Definition of Eligible Rollover Distribution
          to Exclude Hardship Distributions. For purposes of the direct rollover
          provisions in Section 11.02, any amount that is distributed on account
          of hardship shall not be an eligible rollover distribution and the
          distributee may not elect to have any portion of such a distribution
          paid directly to an eligible retirement plan.

          20.07. Rollovers Disregarded in Involuntary Cash-Outs.
                 ----------------------------------------------

               (a)  Applicability and Effective Date. This Section 20.07 shall
          apply to distributions made after December 31, 2001, regardless of
          when the Participant separated from service.

               (b)  Rollovers Disregarded in Determining Value of Account
          Balance for Involuntary Distributions. For purposes of Section
          10.01(b), the value of a Participant's nonforfeitable account balance
          shall be determined without regard to that portion of the account
          balance that is attributable to rollover contributions (and earnings
          allocable thereto) within the meaning of Code sections 402(c),
          403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16). If the value
          of the Participant's nonforfeitable account balance as so determined
          is $5,000 or less, the Plan shall immediately distribute the
          Participant's entire nonforfeitable account balance.

                                      -89-

<PAGE>

          20.08. Repeal of Multiple Use Test.
                 ---------------------------

          The multiple use test described in Treasury Regulation ss. 1.401(m)-2
shall not apply for Plan Years beginning after December 31, 2001.

          20.09. Elective Deferrals: Contribution Limitation.
                 -------------------------------------------

          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 for that taxable year, except to the extent permitted under
Section 20.10 and Code section 414(v), if applicable.

          20.10. Catch-Up Contributions.
                 ----------------------

          All Employees who are eligible to make elective deferrals under this
Plan and who have attained age 50 before the close of the Plan Year shall be
eligible to make catch-up contributions in accordance with, and subject to thin
limitations of, Code section 414(v). Catch-up contributions shall not be taken
into account for purposes of the provisions of the Plan implementing the
required limitations of Code sections 402(g) and 415. The Plan shall not be
treated as failing to satisfy the provisions of the Plan implementing the
requirements of Code section 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416,
as applicable, by reason of the making of such catch-up contributions. Catch-up
contributions shall apply to contributions after December 31, 2001.

          20.11. Suspension Period Following Hardship Distribution.
                 -------------------------------------------------

          A Participant who receives a distribution of elective deferrals after
December 31, 2001, on account of hardship shall be prohibited from making
elective deferrals and employee contributions under this and all other plans of
the Employer for 6 months after receipt of the distribution.

          A Participant who receives a distribution of elective deferrals in
calendar year 2001 on account of hardship shall be prohibited from making
elective deferrals and employee contributions under this and all other plans of
the employer for the period specified in the provisions of the Plan relating to
suspension of elective deferrals that were in effect prior to this amendment.

                 ARTICLE XXI. MINIMUM DISTRIBUTION REQUIREMENTS
                 ----------------------------------------------

          21.01. General Rules.
                 -------------

               (a)  Effective Date. The provisions of this Article will apply
          for purposes of determining required minimum distributions for
          calendar years beginning with the 2003 calendar year.

               (b)  Precedence. The requirements of this Article will take
          precedence over any inconsistent provisions of the Plan.

                                      -90-

<PAGE>

               (c)  Requirements of Treasury Regulations Incorporated. All
          distributions required under this Section will be determined and made
          in accordance with the Treasury Regulations under Code section
          401(a)(9).

          21.02. Time and Manner of Distribution.
                 -------------------------------

               (a)  Required Beginning Date. The Participant's entire interest
          will be distributed, or begin to be distributed, to the Participant no
          later than the Participant's required beginning date.

               (b)  Death of Participant Before Distributions Begin. Unless a
          Participant or Beneficiary elects to apply the Five-Year Rule pursuant
          to Section 21.05, if the Participant dies before distributions begin,
          the Participant's entire interest will be distributed, or begin to be
          distributed, no later than as follows:

                    (1)  If the Participant's surviving spouse is the
               Participant's sole designated beneficiary, then distributions to
               the surviving spouse will begin by December 31 of the calendar
               year immediately following the calendar year in which the
               Participant died, or by December 31 of the calendar year in which
               the Participant would have attained age 70 1/2, if later.

                    (2)  If the Participant's surviving spouse is not the
               Participant's sole designated beneficiary, then distributions to
               the beneficiary will begin by December 31 of the calendar year
               immediately following the calendar year in which the Participant
               died.

                    (3)  If there is no designated beneficiary as of September
               30 of the year following the year of the Participant's death, the
               Participant's entire interest will be distributed by December 31
               of the calendar year containing the fifth anniversary of the
               Participant's death.

                    (4)  If the Participant's surviving spouse is the
               Participant's sole designated beneficiary and the surviving
               spouse dies after the Participant but before distributions to the
               surviving spouse begin, this Section 21.02(b), other than Section
               21.02(b)(l), will apply as if the surviving spouse were the
               Participant.

          For purposes of this Section 21.02(b) and Section 21.04, unless
Section 21.02(b)(4) applies, distributions are considered to begin on the
Participant's required beginning date. If Section 21.02(b)(4) applies,
distributions are considered to begin on the date distributions are required to
begin to the surviving spouse under Section 21.02(b)(1). If distributions under
an annuity purchased from an insurance company irrevocably commence to the
Participant before the Participant's required beginning date (or to the
Participant's surviving spouse before the date distributions are required to
begin to the surviving spouse under Section 21.02(b)(1), the date distributions
are considered to begin is the date distributions actually commence.

                                      -91-

<PAGE>

               (c)  Form of Distribution. Unless the Participant's interest is
          distributed in the form of an annuity purchased from an insurance
          company or in a single sum on or before the required beginning date,
          as of the first distribution calendar year, distributions will be made
          in accordance with Sections 21.03 and 21.04. If the Participant's
          interest is distributed in the form of an annuity purchased from an
          insurance company, distributions thereunder will be made in accordance
          with the requirements of Code section 401(a)(9) and the Treasury
          Regulations.

          21.03. Required Minimum Distributions During Participant's
                 ---------------------------------------------------
Lifetime.
--------

               (a)  Amount of Required Minimum Distribution For Each
          Distribution Calendar Year. During the Participant's lifetime, the
          minimum amount that will be distributed for each distribution calendar
          year is the lesser of:

                    (1)  The quotient obtained by dividing the Participant's
               Account balance by the distribution period in the Uniform
               Lifetime Table set forth in ss. 1.401(a)(9)-9 of the Treasury
               Regulations, using the Participant's age as of the Participant's
               birthday in the distribution calendar year; or

                    (2)  If the Participant's sole designated beneficiary for
               the distribution calendar year is the Participant's spouse, the
               quotient obtained by dividing the Participant's Account balance
               by the number in the Joint and Last Survivor Table set forth in
               ss. 1.401(a)(9)-9 of the Treasury Regulations, using the
               Participant's and spouse's attained ages as of the Participant's
               and spouse's birthdays in the distribution calendar year.

               (b)  Lifetime Required Minimum Distributions Continue Through
          Year of Participant's Death. Required minimum distributions will be
          determined under this Section 21.03 beginning with the first
          distribution calendar year and up to and including the distribution
          calendar year that includes the Participant's date of death.

          21.04. Required Minimum Distributions After Participant's Death.
                 --------------------------------------------------------

               (a)  Death On or After Date Distributions Begin.
                    ------------------------------------------

                    (1)  Participant Survived by Designated Beneficiary. If the
               Participant dies on or after the date distributions begin and
               there is a designated beneficiary, the minimum amount that will
               be distributed for each distribution calendar year after the year
               of the Participant's death is the quotient obtained by dividing
               the Participant's Account balance by the longer of the remaining
               life expectancy of the Participant or the remaining life
               expectancy of the Participant's designated Beneficiary,
               determined as follows:

                                      -92-

<PAGE>

                         (A)  The Participant's remaining life expectancy is
                    calculated using the age of the Participant in the year of
                    death, reduced by one for each subsequent year.

                         (B)  If the Participant's surviving spouse is the
                    Participant's designated sole beneficiary, the remaining
                    life expectancy of the surviving spouse is calculated for
                    each distribution calendar year after the year of the
                    Participant's death using the surviving spouse's age as of
                    the spouse's birthday in that year. For distribution
                    calendar years after the year of the surviving spouse's
                    death, the remaining life expectancy of the surviving spouse
                    is calculated using the age of the surviving spouse as of
                    the spouse's birthday in the calendar year of the spouse's
                    death, reduced by one for each subsequent calendar year.

                         (C)  If the Participant's surviving spouse is not the
                    Participant's sole designated beneficiary, the designated
                    beneficiary's remaining life expectancy is calculated using
                    the age of the beneficiary in the year following the year of
                    the Participant's death, reduced by one for each subsequent
                    year.

                    (2)  No Designated Beneficiary. If the Participant dies on
               or after the date distributions begin and there is no designated
               beneficiary as of September 30 of the year after the year of the
               Participant's death, the minimum amount that will be distributed
               for each distribution calendar year after the year of the
               Participant's death is the quotient obtained by dividing the
               Participant's Account balance by the Participant's remaining life
               expectancy calculated using the age of the Participant in the
               year of death, reduced by one for each subsequent year. (b) Death
               Before Date Distributions Begin.

          Unless a Participant or beneficiary elects to apply the Five-Year Rule
pursuant to Section 21.05, the Participant's interest will be distributed as
follows:

                    (1)  Participant Survived by Designated Beneficiary. If the
               Participant dies before the date distributions begin and there is
               a designated beneficiary, the minimum amount that will be
               distributed for each distribution calendar year after the year of
               the Participant's death is the quotient obtained by dividing the
               Participant's Account balance by the remaining life expectancy of
               the Participant's designated beneficiary, determined as provided
               in Section 21.04(a).

                    (2)  No Designated Beneficiary. If the Participant dies
               before the date distributions begin and there is no designated
               beneficiary as of September 30 of the year following the year of
               the Participant's death, distribution of the Participant's entire
               interest will be completed by

                                      -93-

<PAGE>

               December 31 of the calendar year containing the fifth anniversary
               of the Participant's death.

               (c)  Death of Surviving Spouse Before Distributions to Surviving
          Spouse Are Required to Begin. If the Participant dies before the date
          distributions begin, the Participant's surviving spouse is the
          Participant's sole designated beneficiary, and the surviving spouse
          dies before distributions are required to begin to the surviving
          spouse under Section 21.02(b)(1), this Section 21.04(b) will apply as
          if the surviving spouse were the Participant.

          21.05. Election of Five Year Rule.
                 --------------------------

          A Participant or beneficiary may elect to apply the Five-Year Rule
instead of the life expectancy rule of Section 21.02(b) or 21.04(b). The
Participant or Beneficiary's election must be made no later than the earlier of
September 30 of the calendar year in which distribution would be required to
begin under Section 21.02(b); or by September 30 of the calendar year which
contains the fifth anniversary of the Participant's (or, if applicable,
surviving spouse's) death.

          21.06. Definitions.
                 -----------

               (a)  Designated Beneficiary. A "designated beneficiary" is an
          individual who is designated as the beneficiary under Section 10.02
          and is the designated beneficiary under Code section 401(a)(9) and ss.
          1.401(a)(9)-1, Q&A-4, of the Treasury Regulations.

               (b)  Distribution Calendar Year. A "distribution calendar year"
          is the 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 under Section 21.02(b). The
          required minimum distribution for the Participant's first distribution
          calendar year will be made on or before the Participant's required
          beginning date. The required minimum distribution for other
          distribution calendar years, including the required minimum
          distribution for the distribution calendar year in which the
          Participant's required beginning date occurs, will be made on or
          before December 31 of that distribution calendar year.

               (c)  Five-Year Rule. The "Five-Year Rule" requires that a
          Participant's entire interest be distributed by December 31 of the
          calendar year containing the fifth anniversary of the Participant's
          death.

               (d)  Life Expectancy. "Life expectancy" is the life expectancy
          computed by use of the Single Life Table in ss. 1.401(a)(9)-9 of the
          Treasury Regulations.

                                      -94-

<PAGE>

               (e)  Participant's Account Balance. A Participant's "Account
          balance" is 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
          made and allocated 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. The Account balance for the valuation calendar
          year includes any amounts rolled over or transferred to the Plan
          either in the valuation calendar y ear or in the distribution calendar
          year if distributed or transferred in the valuation calendar year.

               (f)  Required Beginning Date. The date specified in Section
          10.01(b).

                                    EXECUTION
                                    ---------

          IN WITNESS WHEREOF, Guidant Corporation has caused this restated Plan
document to be executed and adopted, effective January 1, 2003, except as
otherwise provided in the Plan, on this day of , 2003.

                                    GUIDANT CORPORATION

                                    By:
                                         --------------------------------------

                                    Date:
                                           ------------------------------------

                                      -95-

<PAGE>

                                    ADDENDUM
                                    --------

          Pursuant to Section 5.01 of the Plan, the Fund Advisory Committee has
designated the following investment Fund options to be available for the
investment of Participant's Salary Reduction Contributions.

          The Stable Value Fund. The investment objective of the Stable Value
Fund is to preserve principle while seeking a high level of current income. The
Fund is designed to provide Participants with a higher return than typically
offered by money markets while maintaining liquidity and safety of principle.
The Fund generally invests in investment contracts issued by insurance
companies, banks, and other financial institutions and will be diversified among
many different institutions.

          Large Company Value. The investment objective of the Large Company
Value Fund is to outperform the Russell 1000 Value Index while maintaining below
average volatility. The fund is a large company stock fund that seeks long-term
growth and income by investing in a diversified portfolio of stocks that are
thought to be under valued relative to their dividend income, the value of the
underlying assets of the issuing corporation, and potential future return.

          The S&P 500 Index Fund. The investment objective of the S&P 500 Index
Fund is to match the investment performance of the U.S. stock market. The Fund
invests in the securities that make up the S&P 500 Index, which includes 500
established companies of different sizes and sectors of the U.S. economy,
resulting in a broadly diversified, mostly large company U.S. stock fund.

          The Large Conwanv Growth Fund. The investment objective of The Large
Company Stock Fund is to outperform the S&P 500 Index over a long term. The Fund
seeks the highest possible level of consistent, sustainable growth by buying
stocks of fundamentally strong, quality companies at prices below their
estimated economic or intrinsic value. The strategy is to enhance and protect
the fund by combining growth and value disciplines. The Fund is comprised of a
select group of both U.S. and international stocks.

          The International Stock Fund. The investment objective of The
International Stock Fund is to seek long-term growth of capital and future
income by investing primarily in the stocks of companies based outside the
United States. The Fund normally invests in foreign and U.S./registered
securities, as well as companies that target markets outside the United States.
The Fund generally emphasizes strong, well-managed companies in Europe, Canada,
Australia and the Far East.

          Small Company Value Fund. The investment objective of the Small
Company Value Fund is to provide superior long-term appreciation through the
selection of under valued stocks. The Fund invests primarily in equity
securities of small capitalization companies based in the United States. Its
strategy is to create a portfolio of undervalued stocks that reflect the
characteristics of the Russell 2000 Index.

          The Real Estate Fund. The investment objective of The Real Estate Fund
is to seek total return with equal emphasis on capital appreciation and current
income. The Fund invests primarily in equity securities of real estate
companies. Some of the securities include

                                      -96-

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common stocks, convertible securities, and preferred stocks. The Fund may
invest, with limitations, the securities of foreign real estate companies.

          Small Company Growth Fund. The investment objective of the Small
Company Growth Fund is to provide 100% appreciation over 36 months. It seeks to
meet this objective by investing in stocks of small and mid-cap companies that
have records of high earnings growth and above average prospects for future
earnings growth.

          Horizon Portfolio Alternatives. The Horizon Portfolios are four
pre-mixed balanced funds, each of which invests in the eight investment Funds
described above, but with an asset allocation formula designed to suit a
particular time horizon. Horizon Portfolio (A) will have a time horizon of 3 to
6 years; Horizon Portfolio (B) will have a time horizon of 6 to 12 years;
Horizon Portfolio (C) will have a time horizon of 12 to 20 years; and Horizon
Portfolio (D) will have a time horizon of 20 years. Each Horizon Portfolio will
be diversified across and within asset classes. Each Horizon Portfolio will he
periodically and automatically rebalanced to the target asset allocations
determined by professional investment advisors. Horizon Portfolios are offered
as an alternative to individual investment direction among the eight funds. A
Participant or Beneficiary who invests in a Horizon Portfolio will not be
permitted to invest in any of the eight investment Funds while invested in a
Horizon Portfolio. In addition, a Participant or Beneficiary may not invest in
more than one Horizon Portfolio at a time.

                                      -97-

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