Document:

<PAGE>
                                                                   EXHIBIT 10.16

                  AMENDMENT NO. 9 TO REVOLVING CREDIT AGREEMENT

                          Dated as of December 20, 2004

         This AMENDMENT NO. 9 TO REVOLVING CREDIT AGREEMENT, dated as of
December 20, 2004 (this "Amendment"), amends that certain Revolving Credit
Agreement, dated as of December 22, 1997 (as amended and in effect from time to
time, the "Credit Agreement"), by and among PERKINS FAMILY RESTAURANTS, L.P., a
Delaware limited partnership ("Perkins"), THE RESTAURANT COMPANY, a Delaware
corporation ("TRC"), PERKINS RESTAURANTS, INC., a Minnesota corporation ("PRI"),
PERKINS MANAGEMENT COMPANY, INC., a Delaware corporation ("PMC"), and PERKINS
FINANCE CORP., a Delaware corporation ("PFC", and together with TRC, PRI and
PMC, the "Original Guarantors"), FLEET NATIONAL BANK (f/k/a BankBoston, N.A.), a
national banking association and the other lending institutions listed on
Schedule 1 thereto (the "Banks"), FLEET NATIONAL BANK (f/k/a BankBoston, N.A.),
as agent and administrative agent for the Banks (the "Agent"), and BANK OF
AMERICA, N.A. (f/k/a Nationsbank, N.A.), as Syndication Agent (the "Syndication
Agent"). All capitalized terms used herein without definitions shall have the
meanings given such terms in the Credit Agreement.

         WHEREAS, pursuant to the Joinder and Amendment No. 2, dated as of
December 20, 1999, by and among Perkins, the Original Guarantors, the Banks, the
Agent and the Syndication Agent, TRC joined the Credit Agreement and the Loan
Documents and agreed to become a Borrower under the Credit Agreement and to
comply with and be bound by all of the terms, conditions and covenants of the
Credit Agreement and Loan Documents applicable to it as a Borrower;

         WHEREAS, as of the Merger Date, Perkins, PRI and PMC merged with and
into TRC such that TRC became the sole Borrower under the Credit Agreement (TRC
is hereinafter referred to as the "Borrower");

         WHEREAS, pursuant to a Guaranty, dated as of December 20, 1999, by The
Restaurant Holding Corporation ("TRHC") in favor of the Agent and the Banks,
TRHC has guaranteed all of the Borrower's obligations to the Banks and the Agent
under or in respect of the Credit Agreement and the other Loan Documents and
became a Guarantor under the Credit Agreement;

         WHEREAS, pursuant to a Guaranty, dated as of September 30, 2000, by The
Restaurant Company of Minnesota ("TRCM") in favor of the Agent and the Banks,
TRCM has guaranteed all of the Borrower's obligations to the Banks and the Agent
under or in respect of the Credit Agreement and the other Loan Documents and
became a Guarantor under the Credit Agreement;

         WHEREAS, pursuant to a Guaranty, dated as of September 30, 2000, by TRC
Realty LLC in favor of the Agent and the Banks, TRC Realty LLC has guaranteed
all of the Borrower's obligations to the Banks and the Agent under or in respect
of the Credit Agreement and the other Loan Documents and became a Guarantor
under the Credit Agreement;

<PAGE>
                                       2

         WHEREAS, the Borrower has requested that the Banks and the Agent agree
to amend certain of the terms of the Credit Agreement;

         WHEREAS, the Banks and the Agent have agreed to amend certain of the
terms of the Credit Agreement upon the conditions set forth herein;

         NOW THEREFORE, in consideration of the mutual agreements contained in
the Credit Agreement and herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

         SS.1. AMENDMENTS TO CREDIT AGREEMENT.

         SS.1.1. DEFINITIONS. Section 1.1 of the Credit Agreement is hereby
amended as follows:

                  (a) The definition of "Applicable Margin" set forth in Section
         1.1 of the Credit Agreement is hereby amended and restated in its
         entirety to read as follows:

                  "Applicable Margin. The Applicable Margin with respect to
                  Revolving Credit Loans that are Base Rate Loans shall be
                  1.25%. The Applicable Margin with respect to Eurodollar Rate
                  Loans and Letters of Credit shall be 3.25%."

                  (b) The definition of "Consolidated Cash Flow" set forth in
         Section 1.1 of the Credit Agreement is hereby amended by deleting the
         term "Maintenance Capital Expenditures" which appears in clause (h) of
         such definition and substituting in lieu thereof the term "Capital
         Expenditures".

                  (c) The definition of "Revolving Credit Loan Maturity Date"
         set forth in Section 1.1 of the Credit Agreement is hereby amended
         and restated in its entirety to read as follows:

                  "Revolving Credit Loan Maturity Date. January 12, 2006."

                  (d) The following new definitions are added in alphabetical
         order:

                  "New Minnesota Property. See Section 9.13(d)."

                  "New Properties. See Section 10.6(b). "

                  "Sale Leaseback Properties. See Section 10.6(b)."

                  "Sale Leaseback Transaction. See Section 10.6(b)."

         SS.1.2. COMMITMENT FEE. The Credit Agreement is hereby further amended
by deleting Section 2.2 in its entirety and substituting in lieu thereof the
following new Section 2.2:

                  "2.2 COMMITMENT FEE. The Borrower agrees to pay to the Agent
         for the accounts of the Banks in accordance with their respective
         Revolving Credit Commitment Percentages a commitment fee at an annual
         rate equal to one-half of

<PAGE>
                                       3

         one percent (0.50%) on the average daily amount during each calendar
         quarter or portion thereof from the Closing Date to the Revolving
         Credit Loan Maturity Date by which the Total Revolving Credit
         Commitment exceeds the sum of (i) the Outstanding amount of Revolving
         Credit Loans, plus (ii) the Maximum Drawing Amount, plus (iii) all
         Unpaid Reimbursement Obligations during such calendar quarter. The
         commitment fee shall be payable quarterly in arrears on the last day of
         each calendar quarter for the calendar quarter then ending, with a
         final payment on the Revolving Credit Loan Maturity Date or any earlier
         date on which the Revolving Credit Commitments shall terminate."

         SS.1.3. LETTER OF CREDIT EXPIRY DATE. The Credit Agreement is hereby
further amended by deleting clause (b) of the first sentence of Section 5.1.3 in
its entirety and substituting in lieu thereof the following:

                  "(b) have an expiry date no later than the date which is
         fourteen (14) days (or, if the Letter of Credit is confirmed by a
         confirmer or otherwise provides for one or more nominated persons,
         forty-five (45) days) prior to the Revolving Credit Loan Maturity
         Date."

         SS.1.4. RELEASE AND GRANT OF CERTAIN LIENS. The Credit Agreement is
hereby further amended by adding the following subsection (d) to Section 9.13:

                  "(d) The parties hereto agree that the Agent shall provide a
         release of the liens granted by the Borrower to the Agent, for the
         benefit of the Banks and the Agent, including without limitation any
         mortgage or deed of trust and any Uniform Commercial Code financing
         statement, upon the fee-owned property constituting Collateral and
         located at 951 West 78th Street, Chanhassen, Minnesota, provided that
         the Borrower shall, simultaneously with such release of liens, grant to
         the Agent, for the benefit of the Banks and the Agent, liens upon
         Borrower's fee-owned property located at 4917 Eden Avenue, Edina,
         Minnesota (the "New Minnesota Property"), such liens to include without
         limitation a fully executed mortgage or deed of trust over the New
         Minnesota Property, in form and substance satisfactory to the Agent,
         together with title insurance polices, evidences of insurances with the
         Agent named as loss payee and additional insured, legal opinions and
         other documents and certificates with respect to the New Minnesota
         Property as was required for Real Estate of the Borrower or any of its
         Subsidiaries subject to mortgages as of the Closing Date. The Borrower
         further agrees that following the taking of such actions with respect
         to the New Minnesota Property, the Agent shall have for the benefit of
         the Banks and the Agent a valid and enforceable first priority mortgage
         or deed of trust over the New Minnesota Property, free and clear of all
         defects and encumbrances except for Permitted Liens."

         SS.1.5. DISPOSITION OF ASSETS. The Credit Agreement is hereby further
amended by deleting Section 10.5(b) in its entirety and substituting in lieu
thereof the following:

                  "(b) become a party to or agree to or effect the disposition
         of any substantial assets, other than sales of inventory in the
         ordinary course of business, consistent with past practices; provided,
         however, that if there is no Default or Event of Default in existence
         at the time and none would be created as a result of such action, such

<PAGE>
                                       4

         Persons may dispose of additional assets in the ordinary course of
         business with an aggregate book value not to exceed, on a cumulative
         basis from the Closing Date, $37,000,000."

         SS.1.6. SALE AND LEASEBACK. The Credit Agreement is hereby further
amended by deleting Section 10.6 in its entirety and substituting in lieu
thereof the following:

                  "10.6 SALE AND LEASEBACK.

                           (a) The Borrower will not, and will not permit any of
                  its Subsidiaries to, enter into any arrangement, directly or
                  indirectly, whereby the Borrower or any Subsidiary of the
                  Borrower shall sell or transfer any property owned by it in
                  order then or thereafter to lease such property or lease other
                  property that the Borrower or any Subsidiary of the Borrower
                  intends to use for substantially the same purpose as the
                  property being sold or transferred, unless such transaction
                  (hereinafter referred to as a "Sale Leaseback Transaction")
                  would be a permitted disposition of assets under Section 10.5
                  and the obligations of the Borrower or such Subsidiary as
                  lessee would constitute permitted Indebtedness under Section
                  10.1.

                           (b) Upon the Borrower's written request, Agent shall
                  release the liens, including without limitation any mortgage
                  or deed of trust granted by the Borrower to the Agent, for the
                  benefit of the Banks and the Agent, together with any Uniform
                  Commercial Code financing statements, existing upon the
                  fee-owned properties constituting Collateral which are the
                  subjects of a Sale Leaseback Transaction consummated prior to
                  the Revolving Credit Loan Maturity Date (the "Sale Leaseback
                  Properties"), provided that (i) the Borrower may request such
                  release of liens upon no more than thirteen (13) Sale
                  Leaseback Properties, (ii) fee-owned properties opened for
                  business by the Borrower subsequent to the Closing Date ("New
                  Properties") shall become Collateral under this Credit
                  Agreement in a number and value equal to the number and value
                  at least of the Sale Leaseback Properties, (iii)
                  simultaneously with the consummation of any Sale Leaseback
                  Transaction, the Borrower shall grant to the Agent, for the
                  benefit of the Banks and the Agent, liens upon the New
                  Properties, such liens to include without limitation a fully
                  executed mortgage or deed of trust over the New Properties, in
                  form and substance satisfactory to the Agent, together with
                  title insurance polices, evidences of insurances with the
                  Agent named as loss payee and additional insured, legal
                  opinions and other documents and certificates with respect to
                  such New Properties as was required for Real Estate of the
                  Borrower or any of its Subsidiaries as of the Closing Date,
                  (iv) following the taking of such actions with respect to such
                  New Properties, the Agent shall have for the benefit of the
                  Banks and the Agent valid and enforceable first priority
                  mortgages or deeds of trust over the New Properties, free and
                  clear of all defects and encumbrances except for Permitted
                  Liens, and (v) the value of the liens granted by the Borrower
                  on the New Properties shall be comparable to or greater than
                  the value of the liens granted by the Borrower on the Sale
                  Leaseback Properties."

<PAGE>
                                       5

         SS.1.7. NET WORTH. The Credit Agreement is hereby further amended by
deleting Section 11.2 in its entirety and substituting in lieu thereof the
following new Section 11.2:

                  "11.2  INTENTIONALLY OMITTED."

         SS.1.8. CASH FLOW RATIO. The Credit Agreement is hereby further amended
by deleting Section 11.3 in its entirety and substituting in lieu thereof the
following new Section 11.3:

                  "11.3 CASH FLOW RATIO. The Borrower will not permit the Cash
         Flow Ratio, determined at the end of each fiscal quarter of the
         Borrower, to be less than 1.05:1."

         SS.1.9. INTEREST COVERAGE RATIO. The Credit Agreement is hereby further
amended by deleting Section 11.4 in its entirety and substituting in lieu
thereof the following new Section 11.4:

                  "11.4  INTENTIONALLY OMITTED."

         SS.1.10. CAPITAL EXPENDITURES. The Credit Agreement is hereby further
amended by deleting Section 11.5 in its entirety and substituting in lieu
thereof the following new Section 11.5:

                  "11.5  INTENTIONALLY OMITTED."

         SS.1.11. MINIMUM EBITDA. The Credit Agreement is hereby further amended
by adding the following new Section 11.6:

                  "11.6 MINIMUM EBITDA. The Borrower will not permit
         Consolidated EBITDA for the twelve fiscal month period ending on the
         last day of each fiscal quarter of the Borrower, to be less than
         $36,000,000."

         SS.2. REPRESENTATIONS AND WARRANTIES. The Borrower and each of the
Guarantors jointly and severally represent and warrant to the Banks and the
Agent as follows:

                  (a) Representations and Warranties in Credit Agreement. The
         representations and warranties of the Borrower and the Guarantors
         contained in the Credit Agreement, each as amended by this Amendment,
         (i) were true and correct in all material respects when made, and (ii)
         except to the extent such representations and warranties by their terms
         are made solely as of a prior date, continue to be true and correct in
         all material respects on the date hereof.

                  (b) Authority, Etc. The execution and delivery by the Borrower
         and each of the Guarantors of this Amendment and the performance by the
         Borrower and each of the Guarantors of all of their agreements and
         obligations under this Amendment and the Credit Agreement as amended
         hereby (i) are within the corporate authority of the Borrower and each
         of the Guarantors, (ii) have been duly authorized by all necessary
         corporate proceedings by the Borrower and each of the Guarantors, (iii)
         do not conflict with or result in any breach or contravention of any
         provision of law, statute, rule or regulation to which the Borrower or
         any of the Guarantors is subject or any judgment, order, writ,
         injunction, license or permit

<PAGE>
                                       6

         applicable to the Borrower or any of the Guarantors, and (iv) do not
         conflict with any provision of any corporate charter or by-laws of, or
         any agreement or other instrument binding upon, the Borrower or any
         Guarantor.

                  (c) Enforceability of Obligations. This Amendment, and the
         Credit Agreement as amended hereby, constitute the legal, valid and
         binding obligations of the Borrower and each of the Guarantors
         enforceable against each such Person in accordance with their
         respective terms. Immediately prior to and immediately after and after
         giving effect to this Amendment, no Default or Event of Default exists
         under the Credit Agreement or any other Loan Document.

         SS.3. AFFIRMATION OF BORROWER AND THE GUARANTORS.

                  (a) The Borrower hereby affirms its absolute and unconditional
         promise to pay to each Bank and the Agent the Obligations due under the
         Notes, the Credit Agreement as amended hereby, and the other Loan
         Documents, at the times and in the amounts provided for therein. The
         Borrower confirms and agrees that (i) the Obligations of the Borrower
         to the Banks and the Agent under the Credit Agreement as amended hereby
         are secured by and entitled to the benefits of the Security Documents
         and (ii) all references to the term "Credit Agreement" in the Security
         Documents shall hereafter refer to the Credit Agreement as amended
         hereby.

                  (b) Each of the Guarantors hereby acknowledges that it has
         read and is aware of the provisions of this Amendment. Each of the
         Guarantors hereby reaffirms its absolute and unconditional guaranty of
         the Borrower's payment and performance of the Obligations to the Banks
         and the Agent under the Credit Agreement, as amended hereby. Each of
         the Guarantors hereby confirms and agrees that the Guaranty shall
         hereafter constitute a guaranty of the Obligations under the Credit
         Agreement as amended hereby.

         SS.4. CONDITIONS TO EFFECTIVENESS. This Amendment shall be effective as
of the date hereof upon the satisfaction of each of the following conditions
precedent:

                  (a) The Agent shall have received an original counterpart
         signature to this Amendment, duly executed and delivered by the
         Borrower, the Guarantors, the Banks and the Agent;

                  (b) The Borrower shall have paid to the Agent, for the pro
         rata account of each Bank, a non-refundable amendment fee in an amount
         equal to fifteen hundredths of one percent (0.15%) on such Bank's
         Revolving Credit Commitment (after giving effect to this Amendment).

         SS.5. MISCELLANEOUS PROVISIONS.

                  (a) Except as otherwise expressly provided by this Amendment,
         all of the terms, conditions and provisions of the Credit Agreement
         shall remain the same. It is declared and agreed by each of the parties
         hereto that the Credit Agreement, as amended hereby, shall continue in
         full force and effect, and that this Amendment and the Credit Agreement
         shall be read and construed as one instrument. Nothing

<PAGE>
                                       7

         contained in this Amendment (i) shall be construed to imply a
         willingness on the part of the Banks or the Agent to grant any similar
         or other future amendment of any of the terms and conditions of the
         Credit Agreement or the other Loan Documents and (ii) shall in any way
         prejudice, impair or effect any rights or remedies of the Banks and the
         Agent under the Credit Agreement or the other Loan Documents.

                  (b) THIS AMENDMENT IS INTENDED TO TAKE EFFECT AS AN AGREEMENT
         UNDER SEAL AND SHALL BE CONSTRUED ACCORDING TO AND GOVERNED BY THE LAWS
         OF THE COMMONWEALTH OF MASSACHUSETTS.

                  (c) This Amendment may be executed in any number of
         counterparts, but all such counterparts shall together constitute but
         one instrument. In making proof of this Amendment it shall not be
         necessary to produce or account for more than one counterpart signed by
         each party hereto by and against which enforcement hereof is sought.

                  (d) Headings or captions used in this Amendment are for
         convenience of reference only and shall not define or limit the
         provisions hereof.

                  (e) The Borrower hereby agrees to pay to the Agent, on demand
         by the Agent, all reasonable out-of-pocket costs and expenses incurred
         or sustained by the Agent in connection with the preparation of this
         Amendment (including reasonable legal fees and expenses).

                            [SIGNATURE PAGES FOLLOW]

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
an agreement under seal as of the date first written above.

                                       THE RESTAURANT COMPANY

                                       By: /s/ Michael P. Donahoe
                                           ------------------------------------
                                           Name: Michael P. Donahoe
                                           Title: CFO/EVP

                                       THE RESTAURANT HOLDING
                                       CORPORATION, as Guarantor

                                       By: /s/ Michael P. Donahoe
                                           ------------------------------------
                                           Name: Michael P. Donahoe
                                           Title: CFO/EVP

                                       PERKINS FINANCE CORP., as Guarantor

                                       By: /s/ Michael P. Donahoe
                                           ------------------------------------
                                           Name: Michael P. Donahoe
                                           Title: CFO/EVP

                                       THE RESTAURANT COMPANY OF
                                       MINNESOTA, as Guarantor

                                       By: /s/ Michael P. Donahoe
                                           ------------------------------------
                                           Name: Michael P. Donahoe
                                           Title: CFO/EVP

                                       TRC REALTY LLC, as Guarantor

                                       By: /s/ Michael P. Donahoe
                                           ------------------------------------
                                           Name: Michael P. Donahoe
                                           Title: CFO/EVP

<PAGE>

                                       FLEET NATIONAL BANK (f/k/a BankBoston,
                                       N.A.), individually and as Agent

                                       By: /s/ Cristin M. O'Hara
                                           ------------------------------------
                                           Name: Cristin M. O'Hara
                                           Title: Director

                                       BANK OF AMERICA, N.A. (f/k/a
                                       Nationsbank, N.A.), individually
                                       and as Syndication Agent

                                       By: /s/ Cristin M. O'Hara
                                           ------------------------------------
                                           Name: Cristin M. O'Hara
                                           Title: Director

                                       AMSOUTH BANK (f/k/a First American
                                       National Bank)

                                       By: /s/ Elizabeth H. Vaughn
                                           ------------------------------------
                                           Name: Elizabeth H. Vaughn
                                           Title: Vice President

                                       SUNTRUST BANK

                                       By: /s/ Susan M. Hall
                                           ------------------------------------
                                           Name: Susan M. Hall
                                           Title: Managing Director<PAGE>
EXHIBIT 10.44

                      HEMAGEN EMPLOYEE STOCK OWNERSHIP PLAN

                            HEMAGEN DIAGNOSTICS, INC.

                          EMPLOYEE STOCK OWNERSHIP PLAN

                        (EFFECTIVE AS OF OCTOBER 1, 2003)

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                <C>
ARTICLE 1.  PLAN IDENTITY........................................................  1
     1.1    Name.................................................................  1
     1.2    Fiscal Period........................................................  1
     1.3    Single Plan for All Employers........................................  1
     1.4    Interpretation of Provisions.........................................  1

ARTICLE 2.  DEFINITIONS..........................................................  1
     2.1    Account..............................................................  1
     2.2    Active Participant...................................................  1
     2.3    Beneficiary..........................................................  1
     2.4    Code.................................................................  1
     2.5    Company..............................................................  1
     2.6    Disability...........................................................  1
     2.7    Effective Date.......................................................  1
     2.8    Employee.............................................................  1
     2.9    Employer.............................................................  2
     2.10   Entry Date...........................................................  2
     2.11   ERISA................................................................  2
     2.12   Highly Paid Employee.................................................  2
     2.13   Hours of Service.....................................................  2
     2.14   Investment Fund......................................................  3
     2.15   Normal Retirement Age................................................  3
     2.16   Normal Retirement Date...............................................  3
     2.17   Participant..........................................................  3
     2.18   Plan Administrator...................................................  3
     2.19   Plan Year............................................................  3
     2.20   Recognized Absence...................................................  3
     2.21   Securities...........................................................  4
     2.22   Securities Fund......................................................  4
     2.23   Service..............................................................  4
     2.24   Spouse...............................................................  4
     2.25   Stock................................................................  4
     2.26   Stock Obligation.....................................................  4
     2.27   Testing Compensation.................................................  4
     2.28   Total Compensation...................................................  5
     2.29   Trust or Trust Fund..................................................  5
     2.30   Trust Agreement......................................................  5
     2.31   Trustee..............................................................  6
     2.32   Unallocated Securities Fund..........................................  6
     2.33   Valuation Date.......................................................  6
     2.34   Valuation Period.....................................................  6
     2.35   Vesting Year.........................................................  6
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                <C>
ARTICLE 3.  ELIGIBILITY FOR PARTICIPATION........................................  1
     3.1    Initial Eligibility..................................................  1
     3.2    Terminated Employees.................................................  1
     3.3    Certain Employees Ineligible.........................................  1
     3.4    Participation and Reparticipation....................................  1

ARTICLE 4.  EMPLOYER CONTRIBUTIONS AND CREDITS...................................  1
     4.1    Discretionary Contributions..........................................  1
     4.2    Employees Eligible for an Allocation.................................  1
     4.3    Conditions as to Contributions.......................................  1

ARTICLE 5.  LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS.........................  1
     5.1    Limitation on Annual Additions.......................................  1
     5.2    Effect of Limitations................................................  1
     5.3    Limitations as to Certain Participants...............................  1

ARTICLE 6.  TRUST FUND AND ITS INVESTMENT........................................  1
     6.1    Creation of Trust Fund...............................................  1
     6.2    Securities Fund and Investment Fund..................................  1
     6.3    Participants' Option to Diversify....................................  1

ARTICLE 7.  ADJUSTMENTS TO ACCOUNTS..............................................  1
     7.1    Adjustments for Transactions.........................................  1
     7.2    Valuation of Investment Fund.........................................  1
     7.3    Adjustments for Investment Experience................................  1
     7.4    Adjustments for Capital Changes......................................  1

ARTICLE 8.  VESTING OF PARTICIPANTS' INTERESTS...................................  1
     8.1    Deferred Vesting in Accounts.........................................  1
     8.2    Computation of Vesting Years.........................................  1
     8.3    Full Vesting Upon Certain Events.....................................  1
     8.4    Full Vesting Upon Plan Termination...................................  1
     8.5    Forfeiture, Repayment, and Restoral..................................  1
     8.6    Accounting for Forfeitures...........................................  2
     8.7    Vesting  and Nonforfeitability.......................................  2

ARTICLE 9.  PAYMENT OF BENEFITS..................................................  1
     9.1    Benefits for Participants............................................  1
     9.2    Benefits on a Participant's Death....................................  1
     9.3    Marital Status.......................................................  2
     9.4    Delay in Benefit Determination.......................................  2
     9.5    Accounting for Benefit Payments......................................  2
     9.6    Direct Transfer of Eligible Plan Distributions.......................  2
     9.7    Minimum Distribution Requirements....................................  3
</TABLE>

<PAGE>

<TABLE>
<S>                                                                           <C>
ARTICLE 10. ESOP PROVISIONS......................................................1
     10.1   Contributions for Stock Obligations..................................1
     10.2   Acquisition of Stock.................................................1
     10.3   Allocation of Contributions..........................................2
     10.4   Restrictions on Disposition of Stock.................................2
     10.5   Dividends on Stock...................................................2
     10.6   Voting and Tendering of Stock........................................2
     10.7   Put Option for Non-traded Securities..............................10-4
     10.8   Securities not Subject to "Put" or "Call".........................10-4

ARTICLE 11. RULES GOVERNING BENEFIT CLAIMS AND REVIEW OF APPEALS.................1
     11.1   Claim for Benefits...................................................1
     11.2   Notification by Plan Administrator...................................1
     11.3   Claims Review Procedure..............................................1

ARTICLE 12. THE PLAN ADMINISTRATOR AND ITS FUNCTIONS.............................1
     12.1   Authority of Plan Administrator......................................1
     12.2   Identity of Plan Administrator.......................................1
     12.3   Duties of Plan Administrator.........................................1
     12.4   Valuation of Securities..............................................1
     12.5   Compliance with ERISA................................................2
     12.6   Adoption of Rules....................................................2
     12.7   Responsibilities to Participants.....................................2
     12.8   Alternative Payees in Event of Incapacity............................2
     12.9   Indemnification by Employers.........................................2
     12.10  Nonparticipation by Interested Member................................2

ARTICLE 13. ADOPTION AMENDMENT, OR TERMINATION OF THE PLAN.......................1
     13.1   Adoption of Plan by Other Employers..................................1
     13.2   Adoption of Plan by Successor........................................1
     13.3   Plan Adoption Subject to Qualification...............................1
     13.4   Right to Amend or Terminate..........................................1

ARTICLE 14. MISCELLANEOUS PROVISIONS.............................................1
     14.1   Plan Creates No Employment Rights....................................1
     14.2   Nonassignability of Benefits.........................................1
     14.3   Limit of Employer Liability..........................................1
     14.4   Treatment of Expenses................................................1
     14.5   Number and Gender....................................................1
     14.6   Nondiversion of Assets...............................................1
     14.7   Separability of Provisions...........................................1
     14.8   Service of Process...................................................1
     14.9   Governing State Law..................................................2
     14.10  Special Rules for Persons Subject to Section 16(b) Requirements......2
</TABLE>

<PAGE>

<TABLE>
<S>                                                                               <C>
ARTICLE 15. TOP-HEAVY PROVISIONS................................................. 1
     15.1   Determination of Top-Heavy Status.................................... 1
     15.2   Minimum Contributions................................................ 1
     15.3   Minimum Vesting...................................................... 2
     15.4   Minimum Benefits for Employees Also Covered Under Another Plan....... 2
</TABLE>e

<PAGE>

                                   Article 1.

                                  Plan Identity

1.1 Name.

The name of this Plan is "Hemagen Diagnostics, Inc. Employee Stock Ownership
Plan."

1.2 Fiscal Period.

This Plan shall be operated on the basis of an October 1 to September 30 fiscal
year for the purpose of keeping the Plan's books and records and distributing or
filing any reports or returns required by law.

1.3 Single Plan for All Employers.

This Plan shall be treated as a single plan with respect to all participating
Employers for the purpose of crediting contributions and forfeitures and
distributing benefits, determining whether there has been any termination of
Service, and applying the limitations set forth in Article 5.

1.4 Interpretation of Provisions.

The Employer intends this Plan and the Trust to be a qualified stock bonus plan
under Section 401(a) of the Code and an employee stock ownership plan within the
meaning of Section 407(d)(6) of ERISA and Section 4975(e)(7) of the Code. The
Plan is intended to have its assets invested primarily in qualifying employer
securities of one or more Employers within the meaning of Section 407(d)(5) of
ERISA, and to satisfy any requirement under ERISA or the Code applicable to such
a plan. Accordingly, the Plan and Trust Agreement shall be interpreted and
applied in a manner consistent with this intent and shall be administered at all
times and in all respects in a nondiscriminatory manner.

--------------------------------------------------------------------------------

      End of Article 1

                                       1
<PAGE>

                                   Article 2.

                                   DEFINITIONS

2.1 Account.

Account means a Participant's interest in the assets accumulated under this Plan
as expressed in terms of a separate account balance which is periodically
adjusted to reflect Employer contributions, the Plan's investment experience,
and distributions and forfeitures.

2.2 Active Participant.

Active Participant means any Employee who has satisfied the eligibility
requirements of Article 3 and who qualifies as an Active Participant for a
particular Plan Year under Section 4.3.

2.3 Beneficiary.

Beneficiary means the person or persons who are designated by a Participant to
receive benefits payable under the Plan on the Participant's death. In the
absence of any designation or if all the designated Beneficiaries shall die
before the Participant dies or shall die before all benefits have been paid, the
Participant's Beneficiary shall be the Participant's surviving Spouse, if any,
or the Participant's estate if the Participant is not survived by a Spouse. The
Plan Administrator will rely upon the advice of the Participant's executor or
administrator as to the identity of the Participant's Spouse.

2.4 Code.

Code means the Internal Revenue Code of 1986, as amended.

2.5 Company.

Company means Hemagen Diagnostics, Inc. and any entity which succeeds to the
business of the Company and adopts this Plan as its own pursuant to Section
13.2.

2.6 Disability.

Disability means a disability as determined for purposes of the long-term
disability plan sponsored by the Employer. In the absence of such a long-term
disability plan, the determination shall be made by the Plan Administrator.

2.7 Effective Date.

Effective Date means October 1, 2003.

2.8 Employee.

Employee means any individual who is or has been employed by the Employer. The
determination of whether a person is an Employee shall be made by the Employer
in its sole and absolute discretion for purposes of the Plan. A determination
that an individual is an employee of the Employer for other purposes, such as
employment tax purposes, shall have no bearing whatsoever on the determination
of whether the individual is an employee under the Plan. An Employee shall not
include a temporary employee. "Employee" also means an individual employed by a
leasing organization who, pursuant to an agreement between the Employer and the
leasing organization, has performed services for the Employer and any related
persons (within the meaning of Section 414(n)(6) of the Code) on a substantially
full-time basis for more than one year and the services are performed under the
primary direction and control of the Employer. However, such a "leased employee"
shall not be considered an Employee if (i) the individual participates in a
money purchase pension plan sponsored by the leasing organization which provides
for immediate participation, immediate full vesting, and an annual contribution
of at least 10% of

                                       1
<PAGE>

the Employee's Total Compensation, and (ii) leased employees do not constitute
more than 20% of the Employer's total work force (including leased employees,
but excluding Highly Paid Employees and any other employees who have not
performed services for the Employer on a substantially full-time basis for at
least one year). Independent Contractors will not be considered Employees for
purposes of the Plan.

2.9 Employer.

Employer means the Company or any affiliate within the purview of Section
414(b), (c) or (m) and 415(h) of the Code, any other corporation, partnership,
or proprietorship which adopts this Plan with the Company's consent pursuant to
Section 0, and any entity which succeeds to the business of any Employer and
adopts the Plan pursuant to Section 0.

2.10 Entry Date.

Entry Date means the date eligible Employees may enter the Plan, which shall be
the Effective Date of the Plan for all eligible Employees who were Employees on
the Effective Date. For eligible Employees who became eligible Employees after
the Effective Date, Entry Date means the first day of the month following 90
days of employment.

2.11 ERISA.

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

2.12 Highly Paid Employee.

Highly Paid Employee means a highly paid Active Employee and a highly paid
former Employee. A highly paid Active Employee means an Employee described in
Section 414(q) of the Code and the Regulations thereunder, and generally means
an Employee who performed services for the Employer during the determination
year and is in one or more of the following groups:

      (a)   An Employee who at any time during the Plan Year or preceding 12
            month period was at any time a 5% owner. A 5% owner means any person
            who owns (or is considered as owning within the meaning of Section
            318 of the Code) more than 5% of the outstanding stock of the
            Employer or stock possessing more than 5% of the total combined
            voting power of all stock of such Employer. In determining
            percentage ownership hereunder, employers that would otherwise be
            aggregated under Sections 414(b), (c), (m) and (o) of the Code shall
            be treated as separate employers.

      (b)   An Employee who received Total Compensation from the Employer in
            excess of $90,000 (as adjusted from time to time pursuant to Section
            414(q)(1) of the Code) during the 12-month period preceding the Plan
            Year, and if the Employer so elects, was in the group consisting of
            the top 20% of Employees when ranked on the basis of Total
            Compensation paid during such preceding 12-month period. "Total
            Compensation" shall include any amount which is excludable from the
            Employee's gross income for tax purposes pursuant to Sections 125,
            401(k), 402(e)(3), 402(h)(1)(B), or 403(b) of the Code. For this
            purpose, the determination year shall be the Plan Year.

2.13 Hours of Service.

Hours of Service means hours to be credited to an Employee under the following
rules:

      (a)   Each hour for which an Employee is paid or is entitled to be paid
for services to the Employer is an Hour of Service.

      (b)   Each hour for which an Employee is directly or indirectly paid or is
entitled to be paid for a period of vacation, holidays, illness, disability,
lay-off, jury duty, temporary military duty, or leave of absence is an Hour of
Service. However, except as otherwise specifically provided, no more than 501
Hours of Service shall be credited for any single continuous period in which an
Employee performs no duties. Further, no Hours of Service shall be credited on
account of payments made solely under a plan maintained to comply with worker's
compensation, unemployment compensation, or disability insurance

                                       2
<PAGE>

laws, or to reimburse an Employee for medical expenses.

      (c)   Each hour for which back pay (ignoring any mitigation of damages) is
either awarded or agreed to by the Employer is an Hour of Service. However, no
more than 501 Hours of Service shall be credited for any single continuous
period during which an Employee would not have performed any duties.

      (d)   Hours of Service shall be credited in any one period only under one
of the foregoing paragraphs (a), (b) and (c); an Employee may not get double
credit for the same period.

      (e)   If the Employer finds it impractical to count the actual Hours of
Service for any class or group of non-hourly Employees, each Employee in that
class or group shall be credited with 45 Hours of Service for each weekly pay
period in which the Employee has at least one Hour of Service. However, an
Employee shall be credited only for the Employee's normal working hours during a
paid absence.

      (f)   Hours of Service to be credited on account of a payment to an
Employee (including back pay) shall be recorded in the period of Service for
which the payment was made. If the period overlaps two or more Plan Years, the
Hours of Service credit shall be allocated in proportion to the respective
portions of the period included in the several Plan Years. However, in the case
of periods of 31 days or less, the Plan Administrator may apply a uniform policy
of crediting the Hours of Service to either the first Plan Year or the second.

      (g)   In all respects an Employee's Hours of Service shall be counted as
required by Section 2530.200b-2(b) and (c) of the Department of Labor's
regulations under Title I of ERISA.

2.14 Investment Fund.

Investment Fund means that portion of the Trust Fund consisting of assets other
than Securities.

2.15 Normal Retirement Age.

Normal Retirement Age means a Participant's 65th birthday.

2.16 Normal Retirement Date.

Normal Retirement Date means the first day of the month coincident with or next
following attainment of Normal Retirement Age.

2.17 Participant.

Participant means any Employee who is eligible and participating in the Plan, or
a former Employee who has previously participated in the Plan and still has a
balance credited to the individual's Account.

2.18 Plan Administrator.

Plan Administrator means the party responsible for the administration of this
Plan in accordance with 0.

2.19 Plan Year.

Plan Year means each period of 12 consecutive months beginning on October 1 and
ending on September 30 of each year.

2.20 Recognized Absence.

Recognized Absence means a period for which one of the following applies:

      (a)   the Employer grants an Employee a leave of absence for a limited
period, but only if the

                                       3
<PAGE>

Employer grants such leaves on a nondiscriminatory basis; or

      (b)   an Employee is temporarily laid off by the Employer because of a
change in business conditions; or

      (c)   an Employee is on active military duty, but only to the extent that
his employment rights are protected by the Military Selective Service Act of
1967 (38 U.S.C. sec. 2021).

2.21 Securities.

Securities mean Stock, a marketable obligation or other securities which are
deemed to be "qualifying employer securities," as that term is defined in ERISA.

2.22 Securities Fund.

Securities Fund means that portion of the Trust Fund consisting of Securities.

2.23 Service.

Service means an Employee's period(s) of employment with the Employer, excluding
for initial eligibility purposes any period in which the individual was a
nonresident alien and did not receive from the Employer any earned income which
constituted income from sources within the United States. An Employee's Service
shall include any service which constitutes service with a predecessor employer
within the meaning of Section 414(a) of the Code. An Employee's Service shall
also include any service with an entity which is not the Employer, but only
either (i) for a period after 1975 in which the other entity is a member of a
controlled group of corporations or is under common control with other trades
and businesses within the meaning of Section 414(b) or 414(c) of the Code, and a
member of the controlled group or one of the trades and businesses is the
Employer, or (ii) for a period after 1979 in which the other entity is a member
of an affiliated service group within the meaning of Section 414(m) of the Code,
and a member of the affiliated service group is the Employer.

2.24 Spouse.

Spouse means the individual, if any, to whom a Participant is lawfully married
on the date benefit payments to the Participant are to begin, or on the date of
the Participant's death, if earlier.

2.25 Stock.

Stock means shares of the voting common stock, or preferred stock, meeting the
requirements of Section 409(l)(3) of the Code, issued by the Employer or an
affiliated corporation.

2.26 Stock Obligation.

Stock Obligation means an indebtedness arising from any extension of credit to
the Plan or the Trust which was obtained for the purpose of buying Stock and
which satisfies the requirements set forth in 0.

2.27 Testing Compensation.

Testing Compensation means a Participant's wages, salaries and other amounts
received for personal services actually rendered (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips, bonuses, fringe
benefits and reimbursements or other expense allowances under a nonaccountable
plan) from the Employer and all Affiliates. The term includes income from
sources outside the United States (as defined in Section 911(b) of the Code) and
is determined without regard to the exclusion from gross income in Sections 931
and 933 of the Code. The term excludes the following:

                                       4
<PAGE>

      (a)   Employer contributions to a plan of deferred compensation which are
not includible in the Employee's gross income for the taxable year in which
contributed, or Employer contributions under a simplified employee pension plan
to the extent such contributions are deductible by the Employee, or any
distributions from a plan of deferred compensation;

      (b)   amounts realized from the exercise of a non-qualified stock option,
or when restricted stock (or property) held by the Employee either becomes
freely transferable or is no longer subject to a substantial risk of forfeiture;

      (c)   amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option; and

      (d)   other amounts which receive special tax benefits, or contributions
made by the Employer (whether or not under a salary reduction agreement) towards
the purchase of an annuity contract described in Section 403(b) of the Code
(whether or not the amounts are actually excludable from the gross income of the
Employee).

In addition, this definition shall include any elective deferrals (as defined in
Section 402(g)(3) of the Code) and any amount which is contributed or deferred
at the election of the Employee and which is not includible in the Employee's
gross income by reason of Sections 125 or 457 of the Code. In addition, this
definition shall include elective amounts that are not included in gross income
by reason of Section 132(f)(4) of the Code. A Participant's Testing Compensation
shall exclude any compensation in any Plan Year in excess of the limit in effect
under Section 401(a)(17) of the Code, as adjusted for cost-of-living increases.

2.28 Total Compensation.

Total Compensation means a Participant's total wages as defined in Section 3401
of the Code and all other payments of compensation by the Employer (in the
course of its trade or business) for which the Employer is required to furnish
the Employee a written statement under Sections 6041(d), 6051(a)(3) and 6052 of
the Code but excluding amounts paid or reimbursed for moving expenses to the
extent it is reasonable to believe (at the time of payment) that the amounts are
deductible by the Employee under Section 217 of the Code; determined without
regard to any rules that limit the remuneration included in wages based on the
nature or location of the employment or the services performed (such as the
exception for agricultural labor in Section 3401(A)(2) of the Code). In
addition, effective for Plan Years and Limitation Years (as defined in Section
4.1(g)) beginning after December 31, 1997, this definition shall include any
elective deferrals (as defined in Section 402(g)(3) of the Code) and any amount
which is contributed or deferred at the election of the employee and which is
not includible in the employee's gross income by reason of Section 125 or 457 of
the Code. In addition, this definition shall include elective amounts that are
not included in gross income by reason of Section 132(f)(4) of the Code. A
Participant's Total Compensation shall exclude any compensation in any Plan Year
in excess of the limit in effect under Section 401(a)(17) of the Code, as
adjusted for cost-of-living increases.

2.29 Trust or Trust Fund.

Trust or Trust Fund means the trust fund created under this Plan.

2.30 Trust Agreement.

Trust Agreement means the agreement between the Company and the Trustee
concerning the Trust Fund. If any assets of the Trust Fund are held in a
co-mingled trust fund with assets of other qualified retirement plans, "Trust
Agreement" shall be deemed to include the Trust Agreement governing that
co-mingled trust fund. With respect to the allocation responsibility for the
assets of the Trust Fund, the provisions of the provisions of Section 2 of the
Trust Agreement are incorporated herein by reference.

                                       5
<PAGE>

2.31 Trustee.

Trustee means one or more corporate persons and individuals selected from time
to time by the Company to serve as Trustee or co-trustees of the Trust Fund.

2.32 Unallocated Securities Fund.

Unallocated Securities Fund means that portion of the Securities Fund consisting
of the Plan's holding of securities which have been acquired in exchange for one
or more Stock Obligations and which have not yet been allocated to the
Participant's Accounts in accordance with Section 0.

2.33 Valuation Date.

Valuation Date means the last day of the Plan Year and each other date as of
which the Plan Administrator shall determine the investment experience of the
Investment Fund and adjust the Participant's accounts accordingly.

2.34 Valuation Period.

Valuation Period means the period following a Valuation Date and ending with the
next Valuation Date.

2.35 Vesting Year.

Vesting Year means a unit of Service credited to a Participant to pursuant to
Section 0 for purposes of determining the Participant's vested interest in the
Participant's Account.

--------------------------------------------------------------------------------
      End of Article 2

                                       6
<PAGE>

                                   ARTICLE 3.

                          ELIGIBILITY FOR PARTICIPATION

3.1 Initial Eligibility.

An Employee shall be eligible after the Employee completes at least 90 days of
Service for the Employer. If an Employee is not in active Service with the
Employer on the Entry Date, the Employee's entry shall be deferred until the
next day the Employee is in Service.

3.2 Terminated Employees.

No Employee shall have any interest or rights under this Plan if the Employee is
never in active Service with the Employer on or after the Effective Date.

3.3 Certain Employees Ineligible.

No Employee shall participate in the Plan while the Employee's Service is
covered by a collective bargaining agreement between the Employer and the
Employee's collective bargaining representative if (i) retirement benefits have
been the subject of good faith bargaining between the Employer and the
representative and (ii) the collective bargaining agreement does not provide for
the Employee's participation in the Plan. No Employee shall participate in the
Plan while the employee is actually employed by a leasing organization rather
than the Employer or if the individual is a temporary employee.

3.4 Participation and Reparticipation.

Subject to the satisfaction of the foregoing requirements, an Employee shall
participate in the Plan during each period of the Employee's Service from the
date on which the Employee first becomes eligible until the Employee
termination. For this purpose, an Employee returning after the Employee's
termination who previously satisfied the initial eligibility requirements shall
re-enter the Plan as of the date of the Employee return to Service with the
Employer.

--------------------------------------------------------------------------------
      End of Article 3

                                       1
<PAGE>

                                   ARTICLE 4.

                       EMPLOYER CONTRIBUTIONS AND CREDITS

4.1 Discretionary Contributions.

The Employer shall from time to time contribute, with respect to a Plan Year,
such amounts as it may determine from time to time. The Employer shall have no
obligation to contribute any amount under this Plan except as so determined in
its sole discretion. The Employers' contributions and available forfeitures for
a Plan Year shall be credited as of the last day of the year to the Accounts of
the Active Participants in proportion to their amounts of Total Compensation.

4.2 Employees Eligible for an Allocation.

A Participant on any day in a Plan Year will be eligible to receive an
allocation of a contribution pursuant to Section 0.

4.3 Conditions as to Contributions.

The Employer's contributions shall in any event be subject to the limitation set
forth in 0. Contributions may be made in the form of cash, or securities and
other property to the extent permissible under ERISA, including Securities, and
shall be held by the Trustee in accordance with the Trust Agreement. In addition
to the provisions of Section 0 for the return of the Employer's contributions in
connection with a failure of the Plan to qualify initially under the Code, any
amount contributed by the Employer due to a good faith mistake of fact, or based
upon a good faith but erroneous determination of its deductibility under Section
404 of the Code, shall be returned to the Employer within one year after the
date on which the contribution was originally made, or within one year after its
nondeductibility has been finally determined. However, the amount to be returned
shall be reduced to take account of any adverse investment experience within the
Trust Fund in order that the balance credited to each Participant's Account is
not less that it would have been if the contributions had never been made.

--------------------------------------------------------------------------------
      End of Article 4

                                       1
<PAGE>

                                   ARTICLE 5.

                  LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS

5.1 Limitation on Annual Additions.

Notwithstanding the provisions of Article 4, the annual addition to a
Participant's Account under this and any other defined contribution plans
maintained by the Employer or an affiliate (within the purview of Section
414(b), (c), and (m) and Section 415(h) of the Code, which affiliate shall be
deemed the Employer for this purpose) shall not exceed for any limitation year
an amount equal to the lesser of the following:

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

      (b)   100% of the Participant's Testing Compensation for such limitation
year.

The compensation limit referred to in Section 0 shall not apply to any
contribution for medical benefits after a separation from service (within the
meaning of Section 401(h) or Section 419A(f)(2) of the Code) which is otherwise
treated as an annual addition. For purposes of this Section 0, the "annual
addition" to a Participant's Account means the sum of (i) the Employer
contributions and forfeitures credited to a Participant's Account with respect
to a limitation year, plus (ii) the Participant's total voluntary contributions
for that year. The limitations referred to shall, for each limitation year, be
automatically adjusted to the new dollar limitations determined by the
Commissioner of Internal Revenue for the calendar year beginning in that
limitation year. Notwithstanding the foregoing, if the special limitations on
annual additions described in Section 415(c)(6) of the Code apply, the
limitations described in this Section 0 shall be adjusted accordingly. A
"limitation year" means each 12 consecutive month period beginning October 1.

5.2 Effect of Limitations.

The Plan Administrator shall take whatever action may be necessary from time to
time to assure compliance with the limitations set forth in Section 0.
Specifically, the Plan Administrator shall see that the Employer restricts its
contributions for any Plan Year to an amount which, taking into account the
amount of available forfeitures, may be completely allocated to the Participants
consistent with those limitations. Where the limitations would otherwise be
exceeded by any Participant, further allocations to the Participant shall be
curtailed to the extent necessary to satisfy the limitations. Where an excessive
amount is contributed on account of a mistake as to one or more Participants'
compensation, or there is an amount of forfeitures which may not be credited in
the Plan Year in which it becomes available, the amount shall be held in a
suspense account to be allocated in lieu of the Employer contributions in future
years until it is eliminated, and to be returned to the Employer if it cannot be
credited consistent with these limitations before the termination of the Plan.

5.3 Limitations as to Certain Participants.

Aside from the limitations set forth in Section 0, if the Plan acquires any
Stock in a transaction as to which a selling shareholder or the estate of a
deceased shareholder is claiming the benefit of Section 1042 of the Code, the
Plan Administrator shall see that none of such Stock, and no other assets in
lieu of such Stock, are allocated to the Accounts of certain Participants in
order to comply with Section 409(n) of the Code.

This restriction shall apply at all times to a Participant who owns (taking into
account the attribution rules under Section 318(a) of the Code, without regard
to the exception for employee plan trusts in Section 318(a)(2)(B)(i)) more than
25% of any class of stock of a corporation which issued the Stock acquired by
the Plan, or another corporation within the same controlled group, as defined in
Section 409(1)(4) of the Code (any such class of stock hereafter called a
"Related Class"). For this purpose, a Participant who

                                       1
<PAGE>

owns more than 25% of any Related Class at any time within the one year
preceding the Plan's purchase of the Stock shall be subject to the restriction
as to all allocations of the Stock, but any other Participant shall be subject
to the restriction only as to allocations which occur at a time when the
Participant owns more than 25% of any Related Class.

Further, this restriction shall apply to the selling shareholder claiming the
benefit of Section 1042 and any other Participant who is related to such a
shareholder within the meaning of Section 267(b) of the Code, during the period
beginning on the date on which the Plan purchases the Stock and ending 10 years
after the later of (i) the date of such purchase, and (ii) the date of the
allocation under Section 0 attributable to the final payment on whatever Stock
Obligations were incurred with the purchase.

This restriction shall not apply to any Participant who is a lineal descendant
of a selling shareholder if the aggregate amounts allocated under the Plan for
the benefit of all such descendants do not exceed 5% of the Stock acquired from
the shareholder.

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      End of Article 5

                                       2
<PAGE>

                                   ARTICLE 6.

                          TRUST FUND AND ITS INVESTMENT

6.1 Creation of Trust Fund.

All amounts received under the Plan from the Employer and investments shall be
held as the Trust Fund pursuant to the terms of this Plan and of the Trust
Agreement between the Company and the Trustee. The benefits described in this
Plan shall be payable only from the assets of the Trust Fund, and none of the
Company, its board of directors or trustees, its stockholders, its officers, its
employees, the Plan Administrator, and the Trustee shall be liable for payment
of any benefit under this Plan except from the Trust Fund.

6.2 Securities Fund and Investment Fund.

The Trust Fund held by the Trustee shall be divided into the Securities Fund,
consisting entirely of Securities, and the Investment Fund, consisting of all
assets of the Trust other than Securities. The Trustee shall have no investment
responsibility for the Securities Fund, but shall accept any Employer
contributions made in the form of Securities, and shall acquire, sell, exchange,
distribute, and otherwise deal with and dispose of Securities in accordance with
the instructions of the Plan Administrator. Employer contributions may be made
in the form of Securities or cash.

6.3 Participants' Option to Diversify At Age 55.

Participants who have reached age 55 and have completed 10 years of
participation in the Plan shall be provided with a procedure under which such
Participant may, during the first five years of a certain six-year period, elect
to have up to 25% of the value of the Participant's Account committed to
alternative investment options within the Investment Fund. For the sixth year in
this period, the Participant may elect to have up to 50% of the value of the
Participant's Account committed to other investments. The six-year period shall
begin with the Plan Year following the first Plan Year in which the Participant
has both reached age 55 and completed 10 years of participation in the Plan. A
Participant's election to diversify the Participant's Account must be made
within the 90-day period immediately following the last day of each of the six
Plan Years. The Plan Administrator shall see that the Investment Fund includes a
sufficient number of investment options to comply with Section 401(a)(28)(B) of
the Code. The Trustee shall comply with any investment directions received from
Participants in accordance with the procedures adopted from time to time by the
Plan Administrator under this Section 0.

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      End of Article 6

                                       1
<PAGE>

                                    ARTICLE 7

                             ADJUSTMENTS TO ACCOUNTS

7.1 Adjustments for Transactions.

An Employer contribution pursuant to Section 0 shall be credited to the
Participants' Accounts as of the last day of the Plan Year for which it is
contributed. Stock released from the Unallocated Securities Fund upon the
Trust's repayment of a Stock Obligation pursuant to Section 0 shall be credited
to the Participants' Accounts as of the last day of the Plan Year in which the
repayment occurred. Any excess amounts remaining from the use of proceeds of a
sale of Stock from the Unallocated Securities Fund to repay a Stock Obligation
shall be allocated as of the last day of the Plan Year in which the repayment
occurred among the Participants' Accounts in proportion to the opening balance
in each Account. Any benefit which is paid to a Participant or Beneficiary
pursuant to 0 shall be charged to the Participant's Account as of the first day
of the Valuation Period in which it is paid. Any forfeiture or restoral shall be
charged or credited to the Participant's Account as of the first day of the
Valuation Period, in which the forfeiture or restoral occurs pursuant to Section
0.

7.2 Valuation of Investment Fund.

As of each Valuation Date, the Plan Administrator shall prepare a balance sheet
of the Investment Fund, recording each asset (including any contribution
receivable from the Employer) and liability at its fair market value. Any
liability with respect to short positions or options and any item of accrued
income or expense and unrealized appreciation or depreciation shall be included;
provided, however, that such an item may be estimated or excluded if it is not
readily ascertainable unless estimating or excluding it would result in a
material distortion. The Plan Administrator shall then determine the net gain or
loss of the Investment Fund since the preceding Valuation Date, which shall mean
the entire income of the Investment Fund, including realized and unrealized
capital gains and losses, net of any expenses to be charged to the general
Investment Fund and excluding any contributions by the Employer. The
determination of gain or loss shall be consistent with the balance sheets of the
Investment Fund for the current and preceding Valuation Dates.

7.3 Adjustments for Investment Experience.

Any net gain or loss of the Investment Fund during a Valuation Period, as
determined pursuant to Section 0, shall be allocated as of the last day of the
Valuation Period among the Participants' Accounts in proportion to the opening
balance in each Account, as adjusted for benefit payments and forfeitures during
the Valuation Period, without regard to whatever Securities may be credited to
an Account.

7.4 Adjustments for Capital Changes.

In the event of any change in the outstanding Securities by reason of any stock
dividend or split, recapitalization, merger, consolidation, spin-off,
reorganization, combination or exchange of shares, or other similar corporate
change, or other increase or decrease in such shares effected without receipt or
payment of consideration by the Company issuing the Securities, the Plan
Administrator shall adjust the number of Securities allocated to the
Participants' Accounts to prevent dilution or enlargement of such Accounts.

--------------------------------------------------------------------------------
      End of Article 7

                                       1
<PAGE>

                                   ARTICLE 8.

                       VESTING OF PARTICIPANTS' INTERESTS

8.1 Deferred Vesting in Accounts.

A Participant's vested interest in the Participant's Account shall be based on
the Participant's Vesting Years in accordance with the following Table, subject
to the balance of this 0:

<TABLE>
<CAPTION>
                                         Percentage of
Vesting Years                           Interest Vested
-------------                           ---------------
<S>                                     <C>
 fewer than 1                                  0%
 1                                            20%
 2                                            40%
 3                                            60%
 4                                            80%
 5 or more                                   100%
</TABLE>

8.2 Computation of Vesting Years.

For purposes of this Plan, a "Vesting Year" means each Plan Year in which an
Employee has at least 1,000 Hours of Service, beginning with the Plan Year in
which the Participant's initial Service with the Employer began; provided,
however, that Service prior to the Effective Date shall not be credited. There
will be no special rules with respect to computing vesting before or after a
Participant has a break in Service and returns to Service with the Employer. All
years of Service with the Employer shall be counted for purposes of vesting.
Unless otherwise specifically excluded, a Participant's Vesting years shall
include any period of active military duty to the extent required by the
Military Selective Service Act of 1967 (38 U.S.C. Section 2021) and in
accordance with Section 414(u) of the Code.

8.3 Full Vesting Upon Certain Events.

Notwithstanding Section 0, a Participant's interest in the Participant's Account
shall fully vest on the Participant's Normal Retirement Date, Disability or
death provided the Participant is in Service on or after that date.

8.4 Full Vesting Upon Plan Termination.

Notwithstanding Section 0, a Participant's interest in the Participant's Account
shall fully vest if the Participant is in Active Service upon termination of
this Plan or upon the permanent and complete discontinuance of contributions by
the Employer. In the event of a partial termination, the interest of each
Participant who is in Service shall fully vest with respect to that part of the
Plan which is terminated.

8.5 Forfeiture, Repayment, and Restoral.

If a Participant's Service terminates before the Participant's Account is fully
vested, that portion which has not vested shall be forfeited if the Participant
either receives a distribution of the Participant's entire vested benefit or has
been separated from service for five years. If a Participant who has received
the Participant's entire vested interest returns to Service, the Participant may
repay to the Trustee an amount equal to the distribution. The Participant may
repay such amount at any time within five years after the Participant has
returned to Service. The amount shall be credited to the Participant's Account
as of the last day of the Plan Year in which it is repaid; an additional amount
equal to the portion of the Participant's Account which was previously forfeited
shall be restored to the Participant's Account at the same time from other
Employees' forfeitures and, if such forfeitures are insufficient, from a special
contribution by the Employer for that year. In the case of a terminated
Participant who does not receive a distribution of the

                                       1
<PAGE>

Participant's entire vested interest and whose Service resumes, any
undistributed balance from the Participant's prior participation which was not
forfeited shall be maintained as a fully vested subaccount with the
Participant's Account. If a portion of a Participant's Account is forfeited,
assets other than Securities must be forfeited before any Securities may be
forfeited.

8.6 Accounting for Forfeitures.

A forfeiture shall be charged to the Participant's Account as of the first day
of the first Valuation Period in which the forfeiture becomes certain pursuant
to Section 0. Except as otherwise provided in that Section, a forfeiture shall
be allocated to the accounts of the Active Participants pursuant to Section 0 as
of the last day of the Plan Year in which the forfeiture becomes certain.

8.7 Vesting and Nonforfeitability.

A Participant's interest in the Participant's Account which has become vested
shall be nonforfeitable for any reason.

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      End of Article 8

                                       2
<PAGE>

                                   ARTICLE 9.

                               PAYMENT OF BENEFITS

9.1 Benefits for Participants.

A Participant whose Service ends for any reason shall receive the vested portion
of the Participant's Account in a single payment in the form of Stock as soon as
administratively practicable after the Participant elects to receive a
distribution after the Participant's termination of employment. Any fractional
shares shall be paid in cash. If the balance credited to the Participant's
Account exceeds $5,000, the Participant's benefits shall not be paid before the
latest of the Participant's 65th birthday or the tenth anniversary of the year
in which the Participant commenced participation in the Plan unless the
Participant elects an early payment date in a written election filed with the
Plan Administrator. A Participant may modify such an election at any time,
provided any new benefit payment date is at least 30 days after a modified
election is delivered to the Plan Administrator. Such an election is not valid
unless it is made after the Participant has received the required notice under
Section 1.411(a)-11(c) of the Income Tax Regulations that provides a general
description of the material features of a lump sum distribution and the
Participant's right to defer receipt of the Participant's benefit. The Notice
shall be provided no less than 30 days and no more than 90 days before the first
day on which all events have occurred which entitle the Participant to such
benefit. Written consent of the Participant to the distribution generally may
not be made within 30 days of the date the Participant receives the notice and
shall not be made more than 90 days from the date the Participant receives the
notice. However, a distribution may be made less than 30 days after the notice
provided under Section 1.411(a)-11(c) of the Income Tax Regulations is given,
if:

      (a) the Plan Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after receiving the
notice to consider the decision of whether or not to elect a distribution (and
if applicable, a particular distribution option), and

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

In all events, a Participant's benefits shall be paid by April 1st of the
calendar year following the year in which the latest of the following events
occur: the Participant reaches age 70-1/2, retires or becomes a 5% owner subject
to the provisions of Section 0. This date is the required beginning date. A
Participant's benefits from that portion of the Participant's Account committed
to the Investment Fund shall be calculated on the basis of the most recent
Valuation Date before the day of payment.

In the event a Participant's Account does not exceed $5,000, the Plan
Administrator will direct that the Participant's Account be paid in a single sum
in the form of Stock as soon as administratively practicable following the close
of the Plan Year in which the Participant terminates employment. If the
Participant is not fully vested in the Participant's Account, payment shall be
in the form of a cash-out distribution.

9.2 Benefits on a Participant's Death.

If a Participant dies before benefits are paid pursuant to Section 0, the
balance credited to the Participant's Account shall be paid to the Participant's
Beneficiary in a single distribution on or before the 60th day after the end of
the Plan Year in which the Participant died. The benefits from that portion of
the Account committed to the Investment Fund shall be calculated on the basis of
the most recent Valuation Date before the date of payment.

If a married Participant dies before benefit payments begin, then unless the
Participant has specifically elected otherwise, the Plan Administrator shall
cause the balance in the Participant's Account to be paid to the Participant's
Spouse. No election by a married Participant of a different Beneficiary shall be
valid unless the election is accompanied by the Spouse's written consent, which
(i) must acknowledge the effect of the election, (ii) must explicitly provide
either that the designated Beneficiary may not subsequently be changed by the
Participant without the Spouse's further consent, or that it may be changed
without such consent, and (iii) must be witnessed by the Plan Administrator, its
representative, or a notary public. This requirement shall not apply if the
Participant establishes to the Plan Administrator's

                                       1
<PAGE>

satisfaction that the Spouse may not be located.

9.3 Marital Status.

The Plan Administrator shall from time to time take whatever steps it deems
appropriate to keep informed of each Participant's marital status. The Employer
shall provide the Plan Administrator with the most reliable information in the
Employer's possession regarding its Participants' marital status, and the Plan
Administrator may, in its discretion, require a notarized affidavit from any
Participant as to the Participant's marital status. The Plan Administrator, the
Plan, the Trustee, and the Employer shall be fully protected and discharged from
any liability to the extent of any benefit payments made as a result of the Plan
Administrator's good faith and reasonable reliance upon information obtained
from a Participant and the Employer as to the Participant's marital status.

9.4 Delay in Benefit Determination.

If the Plan Administrator is unable to determine the benefits payable to a
Participant or Beneficiary on or before the latest date prescribed for payment
pursuant to Section 0 or Section 0, the benefits shall in any event be paid
within 60 days after they can first be determined, with whatever makeup payments
may be appropriate in view of the delay.

9.5 Accounting for Benefit Payments.

Any benefit payment shall be charged to the Participant's Account as of the
first day of the Valuation Period in which the payment is made.

9.6 Direct Transfer of Eligible Plan Distributions.

A Participant or Beneficiary may direct that an "eligible rollover distribution"
(as defined below) included in such payment be paid directly to an "eligible
retirement plan" (as defined below). To affect such a direct transfer, the
Participant or Beneficiary must notify the Plan Administrator that a direct
transfer is desired and provide to the Plan Administrator the eligible
retirement plan to which the payment is to be made. Such notice shall be made in
such form and at such time as the Plan Administrator may prescribe. Upon receipt
of such notice, the Plan Administrator shall direct the Trustee to make a
trustee-to-trustee transfer of the eligible rollover distribution to the
eligible retirement plan so specified.

For purposes of this Section 0, an "eligible rollover distribution" shall have
the meaning set forth in Section 402(c)(4) of the Code and any regulations
promulgated thereunder. To the extent such meaning is not inconsistent with the
above references, an eligible rollover distribution shall mean any distribution
of all or any portion of the Participant's Account, except that such term shall
not include any distribution which is one of a series of substantially equal
periodic payments (not less frequently than annually) made (i) for the life (or
life expectancy) of the Participant or the joint lives (or joint life
expectancies) of the Participant and a designated Beneficiary, or (ii) for a
period of ten years or more. Further, the term "eligible rollover distribution"
shall not include any distribution required to be made under Section 401(a)(9)
of the Code.

For purposes of this Section 0, an "eligible retirement plan" shall have the
meaning set forth in Section 402(c)(8) of the Code and any regulations
promulgated thereunder. To the extent such meaning is not inconsistent with the
above references, an eligible retirement plan shall mean: (i) an individual
retirement account described in Section 408(a) of the Code; (ii) an individual
retirement annuity described in Section 408(b) of the Code (other than an
endowment contract), (iii) a qualified trust described in Section 401(a) of the
Code and exempt under Section 501(a) of the Code, and (iv) an annuity plan
described in Section 403(a) of the Code.

                                        2
<PAGE>

9.7 Minimum Distribution Requirements.

      (a)   General Rules.

            (1)   Precedence. The requirements of this Section 0 will take
                  precedence over any inconsistent provisions of the Plan.

            (2)   Requirements of Treasury Regulations Incorporated. All
                  distributions required under this Section 0 will be determined
                  and made in accordance with the Treasury Regulations under
                  Section 401(a)(9) of the Code.

      (b)   Time and Manner of Distribution.

            (1)   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 as determined pursuant to Section 0 of the Plan.

            (2)   Death of Participant Before Distributions Begin. 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:

                        (A)   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.

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

                        (C)   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.

                        (D)   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 0 will apply as if the
                              surviving spouse were the Participant.

                              For purposes of this Section 0, distributions are
                              considered to begin on the Participant's required
                              beginning date. If Section 9.7(b)(2)(D) applies,
                              distributions are considered to begin on the date
                              distributions are required to begin to the
                              surviving spouse under Section 0(b)(2)(A). 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
                              0(b)(2)(A)), the date distributions are considered
                              to begin is the date distributions actually
                              commence.

            (3)   Forms 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

                                        3
<PAGE>

                  distribution calendar year distributions will be made in
                  accordance with Sections 0(c) and (d). 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 Section 401(a)(9)
                  of the Code and the Treasury Regulations.

      (c)   Required Minimum Distributions During Participant's Lifetime.

            (1)   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:

                        (A)   the quotient obtained by dividing the
                              Participant's Account balance by the distribution
                              period in the Uniform Lifetime Table set forth in
                              Section 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

                        (B)   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 Section 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.

            (2)   Lifetime Required Minimum Distributions Continue Through Year
                  of Participant's Death. Required minimum distributions will be
                  determined under this Section 0 beginning with the first
                  distribution calendar year and up to and including the
                  distribution calendar year that includes the Participant's
                  date of death.

      (d)   Required Minimum Distributions After Participant's Death.

            (1)   Death On or After Date Distributions Begin.

                        (A)   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:

                              (i)   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.

                              (ii)  If the Participant's surviving spouse is the
                                    Participant's sole designated 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

                                        4
<PAGE>

                                    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.

                              (iii) 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.

                        (B)   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.

            (2)   Death Before Date Distributions Begin.

                        (A)   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 0.

                        (B)   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 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 0(b)(2)(A), this Section 0(d)(2) will
                              apply as if the surviving spouse were the
                              Participant.

      (e)   Definitions for Purposes of this Section 0.

            (1)   Designated Beneficiary. The individual who is designated as
                  the beneficiary under Section 15.2 of the Plan and is the
                  designated beneficiary under Section 401(a)(9) of the Code and
                  Section 1.401(a)(9)-1, Q&A-4, of the Treasury Regulations.

            (2)   Distribution Calendar Year. A calendar year for which a
                  minimum distribution is required. For distributions beginning
                  before the Participant's

                                        5
<PAGE>

                  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 0(b)(2). 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.

            (3)   Life Expectancy. Life expectancy as computed by use of the
                  Single Life Table in Section 1.401(a)(9)-9 of the Treasury
                  Regulations.

            (4)   Participant's Account Balance. 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 year or in the distribution calendar year if
                  distributed or transferred in the valuation calendar year.

            (5)   Required Beginning Date. The date specified in Section 9.1 of
                  the Plan.

--------------------------------------------------------------------------------
      End of Article 9

                                       6
<PAGE>

                                   ARTICLE 10.

                                 ESOP PROVISIONS

10.1 Contributions for Stock Obligations.

If the Trustee, upon instructions from the Compensation Committee of the Board
of Directors of the Company, incurs any Stock Obligation upon the purchase of
Stock, the Employer shall contribute for each Plan Year an amount sufficient to
cover all payments of principal and interest as they come due under the terms of
the Stock Obligation. If there is more than one Stock Obligation, the Employer
shall designate the one to which any contribution is to be applied. The
Employer's obligation to make contributions under this Section 0 shall be
reduced to the extent of any investment earnings realized on such contributions
and any dividends paid by the Employer on Stock held in the Unallocated
Securities Fund, which earnings and dividends shall be applied to the Stock
Obligation related to that Stock.

In each Plan Year in which Employer contributions, earnings on contributions, or
dividends on unallocated Stock are used as payments under a Stock Obligation, a
certain number of shares of the Stock acquired with that Stock Obligation which
is then held in the Unallocated Securities Fund shall be released for allocation
among the Participants. The number of shares released shall bear the same ratio
to the total number of those shares then held in the Unallocated Securities Fund
(prior to the release) as (i) the principal and interest payments made on the
Stock Obligation in the current Plan Year bears to (ii) the sum of (i) above,
and the remaining principal and interest payments required (or projected to be
required on the basis of the interest rate in effect at the end of the Plan
Year) to satisfy the Stock Obligation.

At the direction of the Plan Administrator, the current and projected payments
of interest under a Stock Obligation may be ignored in calculating the number of
shares to be released in each year if (i) the Stock Obligation 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)
the interest included in any payment is ignored only to the extent that it would
be determined to be interest under standard loan amortization tables, and (iii)
the term of the Stock Obligation, by reason of renewal, extension, or
refinancing, has not exceeded 10 years from the original acquisition of the
Stock.

For these purposes, each Stock Obligation, the Stock purchased with it, and any
dividends on such Stock, shall be considered separately. The Stock released from
the Unallocated Securities Fund in any Plan Year shall be credited as of the
last day of the year to the Accounts of the Active Participants in proportion to
their amounts of Cash Compensation while a Participant.

10.2 Acquisition of Stock.

From time to time the Compensation Committee of the Board of Directors of the
Company may, in its sole discretion, direct the Trustee to acquire Stock from
the issuing Employer or from shareholders, including shareholders who are or
have been Employees, Participants, or fiduciaries with respect to the Plan. The
Trustee shall pay for such Stock no more than its fair market value, which shall
be determined conclusively by the Plan Administrator pursuant to Section 0. The
Plan Administrator may direct the Trustee to finance the acquisition of Stock by
incurring or assuming indebtedness to the seller or another party which
indebtedness shall be called a "Stock Obligation." Any Stock Obligation shall be
subject to the following conditions and limitations:

      (a)   A Stock Obligation shall be for a specific term, shall not be
            payable on demand except in the event of default, and shall bear a
            reasonable rate of interest.

      (b)   A Stock Obligation may, but need not, be secured by a collateral
            pledge of either the Stock acquired in exchange for the Stock
            Obligation, or the Stock previously pledged in connection with a
            prior Stock Obligation which is being repaid with the proceeds of
            the current Stock Obligation. No other assets of the Plan and Trust
            may be used as collateral for a Stock Obligation, and no creditor
            under a Stock Obligation shall have any

                                        1
<PAGE>

            right or recourse to any Plan and Trust assets other than Stock
            remaining subject to a collateral pledge.

      (c)   Any pledge of Stock to secure a Stock Obligation must provide for
            the release of pledged Stock in connection with payments on the
            Stock Obligations in the ratio prescribed in Section 0.

      (d)   Repayments of principal and interest on any Stock Obligation
            generally shall be made by the Trustee from cash contributions
            designated for such payments, from earnings on such contributions,
            and from cash dividends received on Stock held in the Unallocated
            Securities Fund.

10.3 Allocation of Contributions.

All contributions shall be allocated in accordance with Section 0 unless used to
repay a Stock Obligation. If contributions are used to repay a Stock Obligation,
an Employer shall contribute such amounts of contributions as may be required
(after taking into consideration earnings used for such purposes) to repay the
principal amount of and interest on a Stock Obligation and cause the release
from the Unallocated Securities Fund shares of Stock with a fair market value
equal to the amount of the liability for the contributions. Such shares of Stock
then shall be allocated to a Participant's Account in accordance with Section 0
as if the shares had been contributed by an Employer under Section 0.

10.4 Restrictions on Disposition of Stock.

Except in the case of Stock which is traded on an established market, a
Participant who receives Stock pursuant to Section 0, and any person who has
received Stock from the Plan or from such a Participant by reason of the
Participant's death or incompetency, by reason of divorce or separation from the
Participant, or by reason of a rollover contribution described in Section 402(c)
of the Code, shall, prior to any sale or other transfer of the Stock to any
other person, first offer the Stock to the issuing Employer and to the Plan at
its current fair market value. This restriction shall apply to any transfer,
whether voluntary, involuntary, or by operation of law, and whether for
consideration or gratuitous. Either the Employer or the Trustee may accept the
offer within 14 days after it is delivered. Any Stock distributed by the Plan
shall bear a conspicuous legend describing the right of first refusal under this
Section 0, as well as any other restrictions upon the transfer of the Stock
imposed by federal and state securities laws and regulations.

10.5 Dividends on Stock.

Dividends on Stock which are received by the Trustee in the form of additional
Stock shall be retained in the Securities Fund, and shall be allocated among the
Participant's Accounts and the Unallocated Securities Fund in accordance with
their holdings of the Stock on which the dividends have been paid. Dividends on
Stock credited to Participants' Accounts which are received by the Trustee in
the form of cash shall, at the direction of the Company paying the dividends,
either (i) be credited to the Accounts in accordance with Section 0 and invested
as part of the Investment Fund, (ii) be distributed immediately to the
Participants in proportion with the Participants' Account balance; (iii) be
distributed to the Participants within 90 days of the close of the Plan Year in
which paid in proportion with the Participants' Account balance; or (iv) be used
to repay principal and interest on the Stock Obligation used to acquire Stock on
which the dividends were paid. Dividends on Stock held in the Unallocated
Securities Fund which are received by the Trustee in the form of cash shall be
applied as soon as practicable to payments of principal and interest under the
Stock Obligation incurred with the purchase of the Stock.

10.6 Voting and Tendering of Stock.

      (a)   The Trustee generally shall vote all Securities held under the Plan.
            However, if the Employer has registration-type class of securities
            within the meaning of Section 409(e)(4) of the Code, or if a matter
            submitted to the holders of the Securities involves a merger,
            consolidation, recapitalization, reclassification, liquidation,
            dissolution, or sale of

                                       2
<PAGE>

            substantially all assets of an entity, then (i) the Securities which
            have been allocated to Participants' Accounts shall be voted by the
            Trustee in accordance with the Participants' written instructions,
            and (ii) the Trustee shall vote any Securities which have been
            allocated to Participants' Accounts but for which no written
            instructions have been received and any unallocated Securities for
            the exclusive benefit of the Participants in accordance with the
            principles set forth in 0. In the event no Securities have been
            allocated to Participants' Accounts at the time Securities are to be
            voted, each Participant shall be deemed to have one share of Stock
            allocated to the Participant's Account for the sole purpose of
            providing the Trustee with voting instructions. Notwithstanding any
            provision hereunder to the contrary, all Securities which have been
            allocated to Participants' Accounts and for which the Trustee has
            received no written instructions and all unallocated Securities must
            be voted by the Trustee in a manner determined by the Trustee to be
            solely in the interest of the Participants and Beneficiaries.
            Whenever such voting rights are to be exercised, the Employer, the
            Plan Administrator, and the Trustee shall see that all Participants
            and Beneficiaries are provided with the same notices and other
            materials as are provided to other holders of the Securities, and
            are provided with adequate opportunity to deliver their instructions
            to the Trustee regarding the voting of Securities allocated to their
            Accounts. The instructions of the Participants with respect to the
            voting of allocated shares hereunder shall be confidential.

      (b)   In the event of a tender offer, Securities shall be tendered by the
            Trustee in the same manner as set forth above with respect to the
            voting of Securities. Notwithstanding any provision hereunder to the
            contrary, Securities must be tendered by the Trustee in a manner
            determined by the Trustee to be solely in the interest of the
            Participants and Beneficiaries.

10.7 Put Option for Non-traded Securities. In the event that Securities cease to
be readily tradable on an established securities market within the meaning of
Section 409(h) of the Code, shares of Stock that are distributed (in accordance
with the provisions of this Plan) from a Participant's Account shall be subject
to a right of first refusal on the part of the Plan and of the Company, in that
order, in the event that distributee of said shares desires to sell all or any
part of the same to a purchaser other than the Plan or the Company. Said right
shall consist of an obligation of the distributee to inform the Plan
Administrator, in writing of the distributee's intention to sell the said shares
upon terms (described in said notice) that have been offered by a third party
purchaser in good faith, followed by the right of the Plan (and if the Plan
declines said right, the Company) to purchase said shares at a price equal to
the greater of (a) the then fair market value of said shares or (b) the purchase
price offered by said purchaser, and otherwise upon terms no less favorable to
the seller than in the above described good faith offer. The right of first
refusal shall lapse 14 days after the distributee has given the written notice
referred to above. In the event that Stock again becomes readily tradable on an
established securities market, this Section shall not apply.

10.8 Securities not Subject to "Put" or "Call". Except as otherwise provided in
this 0, no Securities purchased with the proceeds of a Stock Obligation under
the Plan shall be subject to a "put", "call" or other option or to a "buy sell"
or similar arrangement during the time such Securities are held by the Trust
Fund or at the time of its distribution to a Member, notwithstanding any
amendment to or termination of this Plan that causes the Plan to cease to be an
employee stock ownership plan within the meaning of Section 4975(e)(7) of the
Code during or at such times.

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      End of Article 10

                                       3
<PAGE>

                                   ARTICLE 11.

              RULES GOVERNING BENEFIT CLAIMS AND REVIEW OF APPEALS

11.1 Claim for Benefits.

Any Participant or Beneficiary who qualifies for the payment of benefits shall
file a claim for benefits with the Plan Administrator on a form provided by the
Plan Administrator. The claim, including any election of an alternative benefit
form, shall be filed at least 30 days before the date on which the benefits are
to begin. If a Participant or Beneficiary fails to file a claim by the 30th day
before the date on which benefits become payable, the Participant shall be
presumed to have filed a claim for payment for the Participant's benefits in the
standard form prescribed by Section 0 or Section 0.

11.2 Notification by Plan Administrator.

Within 90 days after receiving a claim for benefits (or within 180 days, if
special circumstances require an extension of time and written notice of the
extension is given to the Participant or Beneficiary within 90 days after
receiving the claim for benefits), the Plan Administrator shall notify the
Participant or Beneficiary whether the claim has been approved or denied. If the
Plan Administrator denies a claim in any respect, the Plan Administrator shall
set forth in a written notice to the Participant or Beneficiary the following:

      (a)   each specific reason for the denial;

      (b)   specific references to the pertinent Plan provisions on which the
denial is based;

      (c)   a description of any additional material or information which could
be submitted by the Participant or Beneficiary to support the claim, with an
explanation of the relevance of such information; and

      (d)   an explanation of the claims review procedures set forth in Section
0.

11.3 Claims Review Procedure.

Within 60 days after a Participant or Beneficiary receives notice from the Plan
Administrator that the individual's claim for benefits has been denied in any
respect, the Participant may file with the Plan Administrator a written notice
of appeal setting forth the individual's reasons for disputing the Plan
Administrator's determination. In connection with the individual's appeal, the
Participant or Beneficiary or the individual's representative may inspect or
purchase copies of pertinent documents and records to the extent not
inconsistent with other Participants' and Beneficiaries' rights of privacy.
Within 60 days after receiving a notice of appeal from a prior determination (or
within 120 days, if special circumstances require an extension of time and
written notice of the extension is given to the Participant or Beneficiary and
the individual's representative within 60 days after receiving the notice of
appeal), the Plan Administrator shall furnish to the Participant or Beneficiary
and his representative, if any, a written statement of the Plan Administrator's
final decision with respect to the individual's claim, including the reasons for
such decision and the particular Plan provisions upon which it is based.

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      End of Article 11

                                       1
<PAGE>

                                   ARTICLE 12.

                    THE PLAN ADMINISTRATOR AND ITS FUNCTIONS

12.1 Authority of Plan Administrator.

The Plan Administrator shall be the "plan administrator" within the meaning of
ERISA and shall have exclusive responsibility and authority to control and
manage the operation and administration of the Plan, including the
interpretation and application of its provisions, except to the extent such
responsibility and authority are otherwise specifically (i) allocated to the
Company, the Employer, or the Trustee under the Plan and Trust Agreement, (ii)
delegated in writing to other persons by the Company, the Employer, the Plan
Administrator, or the Trustee, or (iii) allocated to other parties by operation
of law. The Plan Administrator shall have exclusive responsibility regarding
decisions concerning the payment of benefits under the Plan. The Plan
Administrator shall have full investment responsibility with respect to the
Investment Fund except to the extent, if any, specifically provided in the Trust
Agreement. In the discharge of its duties, the Plan Administrator may employ
accountants, actuaries, legal counsel, and other agents (who also may be
employed by the Employer or the Trustee in the same or some other capacity) and
may pay their reasonable expenses and compensation.

12.2 Identity of Plan Administrator.

The Plan Administrator shall be the Company.

12.3 Duties of Plan Administrator.

The Plan Administrator shall keep whatever records may be necessary to implement
the Plan and shall furnish whatever reports may be required from time to time by
the Company. The Plan Administrator shall furnish to the Trustee whatever
information may be necessary to properly administer the Trust. The Plan
Administrator shall see to the filing with the appropriate government agencies
of all reports and returns required of the Plan Administrator under ERISA and
other laws.

Further, the Plan Administrator shall have exclusive responsibility and
authority with respect to the Plan's holdings of Securities and shall direct the
Trustee in all respects regarding the purchase, retention, sale, exchange, and
pledge of Securities and the creation and satisfaction of Stock Obligations. The
Plan Administrator shall at all times act consistently with the Company's
long-term intention that the Plan, as an employee stock ownership plan, be
invested primarily in Securities. Subject to the direction of the Plan
Administrator with respect to Stock Obligations pursuant to the provision of
Section 0, and subject to the provisions of Section 0 as to Participants' rights
under certain circumstances to have their Accounts invested in Securities or in
assets other than Stock, the Plan Administrator shall determine in its sole
discretion the extent to which assets of the Trust shall be used to repay Stock
Obligations, to purchase Securities, or to invest in other assets to be selected
by the Plan Administrator or an investment manager. No provision of the Plan
relating to the allocation or vesting of any interests in the Securities Fund or
the Investment Fund shall restrict the Plan Administrator from changing any
holdings of the Trust, whether the changes involve an increase or a decrease in
the Securities or other assets credited to Participants' Accounts. In
determining the proper extent of the Trust's investment in Securities, the Plan
Administrator shall be authorized to employ investment counsel, legal counsel,
appraisers, and other agents to pay their reasonable expenses and compensation.

12.4 Valuation of Securities.

If the valuation of any Securities is not established by reported trading on a
generally recognized public market, the Plan Administrator shall have the
exclusive authority and responsibility to determine its value for all purposes
under the Plan. Such value shall be determined as of each Valuation Date, and on
any other date as of which the Plan purchases or sells such Securities. The Plan
Administrator shall use generally accepted methods of valuing securities of
similar corporations for purposes of arm's length business and investment
transactions, and in this connection the Plan Administrator shall obtain, and
shall

                                       1
<PAGE>

be protected in relying upon, the valuation of such Securities, as determined by
an independent appraiser experienced in preparing valuations of similar
businesses.

12.5 Compliance with ERISA.

The Plan Administrator shall perform all acts necessary to comply with ERISA.
The Plan Administrator, to the extent assumed by an individual, shall discharge
the individual's duties in good faith and in accordance with the applicable
requirements of ERISA.

12.6 Adoption of Rules.

The Plan Administrator shall adopt such rules and regulations of uniform
applicability as it deems necessary or appropriate for the proper administration
and interpretation of the Plan.

12.7 Responsibilities to Participants.

The Plan Administrator shall determine which Employees qualify to enter the
Plan. The Plan Administrator shall furnish to each eligible Employee whatever
summary plan descriptions, summary annual reports, and other notices and
information may be required under ERISA. The Plan Administrator also shall
determine when a Participant or the Participant's Beneficiary qualifies for the
payment of benefits under the Plan. The Plan Administrator shall furnish to each
such Participant or Beneficiary whatever information is required under ERISA (or
is otherwise appropriate) to enable the Participant or Beneficiary to make
whatever elections may be available pursuant to 0 and 0, and the Plan
Administrator shall provide for the payment of benefits in the proper form and
amount from the assets of the Trust Fund. The Plan Administrator may decide in
its sole discretion to permit modifications of elections and to defer or
accelerate benefits to the extent consistent with applicable law and the best
interests of the individuals concerned.

12.8 Alternative Payees in Event of Incapacity.

If the Plan Administrator finds at any time that an individual qualifying for
benefits under this Plan is a minor or is incompetent, the Plan Administrator
may direct the benefits to be paid, in the case of a minor, to the minor's
parents or legal guardian, a custodian for the minor under the Uniform Transfers
to Minors Act, or the person having actual custody of the minor, or, in the case
of an incompetent, to the individual's Spouse or legal guardian, or the person
having actual custody of the individual, the payments to be used for the
individual's benefit. The Plan Administrator and the Trustee shall not be
obligated to inquire as to the actual use of the funds by the person receiving
them under this Section 0, and any such payment shall completely discharge the
obligations of the Plan, the Trustee, the Plan Administrator, and the Employer
to the extent of the payment.

12.9 Indemnification by Employer.

Except as separately agreed in writing, the Plan Administrator, and any member
or employee of the Plan Administrator, shall be indemnified and held harmless by
the Employer, jointly and severally, to the fullest extent permitted by law
against any and all costs, damages, expenses, and liabilities reasonably
incurred by or imposed upon it or him in connection with any claim made against
it or him or in which it or he may be involved by reason of its or his being, or
having been, the Plan Administrator, or a member or employee of the Plan
Administrator, to the extent such amounts are not paid by insurance.

12.10 Nonparticipation by Interested Member.

Any member of the Plan Administrator who also is a Participant in the Plan shall
take no part in any determination specifically relating to his own participation
or benefits, unless his abstention would leave the Plan Administrator incapable
of acting on the matter.

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      End of Article 12

                                       2
<PAGE>

                                   ARTICLE 13.

                 ADOPTION AMENDMENT, OR TERMINATION OF THE PLAN

13.1 Adoption of Plan by Other Employers.

With the consent of the Company, any entity may become a participating Employer
under the Plan by (i) taking such action as shall be necessary to adopt the
Plan, (ii) becoming a party to the Trust Agreement establishing the Trust Fund,
and (iii) executing and delivering such instruments and taking such other action
as may be necessary or desirable to put the Plan into effect with respect to the
entity's Employees.

13.2 Adoption of Plan by Successor.

In the event that the Employer shall be reorganized by way of merger,
consolidation, transfer of assets or otherwise, so that an entity other than the
Employer shall succeed to all or substantially all of the Employer's business,
the successor entity may be substituted for the Employer under the Plan by
adopting the Plan and becoming a party to the Trust Agreement. Contributions by
the Employer shall be automatically suspended from the effective date of any
such reorganization until the date upon which the substitution of the successor
entity for the Employer under the Plan becomes effective. If, within 90 days
following the effective date of any such reorganization, the successor entity
shall not have elected to become a party to the Plan, or if the Employer shall
adopt a plan of complete liquidation other than in connection with a
reorganization, the Plan shall be automatically terminated with respect to
Employees of the Employer as of the close of business on the 90th day following
the effective date of the reorganization, or as of the close of business on the
date of adoption of a plan of complete liquidation, as the case may be.

13.3 Plan Adoption Subject to Qualification.

Notwithstanding any other provision of the Plan, the adoption of the Plan and
the execution of the Trust Agreement are conditioned upon their being determined
initially by the Internal Revenue Service to meet the qualification requirements
of Section 401(a) of the Code, so that the Employer may deduct currently for
federal income tax purposes their contributions to the Trust and so that the
Participants may exclude the contributions from their gross income and recognize
income only when they receive benefits. In the event that this Plan is held by
the Internal Revenue Service not to qualify initially under Section 401(a), the
Plan may be amended retroactively to the earliest date permitted by U.S.
Treasury Regulations in order to secure qualification under Section 401(a). If
this Plan is held by the Internal Revenue Service not to qualify initially under
Section 401(a) either as originally adopted or as amended, the Employer's
contributions to the Trust under this Plan (including any earnings thereon)
shall be returned to it and this Plan shall be terminated. In the event that
this Plan is amended after its initial qualification and the Plan as amended is
held by the Internal Revenue Service not to qualify under Section 401(a), the
amendment may be modified retroactively to the earliest date permitted by U.S.
Treasury Regulations in order to secure approval of the amendment under Section
401(a).

13.4 Right to Amend or Terminate.

The Company intends to continue this Plan as a permanent program. However, each
participating Employer separately reserves the right to suspend, supersede, or
terminate the Plan at any time and for any reason, as it applies to that
Employer's Employees, and the Company reserves the right to amend, suspend,
supersede, merge, consolidate, or terminate the Plan at any time and for any
reason, as it applies to the Employees of all Employers. No amendment,
suspension, supersession, merger, consolidation, or termination of the Plan
shall reduce any Participant's or Beneficiary's proportionate interest in the
Trust Fund, or shall divert any portion of the Trust Fund to purposes other than
the exclusive benefit of the Participants and their Beneficiaries prior to the
satisfaction of all liabilities under the Plan. Moreover, there shall not be any
transfer of assets to a successor plan or merger or consolidation with another
plan unless, in the event of the termination of the successor plan or the
surviving plan immediately following such transfer, merger, or consolidation,
each Participant or

                                       1
<PAGE>

Beneficiary would be entitled to a benefit equal to or greater than the benefit
the individual would have been entitled to if the plan in which the individual
was previously a Participant or Beneficiary had terminated immediately prior to
such transfer, merger, or consolidation. Following a termination of this Plan by
the Company, the Trustee shall continue to administer the Trust and pay benefits
in accordance with the Plan as amended from time to time and the Plan
Administrator's instructions.

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      End of Article 13

                                       2
<PAGE>

                                   ARTICLE 14.

                            MISCELLANEOUS PROVISIONS

14.1 Plan Creates No Employment Rights.

Nothing in this Plan shall be interpreted as giving any Employee the right to be
retained as an Employee by the Employer, or as limiting or affecting the rights
of the Employer to control its Employees or to terminate the Service of any
Employee at any time and for any reason, subject to any applicable employment or
collective bargaining agreements.

14.2 Nonassignability of Benefits.

No assignment, pledge, or other anticipation of benefits from the Plan will be
permitted or recognized by the Employer, the Plan Administrator, or the Trustee.
Moreover, benefits from the Plan shall not be subject to attachment,
garnishment, or other legal process for debts or liabilities of any Participant
or Beneficiary, to the extent permitted by law. This prohibition on assignment
or alienation shall apply to any judgment, decree, or order (including approval
of a property settlement agreement) which relates to the provision of child
support, alimony, or property rights to a present or former Spouse, child or
other dependent of a Participant pursuant to a State domestic relations or
community property law, unless the judgment, decree, or order is determined by
the Plan Administrator to be a qualified domestic relations order within the
meaning of Section 414(p) of the Code.

14.3 Limit of Employer Liability.

The liability of the Employer with respect to Participants under this Plan shall
be limited to making contributions to the Trust from time to time, in accordance
with 0.

14.4 Treatment of Expenses.

All expenses incurred by the Plan Administrator and the Trustee in connection
with administering this Plan and Trust Fund shall be paid by the Trustee from
the Trust Fund to the extent the expenses have not been paid or assumed by the
Employer or by the Trustee.

14.5 Number and Gender.

Any use of the singular shall be interpreted to include the plural, and the
plural the singular. Any use of the masculine, feminine, or neuter shall be
interpreted to include the masculine, feminine, or neuter, as the context shall
require.

14.6 Nondiversion of Assets.

Except as provided in Section 0 and Section 0, under no circumstances shall any
portion of the Trust Fund be diverted to or used for any purpose other than the
exclusive benefit of the Participants and their Beneficiaries prior to the
satisfaction of all liabilities under the Plan.

14.7 Separability of Provisions.

If any provision of this Plan is held to be invalid or unenforceable, the other
provisions of the Plan shall not be affected but shall be applied as if the
invalid or unenforceable provision had not been included in the Plan.

14.8 Service of Process.

The agent for the service of process upon the Plan shall be the chief executive
officer of the Company, or such other person as may be designated from time to
time by the Company.

                                       1
<PAGE>

14.9 Governing State Law.

This Plan shall be interpreted in accordance with the laws of the State of
Maryland to the extent those laws are applicable under the provisions of ERISA.

14.10 Special Rules for Persons Subject to Section 16(b) Requirements.

Notwithstanding anything herein to the contrary, any former Participant who is
subject to the provisions of Section 16(b) of the Securities Exchange Act of
1934, who becomes eligible to again participate in the Plan, may not become a
Participant prior to the date that is six months from the date such former
Participant terminated participation in the Plan.

In addition, any person subject to the provisions of Section 16(b) of the 1934
Act receiving a distribution of Stock from the Plan must hold such Stock for a
period of six months commencing with the date of distribution. However, this
restriction will not apply to Stock distributions made in connection with death,
retirement, disability or termination of employment, or made pursuant to the
terms of a qualified domestic relations order.

--------------------------------------------------------------------------------
      End of Article 14

                                       2
<PAGE>

                                   ARTICLE 15.

                              TOP-HEAVY PROVISIONS

15.1 Determination of Top-Heavy Status.

This Section shall apply for purposes of determining whether the Plan is a
top-heavy plan under Section 416(g) of the Code and whether the Plan satisfies
the minimum benefits requirements of Section 416(c) of the Code for such years.
In making this determination, the Plan Administrator shall use the following
definitions and principles:

      (a)   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 adjusted under Section 416(i)(1) of the Code for Plan
Years beginning after December 31, 2002), a 5% owner of the Employer, or a 1%
owner of the Employer having Testing Compensation of more than $150,000. The
determination of who is a Key Employee will be made in accordance with Section
416(i)(1) of the Code and the applicable regulations and other guidance of
general applicability issued thereunder.

      (b)   This Section 0 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. 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 Section 416(g)(2) of the Code during
the one-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 Section
416(g)(2)(A)(i) of the Code. 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 "five-year period" for "one-year period." The accrued
benefits and accounts of any individual who has not performed services for the
Employer during the one-year period ending on the determination date shall not
be taken into account.

      (c)   The "Employer" includes all business entities which are considered
commonly controlled or affiliated within the meaning of Sections 414(b), 414(c),
and 414(m) of the Code.

      (d)   The "plan aggregation group" includes each qualified retirement plan
maintained by the Employer (i) in which a Key Employee is a Participant during
the Plan Year, (ii) which enables any plan described in clause (i) to satisfy
the requirements of Section 401(a)(4) or Section 410 of the Code, or (iii) which
provides contributions or benefits comparable to those of the plans described in
clauses (i) and (ii) and which is designated by the Plan Administrator as part
of the plan aggregation group.

      (e)   The "determination date" with respect to the first Plan Year of any
plan, means the last day of that Plan Year, and with respect to each subsequent
Plan Year, means the last day of the preceding Plan Year. If any other plan has
a determination date which differs from this Plan's determination date, the
top-heaviness of this Plan shall be determined on the basis of the other plan's
determination date falling within the same calendar years as this Plan's
determination date.

      (f)   This Plan shall be "top-heavy" for any Plan Year in which the
aggregated benefits of the Key Employees exceed 60% of the total aggregated
benefits for both Key Employees and Non-key Employees.

      (g)   A "Top-Heavy Year" means a Plan Year in which the Plan is top-heavy.

15.2 Minimum Contributions.

For any Top-Heavy Year, the Employer shall make a special contribution on behalf
of each Participant to the extent that the total allocations to the
Participant's Account pursuant to Article 4 is less than the lesser

                                       1
<PAGE>

of (i) 4% of the Participant's Testing Compensation for that year, or (ii) the
highest ratio of such allocation to Testing Compensation received by any Key
Employee for that year. For purposes of the special contribution of this Section
0, a Key Employee's Testing Compensation shall include amounts the Key Employee
elected to defer under a qualified 401(k) arrangement. Such a special
contribution shall be made on behalf of each Participant who is employed by the
Employer on the last day of the Plan Year, regardless of the number of the
Participant's Hours of Service, and shall be allocated to the Participant's
Account. Employer matching contributions shall be taken into account for
purposes of satisfying the minimum contribution requirements of Section
416(c)(2) of the Code 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
Section 401(m) of the Code.

For any Plan Year when (1) the Plan is top-heavy and (2) a Non-key Employee is a
Participant in both this Plan and a defined benefit plan included in the plan
aggregation group which is top heavy, the sum of the Employer contributions and
forfeitures allocated to the Account of each such Non-key Employee shall be
equal to at least 5% of such Non-key Employee's Testing Compensation for that
year.

15.3 Minimum Vesting.

If a Participant's vested interest in the Participant's Account is to be
determined in a Top-Heavy Year, it shall be based on the vesting schedule
provided in Section 0 of the Plan.

15.4 Minimum Benefits for Employees Also Covered Under Another Plan.

The top-heavy minimum benefit requirement of Section 416(c) of the Code will be
met pursuant to the above provisions only to the extent it is not provided in
the 401(k) plan sponsored by the Employer.

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      End of Article 15

                                       2
<PAGE>

         IN WITNESS WHEREOF, the Company has adopted this Plan and caused this
instrument to be executed by its duly authorized officers as of the 1st day
of October, 2003.

Witnesses:                      HEMAGEN DIAGNOSTICS, INC.

/s/ Deborah Ricci               BY:   /s/ William P. Hales
---------------------------        -----------------------------

                                ITS:  President & CEO
---------------------------

                                       3

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