Document:

AMENDED EMPLOYMENT AGREEMENT

     AGREEMENT  made  as  of the 1st day of  February,  1999  and
amended  as  of the 17th day of March, 2000 by and  between  Acme
Electric Corporation, a New York corporation having an office  at
400  Quaker Road, East Aurora, New York, (the "Company") and  Mr.
Robert J. McKenna, residing at 5 Hummingbird Court, Orchard Park,
New York, ("Mr. McKenna").

                      W I T N E S S E T H:

     WHEREAS,  Mr.  McKenna is Chief Executive  Officer  ("CEO"),
Chairman and President of the Company; and

     WHEREAS,  the  Company  believes that  it  is  in  its  best
interest  to assure the continued service of Mr. McKenna  as  its
CEO,   Chairman  and  President  on  the  terms  and   conditions
hereinafter set forth; and

     WHEREAS,  Mr.  McKenna  is desirous of receiving  assurances
that,  should  a "change in control" as hereinafter defined  take
place at the Company, he will be provided with security as to his
position, compensation and benefits.

     NOW,  THEREFORE, in consideration of the premises and mutual
agreement  hereinafter  contained, the parties  hereto  agree  as
follows:

     1.    The Company hereby employs Mr. McKenna and Mr. McKenna
hereby  accepts employment with the Company as its CEO,  Chairman
and President upon the terms and conditions herein contained.

     2A.   The  initial Term shall be for a period commencing  on
the  date  hereof and terminating three years from  the  date  of
commencement or three years from its most recent extension  date,
whichever is later.

          At  the  end  of each month during the Term,  the  Term
shall  be automatically continued and extended for one additional
month,  unless on or before fifteen days prior to the end of  any
month  during the Term, the Company shall give to Mr. McKenna  or
Mr.  McKenna  shall give to the Company a notice not  to  extend.
Then,  in  such  event,  the  Term as  theretofore  automatically
extended  shall  be  deemed further extended for  one  additional
month,  and  thereafter  there  shall  be  no  further  automatic
extensions.   (As an example, should the Company or  Mr.  McKenna
give  to  the  other  party a written notice  not  to  extend  on
November 15, 2000, the Agreement would be deemed extended to, and
would  expire  on, December 31, 2003.)  "Term" as  used  in  this
Agreement  shall be deemed to mean the period of employment  from
the  date  hereof  through February 1, 2002, or as  automatically
extended pursuant to this Paragraph 2A.

     2B.   Should  the Company breach this Agreement pursuant  to
the provisions of Paragraphs 8A, 8B, 8C and 9 herein, Mr. McKenna
shall be entitled to the following:

          a.    Payments  in an amount equal to the  base  salary
     payable  each  year  of  the  then  remaining  Term  of  the
     Agreement, with such base salary to be in an amount equal to
     Mr.  McKenna's base salary in effect prior to  such  breach,
     plus bonus each year of the remaining Term of the Agreement.
     The  bonus amount each year will be equal to the average  of
     Mr.  McKenna's greatest two out of the previous three years'
     bonuses, or 50% of base salary, whichever is greater.

          b.    Company  paid full medical, dental and disability
     insurance benefits and life insurance benefits comparable to
     those  enjoyed prior to such breach, which shall extend  for
     the  duration of the lives of Mr. McKenna and his spouse  or
     until  Mr. McKenna accepts other full-time employment  which
     provides  the  same or similar benefits  and  he  elects  to
     accept such other benefits in lieu  of the benefits provided
     by  the  Company.  In the event that Mr. McKenna  elects  to
     accept  such other benefits, he and his spouse preserve  the
     right  to  require  the  Company to reinstate  the  benefits
     enjoyed  at the time of the breach for the duration  of  the
     lives of Mr. McKenna and his spouse.

          c.    The continuation over the then remaining Term  of
     this  Agreement, in such amounts and in a manner  consistent
     with  that  provided immediately prior to such  breach,  of:
     contributions  in  Mr. McKenna's behalf based  on  his  base
     salary  to the Company's Pension Plan for Salaried Employees
     and  to  the  Supplemental Executive  Retirement  Plan;  Mr.
     McKenna's  Company furnished automobile; and dues  and  fees
     for Mr. McKenna's club memberships.

          d.    Payments made pursuant to this Paragraph 2B shall
     be  made  monthly  from the date the Company  breached  this
     Agreement  throughout  the  then  remaining  Term   of   the
     Agreement,  or at Mr. McKenna's option in a lump sum  within
     thirty (30) days of notification of such breach.  Such  lump
     sum shall be an amount equal to the discounted present value
     of  the  payments  which  were to  be  paid  over  the  Term
     specified herein discounted at a rate of 5% per annum.

     2C.   "Change  in  Control" as used in this Agreement  shall
mean any one of the following:

          a.    An  acquisition of 35% or more of the  beneficial
     ownership,  directly or indirectly, of  the  Company's  then
     outstanding  stock, or merger or consolidation  by  or  with
     another person, entity or group;

          b.    A tender offer or tender offers for the Company's
     stock in which 35% or more of the then outstanding stock  of
     the  Company  is  tendered or purchased by a person,  single
     entity or affiliated group;

          c.      A    reclassification    of    securities    or
     recapitalization   of  the  Company   which,   directly   or
     indirectly,  disproportionately increases or  decreases  the
     outstanding shares of any class of equity securities of  the
     Company by 35% or more;

          d.     A   sale,  lease,  exchange,  mortgage,  pledge,
     transfer  or  other disposition of all or substantially  all
     the assets of the Company approved by the Board of Directors
     to which Mr. McKenna dissented;

          e.    A  change  in  control shall be  deemed  to  have
     occurred if at any time less than 51% of the members of  the
     Board   of  Directors  shall  be  persons  who  were  either
     nominated  for  election by the Board of Directors  or  were
     elected by the Board of Directors.

     3.    Except as otherwise herein provided during the Term of
the  Agreement, the Company shall employ Mr. McKenna as its  CEO,
Chairman  and  President and he shall serve the Company  in  such
capacity,  performing the normal duties of a  CEO,  Chairman  and
President of a corporation in the Company's business, subject  at
all  times to the direction and control of the Board of Directors
of  the  Company,  shall devote his time,  attention,  skill  and
energy  to  the business, welfare and affairs of the Company  and
shall  use  his  best  efforts to promote the  interests  of  the
Company, it being understood that the conduct of such duties does
not  require his attendance at the offices of the Company  during
any  particular  fixed periods.  Mr. McKenna hereby  consents  to
continue  to serve as a Director of the Company or any subsidiary
thereof without additional compensation.

     4A.   The Company shall pay and Mr. McKenna shall accept  as
compensation for all services to be rendered hereunder and during
the  Term  a base salary determined by the Board of Directors  of
the  Company pursuant to its normal procedure for setting  yearly
salaries  for officers of the Company ($295,000 per annum  as  of
March  17,  2000).  Such payments hereunder shall be  payable  in
accordance  with the prevailing salary payroll practices  of  the
Company  and subject to such deductions as are agreed to  by  Mr.
McKenna.  Nothing contained in this Agreement shall be deemed  to
prevent the Company during the Term hereof from giving bonuses or
other  additional consideration to Mr. McKenna from time to  time
as  determined by the Board of Directors or, except as  otherwise
specifically provided herein, prevent Mr. McKenna from  receiving
benefits  in  accordance with any benefit plan  or  program  made
available  by the Company to its officers, salaried employees  or
directors.

     4B.   The  Company  shall  reimburse  Mr.  McKenna  for  all
expenses  reasonably  incurred by  him  in  connection  with  his
performance  of services to the Company, including  entertainment
and  travel.   Mr.  McKenna  shall  be  entitled  to  receive  or
participate  in  all other fringe benefits, such as  medical  and
hospital  plans,  profit-sharing plans and pension  plans,  stock
options under the then existing corporate stock option plan,  and
use  and  maintenance of an automobile of a type and in a  manner
consistent  with  the practices prevailing at  the  time  of  the
execution of this Agreement.

     5A.   Mr. McKenna acknowledges that during the course of his
employment hereunder he will acquire, possess and become  exposed
to  confidential and proprietary information and materials of the
Company.  Accordingly, during his employment hereunder and for  a
period of eighteen (18) months thereafter, he shall not, for  any
reason  whatever, except in the regular authorized course of  the
Company's business under appropriate secrecy provisions, directly
or  indirectly, use or exploit or disclose or divulge  to  anyone
(who  is  not authorized to receive the same), without the  prior
written  permission of the Company, any proprietary  information,
including,  but  not limited to, trade secrets,  know-how,  data,
materials  or  other knowledge relating to or pertaining  to  the
business  of the Company, unless the same (i) has been  published
and/or has become a part of the public domain other than by  acts
of  omission by Mr. McKenna; (ii) has been lawfully furnished  or
made known to Mr. McKenna by a third party without restriction on
disclosure  or use; and (iii) was in Mr. McKenna's possession  at
the  time he first became associated with the Company and was not
acquired  by Mr. McKenna either directly or indirectly  from  the
Company.

     5B.   All  documents, records, prototypes or other  tangible
embodiments  or  evidence  of  the  discoveries,  trade  secrets,
information,   know-how,  data,  materials  or  other   knowledge
previously referred to, which may at any time be acquired  by  or
come  into  the  possession of Mr. McKenna during his  employment
hereunder  (except materials excluded in Subparagraph A  hereof),
are  the  sole and exclusive property of the Company and must  be
surrendered  to  the  Company,  without  demand  therefor,   upon
termination  of Mr. McKenna's employment hereunder, or  upon  the
request by the Company at any other time; and, in addition, prior
to  such termination of employment or upon the reasonable request
by  the  Company  at  any other time, Mr.  McKenna  will  prepare
materials  to  accurately and adequately describe, set  forth  or
embody  any of the foregoing and deliver the same to the  Company
in order to accomplish or complete the transfer of any and all of
the  foregoing  to  the Company and shall be  reimbursed  by  the
Company  for  all  of  his reasonable out-of-pocket  expenses  in
connection therewith.

     5C.   Mr.  McKenna  agrees to execute all documents  and  to
take  all such other action as the Company may reasonably require
(being   reimbursed  for  all  of  his  reasonable  out-of-pocket
expenses  in  this connection) in order to assign to the  Company
any and all rights to any materials prepared by him during and in
connection with his employment hereunder.

     6A.     Mr.  McKenna  agrees  that,  during  his  employment
hereunder  for a period of eighteen (18) months after termination
of  his  employment hereunder for whatever reason (except in  the
event such termination is caused by (a) a material breach of this
Agreement  by  the Company, or (b) the Company's  bankruptcy  (as
defined in Paragraph 14 hereof)), he shall not (without the prior
written  consent  of  the Company) (i) solicit  as  a  client  or
customer  in competition with the Company any persons or entities
which were, during his employment hereunder, clients or customers
of  the  Company, (ii) enter into any business arrangements  with
any  of  the  foregoing which could be reasonably  deemed  to  be
materially  competitive  with  or  materially  injurious  to  any
business  in  which the Company is engaged at the  time  of  such
termination,  or (iii) solicit, or be instrumental in any way  in
causing,  any  other person to leave the employ of  the  Company.
Mr.  McKenna further agrees that he shall not (without the  prior
written  consent  of the Company) for a period of  eighteen  (18)
months after the termination of his employment hereunder for  any
reason (except in the event the termination is caused by a breach
of  this  Agreement  by  the Company),  directly  or  indirectly,
individually  or  as  a director, partner, employee,  officer  or
agent, engage in any employment, performance of services or other
activity on behalf of any company if such employment, performance
of  services  or other activity can be reasonably  deemed  to  be
materially  competitive  with  or  materially  injurious  to  any
business  in  which the Company is engaged at the  time  of  such
termination.

     6B.   For  purposes only of determining whether services  by
Mr. McKenna during the aforesaid eighteen (18) month period after
his  termination  of  employment hereunder shall  be  "materially
competitive  with or materially injurious to the Company"  within
the   meaning  of  this  paragraph,  either  party  may  initiate
arbitration  proceedings to make such determination  pursuant  to
Paragraph 13 hereof.

     6C.   If Mr. McKenna commits a material breach of any of the
provisions of Paragraph 5A, 5B, 5C or 6A, the Company shall  have
the  right  and  remedy  to  have  such  provisions  specifically
enforced by any court having equity jurisdiction, since any  such
breach or threatened breach will cause irreparable injury to  the
Company and money damages will not provide an adequate remedy  to
the  Company.  The initiation of, or participation in,  any  such
proceeding  shall  not  constitute a waiver  of  the  arbitration
provisions of Paragraph 10.

     7.    During  the  Term, Mr. McKenna will  not  directly  or
indirectly  engage  in the business of, or  own  or  control  any
interest  in (except as a passive investor owning less  than  ten
percent  (10%)  of  the  equity securities  of  a  publicly-owned
company),  or  act  as a director, officer  or  employee  of,  or
consultant  to,  any  individual,  partnership,  joint   venture,
corporation  or  other  business entity  directly  or  indirectly
engaged  anywhere in the United States in any business  competing
with  the  business  carried on by the  Company  or  any  of  its
subsidiaries.

     8A.   It  is  specifically understood and  agreed  that  the
Company may terminate this Agreement and its obligations  to  Mr.
McKenna  hereunder prior to a change in control or upon voluntary
retirement  by  Mr.  McKenna  from  active  employment  with  the
Company.   Notwithstanding the foregoing, at any time during  the
Term  of  this  Agreement, after a change of  control  has  taken
place, any termination or notice of termination shall be deemed a
breach  of  this  Agreement and a notice not to extend,  and  the
provisions  of Paragraph 2B above shall apply so as to  have  the
effect of fixing the Term as provided herein and terminating  Mr.
McKenna's employment with the Company.

     8B.  At any time during the Term of this Agreement, after  a
change in control has taken place, should the Company reduce  the
compensation or benefits then being paid to Mr. McKenna, it shall
be  deemed a breach of this Agreement and a notice not to extend,
and  the  provisions of Paragraph 2B above shall apply so  as  to
have  the  effect  of  fixing the Term  as  provided  herein  and
terminating Mr. McKenna's employment with the Company.

     8C.  At any time during the Term of this Agreement, after  a
change in control has taken place, should the Company change  Mr.
McKenna's  position  or duties without his  written  consent,  it
shall  be deemed a breach of this Agreement and a notice  not  to
extend,  and the provisions of Paragraph 2B above shall apply  so
as  to have the effect of fixing the Term as provided herein  and
terminating Mr. McKenna's employment with the Company.

     9.    In  the  event that during Mr. McKenna's lifetime  and
during the Term of this Agreement, after a change in control  has
taken  place, the Company defaults as to any payment  under  this
Agreement  or  fails to make any payments provided  for  in  this
Agreement  and  fails to cure such default or make  such  payment
within  ten  (10) days after written notice thereof,  or  written
demand therefor, or in the event that the Company terminates this
Agreement  for  cause and it is ultimately determined  that  such
termination  was wrongful, Mr. McKenna may elect  to  treat  such
default or wrongful termination as a breach of this Agreement and
shall  he  entitled  to  recover all of his  expenses,  including
reasonable  attorneys'  fees,  in prosecuting  or  defending  any
actions  or  proceedings arising out of,  or  in  any  other  way
relating to, the matters referred to in this paragraph,  and  the
provisions of Paragraph 2B of this Agreement shall apply.

     10.   Any  controversy, claim or dispute arising out  of  or
relating  to  this Agreement, including without  limitation,  any
claim  for  breach  of  this  Agreement,  shall  be  settled   by
arbitration  in  accordance  with  the  Rules  of  the   American
Arbitration  Association (AAA) obtaining  at  the  time  of  such
proceeding, except that the authority of the arbitrators shall be
limited  to the interpretation and enforcement of the  terms  and
conditions of this Agreement and the arbitrators shall set  forth
in  writing the reasons for their decisions.  Judgment  upon  any
award  rendered by the arbitrators pursuant hereto may be entered
in any court having jurisdiction thereof and thereafter enforced.
Either  party  shall  have  the  right  to  initiate  arbitration
proceedings.  Any arbitration shall take place under the auspices
of   the  AAA  in  Buffalo,  New  York.   There  shall  be  three
arbitrators.  Each party shall appoint one arbitrator.  If either
party  fails to appoint an arbitrator within five (5)  days  from
the  date  upon which the notice of the initiating party  of  its
intention  to  arbitrate is received by the other party  to  such
proceedings, the AAA shall make the appointment for  that  party.
The  two  arbitrators appointed in the manner provided for  above
shall  appoint a third arbitrator, mutually acceptable  to  them.
If  the  two arbitrators first appointed cannot, for any  reason,
agree  upon a third arbitrator, or an acceptable person is unable
to  act, the AAA shall appoint the third arbitrator in accordance
with its rules.

     11.   Mr. McKenna may terminate this Agreement prior to  the
date  of expiration of the Term herein above set forth by written
notice  to  the Company if the Company shall file a  petition  in
bankruptcy,  make  a  voluntary assignment  for  the  benefit  of
creditors,  file a petition or an answer seeking  an  arrangement
with creditors or take advantage of any insolvency law, or if the
Company  applies for or consents to the appointment of a receiver
or  trustee  of  all or a substantial part of its assets,  or  an
order,  judgment  or  decree shall be entered  in  any  court  of
competent  jurisdiction  appointing  a  receiver  of  all  or   a
substantial  part  of  its assets, and such  order,  judgment  or
decree  shall continue unstayed and in effect for any consecutive
period of ninety (90) days.

     12.  This Agreement and all rights hereunder are personal to
Mr.  McKenna and shall not be assignable; provided, however, that
all  of  Mr. McKenna's rights under the Agreement shall inure  to
the  benefit of his heirs, distributees, personal representatives
or  designees or other legal representatives, as the case may be.
Any person, firm or corporation succeeding to the business of the
Company  by  merger, purchase, consolidation or otherwise,  shall
assume  by contract or operations of law the obligations  of  the
Company  hereunder;  provided, however, that the  Company  shall,
notwithstanding such assumption or assignment, remain liable  and
responsible  for fulfilling the obligations of the Company  under
this Agreement.

           This  Agreement supersedes and replaces  any  and  all
present  written  or  oral agreements of employment  between  the
parties  hereto,  and  all  such  agreements  are  hereby  deemed
canceled,  revoked  and of no further force or effect;  provided,
however,  that  in  the  event that Mr. McKenna's  employment  is
terminated  prior  to a change in control or under  circumstances
not  involving  a  breach  of  this Agreement,  Mr.  McKenna,  in
addition to the other benefits provided by this Agreement,  shall
be entitled to an amount equal to six (6) months base salary paid
in  a  lump sum in accordance with the letter of August 12,  1992
from the Company to Mr. McKenna.

     13.   Without in any way implying that any provisions hereof
is  invalid or unenforceable, the validity or unenforceability of
any  provision  hereof  shall in no way affect  the  validity  or
enforceability of any other provision.

     14.   This Agreement constitutes the whole agreement between
the  parties  hereto,  and there are no terms  other  than  those
stated  herein.  No variation hereof shall be deemed valid unless
in  writing and signed by the parties hereto, and no discharge of
the terms hereof shall be deemed valid unless by full performance
by  the  parties  hereto or by a writing signed  by  the  parties
hereto.  No waiver by either party of any provisions or condition
of  this  Agreement to be performed by them should  be  deemed  a
waiver of any other provisions of this Agreement.

     15.   Any  notice,  statement,  report,  request  or  demand
required or permitted to be given by this Agreement shall  be  in
writing,  and  shall  be  sufficient if  addressed  and  sent  by
certified mail, return receipt requested, to the parties  at  the
addresses  set  forth above, or at such other place  that  either
party  may  designate by notice to the other and shall be  deemed
given when so mailed.

     16.   This  Agreement  has  been  made  in,  and  shall   be
interpreted according to the laws of, the State of New York.  The
parties hereto submit to the jurisdiction of  the courts  of  the
New  York 7upreme Court, County of Erie, for the purpose  of  any
actions  or  proceedings  which may be required  to  enforce  the
provisions  of this Agreement or an award made in any arbitration
proceeding initiated hereunder.

     IN  WITNESS  WHEREOF, the parties have  hereunto  set  their
respective hands and seals causing these presents to be  executed
as of the day and year first above written.

Witnessed:

/s/ John J. Zak                         /s/
                                        Robert J. McKenna

Witnessed:                              ACME ELECTRIC CORPORATION

/s/ Maryann J. Graf                     By: /s/
                                        Randall L. Clark
                                        Chairman, Compensation Committee

BFLODOCS:335560_1 (76X401)ACME ELECTRIC CORPORATION
               SUPPLEMENTAL RETIREMENT PLAN TRUST

          THIS TRUST AGREEMENT, made and entered into as of the
30 day of March, 2000 by and between Acme Electric Corporation, a
corporation organized under the laws of the State of New York,
hereinafter referred to as the "Company," and John B. Drenning,
an individual with offices at One M&T Plaza, Suite 2000, Buffalo,
New York  14203-2391, hereinafter referred to as the "Trustee".

                        WITNESSETH THAT:

          (1)  The Company has entered into Supplemental
Executive Compensation Agreements (the "Agreements") to provide
supplemental retirement income and benefits for certain executive
employees of the Company ("Executives") as identified in Exhibit
A;

          (2)  The amount and timing of benefit payments (the
"Supplemental Benefits") to which Executive participants and, if
applicable, their surviving spouses (the "Trust Beneficiaries")
are or may become entitled are set forth in the Agreements;

          (3)  In the event of a Change of Control (as defined in
Section 11.5), the Trust Beneficiaries shall be limited to those
individuals who are Trust Beneficiaries at the time of the Change
of Control;

          (4)  The Company has established a trust fund to aid it
in accumulating the amounts necessary to satisfy its contractual
liability to pay Supplemental Benefits under the terms of the
Agreements;

          (5)  The Company is obliged to pay all Supplemental
Benefits from its general assets and the establishment of this
trust shall not reduce or otherwise affect the Company's
continuing liability to pay Supplemental Benefits from such
assets, except that the Company's liability shall be offset by
actual benefit payments made from this trust;

          (6)  The trust established by this Trust Agreement is
intended to be a "grantor trust" with the result that the corpus
and income of the trust be treated as assets and income of the
Company pursuant to Sections 671 through 679 of the Internal
Revenue Code of 1986, as amended (the "Code"); and

          (7)  The Company intends that the Trust Fund (as
hereinafter defined) shall at all times be subject to the claims
of its senior creditors and general unsecured creditors as herein
provided and that the Agreements not be deemed funded within the
meaning of the Employee Retirement Income Security Act of 1974,
as amended, solely by virtue of the existence of this Trust;

          NOW THEREFORE, in consideration of the mutual covenants
herein contained, the Company and the Trustee declare and agree
as follows:

1       SECTION 1.  Establishment and Title of the Trust

          1.1  The Company hereby establishes with the Trustee a
trust to be known as the Acme Electric Corporation Supplemental
Retirement Plan Trust (the "Trust") consisting of such sums of
money and other property acceptable to the Trustee as from time
to time shall be paid or delivered to the Trustee.  All such
money and other property, all investments and reinvestments made
therewith or proceeds thereof and all earnings and profits
thereon, that are not paid to the Company as provided in
Section 4.2 of this Trust Agreement, less all payments and
charges as authorized herein, are hereinafter referred to as the
"Trust Fund."  The Trust Fund shall be held by the Trustee IN
TRUST and shall be dealt with in accordance with the provisions
of this Trust Agreement.  The Trust Fund shall be held for the
exclusive purpose of reimbursing the Company for payments it
makes pursuant to the Agreements to Trust Beneficiaries or
providing direct payments to Trust Beneficiaries in accordance
with the provisions of this Trust Agreement and defraying
reasonable expenses of administration in accordance with the
provisions of this Trust Agreement until all such payments
required by this Trust Agreement have been made; provided,
however, that the Trust Fund shall at all times be subject to the
claims of the senior creditors and general unsecured creditors of
the Company as set forth in Section 8 of this Trust Agreement.

             SECTION 2.  Acceptance by the Trustee

          2.1  The Trustee accepts the Trust established under
this Trust Agreement on the terms and subject to the provisions
set forth herein, and he agrees to discharge and perform fully
and faithfully all of the duties and obligations imposed upon him
under this Trust Agreement.

             SECTION 3.  Limitation on Use of Funds

          3.1  Unless the Trust is terminated in accordance with
the provisions of Sections 6.5, 13.1, 13.2 or 13.3, no part of
the corpus of the Trust Fund shall be recoverable by the Company
or used for any purpose other than for the exclusive purpose of
providing payments to the Company to reimburse it for providing
payments to Trust Beneficiaries in accordance with the provisions
of Section 6.2 or directly to Trust Beneficiaries in accordance
with the provisions of Section 6.3 and defraying reasonable
expenses of administration in accordance with the provisions of
this Trust Agreement until all such payments required by this
Trust Agreement have been made; provided, however, that
(i) nothing in this Section 3.1 shall be deemed to limit or
otherwise prevent the payment from the Trust Fund of expenses and
other charges as provided in Sections 9.1 and 9.2 and (ii) the
Trust Fund shall at all times be subject to the claims of the
senior creditors and general unsecured creditors of the Company
as set forth in Section 8 of this Trust Agreement.

          3.2  Without limiting the foregoing, no part of the
corpus of the Trust Fund may be loaned to the Company.

          SECTION 4.     Duties and Powers of the Trustee With
                    Respect to Investments

          4.1  The Trustee shall invest and reinvest the
principal and income of the Trust Fund and keep the Trust Fund
invested, without distinction between principal and income, in
such debt or equity securities as are permitted in accordance
with the Investment Guidelines which are, or when adopted shall
be, attached hereto as Exhibit B, as amended from time to time by
the Company.  The Trustee may rely on the Investment Guidelines
provided to him until he receives written notice to the contrary
from the Company.  Except as otherwise provided by applicable
law, the Trustee shall have no liability or responsibility for
the Investment Guidelines or the appropriateness thereof.  If at
any time no Investment Guidelines have been provided to the
Trustee, or if the Investment Guidelines provided to the Trustee
are revoked and new Investment Guidelines are not substituted
therefor, the Trustee shall invest the Trust Fund in such one or
more instruments consisting of U.S. Treasury Bills, Notes or
Bonds, U.S. Government Agency issues, notes and other fixed
income securities issued by State and local governments, time
deposits, certificates of deposit, commercial paper, bankers'
acceptances, repurchase agreements and pooled short-term
investment funds, as the Trustee in his sole discretion shall
determine; provided, however, that the investment of Company
assets in such investments is not prohibited by the terms of any
credit agreement to which the Company is a party.

          4.2  Unless directed otherwise by the Company, all net
income of the Trust Fund shall be added to, and used for the same
purposes as, the corpus of the Trust Fund.

    SECTION 5.  Additional Powers and Duties of the Trustee

          5.1  The Trustee shall have the powers conferred by
Section 11-1.1 of the New York Estates, Powers and Trusts Law, as
amended from time to time, and by other provisions of law, in
addition to any powers and authority granted by this Trust
Agreement, with respect to property constituting a part of the
Trust Fund.

          5.2  From time to time and subject to the restrictions
on amendments in Section 14.1(iii), the Company may substitute
new or revised Agreements or add additional executives to the
entitlements hereunder by delivering appropriate documents to the
Trustee.

              SECTION 6.  Payments by the Trustee

          6.1  The establishment of the Trust and the payment or
delivery to the Trustee of money or other property acceptable to
the Trustee shall not vest in any Trust Beneficiary any right,
title or interest in and to any assets of the Trust.

          6.2  The Trustee shall pay to the Company upon the
written request of the Company the amount of Supplemental
Benefits paid by the Company to Trust Beneficiaries.

          6.3  To the extent that the Company has not made a
payment of Supplemental Benefits in accordance with the
Agreements to Trust Beneficiaries, such Beneficiaries may provide
written notice to the Trustee and to the Company.  The Trustee
shall thereupon make direct payments of Supplemental Benefits to
the Trust Beneficiaries from the assets of the Trust, if and to
the extent such assets are available for distribution, in
accordance with the Agreements.  In the event that the Company
notifies the Trustee in writing that any Trust Beneficiary is not
entitled to receive a direct payment because the Company is
making payments of Supplemental Benefits to the Trust
Beneficiary, the Trustee shall suspend all payments to such Trust
Beneficiary until he receives written notification from the
Company or an order from a court of competent jurisdiction to
make direct payments to such Trust Beneficiary.  The Trustee
shall not make a payment to a Trust Beneficiary to the extent
that the amount of the payment required by such Agreement exceeds
the amount then held in the Trust.  In the event that a Trust
Beneficiary is deceased and the Agreement provides for a payment
to be made to such Trust Beneficiary on or after such Trust
Beneficiary's death, such payment shall be made to the legal
representative of such Trust Beneficiary's estate.

          6.4  If the Trust assets are not sufficient to make one
or more payments of Supplemental Benefits to a Trust Beneficiary
(or his or her estate) in accordance with the Agreement, the
Company shall make the balance of such payment when it falls due.

          6.5  Except as provided in Section 8 regarding payments
to Trust Beneficiaries if the Company is insolvent, but
notwithstanding any other provision of this Trust Agreement to
the contrary, if at any time (i) the Trust is finally determined
by the Internal Revenue Service (the "IRS") not to be a "grantor
trust," with the result that the income of the Trust Fund is not
treated as income of the Company pursuant to Sections 671 through
679 of the Code, (ii) a Federal tax is finally determined by the
IRS to be payable by the Trust Beneficiaries with respect to the
entire value of their interest under the Trust Fund prior to the
final distribution of the Trust assets to the Trust
Beneficiaries, or (iii) the Trustee receives an opinion of
counsel satisfactory to it to the effect that it is likely that
the IRS will determine that a tax will be payable by Trust
Beneficiaries as described in (ii) and it is likely that such
determination will be upheld, then the Trust shall immediately
terminate and the assets shall be liquidated and paid in a lump
cash sum as soon as practicable by the Trustee to the Company.
If the IRS determination referred to in (ii) or the opinion
referred to in (iii) applies to less than the entire value of the
Trust Fund for all Trust Beneficiaries, then that part of the
assets to which such determination or opinion relates shall be
liquidated and paid in a lump cash sum as soon as practicable by
the Trustee to the Company and the Trust shall continue in
effect.

          6.6  The Company shall remain primarily liable to pay
Supplemental Benefits under the Plan.  However, the Company's
liability under the Plan shall be reduced or offset to the extent
Supplemental Benefit payments are made from the Trust Fund.

          6.7  The Trustee shall deduct from each payment to a
Trust Beneficiary under this Trust Agreement any Federal, state
or local withholding or other taxes or charges which the Trustee
may be required to deduct under applicable law; provided,
however, that the Trustee shall be fully protected in relying
upon information provided by the Company as to state or local tax
withholding requirements.

                SECTION 7.  Funding of the Trust

          7.1  The Company, at its discretion, may from time to
time make contributions to the Trust Fund.

          7.2  Within sixty (60) days following a Change of
Control, the Company shall contribute to the Trust Fund an amount
equal to the amount that, when added to the Trust Fund, would
cause the Trust Fund to have sufficient assets to provide the
aggregate of the benefits described in the Agreements (determined
as of the date of the Change of Control (as defined in Section
11.5) and assuming that the Company terminated the Agreements on
such date.  Thereafter, the Company shall make annual
contributions within sixty (60) days following the end of the
calendar year in an amount equal to the above and determined by
substituting the last day of that calendar year for the date of
the Change of Control.  The amount to be contributed to the Trust
Fund by the Company following any Change of Control shall be
determined by the Company's actuary ("Actuary").  The Actuary
shall be such actuarial firm as, subject to any conditions on
removal provided in Section 11.6, as shall be designated by the
Company and as consented to by the Trust Beneficiaries.

          7.3  The Company shall make additional contributions to
the Trust Fund as and when required by the Trustee to fund the
payment of the expenses of the Trust, including the expenses for
compensation of the Trustee for his services and other expenses
described in Section 9.

          7.4  The Company may at any time or from time to time
make additional contributions to the Trust Fund to augment the
principal to be held, administered and disposed of by the Trustee
as provided by this Trust Agreement.

       SECTION 8.Trustee Responsibility Regarding Payments
               to Trust Beneficiaries If Company is Insolvent

                 8.1(a)  The Board of Directors and the chief
executive officer of the Company shall have the duty to inform
the Trustee in writing if the Company becomes Insolvent, as
hereinafter defined.  If the Trustee receives any written
certification signed under penalties of perjury by any person
other than the Board of Directors or the chief executive officer
of the Company that the Company has become Insolvent, the Company
shall be deemed to be Insolvent for purposes of this Section 8.
When the Trustee has been so informed by the Board of Directors
or the chief executive officer of the company, or has received
such certification from another person, the Trustee shall
immediately discontinue payments of Supplemental Benefits and
shall hold the assets of the Trust for the benefit of the
Company's senior creditors and general unsecured creditors.

          8.1(b)  The Company shall be considered "Insolvent" for
purposes of this Trust Agreement in the event of (a) the Company
is unable to pay its debts as they become due; (b) a general
assignment for the benefit of the Company's creditors; (c) the
voluntary commencement by the Company of any proceeding under
Title 11 of the United States Code or any other law of any
jurisdiction for the relief, liquidation or rehabilitation of
debtors (all of which proceedings are hereinafter collectively
referred to as "Insolvency Proceedings"); (d) the making of an
admission by the Company of any of the material allegations of or
consenting to or acquiescing in a petition, application, motion
or complaint commencing an Insolvency Proceeding or the seeking
by the Company of the appointment of, or the taking of possession
by, a receiver, custodian, trustee, liquidator or similar
official of or for a substantial part of its assets; (e) the
involuntary commencement of an Insolvency Proceeding against the
Company which is not fully stayed, timely controverted or
dismissed within one hundred twenty (120) days after the filing
thereof; or (f) the appointment of or taking of possession by a
receiver, custodian, trustee, liquidator or similar official of
or for the Company or of or for a substantial part of its assets.

          8.1(c)  Notwithstanding the foregoing provisions of
this Section 8.1, the Company shall be deemed to be no longer
Insolvent if the Trustee has received a copy of the Company's
most recent quarterly (unaudited) condensed balance sheet
("Quarterly Report"), or of its most recent annual (audited)
consolidated balance sheet ("Annual Report"), reporting that the
Company's total assets exceed its total liabilities as of the
date of such Quarterly or Annual Report.  The Company shall
deliver to the Trustee a copy of each Quarterly Report and Annual
Report within one business day after the date such report is
released to anyone not employed by, or affiliated with, the
Company.

          8.1(d)  Nothing in this Trust Agreement shall in any
way enlarge or diminish the rights of the Trust Beneficiaries in
the event the Company is Insolvent to pursue their rights as
general unsecured creditors of the Company with respect to their
Supplemental Benefits or otherwise.

          8.2  Whenever the Trustee has actual knowledge or has
determined that the Company is Insolvent, the Trustee shall
deliver any undistributed principal and income in the Trust Fund
to satisfy claims of the Company's senior creditors and general
unsecured creditors as directed by a court of competent
jurisdiction.

          8.3  If the Trustee discontinues payments as a result
of the Insolvency of the Company, such payments shall be resumed
only after the Trustee has determined that the Company is not
Insolvent (or is no longer Insolvent, assuming the Company had
been deemed to be Insolvent) or upon order of a court of
competent jurisdiction.  Upon such resumption, the first payment
of each Trust Beneficiary following such discontinuance shall
include the aggregate amount of all payments which would have
been made to such Trust Beneficiary in accordance with the
Agreements during the period of such discontinuance, less the
aggregate amount of payments of Supplemental Benefits made to
such Trust Beneficiary by the Company during any such period of
discontinuance.

          SECTION 9.  Taxes, Expenses and Compensation

          9.1  The Company shall from time to time pay taxes of
any and all kinds whatsoever which at any time are lawfully
levied or assessed upon or become payable in respect of the Trust
Fund, the income or any property forming a part thereof, or any
security transaction pertaining thereto.  To the extent that any
taxes levied or assessed upon the Trust Fund are not paid by the
Company, the Trustee shall pay such taxes out of the Trust Fund.
The Trustee shall if requested by the Company, or may, in his
discretion, contest the imposition of taxes in any manner deemed
appropriate by the Company or its counsel, but at Company
expense, and only if he has received an indemnity bond or other
security satisfactory to him to pay any such expenses.
Notwithstanding the foregoing, the Trustee shall not be obligated
to contest the imposition of tax unless he receives an opinion of
counsel, or of a certified public accounting firm of national
reputation, satisfactory to him to the effect that there is a
reasonable basis in law and fact for such contest.  In the
alternative, the Company may itself contest the validity of any
such taxes.

          9.2  The Company shall pay the Trustee such
compensation for his services as may be agreed upon in writing
from time to time by the Company and the Trustee.  The Company
shall also pay the reasonable expenses incurred by the Trustee in
the performance of his duties under this Trust Agreement,
including but not limited to brokerage commissions and fees of
counsel engaged by the Trustee pursuant to Section 9.1.  Such
compensation and expenses shall be charged against and paid from
the Trust Fund to the extent the Company does not pay such
compensation.

            SECTION 10.  Administration and Records

          10.1  The Trustee shall keep or cause to be kept
accurate and detailed accounts of any investments, receipts,
disbursements, and other transactions hereunder, and all such
accounts, books and records shall be open to inspections and
audit at all reasonable times by any person designated by the
Company.  All such accounts, books and records shall be preserved
(in original form, or on microfilm, magnetic tape or any other
similar process) for such period as the Trustee may determine,
but the Trustee may only destroy such accounts, books and records
after first notifying the Company in writing of his intention to
do so and transferring to the Company any of such accounts, books
and records requested.

          10.2  Within ninety (90) days after the close of each
calendar year, and within ninety (90) days after the removal or
resignation of the Trustee or the termination of the Trust, the
Trustee shall file with the Company a written account setting
forth all investments, receipts, disbursements and other
transactions affected by it during the preceding calendar year,
or during the period from the close of the preceding calendar
year to the date of such removal, resignation or termination,
including a description of all investments and securities
purchased and sold with the cost or net proceeds of such
purchases or sales and showing all cash, securities and other
property held at the end of such calendar year or other period.
Upon the expiration of ninety (90) days from the date of filing
such annual or other account, the Trustee shall to the maximum
extent permitted by applicable law be forever released and
discharged from all liability and accountability with respect to
the propriety of his acts and transactions shown in such account
except with respect to any such acts or transactions as to which
the Company shall within such 90 day period file with the Trustee
written objections.

          10.3  The Trustee shall from time to time permit an
independent public accountant selected by the Company (except one
to whom the Trustee has reasonable objection) to have access
during ordinary business hours to such records as may be
necessary to audit the Trustee's accounts.

          10.4  As of the last day of each calendar year, the
fair market value of the assets held in the Trust Fund shall be
determined.  Within ninety (90) days after the close of each
calendar year, the Trustee shall file with the Company the
written report of the determination of such fair market value of
the assets held in the Trust Fund.

          10.5  Nothing contained in this Trust Agreement shall
be construed as depriving the Trustee or the Company of the right
to have a judicial settlement of the Trustee's accounts, and upon
any proceeding for a judicial settlement of the Trustee's
accounts or for instructions the only necessary parties thereto
in addition to the Trustee shall be the Company and the Trust
Beneficiaries.

          10.6  In the event of the removal or resignation of the
Trustee, upon the payment of any unpaid fees and expenses and
after adequate provision has been made for liabilities of the
Trust, the Trustee shall deliver to the successor trustee all
records which shall be required by the successor trustee to
enable it to carry out the provisions of this Trust Agreement.

          10.7  In addition to any tax returns required of the
Trustee by law, the Trustee shall prepare and file such tax
reports and other returns as the Company and the Trustee may from
time to time agree.

     SECTION 11.    Removal or Resignation of the Trustee or the
                    Actuary and Designation of Successor Trustee
                    or Successor Actuary

          11.1  At any time the Company may remove the Trustee
with or without cause, upon at least sixty (60) days' notice in
writing to the Trustee.

          11.2  Trustee may resign at any time upon at least sixty
(60) days' notice in writing to the Company.

          11.3  In the event of such removal or resignation, the
Trustee shall duly file with the Company a written account as
provided in Section 10.2 for the period since the last previous
annual accounting, listing the investments of the Trust and any
uninvested cash balance thereof, and setting forth all receipts,
disbursements, distributions and other transactions respecting the
Trust not included in any previous account, and if written
objections to such account are not filed as provided in
Section 10.2, the Trustee shall to the maximum extent permitted by
applicable law be forever released and discharged from all
liability and accountability with respect to the propriety of its
acts and transactions shown in such account.

          11.4  Within sixty (60) days after any such notice of
removal or resignation of the Trustee, the Company shall
designate a successor trustee qualified to act hereunder;
provided, however, that if the Trustee resigns or is removed
following a Change of Control, the Company must obtain the prior
written consent of all of the Trust Beneficiaries to its
designation of a successor trustee.  In the event that the
Company fails to designate a successor trustee or to obtain prior
written consent of all of the Trust Beneficiaries (if the Trustee
was removed or resigned following a Change of Control), within
sixty (60) days after the Trustee's resignation or removal, the
Trustee shall select a successor trustee who, during such period
as it shall act as such, shall have the powers and duties herein
conferred upon the Trustee, and the word "Trustee" wherever used
herein, except where the context otherwise requires, shall be
deemed to include any successor trustee.  Upon designation of a
successor trustee and delivery to the resigned or removed Trustee
of written acceptance by the successor trustee of such
designation, such resigned or removed Trustee shall promptly
assign, transfer, deliver and pay over to such successor trustee,
in conformity with the requirements of applicable law, the funds
and properties in its control or possession then constituting the
Trust Fund.  In the event the Company selects a successor trustee
which meets the criteria set forth in this Section 11.4, it shall
not be liable for its selection.

          11.5  For purposes of this Trust Agreement, the term
"Change of Control" shall mean: (i) an acquisition of 35% or more
of the Company's stock, or merger or consolidation by or with
another entity or affiliated group; (ii) a tender offer or tender
offers for the Company's stock in which 35% or more of the
outstanding stock of the Company is tendered or purchased by a
single entity or affiliated group; (iii) a reclassification of
securities or recapitalization of the Company which directly or
indirectly, disproportionately increase or decreases the
outstanding shares of any class of equity securities of the
Company by 35% or more; (iv) a sale, lease, exchange, mortgage,
pledge, transfer or other disposition of substantially all the
assets of the Company approved by the Board of Directors; or (v)
a change in control shall be deemed to have occurred if at any
time less than 51% of the members of the Board of Director shall
be persons who were either nominated for election by the Board of
Directors or were elected by the Board of Directors.

          11.6  The Company may remove the Actuary and designate
a successor Actuary  with or without cause at any time; provided,
however, that if the Actuary is removed or resigns following a
Change of Control, the Company must obtain the prior written
consent of at least 75 percent of the Trust Beneficiaries to its
designation of a successor Actuary.  If the Company fails to
designate a successor Actuary or to obtain the prior written
consent of at least 75 percent of the Trust Beneficiaries (if the
Actuary is removed or resigns following a Change of Control),
within sixty (60) days after the Actuary's resignation or
removal, the Trustee shall select a successor Actuary pursuant to
this Section 11.6.

          SECTION 12.    Enforcement of Trust Agreement
                         and Legal Proceedings

          12.1  The Company shall have the right to enforce any
provision of this Trust Agreement, and any Trust Beneficiary
shall have the right as a beneficiary of the Trust, to enforce
any provision of this Trust Agreement that affects the right,
title and interest of such Trust Beneficiary in the Trust.  In
any action or proceedings affecting the Trust, the only necessary
parties shall be the Company, the Trustee and the Trust
Beneficiaries and, except as otherwise required by applicable
law, no other person shall be entitled to any notice or service
of process.  Any judgment entered in such an action or proceeding
shall to the maximum extent permitted by applicable law be
binding and conclusive on all persons having or claiming to have
any interest in the Trust.

          12.2 In the event that any dispute or difference
arising under or in connection with this Trust Agreement results
in arbitration or litigation, Company shall reimburse the Trust
Beneficiary for all reasonable Attorney's Fees and expenses if
the Trust Beneficiary prevails in such proceeding.

             SECTION 13.  Termination and Suspension

          13.1  Except as provided in Section 13.2, the Trust
shall terminate when all payments which have or may become
payable pursuant to the terms of the Trust have been made or the
Trust Fund has been exhausted, and all remaining assets shall
then be paid by Trustee to the Company.

          13.2  This Trust shall terminate if the Company and all
of the Trust Beneficiaries give the Trustee written notice of
termination.  Upon such termination, all remaining assets shall
then be paid by the Trustee to the Company.

                     SECTION 14.  Amendments

          14.1  The Company may from time to time amend or
modify, in whole or in part, any or all of the provisions of this
Trust Agreement with the written consent of the Trustee, but
without the consent of any Trust Beneficiary; provided, that (i)
Sections 1.1, 3.1, 12, 13 and 14 may not be amended; (ii) no such
amendment shall be permitted if, in the opinion of counsel to the
Company, such amendment would cause the Trust to cease to
constitute a grantor trust as described in Section 6.5; (iii) no
amendment may be made to the Agreements if it would reduce or
adversely affect the amount, or time for payment, of the
Supplemental Benefits of any Trust Beneficiary without the
consent of such Trust Beneficiary, unless it is due to an
arithmetic or computational mistake of fact, as determined by the
Company in its sole discretion and certified to the Trustee,
based on the provisions of the Agreements; and (iv) no amendment
may be made to this Trust Agreement following a Change of Control
without the written consent of all of the Trust Beneficiaries.

          14.2  The Company and the Trustee shall execute such
supplements to or amendments of, this Trust Agreement as shall be
necessary to give effect to any such amendment or modification.

                    SECTION 15.  Nonalienation

          15.1  Except insofar as applicable law may otherwise
require and subject to Sections 1.1, 3.1 and 8, (i) no amount
payable to or in respect of any Trust Beneficiary at any time
under the Trust shall be subject in any manner to alienation by
anticipation, sale, transfer, assignment, bankruptcy, pledge,
attachment, charge or encumbrance of any kind, and any attempt to
so alienate, sell, transfer, assign, pledge, attach, charge, or
otherwise encumber any such amount, whether presently or
thereafter payable, shall be void; and (ii) the Trust Fund shall
in no manner be liable for or subject to the debts or liabilities
of any Trust Beneficiary.

                   SECTION 16.  Communications

          16.1  Communications to the Company shall be addressed
to Acme Electric Corporation, 400 Quaker Road, East Aurora, New
York 14052, Attention: President; provided, however, that upon
the Company's written request, such communications shall be sent
to such other address as the Company may specify.

          16.2  Communications to the Trustee shall be addressed
to John B. Drenning, One M&T Plaza, Suite 2000, Buffalo, New York
14203-2391; provided, however, that upon the Trustee's written
request, such communications shall be sent to such other address
as the Trustee may specify.

          16.3  No communication shall be binding on the Trustee
until it is received by the Trustee and no communication shall be
binding on the Company until it is received by the Company.

          16.4  Any action of the Company pursuant to this Trust
Agreement, including all orders, requests, directions,
instructions, approvals and objections of the Company to the
Trustee, shall be in writing, signed on behalf of the Company by
any duly authorized officer of the Company.  Any action by a
Trust Beneficiary shall be in writing.  The Trustee may rely on,
and will be fully protected with respect to any such action taken
or omitted in reliance on any information, order, request,
direction, instruction, approval, objection, or list delivered to
the Trustee by the Company or, to the extent applicable under
this Trust Agreement, by a Trust Beneficiary.

              SECTION 17.  Miscellaneous Provisions

          17.1  This Trust Agreement shall be binding upon and
inure to the benefit of the Company and the Trustee and their
respective successors and assigns.

          17.2  The Trustee assumes no obligation or
responsibility with respect to any action required by this Trust
Agreement on the part of the Company.

          17.3(a)  The Company shall pay and shall protect,
indemnify and save harmless the Trustee and his employees and
agents from and against any and all losses, liabilities
(including liabilities for penalties), actions, suits, judgments,
demands, damages, reasonable costs and reasonable expenses
(including, without limitation, attorney's fees and expenses) of
any nature arising from or relating to any action or failure to
act by the Trustee, his employees and agents or the transactions
contemplated by this Trust Agreement, including, but not limited
to, any claim made by a Trust Beneficiary with respect to
payments made or to be made by the Trustee, any claim made by the
Company or its successor, whether pursuant to a sale of assets,
merger, consolidation, liquidation or otherwise, that this Trust
Agreement is invalid or ultra vires, except to the extent that
any such loss, liability, action, suit, judgment, demand, damage,
cost or expense is the result of the negligence or willful
misconduct of the Trustee, his employees or agents.

          17.3(b)  The Trustee will be under no duties
whatsoever, except such duties as are specifically set forth as
such in this Trust Agreement, and no implied covenant or
obligation will be read into this Trust Agreement against the
Trustee.  The Trustee will not be compelled to take any action
toward the execution or enforcement of the Trust or to prosecute
or defend any suit in respect thereof, unless indemnified to his
satisfaction against loss, reasonable cost, liability and
reasonable expense; and the Trustee will be under no liability or
obligation to anyone with respect to any failure on the part of
the Company or the Committee to perform any of their respective
obligations.

          17.4  Titles to the Sections of this Trust Agreement
are included for convenience only and shall not control the
meaning or interpretation of any provision of this Trust
Agreement.

          17.5  This Trust Agreement and the Trust established
hereunder shall be governed by and construed, enforced, and
administered in accordance with the laws of the State of New York
and the Trustee shall be liable to account only in the courts of
the State of New York.

          17.6  This Trust Agreement may be executed in any
number of counterparts, each of which shall be deemed to be the
original although the others are not produced.

          IN WITNESS WHEREOF, this amended and restated Trust
Agreement has been duly executed by the parties hereto as of the
day and year first above written.

                                   ACME ELECTRIC CORPORATION
WITNESS:

/s/ Maryann J. Graf                By:  /s/ Randall L. Clark

WITNESS:

/s/ Sonia M. Dolegala                   /s/ John B. Drenning
                                        ________________, as Trustee

                            EXHIBIT A

                            Executives

1.   Robert J.  McKenna

2.   Daniel Corwin

BFLODOCS:363697_1 (7SMP01)

                            EXHIBIT B

                      Investment Guidelines

          U.S. Treasury Bills, Notes or Bonds, U.S. Government
Agency issues, notes and other fixed income securities issued by
State and local governments, time deposits, certificates of
deposit, commercial paper, bankers' acceptances, repurchase
agreements and pooled short-term investment funds.

_______________________________
1Operator Auto #:

Level 2 = 1.

1.1 and (a) are automatic

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