Document:

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                                                                     EXHIBIT 4.2

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                                RIGHTS AGREEMENT

                           Dated as of March 23, 2001

                                 By and Between

                               Flowers Foods, Inc.

                                       and

                           First Union National Bank,
                                 as Rights Agent

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                                TABLE OF CONTENTS

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<S>   <C>                                                                                                       <C>
1.    Certain Definitions.........................................................................................1

2.    Appointment of Rights Agent.................................................................................5

3.    Issue of Right Certificates.................................................................................5

4.    Form of Right Certificates..................................................................................7

5.    Countersignature and Registration...........................................................................7

6.    Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
         Destroyed, Lost or Stolen Right Certificates.............................................................8

7.    Exercise of Rights; Purchase Price; Expiration Date of Rights...............................................8

8.    Cancellation and Destruction of Right Certificates..........................................................9

9.    Company Covenants Concerning Securities and Rights.........................................................10

10.   Record Date................................................................................................11

11.   Adjustment of Purchase Price, Number and Kind of Securities or Number of Rights............................12

12.   Certificate of Adjusted Purchase Price or Number of Securities.............................................20

13.   Consolidation, Merger or Sale or Transfer of Assets or Earning Power.......................................20

14.   Fractional Rights and Fractional Securities................................................................22

15.   Rights of Action...........................................................................................24

16.   Agreement of Rights Holders................................................................................24

17.   Right Certificate Holder Not Deemed a Shareholder..........................................................25

18.   Concerning the Rights Agent................................................................................25

19.   Merger or Consolidation or Change of Name of Rights Agent..................................................26

20.   Duties of Rights Agent.....................................................................................26

21.   Change of Rights Agent.....................................................................................28

22.   Issuance of New Right Certificates.........................................................................29
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<TABLE>
<S>   <C>                                                                                                      <C>
23.   Redemption.................................................................................................30

24.   Exchange...................................................................................................31

25.   Notice of Certain Events...................................................................................32

26.   Notices....................................................................................................32

27.   Supplements and Amendments.................................................................................33

28.   Successors; Certain Covenants..............................................................................34

29.   Benefits of This Agreement.................................................................................34

30.   Governing Law..............................................................................................34

31.   Severability...............................................................................................34

32.   Descriptive Headings, Etc..................................................................................34

33.   Determinations and Actions by the Directors................................................................34

34.   Counterparts...............................................................................................35

Exhibit A.......................................................................................................A-1

Exhibit B.......................................................................................................B-1

Exhibit C.......................................................................................................C-1
</TABLE>

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                                RIGHTS AGREEMENT

         This RIGHTS AGREEMENT, dated as of March 23, 2001 (this "Agreement"),
is made and entered into by and between Flowers Foods, Inc., a Georgia
corporation (the "Company"), and First Union National Bank (the "Rights Agent").

                                    RECITALS

         WHEREAS, on March 23, 2001, the Directors of the Company authorized and
declared a dividend distribution of one right (a "Right") for each share of
Common Stock, par value $.01 per share, of the Company (a "Common Share")
outstanding as of the Close of Business (as hereinafter defined) on March 26,
2001 (the "Record Date"), each Right initially representing the right to
purchase one thousandth of a Preferred Share (as hereinafter defined), on the
terms and subject to the conditions herein set forth, and further authorized and
directed the issuance of one Right (subject to adjustment as provided herein)
with respect to each Common Share issued or delivered by the Company (whether
originally issued or delivered from the Company's treasury) after the Record
Date but prior to the earlier of the Distribution Date (as hereinafter defined)
and the Expiration Date (as hereinafter defined) or as provided in Section 22.
Notwithstanding anything in this Agreement to the contrary, this Agreement shall
not take effect until the Close of Business on March 26, 2001.

         NOW, THEREFORE, in consideration of the mutual agreements herein set
forth, the parties hereto hereby agree as follows:

         1. Certain Definitions. For purposes of this Agreement, the following
terms have the meanings indicated:

                  (a) "Acquiring Person" means any Person (other than the
Company or any Related Person) who or which, together with all Affiliates and
Associates of such Person, is the Beneficial Owner of 15% or more of the
then-outstanding Common Shares; provided, however, that a Person will not be
deemed to have become an Acquiring Person solely as a result of a reduction in
the number of Common Shares outstanding unless and until such time as (i) such
Person or any Affiliate or Associate of such Person thereafter becomes the
Beneficial Owner of additional Common Shares representing 1% or more of the
then-outstanding Common Shares, other than as a result of a stock dividend,
stock split or similar transaction effected by the Company in which all holders
of Common Shares are treated equally, or (ii) any other Person who is the
Beneficial Owner of Common Shares representing 1% or more of the
then-outstanding Common Shares thereafter becomes an Affiliate or Associate of
such Person. Notwithstanding the foregoing, (i) the term "Acquiring Person"
shall not include Flowers Industries, Inc. prior to the distribution of the
Common Shares; and (ii) if the Continuing Directors of the Company determine in
good faith that a Person who would otherwise be an "Acquiring Person" as defined
pursuant to the foregoing provisions of this paragraph (a), has become such
inadvertently, and such Person divests as promptly as practicable a sufficient
number of Common Shares so that such Person would no longer be an "Acquiring
Person" as defined pursuant to the foregoing provisions of this paragraph (a),
then such Person shall not be deemed to be an "Acquiring Person" for any
purposes of this Agreement.

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                  (b) "Affiliate" and "Associate" will have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the date of this Agreement,
provided, however, that a Person will not be deemed to be an Affiliate or
Associate of another Person solely because either or both Persons are or were
Directors of the Company.

                  (c) A Person will be deemed the "Beneficial Owner" of, and to
"Beneficially Own," any securities:

                           (i) which such Person or any of such Person's
         Affiliates or Associates beneficially owns, directly or indirectly;

                           (ii) the beneficial ownership of which such Person or
         any of such Person's Affiliates or Associates, directly or indirectly,
         has the right to acquire (whether such right is exercisable immediately
         or only after the passage of time) pursuant to any agreement,
         arrangement or understanding (whether or not in writing), or upon the
         exercise of conversion rights, exchange rights, warrants, options or
         other rights (in each case, other than upon exercise or exchange of the
         Rights); provided, however, that a Person will not be deemed the
         Beneficial Owner of, or to Beneficially Own, securities tendered
         pursuant to a tender or exchange offer made by or on behalf of such
         Person or any of such Person's Affiliates or Associates until such
         tendered securities are accepted for purchase or exchange; or

                           (iii) which such Person or any of such Person's
         Affiliates or Associates, directly or indirectly, has or shares the
         right to vote or dispose of, including pursuant to any agreement,
         arrangement or understanding (whether or not in writing); or

                           (iv) of which any other Person is the Beneficial
         Owner, if such Person or any of such Person's Affiliates or Associates
         has any agreement, arrangement or understanding (whether or not in
         writing) with such other Person (or any of such other Person's
         Affiliates or Associates) with respect to acquiring, holding, voting or
         disposing of any securities of the Company;

provided, however, that a Person will not be deemed the Beneficial Owner of, or
to Beneficially Own, any security (A) if such Person has the right to vote such
security pursuant to an agreement, arrangement or understanding (whether or not
in writing) which (1) arises solely from a revocable proxy given to such Person
in response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of the Exchange Act and
(2) is not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report), or (B) if such beneficial ownership arises
solely as a result of such Person's status as a "clearing agency," as defined in
Section 3(a)(23) of the Exchange Act; provided further, however, that nothing in
this paragraph (c) will cause a Person engaged in business as an underwriter of
securities to be the Beneficial Owner of, or to Beneficially Own, any securities
acquired through such Person's participation in good faith in an underwriting
syndicate until the expiration of 40 calendar days after the date of such
acquisition, or such later date as the Continuing Directors of the Company may
determine in any specific case.

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                  (d) "Business Day" means any day other than a Saturday, Sunday
or a day on which banking institutions in the State of Georgia (or such other
state in which the principal office of the Rights Agent is located) are
authorized or obligated by law or executive order to close.

                  (e) "Close of Business" on any given date means 5:00 P.M.,
Atlanta time, on such date; provided, however, that if such date is not a
Business Day it means 5:00 P.M., Atlanta time, on the next succeeding Business
Day.

                  (f) "Common Shares" when used with reference to the Company
means the shares of Common Stock, par value $.01 per share, of the Company;
provided, however, that, if the Company is the continuing or surviving
corporation in a transaction described in Section 13(a)(ii), "Common Shares"
when used with reference to the Company means shares of the capital stock or
units of the equity interests with the greatest aggregate voting power of the
Company. "Common Shares" when used with reference to any corporation or other
legal entity other than the Company, including an Issuer, means shares of the
capital stock or units of the equity interests with the greatest aggregate
voting power of such corporation or other legal entity.

                  (g) "Company" means Flowers Foods, Inc., a Georgia
corporation.

                  (h) "Continuing Director" shall mean (i) any member of the
Board of Directors of the Company, while such Person is a member of the Board,
who is not an Acquiring Person, or an Affiliate or Associate of an Acquiring
Person, or a representative of an Acquiring Person or of any such Affiliate or
Associate, and was a member of the Board prior to the date of this Agreement, or
(ii) any Person who subsequently becomes a member of the Board, while such
Person is a member of the Board, who is not an Acquiring Person, or an Affiliate
or Associate of an Acquiring Person, or a representative of an Acquiring Person
or of any such Affiliate or Associate, if such Person's nomination for election
or election to the Board is recommended or approved by a majority of the
Continuing Directors.

                  (i) "Distribution Date" means the earlier of: (i) the Close of
Business on the tenth calendar day following the Share Acquisition Date, or (ii)
the Close of Business on the tenth Business Day (or, unless the Distribution
Date shall have previously occurred, such later date as may be specified by the
Continuing Directors of the Company) after the commencement of a tender or
exchange offer by any Person (other than the Company or any Related Person), if
upon the consummation thereof such Person would be the Beneficial Owner of 15%
or more of the then-outstanding Common Shares.

                  (j) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.

                  (k) "Expiration Date" means the earliest of (i) the Close of
Business on the Final Expiration Date, (ii) the time at which the Rights are
redeemed as provided in Section 23, and (iii) the time at which all exercisable
Rights are exchanged as provided in Section 24.

                  (l) "Final Expiration Date" means the tenth anniversary of the
Record Date.

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                  (m) "Flip-in Event" means any event described in clauses (A),
(B) or (C) of Section 11(a)(ii).

                  (n) "Flip-over Event" means any event described in clauses
(i), (ii) or (iii) of Section 13(a).

                  (o) "Issuer" has the meaning set forth in Section 13(b).

                  (p) "Nasdaq" means The NASDAQ Stock Market.

                  (q) "Person" means any individual, firm, corporation or other
legal entity, and includes any successor (by merger or otherwise) of such
entity.

                  (r) "Preferred Shares" means shares of Series A Junior
Participating Preferred Stock, par value $100 per share, of the Company having
the rights and preferences as set forth in Exhibit A.

                  (s) "Purchase Price" means initially $80.00 per one thousandth
of a Preferred Share, subject to adjustment from time to time as provided in
this Agreement.

                  (t) "Record Date" has the meaning set forth in the Recitals to
this Agreement.

                  (u) "Redemption Price" means $.01 per Right, subject to
adjustment by resolution of the Directors of the Company to reflect any stock
split, stock dividend or similar transaction occurring after the Record Date.

                  (v) "Related Person" means (i) any Subsidiary of the Company
or (ii) any employee benefit or stock ownership plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or pursuant to
the terms of any such plan.

                  (w) "Right" has the meaning set forth in the Recitals to this
Agreement.

                  (x) "Right Certificates" means certificates evidencing the
Rights, in substantially the form attached as Exhibit B.

                  (y) "Rights Agent" means First Union National Bank, unless and
until a successor Rights Agent has become such pursuant to the terms of this
Agreement, and thereafter, "Rights Agent" means such successor Rights Agent.

                  (z) "Securities Act" means the Securities Act of 1933, as
amended.

                  (aa) "Share Acquisition Date" means the first date of public
announcement by the Company (by press release, filing made with the Securities
and Exchange Commission or otherwise) that an Acquiring Person has become such.

                  (bb) "Subsidiary" when used with reference to any Person means
any corporation or other legal entity of which a majority of the voting power of
the voting equity securities or equity interests is owned, directly or
indirectly, by such Person; provided, however,

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that for purposes of Section 13(b), "Subsidiary" when used with reference to any
Person means any corporation or other legal entity of which at least 20% of the
voting power of the voting equity securities or equity interests is owned,
directly or indirectly, by such Person.

                  (cc) "Trading Day" means any day on which the principal
national securities exchange on which the Common Shares are listed or admitted
to trading is open for the transaction of business or, if the Common Shares are
not listed or admitted to trading on any national securities exchange, a
Business Day.

                  (dd) "Triggering Event" means any Flip-in Event or Flip-over
Event.

         2. Appointment of Rights Agent. The Company hereby appoints the Rights
Agent to act as agent for the Company and the holders of the Rights (who, in
accordance with Section 3, will also be, prior to the Distribution Date, the
holders of the Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment and hereby
certifies that it complies with the requirements of the New York Stock Exchange
governing transfer agents and registrars. The Company may from time to time act
as Co-Rights Agent or appoint such Co-Rights Agents as it may deem necessary or
desirable. Any actions which may be taken by the Rights Agent pursuant to the
terms of this Agreement may be taken by any such Co-Rights Agent. To the extent
that any Co-Rights Agent takes any action pursuant to this Agreement, such
Co-Rights Agent will be entitled to all of the rights and protections of, and
subject to all of the applicable duties and obligations imposed upon, the Rights
Agent pursuant to the terms of this Agreement. The Rights Agent shall have no
duty to supervise, and shall in no event be liable for, the acts or omissions of
any such Co-Rights Agent. In the event the Company appoints one or more
Co-Rights Agents, the respective duties of the Rights Agent and any Co-Rights
Agents will be as the Company may determine.

         3. Issue of Right Certificates.

                  (a) Until the Distribution Date, (i) the Rights will be
evidenced by the certificates representing Common Shares registered in the names
of the record holders thereof (which certificates representing Common Shares
will also be deemed to be Right Certificates), (ii) the Rights will be
transferable only in connection with the transfer of the underlying Common
Shares, and (iii) the surrender for transfer of any certificates evidencing
Common Shares in respect of which Rights have been issued will also constitute
the transfer of the Rights associated with the Common Shares evidenced by such
certificates. On or as promptly as practicable after the Record Date, the
Company will send by first class, postage prepaid mail, to each record holder of
Common Shares as of the Close of Business on the Record Date, at the address of
such holder shown on the records of the Company as of such date, a copy of a
Summary of Rights to Purchase Preferred Stock in substantially the form attached
as Exhibit C.

                  (b) Rights will be issued by the Company in respect of all
Common Shares (other than Common Shares issued upon the exercise or exchange of
any Right) issued or delivered by the Company (whether originally issued or
delivered from the Company's treasury) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date. Certificates
evidencing such Common Shares will have stamped on, impressed on, printed on,
written on, or otherwise affixed to them the following legend or such similar
legend as the Company may deem

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appropriate and as is not inconsistent with the provisions of this Agreement, or
as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange or transaction reporting system on which the Common Shares may from
time to time be listed or quoted, or to conform to usage:

         This Certificate also evidences and entitles the holder
         hereof to certain Rights as set forth in a Rights Agreement
         between Flowers Foods, Inc. and First Union National Bank,
         dated as of March 23, 2001 (the "Rights Agreement"), the
         terms of which are hereby incorporated herein by reference
         and a copy of which is on file at the principal executive
         offices of Flowers Foods, Inc. The Rights are not exercisable
         prior to the occurrence of certain events specified in the
         Rights Agreement. Under certain circumstances, as set forth
         in the Rights Agreement, such Rights may be redeemed, may be
         exchanged, may expire, may be amended, or may be evidenced by
         separate certificates and no longer be evidenced by this
         Certificate. Flowers Foods, Inc. will mail to the holder of
         this Certificate a copy of the Rights Agreement, as in effect
         on the date of mailing, without charge promptly after receipt
         of a written request therefor. Under certain circumstances as
         set forth in the Rights Agreement, Rights that are or were
         beneficially owned by an Acquiring Person or any Affiliate or
         Associate of an Acquiring Person (as such terms are defined
         in the Rights Agreement) may become null and void.

                  (c) Any Right Certificate issued pursuant to this Section 3
that represents Rights beneficially owned by an Acquiring Person or any
Associate or Affiliate thereof and any Right Certificate issued at any time upon
the transfer of any Rights to an Acquiring Person or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or Affiliate and
any Right Certificate issued pursuant to Section 6 or 11 hereof upon transfer,
exchange, replacement or adjustment of any other Right Certificate referred to
in this sentence, shall be subject to and contain the following legend or such
similar legend as the Company may deem appropriate and as is not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage:

         The Rights represented by this Right Certificate are or were
         beneficially owned by a Person who was an Acquiring Person or
         an Affiliate or an Associate of an Acquiring Person (as such
         terms are defined in the Rights Agreement). This Right
         Certificate and the Rights represented hereby may become null
         and void in the circumstances specified in Section 11(a)(ii)
         or Section 13 of the Rights Agreement.

                  (d) As promptly as practicable after the Distribution Date,
the Company will prepare and execute, the Rights Agent will countersign and the
Company will send or cause to be

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sent (and the Rights Agent will, if requested, send), by first class, insured,
postage prepaid mail, to each record holder of Common Shares as of the Close of
Business on the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate evidencing one Right for each Common
Share so held, subject to adjustment as provided herein. As of and after the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.

                  (e) In the event that the Company purchases or otherwise
acquires any Common Shares after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Shares will be deemed canceled and
retired so that the Company will not be entitled to exercise any Rights
associated with the Common Shares so purchased or acquired.

         4. Form of Right Certificates. The Right Certificates (and the form of
election to purchase and the form of assignment to be printed on the reverse
thereof) will be substantially in the form attached as Exhibit B with such
changes and marks of identification or designation, and such legends, summaries
or endorsements printed thereon, as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or transaction
reporting system on which the Rights may from time to time be listed or quoted,
or to conform to usage. Subject to the provisions of Section 22, the Right
Certificates, whenever issued, on their face will entitle the holders thereof to
purchase such number of one thousandths of a Preferred Share as are set forth
therein at the Purchase Price set forth therein, but the Purchase Price, the
number and kind of securities issuable upon exercise of each Right and the
number of Rights outstanding will be subject to adjustment as provided herein.

         5. Countersignature and Registration.

                  (a) The Right Certificates will be executed on behalf of the
Company by its Chairman, its President or any Vice President, either manually or
by facsimile signature, and will have affixed thereto the Company's seal or a
facsimile thereof which will be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates will be manually countersigned by the Rights Agent and will not be
valid for any purpose unless so countersigned. In case any officer of the
Company who signed any of the Right Certificates ceases to be such officer of
the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered by the Company with
the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate, is a proper officer of
the Company to sign such Right Certificate, although at the date of the
execution of this Rights Agreement any such person was not such officer.

                  (b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at the principal office of the Rights Agent designated
for such purpose and at such other offices as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange or any transaction reporting system on
which the Rights may from time to time be listed or quoted, books for

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registration and transfer of the Right Certificates issued hereunder. Such books
will show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.

         6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates.

                  (a) Subject to the provisions of Sections 7(d) and 14, at any
time after the Close of Business on the Distribution Date and prior to the
Expiration Date, any Right Certificate or Right Certificates representing
exercisable Rights may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the registered holder
to purchase a like number of one thousandths of a Preferred Share (or other
securities, as the case may be) as the Right Certificate or Right Certificates
surrendered then entitled such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any such Right Certificate or Rights Certificates must make
such request in a writing delivered to the Rights Agent and must surrender the
Right Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the principal office of the Rights Agent designated for such
purpose. Thereupon or as promptly as practicable thereafter, subject to the
provisions of Sections 7(d) and 14, the Company will prepare, execute and
deliver to the Rights Agent, and the Rights Agent will countersign and deliver,
a Right Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates.

                  (b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, if requested by the
Company, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will prepare,
execute and deliver a new Right Certificate of like tenor to the Rights Agent
and the Rights Agent will countersign and deliver such new Right Certificate to
the registered holder in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.

         7. Exercise of Rights; Purchase Price; Expiration Date of Rights.

                  (a) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein) in
whole or in part at any time after the Distribution Date and prior to the
Expiration Date, upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the Rights
Agent at the office or offices of the Rights Agent designated for such purpose,
together with payment in cash, in lawful money of the United States of America
by certified check or bank draft payable to the order of the Company, equal to
the sum of (i) the exercise price for the total number of securities as to which
such surrendered Rights are exercised and (ii) an amount equal to any applicable
transfer tax required to be paid by the holder of such Right Certificate in
accordance with the provisions of Section 9(d).

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                  (b) Upon receipt of a Right Certificate representing
exercisable Rights with the form of election to purchase duly executed,
accompanied by payment as described above, the Rights Agent will promptly (i)
requisition from any transfer agent of the Preferred Shares (or make available,
if the Rights Agent is the transfer agent) certificates representing the number
of one thousandths of a Preferred Share to be purchased (and the Company hereby
irrevocably authorizes and directs its transfer agent to comply with all such
requests), or, if the Company elects to deposit Preferred Shares issuable upon
exercise of the Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such number of one thousandths
of a Preferred Share as are to be purchased (and the Company hereby irrevocably
authorizes and directs such depositary agent to comply with all such requests),
(ii) after receipt of such certificates (or depositary receipts, as the case may
be), cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may be
designated by such holder, (iii) when appropriate, requisition from the Company
or any transfer agent therefor (or make available, if the Rights Agent is the
transfer agent) certificates representing the number of equivalent common shares
to be issued in lieu of the issuance of Common Shares in accordance with the
provisions of Section 11(a)(iii), (iv) when appropriate, after receipt of such
certificates, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names as
may be designated by such holder, (v) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of the issuance of fractional
shares in accordance with the provisions of Section 14 or in lieu of the
issuance of Common Shares in accordance with the provisions of Section
11(a)(iii), (vi) when appropriate, after receipt, deliver such cash to or upon
the order of the registered holder of such Right Certificate, and (vii) when
appropriate, deliver any due bill or other instrument provided to the Rights
Agent by the Company for delivery to the registered holder of such Right
Certificate as provided by Section 11(l).

                  (c) In case the registered holder of any Right Certificate
exercises less than all the Rights evidenced thereby, the Company will prepare,
execute and deliver a new Right Certificate evidencing Rights equivalent to the
Rights remaining unexercised and the Rights Agent will countersign and deliver
such new Right Certificate to the registered holder of such Right Certificate or
to his duly authorized assigns, subject to the provisions of Section 14.

                  (d) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company will be obligated to
undertake any action with respect to any purported transfer, split up,
combination or exchange of any Right Certificate pursuant to Section 6 or
exercise of a Right Certificate as set forth in this Section 7 unless the
registered holder of such Right Certificate has (i) completed and signed the
certificate following the form of assignment or the form of election to
purchase, as applicable, set forth on the reverse side of the Right Certificate
surrendered for such transfer, split up, combination, exchange or exercise and
(ii) provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
may reasonably request.

         8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange will, if surrendered to the Company or to any of its
stock transfer agents, be delivered to the Rights Agent for cancellation or in
canceled form, or, if surrendered to the Rights Agent, will be canceled by it,
and no Right Certificates will be issued in lieu thereof except as expressly
permitted by the provisions of this

                                       9
<PAGE>   13

Agreement. The Company will deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent will so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent will deliver all canceled Right Certificates
to the Company, or will, at the written request of the Company, destroy such
canceled Right Certificates, and in such case will deliver a certificate of
destruction thereof to the Company.

         9. Company Covenants Concerning Securities and Rights. The Company
covenants and agrees that:

                  (a) It will cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury, a number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with Section 7.

                  (b) So long as the Preferred Shares (and, following the
occurrence of a Triggering Event, Common Shares and/or other securities)
issuable upon the exercise of the Rights may be listed on a national securities
exchange, or quoted on Nasdaq, it will endeavor to cause, from and after such
time as the Rights become exercisable, all securities reserved for issuance upon
the exercise of Rights to be listed on such exchange, or quoted on Nasdaq, upon
official notice of issuance upon such exercise.

                  (c) It will take all such action as may be necessary to ensure
that all Preferred Shares (and, following the occurrence of a Triggering Event,
Common Shares and/or other securities) delivered upon exercise of Rights, at the
time of delivery of the certificates for such securities, will be (subject to
payment of the Purchase Price) duly authorized, validly issued, fully paid and
nonassessable securities.

                  (d) It will pay when due and payable any and all federal and
state transfer taxes and charges that may be payable in respect of the issuance
or delivery of the Right Certificates and of any certificates representing
securities issued upon the exercise of Rights; provided, however, that the
Company will not be required to pay any transfer tax or charge which may be
payable in respect of any transfer or delivery of Right Certificates to a person
other than, or the issuance or delivery of certificates or depositary receipts
representing securities issued upon the exercise of Rights in a name other than
that of, the registered holder of the Right Certificate evidencing Rights
surrendered for exercise, or to issue or deliver any certificates or depositary
receipts representing securities issued upon the exercise of any Rights until
any such tax or charge has been paid (any such tax or charge being payable by
the holder of such Right Certificate at the time of surrender) or until it has
been established to the Company's reasonable satisfaction that no such tax is
due.

                  (e) It will use its best efforts (i) to file on an appropriate
form, as soon as practicable following the later of the Share Acquisition Date
and the Distribution Date, a registration statement under the Securities Act
with respect to the securities issuable upon exercise of the Rights, (ii) to
cause such registration statement to become effective as soon as practicable
after such filing, and (iii) to cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of

                                       10
<PAGE>   14

(A) the date as of which the Rights are no longer exercisable for such
securities and (B) the Expiration Date. The Company will also take such action
as may be appropriate under, or to ensure compliance with, the securities or
"blue sky" laws of the various states in connection with the exercisability of
the Rights. The Company may temporarily suspend, for a period of time after the
date set forth in clause (i) of the first sentence of this Section 9(e), the
exercisability of the Rights in order to prepare and file such registration
statement and to permit it to become effective. Upon any such suspension, the
Company will issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. In addition, if the Company
determines that a registration statement should be filed under the Securities
Act or any state securities laws following the Distribution Date, the Company
may temporarily suspend the exercisability of the Rights in each relevant
jurisdiction until such time as a registration statement has been declared
effective and, upon any such suspension, the Company will issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect. Notwithstanding anything in this Agreement to the contrary,
the Rights will not be exercisable in any jurisdiction if the requisite
registration or qualification in such jurisdiction has not been effected or the
exercise of the Rights is not permitted under applicable law.

                  (f) Notwithstanding anything in this Agreement to the
contrary, after the later of the Share Acquisition Date and the Distribution
Date it will not take (or permit any Subsidiary to take) any action if at the
time such action is taken it is reasonably foreseeable that such action will
eliminate or otherwise diminish the benefits intended to be afforded by the
Rights.

                  (g) In the event that the Company is obligated to issue other
securities of the Company and/or pay cash pursuant to Section 11, 13, 14 or 24
it will make all arrangements necessary so that such other securities and/or
cash are available for distribution by the Rights Agent, if and when
appropriate.

         10. Record Date. Each Person in whose name any certificate representing
Preferred Shares (or Common Shares and/or other securities, as the case may be)
is issued upon the exercise of Rights will for all purposes be deemed to have
become the holder of record of the Preferred Shares (or Common Shares and/or
other securities, as the case may be) represented thereby on, and such
certificate will be dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase Price (and all
applicable transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the transfer books of the Company for
the Preferred Shares (or Common Shares and/or other securities, as the case may
be) are closed, such Person will be deemed to have become the record holder of
such securities on, and such certificate will be dated, the next succeeding
Business Day on which the transfer books of the Company for the Preferred Shares
(or Common Shares and/or other securities, as the case may be) are open. Prior
to the exercise of the Rights evidenced thereby, the holder of a Right
Certificate will not be entitled to any rights of a holder of any security for
which the Rights are or may become exercisable, including, without limitation,
the right to vote, to receive dividends or other distributions, or to exercise
any preemptive rights, and will not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.

                                       11
<PAGE>   15

         11. Adjustment of Purchase Price, Number and Kind of Securities or
Number of Rights. The Purchase Price, the number and kind of securities issuable
upon exercise of each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.

                  (a) (i) In the event that the Company at any time after the
         Record Date (A) declares a dividend on the Preferred Shares payable in
         Preferred Shares, (B) subdivides the outstanding Preferred Shares, (C)
         combines the outstanding Preferred Shares into a smaller number of
         Preferred Shares, or (D) issues any shares of its capital stock in a
         reclassification of the Preferred Shares (including any such
         reclassification in connection with a consolidation or merger in which
         the Company is the continuing or surviving corporation), except as
         otherwise provided in this Section 11(a), the Purchase Price in effect
         at the time of the record date for such dividend or of the effective
         date of such subdivision, combination or reclassification and/or the
         number and/or kind of shares of capital stock issuable on such date
         upon exercise of a Right, will be proportionately adjusted so that the
         holder of any Right exercised after such time is entitled to receive
         upon payment of the Purchase Price then in effect the aggregate number
         and kind of shares of capital stock which, if such Right had been
         exercised immediately prior to such date and at a time when the
         transfer books of the Company for the Preferred Shares were open, the
         holder of such Right would have owned upon such exercise (and, in the
         case of a reclassification, would have retained after giving effect to
         such reclassification) and would have been entitled to receive by
         virtue of such dividend, subdivision, combination or reclassification;
         provided, however, that in no event shall the consideration to be paid
         upon the exercise of one Right be less than the aggregate par value of
         the shares of capital stock issuable upon exercise of one Right. If an
         event occurs which would require an adjustment under both this Section
         11(a)(i) and Section 11(a)(ii) or Section 13, the adjustment provided
         for in this Section 11(a)(i) will be in addition to, and will be made
         prior to, any adjustment required pursuant to Section 11(a)(ii) or
         Section 13.

                      (ii) Subject to the provisions of Section 24, if:

                                    (A) any Person becomes an Acquiring Person;
                  or

                                    (B) any Acquiring Person or any Affiliate or
                  Associate of any Acquiring Person, directly or indirectly, (1)
                  merges into the Company or otherwise combines with the Company
                  and the Company is the continuing or surviving corporation of
                  such merger or combination (other than in a transaction
                  subject to Section 13), (2) merges or otherwise combines with
                  any Subsidiary of the Company, (3) in one or more transactions
                  (otherwise than in connection with the exercise, exchange or
                  conversion of securities exercisable or exchangeable for or
                  convertible into shares of any class of capital stock of the
                  Company or any of its Subsidiaries) transfers cash, securities
                  or any other property to the Company or any of its
                  Subsidiaries in exchange (in whole or in part) for shares of
                  any class of capital stock of the Company or any of its
                  Subsidiaries or for securities exercisable or exchangeable for
                  or convertible into shares of any class of capital stock of
                  the Company or any of its Subsidiaries, or otherwise obtains
                  from the Company or any of its Subsidiaries, with or without
                  consideration, any additional

                                       12
<PAGE>   16

                  shares of any class of capital stock of the Company or any of
                  its Subsidiaries or securities exercisable or exchangeable for
                  or convertible into shares of any class of capital stock of
                  the Company or any of its Subsidiaries (otherwise than as part
                  of a pro rata distribution to all holders of shares of any
                  class of capital stock of the Company, or any of its
                  Subsidiaries), (4) sells, purchases, leases, exchanges,
                  mortgages, pledges, transfers or otherwise disposes (in one or
                  more transactions) to, from, with or of, as the case may be,
                  the Company or any of its Subsidiaries (otherwise than in a
                  transaction subject to Section 13), any property, including
                  securities, on terms and conditions less favorable to the
                  Company than the Company would be able to obtain in an
                  arm's-length transaction with an unaffiliated third party, (5)
                  receives any compensation from the Company or any of its
                  Subsidiaries other than compensation as a director or a
                  regular full-time employee, in either case at rates consistent
                  with the Company's (or its Subsidiaries') past practices, or
                  (6) receives the benefit, directly or indirectly (except
                  proportionately as a shareholder), of any loans, advances,
                  guarantees, pledges or other financial assistance or any tax
                  credits or other tax advantage provided by the Company or any
                  of its Subsidiaries; or

                                    (C) during such time as there is an
                  Acquiring Person, there is any reclassification of securities
                  of the Company (including any reverse stock split), or any
                  recapitalization of the Company, or any merger or
                  consolidation of the Company with any of its Subsidiaries, or
                  any other transaction or series of transactions involving the
                  Company or any of its Subsidiaries (whether or not with or
                  into or otherwise involving an Acquiring Person), other than a
                  transaction subject to Section 13, which has the effect,
                  directly or indirectly, of increasing by more than 1% the
                  proportionate share of the outstanding shares of any class of
                  equity securities of the Company or any of its Subsidiaries,
                  or of securities exercisable or exchangeable for or
                  convertible into equity securities of the Company or any of
                  its Subsidiaries, of which an Acquiring Person, or any
                  Affiliate or Associate of any Acquiring Person, is the
                  Beneficial Owner;

         then, and in each such case, from and after the latest of the
         Distribution Date, the Share Acquisition Date and the date of the
         occurrence of such Flip-in Event, proper provision will be made so that
         each holder of a Right, except as provided below, will thereafter have
         the right to receive, upon exercise thereof in accordance with the
         terms of this Agreement at an exercise price per Right equal to the
         product of the then-current Purchase Price multiplied by the number of
         one thousandths of a Preferred Share for which a Right was exercisable
         immediately prior to the date of the occurrence of such Flip-in Event
         (or, if any other Flip-in Event shall have previously occurred, the
         product of the then-current Purchase Price multiplied by the number of
         one thousandths of a Preferred Share for which a Right was exercisable
         immediately prior to the date of the first occurrence of a Flip-in
         Event), in lieu of Preferred Shares, such number of Common Shares as
         equals the result obtained by (x) multiplying the then-current Purchase
         Price by the number of one thousandths of a Preferred Share for which a
         Right was exercisable immediately prior to the date of the occurrence
         of such Flip-in Event (or, if any other Flip-in Event shall have
         previously occurred, multiplying the then-current Purchase Price by the
         number of one thousandths of a Preferred Share for which a Right was
         exercisable

                                       13
<PAGE>   17

         immediately prior to the date of the first occurrence of a Flip-in
         Event), and dividing that product by (y) 50% of the current per share
         market price of the Common Shares (determined pursuant to Section
         11(d)) on the date of the occurrence of such Flip-in Event.
         Notwithstanding anything in this Agreement to the contrary, from and
         after the first occurrence of a Flip-in Event, any Rights that are
         Beneficially Owned by (A) any Acquiring Person (or any Affiliate or
         Associate of any Acquiring Person), (B) a transferee of any Acquiring
         Person (or any such Affiliate or Associate) who becomes a transferee
         after the occurrence of a Flip-in Event, or (C) a transferee of any
         Acquiring Person (or any such Affiliate or Associate) who became a
         transferee prior to or concurrently with the occurrence of a Flip-in
         Event pursuant to either (1) a transfer from an Acquiring Person to
         holders of its equity securities or to any Person with whom it has any
         continuing agreement, arrangement or understanding regarding the
         transferred Rights or (2) a transfer which a majority of the Continuing
         Directors of the Company have determined is part of a plan, arrangement
         or understanding which has the purpose or effect of avoiding the
         provisions of this Section 11(a)(ii), and subsequent transferees of any
         of such Persons, will be void without any further action and any holder
         of such Rights will thereafter have no rights whatsoever with respect
         to such Rights under any provision of this Agreement. The Company will
         use all reasonable efforts to ensure that the provisions of this
         Section 11(a)(ii) are complied with, but will have no liability to any
         holder of Right Certificates or any other Person as a result of its
         failure to make any determinations with respect to an Acquiring Person
         or its Affiliates, Associates or transferees hereunder. Upon the
         occurrence of a Flip-in Event, no Right Certificate that represents
         Rights that are or have become void pursuant to the provisions of this
         Section 11(a)(ii) will thereafter be issued pursuant to Section 3 or
         Section 6, and any Right Certificate delivered to the Rights Agent that
         represents Rights that are or have become void pursuant to the
         provisions of this Section 11(a)(ii) will be canceled. Upon the
         occurrence of a Flip-over Event, any Rights that shall not have been
         previously exercised pursuant to this Section 11(a)(ii) shall
         thereafter be exercisable only pursuant to Section 13 and not pursuant
         to this Section 11(a)(ii).

                           (iii) Upon the occurrence of a Flip-in Event, if
         there are not sufficient Common Shares authorized but unissued or
         issued but not outstanding to permit the issuance of all the Common
         Shares issuable in accordance with Section 11(a)(ii) upon the exercise
         of a Right, the Directors of the Company will use their best efforts
         promptly to authorize and, subject to the provisions of Section 9(e),
         make available for issuance additional Common Shares or other equity
         securities of the Company having equivalent voting rights and an
         equivalent value (as determined in good faith by the Directors of the
         Company) to the Common Shares (for purposes of this Section 11(a)(iii),
         "equivalent common shares"). In the event that equivalent common shares
         are so authorized, upon the exercise of a Right in accordance with the
         provisions of Section 7, the registered holder will be entitled to
         receive (A) Common Shares, to the extent any are available, and (B) a
         number of equivalent common shares, which the Directors of the Company
         have determined in good faith to have a value equivalent to the excess
         of (x) the aggregate current per share market value on the date of the
         occurrence of the most recent Flip-in Event of all the Common Shares
         issuable in accordance with Section 11(a)(ii) upon the exercise of a
         Right (the "Exercise Value") over (y) the aggregate current per share
         market value on the date of the occurrence of the most recent Flip-in
         Event of any Common

                                       14
<PAGE>   18

         Shares available for issuance upon the exercise of such Right;
         provided, however, that if at any time after 90 calendar days after the
         latest of the Share Acquisition Date, the Distribution Date and the
         date of the occurrence of the most recent Flip-in Event, there are not
         sufficient Common Shares and/or equivalent common shares available for
         issuance upon the exercise of a Right, then the Company will be
         obligated to deliver, upon the surrender of such Right and without
         requiring payment of the Purchase Price, Common Shares (to the extent
         available), equivalent common shares (to the extent available) and then
         cash (to the extent permitted by applicable law and any agreements or
         instruments to which the Company is a party in effect immediately prior
         to the Share Acquisition Date), which securities and cash have an
         aggregate value equal to the excess of (1) the Exercise Value over (2)
         the product of the then-current Purchase Price multiplied by the number
         of one thousandths of a Preferred Share for which a Right was
         exercisable immediately prior to the date of the occurrence of the most
         recent Flip-in Event (or, if any other Flip-in Event shall have
         previously occurred, the product of the then-current Purchase Price
         multiplied by the number of one thousandths of a Preferred Share for
         which a Right would have been exercisable immediately prior to the date
         of the occurrence of such Flip-in Event if no other Flip-in Event had
         previously occurred). To the extent that any legal or contractual
         restrictions prevent the Company from paying the full amount of cash
         payable in accordance with the foregoing sentence, the Company will pay
         to holders of the Rights as to which such payments are being made all
         amounts which are not then restricted on a pro rata basis and will
         continue to make payments on a pro rata basis as promptly as funds
         become available until the full amount due to each such Rights holder
         has been paid.

                  (b) In the event that the Company fixes a record date for the
issuance of rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Shares (or securities having
equivalent rights, privileges and preferences as the Preferred Shares (for
purposes of this Section 11(b), "equivalent preferred shares")) or securities
convertible into Preferred Shares or equivalent preferred shares at a price per
Preferred Share or equivalent preferred share (or having a conversion price per
share, if a security convertible into Preferred Shares or equivalent preferred
shares) less than the current per share market price of the Preferred Shares
(determined pursuant to Section 11(d)) on such record date, the Purchase Price
to be in effect after such record date will be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which is the number of Preferred Shares outstanding on such
record date plus the number of Preferred Shares which the aggregate offering
price of the total number of Preferred Shares and/or equivalent preferred shares
so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current per
share market price and the denominator of which is the number of Preferred
Shares outstanding on such record date plus the number of additional Preferred
Shares and/or equivalent preferred shares to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock issuable upon exercise of one
Right. In case such subscription price may be paid in a consideration part or
all of which is in a form other than cash, the value of such consideration will
be as determined in good faith by the Directors of the Company, whose
determination will be described in a statement filed with

                                       15
<PAGE>   19

the Rights Agent. Preferred Shares owned by or held for the account of the
Company will not be deemed outstanding for the purpose of any such computation.
Such adjustment will be made successively whenever such a record date is fixed,
and in the event that such rights, options or warrants are not so issued, the
Purchase Price will be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.

                  (c) In the event that the Company fixes a record date for the
making of a distribution to all holders of Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend), assets, stock
(other than a dividend payable in Preferred Shares) or subscription rights,
options or warrants (excluding those referred to in Section 11(b)), the Purchase
Price to be in effect after such record date will be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which is the current per share market price of the
Preferred Shares (as determined pursuant to Section 11(d)) on such record date
or, if earlier, the date on which Preferred Shares begin to trade on an
ex-dividend or when issued basis for such distribution, less the fair market
value (as determined in good faith by the Directors of the Company, whose
determination will be described in a statement filed with the Rights Agent) of
the portion of the evidences of indebtedness, cash, assets or stock so to be
distributed or of such subscription rights, options or warrants applicable to
one Preferred Share, and the denominator of which is such current per share
market price of the Preferred Shares; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock issuable upon exercise of one
Right. Such adjustments will be made successively whenever such a record date is
fixed; and in the event that such distribution is not so made, the Purchase
Price will again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.

                  (d) (i) For the purpose of any computation hereunder, the
         "current per share market price" of Common Shares on any date will be
         deemed to be the average of the daily closing prices per share of such
         Common Shares for the 30 consecutive Trading Days immediately prior to
         such date; provided, however, that in the event that the current per
         share market price of the Common Shares is determined during a period
         following the announcement by the issuer of such Common Shares of (A) a
         dividend or distribution on such Common Shares payable in such Common
         Shares or securities convertible into such Common Shares (other than
         the Rights) or (B) any subdivision, combination or reclassification of
         such Common Shares, and prior to the expiration of 30 Trading Days
         after the ex-dividend date for such dividend or distribution, or the
         record date for such subdivision, combination or reclassification,
         then, and in each such case, the current per share market price will be
         appropriately adjusted to take into account ex-dividend trading or to
         reflect the current per share market price per Common Share equivalent.
         The closing price for each day will be the last sale price, regular
         way, or, in case no such sale takes place on such day, the average of
         the closing bid and asked prices, regular way, in either case as
         reported in the principal consolidated transaction reporting system
         with respect to securities listed or admitted to trading on the New
         York Stock Exchange or, if the Common Shares are not listed or admitted
         to trading on the New York Stock Exchange, as reported in the principal
         consolidated transaction reporting system with respect to securities
         listed on the principal national securities exchange on which the

                                       16
<PAGE>   20

         Common Shares are listed or admitted to trading or, if the Common
         Shares are not listed or admitted to trading on any national securities
         exchange, the last quoted price or, if not so quoted, the average of
         the high bid and low asked prices in the over-the-counter market, as
         reported by Nasdaq or such other system then in use, or, if on any such
         date the Common Shares are not quoted by any such organization, the
         average of the closing bid and asked prices as furnished by a
         professional market maker making a market in the Common Shares selected
         by the Directors of the Company. If the Common Shares are not publicly
         held or not so listed or traded, or are not the subject of available
         bid and asked quotes, "current per share market price" will mean the
         fair value per share as determined in good faith by the Directors of
         the Company, whose determination will be described in a statement filed
         with the Rights Agent.

                           (ii) For the purpose of any computation hereunder,
         the "current per share market price" of the Preferred Shares will be
         determined in the same manner as set forth above for Common Shares in
         Section 11(d)(i), other than the last sentence thereof. If the current
         per share market price of the Preferred Shares cannot be determined in
         the manner provided above, the "current per share market price" of the
         Preferred Shares will be conclusively deemed to be an amount equal to
         the current per share market price of the Common Shares multiplied by
         one thousand (as such number may be appropriately adjusted to reflect
         events such as stock splits, stock dividends, recapitalizations or
         similar transactions relating to the Common Shares occurring after the
         date of this Agreement). If neither the Common Shares nor the Preferred
         Shares are publicly held or so listed or traded, or the subject of
         available bid and asked quotes, "current per share market price" of the
         Preferred Shares will mean the fair value per share as determined in
         good faith by the Directors of the Company, whose determination will be
         described in a statement filed with the Rights Agent. For all purposes
         of this Agreement, the current per share market price of one thousandth
         of a Preferred Share will be equal to the current per share market
         price of one Preferred Share divided by one thousand.

                  (e) Except as set forth below, no adjustment in the Purchase
Price will be required unless such adjustment would require an increase or
decrease of at least 1% in such price; provided, however, that any adjustments
which by reason of this Section 11(e) are not required to be made will be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 will be made to the nearest cent or to the
nearest one one-millionth of a Preferred Share or one ten-thousandth of a Common
Share or other security, as the case may be. Notwithstanding the first sentence
of this Section 11(e), any adjustment required by this Section 11 will be made
no later than the earlier of (i) three years from the date of the transaction
which requires such adjustment and (ii) the Expiration Date.

                  (f) If as a result of an adjustment made pursuant to Section
11(a), the holder of any Right thereafter exercised becomes entitled to receive
any securities of the Company other than Preferred Shares, thereafter the number
and/or kind of such other securities so receivable upon exercise of any Right
(and/or the Purchase Price in respect thereof) will be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Preferred Shares (and the Purchase Price
in respect thereof) contained in this Section 11, and the provisions of Sections
7, 9, 10, 13 and 14 with respect to the

                                       17
<PAGE>   21

Preferred Shares (and the Purchase Price in respect thereof) will apply on
like terms to any such other securities (and the Purchase Price in respect
thereof).

                  (g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder will evidence the right to
purchase, at the adjusted Purchase Price, the number of one thousandths of a
Preferred Share issuable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.

                  (h) Unless the Company has exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price pursuant to Section
11(b) or Section 11(c), each Right outstanding immediately prior to the making
of such adjustment will thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of one thousandths of a Preferred Share
(calculated to the nearest one one-millionth of a Preferred Share) obtained by
(i) multiplying (x) the number of one thousandths of a Preferred Share issuable
upon exercise of a Right immediately prior to such adjustment of the Purchase
Price by (y) the Purchase Price in effect immediately prior to such adjustment
of the Purchase Price and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase Price.

                  (i) The Company may elect, on or after the date of any
adjustment of the Purchase Price, to adjust the number of Rights in substitution
for any adjustment in the number of one thousandths of a Preferred Share
issuable upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights will be exercisable for the number of one
thousandths of a Preferred Share for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such adjustment of
the number of Rights will become that number of Rights (calculated to the
nearest one thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The Company will make
a public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. Such record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, will be at least 10 calendar days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company will, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to the
provisions of Section 14, the additional Rights to which such holders are
entitled as a result of such adjustment, or, at the option of the Company, will
cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof if required by the Company, new Right
Certificates evidencing all the Rights to which such holders are entitled after
such adjustment. Right Certificates so to be distributed will be issued,
executed, and countersigned in the manner provided for herein (and may bear, at
the option of the Company, the adjusted Purchase Price) and will be registered
in the names of the holders of record of Right Certificates on the record date
specified in the public announcement.

                  (j) Without respect to any adjustment or change in the
Purchase Price and/or the number and/or kind of securities issuable upon the
exercise of the Rights, the Right Certificates

                                       18
<PAGE>   22

theretofore and thereafter issued may continue to express the Purchase Price and
the number and kind of securities which were expressed in the initial Right
Certificate issued hereunder.

                  (k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one thousandth of the then par value, if any,
of the Preferred Shares or below the then par value, if any, of any other
securities of the Company issuable upon exercise of the Rights, the Company will
take any corporate action which may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares or such other securities, as the case may be, at
such adjusted Purchase Price.

                  (l) In any case in which this Section 11 otherwise requires
that an adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the occurrence of
such event the issuance to the holder of any Right exercised after such record
date the number of Preferred Shares or other securities of the Company, if any,
issuable upon such exercise over and above the number of Preferred Shares or
other securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company delivers to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
Preferred Shares or other securities upon the occurrence of the event requiring
such adjustment.

                  (m) Notwithstanding anything in this Agreement to the
contrary, the Company will be entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly required by this Section 11,
as and to the extent that in its good faith judgment the Continuing Directors of
the Company determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Shares, (ii) issuance wholly for cash of Preferred
Shares at less than the current per share market price therefor, (iii) issuance
wholly for cash of Preferred Shares or securities which by their terms are
convertible into or exchangeable for Preferred Shares, (iv) stock dividends, or
(v) issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Preferred Shares is not taxable
to such shareholders.

                  (n) Notwithstanding anything in this Agreement to the
contrary, in the event that the Company at any time after the Record Date and
prior to the Distribution Date (i) pays a dividend on the outstanding Common
Shares payable in Common Shares, (ii) subdivides the outstanding Common Shares,
(iii) combines the outstanding Common Shares into a smaller number of shares, or
(iv) issues any shares of its capital stock in a reclassification of the
outstanding Common Shares (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing or
surviving corporation), the number of Rights associated with each Common Share
then outstanding, or issued or delivered thereafter but prior to the
Distribution Date, will be proportionately adjusted so that the number of Rights
thereafter associated with each Common Share following any such event equals the
result obtained by multiplying the number of Rights associated with each Common
Share immediately prior to such event by a fraction the numerator of which is
the total number of Common Shares outstanding immediately prior to the
occurrence of the event and the denominator of which is the total number of
Common Shares outstanding immediately following the occurrence of such event.
The adjustments provided for in this Section 11(n) will be made

                                       19
<PAGE>   23
successively whenever such a dividend is paid or such a subdivision, combination
or reclassification is effected.

         12. Certificate of Adjusted Purchase Price or Number of Securities.
Whenever an adjustment is made as provided in Section 11 or Section 13, the
Company will promptly (a) prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Preferred Shares and the
Common Shares a copy of such certificate, and (c) if such adjustment is made
after the Distribution Date, mail a brief summary of such adjustment to each
holder of a Right Certificate in accordance with Section 26. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein and shall not be obligated or responsible for calculating any
adjustment nor shall it be deemed to have knowledge of any such adjustment
unless and until it shall have received such a certificate.

         13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.

                  (a) In the event that:

                           (i) at any time after a Person has become an
         Acquiring Person, the Company consolidates with, or merges with or
         into, any other Person and the Company is not the continuing or
         surviving corporation of such consolidation or merger; or

                           (ii) at any time after a Person has become an
         Acquiring Person, any Person consolidates with the Company, or merges
         with or into the Company, and the Company is the continuing or
         surviving corporation of such merger or consolidation and, in
         connection with such merger or consolidation, all or part of the Common
         Shares is changed into or exchanged for stock or other securities of
         any other Person or cash or any other property; or

                           (iii) at any time after a Person has become an
         Acquiring Person, the Company, directly or indirectly, sells or
         otherwise transfers (or one or more of its Subsidiaries sells or
         otherwise transfers), in one or more transactions, assets or earning
         power (including without limitation securities creating any obligation
         on the part of the Company and/or any of its Subsidiaries) representing
         in the aggregate more than 50% of the assets or earning power of the
         Company and its Subsidiaries (taken as a whole) to any Person or
         Persons other than the Company or one or more of its wholly owned
         Subsidiaries;

then, and in each such case, proper provision will be made so that from and
after the latest of the Share Acquisition Date, the Distribution Date and the
date of the occurrence of such Flip-over Event (A) each holder of a Right
thereafter has the right to receive, upon the exercise thereof in accordance
with the terms of this Agreement at an exercise price per Right equal to the
product of the then-current Purchase Price multiplied by the number of one
thousandths of a Preferred Share for which a Right was exercisable immediately
prior to the Share Acquisition Date, such number of duly authorized, validly
issued, fully paid, nonassessable and freely tradeable Common Shares of the
Issuer, free and clear of any liens, encumbrances and other adverse claims and
not subject to any rights of call or first refusal, as equals the result
obtained by (x)

                                       20
<PAGE>   24

multiplying the then-current Purchase Price by the number of one thousandths of
a Preferred Share for which a Right is exercisable immediately prior to the
Share Acquisition Date and dividing that product by (y) 50% of the current per
share market price of the Common Shares of the Issuer (determined pursuant to
Section 11(d)), on the date of the occurrence of such Flip-over Event; (B) the
Issuer will thereafter be liable for, and will assume, by virtue of the
occurrence of such Flip-over Event, all the obligations and duties of the
Company pursuant to this Agreement; (C) the term "Company" will thereafter be
deemed to refer to the Issuer; and (D) the Issuer will take such steps
(including without limitation the reservation of a sufficient number of its
Common Shares to permit the exercise of all outstanding Rights) in connection
with such consummation as may be necessary to assure that the provisions hereof
are thereafter applicable, as nearly as reasonably may be possible, in relation
to its Common Shares thereafter deliverable upon the exercise of the Rights.

                  (b) For purposes of this Section 13, "Issuer" means (i) in the
case of any Flip-over Event described in Sections 13(a)(i) or (ii) above, the
Person that is the continuing, surviving, resulting or acquiring Person
(including the Company as the continuing or surviving corporation of a
transaction described in Section 13(a)(ii) above), and (ii) in the case of any
Flip-over Event described in Section 13(a)(iii) above, the Person that is the
party receiving the greatest portion of the assets or earning power (including
without limitation securities creating any obligation on the part of the Company
and/or any of its Subsidiaries) transferred pursuant to such transaction or
transactions; provided, however, that, in any such case, (A) if (1) no class of
equity security of such Person is, at the time of such merger, consolidation or
transaction and has been continuously over the preceding 12-month period,
registered pursuant to Section 12 of the Exchange Act, and (2) such Person is a
Subsidiary, directly or indirectly, of another Person, a class of equity
security of which is and has been so registered, the term "Issuer" means such
other Person; and (B) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, a class of equity security of two or more
of which are and have been so registered, the term "Issuer" means whichever of
such Persons is the issuer of the equity security having the greatest aggregate
market value. Notwithstanding the foregoing, if the Issuer in any of the
Flip-over Events listed above is not a corporation or other legal entity having
outstanding equity securities, then, and in each such case, (x) if the Issuer is
directly or indirectly wholly owned by a corporation or other legal entity
having outstanding equity securities, then all references to Common Shares of
the Issuer will be deemed to be references to the Common Shares of the
corporation or other legal entity having outstanding equity securities which
ultimately controls the Issuer, and (y) if there is no such corporation or other
legal entity having outstanding equity securities, (I) proper provision will be
made so that the Issuer creates or otherwise makes available for purposes of the
exercise of the Rights in accordance with the terms of this Agreement, a kind or
kinds of security or securities having a fair market value at least equal to the
economic value of the Common Shares which each holder of a Right would have been
entitled to receive if the Issuer had been a corporation or other legal entity
having outstanding equity securities; and (II) all other provisions of this
Agreement will apply to the issuer of such securities as if such securities were
Common Shares.

                  (c) The Company will not consummate any Flip-over Event if,
(i) at the time of or immediately after such Flip-over Event, there are or would
be any rights, warrants, instruments or securities outstanding or any agreements
or arrangements in effect which would eliminate or substantially diminish the
benefits intended to be afforded by the Rights, (ii) prior

                                       21
<PAGE>   25

to, simultaneously with or immediately after such Flip-over Event, the
shareholders of the Person who constitutes, or would constitute, the Issuer for
purposes of Section 13(a) shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates or Associates, or (iii)
the form or nature of the organization of the Issuer would preclude or limit the
exercisability of the Rights. In addition, the Company will not consummate any
Flip-over Event unless the Issuer has a sufficient number of authorized Common
Shares (or other securities as contemplated in Section 13(b) above) which have
not been issued or reserved for issuance to permit the exercise in full of the
Rights in accordance with this Section 13 and unless prior to such consummation
the Company and the Issuer have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in subsections (a) and
(b) of this Section 13 and further providing that as promptly as practicable
after the consummation of any Flip-over Event, the Issuer will:

                           (A) prepare and file a registration statement under
         the Securities Act with respect to the Rights and the securities
         issuable upon exercise of the Rights on an appropriate form, and use
         its best efforts to cause such registration statement to (1) become
         effective as soon as practicable after such filing and (2) remain
         effective (with a prospectus at all times meeting the requirements of
         the Securities Act) until the Expiration Date;

                           (B) take all such action as may be appropriate under,
         or to ensure compliance with, the securities or "blue sky" laws of the
         various states in connection with the exercisability of the Rights; and

                           (C) deliver to holders of the Rights historical
         financial statements for the Issuer and each of its Affiliates which
         comply in all respects with the requirements for registration on Form
         10 under the Exchange Act.

                  (d) The provisions of this Section 13 will similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Flip-over Event occurs at any time after the occurrence of a Flip-in
Event, except for Rights that have become void pursuant to Section 11(a)(ii),
Rights that shall not have been previously exercised will cease to be
exercisable in the manner provided in Section 11(a)(ii) and will thereafter be
exercisable in the manner provided in Section 13(a).

         14. Fractional Rights and Fractional Securities.

                  (a) The Company will not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights. In
lieu of such fractional Rights, the Company will pay as promptly as practicable
to the registered holders of the Right Certificates with regard to which such
fractional Rights otherwise would be issuable, an amount in cash equal to the
same fraction of the current market value of one Right. For the purposes of this
Section 14(a), the current market value of one Right is the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights otherwise would have been issuable. The closing price for any
day is the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect

                                       22
<PAGE>   26

to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by Nasdaq or such other
system then in use, or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Rights selected by the
Directors of the Company. If the Rights are not publicly held or are not so
listed or traded, or are not the subject of available bid and asked quotes, the
current market value of one Right will mean the fair value thereof as determined
in good faith by the Directors of the Company, whose determination will be
described in a statement filed with the Rights Agent.

                  (b) The Company will not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
thousandth of a Preferred Share) upon exercise of the Rights or to distribute
certificates which evidence fractional Preferred Shares (other than fractions
which are integral multiples of one thousandth of a Preferred Share). Fractions
of Preferred Shares in integral multiples of one thousandth of a Preferred Share
may, at the election of the Company, be evidenced by depositary receipts
pursuant to an appropriate agreement between the Company and a depositary
selected by it, provided that such agreement provides that the holders of such
depositary receipts have all the rights, privileges and preferences to which
they are entitled as beneficial owners of the Preferred Shares represented by
such depositary receipts. In lieu of fractional Preferred Shares that are not
integral multiples of one thousandth of a Preferred Share, the Company may pay
to any Person to whom or which such fractional Preferred Shares would otherwise
be issuable an amount in cash equal to the same fraction of the current market
value of one Preferred Share. For purposes of this Section 14(b), the current
market value of one Preferred Share is the closing price of the Preferred Shares
(as determined in the same manner as set forth for Common Shares in the second
sentence of Section 11(d)(i)) for the Trading Day immediately prior to the date
of such exercise; provided, however, that if the closing price of the Preferred
Shares cannot be so determined, the closing price of the Preferred Shares for
such Trading Day will be conclusively deemed to be an amount equal to the
closing price of the Common Shares (determined pursuant to the second sentence
of Section 11(d)(i)) for such Trading Day multiplied by one thousand (as such
number may be appropriately adjusted to reflect events such as stock splits,
stock dividends, recapitalizations or similar transactions relating to the
Common Shares occurring after the date of this Agreement); provided further,
however, that if neither the Common Shares nor the Preferred Shares are publicly
held or listed or admitted to trading on any national securities exchange, or
the subject of available bid and asked quotes, the current market value of one
Preferred Share will mean the fair value thereof as determined in good faith by
the Directors of the Company, whose determination will be described in a
statement filed with the Rights Agent.

                  (c) Following the occurrence of a Triggering Event, the
Company will not be required to issue fractions of Common Shares or other
securities issuable upon exercise or exchange of the Rights or to distribute
certificates which evidence any such fractional securities. In lieu of issuing
any such fractional securities, the Company may pay to any Person to whom or
which such fractional securities would otherwise be issuable an amount in cash
equal to the same

                                       23
<PAGE>   27

fraction of the current market value of one such security. For purposes of this
Section 14(c), the current market value of one Common Share or other security
issuable upon the exercise or exchange of Rights is the closing price thereof
(as determined in the same manner as set forth for Common Shares in the second
sentence of Section 11(d)(i)) for the Trading Day immediately prior to the date
of such exercise or exchange; provided, however, that if neither the Common
Shares nor any such other securities are publicly held or listed or admitted to
trading on any national securities exchange, or the subject of available bid and
asked quotes, the current market value of one Common Share or such other
security will mean the fair value thereof as determined in good faith by the
Directors of the Company, whose determination will mean the fair value thereof
as will be described in a statement filed with the Rights Agent.

         15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the holder of any Common Shares), may in his own behalf
and for his own benefit enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect of,
his right to exercise the Rights evidenced by such Right Certificate in the
manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under this Agreement, and injunctive relief
against actual or threatened violations of the obligations of any Person subject
to this Agreement.

         16. Agreement of Rights Holders. Every holder of a Right by accepting
the same consents and agrees with the Company and the Rights Agent and with
every other holder of a Right that:

                  (a) Prior to the Distribution Date, the Rights are
transferable only in connection with the transfer of the Common Shares;

                  (b) After the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer;

                  (c) The Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Share certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Share
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent will be
affected by any notice to the contrary;

                                       24
<PAGE>   28

                  (d) Such holder expressly waives any right to receive any
fractional Rights and any fractional securities upon exercise or exchange of a
Right, except as otherwise provided in Section 14.

                  (e) Notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent will have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, that the Company will use its
best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.

         17. Right Certificate Holder Not Deemed a Shareholder. No holder, as
such, of any Right Certificate will be entitled to vote, receive dividends, or
be deemed for any purpose the holder of Preferred Shares or any other securities
of the Company which may at any time be issuable upon the exercise of the Rights
represented thereby, nor will anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a shareholder of the Company or any right to vote for
the election of Directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in Section 25), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions of this Agreement or
exchanged pursuant to the provisions of Section 24.

         18. Concerning the Rights Agent.

                  (a) The Company will pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
will also indemnify the Rights Agent, its directors, officers, employees and
agents for, and hold each of them harmless against, any loss, liability, suit,
action, proceeding or expense, incurred without gross negligence, bad faith, or
willful misconduct on the part of the Rights Agent, for anything done or omitted
to be done by the Rights Agent or such other indemnified party in connection
with the acceptance and administration of this Agreement or the performance of
the Rights Agent's duties hereunder, including the costs and expenses of
defending against any claim of liability arising therefrom, directly or
indirectly.

                  (b) The Rights Agent will be protected and will incur no
liability for or in respect of any action taken, suffered, or omitted by it in
connection with its administration of this Agreement in reliance upon any Right
Certificate or certificate evidencing Preferred Shares or Common Shares or other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or

                                       25
<PAGE>   29

other paper or document believed by it to be genuine and to be signed, executed,
and, where necessary, verified or acknowledged, by the proper Person or Persons.

                  (c) The indemnity provided in this Section 18 shall survive
the expiration of the Rights and the termination of this Agreement.

         19. Merger or Consolidation or Change of Name of Rights Agent.

                  (a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent is a party, or any corporation succeeding to
the corporate trust business of the Rights Agent or any successor Rights Agent,
will be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21. If at the time
such successor Rights Agent succeeds to the agency created by this Agreement any
of the Right Certificates shall have been countersigned but not delivered, any
such successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Right Certificates so countersigned; and if at
that time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates will have the full force
provided in the Right Certificates and in this Agreement.

                  (b) If at any time the name of the Rights Agent changes and at
such time any of the Right Certificates have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and if at that time any of the
Right Certificates have not been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its changed name; and in
all such cases such Right Certificates will have the full force provided in the
Right Certificates and in this Agreement.

         20. Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Right Certificates, by their
acceptance thereof, will be bound:

                  (a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the advice or opinion of such counsel
will be full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with such
advice or opinion.

                  (b) Whenever in the performance of its duties under this
Agreement the Rights Agent deems it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman, the President,
any Vice President, the Secretary or the Treasurer of the Company and delivered
to the Rights Agent,

                                       26
<PAGE>   30

and such certificate will be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.

                  (c) The Rights Agent will be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.

                  (d) The Rights Agent will not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and will be deemed to
have been made by the Company only.

                  (e) The Rights Agent will not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution and delivery hereof by the Rights Agent) or in respect
of the validity or execution of any Right Certificate (except its
countersignature thereof); nor will it be responsible for any breach by the
Company of any covenant contained in this Agreement or in any Right Certificate;
nor will it be responsible for any adjustment required under the provisions of
Sections 11 or 13 (including any adjustment which results in Rights becoming
void) or responsible for the manner, method or amount of any such adjustment or
the ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after actual notice of any such adjustment); nor will it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of stock or other securities to be
issued pursuant to this Agreement or any Right Certificate or as to whether any
shares of stock or other securities will, when issued, be duly authorized,
validly issued, fully paid and nonassessable.

                  (f) The Company will perform, execute, acknowledge and deliver
or cause to be performed, executed, acknowledged and delivered all such further
and other acts, instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.

                  (g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any one of the Chairman, the President, any Vice President, the Secretary or the
Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it will not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer or for any delay in acting while awaiting
instructions. Any application by the Rights Agent for written instructions from
the Company may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken or omitted by the Rights Agent under this Agreement
and the date on or after which such action shall be taken or such omission shall
be effective. The Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which date shall
not be less than five Business Days after the date any officer of the Company
actually receives such application, unless any such officer shall have consented
in writing to an earlier date) unless, prior to taking any such action (or the
effective date in the date of an omission), the Rights Agent shall have received
written instructions in response to such application specifying the action to be
taken or omitted.

                                       27
<PAGE>   31

                  (h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein will preclude the Rights Agent from acting
in any other capacity for the Company or for any other Person.

                  (i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent will not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided the Rights Agent was not grossly
negligent in the selection and continued employment thereof. The Rights Agent
will not be under any duty or responsibility to ensure compliance with any
applicable federal or state securities laws in connection with the issuance,
transfer or exchange of Right Certificates.

                  (j) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise, transfer, split up, combination or exchange,
either (i) the certificate attached to the form of assignment or form of
election to purchase, as the case may be, has either not been completed or
indicates an affirmative response to clause 1 or 2 thereof, or (ii) any other
actual or suspected irregularity exists, the Rights Agent will not take any
further action with respect to such requested exercise, transfer, split up,
combination or exchange without first consulting with the Company, and will
thereafter take further action with respect thereto only in accordance with the
Company's written instructions.

                  (k) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.

                  (l) The Rights Agent undertakes only the express duties and
obligations imposed on it by this Agreement, and no implied duties or
obligations shall be read into this Agreement against the Rights Agent.

                  (m) Anything in this Agreement to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
indirect or consequential loss or damage of any kind whatsoever, including, but
not limited to, lost profits.

         21. Change of Rights Agent. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Agreement upon 30
calendar days' notice in writing mailed to the Company and to each transfer
agent of the Preferred Shares or the Common Shares by registered or certified
mail, and to the holders of the Right Certificates by first class mail. The
Company may remove the Rights Agent or any successor Rights Agent upon 30
calendar days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Preferred Shares
and the Common Shares by registered or certified mail, and to the holders of the
Right Certificates by first class mail. If the

                                       28
<PAGE>   32

Rights Agent resigns or is removed or otherwise becomes incapable of acting, the
Company will appoint a successor to the Rights Agent. If the Company fails to
make such appointment within a period of 30 calendar days after giving notice of
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who will, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, will be a corporation or other legal entity organized and doing
business under the laws of the United States or of the State of New York (or of
any other state of the United States so long as such corporation is authorized
to do business as a banking institution in the State of New York), in good
standing, having a principal office in the State of New York, which is
authorized under such laws to exercise corporate trust or stock transfer powers
and is subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50 million. After appointment, the successor Rights Agent
will be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent will deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company will file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Preferred Shares or the Common Shares, and mail a notice thereof in writing
to the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, will not affect
the legality or validity of the resignation or removal of the Rights Agent or
the appointment of the successor Rights Agent, as the case may be.

         22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Directors to reflect any adjustment or change in the
Purchase Price per share and the number or kind of securities issuable upon
exercise of the Rights made in accordance with the provisions of this Agreement.
In addition, in connection with the issuance or sale by the Company of Common
Shares following the Distribution Date and prior to the Expiration Date, the
Company (a) will, with respect to Common Shares so issued or sold pursuant to
the exercise, exchange or conversion of securities (other than Rights) issued
prior to the Distribution Date which are exercisable or exchangeable for, or
convertible into Common Shares, and (b) may, in any other case, if deemed
necessary, appropriate or desirable by the Continuing Directors of the Company,
issue Right Certificates representing an equivalent number of Rights as would
have been issued in respect of such Common Shares if they had been issued or
sold prior to the Distribution Date, as appropriately adjusted as provided
herein as if they had been so issued or sold; provided, however, that (i) no
such Right Certificate will be issued if, and to the extent that, in its good
faith judgment the Directors of the Company determine that the issuance of such
Right Certificate could have a material adverse tax consequence to the Company
or to the Person to whom or which such Right Certificate otherwise would be
issued and (ii) no such Right Certificate will be issued if, and to the extent
that, appropriate adjustment otherwise has been made in lieu of the issuance
thereof.

                                       29
<PAGE>   33

         23. Redemption.

                  (a) Prior to the Expiration Date, the Directors of the Company
may, at their option, redeem all but not less than all of the then-outstanding
Rights at the Redemption Price at any time prior to the Close of Business on the
later of (i) the Distribution Date and (ii) Share Acquisition Date; provided,
however, if the Directors of the Company authorize redemption of the Rights in
either of the circumstances set forth in this Section 23, then there must be
Continuing Directors then in office and such authorization shall require the
concurrence of a majority of such Continuing Directors: (A) such authorization
occurs on or after the time a Person becomes an Acquiring Person, or (B) such
authorization occurs on or after the date of a change in a majority of the
directors in office within a two year period following a proxy or consent
solicitation or solicitations if any Person who is a participant in any such
solicitation or solicitations has stated (or, if upon the commencement of the
earliest such solicitation, a majority of the Continuing Directors of the
Company has determined in good faith) that such Person (or any of its Affiliates
or Associates) intends to take, or may consider taking, any action which would
result in such Person becoming an Acquiring Person or which would cause the
occurrence of a Triggering Event. Any such redemption will be effective
immediately upon the action of the Directors of the Company ordering the same,
unless such action of the Directors of the Company expressly provides that such
redemption will be effective at a subsequent time or upon the occurrence or
nonoccurrence of one or more specified events (in which case such redemption
will be effective in accordance with the provisions of such action of the
Directors of the Company).

                  (b) Immediately upon the effectiveness of the redemption of
the Rights as provided in Section 23(a), and without any further action and
without any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights will be to receive the Redemption
Price, without interest thereon. Promptly after the effectiveness of the
redemption of the Rights as provided in Section 23(a), the Company will publicly
announce such redemption and, within 10 calendar days thereafter, will give
notice of such redemption to the holders of the then-outstanding Rights by
mailing such notice to all such holders at their last addresses as they appear
upon the registry books of the Company; provided, however, that the failure to
give, or any defect in, any such notice will not affect the validity of the
redemption of the Rights. Any notice that is mailed in the manner herein
provided will be deemed given, whether or not the holder receives the notice.
The notice of redemption mailed to the holders of Rights will state the method
by which the payment of the Redemption Price will be made. The Company may, at
its option, pay the Redemption Price in cash, Common Shares (based upon the
current per share market price of the Common Shares (determined pursuant to
Section 11(d)) at the time of redemption), or any other form of consideration
deemed appropriate by the Directors of the Company (based upon the fair market
value of such other consideration, determined by the Directors of the Company in
good faith) or any combination thereof. The Company may, at its option, combine
the payment of the Redemption Price with any other payment being made
concurrently to holders of Common Shares and, to the extent that any such other
payment is discretionary, may reduce the amount thereof on account of the
concurrent payment of the Redemption Price. If legal or contractual restrictions
prevent the Company from paying the Redemption Price (in the form of
consideration deemed appropriate by the Directors) at the time of redemption,
the Company will pay the Redemption Price, without interest, promptly after such
time as the Company ceases to be so prevented from paying the Redemption Price.

                                       30
<PAGE>   34

         24. Exchange.

                  (a) The Directors of the Company may, at their option, at any
time after the later of the Share Acquisition Date and the Distribution Date,
exchange all or part of the then-outstanding and exercisable Rights (which will
not include Rights that have become void pursuant to the provisions of Section
11(a)(ii)) for Common Shares at an exchange ratio of one Common Share per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the Record Date (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Any such exchange will be
effective immediately upon the action of the Directors of the Company ordering
the same, unless such action of the Directors of the Company expressly provides
that such exchange will be effective at a subsequent time or upon the occurrence
or nonoccurrence of one or more specified events (in which case such exchange
will be effective in accordance with the provisions of such action of the
Directors of the Company). Notwithstanding the foregoing, (i) the Directors of
the Company will not be empowered to effect such exchange at any time after any
Person (other than the Company or any Related Person), who or which, together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the then-outstanding Common Shares and (ii) no exchange shall
be effected in the circumstances set forth in clauses (A) or (B) of the proviso
to Section 23(a) unless there are Continuing Directors then in office and such
exchange is approved by a majority of such Continuing Directors.

                  (b) Immediately upon the effectiveness of the exchange of any
Rights as provided in Section 24(a), and without any further action and without
any notice, the right to exercise such Rights will terminate and the only right
with respect to such Rights thereafter of the holder of such Rights will be to
receive that number of Common Shares equal to the number of such Rights held by
such holder multiplied by the Exchange Ratio. Promptly after the effectiveness
of the exchange of any Rights as provided in Section 24(a), the Company will
publicly announce such exchange and, within 10 calendar days thereafter, will
give notice of such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent; provided,
however, that the failure to give, or any defect in, such notice will not affect
the validity of such exchange. Any notice that is mailed in the manner herein
provided will be deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the exchange of the
Common Shares for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange
will be effected pro rata based on the number of Rights (other than Rights which
have become void pursuant to the provisions of Section 11(a)(ii)) held by each
holder of Rights.

                  (c) In any exchange pursuant to this Section 24, the Company,
at its option, may substitute for any Common Share exchangeable for a Right (i)
equivalent common shares (as such term is used in Section 11(a)(iii)), (ii)
cash, (iii) debt securities of the Company, (iv) other assets, or (v) any
combination of the foregoing, in any event having an aggregate value, as
determined in good faith by the Directors of the Company (whose determination
will be described in a statement filed with the Rights Agent), equal to the
current market value of one Common Share (determined pursuant to Section 11(d))
on the Trading Day immediately preceding the date of the effectiveness of the
exchange pursuant to this Section 24.

                                       31
<PAGE>   35

         25. Notice of Certain Events.

                  (a) If, after the Distribution Date, the Company proposes (i)
to pay any dividend payable in stock of any class to the holders of Preferred
Shares or to make any other distribution to the holders of Preferred Shares
(other than a regular periodic cash dividend), (ii) to offer to the holders of
Preferred Shares rights, options or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), (iv) to effect any consolidation or merger
into or with, or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of assets or earning power (including, without limitation,
securities creating any obligation on the part of the Company and/or any of its
Subsidiaries) representing more than 50% of the assets and earning power of the
Company and its Subsidiaries, taken as a whole, to any other Person or Persons
other than the Company or one or more of its wholly owned Subsidiaries, (v) to
effect the liquidation, dissolution or winding up of the Company, or (vi) to
declare or pay any dividend on the Common Shares payable in Common Shares or to
effect a subdivision, combination or reclassification of the Common Shares then,
in each such case, the Company will give to each holder of a Right Certificate,
to the extent feasible and in accordance with Section 26, a notice of such
proposed action, which specifies the record date for the purposes of such stock
dividend, distribution or offering of rights, options or warrants, or the date
on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of the Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice will be so given, in
the case of any action covered by clause (i) or (ii) above, at least 10 calendar
days prior to the record date for determining holders of the Preferred Shares
for purposes of such action, and, in the case of any such other action, at least
10 calendar days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the Common Shares and/or
Preferred Shares, whichever is the earlier.

                  (b) In case any Triggering Event occurs, then, in any such
case, the Company will as soon as practicable thereafter give to the Rights
Agent and each holder of a Right Certificate, in accordance with Section 26, a
notice of the occurrence of such event, which specifies the event and the
consequences of the event to holders of Rights.

         26. Notices.

                  (a) Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the Company will be sufficiently given or made if sent by first class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:

                             Flowers Foods, Inc.
                             1919 Flowers Circle
                             Thomasville, Georgia 31757
                             Attention: G. Anthony Campbell, Esq.

                                       32
<PAGE>   36

                             with a copy to:

                             Jones, Day, Reavis & Pogue
                             3500 SunTrust Plaza
                             303 Peachtree Street, N.E.
                             Atlanta, Georgia  30308-3242
                             Attention:  Robert W. Smith, Esq.

                  (b) Subject to the provisions of Section 21 hereof, any notice
or demand authorized by this Agreement to be given or made by the Company or by
the holder of any Right Certificate to or on the Rights Agent will be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:

                             First Union National Bank
                             1525 West W. T. Harris Boulevard, 3C3
                             Charlotte, North Carolina  28288-1153
                             Attention:  Shareholder Services Group

                  (c) Notices or demands authorized by this Agreement to be
given or made by the Company or the Rights Agent to the holder of any Right
Certificate (or, if prior the Distribution Date, to the holder of any
certificate evidencing Common Shares) will be sufficiently given or made if sent
by first class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.

         27. Supplements and Amendments. Subject to the penultimate sentence of
this Section 27, this Agreement may be supplemented or amended at the times and
for the purposes set forth below; provided, however, that no proposed supplement
or amendment to this Agreement shall be effective unless (i) there are
Continuing Directors and (ii) a majority of such Continuing Directors, at a
meeting of Directors duly called and held, votes in favor of the adoption of
such proposed supplement or amendment. Prior to the time at which the Rights
cease to be redeemable pursuant to Section 23, and subject to the last sentence
of this Section 27, the Company may in its sole and absolute discretion, and the
Rights Agent will if the Company so directs, supplement or amend any provision
of this Agreement in any respect without the approval of any holders of Rights
or Common Shares. From and after the time at which the Rights cease to be
redeemable pursuant to Section 23, and subject to the last sentence of this
Section 27, the Company may, and the Rights Agent will if the Company so
directs, supplement or amend this Agreement without the approval of any holders
of Rights or Common Shares in order (i) to cure any ambiguity, (ii) to correct
or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen any
time period hereunder, or (iv) to supplement or amend the provisions hereunder
in any manner which the Company may deem desirable; provided that no such
supplement or amendment shall adversely affect the interests of the holders of
Rights as such (other than an Acquiring Person or an Affiliate or Associate of
an Acquiring Person), and no such supplement or amendment shall cause the Rights
again to become redeemable or cause this Agreement again to become
supplementable or amendable otherwise than in accordance with the provisions of
this sentence. Without limiting the generality or effect of the foregoing, this
Agreement may be

                                       33
<PAGE>   37

supplemented or amended to provide for such voting powers for the Rights and
such procedures for the exercise thereof, if any, as the Continuing Directors of
the Company may determine to be appropriate. Upon the delivery of a certificate
that is signed by a Continuing Director and which states that the proposed
supplement or amendment is in compliance with the terms of this Section 27, the
Rights Agent will execute such supplement or amendment; provided, however, that
the failure or refusal of the Rights Agent to execute such supplement or
amendment will not affect the validity of any supplement or amendment adopted by
the Continuing Directors of the Company, any of which will be effective in
accordance with the terms thereof. Notwithstanding anything in this Agreement to
the contrary, no supplement or amendment may be made which decreases the stated
Redemption Price to an amount less than $.01 per Right or may change the rights
or duties of the Rights Agent under this Agreement without the execution of such
supplement or amendment by the Rights Agent.

         28. Successors; Certain Covenants. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent will be
binding on and inure to the benefit of their respective successors and assigns
hereunder.

         29. Benefits of This Agreement. Nothing in this Agreement will be
construed to give to any Person other than the Company, the Rights Agent, and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares) any legal or equitable right, remedy or claim under
this Agreement. This Agreement will be for the sole and exclusive benefit of the
Company, the Rights Agent, and the registered holders of the Right Certificates
(or prior to the Distribution Date, the Common Shares).

         30. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder will be deemed to be a contract made under the
internal substantive laws of the State of Georgia and for all purposes will be
governed by and construed in accordance with the internal substantive laws of
such State applicable to contracts to be made and performed entirely within such
State.

         31. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement will remain in full force and
effect and will in no way be affected, impaired or invalidated; provided,
however, that nothing contained in this Section 31 will affect the ability of
the Company under the provisions of Section 27 to supplement or amend this
Agreement to replace such invalid, void or unenforceable term, provision,
covenant or restriction with a legal, valid and enforceable term, provision,
covenant or restriction.

         32. Descriptive Headings, Etc. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and will not
control or affect the meaning or construction of any of the provisions hereof.
Unless otherwise expressly provided, references herein to Articles, Sections and
Exhibits are to Articles, Sections and Exhibits of or to this Agreement.

         33. Determinations and Actions by the Directors. For all purposes of
this Agreement, any calculation of the number of Common Shares outstanding at
any particular time, including

                                       34
<PAGE>   38

for purposes of determining the particular percentage of such outstanding Common
Shares of which any Person is the Beneficial Owner, will be made in accordance
with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act. The Directors of the Company will have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Directors of the Company or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including without limitation the right and power to (i) interpret the
provisions of this Agreement and (ii) make all determinations deemed necessary
or advisable for the administration of this Agreement (including any
determination as to whether particular Rights shall have become void). All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, any omission with respect to any of the foregoing)
which are done or made by the Directors of the Company in good faith will (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights and all other parties and (y) not subject the Directors of the
Company to any liability to any Person, including without limitation the Rights
Agent and the holders of the Rights.

         34. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts will for all purposes be deemed to be
an original, and all such counterparts will together constitute but one and the
same instrument.

                                       35
<PAGE>   39

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

[SEAL]

Attest:                                     FLOWERS FOODS, INC.

/s/ G. Anthony Campbell                     /s/ Amos R. McMullian
------------------------------------        ------------------------------------
Name: G. Anthony Campbell                   Name: Amos R. McMullian
Title: General Counsel and Secretary        Title: Chairman and Chief Executive
                                            Officer

                                            FIRST UNION NATIONAL BANK

                                            /s/ Kristin N. Knapp
                                            ------------------------------------
                                            Name: Kristin N. Knapp
                                            Title: Assistant Vice President,
                                            Equity Services

                                       36
<PAGE>   40

                                                                       EXHIBIT A

                            PREFERENCES AND RIGHTS OF
                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                                       OF

                               FLOWERS FOODS, INC.

         1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock"). The number of shares constituting such series shall be
100,000 and such series shall have the rights and preferences and limitations as
set forth below.

         2. Dividends and Distributions.

                  (i) The holders of shares of Series A Preferred Stock, in
preference to the holders of Common Stock and of any other junior stock, shall
be entitled to receive, when, as and if declared by the Board of Directors out
of funds legally available for the purpose, quarterly dividends payable in cash
on the payment date of any quarterly dividend for the Common Stock, or if there
should be no such payment date, then on the 45th day after the end of each
fiscal quarter (each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $50 or (b) subject to the provision for adjustment hereinafter set forth,
1,000 times the aggregate per share amount of all cash dividends, and 1,000
times the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions other than a dividend payable in shares of Common Stock
of the Company or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Preferred Stock. In the event the Company shall
at any time after the date hereof declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the amount to which holders of shares of Series A Preferred Stock
were entitled immediately prior to such event under clause (b) of the preceding
sentence shall be automatically adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

                  (ii) The Company shall declare a dividend or distribution
on the Series A Preferred Stock as provided in subparagraph (i) of this
paragraph 2 immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of

<PAGE>   41

Common Stock); provided that, in the event no dividend or distribution shall
have been declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $50 per share on the Series A Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.

                  (iii) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A
Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares of Series
A Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.

         3. Voting Rights. The holders of shares of Series A Preferred Stock
shall have the following voting rights:

                  (i) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder thereof
to 1,000 votes on all matters submitted to a vote of the shareholders of the
Company. In the event the Company shall at any time after the date hereof
declare or pay any dividend on Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case the number of
votes per share to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event shall be automatically adjusted by
multiplying such number by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

                  (ii) Except as otherwise provided herein or by law, the
holders of shares of Series A Preferred Stock and the holders of shares of
Common Stock and any other capital stock of the Company having general voting
rights shall vote together as one voting group on all matters submitted to a
vote of shareholders of the Company.

                  (iii) Except as set forth herein, holders of Series A
Preferred Stock shall have no special voting rights and their consent shall not
be required (except to the extent they are entitled to vote with holders of
Common Stock and any other capital stock of the Company having general voting
rights as set forth herein) for taking any corporate action.

<PAGE>   42

         4. Certain Restrictions.

                  (i) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Company shall not:

                           (a) declare or pay dividends on, or make any other
         distributions on, any shares of stock ranking junior (either as to
         dividends or upon liquidation, dissolution or winding up) to the Series
         A Preferred Stock;

                           (b) declare or pay dividends on or make any other
         distributions on any shares of stock ranking on a parity (either as to
         dividends or upon liquidation, dissolution or winding up) with the
         Series A Preferred Stock, except dividends paid ratably on the Series A
         Preferred Stock and all such parity stock on which dividends are
         payable or in arrears in proportion to the total amounts to which the
         holders of all such shares are then entitled;

                           (c) redeem or purchase or otherwise acquire for
         consideration shares of any stock ranking junior (either as to
         dividends or upon liquidation, dissolution or winding up) with the
         Series A Preferred Stock, provided that the Company may at any time
         redeem, purchase or otherwise acquire shares of any such junior stock
         in exchange for shares of any stock of the Company ranking junior
         (either as to dividends or upon dissolution, liquidation or winding up)
         to the Series A Preferred Stock; or

                           (d) purchase or otherwise acquire for consideration
         any shares of Series A Preferred Stock, or any shares of stock ranking
         on a parity with the Series A Preferred Stock, except in accordance
         with a purchase offer made in writing or by publication (as determined
         by the Board of Directors) to all holders of such shares upon such
         terms as the Board of Directors, after consideration of the respective
         annual dividend rates and other relative rights and preferences of the
         respective series and classes, shall determine in good faith will
         result in fair and equitable treatment among the respective series or
         classes.

                  (ii) The Company shall not permit any subsidiary of the
Company to purchase or otherwise acquire for consideration any shares of stock
of the Company unless the Company could, under subsection (i) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.

         5. Reacquired Shares. Any shares of Series A Preferred Stock purchased
or otherwise acquired by the Company in any manner whatsoever shall be retired
and canceled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.

         6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Company, no distribution shall be made (a) to
the holders of shares of stock

<PAGE>   43

ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock unless, prior thereto, the holders
of shares of Series A Preferred Stock shall have received $1,000 per share, plus
an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, provided that the holders
of shares of Series A Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 1,000 times the aggregate amount to be distributed per share to holders
of Common Stock, or (b) to the holders of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Company shall at any time after the
date hereof declare or pay any dividend on Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under the proviso in clause (a) of the
preceding sentence shall be automatically adjusted by multiplying such amount by
a fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

         7. Consolidation, Merger etc. In case the Company shall enter into any
consolidation, merger, combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case the shares of Series A
Preferred Stock shall at the same time be similarly exchanged or changed in an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 1,000 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of Common Stock is changed or exchanged. In the event the Company
shall at any time after the date hereof declare or pay any dividend on Common
Stock payable in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series A Preferred Stock shall be adjusted
by multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

         8. No Redemption. The shares of Series A Preferred Stock shall not be
redeemable.

         9. Rank. The Series A Preferred Stock shall rank junior with respect to
payment of dividends and on liquidation to all other series of the Company's
preferred stock outstanding on the date hereof and to all such other series that
specifically provide that they shall rank senior to the Series A Preferred
Stock.

<PAGE>   44

         10. Amendment. The Articles of Incorporation of the Company shall not
be amended in any manner that would materially alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of two-thirds of the
outstanding shares of Series A Preferred Stock, voting together as a single
class.

<PAGE>   45

                                                                       EXHIBIT B

                            FORM OF RIGHT CERTIFICATE

Certificate No. R-                                                        Rights
                                                               ----------

                  NOT EXERCISABLE AFTER MARCH 26, 2011 (SUBJECT TO
                  POSSIBLE EXTENSION AT THE OPTION OF THE COMPANY) OR
                  EARLIER IF REDEEMED, EXCHANGED OR AMENDED. THE
                  RIGHTS ARE SUBJECT TO REDEMPTION, EXCHANGE AND
                  AMENDMENT AT THE OPTION OF THE COMPANY, ON THE TERMS
                  SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
                  CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT,
                  RIGHTS THAT ARE OR WERE BENEFICIALLY OWNED BY AN
                  ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF
                  AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
                  THE RIGHTS AGREEMENT) OR A TRANSFEREE THEREOF MAY
                  BECOME NULL AND VOID.

                                Right Certificate

                               FLOWERS FOODS, INC.

         This certifies that _______________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions, and conditions of the
Rights Agreement, dated as of March 23, 2001 (the "Rights Agreement"), between
Flowers Foods, Inc., a Georgia corporation (the "Company"), and First Union
National Bank (the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 P.M. (Eastern time) on the Expiration Date (as such term is
defined in the Rights Agreement) at the principal office or offices of the
Rights Agent designated for such purpose, one thousandth of a fully paid
nonassessable share of Series A Junior Participating Preferred Stock, par value
$100 per share (the "Preferred Shares"), of the Company, at a purchase price of
$80.00 per one thousandth of a Preferred Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase and related Certificate duly executed. If this Right Certificate is
exercised in part, the holder will be entitled to receive upon surrender hereof
another Right Certificate or Right Certificates for the number of whole Rights
not exercised. The number of Rights evidenced by this Right Certificate (and the
number of one thousandths of a Preferred Share which may be purchased upon
exercise thereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of the date of the Rights Agreement, based on
the Preferred Shares as constituted at such date.

         As provided in the Rights Agreement, the Purchase Price and/or the
number and/or kind of securities issuable upon the exercise of the Rights
evidenced by this Right Certificate are subject to adjustment upon the
occurrence of certain events.

         This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a

<PAGE>   46

full description of the rights, limitations of rights, obligations, duties and
immunities of the Rights Agent, the Company and the holders of the Right
Certificates, which limitations of rights include the temporary suspension of
the exercisability of the Rights under the circumstances specified in the Rights
Agreement. Copies of the Rights Agreement are on file at the above-mentioned
office of the Rights Agent and can be obtained from the Company without charge
upon written request therefor. Terms used herein with initial capital letters
and not defined herein are used herein with the meanings ascribed thereto in the
Rights Agreement.

         Pursuant to the Rights Agreement, from and after the occurrence of a
Flip-in Event, any Rights that are Beneficially Owned by (i) any Acquiring
Person (or any Affiliate or Associate of any Acquiring Person), (ii) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
becomes a transferee after the occurrence of a Flip-in Event, or (iii) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the Flip-in Event pursuant to
either (a) a transfer from an Acquiring Person to holders of its equity
securities or to any Person with whom it has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (b) a transfer
which the Directors of the Company have determined is part of a plan,
arrangement or understanding which has the purpose or effect of avoiding certain
provisions of the Rights Agreement, and subsequent transferees of any of such
Persons, will be void without any further action and any holder of such Rights
will thereafter have no rights whatsoever with respect to such Rights under any
provision of the Rights Agreement. From and after the occurrence of a Flip-in
Event, no Right Certificate will be issued that represents Rights that are or
have become void pursuant to the provisions of the Rights Agreement, and any
Right Certificate delivered to the Rights Agent that represents Rights that are
or have become void pursuant to the provisions of the Rights Agreement will be
canceled.

         This Right Certificate, with or without other Right Certificates, may
be transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates entitling the holder to purchase a like number of one
thousandths of a Preferred Share (or other securities, as the case may be) as
the Right Certificate or Right Certificates surrendered entitled such holder (or
former holder in the case of a transfer) to purchase, upon presentation and
surrender hereof at the principal office of the Rights Agent designated for such
purpose, with the Form of Assignment (if appropriate) and the related
Certificate duly executed.

         Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option at a redemption
price of $.01 per Right or may be exchanged in whole or in part. The Rights
Agreement may be supplemented and amended by the Company, as provided therein.

         The Company is not required to issue fractions of Preferred Shares
(other than fractions which are integral multiples of one thousandth of a
Preferred Share, which may, at the option of the Company, be evidenced by
depositary receipts) or other securities issuable upon the exercise of any Right
or Rights evidenced hereby. In lieu of issuing such fractional Preferred Shares
or other securities, the Company may make a cash payment, as provided in the
Rights Agreement.

         No holder of this Right Certificate, as such, will be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the

<PAGE>   47

Company which may at any time be issuable upon the exercise of the Right or
Rights represented hereby, nor will anything contained herein or in the Rights
Agreement be construed to confer upon the holder hereof, as such, any of the
rights of a shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate have been
exercised in accordance with the provisions of the Rights Agreement.

         This Right Certificate will not be valid or obligatory for any purpose
until it has been countersigned by the Rights Agent.

         WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ________, ____.

[SEAL]

ATTEST:                                     FLOWERS FOODS, INC.

                                            By:
------------------------------------           ---------------------------------
                                               Name:
                                               Title:

Countersigned:

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

By:
  ----------------------------------
   Authorized Signature

<PAGE>   48

                    Form of Reverse Side of Right Certificate

                               FORM OF ASSIGNMENT

                (To be executed by the registered holder if such
                holder desires to transfer the Right Certificate)

                  FOR VALUE RECEIVED, _______________ hereby sells, assigns and
         transfers unto________________________________________________________
                  (Please print name and address of transferee)

 ------------------------------------------------------------------------------
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _______________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.

Dated:
       -----------, ----

                                            ------------------------------------
                                            Signature

Signature Guaranteed:

<PAGE>   49

                                   CERTIFICATE

         The undersigned hereby certifies by checking the appropriate boxes
that:

         (1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being sold, assigned, transferred, split up, combined or exchanged by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Person (as such terms are defined in the Rights
Agreement);

         (2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.

Dated:
      ------------, ----

                                            ------------------------------------
                                            Signature

<PAGE>   50

                          FORM OF ELECTION TO PURCHASE

                      (To be executed if holder desires to
                         exercise the Right Certificate)

To Flowers Foods, Inc.:

         The undersigned hereby irrevocably elects to exercise __________ Rights
represented by this Right Certificate to purchase the one thousandths of a
Preferred Share or other securities issuable upon the exercise of such Rights
and requests that certificates for such securities be issued in the name of and
delivered to:

Please insert social security
or other identifying number:
                            ----------------------------------------------------

--------------------------------------------------------------------------------
                         (Please print name and address)

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

If such number of Rights is not all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
will be registered in the name of and delivered to:

Please insert social security
or other identifying number:
                            ----------------------------------------------------

--------------------------------------------------------------------------------
                         (Please print name and address)

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

Dated:
      ------------, ----

                                            ------------------------------------
                                            Signature

Signature Guaranteed:

<PAGE>   51

                                   CERTIFICATE

         The undersigned hereby certifies by checking the appropriate boxes
that:

         (1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Person (as such terms are defined pursuant
to the Rights Agreement);

         (2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was, or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.

Dated:
      ------------, ----

                                            ------------------------------------
                                            Signature

                                     NOTICE

         SIGNATURES ON THE FOREGOING FORM OF ASSIGNMENT AND FORM OF ELECTION TO
PURCHASE AND IN THE RELATED CERTIFICATES MUST CORRESPOND TO THE NAME AS WRITTEN
UPON THE FACE OF THIS RIGHT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.

         SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED MEDALLION SIGNATURE PROGRAM) PURSUANT TO RULE 17AD-15
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

<PAGE>   52

                                                                       EXHIBIT C

                  SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK

         The Directors (the "Directors") of Flowers Foods, Inc. (the "Company")
have declared a dividend distribution of one right (a "Right") for each
outstanding share of Common Stock, par value $.01 per share (the "Common
Shares"), of the Company. The distribution is payable on March 26, 2001 (the
"Record Date") to the shareholders of record as of the close of business on the
Record Date. Each Right entitles the registered holder thereof to purchase from
the Company one thousandth of a share of Series A Junior Participating Preferred
Stock, par value $100 per share (the "Preferred Shares"), of the Company at a
price (the "Purchase Price") of $80.00 per one thousandth of a Preferred Share,
subject to adjustment. The description and terms of the Rights are set forth in
a Rights Agreement, dated as of March 23, 2001 (the "Rights Agreement"), between
the Company and First Union National Bank, as Rights Agent (the "Rights Agent").

         Under the Rights Agreement, the Rights will be evidenced by the
certificates evidencing Common Shares until the earlier (the "Distribution
Date") of: (i) the close of business on the tenth calendar day following the
first date (the "Share Acquisition Date") of public announcement that a person
or group (other than the Company, a subsidiary or employee benefit or stock
ownership plan of the Company or any of its affiliates or associates), together
with its affiliates and associates, has acquired beneficial ownership of 15% or
more of the outstanding Common Shares (any such person or group being
hereinafter called an "Acquiring Person") or (ii) the close of business on the
tenth business day (or such later date as may be specified by the Directors)
following the commencement of a tender offer or exchange offer by a person
(other than the Company, a subsidiary or employee benefit or stock ownership
plan of the Company or any of its affiliates or associates), the consummation of
which would result in beneficial ownership by such person of 15% or more of the
outstanding Common Shares.

         The Rights Agreement provides that, until the Distribution Date, the
Rights may be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption, exchange or expiration of the Rights),
any certificate evidencing Common Shares of the Company issued upon transfer or
new issuance of the Common Shares will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption, exchange or expiration of the Rights), the surrender for transfer of
any certificates evidencing Common Shares will also constitute the transfer of
the Rights associated with such certificates. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of Common Shares as of the
close of business on the Distribution Date and such separate Right Certificates
alone will evidence the Rights. No Right is exercisable at any time prior to the
Distribution Date. The Rights will expire on the tenth anniversary of the Record
Date (the "Final Expiration Date") unless earlier redeemed, exchanged or amended
by the Company as described below. Until a Right is exercised, the holder
thereof, as such, will have no rights as a shareholder of the Company, including
the right to vote or to receive dividends.

         The Purchase Price payable, and the number of the Preferred Shares or
other securities issuable, upon exercise of the Rights will be subject to
adjustment from time to time to prevent

<PAGE>   53

dilution (i) in the event of a stock dividend on, or a subdivision, combination
or reclassification of, the Preferred Shares, (ii) upon the grant to holders of
Preferred Shares of certain rights or warrants to subscribe for or purchase the
Preferred Shares at a price, or securities convertible into the Preferred Shares
with a conversion price, less than the then-current market price of the
Preferred Shares, or (iii) upon the distribution to holders of the Preferred
Shares of evidences of indebtedness, cash (excluding regular periodic cash
dividends), assets, stock (excluding dividends payable in the Preferred Shares)
or subscription rights or warrants (other than those referred to above). The
number of outstanding Rights and the number of one thousandths of the Preferred
Shares issuable upon exercise of each Right will be subject to adjustment in the
event of a stock dividend on the Common Shares payable in Common Shares or a
subdivision, combination or reclassification of Common Shares occurring, in any
such case, prior to the Distribution Date.

         Rights will be exercisable to purchase Preferred Shares only after the
Distribution Date occurs and prior to the occurrence of a Flip-in Event as
described below. A Distribution Date resulting from the commencement of a tender
offer or exchange offer described in clause (ii) of the second paragraph of this
summary could precede the occurrence of a Flip-in Event and thus result in the
Rights being exercisable to purchase Preferred Shares. A Distribution Date
resulting from any occurrence described in clause (i) of the second paragraph of
this summary would necessarily follow the occurrence of a Flip-in Event and thus
result in the Rights being exercisable to purchase Common Shares or other
securities as described below.

         Under the Rights Agreement, in the event (a "Flip-in Event") that (i)
any person or group, together with its affiliates and associates, becomes an
Acquiring Person (ii) any Acquiring Person or any affiliate or associate thereof
merges into or combines with the Company and the Company is the surviving
corporation, (iii) any Acquiring Person or any affiliate or associate thereof
effects certain other transactions with the Company, or (iv) during such time as
there is an Acquiring Person the Company effects certain transactions, in each
case as described in the Rights Agreement, then, in each such case, proper
provision will be made so that from and after the latest of the Share
Acquisition Date, the Distribution Date and the date of the occurrence of such
Flip-in Event each holder of a Right, other than Rights that are or were owned
beneficially by an Acquiring Person (which, from and after the date of a Flip-in
Event, will be void), will have the right to receive, upon exercise thereof at
the then-current exercise price of the Right, that number of Common Shares (or,
under certain circumstances, an economically equivalent security or securities
of the Company) that at the time of such Flip-in Event have a market value of
two times the exercise price of the Right.

         In the event (a "Flip-over Event") that, at any time after a person has
become an Acquiring Person, (i) the Company merges with or into any person and
the Company is not the surviving corporation, (ii) any person merges with or
into the Company and the Company is the surviving corporation, but all or part
of the Common Shares are changed or exchanged for stock or other securities of
any other person or cash or any other property, or (iii) 50% or more of the
Company's assets or earning power, including securities creating obligations of
the Company, are sold, in each case as described in the Rights Agreement, then,
and in each such case, proper provision will be made so that from and after the
latest of the Share Acquisition Date, the Distribution Date and the date of the
occurrence of such Flip-over Event, each holder of a Right, other than Rights
which have become void, will thereafter have the right to receive, upon the

<PAGE>   54

exercise thereof at the then-current exercise price of the Right, that number of
shares of common stock (or, under certain circumstances, an economically
equivalent security or securities) of such other person that at the time of such
Flip-over Event have a market value of two times the exercise price of the
Right.

         From and after the later of the Share Acquisition Date and the
Distribution Date, Rights (other than any Rights that have become void) will be
exercisable as described above, upon payment of the aggregate exercise price in
cash. In addition, at any time after the later of the Share Acquisition Date and
the Distribution Date and prior to the acquisition by any person or group of
affiliated or associated persons of 50% or more of the outstanding Common
Shares, the Company may exchange the Rights (other than any rights that have
become void), in whole or in part, at an exchange ratio of one Common Share per
Right (subject to adjustment). Notwithstanding the foregoing, a majority of the
continuing directors on the Board (defined to include incumbent Directors of the
Company and their successors who are nominated for election by a majority of the
incumbent Directors, but specifically excluding representatives of Acquiring
Persons) must concur with the exchange of any of the Rights on or following the
date (i) a person becomes an Acquiring Person or (ii) a majority of the Board is
replaced due to the actions of any person or persons who may become an Acquiring
Person or who may cause a Flip-in Event of Flip-over Event.

         With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment in the Purchase
Price of at least 1%. The Company will not be required to issue fractional
Preferred Shares (other than fractions that are integral multiples of one
thousandth of a Preferred Share, which may, at the option of the Company, be
evidenced by depositary receipts) or fractional Common Shares or other
securities issuable upon the exercise of Rights. In lieu of issuing such
securities, the Company may make a cash payment, as provided in the Rights
Agreement.

         The Company may, at its option, redeem the Rights in whole, but not in
part, at a price of $.01 per Right, subject to adjustment (the "Redemption
Price"), at any time prior to the close of business on the later of the
Distribution Date and the Share Acquisition Date. Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
Notwithstanding the foregoing, a majority of the continuing directors on the
Board (defined to include incumbent Directors of the Company and their
successors who are nominated for election by a majority of the incumbent
Directors, but specifically excluding representatives of Acquiring Persons) must
concur with the redemption of the Rights on or following the date (i) a person
becomes an Acquiring Person or (ii) a majority of the Board is replaced due to
the actions of any person or persons who may become an Acquiring Person or who
may cause a Flip-in Event of Flip-over Event.

         The Rights Agreement may be amended in certain instances so long as
there are Continuing Directors and a majority of such Continuing Directors votes
in favor of the proposed amendment. The Rights Agreement may be amended without
the approval of any holders of Rights Certificates, including amendments that
increase or decrease the Purchase Price, that add other events requiring
adjustment to the Purchase Price payable and the number of the Preferred Shares
or other securities issuable upon the exercise of the Rights or that modify
procedures

<PAGE>   55

relating to the redemption of the Rights, except that no amendment may be made
that decreases the stated Redemption Price to an amount less than $.01 per
Right.

         The Directors will have the exclusive power and authority to administer
the Rights Agreement and to exercise all rights and powers specifically granted
to the Directors or to the Company therein, or as may be necessary or advisable
in the administration of the Rights Agreement, including without limitation the
right and power to interpret the provisions of the Rights Agreement and to make
all determinations deemed necessary or advisable for the administration of the
Rights Agreement (including any determination to redeem or not redeem the Rights
or to amend or not amend the Rights Agreement). All such actions, calculations,
interpretations and determinations (including any omission with respect to any
of the foregoing) which are done or made by the Directors in good faith will be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights and all other parties and will not subject the Directors to any
liability to any person, including without limitation the Rights Agent and the
holders of the Rights.

         A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an exhibit to a Registration Statement on Form 10. A copy
of the Rights Agreement is available free of charge from the Company.

         This summary description of the Rights is as of the Record Date, does
not purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is incorporated herein by this reference.<PAGE>   1

                                                                    EXHIBIT 10.3

                                                                  EXECUTION COPY

                               FLOWERS FOODS, INC.

                              RETIREMENT PLAN NO. 1

             AS AMENDED AND RESTATED EFFECTIVE AS OF MARCH 26, 2001

<PAGE>   2

                               FLOWERS FOODS, INC.
                              RETIREMENT PLAN NO. 1

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                       Page
                                                                                       ----
<S>         <C>                                                                        <C>
PREAMBLE              .................................................................. 1

ARTICLE I.            DEFINITIONS....................................................... 2

   1.01     Accrual Computation Period ................................................. 2
   1.02     Accrued Benefit ............................................................ 2
   1.03     Actuarial Equivalent or Actuarially Equivalent ............................. 3
   1.04     Age ........................................................................ 3
   1.05     Annuity Starting Date ...................................................... 3
   1.06     Applicable Interest Rate ................................................... 3
   1.07     Beneficiary ................................................................ 4
   1.08     Board ...................................................................... 4
   1.09     Break in Service or One Year Break in Service .............................. 4
   1.10     Code ....................................................................... 4
   1.11     Committee .................................................................. 4
   1.12     Company .................................................................... 4
   1.13     Compensation ............................................................... 4
   1.14     Controlled Group ........................................................... 6
   1.15     Death Benefit .............................................................. 6
   1.16     Delayed Retirement Benefit ................................................. 6
   1.17     Delayed Retirement Benefit Amount .......................................... 6
   1.18     Delayed Retirement Date .................................................... 6
   1.19     Disability Retirement Benefit .............................................. 6
   1.20     Earliest Retirement Age .................................................... 6
   1.21     Early Retirement Benefit ................................................... 6
   1.22     Early Retirement Benefit Amount ............................................ 7
   1.23     Early Retirement Date ...................................................... 7
   1.24     Effective Date ............................................................. 7
   1.25     Eligibility Computation Period ............................................. 7
   1.26     Eligible Employee .......................................................... 7
   1.27     Employee ................................................................... 7
   1.28     Employer ................................................................... 8
   1.29     Employment Commencement Date ............................................... 8
   1.30     Enrolled Actuary ........................................................... 8
   1.31     ERISA ...................................................................... 8
   1.32     Highly Compensated Employee ................................................ 8
   1.33     Hour of Service ............................................................ 9
   1.34     Leased Employee ............................................................11
   1.35     Normal Retirement Age means Age 65 .........................................11
</TABLE>

<PAGE>   3

<TABLE>
<S>         <C>                                                                         <C>
   1.36     Normal Retirement Benefit ..................................................11
   1.37     Normal Retirement Benefit Amount ...........................................12
   1.38     Normal Retirement Date .....................................................16
   1.39     Participant ................................................................16
   1.40     Plan .......................................................................16
   1.41     Plan Administrator .........................................................16
   1.42     Plan Year ..................................................................16
   1.43     Predecessor Company ........................................................16
   1.44     Predecessor Plan ...........................................................17
   1.45     Qualified Joint and Survivor Annuity .......................................17
   1.46     Qualified Spousal Waiver ...................................................17
   1.47     Repayment Rate .............................................................17
   1.48     Required Beginning Date ....................................................17
   1.49     Spouse .....................................................................17
   1.50     Standard Form ..............................................................17
   1.51     Super Highly Compensated Employee ..........................................17
   1.52     Surviving Spouse ...........................................................17
   1.53     Termination Benefit ........................................................18
   1.54     Totally and Permanently Disabled ...........................................18
   1.55     Trust Agreement ............................................................18
   1.56     Trust Fund or Trust ........................................................18
   1.57     Trustee ....................................................................18
   1.58     Vesting Computation Period .................................................18
   1.59     Year of Benefit Service ....................................................18
   1.60     Year of Eligibility Service ................................................21
   1.61     Year of Vesting Service ....................................................21
   1.62     Use of Terms ...............................................................23

ARTICLE II.           ELIGIBILITY.......................................................24

   2.01     Attainment of Participant Status ...........................................24
   2.02     Reemployment of Former Employees ...........................................25
   2.03     Transfers from/to Eligible Class ...........................................26
   2.04     Transfer of Participants ...................................................26

ARTICLE III.          VESTING IN ACCRUED BENEFITS.......................................28

   3.01     Vesting in Accrued Benefits ................................................28
   3.02     Amendments to Vesting Schedule .............................................28
   3.03     Vesting Upon Termination ...................................................29
   3.04     Forfeitures ................................................................29
   3.05     Recrediting Certain Forfeitures upon Return to Service .....................29
   3.06     Vesting of Employees of Rio Grande Foods Manpower, Inc. ....................30
</TABLE>

                                       ii

<PAGE>   4

<TABLE>
<S>         <C>                                                                         <C>
ARTICLE IV.           BENEFITS PAYABLE..................................................31

   4.01     Application for Commencement of Benefits ...................................31
   4.02     Normal Retirement Benefits .................................................31
   4.03     Delayed Retirement Benefits ................................................31
   4.04     Early Retirement Benefits ..................................................32
   4.05     Disability Benefits ........................................................32
   4.06     Termination Benefits .......................................................33
   4.07     Death Benefits .............................................................33
   4.08     Maximum Benefit Limitations ................................................35
   4.09     Special Provisions Regarding Benefits Payable ..............................39

ARTICLE V.            STANDARD AND OPTIONAL FORMS OF RETIREMENT INCOME..................40

   5.01     Standard Form of Retirement Income .........................................40
   5.02     Automatic Forms of Retirement Income .......................................40
   5.03     Optional Forms of Retirement Income ........................................41
   5.04     Conditions Relative to all Standard and Optional Forms .....................43
   5.05     Automatic and Optional Forms for Termination Benefits ......................44
   5.06     Automatic and Optional Forms for Death Benefits ............................45
   5.07     Suspension upon Delayed Retirement or Reemployment After Annuity
            Starting Date ..............................................................46
   5.08     Required Distributions .....................................................47
   5.09     Code ss. 401(a)(31) Requirement ............................................52

ARTICLE VI.           CONTRIBUTIONS AND TRUST FUND......................................55

   6.01     Required Participant Contributions .........................................55
   6.02     Contributions by the Employer ..............................................55
   6.03     Return of Contributions ....................................................55

ARTICLE VII.          ADMINISTRATION....................................................57

   7.01     Committee ..................................................................57
   7.02     Plan Administrator .........................................................57
   7.03     Delegation of Duties .......................................................57
   7.04     Plan Records ...............................................................57
   7.05     Committee Liability ........................................................57
   7.06     Committee Indemnification ..................................................57
   7.07     Committee Expenses .........................................................58
   7.08     Interpretation of the Plan and Findings of Facts ...........................58

ARTICLE VIII.         THE TRUST FUND AND TRUSTEE........................................59

   8.01     Existence of Trust .........................................................59
   8.02     Exclusive Benefit Rule .....................................................59
</TABLE>

                                      iii

<PAGE>   5

<TABLE>
<S>         <C>                                                                         <C>
   8.03     Removal of Trustee .........................................................59
   8.04     Powers of Trustee ..........................................................59
   8.05     Integration of Trust .......................................................59
   8.06     Liability for Payments .....................................................59

ARTICLE IX.           MISCELLANEOUS PROVISIONS..........................................60

   9.01     Exclusive Benefit Rule .....................................................60
   9.02     Merger or Consolidation of Company .........................................60
   9.03     Nonalienation or Assignment ................................................60
   9.04     Plan Continuance Voluntary .................................................62
   9.05     Plan not an Employment Contract ............................................62
   9.06     Payments to Minors and Others ..............................................62
   9.07     Governing Law ..............................................................62
   9.08     Indemnification ............................................................62
   9.09     Gender and Number ..........................................................63
   9.10     Headings ...................................................................63
   9.11     Claims Procedure ...........................................................63
   9.12     Misstatement in Application for Retirement Income ..........................64
   9.13     Liability Limited ..........................................................64
   9.14     Location of Participant or Beneficiary Unknown .............................64
   9.15     Forfeitures and Investment Income ..........................................65
   9.16     Prohibited Discrimination ..................................................65
   9.17     Correction of Participants' Benefits .......................................65
   9.18     Action of Employer, Committee and Plan Administrator .......................65
   9.19     Employer Records ...........................................................65

ARTICLE X.            AMENDMENT, TERMINATION AND ADOPTION...............................66

  10.01     Permanency of Plan and Trust ...............................................66
  10.02     Right to Amend Plan ........................................................66
  10.03     Right to Terminate Plan and Trust ..........................................67
  10.04     Merger, Consolidation, or Transfer of Assets ...............................67
  10.05     Distribution of Assets of Trust Fund .......................................67
  10.06     Adoption of the Plan by Members of Controlled Group ........................68
  10.07     Early Plan Termination Provision ...........................................69
  10.08     Military Service ...........................................................70
  10.09     Electronic Means of Communication ..........................................70

ARTICLE XI.           TOP HEAVY PROVISIONS..............................................71

  11.01     Applicability ..............................................................71
  11.02     Definitions ................................................................71
  11.03     Minimum Accrued Benefit ....................................................73
  11.04     Minimum Vesting ............................................................74
  11.05     Impact on Code ss. 415 Limitations .........................................74
</TABLE>

                                       iv

<PAGE>   6

<TABLE>
<S>         <C>                                                                         <C>
  11.06     Compensation Limitation ....................................................74
  11.07     No Duplication of Benefits .................................................74

ARTICLE XII.          SPECIAL PROVISIONS REGARDING THE MERGER OF THE
                      STORCK BAKING COMPANY PENSION PLAN WITH AND
                      INTO THE PLAN.....................................................75

  12.01     General Provisions .........................................................75
  12.02     Transfer of Plan Assets ....................................................75
  12.03     Conditions for Merger and Transfer .........................................75
  12.04     Additional Optional Form of Benefit ........................................75
  12.05     Actuarial Equivalent Amounts ...............................................75
  12.06     Vesting ....................................................................76
  12.07     Vested Cash Values .........................................................76
  12.08     Special Rule on Termination ................................................77

ARTICLE XIII.         SPECIAL PROVISIONS REGARDING THE MERGER OF THE
                      SHIPLEY BAKING COMPANY DEFINED BENEFIT PENSION
                      PLAN AND TRUST WITH AND INTO THE PLAN.............................78

  13.01     General Provisions .........................................................78
  13.02     Transfer of Plan Assets ....................................................78
  13.03     Conditions for Merger and Transfer .........................................78
  13.04     Additional Optional Form of Benefit ........................................78
  13.05     Actuarial Equivalent Amounts ...............................................78
  13.06     Vesting ....................................................................79
  13.07     Special Rule on Termination ................................................79
  13.08     Employee Contribution Accounts .............................................79

APPENDIX B            ADDITIONAL RETIREMENT BENEFITS....................................81
</TABLE>

                                       v

<PAGE>   7

                               FLOWERS FOODS, INC.
                              RETIREMENT PLAN NO. 1

                                    PREAMBLE

         Flowers Industries, Inc., a Georgia corporation, adopted by resolution
of its Board of Directors on February 28, 1971, the Retirement Plan for
Non-Bargaining Employees of Flowers Industries, Inc. (the "Plan"). The Plan was
amended in its entirety, effective March 1, 1974, and designated the Flowers
Industries, Inc. Retirement Plan for Non-Bargaining Employees. The Plan was
again amended in its entirety effective March 1, 1976, January 1, 1978, and
January 1, 1982, and redesignated the Flowers Industries, Inc. Retirement Plan.
Subsequently, several further amendments were made to the Plan, and the Plan was
designated the Flowers Industries, Inc. Retirement Plan No. 1, and the Plan was
amended and restated effective as of January 1, 1987. The Plan was again amended
and restated effective as of January 1, 1997.

         Effective as of March 26, 2001, Flowers Foods, Inc., a Georgia
corporation, has assumed the sponsorship of the Plan, and the name of the Plan
has been changed to the Flowers Foods, Inc. Retirement Plan No. 1. The Plan is
herein amended and restated in its entirety, effective as of March 26, 2001.

         The Plan is intended to comply with the Tax Reform Act of 1986 and all
subsequent applicable rulings and legislation, including the Omnibus Budget
Reconciliation Act of 1986, the Omnibus Budget Reconciliation Act of 1987, the
Technical and Miscellaneous Revenue Act of 1988, the Omnibus Budget
Reconciliation Act of 1989, the Omnibus Budget Reconciliation Act of 1990, the
Unemployment Compensation Amendments of 1992, the Revenue Reconciliation Act of
1993, the Uruguay Round Agreements Act, the Uniformed Services Employment and
Reemployment Rights Act of 1994, the Small Business Job Protection Act of 1996,
the Taxpayer Relief Act of 1997, and the Internal Revenue Service Restructuring
and Reform Act of 1998. This Plan, and the Trust which forms a part of the Plan,
are intended to be and to remain qualified and exempt from taxation under
Sections 401 and 501 of the Internal Revenue Code of 1986, and shall be
interpreted and administered in such manner as shall be necessary to carry out
this intention.

         The effective date of the amendment and restatement of this Plan is
March 26, 2001, except where certain provisions have other effective dates as
indicated, and this amendment and restatement shall apply only to a Participant
who is credited with an Hour of Service on or after that date except as
otherwise provided herein. The rights and benefits of a Participant who is not
credited with an Hour of Service on or after March 26, 2001 shall be determined
in accordance with the terms of the Plan in effect on the date of the
Participant's termination of employment with the Employer. Certain provisions of
this amended and restated Plan are effective on other, stated dates, as
specifically provided herein.

<PAGE>   8

                                   ARTICLE I.

                                   DEFINITIONS

         The following words and phrases, whenever capitalized in this document
or the accompanying Trust Agreement, shall have the following meanings unless
the context clearly indicates otherwise:

         1.01 Accrual Computation Period.

                  (a) For purposes of determining Years of Benefit Service and
         One-Year Breaks in Service for purposes of Benefit Accrual, the Accrual
         Computation Period shall be the 12 consecutive month period coincident
         with the Plan Year.

                  (b) If the Company shall amend the Plan to change the Accrual
         Computation Period, such amendment shall comply with the provisions of
         DOL Reg. ss. 2530.204-2(e).

         1.02 Accrued Benefit.

                  (a) In General. Accrued Benefit, with respect to a
         Participant, means the benefit determined in accordance with Section
         1.37 and Article IV (excluding Sections 4.05 and 4.07) which the
         Participant has accrued under this Plan (which may or may not be
         vested).

                  (b) Transitional Rules. Notwithstanding any other contrary
         provision of the Plan, in order that benefit accruals arising during
         the Plan Years (and portions thereof) before December 31, 1991, will
         not cause this Plan to fail to meet the requirements of Code
         ss.ss. 401(a)(4) and 401(a)(26) for such Plan Years, the following
         provisions are added to the Plan effective as noted below:

                           (i)   A Plan Participant who is a Super Highly
                  Compensated Employee may not receive a distribution after
                  January 31, 1989, of a benefit that exceeds the benefit that
                  such Participant had accrued as of the last day of the Plan
                  Year beginning in 1988 until such time as the Accrued Benefit
                  for that Participant under the Plan as in existence after
                  December 31, 1991, exceeds such Participant's Accrued Benefit
                  as of the last day of the Plan Year beginning in 1988.

                           (ii)  Benefit accruals for Participants who are not
                  Highly Compensated Employees shall continue at more than a de
                  minimis level under this Plan after December 31, 1991.

                           (iii) No amendment decreasing benefit accruals of
                  Participants who are not Highly Compensated Employees that do
                  not correspondingly affect Participants who are Highly
                  Compensated Employees or amendment increasing benefit accruals
                  shall be adopted during the period beginning December 13, 1988
                  and ending on December 31, 1991.

                                       2

<PAGE>   9

         It is the intention of the provisions of this subsection (b) to reflect
         the adoption of Alternative IID, as promulgated by the Internal Revenue
         Service in Notice 88-131, for the period beginning January 1, 1989 and
         ending on December 31, 1991, in order to ensure that benefit accruals
         arising prior to January 1, 1992, will not cause the Plan to fail to
         meet the requirements of Code ss.ss. 401(a)(4) and 401(a)(26) for such
         period.

                  (c) Transfer of Participants. The Accrued Benefit of any
         Participant who transfers from the employment of one Employer to that
         of a member of the Controlled Group who is not an Employer or any
         Participant who transfers from the employment of a member of the
         Controlled Group who is not an Employer to that of an Employer shall be
         determined using only Compensation received and Years of Benefit
         Service earned while the Participant was employed by an Employer. See
         also Sections 1.59(b)(ii) and 2.04(b)(i).

         1.03 Actuarial Equivalent or Actuarially Equivalent means a benefit of
equivalent value as of the Participant's or Beneficiary's, as applicable,
Annuity Starting Date, computed on the basis of tables adopted by the Pension
Committee of the Board for purposes of calculating actuarially equivalent
benefits. For purposes of computing lump sum amounts under Sections 5.02(a),
5.03(d), 5.03(e)(iii), 5.05(a), 5.05(b)(iii), 5.06(a) and (b), 12.04, and 13.04,
such tables shall be based upon (a) a mortality table prescribed by the
Secretary of the Treasury, based on the prevailing commissioners' standard table
(described in Section 807(d)(5)(A) of the Code) used to determine reserves for
group annuity contracts issued on the date as of which present value is being
determined (without regard to any other subparagraph of Section 807(d)(5) of the
Code), and (b) the annual rate of interest on 30-year Treasury securities for
the month before the beginning of the Plan Year in which the lump sum
distribution occurs. Exhibit A to the Plan contains the current Actuarial
Equivalent tables which may be changed from time to time by the Pension
Committee of the Board with written documentation of such action by the Pension
Committee of the Board. In no event shall the Accrued Benefit of a Participant
as adjusted by the Actuarial Equivalent tables which are current at his Age when
benefits commence be less than his Accrued Benefit determined as of any earlier
date as adjusted by the Actuarial Equivalent tables in effect on such earlier
date but based upon his Age when benefits commence; provided, however, that the
preceding clause shall not apply to the extent permitted by Section 767(d)(2) of
the Retirement Protection Act of 1994.

         1.04 Age means the age, in years and completed months, of an Employee
as of the date of determination.

         1.05 Annuity Starting Date means, with respect to a Participant or
Beneficiary, (i) the first day of the first period for which an amount is paid
as an annuity or (ii) in the case of a benefit not payable in the form of an
annuity, the first day on which all events have occurred which entitle the
Participant or Beneficiary to such benefit, in accordance with Treas. Reg.
ss. 1.401(a)-20(Q&A-10)(b).

         1.06 Applicable Interest Rate means the interest rate or rates which
would be used by the Pension Benefit Guaranty Corporation for purposes of
determining the present value of a lump sum distribution on termination of a
plan. For purposes of determining the present value of lump sum distributions
from this Plan, such interest rates shall be determined as of the first day

                                       3
<PAGE>   10

of the Plan Year during which the later of the Annuity Starting Date or the lump
sum distribution occurs.

         1.07 Beneficiary means the person or persons, including a trust for the
benefit of individuals, designated by the terms of this Plan or last designated
by a Participant, by written notice filed with the Committee, to receive a
survivor benefit (if applicable) upon his death. If, at any time, no Beneficiary
has been designated by a Participant, or the designated Beneficiary is no longer
living or no longer exists, whichever is applicable, then the Participant's
Beneficiary shall be deemed to be the Participant's Spouse or, if no such Spouse
is then living, the Participant's estate; provided, however, nothing in this
Section shall be interpreted so as to require a benefit for such Beneficiary
except as set forth elsewhere in this Plan. Once a benefit is in pay status, the
Beneficiary of a Participant hereunder may not be changed.

         1.08 Board means the Board of Directors of the Company.

         1.09 Break in Service or One Year Break in Service means any period of
time which would count as a Year of Eligibility Service, a Year of Vesting
Service or a Year of Benefit Service, as applicable, if a Participant had been
credited with at least 1000 Hours of Service during such period, but for which
the Participant was credited with 500 or fewer Hours of Service.

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

         1.11 Committee means the administrative Committee comprised of one or
more persons designated by the President of the Company in accordance with
Article VII hereof.

         1.12 Company means Flowers Foods, Inc., including any successor by
merger, purchase or otherwise which shall adopt the Plan with the approval of
its Board of Directors. With respect to periods of time prior to March 26, 2001,
this term means Flowers Industries, Inc.

         1.13 Compensation.

              (a) General Definition. Subject to subsections (b) through (e)
         below, Compensation for a Plan Year with respect to an Employee shall
         mean the Employee's "wages" as defined in Code ss. 3401(a) for purposes
         of income tax withholding at the source paid by an Employer but
         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
         Code ss. 3401(a)(2)) and all other payments of compensation (in the
         course of the Employer's trade or business) for which the Employer is
         required to furnish the Employee a written statement under Code
         ss.ss. 6041(d), 6051(a)(3) and 6052 which are paid by the Employer to
         such Employee for such Plan Year.

              (b) Safe Harbor Exclusions. Notwithstanding the provisions of
         subsection (a) above, none of the following items shall be included in
         the definition of Compensation, whether or not includable in taxable
         gross income:

                  (i)   reimbursements or other expense allowances;

                                       4
<PAGE>   11

                           (ii)   fringe benefits (cash and noncash);

                           (iii)  moving expenses;

                           (iv)   deferred compensation;

                           (v)    welfare benefits;

                  and, additionally, solely with respect to Highly Compensated
                  Employees:

                           (vi)   amounts received from the exercise of any
                  nonqualified stock options issued by an Employer;

                           (vii)  amounts received from the sale or exchange of
                  stock transferred pursuant to the exercise of an incentive
                  stock option; and

                           (viii) amounts required to be reported as income
                  pursuant to Code ss. 7872.

                  (c) Salary Reduction Arrangements. Notwithstanding the
         preceding subsections of this Section, Compensation shall include any
         amount which is contributed by the Employer pursuant to a salary
         reduction agreement and which is not includable in the gross income of
         the Employee under Code ss.ss. 125, 402(e)(3), 402(h) or 403(b).

                  (d) Limitation. The annual Compensation of an Employee taken
         into account in determining contributions or benefits under the Plan
         for any Plan Year beginning after December 31, 1988, shall not exceed
         $200,000 as adjusted by the Secretary of the Treasury at the same time
         and in the same manner as under Code ss. 415(d). If the Plan determines
         Compensation on a period of time that contains fewer than 12 calendar
         months, the above limitation shall be proportionately reduced;
         provided, however, no proration is required for Employees who are
         covered under the Plan for less than 1 full year if the Plan formula
         for accruals is based on Compensation for a period of at least 12
         months.

                     In addition to other applicable limitations set forth in
         the Plan, and notwithstanding any other provision of the Plan to the
         contrary, for Plan Years beginning on or after January 1, 1994, the
         annual compensation of each employee taken into account under the Plan
         shall not exceed the OBRA '93 annual compensation limit. The OBRA '93
         annual compensation limit is $150,000, as adjusted by the Commissioner
         for increases in the cost of living in accordance with section
         401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
         adjustment in effect for a calendar year applies to any period, not
         exceeding 12 months, over which compensation is determined
         (determination period) beginning in such calendar year.

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

                                       5
<PAGE>   12

                  (e) Special Provisions. The term Compensation may be specially
         defined for purposes of certain provisions of this Plan. See Section
         4.08(f)(i).

                  (f) Limitation. Notwithstanding any other provision herein,
         "Compensation" shall not include amounts paid by Flowers Foods, Inc.
         attributable to services performed on and after March 26, 2001.

         1.14 Controlled Group means the Company and any other entity which is
required to be aggregated with the Company pursuant to Code ss.ss. 414(b), (c),
(m) or (o). For purposes of Section 4.08 hereof and any other part of the Plan
referring to the Code ss.415 limitations, the definition of Controlled Group
shall be modified pursuant to Code ss. 415(h).

         1.15 Death Benefit means the benefit to which the Surviving Spouse of a
Participant is entitled upon the death of the Participant prior to his Annuity
Starting Date as set forth in Section 4.07 herein.

         1.16 Delayed Retirement Benefit means the benefit to which a
Participant is entitled upon continuing in the employ of an Employer beyond his
Normal Retirement Date as set forth in Section 4.03 herein.

         1.17 Delayed Retirement Benefit Amount means the Participant's Normal
Retirement Benefit Amount, determined as of his date of severance from
employment with all members of the Controlled Group, unadjusted actuarially to
reflect a delay in the payment of benefits after the Participant's Normal
Retirement Date, and not offset by any earlier payments of benefits required by
Section 5.08 herein.

         1.18 Delayed Retirement Date. See Section 4.03 of this Plan.

         1.19 Disability Retirement Benefit means the benefit to which a
Participant is entitled upon severance from employment with all members of the
Controlled Group as a result of becoming Totally and Permanently Disabled as set
forth in Section 4.05 herein.

         1.20 Earliest Retirement Age means the earliest age at which a
Participant could sever from employment with all members of the Controlled Group
and receive a distribution, in accordance with Treas. Reg. ss.
1.401(a)-20(Q&A-17)(b).

         1.21 Early Retirement Benefit means the benefit to which a Participant
is entitled upon attainment of his Early Retirement Date while in the service of
an Employer as set forth in Section 4.04 herein.

                                       6
<PAGE>   13

         1.22 Early Retirement Benefit Amount means the amount payable each
month to a Participant as of the Participant's selected Annuity Starting Date,
which shall be equal to the Participant's Normal Retirement Benefit Amount
determined as of his date of severance from employment with all members of the
Controlled Group, multiplied by the appropriate factor from Table 1 in Exhibit A
as determined by the period of time prior to the Participant's Normal Retirement
Date that his Annuity Starting Date occurs.

         1.23 Early Retirement Date means, with respect to a Participant, the
first day of any month prior to his attainment of Normal Retirement Age and
coincident with or immediately following the date the Participant has completed
all of the following requirements: (a) attainment of Age 55 ("Early Retirement
Age"), (b) completion of 5 Years of Vesting Service (10 Years of Vesting Service
for Employees who do not have at least one Hour of Service in a Plan Year
beginning after December 31, 1988), and (c) severance from employment with all
members of the Controlled Group. See Section 4.04 of this Plan.

         1.24 Effective Date means the Effective Date of this restated and
amended Plan, which is March 26, 2001.

         1.25 Eligibility Computation Period means, with respect to an Employee,
the following for purposes of determining Years of Eligibility Service and One
Year Breaks in Service for purposes of eligibility:

                  (a) The initial Eligibility Computation Period is the
         12-consecutive-month period beginning on the Employee's Employment
         Commencement Date.

                  (b) Succeeding 12-consecutive-month periods which are the Plan
         Years that include each anniversary of the Employee's Employment
         Commencement Date shall constitute subsequent Eligibility Computation
         Periods for the Employee.

         1.26 Eligible Employee means an Employee who (i) is employed by an
Employer, and (ii) is eligible to participate in this Plan and become a
Participant for all or a portion of a Plan Year pursuant to Article II of this
Plan. Leased Employees and Employees described in Section 2.01(d) and (e) are
excluded from participating in this Plan; provided that Leased Employees who are
Highly Compensated Employees, Leased Employees who are not Highly Compensated
Employees and Employees described in Section 2.01(e), are included in the
coverage test performed for this Plan under Code Section 410(b).

         1.27 Employee means an individual currently performing services as a
common law employee of any member of the Controlled Group. The term "Employee"
shall also include any Highly Compensated Leased Employee and any Non-Highly
Compensated Leased Employee of an Employer or any member of the Controlled
Group. The term "Employee" shall not include an individual who provides services
to the Employer or another Controlled Group member pursuant to a contractual
arrangement with another entity, but who is not deemed to constitute a Leased
Employee. It is expressly intended that individuals not treated as common law
employees by the Employer or Controlled Group member on their payroll records
are to be excluded from Plan participation even if a court or administrative
agency determines that such individuals are common law employees and not
independent contractors.

                                       7
<PAGE>   14

         1.28 Employer means the Company and any other member of the Controlled
Group that adopts the Plan with the consent of the Board of the Company pursuant
to Section 10.06.

         1.29 Employment Commencement Date means the date on which an Employee
first performs an Hour of Service for the Employer or any other member of the
Controlled Group.

         1.30 Enrolled Actuary means an individual who has been approved and
enrolled by the Joint Board for the Enrollment of Actuaries to perform actuarial
services required by ERISA or the regulations thereunder.

         1.31 ERISA means the Employee Retirement Income Security Act of 1974,
as amended.

         1.32 Highly Compensated Employee means the following:

                  (a) An Employee shall be a Highly Compensated Employee, with
         respect to a Plan Year, if the Employee is described under either or
         both paragraph (b) or paragraph (c) below.

                  (b) An Employee is described under this paragraph (b) if the
         Employee is performing services during the Determination Year for an
         Employer and: (1) the Employee received compensation from the Employer
         during the Look-Back Year in excess of $80,000 and was a member of the
         top-paid group (as defined in Treas. Reg. ss. 1.414(q)-1T(Q&A-9)) for
         such Look-Back Year; or (2) the Employee was a "5-percent owner" (as
         defined in Treas. Reg. ss. 1.414(q)-1T(Q&A-8)) at any time during
         either or both the Look-Back Year or the Determination Year.

                  (c) An Employee is described under this paragraph (c) if the
         individual was, at one time, an Employee of the Employer and the
         individual separated from service (or was deemed to have separated from
         service pursuant to Treas. Reg. ss. 1.414(q)-1T(Q&A5)) from the
         Employer prior to the Determination Year, such individual performs no
         service for the Employer during the Determination Year, and such
         individual is a "highly compensated employee" (as defined in Code ss.
         414(q) for either the Determination Year during which the individual
         separated from service with the Employer or any Determination Year
         ending on or after the individual's 55th birthday.

                  (d) For purposes of this Section, the applicable dollar amount
         specified in subparagraph (1) of paragraph (b) shall be the applicable
         dollar amount prescribed in Code ss.ss. 414(q)(1)(B) as adjusted
         pursuant to the last sentence of Code ss. 414(q)(1).

                  (e) For purposes of this Section, the term "Determination
         Year" shall mean the respective Plan Year specified in paragraph (a)
         above, and the term "Look-Back Year" shall mean the 12 month period
         immediately preceding the Determination Year.

                  (f) The determination of who is a Highly Compensated Employee,
         including the determinations of the number and identity of the
         Employees in the top-paid group, and the compensation that is
         considered, will be made in accordance with Code ss. 414(q) and the
         regulations thereunder. For purposes of this Section, "compensation"
         shall be

                                       8
<PAGE>   15

         defined as set forth in Section 4.08(f)(i), except compensation for
         each year shall include any amount which is contributed by an Employer
         pursuant to a salary reduction arrangement and which is not includable
         in the gross income of the Employee under Code ss.ss. 125, 402(e)(3) or
         403(b).

         1.33 Hour of Service means the following:

                  (a) An Employee shall receive credit for an Hour of Service
         for each hour for which he is paid or entitled to payment by an
         Employer for the performance of duties.

                  (b) An Employee shall also receive credit for an Hour of
         Service for each hour for which he is paid or entitled to payment by an
         Employer on account of a period of time during which no duties are
         performed (irrespective of whether the employment relationship has
         terminated) due to vacation, holiday, illness, incapacity (including
         disability), layoff, jury duty, military duty or leave of absence;
         provided, however, that:

                           (i)   No more than 501 Hours of Service shall be
                  credited because of this subsection (b) to an Employee on
                  account of any single continuous period during which the
                  Employee performs no duties (whether or not said period occurs
                  in a single computation period);

                           (ii)  An hour for which an Employee is directly or
                  indirectly paid or entitled to payment on account of a period
                  during which no duties are performed shall not be credited to
                  an Employee if said payment is made or due under a plan
                  maintained solely for the purpose of complying with applicable
                  worker's compensation, unemployment compensation, or
                  disability insurance laws; and

                           (iii) Hours of Service shall not be credited for a
                  payment which reimburses an Employee solely for medical or
                  medically related expenses incurred by the Employee.

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

                  (c) An Employee shall also receive credit for an Hour of
         Service for each hour for which back pay, irrespective of mitigation of
         damages, is either awarded or agreed to by an Employer provided that no
         Hour of Service shall be credited pursuant both to this subsection (c)
         and subsections (a) or (b) above. Crediting of Hours of Service for
         back pay awarded or agreed to with respect to periods described in
         subsection (b) above shall be subject to the limitations set forth in
         that subsection.

                  (d) In addition to the Service for which an Hour of Service
         must be credited pursuant to subsections (a), (b) and (c) above, an
         Employee shall receive credit for an Hour of Service for:

                                       9
<PAGE>   16

                           (i) Each hour, whether or not said Employee is paid
                  therefor, during which he would otherwise perform an Hour of
                  Service, except for the fact that he is on an approved leave
                  of absence (not to exceed 24 months). If he does not return to
                  work on or before the end of his leave, Service will be deemed
                  to have terminated as of the end of his leave (unless the
                  Employee terminated earlier); and

                           (ii) Each hour for which an Employee performs no
                  duties due to absence during any military service to the
                  extent required by law.

                  (e) Each Employee for whom the Employer does not keep records
         of actual Hours of Service shall be credited with 45 Hours of Service
         for each week for which said Employee would be required to be credited
         with at least one (1) Hour of Service, in accordance with this Section
         and applicable regulations promulgated by the Department of Labor. If,
         based on the preceding sentence, an Employee would not be credited with
         1,000 Hours of Service in an eligibility computation period, a vesting
         computation period or an accrual computation period, Hours of Service
         shall be determined from the record of hours worked or hours for which
         payment is made or owing.

                  (f) In determining the number of Hours of Service to be
         credited to an Employee, the provisions of DOL Reg. ss. 2530.200b-2(b)
         and (c) are incorporated herein by reference.

                  (g) If an Employee is absent from service with the Employer as
         a result of a Maternity/Paternity Absence, then, solely for purposes of
         determining whether the Employee incurs a One Year Break in Service for
         purposes of eligibility to participate and vesting in benefits, the
         Employee will be credited with up to 501 Hours of Service with respect
         to the period of Maternity/Paternity Absence. Such 501 Hours of Service
         shall be credited at the rate at which the Employee would have
         otherwise accrued Hours of Service but for the Maternity/Paternity
         Absence, provided that, if the Committee is unable to determine the
         Hours of Service that would have otherwise been credited, such Hours of
         Service shall be credited at the rate of eight hours for each day of
         the Maternity/Paternity Absence. Such 501 Hours of Service shall be
         credited only in the Computation Period in which the Employee's
         Maternity/Paternity Absence commences if the Employee would have
         incurred a One Year Break in Service in such Computation Period but for
         the crediting of the additional Hours of Service. If such 501 Hours of
         Service are not credited to the Computation Period in which the
         Maternity/Paternity Absence commences pursuant to the immediately
         preceding sentence, such Hours of Service shall be credited to the next
         Computation Period commencing after the Maternity/Paternity Absence
         commences. For purposes of this subsection, the term
         "Maternity/Paternity Absence" means an absence from service with the
         Employer by an Employee if the absence is caused:

                           (i)   By reason of the pregnancy of the Employee;

                           (ii)  By reason of the birth of a child of the
                  Employee;

                                       10
<PAGE>   17

                           (iii) By reason of the placement of a child with the
                  Employee in connection with the adoption of such child by the
                  Employee; or

                           (iv)  For purposes of caring for such child for a
                  period beginning immediately following such birth or
                  placement.

         For purposes of this subsection (g), "Computation Period" shall mean
         the Eligibility Computation Period or Vesting Computation Period, as
         applicable.

                  (h) For purposes of this Section, service with any member of
         the Controlled Group during the period that it is a member thereof
         shall be treated as service with the Employer except as indicated to
         the contrary in this Plan, and prior service shall also be included if
         so provided in this Plan.

                  (i) Notwithstanding any other provision herein, effective as
         of March 26, 2001, Hours of Service shall not be credited under the
         foregoing provisions of this Section 1.33 with respect to hours that
         are both (1) attributable to Flowers Industries, Inc. and (2) allocable
         to periods of time after March 26, 2001.

         1.34 Leased Employee.

                  (a) Leased Employee shall mean any person (other than an
         employee of the Employer) who pursuant to an agreement between the
         Employer and any other person ("leasing organization") has performed
         services for the Employer (or for the Employer and related persons
         determined in accordance with Code ss. 414(n)(6)) on a substantially
         full time basis for a period of at least one year, and such services
         are performed under the primary direction or control of the Employer.
         Contributions or benefits provided a Leased Employee by the leasing
         organization which are attributable to services performed for the
         Employer shall be treated as provided by the Employer.

                  (b) A Leased Employee shall not, however, be considered an
         Employee of the Employer if: (i) such Employee is covered by a money
         purchase pension plan of his legal employer providing: (1) a
         nonintegrated employer contribution rate of at least 10% of
         compensation (as defined in Code ss. 415(c)(3), but excluding amounts
         contributed pursuant to a salary reduction agreement which are
         excludable from the employee's gross income under Code ss.ss. 125,
         402(e)(3), 402(h) or 403(b)), (2) immediate participation, and (3) full
         and immediate vesting; and (ii) Leased Employees do not constitute more
         than 20% of the Employer's nonhighly compensated workforce. For
         purposes of this subsection (b), the term "nonhighly compensated
         workforce" means the total number of individuals (other than Highly
         Compensated Employees) who are either Employees of the Employer or
         Leased Employees of the Employer.

         1.35 Normal Retirement Age means Age 65.

         1.36 Normal Retirement Benefit means the benefit to which a Participant
is entitled upon attainment of his Normal Retirement Age while in the service of
an Employer as set forth in Section 4.02 herein.

                                       11
<PAGE>   18

         1.37 Normal Retirement Benefit Amount means the amount payable each
month to a Participant as of the later of the Participant's attainment of his
Normal Retirement Age, or the Participant's date of actual severance from
employment with all members of the Controlled Group, unless the Participant
continues to work past his Required Beginning Date, in which event Normal
Retirement Benefit Amount shall mean the amount payable each month to the
Participant as of his Required Beginning Date, with subsequent accruals by the
Participant to be taken into account in accordance with Section 5.08(f). A
Participant's Normal Retirement Benefit Amount shall be determined as of the
earlier of (1) the Participant's Annuity Starting Date, or (2) the Participant's
date of death, in the following manner:

                  (a) General Rule. The Normal Retirement Benefit Amount for any
         Participant shall be equal to the sum of the Participant's Plan Year
         Accruals ("PYA's") for each Accrual Computation Period as calculated in
         paragraphs (i) through (v) below, but not less than the amount
         calculated in subsection (b) below.

                           (i) Post 1988 PYA's. For each Accrual Computation
                  Period beginning on or after January 1, 1989, the
                  Participant's Plan Year Accrual with respect to such Accrual
                  Computation Period shall be equal to:

                           PYA = (1/12) x [(0.0135 x A) + (0.0065 x B)],

                  for each of the first 35 Years of Benefit Service of the
                  Participant, less any Years of Benefit Service which are taken
                  into consideration under paragraphs (ii), (iii) and (iv) of
                  this subsection (a), and shall be equal to:

                           PYA = (1/12) x (0.0180 x A)

                  for each Year of Benefit Service of the Participant
                  thereafter, where:

                           A = The Participant's Compensation during the Accrual
                               Computation Period; and

                           B = The Participant's Compensation in excess of
                               $10,000 during the Accrual Computation Period.

                           (ii) 1976 to 1988 PYA's. For each Year of Benefit
                  Service completed during an Accrual Computation Period
                  beginning on or after January 1, 1976, but prior to January 1,
                  1989, the Participant's Plan Year Accrual shall be equal to
                  the following amount:

                           PYA = (1/12) x [(0.0090 x C) + (0.0110 x D)]

                  where:
                           C = The Participant's Earnings during the Accrual
                               Computation Period; and

                                       12
<PAGE>   19

                           D =   The Participant's Earnings in excess of $7,800
                                 during the Accrual Computation Period.

                           (iii) 1971 to 1975 PYA's. For each Year of Benefit
                  Service completed during an Accrual Computation Period
                  beginning on or after March 1, 1971, but prior to January 1,
                  1976, the Participant's Plan Year Accrual shall be equal to
                  the following amount:

                           PYA = (1/12) x [(0.0090 x C) + (0.0060 x D)]

                  where C and D have the meanings given in paragraph (ii) above.

                           (iv) Pre-1971 PYA's. For each Year of Benefit Service
                  completed during Accrual Computation Periods prior to March 1,
                  1971, the Participant's Plan Year Accrual shall be equal to
                  the following amount:

                           PYA = (1/12) x [(0.0090 x E) + (0.0060 x F)] x G

                  where:

                           E  =  The Participant's Average Earnings as of
                                 March 1, 1971; and

                           F  =  The Participant's Average Earnings as of
                                 March 1, 1971, in excess of $7,800; and

                           G  =  The Participant's Years of Benefit Service
                                 prior to March 1, 1971;

                  provided, however, that a Participant's aggregate Plan Year
                  Accruals for Accrual Computation Periods prior to March 1,
                  1971, shall not be less than the monthly amount of payments
                  which could be provided by a benefit payable in the Standard
                  Form which is Actuarially Equivalent to (i) the total cash
                  surrender value of the individual policies or annuity
                  contracts which were being purchased for the Participant under
                  any pension or profit sharing plan which has been merged into
                  this Plan, or (ii) the fair market value of the assets
                  allocated to the Participant under any such plan on the day
                  before the date such plan was merged into this Plan.

                           (v) Definitions and Rules. Solely for purposes of
                  this subsection (a), the following definitions and rules shall
                  apply:

                                    (A) "Earnings" of an Employee for an Accrual
                           Computation Period shall mean the total compensation
                           actually paid to an Employee by an Employer as
                           reported on Form W-2 including overtime pay, premium
                           pay, incentive pay, bonuses, expense allowances or
                           any other special payments. Effective as of July 1,
                           1987, for purposes of determining Earnings, Earnings
                           shall include any amount which is contributed by the
                           Employer pursuant to a salary reduction agreement and
                           which is not

                                       13
<PAGE>   20

                           includable in the gross income of the Employee under
                           Code ss. 125. (Note that for purposes of paragraph
                           (i), Compensation as defined in Section 1.13, and not
                           Earnings, is used to determine the Normal Retirement
                           Benefit Amount.)

                                    (B) "Average Earnings" of an Employee for an
                           Accrual Computation Period as of a date shall mean
                           the average of the Employee's "Earnings" (as defined
                           in subparagraph (A) above) over the 5 year period (or
                           the total period of service of the Employee if less
                           than 5 years) ending on such date.

                                    (C) Should a record of Earnings not exist
                           for any year in which service is to be credited for
                           benefits, such Earnings shall be computed upon the
                           assumption that Earnings for any year prior to the
                           earliest year of known Earnings are lower than the
                           Earnings for the years following. The assumed
                           Earnings will be determined as if they have increased
                           at the rate of 5% per year to the earliest year of
                           known Earnings.

                                    (D) For purposes of paragraphs (i), (ii) and
                           (iii) above, a Participant's Compensation or Earnings
                           during an Accrual Computation Period shall only
                           include amounts paid during such Accrual Computation
                           Period for service rendered which service would be
                           included and not excluded under paragraphs (ii)
                           through (ix) of Section 1.59(b).

                  (b) Transitional Rule. The Accrued Benefit for the period
         beginning January 1, 1989, and ending on the December 31, 1991, of any
         Plan Participant who is not a Super Highly Compensated Employee shall
         be equal to the greater of (1) his Normal Retirement Benefit Amount
         calculated under subsection (a) above for the entire period, or (2) his
         Normal Retirement Benefit Amount calculated under subsection (a) above
         for the entire period with the following inserted in lieu of paragraph
         (i) of subsection (a):

                           (i) Post 1988 PYA's. For each Accrual Computation
                  Period of a Participant beginning on or after January 1, 1989,
                  the Participant's Plan Year Accrual with respect to such
                  Accrual Computation Period shall be equal to the following
                  amount:

                           PYA = (1/12) x [(0.0090 x H) + (0.0110 x I)]

                  where:

                           H =   The Participant's Maximum Earnings during the
                                  Accrual Computation Period; and

                           I =   The Participant's Maximum Earnings in excess
                                 of $7,800 during the Accrual Computation
                                 Period;

                  and with the following added to paragraph (v) of subsection
                  (a):

                                       14
<PAGE>   21

                                    (E) "Maximum Earnings" of an Employee for a
                           Plan Year shall mean the "Earnings" (as defined in
                           subparagraph (A) above) of the Employee subject to
                           the limitation provisions of Section 1.13(d).

                  (c) Accruals Beyond Normal Retirement Date. Notwithstanding
         the provisions of Section 1.37, with respect to a Participant who
         continues to work beyond his Normal Retirement Date, such Participant
         shall accrue no further benefit after reaching his Normal Retirement
         Date for any Plan Year beginning before January 1, 1988, unless such
         Participant is credited with at least one Hour of Service in a Plan
         Year beginning on or after January 1, 1988, in which event, such
         Participant shall continue to accrue further benefits in accordance
         with the terms and provisions of this Plan. Such accruals shall include
         accruals for Years of Benefit Service completed during Plan Years
         beginning before January 1, 1988. The provisions of this subsection (c)
         shall be interpreted in accordance with Prop. Treas. Reg.
         ss. 1.411(b)-2(f) and any corresponding future regulations under
         Sections 9201 through 9204 of the Omnibus Budget Reconciliation Act of
         1986.

                  (d) In the event that either the annual overall permitted
         disparity limit, or the cumulative permitted disparity limit, under
         Treas. Reg. 1.40(l)-5 would be exceeded for any Participant for a given
         Plan year, the benefits under this Plan which would otherwise accrue
         pursuant to the provisions hereof shall be changed, depending on
         whether or not the Participant is a Highly Compensated Employee, as
         follows:

                           (i)  For Highly Compensated Employees, the excess
                  benefit percentage factor of 0.0065 described in section
                  1.37(a)(i) hereof shall be reduced to the extent required to
                  avoid said disparity.

                           (ii) For Employees who are not Highly Compensated
                  Employees, the base benefit percentage factor of 0.0135
                  described in Section 1.37(a)(i) hereof shall be increased to
                  the extent required to avoid said disparity. In the case of a
                  Participant whose years of Benefit Service exceed 34, any such
                  adjustment required because of participation in another
                  retirement plan shall be effected in said other plan.

                  (e) The Accrued Benefit determined under subsection (a) above
         on or after January 1, 1992, shall not be less than the Accrued Benefit
         determined under subsection (b) above as of December 31, 1991.

                  (f) Accruals for Certain Highly Compensated Employees. With
         respect to those Plan Years beginning on or after January 1, 1995 and
         prior to December 31, 2001, no Participant who

                           (i)   is a Highly Compensated Employee in the current
                  Plan Year (but determined solely on the basis of compensation,
                  as defined in Section 1.32(g), received in the Look-Back
                  Year),

                           (ii)  is, or has at any time been, a participant in
                  the Flowers Industries, Inc. 1989 Executive Stock Incentive
                  Plan, and

                                       15
<PAGE>   22

                           (iii) is an Employee of Flowers Industries, Inc., on
                  January 1 of the Plan Year in question,

         will accrue any benefit for said Plan Year until after the end of said
         Plan Year. The benefit which will then accrue retroactively for each
         such Participant will be limited to the maximum benefit that said
         Participant can accrue for the Plan Year without causing the Plan to
         violate Code Section 410(b) as determined by the Plan's Actuary, as
         soon as practicable after the end of each Plan Year, using
         substantiation quality data as defined in relevant Internal Revenue
         Service publications. For each Plan Year when such Participants are
         prevented from accruing the benefit they would accrue without the
         application of Code Section 410(b) by virtue of this subparagraph, the
         Actuary will determine the accruals by reducing on a uniform basis the
         level of Compensation which can be taken into account under
         subparagraph 1.37(a) to the level required to satisfy Code Section
         410(b).

                  (g) Subject to subsection (f) of this Section 1.37, in the
         case of a Participant whose Social Security Number is listed in
         Appendix B to the Plan, the Normal Retirement Benefit Amount and
         Accrued Benefit shall be equal to the sum of (i) the amount determined
         under the provisions of subsections (a) through (f) above, as if this
         subsection (g) had not been added to the Plan, plus (ii) the
         "Additional Retirement Benefit" applicable to such Participant, as set
         forth opposite such Participant's Social Security Number in said
         Appendix B. This subsection (g) shall be effective as of January 1,
         1996.

         1.38 Normal Retirement Date means the first day of the month coincident
with or next following the date on which the Participant attains his Normal
Retirement Age.

         1.39 Participant means an Employee who has satisfied the requirements
for participation pursuant to Article II. A Participant shall continue to be a
Participant (whether or not he continues to be credited with Years of Vesting
Service or Years of Benefit Service) until his benefits have been fully
distributed, although he may or may not accrue additional benefits under this
Plan.

         1.40 Plan means the Flowers Foods, Inc. Retirement Plan No. 1, as set
forth herein and as from time to time amended.

         1.41 Plan Administrator means the person or persons appointed by the
Committee pursuant to Article VII herein. If no such appointment is made, the
Committee shall be the Plan Administrator.

         1.42 Plan Year means the period for keeping the books and records of
the Plan, which shall be the calendar year.

         1.43 Predecessor Company means a company which has heretofore or
hereafter been merged, consolidated or otherwise absorbed by a member of the
Controlled Group or all or a substantial part of the assets or business of which
have been or shall be acquired by a member of the Controlled Group.

                                       16
<PAGE>   23

         1.44 Predecessor Plan means a plan which has heretofore or hereafter
been merged, consolidated or otherwise absorbed by this Plan or all or a
substantial part of the assets and liabilities of which have been or shall be
transferred to this Plan.

         1.45 Qualified Joint and Survivor Annuity means an annuity for the life
of the Participant with a survivor annuity for the life of the Participant's
Spouse, under which the Spouse's monthly benefit is 50% of the amount of the
Participant's monthly benefit.

         1.46 Qualified Spousal Waiver means a written election, delivered to
the Committee, signed by the Participant's Spouse, and witnessed by a notary
public or an authorized Plan representative, which consents to the payment of
all or a specified part of the Participant's benefit to a named Beneficiary
other than the Participant's Spouse, and/or in a specified form other than a
Qualified Joint and Survivor Annuity. Such election may not be changed without
Spousal consent (unless the consent expressly permits designations by the
Participant without further consent of the Spouse). A Participant may, however,
revoke a Qualified Spousal Waiver at any time prior to his Annuity Starting Date
by way of a written signed statement to the Committee, and a Qualified Spousal
Waiver shall not be effective at any time following delivery of such a
revocation to the Committee provided that such revocation is received by the
Committee prior to his Annuity Starting Date. If a Participant revokes a
Qualified Spousal Waiver, the Participant's benefits automatically shall become
payable in the form of a Qualified Joint and Survivor Annuity unless the Spouse
thereafter consents to the payment of benefits in a form other than a Qualified
Joint and Survivor Annuity pursuant to a Qualified Spousal Waiver.

         1.47 Repayment Rate means, with respect to a Participant, 120% of the
Federal mid-term rate as in effect under Code ss. 1274 for the first month of
the applicable Plan Year.

         1.48 Required Beginning Date. See Section 5.08(b)(i) of this Plan.

         1.49 Spouse means the legally recognized Spouse of a Participant
determined as of the Participant's Annuity Starting Date, or if earlier,
determined as of the Participant's date of death, under the laws of the state in
which the Participant is domiciled.

         1.50 Standard Form means a life annuity payable monthly on the first
day of each month during the lifetime of the applicable Participant or
Beneficiary and ending on the first day of the month coincident with or
immediately preceding the Participant's or Beneficiary's date of death.

         1.51 Super Highly Compensated Employee means an Employee who is a
Highly Compensated Employee as described in subsections (b)(1), (b)(4) or (b)(7)
of Section 1.32 of this Plan (as the Plan was amended and restated effective as
of January 1, 1987). For purposes of Sections 1.02 and 1.37, a Participant who
is a Super Highly Compensated Employee for a 1989 Plan Year shall also be
considered a Super Highly Compensated Employee for the 1990 and 1991 Plan Years.

         1.52 Surviving Spouse means the surviving Spouse, if any, of a deceased
Participant determined as of the Participant's date of death.

                                       17
<PAGE>   24

         1.53 Termination Benefit means the benefit to which a Participant is
entitled upon severance from employment with all members of the Controlled Group
as set forth in Section 4.06 herein.

         1.54 Totally and Permanently Disabled means any medically determinable
physical or mental impairment arising after an Employee has become a Participant
and while employed by an Employer resulting from demonstrable injury or disease
that can be expected to continue for an indefinite period of greater than 12
months or to result in death and which prevents the Participant from engaging in
his occupation or performing any gainful occupation for which he is qualified by
reason of education, training or experience as determined by a qualified
physician selected by the Committee.

         1.55 Trust Agreement means the Master Trust Agreement entered into
between the Company and the Trustee, as it may subsequently be amended from time
to time, whereby the Trustee holds the assets of this Plan. The terms of the
Master Trust Agreement are hereby incorporated by reference herein.

         1.56 Trust Fund or Trust means all assets held by the Trustee pursuant
to the terms of the Master Trust Agreement.

         1.57 Trustee means the person(s), corporation, association, or a
combination thereof who shall accept the appointment by the Company to execute
the duties of the Trustee as stated in this Plan and in the Master Trust
Agreement.

         1.58 Vesting Computation Period means, for purposes of determining
Years of Vesting Service and One-Year Breaks in Service for purposes of Vesting,
the following:

                  (a) The Vesting Computation Period shall be the 12 consecutive
         month period coincident with the Plan Year.

                  (b) If the Company shall amend the Plan to change the Vesting
         Computation Period, such amendment shall comply with the requirements
         of DOL Reg. ss. 2530.203-2(c).

         1.59 Year of Benefit Service.

                  (a) Pre-1976 Service. For Plan Years beginning before January
         1, 1976, a Participant's Years of Benefit Service shall be the number
         of years or fractional parts thereof for which the Participant received
         credit in accordance with the applicable provisions of this Plan as in
         effect on December 31, 1975.

                  (b) Post-1975 Service. For Plan Years beginning after December
         31, 1975, the following rules shall apply in determining a
         Participant's Years of Benefit Service:

                           (i) In General. Year of Benefit Service shall mean an
                  Accrual Computation Period during which the Employee completes
                  1,000 Hours of Service.

                                       18
<PAGE>   25

                           (ii)  Other Controlled Group Service. With respect to
                  Plan Years beginning before December 31, 1998, for purposes of
                  determining Years of Benefit Service, service with any member
                  of the Controlled Group during the period that it is (1) a
                  member thereof, and (2) an Employer, shall be treated as
                  service with the Employer; provided, however, that for a
                  Participant who transfers from the employment of an Employer
                  to that of a member of the Controlled Group who is not an
                  Employer, such a Participant shall be deemed to be employed by
                  an Employer while employed by such Controlled Group member if
                  such Participant is not eligible to participate in any other
                  retirement plan qualified under Code ss. 401(a) to which the
                  Company or any other Controlled Group member makes
                  contributions on his behalf. Notwithstanding any provision of
                  this Plan to the contrary including Section 1.33(h), service
                  with any member of the Controlled Group shall otherwise not be
                  treated as service with the Employer, except as provided in
                  paragraph (ix) below. See also Sections 1.02(c) and
                  2.04(b)(i).

                           (iii) Service While Ineligible. For purposes of
                  determining Years of Benefit Service, notwithstanding any
                  provision of this Plan to the contrary including Section 1.33,
                  service with any member of the Controlled Group during the
                  period that an Employee is not an Eligible Employee shall not
                  be treated as service with the Employer, except as provided in
                  paragraph (ix) below.

                           (iv)  Imputed Service. For purposes of determining
                  Years of Benefit Service, notwithstanding any provision of
                  this Plan to the contrary including Section 1.33, Hours of
                  Service credited under Section 1.33(d)(i) shall not be
                  considered in determining a Participant's Years of Benefit
                  Service, but Hours of Service credited under Section
                  1.33(d)(ii) shall be considered in determining a Participant's
                  Years of Benefit Service.

                           (v)   Service While Contribution Required. Years of
                  Benefit Service of an Employee during a period for which the
                  Employee declined to make any required contribution to this
                  Plan, or a Predecessor Plan or any employee benefit pension
                  plan maintained by a Predecessor Company shall be disregarded.
                  If an Employee contributes any part of the required
                  contributions for a year, such year may not be excluded under
                  this paragraph.

                           (vi)  Service While no Plan in Existence. Years of
                  Benefit Service of an Employee during any period for which the
                  Employer did not maintain this Plan or a predecessor plan
                  shall be disregarded, except as provided in paragraph (ix)
                  below. For purposes of this paragraph, whether the Employer
                  maintained a "predecessor plan" shall be determined in
                  accordance with Treas. Reg. ss. 1.411(a)-5(b)(3).

                           (vii) Rule of Parity. Any former Employee (1) who
                  does not have any vested right under the Plan to his Accrued
                  Benefit, and (2) for whom the number of consecutive One-Year
                  Breaks in Service prior to such Employee's reemployment equals
                  or exceeds the greater of 5 or the aggregate number of

                                       19
<PAGE>   26

                  Years of Benefit Service before such Breaks in Service shall
                  not receive credit for service prior to such Breaks in
                  Service.

                           (viii) Service Where Benefit has been Distributed.
                  For purposes of determining Years of Benefit Service, service
                  (which would otherwise constitute Years of Benefit Service)
                  performed by an Employee with respect to which the Employee
                  has received (or has been deemed to receive) a distribution
                  under this Plan of the present value of his entire Accrued
                  Benefit at the time of such distribution due to the
                  termination of such Employee's participation in the Plan shall
                  be excluded. However, such Years of Benefit Service shall not
                  be excluded under this paragraph if the Employee, after
                  returning to the employ of an Employer, repays to the Trustee
                  the entire amount of the distribution he received (or was
                  deemed to have received) from the Plan (with interest
                  compounded annually at the Repayment Rate for the entire
                  period of time beginning with the date such distribution was
                  made and ending with the date such repayment occurs) before
                  the earlier of (1) 5 years after the first date on which the
                  Employee is subsequently reemployed by an Employer, or (2) the
                  end of the first period of 5 consecutive One-Year Breaks in
                  Service after the distribution. A Participant who has been
                  deemed to have received a distribution under this Plan and who
                  incurs a forfeiture and returns to service with a member of
                  the Controlled Group, prior to incurring 5 consecutive
                  One-Year Breaks-in-Service shall be deemed to have repaid his
                  deemed distribution upon said return.

                           (ix)   Past Service Credit. An Employee shall,
                  subject to the foregoing provisions of this Section, receive
                  Years of Benefit Service in accordance with any applicable
                  document referred to in Section 10.06(a).

                           (x)    Fractional Years of Benefit Service. In
                  determining an Employee's Years of Benefit Service, an
                  Employee will be credited with fractional Years of Benefit
                  Service based on the percentage of the Accrual Computation
                  Period during which he was employed; provided, however, to
                  receive such credit, the Employee must complete during such
                  portion of the Accrual Computation Period a minimum number of
                  Hours of Service determined by multiplying 1,000 by the
                  percentage of the Accrual Computation Period during which he
                  was employed.

                           (xi)   Service with Flowers Industries, Inc. or
                  Flowers Foods, Inc. after March 26, 2001. Notwithstanding
                  any other provision herein, effective as of March 26, 2001,
                  a Participant shall not earn Years of Benefit Service
                  based upon service or Hours of Service that are both (1)
                  attributable to Flowers Industries, Inc. or Flowers Foods,
                  Inc. and (2) allocable to periods of time after March 26,
                  2001; provided, however, that nothing in this Section
                  1.59(b)(xi) shall affect the continued crediting of Years of
                  Benefit Service, and the continued accrual of benefits, on
                  and after March 26, 2001, with respect to Eligible Employees
                  of participating Employers (other than Flowers Industries,
                  Inc. and Flowers Foods, Inc.).

                                       20
<PAGE>   27

         1.60 Year of Eligibility Service.

                  (a) In General. Year of Eligibility Service shall mean an
         Eligibility Computation Period during which the Employee completes
         1,000 Hours of Service.

                  (b) Other Controlled Group Service. For purposes of this
         Section, employment with any member of the Controlled Group shall be
         considered employment with an Employer. In addition, in the case of a
         Leased Employee of any member of the Controlled Group, employment with
         such member of the Controlled Group shall be considered employment with
         an Employer.

                  (c) Service with Predecessor Employers. For purposes of this
         Section, in any case in which the Employer maintains a plan of a
         predecessor employer, service for such predecessor shall be treated as
         service for the Employer.

                  (d) Service with Flowers Industries, Inc. after March 26,
         2001. Notwithstanding any other provision herein, effective as of March
         26, 2001, an Employee shall not earn Years of Eligibility Service based
         upon service or Hours of Service that are both (1) attributable to
         Flowers Industries, Inc. and (2) allocable to periods of time after
         March 26, 2001.

         1.61 Year of Vesting Service.

                  (a) Pre-1976 Service. For Plan Years beginning before January
         1, 1976, an Employee's Years of Vesting Service shall be the number of
         years or fractional parts thereof as an Employee of an Employer.

                  (b) Post-1975 Service. For Plan Years beginning after December
         31, 1975, the following rules shall apply in determining a
         Participant's Years of Vesting Service:

                           (i)   In General. Year of Vesting Service shall mean
                  a Vesting Computation Period during which an Employee
                  completes 1,000 Hours of Service.

                           (ii)  Other Controlled Group Service. For purposes of
                  this Section, employment with any member of the Controlled
                  Group during the period that it is a member thereof shall be
                  considered employment with an Employer. In addition, in the
                  case of a Leased Employee of any member of the Controlled
                  Group, employment with such member of the Controlled Group
                  during the period that it is a member thereof shall be
                  considered employment with an Employer. However, service with
                  any member of the Controlled Group shall otherwise not be
                  treated as service with the Employer, except as provided in
                  paragraph (viii) below.

                           (iii) Service with Predecessor Employers. For
                  purposes of this Section, in any case in which the Employer
                  maintains a plan of a predecessor employer, service for such
                  predecessor shall be treated as service for the Employer.

                                       21
<PAGE>   28

                           (iv)   Imputed Service. For purposes of determining
                  Years of Vesting Service, notwithstanding any provision of
                  this Plan to the contrary including Section 1.33, Hours of
                  Service credited under Section 1.33(d)(i) shall not be
                  considered in determining a Participant's Years of Vesting
                  Service, but Hours of Service credited under Section
                  1.33(d)(ii) shall be considered in determining a Participant's
                  Years of Vesting Service.

                           (v)    Service While Contributions Required. Years of
                  Vesting Service of an Employee during a period for which the
                  Employee declined to make any required contribution to this
                  Plan, or a Predecessor Plan or any employee benefit pension
                  plan maintained by a Predecessor Company shall be disregarded.
                  If an Employee contributes any part of the required
                  contributions for a year, such year may not be excluded under
                  this paragraph.

                           (vi)   Service While no Plan in Existence. Years of
                  Vesting Service of an Employee during any period for which the
                  Employer did not maintain this Plan or a predecessor plan
                  shall be disregarded, except as provided in paragraph (viii)
                  below. For purposes of this paragraph, whether the Employer
                  maintained a "predecessor plan" shall be determined in
                  accordance with Treas. Reg. ss. 1.411(a)-5(b)(3).

                           (vii)  Rule of Parity. Any former Employee (1) who
                  does not have any vested right under the Plan to his Accrued
                  Benefit, and (2) for whom the number of consecutive One-Year
                  Breaks in Service prior to such Employee's reemployment equals
                  or exceeds the greater of 5 or the aggregate number of Years
                  of Vesting Service before such Breaks in Service shall not
                  receive credit for service prior to such Breaks in Service.

                           (viii) Past Service Credit. An Employee shall,
                  subject to the foregoing provisions of this Section, receive
                  credit for Years of Vesting Service in accordance with any
                  applicable document referred to in Section 10.06(a).

                           (ix)   Fractional Years of Vesting Service. In
                  determining an Employee's Years of Vesting Service, an
                  Employee will be credited with fractional Years of Vesting
                  Service based on the percentage of the Vesting Computation
                  Period during which he was employed; provided, however, that
                  to receive such credit, the Employee must complete during such
                  portion of the Vesting Computation Period a minimum number of
                  Hours of Service determined by multiplying 1,000 by the
                  percentage of the Vesting Computation Period during which he
                  was employed.

                           (x)    Service with Flowers Industries, Inc. after
                  March 26, 2001. Notwithstanding any other provision herein,
                  effective as of March 26, 2001, an Employee shall not earn
                  Years of Vesting service based upon service or Hours of
                  Service that are both (1) attributable to Flowers Industries,
                  Inc. and (2) allocable to periods of time after March 26,
                  2001.

                                       22
<PAGE>   29

         1.62 Use of Terms. Any words used in this Plan in the masculine shall
be read and construed in the feminine where they would so apply. Words in the
singular shall be read and construed in the plural in all cases where they would
so apply.

                                       23

<PAGE>   30

                                   ARTICLE II.

                                   ELIGIBILITY

         2.01     Attainment of Participant Status.

                  (a)      Participants as of the Effective Date. Subject to
         subsections (c), (d), (e) and (f) below, all Eligible Employees who
         were Participants in this Plan immediately prior to the Effective Date
         shall remain and continue as Participants hereunder as of the Effective
         Date.

                  (b)      Prerequisites for Participation. Subject to
         subsections (c), (d), (e) and (f) below, prior to January 1, 1990, each
         Eligible Employee who is not a Participant in accordance with
         subsection (a) shall become a Participant as of the later of (i) the
         date the Employee becomes an Eligible Employee, or (ii) the date on
         which this Plan becomes effective with respect to the Employer of the
         Employee. Subject to subsections (c), (d), (e), (f), (g), (h), (i) and
         (j) below, on and after January 1, 1990, each Eligible Employee who is
         not a Participant in accordance with subsection (a) or the preceding
         sentence shall become a Participant as of the later of (i) the date the
         Employee becomes an Eligible Employee, (ii) the date on which this Plan
         becomes effective with respect to the Employer of the Employee, or
         (iii) the date on which the Employee completes one Year of Eligibility
         Service.

                  (c)      Leased Employees. Leased Employees shall not be
         eligible to participate in this Plan unless they become the common law
         employees of an Employer.

                  (d)      Collectively Bargained Employees. Employees who are
         included in a unit of Employees covered by a collective bargaining
         agreement between their collective bargaining representative and their
         Employer shall not be eligible to participate in this Plan.

                  (e)      Employees Participating in Other Plans.

                           (i)      Prior to January 1, 1993. Prior to January
                  1, 1993, Employees who are actively participating in any other
                  retirement plan qualified under Code ss.401(a) (other than the
                  Flowers Industries, Inc. Employee Stock Ownership Plan) to
                  which their Employer makes contributions on their behalf shall
                  not be eligible to participate in this Plan.

                           (ii)     After December 31, 1992. After December 31,
                  1992, Employees who are actively participating in any other
                  employee pension benefit plan (as defined in ERISA ss.3(2)) to
                  which Title IV of ERISA applies and to which any member of the
                  Controlled Group makes contributions on their behalf shall not
                  be eligible to participate in this Plan.

                  (f)      Distributors and Thrift Store Operators.
         Notwithstanding any provision of the Plan to the contrary, individuals
         who are distributors or thrift store operators and who have executed a
         written agreement with a member of the Controlled Group for the

                                       24
<PAGE>   31

         distribution or sale of goods or products (and any employees, agents or
         independent contractors of such distributors or thrift store operators)
         shall not be eligible to participate in this Plan.

                  (g)      Employees Hired After December 31, 1998.
         Notwithstanding any provision of the Plan to the contrary, an
         individual who is first credited with an Hour of Service with the
         Company or with another Controlled Group member on or after January 1,
         1999 shall not be an "Eligible Employee" and shall not be eligible to
         participate in this Plan.

                  (h)      Employees of Flowers Industries, Inc. after March 26,
         2001. Notwithstanding any other provision herein, effective as of March
         26, 2001 employees of Flowers Industries, Inc. shall not be eligible to
         participate in the Plan; provided, however, that individuals who were,
         prior to March 26, 2001 employees of Flowers Industries, Inc. and
         Participants in this Plan shall be entitled to all benefits accrued
         under this Plan prior to that date.

                  (i)      Employees of Flowers Foods, Inc. Notwithstanding any
         other provision herein, employees of Flowers Foods, Inc. shall not be
         eligible to participate in this Plan; provided, however, that an
         individual who was a Participant in this Plan prior to becoming an
         employee of Flowers Foods, Inc. shall be entitled to all benefits
         accrued under this Plan prior to the individual's becoming an employee
         of Flowers Foods, Inc.; provided, further, that this Section 2.01(i)
         shall have no effect on the continued accrual of benefits, on and after
         March 26, 2001, with respect to Eligible Employees of participating
         Employers (other than Flowers Industries, Inc. and Flowers Foods,
         Inc.).

         2.02     Reemployment of Former Employees.

                  (a)      Prior to January 1, 1990, any former Employee who
         terminated employment with the Employer shall, upon being rehired by an
         Employer as an Eligible Employee, immediately become a Participant
         hereunder, subject to subsections (c), (d), (e), and (f) of Section
         2.01 above.

                  (b)      Effective on or after January 1, 1990, any former
         Employee who terminated employment with the Employer prior to having a
         vested Accrued Benefit hereunder shall:

                           (i)      if such Employee has not incurred five
                  consecutive One Year Breaks in Service, become a Participant
                  as of the later of (1) his reemployment commencement date or
                  (2) the anniversary of his original employment commencement
                  date first following his completion of one Year of Eligibility
                  Service; or

                           (ii)     if such Employee has incurred five
                  consecutive One Year Breaks in Service, become a Participant
                  in accordance with subsection (b) of Section 2.01 above.

                                       25
<PAGE>   32

         Any other former Employee shall, upon being rehired by an Employer as
         an Eligible Employee, immediately become a Participant hereunder,
         subject to subsections (c), (d), (e), (f), (g), (h), (i) and (j) of
         Section 2.01 above.

                  (c)      Notwithstanding any other provision herein, effective
         January 1, 1999, any former Employee who terminated employment with the
         Employer and who on or after January 1, 1999 is rehired by an Employer
         as an Eligible Employee shall not accrue any additional benefits under
         the Plan, but shall be entitled to benefits (if any) based upon Years
         of Benefit Service and Compensation prior to the termination of
         employment.

         2.03     Transfers from/to Eligible Class.

                  (a)      Exclusion after Participation. A Participant who
         ceases to be an Eligible Employee by reason of subsections (c), (d),
         (e), (f), (h), (i) or (j) of Section 2.01 above but who remains
         employed by a member of the Controlled Group shall continue to earn
         Years of Eligibility Service and Years of Vesting Service, but during
         the period the Participant is not an Eligible Employee by reason of
         subsections (c), (d), (e), (f), (h),(i) or (j) of Section 2.01 above,
         the Participant shall not be credited with Years of Benefit Service and
         the Participant's Compensation during such period shall not be taken
         into account for purposes of determining the Participant's Accrued
         Benefit under this Plan.

                  (b)      Participation after Exclusion. An individual who has
         been employed by a member of the Controlled Group and who is not an
         Eligible Employee by reason of subsections (c), (d), (e), or (f) of
         Section 2.01 above but who becomes an Eligible Employee because he is
         no longer in a status described in subsections (c), (d), (e), or (f) of
         Section 2.01 above shall be eligible to participate in this Plan and
         accrue benefits hereunder in accordance with Sections 2.01 through 2.02
         above. Notwithstanding the foregoing, effective January 1, 1999, an
         individual who has been employed by a member of the Controlled Group
         and who is not an Eligible Employee by reason of subsections (c), (d),
         (e), (f), (h), (i) or (j) of Section 2.01 above but who becomes an
         Eligible Employee on or after January 1, 1999 because he is no longer
         in a status described in subsections (c), (d), (e), (f), (h), (i) or
         (j) of Section 2.01 above shall not be eligible to participate in this
         Plan and shall not accrue additional benefits hereunder based upon
         service on or after January 1, 1999.

         2.04     Transfer of Participants.

                  (a)      Transfers among Employers. Any Participant who
         transfers from the employment of one Employer to that of another
         Employer shall continue to participate hereunder without interruption
         or adverse effect because of such transfer if such Participant remains
         an Eligible Employee, subject to subsections (c), (d), (e), (f), (h)
         and (i) of Section 2.01.

                  (b)      Transfers to/from Employer from/to Non-Employer
         Controlled Group Member.

                           (i)      Transfer to Non-Employer Controlled Group
                  Member. Any Participant who transfers from the employment of
                  an Employer to that of a

                                       26
<PAGE>   33

                  member of the Controlled Group who is not an Employer shall
                  remain a Participant hereunder but shall not accrue any
                  further benefit hereunder. See also Sections 1.02(c) and
                  1.59(b)(ii).

                           (ii)     Transfer to Employer. With respect to Plan
                  Years beginning before December 31, 1998, any individual who
                  transfers from the employment of a member of the Controlled
                  Group to that of an Employer shall become a Participant
                  hereunder (or shall continue participation hereunder) in
                  accordance with the provisions of Sections 2.01 to 2.03 above.
                  Notwithstanding any other provision herein, effective January
                  1, 1999 with respect to an individual who transfers on or
                  after that date from the employment of a member of the
                  Controlled Group that is not an Employer to the employment of
                  an Employer shall not become a Participant hereunder (if the
                  individual was not previously a Participant hereunder) and
                  shall not accrue additional benefits hereunder based upon
                  service on or after January 1, 1999 (if the individual was
                  previously a Participant).

                  (c)      Transfer to Holsum Baking Company. Notwithstanding
         the provisions of subsection (b) above or any provision of this Plan to
         the contrary, any Participant who transfers from the employment of an
         Employer to the employment of Holsum Baking Company shall continue to
         participate hereunder without interruption or adverse effect because of
         such transfer, subject to subsections (c), (d) and (e) of Section 2.01
         above, until such time as Holsum Baking Company adopts the Flowers
         Industries, Inc. 401(k) Retirement Savings Plan in accordance with the
         provisions of Section 11.6 of such plan.

                                       27
<PAGE>   34

                                  ARTICLE II.

                           VESTING IN ACCRUED BENEFITS

         3.01     Vesting in Accrued Benefits.

                  (a)      Full Vesting Events. A Participant shall be 100%
         vested in his Accrued Benefit upon the occurrence of any of the
         following events:

                           (i)      The Participant attains Age 65 while still
                  in service as an Employee;

                           (ii)     The Participant becomes Totally and
                  Permanently Disabled while still in service as an Employee; or

                           (iii)    The Participant completes five (5) Years of
                  Vesting Service (10 Years of Vesting Service for Participants
                  who do not have at least one (1) Hour of Service in a Plan
                  Year beginning after December 31, 1988).

         A Participant whose Accrued Benefit is not 100% vested under the
         preceding provisions of this Section shall not be vested in any portion
         of his Accrued Benefit.

                  (b)      Nonforfeitability by Participant Conduct. No portion
         of a Participant's Accrued Benefit shall be forfeited as a result of
         conduct of the Participant (other than his severance from employment
         prior to an event described in subsection (a) above).

         3.02     Amendments to Vesting Schedule.

                  (a)      General Rule. Notwithstanding Section 3.01, no
         Participant shall have his vested interest in his Accrued Benefit
         decreased as a result of the merger of a plan with this Plan, or as a
         result of any amendment which alters the vesting provisions hereof. Any
         Participant who has a vested accrued benefit under a plan merged with
         this Plan will receive no less than that vested accrued benefit under
         this Plan and any Participant who has a vested Accrued Benefit under
         this Plan prior to an amendment which alters the vesting provisions
         hereof shall receive no less than that vested Accrued Benefit under
         this Plan, as so amended. In addition, no such amendment shall reduce a
         Participant's vested percentage as of the effective date of said
         amendment.

                  (b)      Application of Former Schedule. If the vesting
         schedule applicable to a Participant is amended, any Participant who
         has at least three (3) Years of Vesting Service (without regard to
         paragraphs (v) and (vi) of subsection (b) of Section 1.61) prior to the
         expiration of the election period described below may elect to have his
         vesting percentage computed without regard to the change in the vesting
         schedule. Such an election must be made within sixty (60) days after
         the later of (i) the date of issuance of a written notification by the
         Committee of the adoption of this Plan or of any subsequent amendment
         which alters the vesting provisions hereof; (ii) the date of the
         adoption of this Plan or of any subsequent amendment which alters the
         vesting provisions hereof; or (iii) the effective date of this Plan or
         of any subsequent amendment which alters the vesting

                                       28
<PAGE>   35

         provisions hereof. Notwithstanding the foregoing, no election shall be
         provided for any Participant whose vested percentage under the Plan, or
         under the Plan as amended, at any time cannot be less than such
         percentage determined without regard to the Plan or the amendment. For
         Participants who have not completed at least one Hour of Service in any
         Plan Year beginning after December 31, 1988, this subsection (b) shall
         be applied by substituting "five (5) Years of Vesting Service" for
         "three (3) Years of Vesting Service" where such language appears.

                  (c)      Automatic Amendments to Vesting Schedule. The rules
         of this Section shall apply to the automatic change in the vesting
         schedule in Section 3.01 above after the end of the Plan Year beginning
         on January 1, 1988. Furthermore, the rules of this Section shall apply
         to any automatic change in the vesting schedule caused by the operation
         of Article XI of this Plan.

                  (d)      Determination of Amendment. For purposes of this
         Section, an amendment of a vesting schedule is any plan amendment which
         directly or indirectly affects the computation of the vested percentage
         of a Participant's Accrued Benefit, as described in Treas.
         Reg. ss. 1.411(a)-8(c).

         3.03     Vesting Upon Termination. If, pursuant to Article X, this Plan
is wholly or partially terminated, the rights of each affected Participant to
his Accrued Benefit as of the date of such termination or partial termination,
to the extent funded, shall be fully vested notwithstanding any other provisions
of this Article III to the contrary. See Section 10.03(a) herein.

         3.04     Forfeitures. In the event a Participant severs from employment
with the Employer and receives (or, if applicable, begins receiving) or is
deemed to have received a distribution of his vested Accrued Benefit, the
non-vested portion of his Accrued Benefit shall be forfeited as of the date of
the distribution (or, if applicable, commencement of distribution) and shall be
used to reduce future contributions of the Employer. In the event a Participant
severs from employment with the Employer and incurs a period of One-Year
Breaks-in-Service (as defined in Section 1.09) such that the Participant's
service prior to his severance may be disregarded under Section 1.61(b)(vii),
the non-vested portion of his accrued benefits shall then be forfeited and shall
be used to reduce future contributions of the employer.

         3.05     Recrediting Certain Forfeitures upon Return to Service. If a
Participant incurs a forfeiture prior to incurring five consecutive One Year
Breaks in Service, the Participant shall have the previously forfeited Accrued
Benefit restored if and when the Participant, after returning to service with
the Employer, repays to the Trustee the entire amount of the distribution(s) he
received from the Plan, with interest at the Repayment Rate computed on the
amount of the distribution from the date of such distribution to the date of
repayment, before the earlier of (i) 5 years after the first date on which the
Participant is subsequently reemployed by the Employer, or (ii) the end of the
first period of five consecutive One Year Breaks in Service after the
distribution. A Participant who has been deemed to have received a distribution
under this Plan and who otherwise is described in the preceding sentence shall
be deemed to have repaid his deemed distribution and appropriate interest upon
his return to service with an Employer.

                                       29
<PAGE>   36

         3.06     Vesting of Employees of Rio Grande Foods Manpower, Inc.
Notwithstanding the provisions of this Article III or any provision of this Plan
to the contrary, effective April 1, 1995, each Employee of Rio Grande Foods
Manpower, Inc. shall be 100% vested in his Accrued Benefit as of April 1, 1995.

                                       30
<PAGE>   37

                                  ARTICLE III.

                                BENEFITS PAYABLE

         4.01     Application for Commencement of Benefits.

                  (a)      Benefits to Participants. A Participant must apply to
         have any benefits paid from this Plan pursuant to Sections 4.02 through
         4.06 herein. The application for benefits must be made in the form
         prescribed by the Committee and must be filed with the Committee not
         less than 30 days prior to the Participant's Annuity Starting Date.
         Subject to Sections 5.02 and 5.08, no benefit will be payable to a
         Participant until proper application has been received by the
         Committee.

                  (b)      Benefits Payable to Beneficiaries. A Beneficiary must
         apply to have any benefits paid from this Plan pursuant to Section 4.07
         herein. The application for benefits must be made in the form
         prescribed by the Committee and must be filed with the Committee not
         less than 30 days prior to the Beneficiary's Annuity Starting Date.
         Subject to Sections 5.06 and 5.08, no benefit will be payable to a
         Beneficiary until proper application has been received by the
         Committee.

         4.02     Normal Retirement Benefits. A Participant shall be entitled to
sever from employment with all members of the Controlled Group as of his
attainment of his Normal Retirement Age and receive a Normal Retirement Benefit
as defined below. Subject to the limitations of Section 4.08 and the applicable
provisions of Article V, a Participant's Normal Retirement Benefit shall be a
monthly pension payable in the Standard Form commencing on the Participant's
Normal Retirement Date (or as soon as is administratively practicable
thereafter, with retroactive payments if applicable) with the amount of the
Participant's monthly payments equal to the Participant's Normal Retirement
Benefit Amount, or, if greater and if applicable, the largest Early Retirement
Benefit Amount that would have been payable to the Participant had he (1)
selected an Annuity Starting Date on or after his Early Retirement Date, but
prior to his Normal Retirement Age, and (2) severed from employment with all
members of the Controlled Group immediately prior to such Annuity Starting Date.
A Participant who continues his employment with an Employer beyond his Normal
Retirement Age shall be entitled to receive a Delayed Retirement Benefit under
Section 4.03 below. A Participant who severs from employment with all members of
the Controlled Group as of his Normal Retirement Age and who begins receiving
benefits may have his benefits suspended upon reemployment with a member of the
Controlled Group under the provisions of Section 5.07. The form of payment of a
Participant's Normal Retirement Benefit shall be determined in accordance with
Sections 5.01 through 5.04.

         4.03     Delayed Retirement Benefits. A Participant shall be entitled
to continue in employment with an Employer past his Normal Retirement Date and
receive a Delayed Retirement Benefit as defined below. Subject to the
limitations of Section 4.08 and the applicable provisions of Article V, a
Participant's Delayed Retirement Benefit shall be a monthly pension payable in
the Standard Form commencing as of the earlier of (1) the first day of the month
next following the date the Participant severs from employment with all members
of the Controlled Group subsequent to his Normal Retirement Date (the
Participant's "Delayed

                                       31
<PAGE>   38

Retirement Date") (or as soon as is administratively practicable thereafter,
with retroactive payments if applicable), or (2) the Participant's Required
Beginning Date, with the amount of the Participant's monthly payments equal to
the Participant's Delayed Retirement Benefit Amount. Delayed Retirement Benefits
shall take into account any Years of Benefit Service credited and any
Compensation earned after attainment of Normal Retirement Age (including any
such Years of Benefit Service completed or Compensation earned after the
Participant's Annuity Starting Date under this Section) subject to the
provisions of Section 1.37(c), but Delayed Retirement Benefits shall not be
actuarially adjusted to reflect the delay in the payment of benefits after the
Participant's Normal Retirement Date and the Participant shall be notified in
accordance with Section 5.07, and Delayed Retirement Benefits shall not be
offset by any earlier payments required under this Section in accordance with
Section 5.08. A Participant who severs from employment with all members of the
Controlled Group as of his Delayed Retirement Date and who has begun receiving
benefits may have his benefits suspended upon reemployment with a member of the
Controlled Group under the provisions of Section 5.07. The form of payment of a
Participant's Delayed Retirement Benefit shall be determined in accordance with
Sections 5.01 through 5.04 and 5.08.

         4.04     Early Retirement Benefits. A Participant (1) who is employed
by an Employer as of the date he has attained Age 55, and (2) who has completed
5 Years of Vesting Service (10 Years of Vesting Service for Participants who do
not have at least one Hour of Service in a Plan Year beginning after December
31, 1988), shall be entitled to sever from employment with all members of the
Controlled Group and receive an Early Retirement Benefit as defined below.
Subject to the limitations of Section 4.08 and the applicable provisions of
Article V, a Participant's Early Retirement Benefit shall be a deferred monthly
pension payable in the Standard Form commencing on the Participant's Normal
Retirement Date (or as soon as is administratively practicable thereafter, with
retroactive payments if applicable) with the amount of the Participant's monthly
payments equal to the Participant's Normal Retirement Benefit Amount.
Alternatively, the Participant may elect to commence payments earlier as of his
Early Retirement Date or on the first day of any month thereafter prior to his
Normal Retirement Date (or as soon as is administratively practicable
thereafter, with retroactive payments if applicable), with the amount of the
Participant's monthly payments equal to the Participant's Early Retirement
Benefit Amount. A Participant who severs from employment with all members of the
Controlled Group as of his Early Retirement Date and who has begun receiving
benefits may have his benefits suspended upon reemployment with a member of the
Controlled Group under the provisions of Section 5.07. The form of payment of a
Participant's Early Retirement Benefit shall be determined in accordance with
Sections 5.01 through 5.04.

         4.05     Disability Benefits. A Participant (1) who severs from
employment with all members of the Controlled Group as a result of his becoming
Totally and Permanently Disabled, (2) who is an Eligible Employee (or would be
an Eligible Employee but for Section 2.01(d)) at the time of such severance, and
(3) who survives until his applicable Annuity Starting Date, shall be entitled
to receive a Disability Retirement Benefit as defined below. Subject to the
limitations of Section 4.08 and the applicable provisions of Article V, a
Participant's Disability Retirement Benefit shall be a deferred monthly pension
payable in the Standard Form commencing on the Participant's Normal Retirement
Date (or as soon as is administratively practicable thereafter, with retroactive
payments if applicable) with the amount of the Participant's monthly payments
equal to the Participant's vested Normal Retirement Benefit Amount.
Alternatively, if applicable

                                       32
<PAGE>   39

(i.e., if it is possible for the Participant to have an Early Retirement Date
prior to his Normal Retirement Date), the Participant may elect to commence
payments as of the later of (1) his Early Retirement Date, or (2) his date of
severance from employment with all members of the Controlled Group as a result
of his becoming Totally and Permanently Disabled, or on the first day of any
month thereafter prior to his Normal Retirement Date (or as soon as is
administratively practicable thereafter, with retroactive payments if
applicable), with the amount of the Participant's monthly payments equal to the
Participant's vested Early Retirement Benefit Amount. A Participant who severs
from employment with all members of the Controlled Group as a result of becoming
Totally and Permanently Disabled and who has begun receiving benefits may have
his benefits suspended upon reemployment with a member of the Controlled Group
under the provisions of Section 5.07. The form of payment of a Participant's
Disability Retirement Benefit shall be determined in accordance with Sections
5.01 through 5.04.

         4.06     Termination Benefits. A Participant (1) who severs from
employment with all members of the Controlled Group prior to his Normal
Retirement Date or, if applicable, his Early Retirement Date (a "Severed
Participant"), and (2) who survives until his applicable Annuity Starting Date,
shall be entitled to receive a Termination Benefit as defined below. Subject to
the limitations of Section 4.08 and the applicable provisions of Article V, a
Participant's Termination Benefit shall be a deferred monthly pension payable in
the Standard Form commencing on the Participant's Normal Retirement Date (or as
soon as is administratively practicable thereafter, with retroactive payments if
applicable), with the amount of the Participant's monthly payments equal to the
Participant's vested Normal Retirement Benefit Amount. Alternatively, if
applicable (i.e., if it is possible for the Participant to have an Early
Retirement Date prior to his Normal Retirement Date), the Participant may elect
to commence payments as of his Early Retirement Date or on the first day of any
month thereafter prior to his Normal Retirement Date (or as soon as is
administratively practicable thereafter, with retroactive payments if
applicable), with the amount of the Participant's monthly payments equal to the
Participant's vested Early Retirement Benefit Amount. A Participant who severs
from employment with all members of the Controlled Group and who has begun
receiving benefits may have his benefits suspended upon reemployment with a
member of the Controlled Group under the provisions of Section 5.07. The form of
payment of a Participant's Termination Benefit shall be determined in accordance
with Section 5.05.

         4.07     Death Benefits.

                  (a)      Death Prior to Annuity Starting Date and On or Prior
         to Earliest Retirement Age. In the event a Participant dies (1) while
         he has a vested Accrued Benefit hereunder, (2) before his Annuity
         Starting Date, and (3) on or before his Earliest Retirement Age, the
         Surviving Spouse of the Participant, if any, shall, if such Spouse
         survives until such Spouse's applicable Annuity Starting Date, be
         entitled to receive a Death Benefit as defined below. Subject to the
         limitations of Section 4.08 and the applicable provisions of Article V,
         the Surviving Spouse's Death Benefit shall be a monthly pension payable
         in the Standard Form commencing on the first day of the month
         coincident with or immediately following the Participant's Earliest
         Retirement Age (or as soon as is administratively practicable
         thereafter, with retroactive payments if applicable) with the amount of
         the Spouse's monthly payments equal to the amount payable to such
         Spouse if the Participant had (1) severed from employment from all
         members of the

                                       33
<PAGE>   40

         Controlled Group on his date of death, or, if earlier, his actual date
         of such severance, (2) survived to his Earliest Retirement Age, (3)
         commenced receiving his vested Accrued Benefit in the form of a
         Qualified Joint and Survivor Annuity at his Earliest Retirement Age,
         and (4) died immediately thereafter. Payment of such Death Benefit
         shall commence as of the first day of the month coincident with or next
         following the date on which the Participant would have attained his
         Normal Retirement Age, unless the Surviving Spouse elects to commence
         payments earlier, in which event payments shall commence as of the
         first day of any month after the month during which the Participant
         died but prior to the Participant's Normal Retirement Date (or as soon
         as is administratively practicable thereafter, with retroactive
         payments if applicable), with the amount of the Spouse's monthly
         payments such that the benefit paid is calculated to be Actuarially
         Equivalent to the Spouse's Death Benefit as of the Spouse's Annuity
         Starting Date.

                  (b)      Death Prior to Annuity Starting Date And After
         Earliest Retirement Age. In the event a Participant dies (1) while he
         has a vested Accrued Benefit hereunder, (2) prior to his Annuity
         Starting Date, and (3) after his Earliest Retirement Age, the Surviving
         Spouse of the Participant, if any, shall, if such Spouse survives until
         such Spouse's applicable Annuity Starting Date, be entitled to receive
         a Death Benefit as defined below. Subject to the limitations of Section
         4.08 and the applicable provisions of Article V, the Surviving Spouse's
         Death Benefit shall be a monthly pension payable in the Standard Form
         commencing on the first day of the month coincident with or immediately
         following the Participant's date of death (or as soon as is
         administratively practicable thereafter, with retroactive payments if
         applicable) with the amount of the Spouse's monthly payments equal to
         the amount payable to such Spouse if the Participant had (1) severed
         from employment from all members of the Controlled Group on the day
         before his date of death, and (2) elected that his vested Accrued
         Benefit be paid in the form of a Qualified Joint and Survivor Annuity
         with his Annuity Starting Date to occur as of the first day of the
         month coincident with or immediately following the Participant's date
         of death. Payment of such Death Benefit shall commence as of the first
         day of the month coincident with or next following the date on which
         the Participant would have attained his Normal Retirement Age, unless
         the Surviving Spouse elects to commence payments earlier, in which
         event payments shall commence as of the first day of any month after
         the month during which the Participant died but prior to the
         Participant's Normal Retirement Date (or as soon as is administratively
         practicable thereafter, with retroactive payments if applicable), with
         the amount of the Spouse's monthly payments such that the benefit paid
         is calculated to be Actuarially Equivalent to the Spouse's Death
         Benefit as of the Spouse's Annuity Starting Date.

                  (c)      Death On or After Annuity Starting Date. In the event
         a Participant dies after his Annuity Starting Date, any further benefit
         payable shall be determined exclusively by the form of payment selected
         by the Participant under Article V and shall be determined using only
         the Beneficiary of the Participant as of the Participant's Annuity
         Starting Date.

                  (d)      No Additional Death Benefits. Except as provided
         above, no benefit shall be paid under this Plan on behalf of a deceased
         Participant.

                                       34
<PAGE>   41

                  (e)      Minimum Death Benefit. Notwithstanding any provision
         of this Section to the contrary, with respect to any Participant who
         has a total cash surrender value under any individual policies or
         annuity contracts being purchased for such Participant under a pension
         or profit-sharing plan which has been merged into this Plan or
         designated as a "Former Plan" by resolution of the Board, or who has
         assets allocated to him under such a plan on the day before such plan
         was so merged or designated, such cash value or assets, offset by any
         amounts required to be paid to the Participant's Surviving Spouse under
         the preceding subsections of this Section, shall be paid in the form of
         a single lump sum cash payment to the Participant's Beneficiary after
         all payments required under the preceding subsections of this Section
         have ended.

         4.08     Maximum Benefit Limitations.

                  (a)      General Rule. Except as otherwise provided in this
         Section, the benefits under the Plan with respect to a Participant for
         any Plan Year (which shall be the limitation year) shall not exceed,
         when expressed as an annual benefit in the form of a straight life
         annuity (with no ancillary benefits), the lesser of:

                           (i)      the dollar limitation in effect for such
                  year under Code ss. 415(b)(1)(A), or

                           (ii)     one hundred percent (100%) of the
                  Participant's average Compensation for the period of three (3)
                  consecutive calendar years during which the Participant both
                  was an active Participant in the Plan and had the greatest
                  aggregate Compensation from the Controlled Group.

                  (b)      Adjustments. Notwithstanding the foregoing provisions
         of this Section:

                           (i)      If the benefit under the Plan is payable in
                  any form other than the life annuity form, or if the Employees
                  contribute to the Plan or make rollover contributions or plan
                  to plan transfers, for purposes of determining whether the
                  limitations described in Subsection (a) of this Section have
                  been satisfied, such benefit shall be adjusted, in accordance
                  with rules determined by the Commissioner of the Internal
                  Revenue under Treasury Regulation Section 1.415-3(c), so that
                  such benefit is equivalent to an annual benefit. For purposes
                  of this part (i), any ancillary benefit which is not directly
                  related to retirement income benefits shall not be taken into
                  account, and that portion of any joint and survivor annuity
                  which constitutes a qualified joint and survivor annuity (as
                  defined in Code ss. 417(b)) shall not be taken into account.

                           (ii)     If the benefit under the Plan begins before
                  the Social Security Retirement Age, for purposes of
                  determining whether the limitation set forth in Paragraph (i)
                  of Subsection (a) has been satisfied, such benefit shall be
                  reduced, in accordance with regulations prescribed by the
                  Secretary of the Treasury, so that such limitation (as so
                  reduced) equals an annual benefit (beginning when such benefit
                  under the Plan begins) which is Actuarially Equivalent to an
                  annual benefit equal to the limitation beginning at the Social
                  Security Retirement Age

                                       35
<PAGE>   42

                  provided that such reduction shall be made in such manner as
                  the Secretary of the Treasury may prescribe which is
                  consistent with the reduction for old age insurance benefits
                  commencing before the Social Security Retirement Age under the
                  Social Security Act.

                           (iii)    If the benefit under the Plan begins after
                  the Social Security Retirement Age, for purposes of
                  determining whether the limitation set forth in Paragraph (i)
                  of Subsection (a) has been satisfied, such limitation shall be
                  increased, in accordance with regulations prescribed by the
                  Secretary of the Treasury, so that such limitation (as so
                  increased) equals an annual benefit (beginning when such
                  benefit under the Plan begins) which is Actuarially Equivalent
                  to an annual benefit equal to the limitation beginning at the
                  Social Security Retirement Age.

                           (iv)     For purposes of adjusting any benefit or
                  limitation under paragraph (i) or (ii) above, the factor to be
                  used shall be the smaller of the Plan factor from Exhibit A or
                  the factor based on the mortality table described in Section
                  1.03(a) and 5% interest; provided, however, that for purposes
                  of adjusting any benefit under paragraph (i) for any form of
                  benefit subject to Code ss. 417(e)(3), the factor shall be the
                  smaller of the Plan factor from Exhibit A or the factor based
                  on the mortality table and interest rate described in Sections
                  1.03(a) and 1.03(b) to determine the Actuarial Equivalent of
                  the particular form of benefit in which the pension is to be
                  paid. For purposes of adjusting any benefit or limitation
                  under paragraph (iii) above, the factor shall be the smaller
                  of the Plan factor from Exhibit A or the factor based upon the
                  mortality table described in Section 1.03(a) and 5% interest.

                  (c)      Multiple Defined Benefit Plan Limitation. The
         limitation of this Section with respect to any Participant who at any
         time has been a Participant in any other defined benefit plan
         maintained by the Employer or any other member of the Controlled Group
         which is qualified under Code ss.401(a) shall apply as if the total
         benefits payable under all such defined benefit plans in which the
         Participant has participated were payable from one plan.

                  (d)      De Minimis Exception. In the event the annual benefit
         payable to a Participant under this Plan and all other defined benefit
         plans of the Employer or any other member of the Controlled Group does
         not exceed $10,000 for the Plan Year or any prior Plan Year, and the
         Participant has at no time participated in a defined contribution plan
         maintained by the Employer or any other member of the Controlled Group,
         the limitation otherwise imposed by this Section shall not apply.

                  (e)      Benefits Phased by Participation.

                           (i)      For purposes of subsections (b)(ii),
                  (b)(iii), and (c) above, the dollar limit specified in
                  subsection (a)(i) above for any Participant who has
                  participated for less than ten (10) years in a defined benefit
                  plan maintained by the Employer shall be reduced by
                  multiplying it by a fraction, the numerator of which

                                       36
<PAGE>   43

                  is the Participant's years (or part thereof) of participation
                  and the denominator of which is ten (10). For purposes of
                  determining a Participant's years of participation in a plan,
                  the provisions of Notice 87-21, 1987-1 C.B. 458, shall govern
                  until regulations under Code ss. 415(b)(5), as amended, are
                  issued.

                           (ii)     For purposes of the percentage limit under
                  subsection (a)(ii) above and for purposes of subsection (d)
                  above, the maximum retirement benefits to any Participant who
                  has completed less than ten (10) Years of Vesting Service,
                  shall be the amount determined in subsection (a)(ii) or (d) of
                  this Section, as applicable, multiplied by a fraction, the
                  numerator of which is the Participant's number of Years of
                  Vesting Service and the denominator of which is ten (10).

                           (iii)    In no event shall paragraphs (i) and (ii)
                  above reduce the limitations referred to in subsections (a)
                  and (d) above to an amount less than one-tenth (1/10) of such
                  limitation (as determined without regard to paragraphs (i) and
                  (ii) above). Furthermore, the limitations reduction referred
                  to in paragraphs (i) and (ii) above shall apply separately
                  with respect to each change in the benefit structure of a
                  plan, other than changes adopted and made effective prior to
                  May 17, 1989. For purposes of the preceding sentence, the
                  provisions of Notice 89-45 shall govern until regulations
                  under Code ss. 415(b)(5)(D), as amended, are issued.

                  (f)      Definitions. For purposes of this Section the
         following terms shall have the following meanings:

                           (i)      "Compensation" shall mean a Participant's
                  wages, salaries, fees for professional services and other
                  amounts received (without regard to whether or not an amount
                  is paid in cash) for personal services actually rendered in
                  the course of employment with an Employer maintaining the plan
                  to the extent that the amounts are includable in gross income
                  (including, but not limited to, commissions paid salesmen,
                  compensation for services on the basis of a percentage of
                  profits, commissions on insurance premiums, tips, bonuses,
                  fringe benefits, and reimbursements or other expense
                  allowances under a nonaccountable plan (as described in Treas.
                  Reg. ss. 1.62-2(c))), including foreign earned income (as
                  defined in Code ss. 911(b)) whether or not excludable from
                  gross income under Code ss. 911, and determined without regard
                  to the exclusions from gross income in Code ss. 931 and 933;
                  amounts described in Code ss. ss. 104(a)(3), 105(a) and
                  105(h), but only to the extent that these amounts are
                  includable in the gross income of the Participant; amounts
                  paid or reimbursed by the Employer for moving expenses
                  incurred by the Participant, but only to the extent that at
                  the time of the payment it is reasonable to believe that these
                  amounts are not deductible by the Participant under Code ss.
                  217; the value of a non-qualified stock option granted to the
                  Participant by the Employer, but only to the extent that the
                  value of the option is includable in the gross income of the
                  Participant for the taxable year in which granted; and the
                  amount includable in the gross income of the Participant upon
                  making a Code ss. 83(b) election; and excluding the following:

                                       37
<PAGE>   44

                  (a)      Employer contributions to a plan of deferred
         compensation which are not (before the application of the Code ss. 415
         limitations to the plan) includable in the Participant's gross income
         for the taxable year in which contributed, or Employer contributions
         under a simplified employee pension plan described in Code ss. 408(k),
         or any distributions from a plan of deferred compensation (whether or
         not includable in the Participant's gross income when distributed),
         except that amounts received by the Participant pursuant to an unfunded
         non-qualified plan shall be included in the year such amounts are
         includable in the gross income of the Participant;

                  (b)      amounts realized from the exercise of a non-qualified
         stock option, or when restricted stock (or property) held by the
         Participant becomes freely transferable or is no longer subject to a
         substantial risk of forfeiture under Code ss. 83;

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

                  (d)      other amounts which received special tax benefits
         such as premiums for group-term life insurance (but only to the extent
         that the premiums are not includable in the gross income of the
         Participant), or contributions made by the Employer (whether or not
         under a salary reduction agreement) towards the purchase of an annuity
         described in Code ss. 403(b) (whether or not the amounts are actually
         excludable from the gross income of the Participant).

Effective for Limitation Years beginning on and after January 1, 1998,
Compensation shall also include any amount which is contributed by any member of
the Controlled Group pursuant to a salary reduction agreement and which is not
includable in the gross income of the Employee under Code ss. ss. 125, 402(e)(3)
or 403(b).

For purposes of applying the Limitations of this Section, Compensation for a
Limitation Year is the Compensation actually paid, made available or includable
in gross income during such year. Notwithstanding the preceding sentence,
Compensation for a Participant in a defined contribution plan who is
"permanently and totally disabled" (as defined in Code ss. 22(e)(3)) is the
compensation such Participant would have received for the Limitation Year if the
Participant had been paid at the rate of compensation paid immediately before
becoming permanently and totally disabled; such imputed compensation for the
disabled Participant may be taken into account only if the Participant is not a
Highly Compensated Employee and contributions made on behalf of such Participant
are nonforfeitable when made. In interpreting this subsection (b), the
provisions of Treas. Reg. ss. 1.415-2(d)(1), (2) and (3) or the corresponding
provisions of any future Treasury Regulations shall control.

                                       38
<PAGE>   45
                           (ii)     "Employer" shall mean, solely for purposes
                  of this Section 4.08, an employer which adopts this Plan and
                  all members of a controlled group of corporations (as defined
                  in Code ss. 414(b), as modified by Code ss. 415(h)), all
                  trades or businesses (whether or not incorporated) under
                  common control (as defined by Code ss. 414(c), as modified by
                  Code ss. 415(h)), or all members of an affiliated service
                  group (as defined in Code ss. 414(m)) of which the adopting
                  employer is a part.

                           (iii)    "Limitation Year" shall mean the Plan Year.

                           (iv)     "Social Security Retirement Age" shall mean
                  the age used as the retirement age under Section 216(l) of the
                  Social Security Act, except that such section shall be applied
                  without regard to the age increase factor, and as if the early
                  retirement age under section 216(l)(2) of such Act were 62.

         4.09     Special Provisions Regarding Benefits Payable.

                  (a)      Restriction. Notwithstanding anything in this Article
         to the contrary, no distribution may be made to any Participant prior
         to the Participant's "severance from employment" (as defined in Rev.
         Ruls. 56-693 and 60-323, Internal Revenue Service General Counsel
         Memorandum 39824, and any subsequent guidance issued by the Internal
         Revenue Service) with all members of the Controlled Group.

                  (b)      Transferring Employees. See Sections 2.03 and 2.04
         for special provisions regarding transferring Employees.

                  (c)      QDRO Alternate Payees. See Section 9.03(b) for
         special provisions regarding alternate payees under a qualified
         domestic relations order.

                                       39
<PAGE>   46

                                  ARTICLE IV.

                STANDARD AND OPTIONAL FORMS OF RETIREMENT INCOME

         5.01     Standard Form of Retirement Income. A Participant's vested
Accrued Benefit payable under Sections 4.02, 4.03, 4.04 or 4.05, as applicable,
shall be paid in the Standard Form with payments commencing as of a permissible
Annuity Starting Date under said Section subject to the provisions of Sections
5.02 and 5.03 below.

         5.02     Automatic Forms of Retirement Income. The following provisions
apply to any distribution of a Participant's Normal, Delayed, Early or
Disability Retirement Benefit.

                  (a)      Automatic Cash-Outs. In the event that the
         Actuarially Equivalent present value of a Participant's vested Accrued
         Benefit does not exceed $3,500 (or, effective with respect to
         distributions that are made in Plan Years beginning on or after January
         1, 1998, does not exceed $5,000 at any time after the Participant's
         termination of employment and prior to the Annuity Starting Date), the
         Participant's entire benefit shall be distributed in a lump sum payment
         as soon as possible after the date he severs from employment with all
         members of the Controlled Group, or, if earlier, his Required Beginning
         Date. If the Actuarially Equivalent present value of the Participant's
         vested Accrued Benefit at such time is zero, the Participant shall be
         deemed to have received a distribution of such Accrued Benefit.

                  (b)      Automatic Form for Married Participants.

                           (i)      Automatic QJSA. Unless otherwise elected as
                  provided below and except as provided in subsection (a) above,
                  if a Participant has a Spouse on his selected Annuity Starting
                  Date, his benefit shall be paid in the form of a Qualified
                  Joint and Survivor Annuity with the amount of the monthly
                  payments such that the benefit payable will be Actuarially
                  Equivalent to his vested benefit payable. (The amount of the
                  Survivor's annuity shall be 50% of the amount of the payments
                  made to the Participant.)

                           (ii)     Waiver of Automatic QJSA. Any election to
                  waive the Qualified Joint and Survivor Annuity provided for in
                  this subsection must be made by the Participant in writing
                  during the "election period" and must be consented to by the
                  Participant's Spouse by way of a Qualified Spousal Waiver as
                  defined in Section 1.46. However, such consent shall not be
                  required if it is established to the satisfaction of the
                  Committee that the required consent cannot be obtained because
                  there is no Spouse, the Spouse cannot be located, or other
                  circumstances that may be prescribed by regulations
                  promulgated by the Secretary of the Treasury. Any such
                  election may be revoked by the Participant in writing without
                  the consent of the Spouse at any time during the election
                  period. Any new election, however, must comply with the
                  requirements of this subsection and must be made during the
                  election period. In addition, a consent executed by a former
                  Spouse shall not be binding on a subsequent Spouse.

                                       40
<PAGE>   47

                           (iii)    Election Period for Waiver. The "election
                  period" to waive the Qualified Joint and Survivor Annuity
                  shall be the ninety (90) day period ending on the Annuity
                  Starting Date.

                           (iv)     Annuity Explanation. With respect to the
                  election described in paragraph (iii) above, the Committee
                  shall provide the Participant, no later than thirty (30) days
                  and no more than ninety (90) days before the Annuity Starting
                  Date, a written explanation of: (i) the terms and conditions
                  of the Qualified Joint and Survivor Annuity, (ii) the
                  Participant's right to make an election to waive the Qualified
                  Joint and Survivor Annuity, (iii) the requirement for the
                  Participant's Spouse to consent to any election to waive the
                  Qualified Joint and Survivor Annuity, and (iv) the right of
                  the Participant to revoke such election and the effect of such
                  revocation. A Participant who so requests in writing shall
                  have the right to receive a written, detailed explanation of
                  the financial effects of electing an optional form of
                  retirement income.

                           (v)      Default Form. If a married Participant makes
                  a valid election to waive the Qualified Joint and Survivor
                  Annuity but fails to elect an optional form of benefit, then
                  all of his benefit shall be payable in the Standard Form.

                           (vi)     Special Provisions On and After April 1,
                  1999. Notwithstanding any other provision herein, effective
                  with respect to Participants whose employment terminates on or
                  after April 1, 1999, the written explanation described in
                  paragraph (iv) above may be provided prior to or after the
                  Annuity Starting Date, and such explanation shall clearly
                  indicate that the Participant has a right to 30 days in which
                  to consider the decision of whether to waive the Qualified
                  Joint and Survivor Annuity and to choose another optional form
                  of distribution. A Participant may waive his right to the
                  30-day period for considering whether to waive the Qualified
                  Joint and Survivor Annuity and may elect an optional form of
                  benefits at any time after the written explanation described
                  in paragraph (iv) is provided to the Participant; provided,
                  however, that the Participant shall be permitted to revoke a
                  distribution election until the later of (A) the Annuity
                  Starting Date, or (B) the 8th day after the written
                  explanation described in paragraph (iv) is provided to the
                  Participant. In no event shall distribution of the
                  Participant's benefits actually begin in accordance with the
                  election before the 8th day after the written explanation
                  described in paragraph (iv) has been provided to the
                  Participant.

         5.03     Optional Forms of Retirement Income. In lieu of the Standard
Form described in Section 5.01, or the automatic Qualified Joint and Survivor
Annuity form payable to a married Participant as described in Section 5.02(b), a
Participant may elect, in accordance with paragraphs (ii) through (v) of Section
5.02(b), and subject to subsection (a) of Section 5.02, to receive all of his
vested Accrued Benefit payable under Sections 4.02, 4.03, 4.04 or 4.05, as
applicable, in any one of the following forms with payments commencing as of the
permissible Annuity Starting Date under Section 4.02, 4.03, 4.04 or 4.05, as
applicable, selected by the Participant (subject to subsection (e) below) in an
amount such that the form chosen will be Actuarially Equivalent to his vested
benefit payable as of his selected Annuity Starting Date:

                                       41
<PAGE>   48

                  (a)      Period Certain and Life Annuity Option. An income
         payable in the Standard Form, but guaranteed for at least 5 or 10 years
         (according to the election of the Participant) regardless of whether or
         not the Participant survives such 5 or 10 year period. The Participant
         shall designate the Beneficiary who will receive any guaranteed
         payments under this subsection (a), provided that if no such
         Beneficiary is designated or the Beneficiary designated fails to
         survive the Participant, the Actuarial Equivalent present value of the
         remaining guaranteed payments shall be paid in a lump sum to the
         Participant's estate. For purposes of this subsection (a), the
         Actuarially Equivalent present value shall be calculated by using the
         Applicable Interest Rate. If the designated Beneficiary of guaranteed
         payments dies after the Annuity Starting Date but before the guaranteed
         payments are paid in full, the Actuarial Equivalent of the remaining
         payments will be paid in a lump sum to the estate of said designated
         Beneficiary.

                  (b)      Joint and Survivor Annuity Option. An income payable
         in the Standard Form, but further continuing after the first day of the
         month next following the death of the Participant at the rate of 50%,
         75% or 100% (according to the election of the Participant) of the
         monthly amount which was paid to the Participant to his designated
         Beneficiary and ending on the first day of the month next following the
         Beneficiary's date of death. The designated Beneficiary may not
         subsequently be changed by the Participant after the Annuity Starting
         Date.

                  (c)      Life Annuity Option. An income payable in the
         Standard Form.

                  (d)      Level Income Annuity Option. An income payable in the
         Standard Form, but with the monthly payment amounts structured so as to
         provide larger monthly payments from commencement until the Participant
         would be eligible for primary Social Security benefits and smaller
         monthly payments thereafter, with the anticipated result being a level
         income to the Participant when primary Social Security benefits are
         taken into account.

                  (e)      Immediate Payment Options. In the event that the
         Actuarially Equivalent present value of a Participant's vested benefit
         under Section 4.02, 4.03, 4.04 or 4.05, as applicable (determined after
         reduction for an alternate payee's vested benefit, as described in
         Section 9.03(b)(iii), if any), exceeds $3,500 (or, effective with
         respect to distributions that are made in Plan Years beginning on or
         after January 1, 1998, exceeds $5,000) but does not exceed $7,500, the
         Participant shall have the following additional payment options with
         his Annuity Starting Date to be the first day of the month next
         following the date the Participant severs from employment with all
         members of the Controlled Group rather than a permissible Annuity
         Starting Date under Section 4.02, 4.03, 4.04 or 4.05, as applicable:

                           (i)      Annuity Option for Single Participants.
                  Subject to paragraph (iii) below, such a Participant who is
                  not married as of his Annuity Starting Date may elect to
                  receive his benefit in the Standard Form, with the amount of
                  the Participant's monthly payments such that the vested
                  benefit payable under this paragraph (i) shall be Actuarially
                  Equivalent to the Participant's vested benefit payable under
                  Section 4.02, 4.03, 4.04 or 4.05, as applicable.

                                       42
<PAGE>   49

                           (ii)     Annuity Option for Married Participants.
                  Subject to paragraph (iii) below, such a Participant who is
                  married as of his Annuity Starting Date may elect to receive
                  his benefit in the form of a Qualified Joint and Survivor
                  Annuity, with the amount of the Participant's and Surviving
                  Spouse's monthly payments such that the vested benefit payable
                  under this paragraph (ii) shall be Actuarially Equivalent to
                  the Participant's vested benefit payable under Section 4.02,
                  4.03, 4.04 or 4.05, as applicable.

                           (iii)    Lump Sum Option. Such a Participant whether
                  married or single may elect to receive his vested benefit in
                  the form of a single lump sum payment in an amount equal to
                  the Actuarially Equivalent present value of the Participant's
                  vested benefit payable under Section 4.02, 4.03, 4.04 or 4.05,
                  as applicable.

         5.04     Conditions Relative to all Standard and Optional Forms.

                  (a)      Election of Optional Forms. To become effective, an
         election by a married Participant of an optional form of payment must
         be made during the "election period" described in Section 5.02(b)(iii)
         and must satisfy the Spouse's consent requirements of Section
         5.02(b)(ii). An election by an unmarried Participant of an optional
         form of payment must be made during the "election period" described in
         Section 5.02(b)(iii) to become effective.

                  (b)      Revocation of Elections. A Participant may revoke his
         election of an optional form of retirement income at any time before
         his Annuity Starting Date.

                  (c)      Special Provisions for Joint and Survivor Annuities.
         If a Participant has elected or is entitled to a joint and survivor
         annuity, then,

                           (i)      if his joint annuitant under a joint and
                  survivor annuity election dies before the Participant's
                  Annuity Starting Date, the election shall thereupon become
                  void, and the Standard Form of retirement income under Section
                  5.01 (or a Qualified Joint and Survivor Annuity under Section
                  5.02(b) if the Participant is married) will be deemed to be
                  the Participant's election unless he elects otherwise; and

                           (ii)     if the Participant dies before his Annuity
                  Starting Date, the election shall thereupon become void and
                  the Beneficiary or the joint annuitant shall not be entitled
                  to benefits under such option; instead, a death benefit, if
                  any, shall be payable in accordance with the provisions of
                  Section 4.07; and

                           (iii)    if the joint annuitant under the joint and
                  survivor annuity dies after Participant's Annuity Starting
                  Date, but before the death of the Participant, the Participant
                  shall nevertheless receive the reduced income payable to him
                  in accordance with the form of benefit in effect.

                  (d)      Reemployed Participants in Pay Status. If the
         Participant is reemployed by a member of the Controlled Group after
         benefits have commenced, his election shall

                                       43
<PAGE>   50

         nevertheless continue to be effective, but payments under said election
         shall be suspended in accordance with Section 5.07.

                  (e)      Additional Accruals After Annuity Starting Date. Any
         accrual of benefits by a Participant after the Participant's Annuity
         Starting Date shall be paid under the optional form of payment
         previously applicable to the Participant, unless the Participant's
         Annuity Starting Date occurred prior to his Normal Retirement Age.

                  (f)      All Forms Subject to Code ss.401(a)(9).
         Notwithstanding any provision of this Article V to the contrary, no
         optional form of payment otherwise available to a Participant shall be
         allowed to the extent such form fails to satisfy the provisions of
         Section 5.08 herein.

         5.05     Automatic and Optional Forms for Termination Benefits. The
form of payment of the Termination Benefit of a Participant who has severed from
employment with all members of the Controlled Group shall depend upon the amount
of the benefit as follows:

                  (a)      Automatic Cash-Out of Small Benefits. If the
         Actuarial Equivalent present value of a Participant's vested
         Termination Benefit does not exceed $3,500 (or, effective with respect
         to distributions that are made in Plan Years beginning on or after
         January 1, 1998, does not exceed $5,000), such Participant shall
         automatically receive his vested Termination Benefit in the form of a
         single lump sum payment in an amount equal to the Actuarially
         Equivalent present value of the Participant's vested Termination
         Benefit as soon as possible following his severance from employment
         with all members of the Controlled Group. For purposes of the preceding
         sentence, if the Actuarial Equivalent present value of the
         Participant's vested Termination Benefit is zero, the Participant shall
         be deemed to have received a distribution of such Termination Benefit
         under this subsection (a).

                  (b)      Immediate or Deferred Payment Options. If the
         Actuarial Equivalent present value of a Participant's vested
         Termination Benefit does exceed $3,500 (or, effective with respect to
         distributions that are made in Plan Years beginning on or after January
         1, 1998, exceeds $5,000) but does not exceed $7,500, such Participant's
         Termination Benefit shall be paid in the Standard Form subject to the
         provisions of Sections 5.02 and 5.03 above, with payments commencing as
         of a permissible Annuity Starting Date under Section 4.06 and elected
         by the Participant, unless the Participant elects that his Annuity
         Starting Date be the first day of the month next following the date the
         Participant severs from employment with all members of the Controlled
         Group or the first day of any month thereafter but prior to Normal
         Retirement Date rather than a permissible Annuity Starting Date under
         Section 4.06, in which event such Participant's Termination Benefit
         shall be paid in accordance with the following provisions:

                           (i)      Automatic Form for Single Participants.
                  Subject to paragraph (iii) below, such a Participant who is
                  not married as of his Annuity Starting Date shall
                  automatically receive his Termination Benefit in the Standard
                  Form with the amount of the Participant's monthly payments
                  such that the vested benefit payable

                                       44
<PAGE>   51

                  under this paragraph (i) shall be Actuarially Equivalent to
                  the Participant's vested Termination Benefit under Section
                  4.06.

                           (ii)     Automatic Form for Married Participants.
                  Subject to paragraph (iii) below, such a Participant who is
                  married as of his Annuity Starting Date shall automatically
                  receive his Termination Benefit in the form of a Qualified
                  Joint and Survivor Annuity, with the amount of the
                  Participant's monthly payments such that the vested benefit
                  payable under this paragraph (ii) shall be Actuarially
                  Equivalent to the Participant's vested Termination Benefit
                  under Section 4.06.

                           (iii)    Lump Sum Option. Such a Participant may
                  elect, but only in accordance with paragraphs (ii) through (v)
                  of Section 5.02(b), to receive his Termination Benefit in the
                  form of a single lump sum payment in an amount equal to the
                  Actuarially Equivalent present value of the Participant's
                  vested Termination Benefit under Section 4.06. For purposes of
                  this paragraph (iii), Actuarially Equivalent present value
                  shall be calculated by using the Applicable Interest Rate and
                  the UP-1984 Mortality Table.

                  (c)      Deferred Payment Options. If the Actuarially
         Equivalent present value of a Participant's vested Termination Benefit
         does exceed $7,500, such Participant's vested Termination Benefit shall
         be paid in the Standard Form subject to the provisions of Sections 5.02
         and 5.03 above, with payments commencing as of a permissible Annuity
         Starting Date under Section 4.06 selected by the Participant.

All forms of payment under this Section shall be Actuarially Equivalent, as of
the Participant's Annuity Starting Date, to the Participant's vested Termination
Benefit. Only the provisions of Sections 5.02(b)(i) (to the extent specified in
subsection (c) above) and (b)(ii) through (v), 5.03 (to the extent specified in
subsection (c) above), 5.04 and 5.07 of this Article V shall apply to any
distribution of a Participant's vested Termination Benefit under this Section.

         5.06     Automatic and Optional Forms for Death Benefits. The form of
payment of a Surviving Spouse's Death Benefit shall depend upon the amount of
the benefit as follows:

                  (a)      Automatic Cash-Out of Small Benefits. If the
         Actuarially Equivalent present value of a Surviving Spouse's Death
         Benefit does not exceed $3,500 (or, effective with respect to
         distributions that are made in Plan Years beginning on or after January
         1, 1998, does not exceed $5,000), such Surviving Spouse shall
         automatically receive his entire Death Benefit as soon as possible
         following the Participant's date of death in the form of a single lump
         sum payment in an amount equal to the Actuarially Equivalent present
         value of the Surviving Spouse's Death Benefit. For purposes of this
         subsection (a), Actuarially Equivalent present value shall be
         calculated by using the Applicable Interest Rate and the UP-1984
         Mortality Table.

                  (b)      Immediate Options. If the Actuarially Equivalent
         present value of a Surviving Spouse's Death Benefit exceeds $3,500 (or,
         effective with respect to distributions that are made in Plan Years
         beginning on or after January 1, 1998, exceeds $5,000), such Surviving
         Spouse's Death Benefit shall be paid in the Standard Form with

                                       45
<PAGE>   52

         payments commencing as of the applicable Annuity Starting Date
         specified in Section 4.07, unless the Actuarially Equivalent present
         value of a Surviving Spouse's Death Benefit does exceed $3,500 (or,
         effective with respect to distributions that are made in Plan Years
         beginning on or after January 1, 1998, exceeds $5,000) but does not
         exceed $7,500, in which event, the Surviving Spouse may elect that
         payment of such Death Benefit be made in the form of a single lump sum
         payment in an amount equal to the Actuarially Equivalent present value
         of the Surviving Spouse's Death Benefit.

                  (c)      Payment of Minimum Death Benefit. To the extent that
         any amount is payable to the Beneficiary of a deceased Participant
         under the provisions of subsection (e) of Section 4.07, such amount
         shall be paid in a single lump sum cash payment as soon as practicable
         following the death of the Participant or the death of the
         Participant's Surviving Spouse, as applicable.

All forms of payment under this Section shall be Actuarially Equivalent, as of
the Surviving Spouse's Annuity Starting Date, to the Surviving Spouse's Death
Benefit.

         5.07     Suspension upon Delayed Retirement or Reemployment After
Annuity Starting Date.

                  (a)      Suspension of Benefits. The benefits otherwise
         payable under the Plan to a Participant who has severed from employment
         and who has commenced receiving benefits shall be suspended if such
         Participant has become reemployed and has completed 40 or more hours of
         "section 203(a)(3)(B) service" (as defined in DOL Reg.ss.2530.203-3(c))
         with any member of the Controlled Group in a four week payroll period
         ending in such calendar month. Such Participant's benefits shall resume
         as of the first day of the month following his subsequent severance
         from employment and, except as provided in (b) below, shall be the same
         amount and paid in the same form as the Participant was previously
         receiving. A Participant who continues in employment with the Employer
         past his Normal Retirement Date and who is eligible to receive a
         Delayed Retirement Benefit under Section 4.03 shall, although not
         entitled to a benefit until his severance from employment, be deemed to
         have his benefits suspended under this Section 5.07 until his severance
         from employment or until his Required Beginning Date, whichever first
         occurs. Such cessation or suspension of benefits shall not affect the
         payment of benefits after the death of a reemployed Participant under
         any form of benefit which shall at that time be in effect.

                  (b)      Resumption of Benefits. In the case where payment of
         benefits is suspended on account of reemployment, the amount of
         benefits to be paid upon subsequent severance from employment shall be
         based on a Participant's Years of Benefit Service rendered and
         Compensation earned during that period of his reemployment, as well as
         his Years of Benefit Service rendered and Compensation earned prior to
         the date of his previous severance from employment, to the extent that
         such Years of Benefit Service were completed and Compensation was
         earned prior to the Participant's Normal Retirement Date, and, if the
         Participant has completed at least one Hour of Service in a Plan Year
         beginning after December 31, 1988, to the extent that such Years of
         Benefit Service were completed and Compensation was earned after the
         Participant's Normal

                                       46
<PAGE>   53

         Retirement Date. In any case of reemployment, the benefit payments upon
         an Employee's subsequent severance from employment shall be reduced by
         the Actuarial Equivalent of any benefit payments he previously received
         from the Plan prior to his Required Beginning Date.

                  (c)      Notification Required. No payment of benefits shall
         be withheld by the Plan pursuant to this Section 5.07 unless the
         Committee notifies the Employee, by personal delivery or first class
         mail during the first calendar month in which the Plan withholds
         payments, that his benefits are suspended. Such notification shall
         contain a description of the specific reasons why benefit payments are
         being suspended, a description of the Plan provision relating to the
         suspension of payments, a copy of such provisions and a statement to
         the effect that the applicable Department of Labor regulations may be
         found in section 2530.203-3 of the Code of Federal Regulations. In
         addition, the notice shall inform the Employee of the Plan's procedures
         for affording a review of the suspension of benefits. Requests for such
         reviews may be considered in accordance with the claims procedure
         established by the Committee.

                  (d)      Accrual Required During Suspension. See Section
         11.03(e) herein for a special rule relating to the application of this
         Section if the Plan is a Top-Heavy Plan.

                  (e)      Suspension of Required Distributions. Notwithstanding
         the preceding provisions of this Section, retirement benefits shall not
         be suspended on and after the Required Beginning Date of a Participant.

         5.08     Required Distributions.

                  (a)      General Rules. The requirements of this Section 5.08
         shall apply to any distribution of a Participant's benefit payable
         under this Plan made on or after the Participant's first Distribution
         Calendar Year and will take precedence over any provisions of this Plan
         which are less restrictive. All distributions required under this
         Section 5.08 shall be determined and made in accordance with Code
         ss.401(a)(9) and the regulations promulgated thereunder, including the
         minimum distribution incidental benefit requirement of Treas. Reg.
         ss.1.401(a)(9)-2.

                  (b)      Definitions. For purposes of this Section 5.08, the
         following terms and phrases shall have the meanings indicated below:

                           (i)      Required Beginning Date -

                                    (A)      General Rule - The Required
                           Beginning Date of a Participant is the first day of
                           April of the calendar year following the calendar
                           year in which the Participant attains age 70-1/2,
                           subject to the transitional rule of subparagraph (B)
                           below.

                                    (B)      Transitional Rule - The Required
                           Beginning Date of a Participant who attains age
                           70-1/2 before January 1, 1988, shall be determined in
                           accordance with (1) or (2) below:

                                       47
<PAGE>   54

                                             (1)      Non-5-Percent Owners. The
                                    Required Beginning Date of a Participant who
                                    is not a 5-Percent Owner (as defined in
                                    subparagraph (C) below) during any Plan Year
                                    beginning after December 31, 1979, is the
                                    first day of April of the calendar year
                                    following the calendar year in which the
                                    later of retirement or attainment of age
                                    70-1/2 occurs.

                                             (2)      5-Percent Owners. The
                                    Required Beginning Date of a Participant who
                                    is a 5-Percent Owner (as defined in
                                    subparagraph (C) below) during any Plan Year
                                    beginning after December 31, 1979, is the
                                    first day of April following the later of
                                    the calendar year in which the Participant
                                    attains age 70-1/2, or the earlier of (1)
                                    the calendar year with or within which ends
                                    the Plan Year in which the Participant
                                    becomes a 5-Percent Owner or (2) the
                                    calendar year in which the Participant
                                    retires.

                                    (C)      5-Percent Owner - A Participant is
                           treated as a 5-Percent Owner for purposes of this
                           paragraph (i) if such Participant is a 5-Percent
                           Owner as defined in Code ss. 416(i) at any time
                           during the Plan Year ending with or within the
                           calendar year in which such Participant attains age
                           66-1/2 or any subsequent Plan Year.

                                    (D)      Once distributions have begun to a
                           5-Percent Owner under this Section, they must
                           continue to be distributed, even if the Participant
                           ceases to be a 5-Percent Owner in a subsequent year.

                           (ii)     Distribution Calendar Year - A calendar year
                  for which a minimum distribution is required. For
                  distributions beginning before the Participant's death, the
                  first Distribution Calendar Year is the calendar year
                  immediately preceding the calendar year which contains the
                  Participant's Required Beginning Date. For distributions
                  beginning after the Participant's death, the first
                  Distribution Calendar Year is the calendar year in which
                  distributions are required to begin pursuant to subsection (d)
                  below.

                           (iii)    Designated Beneficiary - The individual(s)
                  who is (are) designated as the Beneficiary under the Plan by
                  the terms of the Plan or by an affirmative election by the
                  Participant (and/or the Participant's Spouse) consistent with
                  the requirements of the Plan. Designated Beneficiaries must be
                  identifiable (within the meaning of Treas. Reg.
                  ss. 1.401(a)(9)-1(D-2)) as of the Participant's Required
                  Beginning Date, or as of the Participant's death, and at all
                  subsequent times.

                           (iv)     Applicable Life Expectancy - The life
                  expectancy (or joint and last survivor expectancy) calculated
                  using the attained age of the Participant (or Designated
                  Beneficiary) as of the Participant's (or Designated
                  Beneficiary's) birthday in the applicable calendar year
                  reduced by one for each calendar year which has elapsed since
                  the date life expectancy was first calculated. If life
                  expectancy is being recalculated, the applicable life
                  expectancy shall be the life

                                       48

<PAGE>   55

                  expectancy as so recalculated. The applicable calendar year
                  shall be the first Distribution Calendar Year, and if life
                  expectancy is being recalculated, such succeeding calendar
                  year. If annuity payments commence before the Required
                  Beginning Date, the applicable calendar year is the year such
                  payments commence. If distribution is in the form of an
                  immediate annuity purchased after the Participant's death with
                  the Participant's remaining interest, the applicable calendar
                  year is the year of purchase.

                           (v)      Life Expectancy - Life expectancy and joint
                  and last survivor expectancy are computed by use of the
                  expected return multiples in Tables V and VI of Treas. Reg.
                  ss. 1.72-9. Unless otherwise elected by the Participant (or
                  Spouse, in the case of distributions described in subsection
                  (d)(ii)(B) below) by the time distributions are required to
                  begin, life expectancies shall be recalculated annually. Such
                  election shall be irrevocable as to the Participant (or
                  Spouse) and shall apply to all subsequent years. The life
                  expectancy of a nonspouse Beneficiary may not be recalculated.

                  (c)      Required Distribution Rule. The entire interest of a
         Participant must be distributed or begin to be distributed no later
         than the Participant's Required Beginning Date.

                  (d)      Death Distribution Provisions.

                           (i)      Distribution Beginning Before Death - If the
                  Participant dies after distribution of his or her interest has
                  begun, the remaining portion of such interest will continue to
                  be distributed at least as rapidly as under the method of
                  distribution being used prior to the Participant's death.

                           (ii)     Distribution Beginning After Death - If the
                  Participant dies before distribution of his or her interest
                  begins, distributions of the Participant's entire interest
                  shall be completed by December 31 of the calendar year
                  containing the fifth anniversary of the Participant's death,
                  except to the extent that an election is made to receive
                  distributions in accordance with (A) or (B) below:

                                    (A)      If any portion of the Participant's
                           interest is payable to a Designated Beneficiary,
                           distributions may be made over the life of, or over a
                           period certain not greater than the life expectancy
                           of, the Designated Beneficiary commencing on or
                           before December 31 of the calendar year immediately
                           following the calendar year in which the Participant
                           died;

                                    (B)      If the Designated Beneficiary is
                           the Participant's surviving Spouse, the date
                           distributions are required to begin in accordance
                           with subparagraph (A) above shall not be earlier than
                           the later of (1) December 31 of the calendar year
                           immediately following the calendar year in which the
                           Participant died and (2) December 31 of the calendar
                           year in which the Participant would have attained age
                           70-1/2.

                                       49
<PAGE>   56

                  If the Participant has not made an election pursuant to this
                  subsection (d) by the time of his or her death, the
                  Participant's Designated Beneficiary must elect the method of
                  distribution no later than the earlier of (a) December 31 of
                  the calendar year in which distribution would be required to
                  begin under this subsection (d), or (b) December 31 of the
                  calendar year which contains the fifth anniversary of the date
                  of death of the Participant. If the Participant has no
                  Designated Beneficiary, or if the Designated Beneficiary does
                  not elect a method of distribution, distribution of the
                  Participant's entire interest must be completed by December 31
                  of the calendar year containing the fifth anniversary of the
                  Participant's death.

                           (iii)    For purposes of paragraph (ii) above, if the
                  surviving Spouse dies after the Participant, but before
                  payments to such Spouse begin, the provisions of paragraph
                  (ii), with the exception of subparagraph (B) therein, shall be
                  applied as if the surviving Spouse were the Participant.

                           (iv)     For purposes of this subsection, any amount
                  paid to a child of the Participant will be treated as if it
                  had been paid to the surviving Spouse if the amount becomes
                  payable to the surviving Spouse when the child reaches the age
                  of majority.

                           (v)      For purposes of this subsection,
                  distribution of a Participant's interest is considered to
                  begin on the Participant's Required Beginning Date (or, if
                  paragraph (iii) above is applicable, the date distribution is
                  required to begin to the surviving Spouse pursuant to
                  paragraph (ii) above). If distribution in the form of an
                  annuity described in subsection (f)(i) below irrevocably
                  commences to the Participant before the Required Beginning
                  Date, the date distribution is considered to begin is the date
                  distribution actually commences.

                  (e)      Limits on Distribution Periods. As of the first
         Distribution Calendar Year, distributions, if not made in a single-sum,
         may only be made over one of the following periods (or a combination
         thereof):

                           (i)      The life of the Participant;

                           (ii)     The life of the Participant and a Designated
                  Beneficiary;

                           (iii)    A period certain not extending beyond the
                  life expectancy of the Participant; or

                           (iv)     A period certain not extending beyond the
                  joint and last survivor expectancy of the Participant and a
                  Designated Beneficiary;

                  (f)      Determination of Amount to be Distributed Each Year.

                           (i)      If the Participant's interest is to be paid
                  in the form of annuity distributions under the Plan, payments
                  under the annuity shall satisfy the following requirements:

                                       50
<PAGE>   57

                                    (A)      The distribution period must be
                           over a life (or lives) or over a period certain not
                           longer than a life expectancy (or joint life and last
                           survivor expectancy) described in Code
                           ss.ss. 401(a)(9)(A)(ii) or 401(a)(9)(B)(iii),
                           whichever is applicable;

                                    (B)      The life expectancy (or joint life
                           and last survivor expectancy) for purposes of
                           determining the period certain shall be determined
                           without recalculation of life expectancy;

                                    (C)      Once payments have begun over a
                           period certain, the period certain may not be
                           lengthened even if the period certain is shorter than
                           the maximum permitted.

                                    (D)      Payments must either be
                           nonincreasing or increase only as follows:

                                             (1)      With any percentage
                                    increase in a specified and generally
                                    recognized cost-of-living index;

                                             (2)      To the extent of the
                                    reduction to the amount of the Participant's
                                    payments to provide for a survivor benefit
                                    upon death, but only if the beneficiary
                                    whose life was being used to determine the
                                    distribution period described in subsection
                                    (e) above dies and the payments continue
                                    otherwise in accordance with that section
                                    over the life of the Participant;

                                             (3)      Because of an increase in
                                    benefits under the Plan.

                                    (E)      If the annuity is a life annuity
                           (or a life annuity with a period certain not
                           exceeding 20 years), the amount which must be
                           distributed on or before the Participant's Required
                           Beginning Date (or, in the case of distributions
                           after the death of the Participant, the date
                           distributions are required to begin pursuant to
                           subsection (d) above) shall be the payment which is
                           required for one payment interval. The second payment
                           need not be made until the end of the next payment
                           interval even if that payment interval ends in the
                           next calendar year. Payment intervals are the periods
                           for which payments are received, e.g., bimonthly,
                           monthly, semi-annually, or annually.

                                    (F)      If the annuity is a period certain
                           annuity without a life contingency (or is a life
                           annuity with a period certain exceeding 20 years)
                           period payments for each Distribution Calendar Year
                           shall be combined and treated as an annual amount.
                           The amount which must be distributed by the
                           Participant's Required Beginning Date (or, in the
                           case of distributions after the death of the
                           Participant, the date distributions are required to
                           begin pursuant to subsection (d) above) is the annual
                           amount for the first Distribution Calendar Year. The
                           annual amount for other Distribution Calendar Years,
                           including the annual amount for the calendar

                                       51
<PAGE>   58

                           year in which the Participant's Required Beginning
                           Date (or the date distributions are required to begin
                           pursuant to subsection (d) above) occurs, must be
                           distributed on or before December 31 of the calendar
                           year for which the distribution is required.

                           (ii)     Annuities purchased after December 31, 1988,
                  are subject to the following additional conditions:

                                    (A)      Unless the Participant's Spouse is
                           the Designated Beneficiary, if the Participant's
                           interest is being distributed in the form of a period
                           certain annuity without a life contingency, the
                           period certain as of the beginning of the first
                           distribution calendar year may not exceed the
                           applicable period determined using the table set
                           forth in Treas. Reg. ss. 1.401(a)(9)-2(Q&A-5).

                                    (B)      If the Participant's interest is
                           being distributed in the form of a joint and survivor
                           annuity for the joint lives of the Participant and a
                           nonspouse Beneficiary, annuity payments to be made on
                           or after the Participant's Required Beginning Date to
                           the Designated Beneficiary after the Participant's
                           death must not at any time exceed the applicable
                           percentage of the annuity payment for such period
                           that would have been payable to the Participant using
                           the table set forth in Treas. Reg.
                           ss.1.401(a)(9)-2(Q&A-6).

                           (iii)    Transitional Rule. If payments under an
                  annuity which complies with paragraph (i) above begin prior to
                  January 1, 1989, the minimum distribution requirements in
                  effect as of July 27, 1987, shall apply to distributions from
                  this Plan, regardless of whether the annuity form of payment
                  is irrevocable. This transitional rule also applies to
                  deferred annuity contracts distributed to or owned by the
                  Participant prior to January 1, 1989, unless additional
                  contributions are made under the Plan by the Employer with
                  respect to such contract.

                           (iv)     If the form of distribution is an annuity
                  made in accordance with this subsection (f), any additional
                  benefits accruing to the Participant after his or her Required
                  Beginning Date shall be distributed as a separate and
                  identifiable component of the annuity beginning with the first
                  payment interval ending in the calendar year immediately
                  following the calendar year in which such amount accrues.

         5.09     Code ss. 401(a)(31) Requirement.

                  (a)      General Rule. If a Participant or Surviving Spouse
         (or alternate payee) of a Participant who is to receive a payment under
         this Article and Article IV which is an eligible rollover distribution
         (as defined below) elects (within the 90 day period ending on the
         Annuity Starting Date) to have such distribution (or a portion of such
         distribution) paid directly to an eligible retirement plan (as defined
         below) and specifies the eligible retirement plan to which such
         distribution is to be paid, such payment to be made to the

                                       52
<PAGE>   59

         Participant or Surviving Spouse (or alternate payee) of a Participant
         shall be made in the form of a direct lump sum cash transfer from the
         Trustee to the trustee of the eligible retirement plan so specified in
         lieu of the payment otherwise required by this Article and Article IV.
         The preceding sentence shall only apply to the extent that the eligible
         rollover distribution would be includable in the Participant's or
         Surviving Spouse's (or alternate payee's) gross income if not so
         transferred (determined without regard to Code ss.ss. 402(c) and
         403(a)(4)).

                  (b)      Definitions. For purposes of this Section, the
         following terms shall have the meanings indicated:

                           (i)      Eligible retirement plan shall mean:

                                    (A)      with respect to a Participant (or
                           alternate payee), an individual retirement account
                           described in Code ss. 408(a), an individual
                           retirement annuity described in Code ss. 408(b)
                           (other than an endowment contract), a qualified trust
                           which is a defined contribution plan and the terms of
                           which permit the acceptance of rollover
                           distributions, or an annuity plan described in Code
                           ss. 403(a); or

                                    (B)      with respect to a Surviving Spouse
                           of a Participant, an individual retirement account
                           described in Code ss. 408(a) or an individual
                           retirement annuity described in Code ss. 408(b)
                           (other than an endowment contract).

                           (ii)     Eligible rollover distribution shall mean
                  any distribution to a Participant or Surviving Spouse (or
                  alternate payee) of a Participant of all or any portion of the
                  balance to the credit of such individual in this Plan;
                  provided, however, such term shall not include:

                                    (A)      any distribution which is one of a
                           series of substantially equal periodic payments (not
                           less frequently than annually) made for the life (or
                           life expectancy) of the Participant or his designated
                           Beneficiary or the joint lives (or joint life
                           expectancies) of the Participant and his designated
                           Beneficiary, or for a specified period of 10 years or
                           more;

                                    (B)      any distribution to the extent such
                           distribution is required by Section 5.08;

                                    (C)      the portion of any distribution
                           that is not includable in gross income; and

                                    (D)      any other distribution or portion
                           of a distribution to the extent such distribution is
                           not considered an eligible rollover distribution
                           under Treasury regulations or other guidance issued
                           by the Internal Revenue Service.

                                       53
<PAGE>   60

                  (c)      Special Effective Date. The provisions of this
         Section shall be effective for any distributions or payments made after
         December 31, 1992.

                  (d)      Satisfaction of Requirements. For purposes of this
         Section, the Participant or Surviving Spouse (or alternate payee) of a
         Participant electing the transfer must present sufficient evidence in a
         timely manner to the Plan Administrator that the transferee plan
         satisfies the definition of an eligible retirement plan set forth
         above. At a minimum, the Participant or Surviving Spouse (or alternate
         payee) must state the name of the transferee plan and represent that
         the transferee plan is an eligible retirement plan (as defined in
         paragraph (i) of subsection (b) above). The Participant or Surviving
         Spouse (or alternate payee) must also present such additional
         documentation as the Plan Administrator may require which shall be used
         to verify that the requirements of this Section have been met. The
         Trustee, the Committee, the Plan Administrator, or any Plan fiduciary
         shall have no duty to verify the authenticity of any such evidence or
         documentation, and shall be entitled to rely on any such evidence
         submitted by a Participant or Surviving Spouse (or alternate payee),
         without questioning the authenticity thereof, unless it is unreasonable
         so to rely. Furthermore, in the event that the Trustee, the Committee,
         the Plan Administrator or any Plan fiduciary shall have actual
         knowledge of an issue relating to the transferee plan's ability to
         satisfy the definition of an eligible retirement plan, such issue must
         be expressly resolved in favor of the satisfaction of such definition
         by the transferee plan by a ruling from the Internal Revenue Service or
         by an opinion of legal counsel (chosen by the Participant or Surviving
         Spouse (or alternate payee), but acceptable to the Committee) directed
         to the Trustee, the Plan, the Committee, the Plan Administrator and any
         fiduciary of the Plan, before the transfer can occur.

                  (e)      Determination in the Committee's Discretion. The
         Committee shall have complete and absolute discretion to determine
         whether the proposed transferee plan selected by the distributee
         satisfies the requirements of this Section, and to determine whether
         the requirements of this Section have otherwise been satisfied by a
         proposed transfer.

                  (f)      Interpretation. The provisions of this Section shall
         be interpreted in accordance with Code ss. 401(a)(31), as added by the
         Unemployment Compensation Amendments of 1992, and any regulations or
         other guidance promulgated by the Internal Revenue Service thereunder,
         and shall not be construed or interpreted in a manner other than strict
         compliance with such requirements.

                  (g)      Application of Other Rules. For all purposes of this
         Plan, the election by a Participant or Surviving Spouse (or alternate
         payee) of a Participant of a transfer under this Section shall be
         considered a payment or distribution under this Article and Article IV
         as if the amount transferred were paid directly to the Participant or
         Beneficiary (or alternate payee).

                                       54
<PAGE>   61
                                  ARTICLE VI.

                          CONTRIBUTIONS AND TRUST FUND

         6.01     Required Participant Contributions. Participants under the
Plan are not required nor permitted to contribute to the Trust Fund.

         6.02     Contributions by the Employer. Annually, the Committee shall
cause an actuarial valuation of the liabilities under the Plan to be made by an
Enrolled Actuary on the basis of the service and mortality tables, rate of
interest, and method of funding approved by the Committee.

         The Enrolled Actuary shall report to the Committee as to:

                  (a)      The amount of the minimum funding requirement under
         Code ss. 412, which would be sufficient to provide for currently
         accruing benefit liabilities; and

                  (b)      The applicable limitations established by law as to
         the amount of the deposit in respect of both past and currently
         accruing benefit liabilities which could be deducted as a cost for tax
         purposes.

         The contributions of the Employer will be paid at such times and in
such amounts as the Company shall determine based on the Committee's
information, in accordance with the requirement for quarterly contributions
under Code ss. 412(m) and ERISA ss. 302(e).

         6.03     Return of Contributions. Notwithstanding the foregoing,
Contributions made by the Employer shall be returned to said Employer by the
Trustee in the following instances:

                  (a)      Mistake of Fact. If a Contribution is made by the
         Employer under a mistake of fact, the amount of the Contribution
         described in subsection (c) below shall be returned to the Employer
         within one year after the payment of said Contribution.

                  (b)      Deductibility Condition. All Contributions made to
         the Plan are specifically made contingent upon their deductibility by
         the Employer. If a Contribution is nondeductible under Code ss. 404 for
         the Plan Year for which it was contributed, then the amount described
         in subsection (c) below shall be returned to the Employer within one
         year after the disallowance of the deduction. The provisions of this
         subsection (b) shall be construed in accordance with Rev. Proc. 89-35,
         Rev. Proc. 90-49, and any corresponding future guidance issued by the
         Internal Revenue Service.

                  (c)      Amount Returned. For purposes of subsection (a) and
         (b) above, the amount which will be returned to the Employer is the
         excess of (i) the amount contributed, over, as relevant, (ii) (A) the
         amount that would have been contributed had no mistake of fact
         occurred, or (B) the amount that would have been contributed had the
         contribution been limited to the amount that is deductible after any
         disallowance of a deduction. Earnings attributable to the excess
         Contribution will not be returned to the Employer, but losses
         attributable thereto will reduce the amount so returned.

                                       55
<PAGE>   62

                  (d)      Construction. The provisions of this Section shall
         be construed in a manner consistent with Rev. Rul. 91-4 or any future
         guidance issued by the Internal Revenue Service regarding
         Code ss. 401(a)(2) and ERISA ss. 403(c)(2).

                                       56
<PAGE>   63

                                 ARTICLE VII.

                                 ADMINISTRATION

         7.01     Committee. Administration of the Plan, the exclusive power to
interpret it, and the responsibility for carrying out its provisions are vested
in an administrative Committee, which shall be comprised of one or more
members. The Chief Executive Officer of the Company shall appoint the Committee
member(s) and shall have the power of removal and substitution. Any Committee
member may resign by notifying the Company in writing. The Committee shall
establish rules for administration of the Plan and the transaction of its
business. The Committee shall constitute the "administrator" (as defined in
ERISA ss. 3(16)(A)) and the "plan administrator" (as defined in Code ss. 414(g))
of the Plan, and shall perform the duties and responsibilities associated
therewith unless otherwise provided in this Plan.

         7.02     Plan Administrator. One or more persons, who may or may not
be members of the Committee, shall be appointed by the Committee to serve as
the Plan Administrator. If no such appointment is made, the Committee shall be
the Plan Administrator. The Plan Administrator shall perform those duties and
responsibilities allocated to it under the terms and provisions of this Plan
and any other duties and responsibilities delegated to it by the Committee.

         7.03     Delegation of Duties. The Committee may obtain clerical,
legal, accounting and actuarial assistance to carry out the provisions of the
Plan.

         7.04     Plan Records. The Committee shall maintain appropriate
accounts and records of the Plan and shall keep in convenient form the data
necessary for actuarial valuations.

         7.05     Committee Liability. Committee members shall use ordinary
care and diligence in performing their duties; however, to the extent permitted
by ERISA or other applicable law, no member shall be personally liable by
virtue of any contract, agreement, bond or other instrument made or executed by
or for him as a Committee member, nor for any loss unless due to his own
willful misconduct.

         7.06     Committee Indemnification. The Employer shall indemnify each
Committee member against costs, expenses and liabilities, including attorney's
fees, incurred in connection with any action, suit or proceeding instituted
against him because of any act of omission or commission performed by him as a
Committee member while acting in good faith and exercising his judgment for the
best interest of the Plan.

         Promptly upon receipt by an indemnified party under this Section, of
notice of the commencement of any such action, such indemnified party will, if
a claim in respect thereof is to be made against an Employer or all of the
Employers in the aggregate, notify the Company of the commencement thereof, but
the omission to so notify the Company will not relieve it from the liability
hereunder, nor from any other liability which it may have to such person. The
Employer shall be entitled to participate at its own expense in the defense or
to assume the defense of any action brought against any party indemnified
hereunder.

                                       57
<PAGE>   64

         In the event the Employer acting by and through the Company elects to
assume the defense of any such suit, such defense shall be conducted by counsel
chosen by the Company, and the indemnified party shall bear the fees and
expenses of any additional counsel retained by him.

         7.07     Committee Expenses. Subject to Section 9.01, any reasonable
expenses incurred by the Committee, with the prior approval of the Company, in
the performance of its duties shall be paid by the Plan. The members of the
Committee shall serve without compensation for the performance of their duties
hereunder, unless a member of the Committee is not a full-time Employee of an
Employer.

         7.08     Interpretation of the Plan and Findings of Facts. The
Committee shall have sole and absolute discretion to interpret the provisions
of the Plan (including, without limitation, by supplying omissions from,
correcting deficiencies in, or resolving inconsistencies or ambiguities in, the
language of the Plan), to make factual findings with respect to any issue
arising under the Plan, to determine the rights and status under the Plan of
Participants and other persons, to decide disputes arising under the Plan and
to make any determinations and findings (including factual findings) with
respect to the benefits payable thereunder and the persons entitled thereto as
may be required for the purposes of the Plan. In furtherance of, but without
limiting, the foregoing, the Committee is hereby granted the following specific
authorities, which it shall discharge in its sole and absolute discretion in
accordance with the terms of the Plan (as interpreted, to the extent necessary,
by the Committee):

                  (a)      To resolve all questions (including factual
         questions) arising under the provisions of the Plan as to any
         individual's entitlement to become a Participant; and

                  (b)      To determine the amount of benefits, if any, payable
         to any person under the Plan (including, to the extent necessary,
         making any factual findings with respect thereto);

All decisions of the Committee as to the facts of the case, as to the
interpretation of any provision of the Plan or its application to any case, and
as to any other interpretative matter or other determination or question under
the Plan shall be final and binding on all parties affected thereby, subject to
the claims and review procedures under this Plan. The Committee shall direct
the Trustee relative to benefits to be paid under the Plan and shall furnish
the Trustee with any information reasonably required by it for the purpose of
paying benefits under the Plan.

                                       58
<PAGE>   65

                                 ARTICLE VIII.

                           THE TRUST FUND AND TRUSTEE

         8.01     Existence of Trust. The Company has entered into a Master
Trust Agreement with the Trustee to hold the funds necessary to provide the
benefits set forth in this Plan.

         8.02     Exclusive Benefit Rule. The Trust Fund shall be received,
held in trust, and disbursed by the Trustee in accordance with the provisions
of the Master Trust Agreement and this Plan. No part of the Trust Fund shall be
used for or diverted to purposes other than for the exclusive benefit of
Participants and their Beneficiaries and the payment of reasonable expenses
attributable to the administration of the Plan in accordance with ERISA
ss. 404(a)(1)(A)(ii). (See Section 9.01.) No person shall have any interest in,
or right to, the Trust Fund or any part thereof, except as specifically
provided for in this Plan or the Master Trust Agreement.

         8.03     Removal of Trustee. The Company may remove the Trustee at any
time upon the notice required by the terms of the Master Trust Agreement, and
upon such removal or upon the resignation of a Trustee, the Company shall
appoint a successor Trustee.

         8.04     Powers of Trustee. The Trustee shall have the power to hold,
invest, reinvest, or to control and disburse the Trust Funds in accordance with
the provisions of the Master Trust Agreement and this Plan. Notwithstanding the
foregoing, the Pension and Finance Committee of the Board may appoint one or
more investment managers to direct the investment of the Trust Fund.
Furthermore, the Pension and Finance Committee of the Board may manage all or a
portion of the Trust Fund in accordance with applicable provisions of the
Master Trust Agreement.

         8.05     Integration of Trust. The Master Trust Agreement shall be
deemed to be a part of this Plan, and all rights of Participants or others
under this Plan shall be subject to the provisions of the Master Trust
Agreement.

         8.06     Liability for Payments. Each Participant, Beneficiary,
Spouse, joint annuitant or other party that shall claim the right to any
payment under the Plan shall be entitled to look only to the Trust Fund for
such payment. No liability for the payment of benefits under the Plan shall be
imposed upon the Committee or the Employer except as may be required by ERISA
ss. 4062(b) pertaining to Employer liability imposed by the Pension Benefit
Guaranty Corporation in the event the Plan terminates with assets which are
insufficient to provide the Plan liabilities guaranteed by the Pension Benefit
Guaranty Corporation; or ERISA ss. 302(f) pertaining to Employer liability to
the Plan for failure to make a required contribution.

                                       59
<PAGE>   66

                                  ARTICLE IX.

                            MISCELLANEOUS PROVISIONS

         9.01     Exclusive Benefit Rule. The Trust Fund shall be received,
held in trust, and disbursed by the Trustee in accordance with the provisions
of the Trust Agreement and this Plan. No part of the Trust Fund shall be used
for or diverted to purposes other than for the exclusive benefit of
Participants and their Beneficiaries and the payment of reasonable expenses
attributable to the administration of the Plan in accordance with ERISA
ss. 404(a)(1)(A)(ii).

         9.02     Merger or Consolidation of Company. If the Company is merged
or consolidated with another organization, or another organization acquires all
or substantially all of the Company's assets, such organization may assume the
role of the Company hereunder by action of its Board of Directors and by action
of the Board of the prior Company, if still existent. Such change in the
Company shall not be deemed a termination of the Plan by either the predecessor
or successor Company.

         9.03     Nonalienation or Assignment.

                  (a)      Spendthrift Clause. Except as provided in (b) below,
         none of the benefits under the Plan are subject to the claims of
         creditors of Participants or their Beneficiaries, and will not be
         subject to attachment, garnishment, or any other legal process
         whatsoever. Neither a Participant nor his Beneficiaries may assign,
         sell, borrow on, or otherwise encumber any of his beneficial interest
         in the Plan and Trust Fund, nor shall any such benefits be in any
         manner liable for or subject to the deeds, contracts, liabilities,
         engagements, or torts of any Participant or Beneficiary.
         Notwithstanding any provision of the Plan to the contrary, the Plan
         shall honor a judgment, order, decree or settlement providing for the
         offset of all or a part of a Participant's benefit under the Plan, to
         the extent permitted under Code ss. 401(a)(13)(C); provided that the
         requirements of Code ss. 401(a)(13)(C)(iii) relating to the protection
         of the Participant's spouse (if any) are satisfied.

                  (b)      Qualified Domestic Relations Orders.

                           (i)      General Rule. The provisions of subsection
                  (a) above shall not apply to a "qualified domestic relations
                  order," as defined in Code ss. 414(p), or any other domestic
                  relations order permitted to be treated as a "qualified
                  domestic relations order" by the Plan Administrator under the
                  provisions of the Retirement Equity Act of 1984. The Plan
                  Administrator shall establish a written procedure to
                  determine the qualified status of domestic relations orders
                  and to administer distributions under such qualified orders.
                  To the extent provided under a "qualified domestic relations
                  order," a former Spouse of a Participant shall be treated as
                  the Spouse or Surviving Spouse for all purposes under the
                  Plan.

                                       60
<PAGE>   67

                           (ii)     QDRO Procedures.

                                    (A)      Procedure Upon Receipt. Upon
                           receiving a domestic relations order, the Plan
                           Administrator shall notify all affected Participants
                           and any alternate payees (Spouse, former spouse,
                           child or other dependent of the Participant, named
                           in the order) that the order has been received. The
                           Plan Administrator shall also notify the affected
                           Participants and alternate payees of its procedure
                           for determining whether the domestic relations order
                           is qualified.

                                    (B)      Procedure During Determination.
                           During the period the Plan Administrator is
                           determining the qualified status of the order, the
                           Plan Administrator shall separately account for the
                           amounts (if any) that would be payable to an
                           alternate payee under this order (if it were a
                           qualified domestic relations order) during this
                           period. If the Plan Administrator determines the
                           order is a qualified domestic relations order during
                           the 18-month period commencing on the date the first
                           payment would be required under the qualified
                           domestic relations order, then the alternate payee
                           shall receive payment of the amounts determined in
                           accordance with the preceding sentence. If the Plan
                           Administrator cannot make a determination of the
                           order's qualified status during this 18-month period
                           (or determines the order is not a qualified domestic
                           relations order), then the separate accounting
                           required under the first sentence of this
                           subparagraph (B) shall no longer be required.

                           (iii)    QDRO Payouts. Notwithstanding any provision
                  of this Plan to the contrary, effective as of the first day
                  of the calendar month following the date which is 30 days
                  from the date a favorable determination letter is received
                  for this Plan with this provision included (the "QDRO Payout
                  Effective Date"), then if at any time, either before or after
                  the QDRO Payout Effective Date, this Plan receives a domestic
                  relations order which is determined to be a "qualified
                  domestic relations order" pursuant to subsection (b) above,
                  and such order requires that a portion of a Participant's
                  accrued Benefit become, in effect, an Accrued Benefit of an
                  alternate payee, then, if the Actuarially Equivalent present
                  value of the alternate payee's vested Accrued Benefit does
                  not exceed $7,500, the alternate payee's vested Accrued
                  Benefit shall be distributed to such alternate payee in the
                  form of a single lump sum payment (or such other form as may
                  be required by said qualified domestic relations order) as
                  soon as possible after (1) such order is determined to be a
                  qualified domestic relations order, if the order is received
                  after the QDRO Payout Effective Date, or (2) the QDRO Payout
                  Effective Date, if the order was received before the QDRO
                  Payout Effective Date, or (3) any later date specified in
                  said qualified domestic relations order. If the alternate
                  payee should thereafter vest in additional Accrued Benefits,
                  this payout rule shall be applied to such additional vested
                  Accrued Benefit as if such order were received as of the date
                  the additional vesting occurs. No consent of the alternate
                  payee shall be required for a distribution under this
                  paragraph (iii) pursuant to Treas. Reg .ss. 1.411(a)-11(c)(6).

                                       61
<PAGE>   68

                           (iv)     Status of Alternate Payee. An alternate
                  payee under a qualified domestic relations order shall be
                  entitled to all rights of a Beneficiary hereunder except as
                  otherwise specified herein.

         9.04     Plan Continuance Voluntary. Although it is the intention of
each Employer that this Plan shall be continued and that contributions shall be
made regularly, this Plan is entirely voluntary on the part of each
participating Employer, and the continuance of the Plan is not assumed as a
contractual obligation of any Employer.

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

         9.06     Payments to Minors and Others. In making any distribution to
or for the benefit of any minor or incompetent Participant or Beneficiary, or
any other Participant or Beneficiary who, in the opinion of the Committee, is
incapable of properly using, expending, investing, or otherwise disposing of
such distribution, the Committee, in its sole and complete discretion may, but
need not, order the Trustee to make such distribution to a legal or natural
guardian or other relative of such minor or court appointed committee of any
incompetent, or to any adult with whom such person temporarily or permanently
resides; and any such guardian, committee, relative, or other person shall have
full authority and discretion to expend such distribution for the use and
benefit of such person; and the receipt of such guardian, committee, relative,
or other person shall be a complete discharge to the Trustee, the Committee and
this Plan, without any responsibility on the part of the Committee or the
Trustee to see to the application of amounts so distributed.

         9.07     Governing Law. This Plan shall be administered in the United
States of America, and its validity, construction, and all rights hereunder
shall be governed by the laws of the United States under ERISA. To the extent
that ERISA shall not be held to have preempted local law, the Plan shall be
administered under the laws of the State of Georgia. If any provision of the
Plan shall be held invalid or unenforceable, the remaining provisions hereof
shall continue to be fully effective.

         9.08     Indemnification. The Employers hereby agree to indemnify any
current or former Employee or director to the full extent of any expenses,
penalties, damages, or other pecuniary loss which such current or former
Employee may suffer as a result of his responsibilities, obligations, or duties
in connection with the Plan or Trust or fiduciary activities actually performed
in connection with the Plan or Trust. Such indemnification shall be paid by the
Employers to the current or former Employee to the extent that fiduciary
liability insurance is not available for the payment of such items, but in no
event shall such items be paid out of Plan assets. This indemnification
agreement shall not apply to loss sustained as a result of willful wrongdoing,
as determined by the Company. Notwithstanding the foregoing, this
indemnification agreement shall not relieve any current or former Employee
serving in a

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<PAGE>   69

fiduciary capacity of his fiduciary responsibilities under ERISA, nor shall
this agreement violate any provision of ERISA as it may be interpreted from
time to time by the United States Department of Labor and any courts of
competent jurisdiction.

         9.09     Gender and Number. Wherever applicable, the masculine pronoun
shall include the feminine pronoun, and the singular shall include the plural.

         9.10     Headings. The titles in this Plan are inserted for
convenience of reference; they constitute no part of the Plan, and are not to
be considered in the construction hereof.

         9.11     Claims Procedure.

                  (a)      Filing a Claim. All claims and requests for benefits
         under the Plan shall be directed to the attention of the Plan
         Administrator in writing. The writing must be reasonably calculated to
         bring the claim to the attention of the Plan Administrator.

                  (b)      Notification of Denial. If the Plan Administrator
         determines that any individual who has claimed a right to receive
         benefits under the Plan (the "claimant") is not entitled to receive
         all or any part of the benefits claimed, the claimant shall be
         informed in writing of the specific reason or reasons for the denial,
         with specific reference to pertinent Plan provisions on which the
         denial is based, a description of any additional material or
         information necessary for the claimant to perfect the claim and an
         explanation of why said material or information is necessary and a
         description of the review procedures set forth in subsection (d)
         below.

                  (c)      Timing of Notification. The claimant shall be so
         notified of the Plan Administrator's decision within 90 days after the
         receipt of the claim, unless special circumstances require an
         extension of time for processing the claim. If such an extension of
         time for processing is required, the Plan Administrator shall furnish
         the claimant written notice of the extension prior to the termination
         of the initial 90-day period. In no event shall said extension exceed
         a period of 90 days from the end of said initial period. The extension
         notice shall indicate the special circumstances requiring an extension
         of time and the date by which the Plan Administrator expects to render
         a final decision. If for any reasons, the claimant is not notified
         within the period described above, the claim shall be deemed denied
         and the claimant may then request review of said denial, subject to
         the provisions of subsection (d) below.

                  (d)      Review Procedures. The claimant or his duly
         authorized representative may, within 60 days after notice of the Plan
         Administrator's decision, request a review of said decision by the
         administrative Committee, review pertinent documents and submit to the
         Committee such further information as will, in the claimant's opinion,
         establish his rights to such benefits. If upon receipt of this further
         information, the Committee determines that the claimant is not
         entitled to the benefits claimed, it shall afford the claimant or his
         representative reasonable opportunity to submit issues and comments in
         writing and to review pertinent documents. If the claimant wishes, he
         may request in writing that the Committee hold a hearing. The
         Committee may, in its discretion, schedule an opportunity for a full
         and fair hearing on the issue as soon as is reasonably

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<PAGE>   70

         possible under the circumstances. The Committee shall render its final
         decision with the specific reasons therefor in writing and in a manner
         calculated to be understood by the claimant.

                  (e)      Timing of Final Decision. The Committee's final
         decision shall include specific references to the pertinent Plan
         provisions on which the decision is based, and shall be transmitted to
         the claimant by certified mail within 60 days of receipt of claimant's
         request for such review, unless special circumstances require a
         further extension of time for processing, in which case a decision
         shall be rendered as soon as possible, but not later than 120 days
         after receipt of a request for review. If such an extension of time
         for review is required because of special circumstances, written
         notice of the extension shall be furnished to the claimant prior to
         the commencement of the extension. If the Committee holds regularly
         scheduled meetings at least quarterly, in lieu of the time period
         described above, the Committee's decision on review shall be made by
         no later than the date of the meeting of the Committee which
         immediately follows its receipt of the request for review, unless said
         request is filed within 30 days preceding the date of said meeting in
         which case a decision shall be made no later than the date of the
         second meeting following its receipt of said request for review. If
         special circumstances require a further extension of time for
         processing, a decision shall be rendered not later than the third
         meeting of the Committee following its receipt of the request for
         review. If a decision on review is not furnished within the time
         period described above, the claim shall be deemed denied on review.

                  (f)      Special Effective Date. The provisions of this
         Section 9.11 shall be effective as of June 1, 1999. Prior to that
         date, the provisions of Section 9.11 of the Plan, as it was amended
         and restated effective as of January 1, 1987, shall govern the
         handling of claims.

         9.12     Misstatement in Application for Retirement Income. If a
Participant in his application for retirement income, or in response to any
request of his Employer, the Company or the Committee for information, makes
any statement which is erroneous or omits any material fact or fails before
receiving his first retirement income payment to correct any information that
he previously incorrectly furnished to his Employer or the Committee for its
records, the amount of his retirement income shall be adjusted on the basis of
the correct facts, and the amount of any overpayment or underpayment thereto
made to such Participant shall be deducted from or added to his next succeeding
payments as the Committee shall direct.

         9.13     Liability Limited. To the extent permitted by ERISA and other
applicable law, neither the Committee, nor any member thereof, nor any Employer
shall be liable for any acts of omission or commission in administering the
Plan, except for his or its own individual, willful misconduct. The Company and
each member of the Committee shall be entitled to rely conclusively on all
tables, valuations, certificates, opinions and reports which shall be furnished
by an actuary, accountant, trustee, insurance company, counsel or other expert
who shall be employed or engaged by the Committee, Company or Board or any
Employer.

         9.14     Location of Participant or Beneficiary Unknown. In the event
that all, or any portion, of the distribution payable to a Participant or his
Beneficiary hereunder shall, at the

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<PAGE>   71

expiration of a reasonable time after it has become payable, remain unpaid
solely by reason of the inability of the Committee, after sending a registered
letter, return receipt requested, to the last known address, and after further
diligent effort (including requests to the Internal Revenue Service under
Policy Statement P-1-187), to ascertain the whereabouts of such Participant or
his Beneficiary, the amount so distributable shall be forfeited and shall be
used to reduce the contributions to the Plan. In the event a Participant or
Beneficiary is located subsequent to his benefit being forfeited, such benefit
shall be restored.

         9.15     Forfeitures and Investment Income. Forfeitures, if any, and
investment income shall be used to reduce the contributions of Employers and
shall not be used hereunder to increase the benefit of any person.

         9.16     Prohibited Discrimination. This Plan shall be operated and
administered in a uniform and consistent manner with respect to all
Participants and in a manner which does not discriminate in favor of Highly
Compensated Employees.

         9.17     Correction of Participants' Benefits. If an error or omission
is discovered in the Accrued Benefit of a Participant, or in the amount
distributed to a Participant, the Committee will make such equitable
adjustments in the records of the Plan and, if applicable, in the payments made
to a Participant, as may be necessary or appropriate to correct such error or
omission as of the Plan Year in which such error or omission is discovered.
Further, an Employer may, in its discretion, make a special contribution to the
Plan for the purpose of correcting any such error or omission.

         9.18     Action of Employer, Committee and Plan Administrator. Except
as may be specifically provided, any action required or permitted to be taken
by an Employer, Committee, or the Plan Administrator may be taken on behalf of
such person by any entity or individual who has been delegated the proper
authority.

         9.19     Employer Records. Records of an Employer as to an Employee's
or Participant's period of employment, severance from employment and the reason
therefore, leaves of absence, reemployment, compensation, and elections or
designations under this Plan will be conclusive on all persons, unless
determined to be incorrect.

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<PAGE>   72

                                   ARTICLE X.

                      AMENDMENT, TERMINATION AND ADOPTION

         10.01    Permanency of Plan and Trust. It is contemplated by the
Company and each Employer that the Plan and Trust shall be maintained
permanently and that they shall constitute a qualified plan under Code ss. 401
and a tax-exempt trust under Code ss. 501, or any successor provisions.
Nevertheless, the Company and each Employer must necessarily reserve and does
hereby reserve the rights of amendment, termination and withdrawal as set forth
in this Article.

         10.02    Right to Amend Plan.

                  (a)      Amendment by the Company. The Company reserves the
         right, at any time, to modify or amend, in whole or in part, any or
         all of the provisions of the Plan, including specifically the right to
         make such amendments effective retroactively, if necessary or
         desirable, to bring the Plan into conformity with the Code, ERISA, and
         any applicable regulations promulgated so that the Plan may continue
         to remain qualified and the Trust may continue to remain tax-exempt,
         or for any other purpose, subject to subsection (b) below.

                  (b)      Restrictions on Amendments.

                           (i)      Exclusive Benefit Rule. No modification or
                  amendment shall make it possible for Trust assets to be used
                  for, or diverted to, purposes other than the exclusive benefit
                  of Participants and their Beneficiaries in accordance with
                  Section 9.01 (Exclusive Benefit Rule) herein, except as
                  provided in Section 6.03 (Return of Contributions).

                           (ii)     Code ss. 411(d)(6) Restrictions. No
                  amendment to the Plan shall be permitted that would have the
                  effect of decreasing the Accrued Benefit of any Participant.
                  Furthermore, no amendment shall be permitted that would have
                  the effect of eliminating or reducing an early retirement
                  benefit or a retirement-type subsidy (as defined in Treasury
                  regulations under Code ss. 411(d)(6)(B)(i)) or, except as
                  permitted under Treasury regulations, eliminating an "optional
                  form of benefit" as defined in Treas. Reg. ss.
                  1.411(d)-4(Q&A-1) with respect to a Participant's Accrued
                  Benefit. Notwithstanding the preceding sentences, a
                  Participant's Accrued Benefit may be reduced to the extent
                  permitted under Code ss. 412(c)(8).

                           (iii)    Code ss. 411(a)(10) Vesting Restrictions.
                  Any amendment changing the vesting schedule of this Plan shall
                  comply with the provisions of Section 3.02 (Changes in Vesting
                  Schedule). For purposes of this paragraph (iii), an "amendment
                  changing the vesting schedule" is any amendment which directly
                  or indirectly affects the computation of the vested percentage
                  of a Participant's Accrued Benefit as described in Treas. Reg.
                  ss. 1.411(a)-8(c).

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<PAGE>   73

         10.03    Right to Terminate Plan and Trust.

                  (a)      Termination by the Company. The Company reserves the
         right, at any time, to wholly or partially terminate the Plan. If the
         Plan is terminated by the Company, all Accrued Benefits of "affected"
         Participants within the meaning of Code ss. 411(d)(3) as of the date of
         termination shall immediately become fully vested, to the extent
         funded. See Section 3.03 (Vesting Upon Termination). If the Plan is
         partially terminated by the Company or by an Employer, all Accrued
         Benefits of those "affected" Participants within the meaning of Code
         ss. 411(d)(3) shall, as of the date of partial termination, immediately
         become fully vested, to the extent funded.

                  (b)      Distributions Upon Termination. If the Plan is
         terminated, the Accrued Benefits of affected Participants shall be
         either held in the Trust pursuant to the provisions of the Plan or
         distributed as soon as administratively feasible pursuant to Rev. Rul.
         89-87, in the sole discretion of the Company.

         10.04    Merger, Consolidation, or Transfer of Assets.

                  (a)      Code ss. 401(a)(12) Restriction. The Plan shall not
         be merged or consolidated with any other plan, and its assets and
         liabilities may not be transferred to any other trust, unless each
         Participant, immediately after the merger, consolidation or transfer
         (if the Plan then is terminated), would receive a benefit which is
         equal to or greater than the benefit he would have been entitled to
         receive, and would be entitled to each benefit payment option which he
         would have been entitled to, immediately before the merger,
         consolidation or transfer (if the Plan is then terminated).

                  (b)      Transfers of Assets and Liabilities to/from Plan.
         This Plan may be the recipient of a transfer of assets and liabilities
         from, or may transfer liabilities and assets to, another plan qualified
         under Code ss. 401(a), subject to the approval of the Company, but only
         if such transfer satisfies the provisions of Treas. Reg. ss.
         1.411(d)-4(Q&A-3).

                  (c)      Changes in Law. In the event that another qualified
         retirement plan is merged with this Plan and this Plan is the
         surviving plan following the merger, and if the date of the merger
         follows the effective date of a change in the qualification
         requirements of the Code but precedes the date by which the other plan
         is required to be amended to take into account those changes in the
         law, then the applicable provisions of this Plan (as amended) shall be
         deemed to relate back and to be included in the other plan as of the
         applicable effective date.

         10.05    Distribution of Assets of Trust Fund.

                  (a)      In the event that it becomes necessary to terminate
         the Plan, the assets in the Trust Fund held for the benefit of the
         affected Participants, Spouses, Beneficiaries, and joint annuitants
         shall be applied in the following order, all persons in each class
         being entitled to their respective proportionate shares based upon the
         present value of their benefits at the time of application.

                                       67
<PAGE>   74

         Firstly:

                           (i)      In the case of benefits which had been in
                  pay status three years prior to the date of discontinuance,
                  provision to all Participants, Spouses, Beneficiaries, and
                  joint annuitants of the lowest benefit in pay status during
                  such three-year period.

                           (ii)     In the case of benefits which would have
                  been in pay status for three years prior to the date of
                  discontinuance had the Participant retired, provision to all
                  Participants, Spouses, Beneficiaries, and joint annuitants of
                  the lowest benefit which would have been in pay status during
                  such three-year period but ignoring any increase in such
                  benefits as a result of amendments to the Plan during the
                  five-year period prior to the date of discontinuance.

         Secondly: Provision to all Participants, Spouses, Beneficiaries, and
         joint annuitants of benefits insured by the Pension Benefit Guaranty
         Corporation not previously provided for herein.

         Thirdly: Provision to all Participants, Spouses, Beneficiaries, and
         joint annuitants of any benefits to which they had a vested right just
         prior to the date of discontinuance not previously provided for
         herein. Any benefits which were vested as a result of the
         discontinuance shall be ignored for purposes of this paragraph.

         Fourthly: Provisions to all Participants, Spouses, Beneficiaries, and
         joint annuitants of all remaining benefits which accrued prior to the
         date of the discontinuance but are not previously provided for herein.

         If the assets available in the Trust Fund are insufficient to provide
         for all of the benefits included in one of the above priority
         categories, the benefits determined according to the Plan provisions
         in effect five years prior to the date of discontinuance shall be
         provided for first. If the assets are sufficient to provide for all of
         these benefits, then the assets shall be applied to the extent
         possible to provide for increased benefits due to Plan amendments
         during such five-year period with the amendments being considered in
         chronological order with the most recent amendment being considered
         last.

                  (b)      Any surplus remaining in the Trust Fund, after the
         satisfaction of all rights or contingent rights accrued under the Plan
         with respect to such benefits, shall, subject to the pertinent
         provisions of federal or state law, be returned to the Employer.

         10.06    Adoption of the Plan by Members of Controlled Group.

                  (a)      Procedure for Adoption. This Plan may be adopted by
         the Board of Directors of any member of the Controlled Group by a
         formal resolution to adopt this Plan, indicating the effective date of
         said adoption, delivered to and accepted in writing by the Plan
         Administrator or approved by resolution of the Board of Directors of
         Flowers Industries, Inc. The resolution(s) referred to in the
         preceding sentence of this Section shall be attached hereto and made a
         part of the Plan. Such resolution(s) may, in addition to specifying
         the effective date of the adoption, specify other provisions
         including, but

                                      68
<PAGE>   75

         not limited to, credit for service prior to the effective date for
         benefit accrual, eligibility and vesting purposes.

                  (b)      Procedure for Withdrawal. Each member of the
         Controlled Group may voluntarily withdraw from participating in the
         Plan, provided that notice of such intent to discontinue participation
         is furnished to the Company at least 90 days prior to the effective
         date of the withdrawal, unless waived by the Company. The Company
         unilaterally may terminate an Employer's participation in the Plan for
         failure: (1) to timely provide requested information; (2) to timely
         make contributions; or (3) to cooperate with the Company in
         administering the Plan. The Company may also unilaterally terminate an
         Employer's participation in the Plan for any other reason that it
         deems appropriate.

                  (c)      Transfer of Assets and Liabilities. Upon the
         voluntary withdrawal or involuntary termination of an Employer's
         participation in the Plan, the Company shall determine the amount of
         assets and liabilities of the Plan (if any) which shall be transferred
         to any successor plan established by the Employer. This determination
         shall be made based upon principles set forth in Code ss.ss. 401(a)(12)
         and 414(l) and the regulations promulgated thereunder.

                  (d)      Apportionment of Costs. All Employers shall share in
         the cost of the Plan, including but not limited to, the contributions
         to the Plan, the costs of the Committee, the costs of the consultants
         (actuaries, accountants, attorneys, etc.) and various other direct and
         indirect costs of operating the Plan which may initially be borne by
         the Company or an Employer but which are determined by the Committee
         to be costs associated with the Plan. The Committee shall apportion
         these costs to each Employer as it deems to be equitable.

                  (e)      Cooperation. Each Employer shall cooperate fully
         with the Company and the Committee with regard to all matters
         pertaining to the Plan. Any failure to cooperate will be grounds for
         the involuntary termination of that Employer's participation in the
         Plan.

         10.07    Early Plan Termination Provision.

                  (a)      General Limitation. In the event of termination of
         the Plan, the benefit of any active or former Highly Compensated
         Employee is limited to a benefit that is non-discriminatory under
         Code ss. 401(a)(4).

                  (b)      Specific Limitation for Highly Compensated
         Employees. For Plan Years beginning on or after January 1, 1992, the
         benefits distributed to any of the 25 most highly compensated
         employees, whether active or former, are restricted such that the
         annual payments are no greater than an amount equal to the payment
         that would be made on behalf of the Employee under a single life
         annuity that is the Actuarial Equivalent of the sum of the Employee's
         Accrued Benefit and the Employee's other benefits under the Plan.

                                      69
<PAGE>   76

                  (c)      Exceptions. The preceding subsection shall not apply
         if:

                           (i)      After payment of the benefit to an Employee
                  described in the preceding subsection, the value of plan
                  assets equals or exceeds 110% of the value of current
                  liabilities, as defined in Code ss. 412(l)(7),

                           (ii)     The value of the benefits for an Employee
                  described in the preceding subsection is less than 1% of the
                  value of current liabilities, or

                           (iii)    The value of the benefits for an Employee
                  described in the preceding subsection must not exceed $5,000.

                  (d)      Benefit Definition. For purposes of this Section,
         the term "benefit" includes loans in excess of the amount set forth in
         Code ss. 72(p)(2)(A), any periodic income, any withdrawal values
         payable to a living Employee, and any death benefits not provided for
         by insurance on the Employee's life.

         10.08    Military Service. Notwithstanding any provisions of this Plan
to the contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with Code ss. 414(u)
of the Code. "Qualified military service" means any service in the uniformed
services (as defined in chapter 43 of title 38 of the United States Code) by
any individual if such individual is entitled to reemployment rights under such
chapter with respect to such service.

         10.09    Electronic Means of Communication. Whenever, under this Plan,
a Participant or Beneficiary is required or permitted to make an election,
provide a notice, give a consent, request a distribution, or otherwise
communicate with the Employer, the Plan Administrator, the Trustee or a
delegate of any of them, to the extent permitted by law, the election, notice,
consent, distribution request, or other communication may be transmitted by
means of telephonic or other electronic communication, if the administrative
procedures under the Plan provide for such means of communication.

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<PAGE>   77

                                  ARTICLE XI.

                              TOP HEAVY PROVISIONS

         11.01    Applicability. If the Plan is or becomes a Top-Heavy Plan in
any Plan Year, the provisions of this Article XI shall be controlling and shall
supersede any conflicting provisions in the Plan. This Article XI shall be
interpreted in accordance with Code ss. 416 and the regulations thereunder.

         11.02    Definitions. For the purposes of this Article XI, the
following terms shall have the following meanings:

                  (a)      "Benefit Amount" shall mean (i) the present value
         (determined by reference to the interest and mortality factors
         specified in Exhibit A) of an individual's Accrued Benefit determined
         on the Valuation Date, plus (ii) the aggregate amount of distributions
         made with respect to such individual within the five (5) year period
         ending on the Determination Date (except to the extent already included
         on the Valuation Date). For this purpose, the Accrued Benefit of a
         current Participant shall be determined as if the individual terminated
         service as of such Valuation Date. For purposes of this Article XI, the
         Accrued Benefit of a Non-key Employee shall be determined under the
         method which is used for accrual purposes for all plans of the members
         of the Controlled Group; or if there is no method described above, as
         if such benefit accrued not more rapidly than the slowest accrual rate
         permitted under Code ss. 411(b)(1)(C). With respect to a defined
         contribution plan, "Benefit Amount" shall mean (i) the sum of the
         amounts credited, as of the Determination Date, to an individual's
         account plus (ii) the aggregate amount of distributions within the five
         (5) year period ending on the Determination Date of such Plan.

                  (b)      "Determination Date" shall mean the last day of the
         preceding Plan Year and, in the case of the first Plan Year, the last
         day of such first Plan Year.

                  (c)      "Key Employee" shall mean any Employee or former
         Employee (and the beneficiaries of any such Employee) who at any time
         during the Plan Year containing the Determination Date or during the
         four preceding Plan Years was: (i) an officer of the Employer having
         an annual compensation greater than 50% of the dollar amount in effect
         under Code ss. 415(b)(1)(A), (ii) an owner (or considered an owner
         under Code ss. 318) of one of the 10 largest interests in the Employer
         if such individual's annual compensation from the Employer exceeds the
         dollar limitation in effect under Code ss. 415(c)(1)(A), (iii) a
         five-percent (5%) owner of the Employer or (iv) a one-percent (1%)
         owner of the Employer who has an annual compensation from the Employer
         of more than $150,000.

         For purposes of (i) above, no more than 50 Employees shall be treated
         as officers, and Employees described in Code ss. 414(q)(8) shall be
         excluded. For purposes of (ii) above, if two Employees have the same
         interest in the Employer, the Employee having the greater annual
         compensation from the Employer shall be treated as having a larger
         interest. The determination of who is a Key Employee will be made in
         accordance with Code ss. 416(i) and the regulations thereunder. For
         purposes of this subsection (c), "annual

                                      71
<PAGE>   78

         compensation" means "compensation" as defined in paragraph (i) of
         subsection (h) of Section 4.08, but including amounts contributed by
         any member of the Controlled Group pursuant to a salary reduction
         agreement which are excludable from gross income under Code ss. 125,
         402(a)(8), 402(h) or 403(b).

                  (d)      "Non-Key Employee" shall mean any Employee who is
         not a Key Employee.

                  (e)      "Permissive Aggregation Group" shall mean the
         Required Aggregation Group plus any other plan or plans of a member of
         the Controlled Group which, when considered as a group with the
         Required Aggregation Group, would continue to satisfy the requirements
         of Code ss.ss. 401(a)(4) and 410.

                  (f)      "Required Aggregation Group" shall mean a group of
         plans maintained by the Controlled Group comprised of (i) each
         qualified plan of the Controlled Group in which at least one Key
         Employee participates and (ii) any other qualified plan of the
         Controlled Group which enables a plan described in (i) above to meet
         the requirements of Code ss.ss. 401(a)(4) or 410.

                  (g)      "Super Top-Heavy Plan" shall mean a plan as to which
         any of the following conditions exists:

                           (i)      The Top-Heavy Ratio for the Plan exceeds
                  ninety percent (90%) and the Plan is not part of a Required
                  Aggregation Group or Permissive Aggregation Group;

                           (ii)     The Plan is part of a Required Aggregation
                  Group but not part of a Permissive Aggregation Group and the
                  Top-Heavy Ratio for the group of plans exceeds ninety percent
                  (90%); or

                           (iii)    The plan is part of a Required Aggregation
                  Group and a Permissive Aggregation Group and the Top-Heavy
                  Ratio for the Permissive Aggregation Group exceeds ninety
                  percent (90%).

                  (h)      "Top-Heavy Plan" shall mean a plan as to which any
         of the following conditions exists:

                           (i)      The Top-Heavy Ratio for the Plan exceeds
                  sixty percent (60%) and the plan is not part of a Required
                  Aggregation Group or Permissive Aggregation Group;

                           (ii)     The plan is part of a Required Aggregation
                  Group but not part of a Permissive Aggregation Group and the
                  Top-Heavy Ratio for the group of plans exceeds sixty percent
                  (60%); or

                           (iii)    The plan is part of a Required Aggregation
                  Group and a Permissive Aggregation Group and the Top-Heavy
                  Ratio for the Permissive Aggregation Group exceeds sixty
                  percent (60%).

                                      72
<PAGE>   79

                  (i)      "Top Heavy Ratio" shall mean the ratio, as of the
         Determination Date, of the sum of the Benefit Amounts of all Key
         Employees to the sum of the Benefit Amounts of all Participants. The
         calculation of this ratio, and the extent to which distributions,
         rollovers and transfers are taken into account will be made in
         accordance with Code ss. 416 and the regulations thereunder. When
         aggregating plans, the value of account balances and accrued benefits
         will be calculated with reference to the Determination Dates that fall
         within the same calendar year. For purposes of determining the
         Top-Heavy Ratio of a Required Aggregation Group, the Benefit Amount of
         any individual shall also include any distributions made within the
         five (5) year period ending on the Determination Date under a
         terminated plan which if it had not been terminated, would have been
         included in the Required Aggregation Group. The Benefit Amount of any
         individual who has not performed an Hour of Service for any Employer
         maintaining the Plan at any time during the five (5) year period
         ending on the Determination Date shall not be taken into account when
         computing this ratio.

                  (j)      "Valuation Date" shall mean the December 31, which
         falls within the 12-month period ending on the Determination Date.

         11.03    Minimum Accrued Benefit.

                  (a)      Minimum Benefit Amount. For any Plan Year in which
         this Plan is a Top-Heavy Plan, each Participant who is a Non-Key
         Employee and has completed one Hour of Service will accrue a benefit
         (to be provided solely by contributions by the Employer and expressed
         as a life annuity commencing at Normal Retirement Age) of not less
         than two percent (2%) of his or her highest average Compensation for
         the five consecutive years for which the Participant had the highest
         Compensation.

                  (b)      Coordination with Other Plan Provisions. The minimum
         accrued benefit shall be determined without regard to Social Security
         contributions. The minimum accrual applies even though under other
         Plan provisions the Participant would not otherwise be entitled to
         receive an accrual, or would have received a lesser accrual for the
         year because (i) the Non-Key Employee's Compensation is less than a
         stated amount, (ii) the Non-Key Employee is not employed on the last
         day of the accrual computation period, or (iii) the Plan is integrated
         with Social Security.

                  (c)      Limitation on Minimum Benefits. No additional
         benefit accruals shall be provided pursuant to (a) above to the extent
         that the total accruals on behalf of the Participant attributable to
         Contributions of the Employer will provide a benefit expressed as a
         life annuity commencing at Normal Retirement Age that equals or
         exceeds twenty percent (20%) of the Participant's highest average
         Compensation for the five consecutive years for which the Participant
         had the highest Compensation.

                  (d)      No Duplication of Benefits. The minimum accrued
         benefit required by this Section shall be reduced (but not below zero)
         by the Accrued Benefit to which the Participant is otherwise entitled
         under this Plan determined without regard to this Section.

                                      73
<PAGE>   80

                  (e)      Accrual Required During Suspension. The minimum
         benefit required under this Section shall not be subject to forfeiture
         on account of the reemployment of an Employee and suspension of his
         benefits in accordance with Code ss. 411(a)(3)(B) and ERISA
         ss. 203(a)(3)(B). If benefits are suspended during a period of
         reemployment, the benefit payable upon subsequent resumption of
         payments must be automatically increased to reflect the nonpayment of
         benefits during such period of reemployment.

         11.04    Minimum Vesting. The following vesting schedule shall apply
to all Accrued Benefits attributable to contributions of the Employer:

<TABLE>
<CAPTION>
             Years of                              Vested
          Vesting Service                        Percentage
          ---------------                        ----------
          <S>                                    <C>
               2                                      20%
               3                                      40%
               4                                      60%
           5 or more                                 100%
</TABLE>

The above schedule applies to all accrued benefits within the meaning of Code
ss. 411(a)(7) including benefits accrued before the effective date of Code
ss. 416 and benefits accrued before the Plan became a Top-Heavy Plan. However,

this schedule does not apply to the Accrued Benefits of any Employee who does
not complete an Hour of Service after the Plan has initially become Top-Heavy.

         11.05    Impact on Code ss. 415 Limitations. Sections 4.08(h)(ii) and
4.08(h)(iii) of the Plan shall be read by substituting "100%" for "125%"
wherever it appears therein. This substitution shall not have the effect of
reducing any benefit accrued under this Plan prior to the first day of the Plan
Year in which this provision becomes applicable. However, "100%" shall not be
so substituted for "125%" if the Plan is not a Super Top-Heavy Plan and if
Section 11.03(a) is applied by substituting "three percent (3%)" for "two
percent (2%)" and Section 11.03(c) is applied by substituting "thirty percent
(30%)" for "twenty percent (20%)."

         11.06    Compensation Limitation. For any Plan Year beginning before
January 1, 1989, in which this Plan is a Top-Heavy Plan, the Compensation of
any Employee in excess of $200,000 (as adjusted pursuant to Code ss. 416(d))
shall not be taken into account under this Plan, as required by Treas. Reg.
ss. 1.416-1(T-41, 42). However, this Section shall not be construed to cause a
reduction or elimination of any Participant's Code ss. 411(d)(6) protected
benefits (as defined in Treas. Reg. ss. 1.411(d)-4).

         11.07    No Duplication of Benefits. If the Company or other member of
the Controlled Group also maintains a defined contribution plan and both plans
become Top-Heavy Plans, the minimum allocation provisions in this Article will
not be required to be made to both plans. Thus, if both plans are Top-Heavy
Plans, the requirements of this Article will be satisfied by providing the
minimum required benefit under this defined benefit plan.

                                      74
<PAGE>   81

                                 ARTICLE XII.

                    SPECIAL PROVISIONS REGARDING THE MERGER
                          OF THE STORCK BAKING COMPANY
                      PENSION PLAN WITH AND INTO THE PLAN

         12.01    General Provisions. Effective as of January 1, 1997 (the
"Storck Merger Effective Date"), the Storck Baking Company Pension Plan (the
"Storck Plan") is merged with and into the Plan. The Plan shall, as of the
Storck Merger Effective Date, assume all obligations of the Storck Plan under
the terms and provisions of the Storck Plan for (i) employees of Storck Baking
Company participating in the Storck Plan immediately prior to the Storck Merger
Effective Date and (ii) former employees of Storck Baking Company and
beneficiaries with vested accrued benefits under the Storck Plan immediately
prior to the Storck Merger Effective Date. Such Participants and Beneficiaries
shall, as of the Storck Merger Effective Date, automatically become
Participants in the Plan, with respect to such accrued benefits only, and shall
be referred to as "Storck Participants" herein. The Plan shall provide for
payment of such vested accrued benefits pursuant to the provisions of the Plan
subsequent to the Storck Merger Effective Date.

         12.02    Transfer of Plan Assets. Effective as of the Storck Merger
Effective Date, the assets of the Storck Plan shall become assets of the Plan,
and shall be held by the Trustee under the provisions of the Plan and its
accompanying Trust for the exclusive benefit of Participants and beneficiaries
under the Plan, as amended by this Article.

         12.03    Conditions for Merger and Transfer. The merger of plans and
transfer of assets as provided for in this Article is made on the condition (as
required by Code ss.ss. 401(a)(12) and 414(1), as amended) that each
Participant in the Plan will (if the Plan then terminated) be entitled to
receive a benefit immediately after the merger and transfer which is equal to
or greater than the benefit he would have been entitled to receive immediately
before the merger and transfer (if either plan had then terminated), in
accordance with Section 12.04. A Storck Participant's accrued benefit under the
Storck Plan immediately prior to the Storck Merger Effective Date shall be the
Participant's "Storck Accrued Benefit."

         12.04    Additional Optional Form of Benefit. Any Participant with a
Storck Accrued Benefit shall be entitled to elect, in addition to the optional
forms of benefit available under Article V, to have his Storck Accrued Benefit
distributed in one lump sum at the time he is otherwise entitled to payment
hereunder, if the Participant and the Participant's spouse consent in writing
to such distribution in accordance with paragraphs (ii) through (v) of Section
5.02(b), subject to the provisions of Section 5.04 and subsection (a) of
Section 5.02. Such lump sum shall be an amount which is the Actuarial
Equivalent of said Storck Accrued Benefit determined as of the Participant's
Annuity Starting Date.

         12.05    Actuarial Equivalent Amounts. In determining an amount which
is the Actuarial Equivalent of a Storck Accrued Benefit, for purposes of
computing the amount of a benefit in the form of a Period Certain and Life
Annuity with a 10 year period certain, a Joint and Survivor Annuity with
continuation payments equal to 50% or 100% of the initial monthly payments, a

                                      75
<PAGE>   82

Life Annuity, or a Level Income Annuity, the following mortality and interest
factors shall apply: the 1983 Group Annuity Mortality Table for males set back
one year and 5% interest.

         12.06    Vesting. Notwithstanding other provisions of Section 3.01(a)
to the contrary, the extent to which a Participant's Storck Accrued Benefit
shall be vested shall be determined in accordance with the provisions of the
Storck Plan in effect at the time of the Participant's termination of
employment if the Participant terminated from Storck Baking Company on or
before December 31, 1988, and failed to complete at least one Hour of Service
(as defined in Section 1.33(a)) with Storck Baking Company, or an Employer on
or after January 1, 1989.

         12.07    Vested Cash Values.

                  (a)      Benefits Derived From Vested Cash Values. With
         respect to each Storck Participant who has a Vested Cash Value, the
         following benefit shall be payable:

                           (i)      Disability Benefit. If a Storck Participant
                  becomes "totally and permanently disabled" as defined in
                  Section 12.07(d) below, he shall receive a pension benefit in
                  the Standard Form commencing on what otherwise would have
                  been his Normal Retirement Date equal to (i) an amount which
                  can be provided by his Vested Cash Value, and (ii) his Storck
                  Accrued Benefit reduced by the Actuarial Equivalent of the
                  monthly annuity in the Standard Form which could have been
                  purchased by the amount of his Vested Cash Value; provided,
                  however, that in lieu of any pension benefit described in (i)
                  above, any Storck Participant may elect at any time prior to
                  his Normal Retirement Date a lump sum cash payment equal to
                  his Vested Cash Value, in which event his monthly pension
                  benefit in the Standard Form shall be equal to the amount
                  described in (ii) above.

                           (ii)     Death Benefit. If a Storck Participant for
                  whom Sections 4.07(a) or 4.07(b) do not apply dies while in
                  active employment, prior to his Normal, Early or Delayed
                  Retirement Date, there shall be paid to the beneficiary last
                  designated by him an amount equal to his Vested Cash Value.
                  Upon the death of a Storck Participant prior to what would
                  otherwise have been his Normal Retirement Date hereunder who
                  has terminated his employment but has not elected a cash
                  payment as provided in Section 12.07(a)(iii) prior to his
                  date of death, there shall be paid to the "beneficiary" (as
                  defined in Section 12.07(c)) last designated by him an amount
                  equal to his Vested Cash Value.

                           (iii)    Termination Benefit. Any Storck Participant
                  who has completed 5 Years of Vesting Service on his
                  termination date shall be entitled to a pension benefit in
                  the Standard Form commencing on his Normal Retirement Date
                  equal to (i) an amount which can be provided by this Vested
                  Cash Value, if any, and (ii) his Storck Accrued Benefit
                  reduced by the Actuarial Equivalent of the monthly annuity in
                  the Standard Form which could have been purchased by the
                  amount of his Vested Cash Value; provided, however, that in
                  lieu of any pension benefit described in (i) above, any
                  Storck Participant may elect at any time prior to his Normal
                  Retirement Date a lump sum cash payment equal to his Vested
                  Cash

                                      76
<PAGE>   83

                  Value in which event his monthly pension benefit in the
                  Normal Form shall be equal to the amount described in (ii)
                  above.

                  (b)      "Vested Cash Value." "Vested Cash Value" shall mean
         the vested portion of the net cash value of certain individual
         policies held by the Trustees of the Storck Plan prior to January 31,
         1973, for the benefit of certain Storck Participants, which values
         were transferred to New England Mutual Life Insurance Company for
         deposit under a group annuity policy, as described in Section 18.1 of
         the Storck Plan, as that plan was amended and restated effective as of
         January 1, 1989.

                  (c)      "Beneficiary." For purposes of this Article XII,
         "beneficiary" shall mean the person or persons determined in
         accordance with Section 1.07 of the Plan; provided, however, that if,
         at any time no Beneficiary has been designated by a Storck
         Participant, or the designated Beneficiary is no longer living or no
         longer exists, whichever is applicable, then the Storck Participant's
         "beneficiary" for purposes of this Article XII shall be deemed to be
         the person or persons described below, in the following order of
         priority:

                           (i)      the Participant's Spouse;

                           (ii)     the Participant's natural and adopted
                  children and children of deceased children, per stirpes;

                           (iii)    the Participant's parents in equal shares;

                           (iv)     the Participant's brothers and sisters, and
                  nephews and nieces who are children of deceased brothers and
                  sisters, per stirpes; and

                           (v)      the Participant's estate.

                  (d)      "Totally and permanently disabled." For purposes of
         Section 12.07(a), a Storck Participant shall be considered to be
         "totally and permanently disabled" if he is unable to engage in any
         occupation or employment for wages or profit for which he is
         reasonably qualified by training, education or experience.

         12.08    Special Rule on Termination. Notwithstanding any other
provision of this Plan, if the Plan is terminated within the 5-year period
beginning on the Storck Merger Effective Date, then those benefits that would
have been provided under the Storck Plan on a termination basis on December 31,
1996 shall be payable in a priority category higher than the highest priority
category described in Section 10.05(a) of the Plan, to the extent provided in
Treasury Regulations ss.ss. 1.414(l)-1(f) and (h).

                                      77
<PAGE>   84

                                 ARTICLE XIII.

                   SPECIAL PROVISIONS REGARDING THE MERGER OF
                   THE SHIPLEY BAKING COMPANY DEFINED BENEFIT
                 PENSION PLAN AND TRUST WITH AND INTO THE PLAN

         13.01    General Provisions. Effective as of December 31, 1998 (the
"Shipley Merger Effective Date"), the Shipley Baking Company Defined Benefit
Pension Plan and Trust (the "Shipley Plan") is merged with and into the Plan.
The Plan shall, as of the Shipley Merger Effective Date, assume all obligations
of the Shipley Plan under the terms and provisions of the Shipley Plan for (i)
employees of Shipley Baking Company participating in the Shipley Plan
immediately prior to the Shipley Merger Effective Date and (ii) former
employees of Shipley Baking Company and beneficiaries with vested accrued
benefits under the Shipley Plan immediately prior to the Shipley Merger
Effective Date. Such Participants and Beneficiaries shall, as of the Shipley
Merger Effective Date, automatically become Participants in the Plan, with
respect to such accrued benefits only, and shall be referred to as "Shipley
Participants" herein. The Plan shall provide for payment of such vested accrued
benefits pursuant to the provisions of the Plan subsequent to the Shipley
Merger Effective Date.

         13.02    Transfer of Plan Assets. Effective as of the Shipley Merger
Effective Date, the assets of the Shipley Plan shall become assets of the Plan,
and shall be held by the Trustee under the provisions of the Plan and its
accompanying Trust for the exclusive benefit of Participants and beneficiaries
under the Plan, as amended by this Article.

         13.03    Conditions for Merger and Transfer. The merger of plans and
transfer of assets as provided for in this Article is made on the condition (as
required by Code ss.ss. 401(a)(12) and 414(1), as amended) that each
Participant in the Plan will (if the Plan then terminated) be entitled to
receive a benefit immediately after the merger and transfer which is equal to
or greater than the benefit he would have been entitled to receive immediately
before the merger and transfer (if either plan had then terminated), in
accordance with Section 13.04. A Shipley Participant's accrued benefit under
the Shipley Plan immediately prior to the Shipley Merger Effective Date shall
be the Participant's "Shipley Accrued Benefit."

         13.04    Additional Optional Form of Benefit. Any Participant with a
Shipley Accrued Benefit shall be entitled to elect, in addition to the optional
forms of benefit available under Article V, to have his Shipley Accrued Benefit
distributed in one lump sum at the time he is otherwise entitled to payment
hereunder, if the Participant and the Participant's spouse consent in writing
to such distribution in accordance with paragraphs (ii) through (v) of Section
5.02(b), subject to the provisions of Section 5.04 and subsection (a) of
Section 5.02. Such lump sum shall be an amount which is the Actuarial
Equivalent of said Shipley Accrued Benefit determined as of the Participant's
Annuity Starting Date.

         13.05    Actuarial Equivalent Amounts. In determining an amount which
is the Actuarial Equivalent of a Shipley Accrued Benefit, for purposes of
computing the amount of a benefit in the form of a Joint and Survivor Annuity
with continuation payments equal to 50%, 75% or 100% of the initial monthly
payments, or a Life Annuity, the following mortality and interest factors shall
apply:

                                      78
<PAGE>   85

                  (a)      Mortality Table

                           (i)      Pre-retirement: none.

                           (ii)     Post-retirement: UP - 1984.

                  (b)      Interest Rate: 8%.

In determining an amount which is the Actuarial Equivalent of a Shipley Accrued
Benefit, for purposes of computing the amount of a benefit in the form of a
lump sum distribution, the mortality and interest factors that shall apply are
either the factors set forth above in this Section 13.05, or the factors
described in the second sentence of Section 1.03 of the Plan, whichever factors
produce the largest lump sum amount.

         13.06    Vesting. Notwithstanding other provisions of Section 3.01(a)
to the contrary, the extent to which a Participant's Shipley Accrued Benefit
shall be vested shall be determined in accordance with the provisions of the
Shipley Plan in effect at the time of the Participant's termination of
employment if the Participant terminated from Shipley Baking Company on or
before December 31, 1998, and failed to complete at least one Hour of Service
(as defined in Section 1.33(a)) with Shipley Baking Company, or an Employer on
or after January 1, 1999. In the case of a Shipley Participant who is credited
with at least one Hour of Service (as defined in Section 1.33(a)) with Shipley
Baking Company or an Employer on or after January 1, 1999, such a Participant
shall be vested in a percentage of his or her Shipley Accrued Benefit
determined in accordance with the following table:

<TABLE>
<CAPTION>
      Years of Vesting Service                Vested Percentage
      ------------------------                -----------------
      <S>                                     <C>
         Less than 3                                 0%
         3                                          20%
         4                                          40%
         5 or more                                 100%
</TABLE>

For purposes of this section, the "Years of Vesting Service" of a Shipley
Participant as of December 31, 1998 shall be equal to the number of "Years of
Service" as of that date, determined in accordance with the terms of the
Shipley Plan.

         13.07    Special Rule on Termination. Notwithstanding any other
provision of this Plan, if the Plan is terminated within the 5-year period
beginning on the Shipley Merger Effective Date, then those benefits that would
have been provided under the Shipley Plan on a termination basis on December
31, 1998 shall be payable in a priority category higher than the highest
priority category described in Section 10.05(a) of the Plan, to the extent
provided in Treasury Regulations ss.ss. 1.414(l)-1(f) and (h).

         13.08    Employee Contribution Accounts.

                  (a)      Shipley Voluntary Contribution Accounts. Any Shipley
         Participant who had a "Voluntary Contribution Account" under the
         Shipley Plan as of the day prior to the Shipley Merger Effective Date
         shall have a Shipley Voluntary Contribution Account

                                      79
<PAGE>   86

         under this Plan as of the Shipley Merger Effective Date. The Shipley
         Voluntary Contribution Account shall be credited with interest at a
         rate of interest equal to 120% of the federal mid-term rate, as in
         effect under Code ss. 1274 on the first month of a plan year. The
         balance in the Shipley Voluntary Contribution Account shall be fully
         (100%) vested at all times.

                  (b)      Shipley Required Contribution Accounts. Any Shipley
         Participant who had a Required Contribution Account under the Shipley
         Plan as of the day prior to the Shipley Merger Effective Date shall
         have a Shipley Required Contribution Account under this Plan as of the
         Shipley Merger Effective Date. The Shipley Required Contribution
         Account shall be credited with interest at a rate of interest equal to
         120% of the federal mid-term rate, as in effect under Code ss. 1274 on
         the first month of a plan year. The balance in the Shipley Required
         Contribution Account shall be fully (100%) vested at all times.

                  (c)      Shipley Voluntary Contribution Account -
         Withdrawals. A Participant (or his or her beneficiary) may, on prior
         written notice to the Plan Administrator, on a form provided for that
         purpose by the Plan Administrator, withdraw all or any part of the
         balance of his or her Shipley Voluntary Contribution Account. Such a
         distribution shall be in one of the forms specified in Sections 5.02
         and 5.03, and generally shall be subject to the provisions of Article
         V. Such withdrawal shall have no effect on a Participant's Shipley
         Accrued Benefit.

                  (d)      Shipley Required Contribution Account - Withdrawals.
         A Participant (or his or her Beneficiary) may, on 30 days' prior
         written notice to the Plan Administrator, withdraw all or part of the
         balance of his Shipley Required Contribution Account in the Trust Fund
         at any time. Such withdrawal shall have no effect on a Participant's
         Shipley Accrued Benefit. Any such distribution shall be in one of the
         forms specified in Sections 5.02 and 5.03, and generally shall be
         subject to the provisions of Article V.

                                      80
<PAGE>   87

         IN WITNESS WHEREOF, this Plan has been executed by the Company and its
corporate seal attached hereto this ____ day of ________________________, 2001.

                                    FLOWERS FOODS, INC.

                                    By:
                                       ----------------------------------------
                                    Title:
                                          -------------------------------------

                                      81
<PAGE>   88

                                   APPENDIX B

                         ADDITIONAL RETIREMENT BENEFITS

Pursuant to this Appendix B, the following list of Participants, identified by
Social Security Number, shall be entitled to receive the corresponding
Additional Retirement Benefits, in accordance with the terms and conditions set
forth in Section 1.37(g) of the Plan:

<TABLE>
<CAPTION>
====================================== ====================================
                                          Annual Additional Retirement
       Social Security Number                        Benefit
-------------------------------------- ------------------------------------
       <S>                                <C>
         ###-##-####                                 35,870
-------------------------------------- ------------------------------------
         ###-##-####                                 12,498
-------------------------------------- ------------------------------------
         ###-##-####                                  4,230
-------------------------------------- ------------------------------------
         ###-##-####                                  3,282
-------------------------------------- ------------------------------------
         ###-##-####                                    200
-------------------------------------- ------------------------------------
         ###-##-####                                    570
-------------------------------------- ------------------------------------
         ###-##-####                                  3,067
-------------------------------------- ------------------------------------
         ###-##-####                                 12,878
-------------------------------------- ------------------------------------
         ###-##-####                                  1,996
-------------------------------------- ------------------------------------
         ###-##-####                                    177
-------------------------------------- ------------------------------------
         ###-##-####                                  1,689
-------------------------------------- ------------------------------------
         ###-##-####                                 38,817
-------------------------------------- ------------------------------------
         ###-##-####                                    580
-------------------------------------- ------------------------------------
         ###-##-####                                  3,282
-------------------------------------- ------------------------------------
         ###-##-####                                    398
-------------------------------------- ------------------------------------
         ###-##-####                                  1,624
-------------------------------------- ------------------------------------
         ###-##-####                                     49
-------------------------------------- ------------------------------------
         ###-##-####                                 20,511
-------------------------------------- ------------------------------------
         ###-##-####                                    479
-------------------------------------- ------------------------------------
         ###-##-####                                    313
-------------------------------------- ------------------------------------
         ###-##-####                                    419
-------------------------------------- ------------------------------------
         ###-##-####                                    423
-------------------------------------- ------------------------------------
         ###-##-####                                     15
-------------------------------------- ------------------------------------
         ###-##-####                                  2,172
-------------------------------------- ------------------------------------
</TABLE>

                                      82
<PAGE>   89

<TABLE>
<CAPTION>
====================================== ====================================
                                          Annual Additional Retirement
       Social Security Number                        Benefit
-------------------------------------- ------------------------------------
       <S>                                <C>
         ###-##-####                                    540
-------------------------------------- ------------------------------------
         ###-##-####                                 16,174
-------------------------------------- ------------------------------------
         ###-##-####                                     98
-------------------------------------- ------------------------------------
         ###-##-####                                    175
-------------------------------------- ------------------------------------
         ###-##-####                                 21,810
-------------------------------------- ------------------------------------
         ###-##-####                                    308
-------------------------------------- ------------------------------------
         ###-##-####                                    188
-------------------------------------- ------------------------------------
         ###-##-####                                    497
-------------------------------------- ------------------------------------
         ###-##-####                                    392
-------------------------------------- ------------------------------------
         ###-##-####                                    245
-------------------------------------- ------------------------------------
         ###-##-####                                  3,067
====================================== ====================================
</TABLE>

The criteria used to determine the group of Participants eligible for, and the
amount of, the Additional Retirement Benefits shall comply with all of the
provisions of the Code, including without limitation Code ss.ss. 401(a)(4),
410(b), and 415.

                                      83

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