Document:

<PAGE>

                                                                   Exhibit 10.29

                             PACKAGING DYNAMICS LLC

                              EMPLOYEE 401(k) PLAN

               (As Amended and Restated Effective January 1, 2000)

<PAGE>

                                Table of Contents

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ARTICLE 1 - DEFINITIONS .................................................      1
    1.01     Account(s) .................................................      1
    1.02     Approved Leave of Absence ..................................      1
    1.03     Attained Age ...............................................      1
    1.04     Beginning Balance ..........................................      1
    1.05     Beneficiary ................................................      1
    1.06     Board ......................................................      1
    1.07     Closing Balance ............................................      2
    1.08     Code .......................................................      2
    1.09     Committee ..................................................      2
    1.10     Company ....................................................      2
    1.11     Compensation ...............................................      2
    1.12     Effective Date .............................................      2
    1.13     Eligible Employee ..........................................      2
    1.14     Employee ...................................................      3
    1.15     Employer ...................................................      3
    1.16     Employer Discretionary Contribution ........................      3
    1.17     Employer Discretionary Contribution Account ................      3
    1.18     Employer Matching Contribution .............................      3
    1.19     Employer Matching Contribution Account .....................      3
    1.20     ERISA ......................................................      4
    1.21     Highly Compensated Employee ................................      4
    1.22     Hour of Service ............................................      4
    1.23     Leased Employee ............................................      5
    1.24     Limitation Year ............................................      6
    1.25     Normal Retirement Age ......................................      6
    1.26     Normal Retirement Date .....................................      6
    1.27     Participant ................................................      6
    1.28     Participation Date .........................................      6
    1.29     Plan .......................................................      6
    1.30     Plan Administrator .........................................      6
    1.31     Plan Year ..................................................      6
    1.32     Pre-Tax Contribution Account ...............................      6
    1.33     Pre-Tax Contributions ......................................      6
    1.34     Rollover Contribution Account ..............................      6
    1.35     Rollover Contributions .....................................      7
    1.36     Total and Permanent Disability .............................      7
    1.37     Trust ......................................................      7
    1.38     Trust Fund .................................................      7
    1.39     Trustee ....................................................      7
    1.40     Valuation Date .............................................      7
    1.41     Year of Service ............................................      7

ARTICLE II - ELIGIBILITY AND PARTICIPATION ..............................      8
    2.01     Eligibility ................................................      8
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                               Table of Contents

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         2.02     Participation ...................................................................     8
         2.03     Participation Forms .............................................................     8
         2.04     Termination and Reemployment ....................................................     8
         2.05     Change in Employment Status .....................................................     8

ARTICLE III - CONTRIBUTIONS .......................................................................     9
         3.01     Pre-Tax Contributions ...........................................................     9
         3.02     Effective Date of Pre-Tax Salary Reduction Agreement ............................     9
         3.03     Limitations on Pre-Tax Contributions ............................................     9
         3.04     Transfer to Trust ...............................................................     9
         3.05     Modification of Pre-Tax Contributions ...........................................    10
         3.06     Pre-Tax Contribution Account ....................................................    10
         3.07     Limitations on Amount of Pre-Tax Contributions ..................................    10
         3.08     Limitation on Distribution of Pre-Tax Contributions .............................    13
         3.09     Employer Matching Contributions .................................................    13
         3.10     Employer Discretionary Contributions ............................................    13
         3.11     Limitations on Amount of Employer Matching Contributions ........................    13
         3.12     Multiple Use Test ...............................................................    15
         3.13     Limitation to Deductible Amount .................................................    16
         3.14     Qualified Non-Elective Contributions ............................................    16
         3.15     Employer Discretionary Contribution .............................................    16
         3.16     Qualified Employer Matching Contributions ("QMACs") .............................    16
         3.17     Reversion to Employer ...........................................................    16
         3.18     Rollover Contributions ..........................................................    16
         3.19     Continuity of Employment ........................................................    17
         3.20     Re-employed Veterans ............................................................    17

ARTICLE IV - ALLOCATIONS, ACCOUNTING AND ADJUSTMENTS ..............................................    18
         4.01     Valuation .......................................................................    18
         4.02     Composition of the Trust Fund ...................................................    18
         4.03     Allocation of Earnings and Losses ...............................................    18
         4.04     Contributions ...................................................................    18
         4.05     Maximum Annual Additions ........................................................    19
         4.06     Related Employers ...............................................................    21

ARTICLE V - VESTING ...............................................................................    22
         5.01     Pre-Tax Contribution, Rollover Contribution, Qualified Nonelective
                  Contributions, and Qualified Employer Matching Contributions ....................    22
         5.02     Employer Discretionary Contribution Account and Matching Contribution Account ...    22
         5.03     Forfeitures .....................................................................    22

ARTICLE VI - TIME AND METHOD OF PAYMENT ...........................................................    23
         6.01     Distribution Events .............................................................    23
         6.02     Time of Payment .................................................................    23
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                               Table of Contents

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         6.03     Method of Payment ..............................................    23
         6.04     Required Distribution Rules ....................................    24
         6.05     Distribution of Unallocated Contribution .......................    25
         6.06     Certain Delayed Payments .......................................    25
         6.07     Beneficiary ....................................................    26
         6.08     Administrative Powers Relating to Payments .....................    27
         6.09     Small Amounts ..................................................    27
         6.10     Consents, Elections and Revocations ............................    28
         6.11     Hardship Withdrawals ...........................................    28
         6.12     Eligible Rollover Distributions ................................    29
         6.13     Loans ..........................................................    30

ARTICLE VII - JOINT AND SURVIVOR ANNUITY REQUIREMENTS ............................    32
         7.01     Qualified Joint and Survivor Annuity ...........................    32
         7.02     Qualified Preretirement Survivor Annuity .......................    32
         7.03     Definitions ....................................................    32
         7.04     Notice Requirements ............................................    34
         7.05     Exception to the Joint and Survivor Annuity Requirements .......    35

ARTICLE VIII - TOP-HEAVY PROVISIONS ..............................................    36
         8.01     Definitions ....................................................    36
         8.02     Top-Heavy Plan Requirements ....................................    39
         8.03     Minimum Vesting Requirement ....................................    39
         8.04     Minimum Contribution Requirement ...............................    39
         8.05     Coordination with Other Plans ..................................    40

ARTICLE IX - MANAGEMENT OF FUNDS .................................................    41
         9.01     Trust Agreement ................................................    41
         9.02     Exclusive Benefit ..............................................    41
         9.03     Removal of Trustee .............................................    41
         9.04     Powers .........................................................    41
         9.05     Settlement of Accounts .........................................    41

ARTICLE X - PLAN ADMINISTRATION ..................................................    42
         10.01    Administrative Committee .......................................    42
         10.02    Powers and Duties of the Committee .............................    42
         10.03    Exercise of the Committee's Duties .............................    42
         10.04    Organization and Operations of the Committee ...................    43
         10.05    Records and Reports of the Committee ...........................    43
         10.06    Compensation and Expenses of the Committee .....................    43
         10.07    Indemnity of the Committee Members .............................    43

ARTICLE XI - CLAIMS PROCEDURE ....................................................    44
         11.01    Informal Review ................................................    44
         11.02    Formal Review ..................................................    44
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                               Table of Contents

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ARTICLE XII - AMENDMENT AND TERMINATION .........................................    45
         12.01    Amendment .....................................................    45
         12.02    Plan Termination or Discontinuance of Contributions ...........    46
         12.03    Procedure for Becoming an Employer ............................    46

ARTICLE XIII - MISCELLANEOUS ....................................................    47
         13.01    No Contract of Employment .....................................    47
         13.02    Merger or Consolidation of Plan, Transfer of Assets ...........    47
         13.03    Data ..........................................................    47
         13.04    Restrictions Upon Assignments and Creditors' Claims ...........    47
         13.05    Allocation of Fiduciary Duties ................................    48
         13.06    Applicable Law ................................................    48
         13.07    Restriction of Claims Against Trust Fund ......................    48
         13.08    Named Fiduciaries .............................................    48
         13.09    Benefits Payable by Trust Fund ................................    48
         13.10    Successor to Employer or Company ..............................    48
         13.11    Internal Revenue Service Approval .............................    49
         13.12    Deductibility of Employer Discretionary Contributions .........    49
</TABLE>

<PAGE>

                                  INTRODUCTION
                                  ------------

     Packaging Dynamics LLC ("Packaging Dynamics") adopted the Packaging
Dynamics LLC Employee 401(k) Plan (the "Plan") effective July 1, 1999. The Plan
was amended from time to time. Packaging Dynamics has three divisions: Bagcraft,
IPMC and ICI. "IPMC" and "ICI" each sponsored tax-qualified plans; the IPMC,
Inc. Pension and Profit Sharing Retirement Plan (the "IPMC Plan") and the
International Converter, Inc. 401(k) Profit Sharing Plan (the "ICI Plan"),
respectively. Effective as of July 1, 1999, the IPMC Plan and, effective as of
January 1, 2000, the ICI Plan were merged into the Plan.

     It is intended that this Plan together with the Trust satisfies the
requirements applicable to a qualified retirement plan under Section 401(a) and
501(a) of the Internal Revenue Code of 1986 ("Code"), and to cash or deferred
arrangements under Section 401(k) of the Code, and shall be interpreted to
comply with the terms of the Code and ERISA and the applicable regulations and
rulings issued thereunder.

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS
                                   -----------

       Whenever used herein with the initial letter capitalized, words and
phrases shall have the meanings stated below unless a different meaning is
plainly required by the context. All masculine terms shall include the feminine
and all singular terms shall include the plural, unless the context clearly
indicates otherwise.

1.01   Account(s)
       ----------

       The separate account or accounts, which are maintained for each
       Participant, including the Pre-Tax Contribution Account, Employer
       Matching Contribution Account, Employer Discretionary Contribution
       Account and Rollover Contribution Account.

1.02   Approved Leave of Absence
       -------------------------

       An absence from work approved by an Employer or Related Employers under
       Named Investment Fiduciary from rules and conditions for all Employees,
       including a "maternity or paternity leave of absence".

       A "maternity or paternity leave of absence" shall mean, for any Plan
       Year, an absence from work (for such period as may be required under
       Section 102(e) of the Retirement Equity Act of 1984 or regulations
       thereunder) by reason of the Participant's pregnancy, birth of the
       Participant's child, placement of a child with the Participant in
       connection with the adoption of such child, or any absence for the
       purpose of caring for such child for a period immediately following such
       birth or placement.

1.03   Attained Age
       ------------

       The age in years of an Employee as of the last anniversary of the
       Employee's date of birth.

1.04   Beginning Balance
       -----------------

       The fair market value of the Trust Fund, each Employer Discretionary
       Contribution Account, Employer Matching Contribution Account, Pre-Tax
       Contribution Account and each Rollover Contribution Account as of the
       Valuation Date immediately preceding the event for which the Beginning
       Balance is being determined.

1.05   Beneficiary
       -----------

       Any person or persons (or a trust) designated under Section 6.07 to
       receive a benefit under the Plan after the death of a Participant. This
       designation may be revoked by a Participant or former Participant as
       prescribed in Section 6.07.

<PAGE>

1.06   Board
       -----

       The Board of Directors of the Company.

1.07   Closing Balance
       ---------------

       The fair market value of the Trust Fund, each Employer Discretionary
       Contribution Account, Employer Matching Contribution Account, Pre-Tax
       Contribution Account and Rollover Contribution Account as of the
       Valuation Date coincident with or next following the event for which the
       Closing Balance is being determined.

1.08   Code
       ----

       The Internal Revenue Code of 1986, as amended.

1.09   Committee
       ---------

       The person or persons appointed by the Board pursuant to Article X.

1.10   Company
       -------

       Packaging Dynamics, LLC, its successors and assigns, and any corporation
       into which they may be merged or consolidated or to which all or
       substantially all of their assets may be transferred. The provisions of
       the immediately preceding sentence are subject to the successor,
       assigned, merged or consolidated corporation adopting the Plan and giving
       notice of such adoption in writing to the Trustee.

1.11   Compensation
       ------------

       (a)   The definition of Compensation is set forth in the Appendix.

       (b)   The annual Compensation of each Participant taken into account for
             determining all benefits provided under the Plan for any Plan year
             shall not exceed $150,000, as adjusted for increases in the
             cost-of-living in accordance with Section 401(a)(17)(B) of the
             Code. The annual Compensation of each Participant taken into
             account in determining allocations for any Plan Year beginning
             after December 31, 2001, shall not exceed $200,000, as adjusted for
             cost-of-living increases in accordance with Section 401(a)(17)(B)
             of the Code. The cost-of-living adjustment in effect for a calendar
             year applies to any determination period beginning in such calendar
             year.

       (c)   Compensation during an Employee's first year of participation shall
             be recognized as of the first day of the Plan Year in which the
             Participant entered the Plan.

1.12   Effective Date
       --------------

       The Effective Date of this amended and restated Plan is July 1, 2000. The
       original effective date of the Plan was July 1, 1999.

1.13   Eligible Employee
       -----------------

<PAGE>

       Eligible Employee shall mean all employees of the Employer, excluding
       Leased Employees, those Employees whose employment is governed by a
       collective bargaining agreement, unless such agreement includes a
       provision for retirement benefits that were the subject of good faith
       bargaining. As of the Effective Date of this amendment and restatement,
       members of Teamsters Local 743 shall be Eligible Employees.

1.14   Employee
       --------

       An Employee of an Employer, including Leased Employees. However, the term
       Employee shall exclude any individual who is retained by an Employer to
       perform services for the Employer (for either a definite or indefinite
       duration) and is characterized thereby as a fee-for-service worker or
       independent contractor or in a similar capacity (rather than in the
       capacity of an employee), regardless of such individual's status under
       common law, including without limitation, any such individual who is or
       has been determined by a third party, a government agency, board, court
       or arbitrator, to be an employee of the Employer for any purpose,
       including for purposes of participation in an employee benefit plan of
       the Employer (including this Plan) or for purposes of federal, state or
       local tax withholding, employment tax or employment law.

1.15   Employer
       --------

       The Company and any other Employer which, with the approval of the Board,
       shall adopt this Plan, in whole or part, for the benefit of its
       Employees, according to an appropriate written resolution of the board of
       directors of such Employer. Such an Employer shall execute such documents
       as may be deemed necessary by the Company. For purposes of eligibility,
       vesting, breaks in service and restrictions on contributions and
       benefits, Employer shall also include any member of (a) controlled group
       in which an Employer is a member within the meaning of Section 414(b) of
       the Code, (b) an affiliated service group within the meaning of Section
       414(m) of the Code, (c) a group of trades or businesses under common
       control (within the meaning of Code Section 414(c)) of which the Employer
       is a member, and (d) any other entity required to be aggregated with the
       Employer pursuant to Section 414(o).

1.16   Employer Discretionary Contribution
       -----------------------------------

       The contribution made to the Employer Discretionary Contribution Account
       of a Participant by an Employer as provided in Article III.

1.17   Employer Discretionary Contribution Account
       -------------------------------------------

       The separate Account maintained for each Participant to reflect Employer
       Discretionary Contributions made on behalf of the Participant and any
       earnings thereon.

1.18   Employer Matching Contribution
       ------------------------------

       The contribution made by the Employer on the condition that the Employee
       enters a salary reduction agreement to make Pre-Tax Contributions to the
       Plan, and in such amount provided in accordance with the Appendix, as
       provided in Article III.

1.19   Employer Matching Contribution Account
       --------------------------------------

<PAGE>

       The separate Account maintained for each Participant to which Employer
       Matching Contributions are allocated.

1.20   ERISA
       -----

       The Employee Retirement Income Security Act of 1974, as amended.

1.21   Highly Compensated Employee
       ---------------------------

       The term Highly Compensated Employee includes highly compensated active
       employees and highly compensated former employees.

       A "highly compensated active employee" includes any Employee who performs
       service for the Employer during the "determination year" and who:

       (a)   was a 5% owner of the Employer (within the meaning of Section
             416(i)(1) of the Code) at any time during the Plan Year or the
             preceding Plan Year; or

       (b)   received compensation from the Employer in excess of $80,000 (or
             such other amount as may be determined by the Secretary of the
             Treasury) and, effective as of the Plan Year beginning January 1,
             2001, was among the "top-paid group" of employees (as defined in
             Section 414(q)(3) of the Code for the preceding year. In
             determining a Highly Compensated Employee, "compensation" means
             compensation as defined in Section 414(q) of the Code.

       For this purpose, the "determination year" shall be the Plan Year.

       A "highly compensated former employee" includes any Employee who
       separated from service (or was deemed to have separated) prior to the
       determination year, performs no service for the Employer during the
       determination year, and was a highly compensated active Employee for
       either the separation year or any determination year ending on or after
       the Employee's 55th birthday.

       The determination of who is a Highly Compensated Employee will be made in
       accordance with Section 414(q) of the Code and the regulations
       thereunder.

1.22   Hour of Service
       ---------------

       (a)   (1) Each hour for which an Employee is directly or indirectly paid,
                 or entitled to payment, by an Employer for the performance of
                 duties. These hours will be credited to the Employee for the
                 computation period in which the duties are performed; and

             (2) Each hour for which an Employee is directly or indirectly
                 paid, or entitled to payment, by an Employer for reasons (such
                 as vacation, sickness, disability, or similar leave of absence)
                 other than for the performance of duties, irrespective of
                 whether the employment relationship has terminated. In no event
                 shall more than five hundred and one (501) Hours of Service be
                 credited for any one continuous period of absence during or for
                 which the Employee receives payment for nonperformance of
                 duties. Hours of Service credited to an Employee under this
                 paragraph will be

<PAGE>

                   calculated and credited pursuant to DOL Regulations Section
                   2530.200b-2; and

             (3)   Each hour for which back pay, irrespective of mitigation of
                   damages, has been either awarded or agreed to by an Employer.
                   The same Hours of Service will not be credited both under
                   paragraph (1) or paragraph (2), as the case may be, and under
                   this paragraph (3). These hours will be credited to the
                   Employee for the computation period(s) to which the award
                   pertains rather than the computation period in which the
                   award, agreement or payment is made;

             Hours of Service will be credited for employment with other members
             of an affiliated service group (under Section 414(m) of the Code),
             a controlled group of corporations (under Section 414(b) of the
             Code), or a group of trades or businesses under common control
             (under Section 414(c) of the Code) of which the Company is a
             member, and any other entity required to be aggregated with the
             Employer.

       (b)   An individual who is absent from work for maternity or paternity
             reasons shall receive credit for purposes of vesting and
             eligibility to participate, for the Hours of Service which would
             otherwise have been credited to such individual but for such
             absence, or in any case in which such hours cannot be determined,
             eight (8) Hours of Service per day of such absence. For purposes of
             this paragraph, an absence from work for maternity or paternity
             reasons means an absence;

             (1)   by reason of the pregnancy of the individual,

             (2)   by reason of a birth of a child of the individual,

             (3)   by reason of the placement of a child with the individual in
                   connection with the adoption of such child by such
                   individual, or

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

             The Hours of Service credited under this paragraph shall be
             credited;

             (i)   in the computation period in which the absence begins if the
                   crediting is necessary to accrue vesting or participation
                   service that period, or

             (ii)  in all other cases, in the following computation period.

1.23   Leased Employee
       ---------------

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

<PAGE>

       organization which are attributable to services performed for the
       recipient employer shall be treated as provided by the recipient
       employer.

1.24   Limitation Year
       ---------------

       The Plan Year.

1.25   Normal Retirement Age
       ---------------------

       Normal Retirement Age shall have the meaning set forth in the Appendix.

1.26   Normal Retirement Date
       ----------------------

       Normal Retirement Date shall have the meaning set forth in the Appendix.

1.27   Participant
       -----------

       An Eligible Employee who has met the requirements of Article II for
       participation in the Plan. The term shall also include, where
       appropriate, a former Participant who terminated his service with an
       Employer and is entitled to a benefit hereunder.

1.28   Participation Date
       ------------------

       An Eligible Employee's Participation shall be the first day of the month
       coinciding with or next following the date the requirements set forth in
       Article II are met, except as provided in the Appendix.

1.29   Plan
       ----

       The Packaging Dynamics LLC Employee 401(k) Plan, as detailed herein.

1.30   Plan Administrator
       ------------------

       The Company.

1.31   Plan Year
       ---------

       A twelve (12) consecutive month period from January 1 to December 31 each
       year.

1.33   Pre-Tax Contribution Account
       ----------------------------

       The separate Account maintained for each Participant to reflect Salary
       Reduction Contributions and any earnings thereon.

1.33   Pre-Tax Contributions
       ---------------------

       The contributions made by an Employer that are attributable to the
       reduction in Compensation a Participant agrees to accept from an Employer
       each Plan Year as described in Section 3.01 of the Plan.

1.34   Rollover Contribution Account
       -----------------------------

<PAGE>

       The separate Account maintained for each Employee or Participant to
       reflect Rollover Contributions and any earnings thereon.

1.35   Rollover Contributions
       ----------------------

       The amounts contributed by an Employee or a Participant to another
       retirement plan or retirement arrangement, and which the Employee or
       Participant rolls into this Plan, subject to the applicable requirements
       of the Code and regulations to qualify for rollover treatment.

1.36   Total and Permanent Disability
       ------------------------------

       Total and Permanent Disability shall have the meaning set forth in the
       Appendix.

1.37   Trust
       -----

       The Packaging Dynamics LLC Employee 401(k) Trust, as amended from time to
       time.

1.38   Trust Fund
       ----------

       All cash, securities and other property, held under the Trust for the
       purposes of the Plan, and any earnings thereon.

1.39   Trustee
       -------

       The person, persons, entity or entities appointed by the Company as
       Trustee of the Trust.

1.40   Valuation Date
       --------------

       Each business day that the New York Stock Exchange is open for trading.

1.41   Year of Service
       ---------------

       For vesting and eligibility purposes, a Plan Year during which a
       Participant is credited with at least 1,000 Hours of Service.

       All Years of Service with other members of a controlled group of
       corporations (as defined in Code Section 414(b), trades or business
       Lender common control (as defined in Code Section 414(c), or members of
       an affiliated service group (as defined, in Section 414(m) shall be
       credited for purposes of determining an Employee's Years of Service.

<PAGE>

                                   ARTICLE II

                          ELIGIBILITY AND PARTICIPATION
                          -----------------------------

2.01   Eligibility
       -----------

       For purposes of merged plans, any Employee who was eligible, as of the
       date of merger, to participate in a plan that merged into this Plan shall
       be eligible to participate in this Plan.

       Each other Employee shall be eligible to participate in the Plan upon the
       later of the Effective Date or the completion of one-half Year of Service
       with the Employer and the attainment of age 18, except as otherwise
       provided for ICI in the Appendix.

2.02   Participation
       -------------

       Each Employee who meets the eligibility requirements described in Section
       2.01 shall become a Participant on the coinciding or next following
       Participation Date and may enter into a pre-tax salary reduction
       agreement relating to Compensation earned after the date he becomes a
       Participant.

2.03   Participation Forms
       -------------------

       Each Participant shall designate a Beneficiary in the manner prescribed
       by the Committee as provided in Section 6.07. Pre-Tax Contributions to be
       made pursuant to Article III must be elected by the Participant in the
       manner prescribed by the Committee.

2.04   Termination and Reemployment
       ----------------------------

       (a)   If an Employee who has met the eligibility requirements of Section
             2.01 terminates employment and is subsequently rehired by an
             Employer, he shall again be eligible to participate in the Plan on
             his date of reemployment and may enter into a pre-tax salary
             reduction agreement to be effective as of the first day of the
             month following his date of reemployment.

       (b)   If an Employee who has not met the eligibility requirements of
             Section 2.01 terminates employment and is subsequently rehired by
             an Employer, he shall be eligible to participate in the Plan when
             he meets the eligibility requirements of Section 2.01, based upon
             his date of reemployment.

2.05   Change in Employment Status
       ---------------------------

       If an Employee is excluded from participating in the Plan due to the
       Employee's employment status and the Employee subsequently becomes
       employed in an employment status eligible for participation in the Plan,
       all Years of Service of the Employee shall be counted for purposes of
       eligibility and participation.

<PAGE>

                                   ARTICLE III

                                  CONTRIBUTIONS
                                  -------------

3.01   Pre-Tax Contributions
       ---------------------

       Each Participant who has met the eligibility requirements of Section 2.01
       may enter into a written salary reduction agreement, in the manner
       prescribed by the Committee, with his Employer to make Pre-Tax
       Contributions.

3.02   Effective Date of Pre-Tax Salary Reduction Agreement
       ----------------------------------------------------

       A pre-tax salary reduction agreement shall be effective as of the date(s)
       set forth in the Appendix.

3.03   Limitations on Pre-Tax Contributions
       ------------------------------------

       A Participant may agree to make Pre-Tax Contributions in the amounts set
       forth in the Appendix. No Participant shall be permitted to make Pre-Tax
       Contributions during any calendar year of more than the maximum amount
       provided under Code Section 402(g) for such calendar year.

       A Participant may request a return of a portion of his Pre-Tax
       Contributions for a Plan Year, in the event that: (a) he has made Pre-Tax
       Contributions greater than the maximum amount allowable under Code
       Section 402(g) for the previous taxable year, and (b) he so notifies the
       Plan Administrator, in the manner prescribed, by March 1 of the amount to
       be returned. The Plan Administrator shall return such excess Pre-Tax
       Contributions to the Participant by the next following April 15 in the
       amount specified in the Participant's notification, together with
       earnings. A Participant is deemed to notify the Plan Administrator of any
       excess Pre-Tax Contributions that arise by taking into account only those
       Pre-Tax Contributions made to this Plan and any other plans of the
       Employer. The excess Pre-Tax Contributions shall be adjusted for any
       income or loss up to the last day of the year in which the excess Pre-Tax
       Contributions were withheld from the Participant's salary, based on the
       income or loss allocable to all of the Participant's Pre-Tax
       Contributions for the taxable year multiplied by a fraction where the
       numerator is the Participant's excess Pre-Tax Contributions for the year
       and the denominator is the Participant's account balance attributable to
       Pre-Tax Contributions without income or loss for the taxable year.

3.04   Transfer to Trust
       -----------------

       An Employer shall contribute to the Trust an Employee's Pre-Tax
       Contributions, as soon as can be reasonably segregated from the
       Employer's general assets (but not later than the date prescribed by
       law).

3.05   Modification of Pre-Tax Contributions
       -------------------------------------

       Each Participant may increase, decrease or resume his Pre-Tax
       Contributions by entering into a new salary reduction agreement in
       accordance with procedures established by the

<PAGE>

      Committee, to be effective as set forth in the Appendix. In addition, each
      Participant may suspend his Pre-Tax Contributions at any time by entering
      into a new salary reduction agreement and electing zero percent (0%)
      Pre-Tax Contributions. Such suspension election shall be made in
      accordance with procedures established by the Committee, to be effective
      as set forth in the Appendix.

3.06  Pre-Tax Contribution Account
      ----------------------------

      An Employer shall establish and maintain a Pre-Tax Contribution Account in
      the name of each Participant who elects to make Pre-Tax Contributions.

3.07  Limitations on Amount of Pre-Tax Contributions
      ----------------------------------------------

      (a)  Pre-Tax Contributions by Highly Compensated Employees for a Plan Year
           shall be subject to the following limitations:

           (1)  The Plan Administrator may limit or restrict the amount of
                Pre-Tax Contributions of Highly Compensated Employees before the
                end of the Plan Year, in the amount it determines necessary (and
                in the manner it determines), in order to ensure that the Actual
                Deferral Percentage ("ADP") for Participants who are Highly
                Compensated Employees for each Plan Year and the ADP for
                Participants who are non-Highly Compensated Employees for the
                preceding Plan Year satisfies either the test under (A) or (B)
                below:

                (A)  The ADP for Participants who are Highly Compensated
                     Employees is not greater than one hundred twenty-five
                     percent (125%) of the ADP for Participants who are
                     non-Highly Compensated Employees for the preceding Plan
                     Year.

                (B)  The ADP for Participants who are Highly Compensated
                     Employees for the Plan Year:

                     (i)   does not exceed the ADP for Participants who are
                           non-Highly Compensated Employees for the preceding
                           Plan Year, plus two percent (2%); and

                     (ii)  does not exceed two hundred percent (200%) of the ADP
                           for Participants who are non-Highly Compensated
                           Employees for the preceding Plan Year.

                     The Employer may apply paragraph (i) by using the current
                     Plan Year if the Employer so elects, except that if such an
                     election is made, it may not be changed except as provided
                     by the Secretary of the Treasury.

                     "Actual Deferral Percentage" (or "ADP") means the average
                     of the ratios (calculated separately for each Participant
                     in a group) of (i) the amount of Employer Discretionary
                     Contributions (as described below) actually paid to the
                     Trust on behalf of a Participant for the Plan Year to (ii)
                     a Participant's compensation for the Plan Year,

<PAGE>

                     whether or not the Employee was a Participant for the
                     entire Plan Year. Employer Discretionary Contributions for
                     this purpose shall include: (i) any Pre-Tax Contributions
                     made pursuant to a Participant's election, including excess
                     Pre-Tax Contributions, but excluding Pre-Tax Contributions
                     that are taken into account in the Actual Contribution
                     Percentage ("ACP") test under Section 3.10 (provided the
                     ADP test is satisfied both with and without exclusion of
                     these Pre-Tax Contributions; and (ii) any qualified
                     non-elective contributions ("QNECs") and qualified matching
                     after-tax contributions ("QMACs"). For purposes of
                     computing Actual Deferral Percentages, an Employee who
                     would be a Participant but for suspension due to a hardship
                     distribution or for the failure to make Pre-Tax
                     Contributions shall be treated as a Participant who is not
                     making Pre-Tax Contributions.

           (2)  For purposes of this Section 3.07, "compensation" means
                compensation as defined in Section 414(s) of the Code and the
                regulations thereunder.

           (3)  For the ADP test, Pre-Tax Contributions, QNECs and QMACs must be
                made before the last day of the twelve-month period immediately
                following the Plan Year to which the contributions relate.
                Provided; however, any QNECs or QMACs must be allocated as of a
                date within the Plan Year to which they relate. A Pre-Tax
                Contribution will be taken into account under the ADP test for a
                Plan Year only if it relates to compensation that either would
                have been received by the Participant in the Plan Year (but for
                the deferral election) or is attributable to services performed
                by the Participant in the Plan Year and would have been received
                by the Participant within 2 1/2 months after the close of the
                Plan Year (but for the deferral election).

           (4)  The Employer shall maintain records sufficient to demonstrate
                satisfaction of the ADP test and the amount of QNECs or QMACs,
                or both, used in such test.

      (b)  The Plan Administrator shall make a determination as of the last day
           of the Plan Year regarding the maximum Pre-Tax Contribution for each
           Participant who is a Highly Compensated Employee.

           (1)  Any Participant who elected to reduce his salary by more than
                his maximum permissible amount shall be deemed to have elected
                to defer the maximum permissible Pre-Tax Contribution as
                determined by the Plan Administrator. If, as of the end of the
                Plan Year, any amounts withheld by the Employer for a
                Participant exceeds the maximum permissible amount determined by
                the Plan Administrator, the Participant's excess Pre-Tax
                Contributions, together with interest thereon (if any), shall be
                returned by the Employer or the Trustee to the Participant as
                soon as practicable after the end of the Plan Year, but in no
                event later than the last day of the following Plan Year. The
                amount of excess Pre-Tax Contributions to be distributed shall
                be reduced by the excess aggregate contributions previously
                distributed for the taxable year ending in the same Plan Year.

<PAGE>

                If such excess amounts are distributed more than 2 1/2 months
                after the last day of the Plan Year in which such excess amounts
                arose, a ten (10) percent excise tax will be imposed on the
                Employer with respect to such amounts.

           (2)  For purposes of subsection (b)(1) above, Pre-Tax Contributions
                of Highly Compensated Employees shall be reduced on the basis of
                the dollar amount of their Pre-Tax Contributions in accordance
                with regulations issued by the Secretary of the Treasury under
                Section 401(k) of the Code.

           (3)  Excess Pre-Tax Contributions shall be adjusted for any income or
                loss up to the last day of the year in which the excess Pre-Tax
                Contribution were withheld from the Participant's salary, based
                on the income or loss allocable to the Participant's Pre-Tax
                Contributions (and, if applicable, the QNECs and/or QMACs for
                the Plan Year multiplied by a fraction, where the numerator is
                the Participant's excess Pre-Tax Contributions for the year and
                the denominator is the Participant's account balance
                attributable to Pre-Tax Contributions (and QNECs and/or QMACs,
                if applicable) without regard to any income or loss occurring
                during such Plan Year.

      (c)  The provisions of this paragraph (c) apply only to Highly Compensated
           Employees with respect to Plan Years beginning on and after January
           1, 1988. The salary reduction arrangement of this Plan and any other
           plans of the Employer (which include a cash or deferred arrangement
           under Section 401(k) of the Code and which are considered one plan
           for purposes of Section 401(a)(4), or 410(b) of the Code) shall be
           treated as one salary reduction arrangement for purposes of applying
           the provisions of this Section 3.07. In the event that this Plan
           satisfies the requirements of Sections 401(k), 401(a)(4), or 410(b)
           of the Code only if aggregated with one or more other plans, or if
           one or more other plans satisfy the requirements of such sections of
           the Code only if aggregated with this Plan, then this subsection
           shall be applied by determining the ADP of Employees as if all such
           plans were a single plan. Plans which are mandatorily disaggregated
           remain so for purposes of this Section 3.07. For Plan Years.
           Beginning after December 31, 1989, plans may be aggregated in order
           to satisfy Section 401 (k) of the Code only if they have the same
           Plan Year.

      (d)  The Plan Administrator shall have the right to otherwise limit or
           reduce the Pre-Tax Contributions of Participants, as it determines
           necessary and in any manner it determines, to ensure that the
           aggregate allocation of Pre-Tax Contributions to all Participants
           will not exceed the amount permitted as a deduction by the Employer
           pursuant to the Code and to ensure that, with respect to any
           particular Participant, the amount credited to such Participant's
           Account for the Plan Year does not exceed the amount permissible
           under Section 415 of the Code.

      (e)  The Plan Administrator may establish such rules and procedures
           regarding Pre-Tax Contributions under this Plan as it deems
           appropriate.

<PAGE>

      (f)  QNECs and/or matching contributions may be treated as Pre-Tax
           Contributions only if the conditions described in Section
           1.401(k)-1(b)(5) of the regulations are satisfied. QNECs and/or
           Employer Matching Contributions which may be treated as Pre-Tax
           Contributions for purposes of the ADP test of Section 401(k) must be
           nonforfeitable when made and subject to the same distribution
           restrictions that apply to Pre-Tax Contributions, without regard to
           whether they are actually taken into account as Pre-Tax
           Contributions.

3.08  Limitation on Distribution of Pre-Tax Contributions
      ---------------------------------------------------

      Distributions of a Participant's Pre-Tax Contribution Account shall not
      commence prior to the earliest of his retirement, death, Total and
      Permanent Disability, other termination of employment, or his
      demonstration of hardship as defined in Section 6.11, except upon the
      occurrence of an event described in Section 401(k)(10) of the Code.

3.09  Employer Matching Contributions
      -------------------------------

      If a Participant elects to make Pre-Tax Contributions, the Employer shall
      make an Employer Matching Contribution in an amount as set forth in the
      Appendix and allocated in accordance with the method set forth in the
      Appendix. Employer Matching Contributions shall be deposited into the
      Participant's Employer Matching Contribution Account monthly.

3.10  Employer Discretionary Contributions
      ------------------------------------

      The Employer may, from time to time and subject to the provisions detailed
      in the Appendix, make Employer Discretionary Contributions to the Plan, to
      be allocated among the Employees as provided in the Appendix. Any Employer
      Discretionary Contributions shall be deposited into the Participant's
      Employer Discretionary Contribution Account on an annual basis.

3.11  Limitations on Amount of Employer Matching Contributions
      --------------------------------------------------------

      (a)  To the extent not aggregated with Pre-Tax Contributions for purposes
           of determining the ADP limitations under Section 3.07, Employer
           Matching Contributions on behalf of Highly Compensated Employees for
           2 Plan Year shall be subject to the following limitations:

           (1)  The Plan Administrator may limit or restrict the Employer
                Matching Contributions of Highly Compensated Employees before
                the end of the Plan Year, in the amount it determines necessary
                (and in the manner it determines), in order to ensure that the
                Actual Contribution Percentage ("ACP") for Participants who are
                Highly Compensated Employees for each Plan Year and the ACP for
                Participants who are non-Highly Compensated Employees for the
                preceding Plan Year satisfies either the test under (A) or (B)
                below:

                (A)  The ACP for Participants who are Highly Compensated
                     Employees for the Plan Year shall not exceed the ACP for
                     Participants who are non-Highly Compensated Employees for
                     the preceding Plan Year multiplied by 125%.

<PAGE>

                (B)  Subject to Section 3.12, the ACP for Participants who are
                     Highly Compensated Employees for the Plan Year shall not
                     exceed the ACP for Participants who are non-Highly
                     Compensated Employees for the preceding Plan Year
                     multiplied by 200%, provided that the ACP for Participants
                     who are Highly Compensated Employees may not exceed the ACP
                     for Participants who are non-Highly Compensated Employees
                     for the preceding Plan Year by more than two (2) percentage
                     points.

                The Employer may apply paragraph (1) by using the current Plan
                Year if the Employer so elects, except that if such an election
                is made, it may not be changed except as provided by the
                Secretary of the Treasury.

                "Actual Contribution Percentage" ("ACP") means the average of
                the ratios (calculated separately for each Participant in a
                group) of (i) the amount of Employer Matching Contributions (and
                other included contributions as described below) actually paid
                to the Trust on behalf of a Participant for the Plan Year to
                (ii) a Participant's compensation for the Plan Year whether or
                not the Employee was a Participant for the entire Plan Year. The
                following contributions shall be included with Employer Matching
                Contributions for purposes of determining the ACP: (i) any
                Pre-Tax Contributions made pursuant to the Participant's salary
                reduction agreement including excess Pre-Tax Contributions, but
                excluding Pre-Tax Contributions that are taken into account in
                the Average Deferral Percentage test (provided the ADP test is
                met before the Pre-Tax Contributions are used in the ACP test
                and continues to be met following the exclusion of those Pre-Tax
                Contributions that are used to meet the ACP test); and (ii) at
                the election of the Employer, QNECs to the extent not taken into
                account in the average deferral percentage test. For purposes of
                computing Actual Contribution Percentages, an Employee who would
                receive an allocation of Employer Matching Contributions but for
                the failure to make Pre-Tax Contributions shall be treated as a
                Participant on whose behalf no Employer Matching Contributions
                are made.

           (2)  For purposes of this Section 3.11, "compensation" means
                compensation as defined in Section 414(s) of the Code and the
                regulations thereunder.

           (3)  For the ACP test, Employer Matching Contributions, Pre-Tax
                Contributions, and QNECs must be made before the last day of the
                twelve-month period immediately following the Plan Year to which
                the contributions relate.

           (4)  The Employer shall maintain records sufficient to demonstrate
                satisfaction of the ACP test and the amount of Pre-Tax
                Contributions or QNECs, or both, used in such test.

           (5)  The determination and treatment of the ACP amounts of any
                Participant shall satisfy such other requirements as may be
                prescribed by the Secretary of the Treasury.

<PAGE>

      (b)  If it is determined as of the end of the Plan Year that any amounts
           contributed by the Employer for a Participant exceed the amount
           determined permissible by the Plan Administrator to meet the ACP
           test, the excess aggregate contribution, to the extent that it is
           vested, together with allocable earnings and less allocable losses
           thereon (if any), shall be returned by the Trustee to the Participant
           as soon as practicable after the end of the Plan Year, but in no
           event later than the last day of the following Plan Year. To the
           extent such excess aggregate contribution is not vested, it shall be
           forfeited as of the last day of the Plan Year following the Plan Year
           for which the excess aggregate contribution was made. Vested Employer
           Matching Contributions with regard to excess Pre-Tax Contributions
           which were distributed under Section 3.07(b) of the Plan shall also
           be distributed at the same time and in the same manner as such excess
           Pre-Tax Contributions. The amount of excess aggregate contributions
           to be distributed shall be reduced by the excess Pre-Tax
           Contributions previously distributed for the taxable year ending in
           the same Plan Year.

           If such vested excess aggregate contributions are distributed more
           than 2 1/2 months after the last day of the Plan Year in which such
           excess aggregate amounts arose, a ten (10) percent excise tax will be
           imposed on the Employer with respect to such amounts.

           For purposes of this subsection, distributions or forfeitures of
           excess aggregate contributions of Highly Compensated Employees shall
           occur based on the dollar amount of excess aggregate contributions
           made on behalf of Highly Compensated Employees in accordance with
           regulations issued by the Secretary of the Treasury under Section
           401(m) of the Code.

           Vested excess aggregate contributions shall be adjusted for any
           income or loss up to the last day of the year in which the excess
           contributions were made, based on the income or loss allocable to the
           Participant's Pre-Tax Contributions, Employer Matching Contributions
           (and, if applicable, QNECs and QMACs) for the Plan Year multiplied by
           a fraction, where the numerator is the Participant's excess aggregate
           contributions for the year and the denominator is the Participant's
           account balance attributable to "contribution percentage amounts
           without regard to any income or loss occurring during such Plan Year.
           For purposes of this subsection, "contribution percentage amounts"
           shall mean the sum of the Employer Matching Contributions made under
           the Plan on behalf of the Participant for the Plan Year. Such
           "contribution percentage amounts" shall include forfeitures of excess
           aggregate contributions or matching contributions" allocated to the
           Participant's Account which shall be taken into account in the year
           in which such forfeiture is allocated. The Employer may elect to
           include QNECs in the "contribution percentage amounts." The Employer
           also may elect to use Pre-Tax Contributions in the "contribution
           percentage amounts" so long as the ADP test is met before the Pre-Tax
           Contributions are used in the ACP test and continues to be met
           following the exclusion of those Pre-Tax Contributions that are used
           to meet the ACP test.

      (c)  Employer Matching Contributions shall be distributable only in
           accordance with the distribution provisions applicable to a
           Participant's Pre-Tax Contributions.

3.12  Multiple Use Test
      -----------------

<PAGE>

         The multiple use test described in Treasury Regulation Section
         1.40(m)-2 shall not apply for Plan Years beginning after December 31,
         1999.

3.13     Limitation to Deductible Amount
         -------------------------------

         Employer Matching Contributions, Employer Discretionary Contributions
         and Pre-Tax Contributions under the Plan shall not exceed the amount
         allowable as a deduction under Section 404 of the Code, as amended from
         time to time.

3.14     Qualified Non-Elective Contributions
         ------------------------------------

         If provided for in the Appendix, in order to meet the nondiscrimination
         requirements of Section 401(k) of the Code, the Board may authorize the
         Employer to make additional contributions applicable only to those
         Participants who are non-Highly Compensated Employees. Contributions
         made under this Section 3.14 shall be deemed for all Plan purposes to
         be Pre-Tax Contributions, and shall be allocated to the Participant's
         Pre-Tax Contribution Account, except that no Employer Matching
         Contributions willbe based upon such contributions.

3.15     Employer Discretionary Contribution
         -----------------------------------

         In addition to Employer Matching Contributions, the Employer may, as
         set forth in the Appendix, pay to the Trustee Employer Discretionary
         Contributions in an amount as determined by the Board. Any Employer
         Discretionary Contribution made to the Plan on behalf of a Participant
         shall be allocated to his Employer Discretionary Contribution Account.

3.16     Qualified Employer Matching Contributions ("QMACs")
         ---------------------------------------------------

         If provided for in the Appendix, in order to meet the nondiscrimination
         requirements of Section 401(m) of the Code, the Board may authorize the
         Employer to make additional contributions applicable only to those
         Participants who are non-Highly Compensated Employees. QMACs are
         subject to the distribution and nonforfeitability requirements of Code
         Section 401(k) when made. Any QMAC made to the Plan on behalf of a
         Participant shall be allocated to such Participant's Pre-Tax
         Contribution Account.

3.17     Reversion to Employer
         ---------------------

         At no time shall any part of the corpus or income of the Trust Fund be
         used for or diverted to purposes other than for the exclusive benefit
         of Participants and their Beneficiaries and to pay the reasonable
         expenses of administration of the Plan and Trust, to the extent that
         such expenses are not paid by an Employer. Notwithstanding the above, a
         contribution which is made by an Employer by a mistake of fact may be
         returned to the Employer within one (1) year after the. payment of the
         contribution to the Trust. If a contribution is conditioned upon the
         deductibility of the contribution under Section 404 of the Code, then,
         to the extent the deduction is disallowed, such a contribution shall be
         returned to the Employer within one (1) year after the disallowance of
         the deduction. All contributions to the Plan are conditioned on their
         deductibility under Code Section 404.

3.18     Rollover Contributions
         ----------------------

<PAGE>

         Any Employee may, regardless of whether he is presently eligible to
         participate in this Plan and in accordance with procedures approved by
         the Committee, make Rollover Contributions to the Plan. The Employee
         shall furnish the Trustee with a written statement that the
         contribution is a Rollover Contribution, together with such other
         statements and information as may be required by the Trustee.

3.19     Continuity of Employment
         ------------------------

         Except as expressly provided to the contrary herein, the concept of
         "employment" shall be deemed to refer equally to employment with any
         participating Employer, so that for the purpose of measuring Years of
         Service of for any other purpose under the Plan, employment with any
         participating Employer shall be deemed to the equivalent of employment
         with any other participating Employer, and employment with any
         participating Employer may be combined with employment with any other
         participating Employer as if all employment had been with any one
         participating Employer. Regardless of the duration of service with any
         particular participating Employer in any given year or the number of
         participating Employers for whom an Employee works, an Employee will
         not be credited with more than one Year of Service in any Plan Year.

3.20     Re-employed Veterans
         --------------------

         Notwithstanding any provision of this Plan to the contrary,
         contributions, benefits and service credit with respect to qualified
         military service will be provided in accordance with Section 414(u) of
         the Code.

<PAGE>

                                   ARTICLE IV

                     ALLOCATIONS, ACCOUNTING AND ADJUSTMENTS
                     ----------------------------------------

4.01     Valuation
         ---------

         As of each Valuation Date, the Trustee shall determine the Closing
         Balance of the Trust, and the Plan Administrator shall determine the
         Closing Balance of the Employer Discretionary Contribution Account,
         Employer Matching Contribution Account, if any, Pre-Tax Contribution
         Account, if any, and Rollover Contribution Account, if any, of each
         Participant and former Participant. The Closing Balance of these
         Accounts of each active Participant and former Participant shall be
         equal to the Beginning Balance of such Accounts plus or minus the
         applicable adjustments contained in Section 4.03, 4.04, 4.05, 4.06 and
         13.12.

4.02     Composition of the Trust Fund
         -----------------------------

         (a)  A separate Employer Discretionary Contribution Account shall be
              maintained for each Participant or Employee covered under the Plan
              for whom Employer Discretionary Contributions and Employer
              Matching Contributions are made. Additional Accounts, if
              necessary, will be maintained for each Participant who elects to
              make Pre-Tax Contributions pursuant to Section 3.01.

         (b)  Each Participant may elect to have his Pre-Tax Contribution
              Account and Rollover Account, if any, invested among the various
              investment funds offered in 1% increments.

         (c)  A Participant may change his investment election for his Pre-Tax
              Contribution Account on a daily basis (subject to the approval of
              the Plan's recordkeeper in the case of excessive transactions). If
              for any reason multiple investment elections are made on the same
              day, the last investment election made on any such day will be the
              investment election that takes effect.

         (d)  All investment elections must be made by calling the toll-free
              number or accessing by such electronic method provided by the Plan
              Administrator. Such investment elections will be effective the
              same day, or the next Valuation Date, depending on the time of day
              such election was made using a toll-free telephone number or using
              an electronic method designated by the Administrator.

4.03     Allocation of Earnings and Losses
         ---------------------------------

         As of each Valuation Date, the Accounts of each Participant and former
         Participant shall be adjusted to account for investment earnings or
         losses. The investment earnings (or losses) of the Trust Fund will
         equal the sum of all income received and realized and unrealized
         appreciation since the last Valuation Date, less all charges, expenses
         and realized and unrealized depreciation since the last Valuation Date.

<PAGE>

4.04     Contributions
         -------------

         Employer Discretionary Contributions may be made as set forth in Plan
         Sections 3.10 and 3.15 and the Appendix. To the extent Employer
         Discretionary Contributions may be made as set forth in the Appendix,
         they shall be allocated as follows:

         (a)  As of each Valuation Date which coincides with the fast day of the
              Plan Year, discretionary Employer Discretionary Contributions, if
              made, shall be allocated as set forth in the Appendix. Such
              amounts shall be allocated among Participants in the same
              proportion that each Participant's Compensation bears to the
              aggregate Compensation of all Participants eligible for Employer
              Discretionary Contributions.

         (b)  As of each Valuation Date, Employer Matching Contributions shall
              be allocated among those Participants who since the last Valuation
              Date made Pre-Tax Contributions and were eligible to receive an
              allocation as provided in the Appendix. Such amounts shall be
              allocated among Participants who made Pre-Tax Contributions in
              the matching percentage as set forth in the Appendix.

         (c)  As of each Valuation Date, the Pre-Tax Contribution Account, or
              Rollover Contribution Account, as applicable, of each Participant
              shall be increased by any Pre-Tax Contributions, or Rollover
              Contributions made by or on behalf of the Participant since the
              preceding Valuation Date pursuant to Article III.

4.05     Maximum Annual Additions
         ------------------------

         (a)  If the Employer Matching Contribution or Employer Discretionary
              Contribution that would otherwise be contributed or allocated to a
              Participant's Account would cause the annual additions for a
              Limitation Year to exceed the maximum permissible amount, the
              amount contributed or allocated will be reduced so that the annual
              additions for the Limitation Year will equal the maximum
              permissible amount.

              Prior to determining a Participant's actual Compensation for a
              Limitation Year, the Employer may determine the maximum
              permissible amount for a Participant on a basis of a reasonable
              estimate of a Participant's Compensation for the Limitation Year,
              uniformly determined for all Participants similarly situated. As
              soon as is administratively feasible after the end of the
              Limitation Year, the maximum permissible amount for the Limitation
              Year will be determined on the basis of the Participant's actual
              Compensation for the Limitation Year.

              If pursuant to the preceding paragraph there is an excess amount,
              the excess will be disposed of as follows:

              (1) Any unmatched Pre-Tax Contributions to the extent they would
                  reduce the excess amount will be returned to the Participant.

              (2) If after the application of paragraph (1) an excess amount
                  still exists, and the Participant is covered by the Plan at
                  the end of the Limitation Year, the excess amount in the
                  Participant's account will be used to reduce Employer
                  Discretionary Contributions (including any allocation of

<PAGE>

                   forfeitures) for such Participant in the next Limitation
                   Year, and each succeeding Limitation Year, if necessary.

              (3)  If after the application of paragraph (1) an excess amount
                   still exists, and the Participant is not covered by the Plan
                   at the end of the Limitation Year, the excess amount will be
                   held unallocated in a suspense account. The suspense account
                   will be applied to reduce future Employer Discretionary
                   Contributions (including allocation of any forfeitures) for
                   all remaining Participants in the next Limitation Year, and
                   each succeeding Limitation Year, if necessary.

              (4)  If a suspense account is in existence at any time during the
                   Limitation Year pursuant to this paragraph, it will not
                   participate in the allocation of investment gains and losses.
                   If a suspense account is in existence at any time during a
                   particular Limitation Year, all amounts in the suspense
                   account must be allocated and reallocated to Participants'
                   accounts before any Employer Discretionary Contributions may
                   be made to the Plan for that Limitation Year. Excess amounts
                   may not be distributed to Participants or former
                   Participants.

        (b)   Definitions.
              -----------

              (1)  Annual additions: The sum of the following amounts credited
                   ----------------
                   to a Participant's Account for the Limitation Year:

                   (A) Employer Discretionary Contributions (including Employer
                       Matching Contributions and Employer Discretionary
                       Contributions); and

                   (B) Employee contributions (but not including Rollover
                       Contributions).

              (2)  Compensation: Compensation as defined in Section 1.11 and
                   ------------
                   excluding the Employee Discretionary Contributions to a plan
                   of deferred compensation (other than as described in Section
                   402(g)(3) of the Code) which are not includable in the
                   Employee's gross income for the taxable year in which
                   contributed, or Employer Discretionary Contributions under a
                   simplified employee pension plan, or any distributions from a
                   plan of deferred compensation;

                   For purposes of applying the limitations of this Section
                   4.05, Compensation for a Limitation Year is the Compensation,
                   actually paid or made available in gross income during such
                   Limitation Year. For Limitation Years beginning on and after
                   January 1, 2001, compensation paid or made available during
                   such Limitation Year shall include elective amounts that are
                   not includible in the gross income of the employee by reason
                   of Code Section 132(f)(4).

              (3)  Defined contribution dollar limitation: $30,000, as adjusted
                   --------------------------------------
                   by the Secretary of the Treasury pursuant to Code Section
                   415(d). Effective as of January 1, 2002, the defined
                   contribution dollar limitation shall be

<PAGE>

                       $40,000, as adjusted by the Secretary of the Treasury
                       pursuant to Code Section 415(d).

                   (4) Employer: For purposes of this Section 4.05, Employer
                       --------
                       shall mean the Employer that adopts this Plan, and all
                       members of a controlled group of corporations (as defined
                       in Section 414(b) of the Code as modified by Section
                       415(h), all commonly controlled trades or businesses (as
                       defined in Section 414(c) as modified by Section 415(h))
                       or affiliated service groups (as defined in Section
                       414(m)) of which the adopting Employer is a part, and any
                       other entity required to be aggregated with the Employer
                       pursuant to regulations under Section 414(o) of the Code.

                   (5) Excess amount: The excess of the Participant's annual
                       -------------
                       additions for the Limitation Year over the maximum
                       permissible amount.

                   (6) Maximum permissible amount: The maximum annual addition
                       --------------------------
                       that may be contributed or allocated to a Participant's
                       Account under the Plan for any Limitation Year shall not
                       exceed tile lesser of:

                       (A) the defined contribution dollar limitation, or

                       (B) 100 percent of the Participant's Compensation for
                           Limitation Years after 2001, and 25 percent of the
                           Participant's Compensation for Limitation Years prior
                           to 2002.

4.06      Related Employers
          -----------------

          In the event that more than one Employer becomes signatory to the
          Plan, completely independent records, allocations and contributions
          shall be maintained for each Employer.

<PAGE>

                                    ARTICLE V

                                     VESTING
                                     -------

5.01     Pre-Tax Contributions, Rollover Contributions, Qualified Non-elective
         ---------------------------------------------------------------------
         Contributions and Qualified Employer Matching Contributions
         -----------------------------------------------------------

         A Participant or former Participant shall at all times be one hundred
         percent (100%) vested in his Pre-Tax Contribution Account and Rollover
         Contribution, if any, Account. Notwithstanding any other provision of
         the Plan, a Participant's right to his or her normal retirement benefit
         is nonforfeitable upon attainment of Normal Retirement Age while
         employed by the Employer, upon a Participant's death or Total and
         Permanent Disability, and upon termination of the Plan.

5.02     Employer Discretionary Contribution Account and Employer Matching
         -----------------------------------------------------------------
         Contribution Account
         --------------------

         A Participant or former Participant shall be vested in his Employer
         Discretionary Contribution Account and Employer Matching Contribution
         Account as set forth in the Appendix.

         Any amount in a Participant's Employer Discretionary Contribution
         Account and Matching Contribution Account which is not vested at the
         time of the Participant's separation from service shall be forfeited
         and allocated as provided in the Appendix.

5.03     Forfeitures
         -----------

         Forfeitures of Employer Discretionary Contributions and Employer
         Matching Contributions shall be used to reduce future Employer Matching
         Contributions.

<PAGE>

                                   ARTICLE VI

                           TIME AND METHOD OF PAYMENT
                           --------------------------

6.01     Distribution Events
         -------------------

         The Committee shall direct the Trustee to make payment of his Accounts
         to a Participant or his Beneficiary upon termination of the
         Participant's employment with the Employer (whether by reason of
         retirement on or after his Normal Retirement Age, death, Total and
         Permanent Disability, or for other reasons) as provided in this Article
         Vl.

6.02     Time of Payment
         ---------------

         (a)  The distribution of benefits to which a Participant becomes
              entitled as a result of retirement on or after his Normal
              Retirement Age, death, Total and Permanent Disability, or
              termination of employment will generally be made or commence, as
              of the Valuation Date following date the Trustee receives
              notification regarding the Participant's termination of employment
              or change in eligibility status. If the value of a Participant's
              Accounts exceeds $5,000 or ever exceeded, a distribution will
              occur before Normal Retirement Age only with the Participant's
              consent. However, at the election of the Participant or former
              Participant or Beneficiary, the Committee will defer commencement
              of payments to a later date, but not later than the applicable
              date specified in Section 6.04.

              Notwithstanding the foregoing, distribution to an Alternate Payee
              under a qualified domestic relations order under Code Section
              414(p) shall be made as of the Valuation Date following the date
              of receipt of such qualified order by the Plan Administrator or as
              of any subsequent Valuation Date, pursuant to the terms of such
              order.

         (b)  Except as provided herein, unless a Participant otherwise elects,
              the payment of benefits under the Plan to a Participant may not be
              delayed beyond the later of the sixtieth (60th) day after the
              close of the Plan Year in which the latest of the following events
              occurs:

              (1) the earlier of the date on which the Participant attains age
                  65 or Normal Retirement Age; or

              (2) the tenth (10th) anniversary of the year in which the
                  Participant commenced participation in the Plan; or

              (3) the Participant's termination of service with the Employer.

6.03     Method of Payment
         -----------------

         Except as otherwise provided in Article VII, payment to a Participant
         or his Beneficiary shall be made in accordance with one of the
         following forms, as applicable to such Participant or Beneficiary in
         accordance with the Appendix:

<PAGE>

         (a)  Annuity (including a Qualified Joint and Survivor Annuity or
              Qualified Pre-Retirement Survivor Annuity);

         (b)  Single sum, in cash or in kind,

         (c)  Installment payments;

         (d)  Cash-out; or

         (e)  Direct rollover.

6.04     Required Distribution Rules
         ---------------------------

         (a)  Notwithstanding any provision in this Plan to the contrary, a
              Participant's Accounts shall be distributed to him: (i) not later
              than April 1 of the calendar year following the calendar year in
              which the later occurs: (A) the Participant attains age 70 1/2, or
              (B) the Participant terminates employment with the Employer; or
              (ii) in the case of a 5% owner, not later than the April 1 of the
              calendar year in which the Participant attains age 70 1/2.
              Alternatively, installment payments or annuity payments to a
              Participant shall begin no later than the April 1 following such
              calendar year. Installment payments shall be made in an amount not
              less than the minimum required distribution amount as provided
              under Code Section 401(a)(9) and regulations promulgated
              thereunder. Annuity payments must be made over the life of the
              Participant (or the lives of the Participant and his Beneficiary)
              or a period not exceeding the life expectancy of the Participant
              or the life expectancies of the Participant and his Beneficiary.

         (b)  If the distribution of a Participant's interest has begun and the
              Participant dies before his entire interest has been distributed
              to him, the remaining portion of such interest shall be
              distributed at least as rapidly as under the method of
              distribution being used prior to the Participant's death.

         (c)  If a Participant dies before he has begun to receive any
              distributions of his interest under the Plan, the death benefit
              that is payable depends on whether the joint and survivor annuity
              requirements of Article VII apply, as determined under the terms
              of the Appendix. A Participant's entire interest must be
              distributed within five years of his death.

              (1) If the Joint and Survivor Annuity Requirements Apply. In this
                  ----------------------------------------------------
                  case, the death benefit shall be paid in the form of a
                  qualified pre-retirement survivor annuity ("QPSA") or, in the
                  event that the QPSA is defined to be less than 100% of the
                  Participant's vested Account balance, a non-QPSA payment. The
                  QPSA shall be payable in accordance with Section 7.02, unless
                  the Participant has waived such death benefit under the waiver
                  procedures described in that Section. In the event the
                  Participant has waived the QPSA, then such portion of the
                  benefit shall be payable in the same manner as the non-QPSA
                  death benefit. The non-QPSA death benefit is payable in the
                  form and at the time described in Section 6.02.

<PAGE>

               (2) If the Joint and Survivor Annuity Requirements Do Not Apply.
                   -----------------------------------------------------------
                   In this case, the entire death benefit is payable in the form
                   and at the time as described in Section 6.02.

          (d)  The 5-year distribution requirement of subsection (c) shall not
               apply to any portion of the deceased Participant's interest which
               is payable to or for the benefit of a designated Beneficiary. In
               such event, such portion may be distributed over the life of such
               designated Beneficiary (or over a period not extending beyond the
               life expectancy of such designated Beneficiary) provided such
               distribution begins not later than one year after the date of the
               Participant's death (or such later date as may be prescribed by
               Treasury regulations). However, in the event the Participant's
               spouse is his Beneficiary, the requirement that distributions
               commence within one year of a Participant's death shall not
               apply. In lieu thereof, such distribution must commence no later
               than the date on which the deceased participant would have
               attained age seventy and one-half (70 1/2). If the surviving
               spouse dies before the distributions to such spouse begin, then
               the 5-year distribution requirements of subsection (c) shall
               apply as if the spouse were the Participant.

          (e)  With respect to distributions under the Plan made on or after
               November 1, 2001 for calendar years beginning on or after January
               1, 2001, the Plan shall apply the minimum distribution
               requirements of Section 401(a)(9) of the Code in accordance with
               the proposed regulations under Section 401(a)(9) that were issued
               on January 17, 2001 (the 2001 Proposed Regulations),
               notwithstanding any provision of the Plan to the contrary. If the
               total amount of the required minimum distributions made to a
               Participant for 2001 prior to October 5, 2001 are equal to or
               greater than the amount of required minimum distributions
               determined under the 2001 Proposed Regulations, then no
               additional distributions are required for such Participant for
               2001 on or after such date. If the total amount of required
               minimum distributions made to a Participant for 2001 prior to
               October 5, 2001 are less than the amount determined under the
               2001 Proposed Regulations, then the amount of required minimum
               distributions for 2001 on or after such date will be determined
               so that the total amount of required minimum distributions for
               2001 is the amount determined under the 2001 Proposed
               Regulations. This provision shall continue in effect until the
               last calendar year beginning before the effective date of the
               final regulations under section 401(a)(9) or such other date as
               may be published by the Internal Revenue Service.

6.05      Distribution of Unallocated Contribution
          ----------------------------------------

          If, on the date of termination of a Participant's employment, an
          Employer shall be holding Plan contributions made by or on behalf of
          the Participant, but not yet allocated to his specific Accounts, the
          Employer shall pay such amounts either directly to the Participant (or
          his Beneficiary, as the case may be), or to the Trustee, to be
          distributed by the Trustee in accordance with the method of
          distribution determined under Section 6.03.

6.06      Certain Delayed Payments
          ------------------------

          If the amount of the payment required to commence on the date
          determined under Section 6.02 cannot be ascertained by such date, a
          payment retroactive to such date may

<PAGE>

      be made no later than sixty (60) days after the earliest date on which the
      amount of such payment can be ascertained under the Plan.

6.07  Beneficiary
      -----------

      The Participant may designate a Beneficiary to receive the death benefits
      described in Section 6.04. Any Beneficiary designation is subject to the
      rules under (a) through (d) below.

      (a)  Spousal Consent to Beneficiary designation - Post-Retirement Death
           ------------------------------------------------------------------
           Benefit. If a Participant is married at the time distribution
           -------
           commences to the Participant, the Beneficiary of any post-retirement
           death benefit is the Participant's surviving spouse, regardless of
           whether the Joint and Survivor Annuity requirements of Article VII
           apply, unless there is no surviving spouse or the spouse has
           consented to the Beneficiary designation in a manner that is
           consistent with the requirements for a "qualified election" under
           Section 7.03(d), or makes a valid disclaimer of the benefit. If the
           Joint and Survivor Annuity requirements apply, the spouse is
           determined as of the "annuity starting date" for purposes of the
           spousal consent requirements. If the Joint and Survivor Annuity
           requirements do not apply, the spouse is determined as of the
           Participant's date of death for purposes of this spousal consent
           requirement.

      (b)  Spousal Consent to Beneficiary designation - Pre-Retirement Death
           -----------------------------------------------------------------
           Benefit. The terms of the Appendix set forth whether the Joint and
           -------
           Survivor Annuity requirements apply.

           (1)  If the Joint and Survivor Annuity Requirements Apply. In this
                ----------------------------------------------------
                case, the QPSA death benefit may be payable to a non-spouse
                Beneficiary only if the spouse consents to the Beneficiary
                designation, pursuant to the "qualified election" requirements
                under Section 7.03(d) or makes a valid disclaimer. The non-QPSA
                death benefit, if any, is payable to the person named in the
                Beneficiary designation, without regard to whether spousal
                consent is obtained for such designation. Thus, if a spouse does
                not properly consent to a Beneficiary designation, the QPSA
                waiver is invalid, and the QPSA death benefit is still payable
                to the spouse, but the Beneficiary designation remains valid
                with respect to any non-QPSA death benefit.

           (2)  If the Joint and Survivor Annuity requirements do no apply. In
                ----------------------------------------------------------
                this case, the surviving spouse (determined at the time of the
                Participant's death), if any, must be treated as the sole
                Beneficiary, regardless of any contrary Beneficiary designation,
                unless there is no surviving spouse, or the spouse has consented
                to the Beneficiary designation in a manner that is consistent
                with the requirements for a "qualified election" under Section
                7.03(d) or makes a valid disclaimer.

      (c)  Default beneficiaries. To the extent a Beneficiary has not been named
           ---------------------
           by the Participant (subject to the spousal consent rules discussed
           above) and is not designated under the terms of this Plan to receive
           all or any portion of the deceased Participant's death benefit, such
           amount shall be distributed to the Participant's surviving spouse (if
           the Participant was married at the time of death).

<PAGE>

           If the Participant does not have a surviving spouse at the time of
           death, distribution will be made to his named secondary beneficiary.
           If the Participant does not have a surviving spouse or a named
           secondary beneficiary, the distribution will be made to his estate.

      (d)  Subject to subsection (b) of this Section 6.07, each Participant or
           former Participant shall have the right to designate, in a manner
           prescribed by the Committee, a person or persons, or entity or
           entities, to receive any benefits which may become payable upon his
           death or any installments under Section 6.03(b) remaining unpaid at
           his death. Successive designations may be made, and the last valid
           designation received by the Committee prior to the Participant's
           death shall be effective and shall revoke all prior designations. If
           a designated Beneficiary shall die before the Participant or former
           Participant, his interest shall terminate and, unless otherwise
           provided in the written designation, such interest shall be paid in
           equal shares to those Beneficiaries, if any, who survive the
           Participant or former Participant. The Participant or former
           Participant shall have the right to revoke the designation of any
           Beneficiary without the consent of the Beneficiary, unless such
           Beneficiary is the spouse of the Participant.

      (e)  Notwithstanding any provision in the Plan to the contrary, the
           designated Beneficiary of a married Participant shall be his spouse,
           unless the spouse consents, in writing, to a designation by the
           Participant of a different Beneficiary (which consent shall be in
           accordance with Section 6.10).

      (f)  The Committee may determine the identity of the distributees and in
           so doing may act and rely upon any information it may deem reliable
           upon reasonable inquiry, or upon any affidavit, certificate, or other
           paper believed by it to be genuine, or upon any evidence believed by
           its sufficient.

6.08  Administrative Powers Relating to Payments
      ------------------------------------------

      If a Participant, former Participant or Beneficiary is under a legal
      disability or, by reason of illness or mental or physical disability, is
      unable, in the opinion of the Committee, to attend properly to his
      personal financial matters, the Trustee may make such payments in such of
      the following ways as the Committee shall direct:

      (a)  To such Participant, former Participant or Beneficiary;

      (b)  To the legal representative of such Participant, former Participant
           or Beneficiary; or

      (c)  To the legal guardian of the Participant or Beneficiary, for the
           benefit of such Participant, former Participant, or Beneficiary.

      Any payment made pursuant to this Section 6.08 shall be in complete
      discharge of the obligation for such payment under the Plan.

6.09  Small Amounts
      -------------

      If the value of the Participant's Accounts does not exceed $5,000 and has
      not exceeded $5,000 at the time of any prior distribution, the Committee
      shall direct that such benefit be paid to the Participant or Beneficiary
      in a single sum in cash. Provided, however, if the

<PAGE>

      value of the Participant's Accounts exceeds $5,000 or has ever exceeded
      $5,000, a distribution shall occur prior to age 65 only with the
      Participant's consent.

6.10  Consents, Elections and Revocations
      -----------------------------------

      Any consents, elections and revocations provided for in this Article VI
      shall be made by the Participant in writing during the applicable election
      period. If the Participant's spouse is required to join in any such
      consent or election, such spouse's consent must acknowledge the effect of
      such election and be witnessed by a Plan representative or a notary
      public. At the time of such election, the Participant shall designate a
      Beneficiary or a form of benefit which may not be changed without spousal
      consent. Such spousal 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 exist that may be prescribed by Treasury regulations.
      The election made by the Participant and consented to by his spouse may be
      revoked by the Participant in writing without the consent of the spouse at
      any time during the applicable election period. Any new election must
      comply with the requirements of this Section 6.10 of the Plan. A former
      spouse's waiver shall not be binding on a new spouse.

6.11  Hardship Withdrawals
      --------------------

      A Participant who has a Pre-Tax Contribution Account may elect in writing
      to withdraw at any time any amount up to the lesser of (i) the balance of
      his Pre-Tax Contribution Account, or (ii) the balance of his Pre-Tax
      Contribution Account reduced by all allocations of earnings and increased
      by all allocations of losses subject to the following conditions:

      (a)  Any request for a withdrawal must be submitted in accordance with
           procedures established by the Committee.

           All hardship withdrawals are subject to approval by the Committee.
           Such a withdrawal shall be permitted only to the extent that the
           withdrawal is made on account of a hardship based on a Participant's
           immediate and heavy financial need and is necessary to satisfy such
           financial need.

      (b)  For purposes of this Section; hardship is defined as an immediate and
           heavy financial need of the Participant where such Participant lacks
           other available resources. Financial needs considered immediate and
           heavy shall include:

           (i)   nonreimbursable medical expenses (within the meaning of Section
                 213(d) of the Code) of the Participant, or the Participant's
                 spouse, children, or dependents (as defined in Section 152 of
                 the Code);

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

           (iii) payment of tuition, or related educational fees, and room and
                 board expenses, for the next 12 months of post-secondary
                 education for the Participant, the Participant's spouse,
                 children or dependents (as defined in Section 152 of the Code);
                 or

<PAGE>

           (iv)  the need to prevent the eviction of the Participant from, or a
                 foreclosure on the mortgage of, the Participant's principal
                 residence.

      (c)  A distribution generally may be treated as necessary to satisfy a
           financial need if the Employer relies upon the Employee's written
           representation, unless the Employer has actual knowledge to the
           contrary, that the need cannot reasonably be relieved:

           (1)  Through reimbursement or compensation by insurance or otherwise;

           (2)  By liquidation of the Employee's assets;

           (3)  By cessation of elective contributions or Employee contributions
                under the Plan; or

           (4)  By other distributions or nontaxable (at the time of the loans)
                loans from plans maintained by the Employer or by any other
                employer, or by borrowing from commercial sources on reasonable
                commercial terms, in an amount sufficient to satisfy the need.

      (d)  Such a withdrawal shall be charged against the Participant's Pre-Tax
           Contribution Account.

      (e)  Participants are prohibited from making Pre-Tax Contributions for a
           period of 12 months following receipt of a hardship withdrawal.

6.12  Eligible Rollover Distributions
      -------------------------------

      (a)  Notwithstanding any provision of the Plan to the contrary that would
           otherwise limit a distributee's election under this Section 6.12, a
           distributee may elect, at the time and in the manner prescribed by
           the Plan Administrator, to have any portion of an eligible rollover
           distribution paid directly to an eligible retirement plan specified
           by the distributee in a direct rollover.

      (b)  Definitions
           -----------

           (1)  "Eligible rollover distribution" -- An eligible rollover
                distribution is any distribution of all or any portion of the
                balance to the credit of the distributee, except that an
                eligible rollover distribution does not include: any
                distribution that is one of a series of substantially equal
                periodic payments (not less frequently than annually) made for
                the life (or life expectancy) of the distributee or the joint
                lives (or, joint life expectancies) of the distributee and the
                distributee's designated beneficiary, or for a specified period
                of ten years or more; any distribution to the extent such
                distribution is required under Section 401(a)(9) of the Code;
                the portion of any distribution that is not includable in gross
                income (determined without regard to the exclusion for net
                unrealized appreciation with respect to employer securities);
                and any hardship distribution described in Code Section
                401(K)(2)(B)(i)(iv).

<PAGE>

           (2)  "Eligible retirement plan" -- An eligible retirement plan is an
                individual retirement account described in Section 408(a) of the
                Code, an individual retirement annuity described in
                Section.408(b) of the Code, an annuity plan described in Section
                403(a) of the Code, or a qualified trust described in Section
                401(a) of the Code, that accepts the distributee's eligible
                rollover distribution. However, in the case of an eligible
                rollover distribution to the surviving spouse, an eligible
                retirement plan is an individual retirement account or
                individual retirement annuity.

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

           (4)  "Direct rollover" -- A direct rollover is a payment by the Plan
                to the eligible retirement plan specified by the distributee.

      (c)  If a distribution is one to which Sections 401(a)(11) and 417 of the
           Internal Revenue Code do not apply, such distribution may commence
           less than 30 days after the notice required under Section
           1.411(a)-11(c) of the Income Tax Regulations is given, provided that:

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

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

6.13  Loans
      -----

      Upon the application of any Participant, using the method selected by the
      Committee, a loan or loans from the Participant's Accounts to such
      Participant may be granted in accordance with rules established by the
      Committee and upon the following specific conditions:

      (a)  The loan is none which is not made available to highly-compensated
           Participants in an amount greater in proportion to the size of such
           Participants' Accounts than that available to other Participants;

      (b)  The loan shall bear reasonable interest consistant with its nature as
           a prudent investment of the Trust. At the time any loan is approved,
           the Committee shall establish a reasonable interest rate thereon,
           taking into account such factors as (i) the amount of the requested
           loan; (ii) the term during which the requested loan would be
           outstanding, and (iii) the security held under the requested loan;

      (c)  The loan shall be adequately secured by assignment of a portion of
           the Participant's Accounts in an amount equal to the principal amount
           of the loan. In

<PAGE>

           the event that a Participant shall default upon his obligation to
           repay amounts loaned to him, the Trustee may offset amounts owed by
           such Participant against benefits owed to him hereunder without being
           in violation of Section 13.04. To the extent the loan is secured
           against an Account that is subject to the terms of Article VII, such
           loan may not be made without the prior written consent of the
           Participant's spouse. In addition, any Participants employed by ICI
           must obtain spousal consent prior to securing a loan;

      (d)  The minimum amount shall be $1,000.

      (e)  The maximum amount which may be loaned hereunder to any Participant
           will be established by the Committee and, whether by one or more
           loans, shall not exceed the lesser of (i) $50,000, reduced by the
           excess (if any) of the highest outstanding balance of all loans to
           the Participant from all tax_qualified plans of the Employer during
           the one_year period ending on the day before the date on which such
           loan is made, over the outstanding balance of all loans to the
           Participant from all tax_qualified plans of the Employer on the date
           on which such loan is made, or (ii) fifty percent (50%) of the vested
           balance of the Participant's Accounts;

      (f)  Any loan shall by its terms require that repayment of principal and
           interest be amortized in level payments not extending beyond five
           years from the date of the loan, unless such loan is used to acquire
           a dwelling unit which within a reasonable time will be used as the
           principal residence of the Participant; and

      (g)  Subject to the terms set forth in the Appendix, the Committee shall
           adopt a loan policy, provided that it shall not conflict with the
           Plan. Such Participant loan program shall be contained in a separate
           written document which, when properly executed, is hereby
           incorporated by reference and made a part of this Plan.

<PAGE>

                                   ARTICLE VII

                     JOINT AND SURVIVOR ANNUITY REQUIREMENTS
                     ---------------------------------------

This Article provides rules concerning the application of the Joint and Survivor
Annuity requirements under this Plan. The provisions of this Article apply only
as provided in the Appendix.

7.01  Qualified Joint-and Survivor Annuity
      ------------------------------------

      If the Joint and Survivor Annuity requirements apply to a Participant as
      set forth in the Appendix, any distribution from the Plan to that
      Participant must be in the form of a qualified joint and survivor annuity
      ("QJSA") (as defined in Section 7.03(a), unless the Participant (and the
      Participant's spouse, if the Participant is married) elects to receive the
      distribution in an alternative form. Any election of an alternative form
      of distribution must be pursuant to a "qualified election." Only the
      Participant shall be required to consent (pursuant to Section 7.06) to the
      commencement of a distribution in the form of a QJSA.

7.02  Qualified Pre-retirement Survivor Annuity
      -----------------------------------------

      If the Joint and Survivor Annuity requirements apply to a Participant who
      dies before the annuity starting date, the spouse of that Participant is
      entitled to receive a qualified pre-retirement survivor annuity ("QPSA")
      (as defined in Section 7.03(b)), unless the Participant and spouse have
      waived the QPSA pursuant to the requirements for a "qualified election." A
      surviving spouse is not entitled to a QPSA benefit if the Participant and
      surviving spouse were not married throughout the one year period ending on
      the date of the Participant's death. Any portion of a Participant's vested
      Account balance that is not payable to the surviving spouse as a QPSA (or
      other form elected by the surviving spouse) constitutes a non-QPSA death
      benefit and is payable under the rules described in Section 6.02.

7.03  Definitions
      -----------

      (a)  Qualified Joint and Survivor Annuity("QJSA")
           --------------------------------------------

           A QJSA is an immediate annuity payable over the life of the
           Participant with a survivor annuity payable over the life of the
           spouse. If the Participant is not married as of the "annuity starting
           date", the QJSA is an immediate annuity payable over the life of the
           Participant. The survivor annuity must provide for payments to the
           surviving spouse equal to 50% of the payments which the Participant
           is entitled under the annuity during the joint lives of the
           Participant and the spouse.

      (b)  Qualified Preretirement Survivor Annuity ("QPSA")
           -------------------------------------------------

           A QPSA is an annuity payable over the life of the surviving spouse
           which is purchased using 50% of the Participant's vested Account
           Balance as of the date of the death. The remaining vested Account
           Balance will be distributed in accordance with the death distribution
           provisions under Section 6.04.

<PAGE>

           The surviving spouse may elect to have the QPSA distributed at any
           time following the Participant's death (subject to the required
           minimum distribution rules under Article VI) and may elect to receive
           distribution in any form permitted under Section 6.03 of the Plan. If
           the surviving spouse fails to elect distribution upon the
           Participant's death, the QPSA benefit will be distributed in
           accordance with Section 6.04.

      (c)  Annuity Starting Date
           ---------------------

           The "annuity starting date" is the date an employee commences
           distributions from the Plan. If distribution is made in the form of
           an annuity, the "annuity starting date" is the first day of the first
           period for which annuity payments are made.

      (d)  Qualified Election
           ------------------

           A Participant (and the Participant's spouse) may waive the QJSA or
           QPSA pursuant to a "qualified election". If it is established to the
           satisfaction of a Plan representative that there is no spouse or that
           the spouse cannot be located, any waiver signed by the Participant is
           deemed to be a "qualified election". For this purpose, a former
           spouse of the Participant will be treated as the spouse or surviving
           spouse and any current spouse will not be treated as the spouse or
           surviving spouse to the extent provided under a qualified domestic
           relations order ("QDRO").

           A "qualified election" is a written election signed by both the
           Participant and the Participant's spouse (if applicable), which
           specifically acknowledges the effect of the. election. The spouse's
           consent must be witnessed by a plan representative or notary public.
           In the case of a waiver of the QJSA, the election must designate an
           alternative form of benefit payment, which may not be changed without
           spousal consent (unless the spouse expressly permits the Participant
           to change the form of payment without any further spousal consent.)
           In the case of a waiver of the QPSA, the election must be made within
           the "QPSA election period" and the election must designate a specific
           alternate Beneficiary, including any class of Beneficiaries of any
           contingent Beneficiaries, which may not be changed without spousal
           consent (unless the spouse expressly permits the Participant to
           change the Beneficiary designation without any further spousal
           consent.)

           Any consent by a spouse under a "qualified election" (or the
           determination that the consent of a spouse is not required) shall be
           effective only with respect to such spouse. If the "qualified
           election" permits the Participant to change a payment form or
           Beneficiary designation without any further consent by the spouse,
           the "qualified election" must acknowledge that the spouse has the
           right to limit consent to a specific form of benefit or a specific
           Beneficiary, as applicable, and that the spouse voluntarily elects to
           relinquish either or both of such rights. A revocation of a prior
           waiver may be made by a Participant without the consent of the spouse
           at any time before the commencement of benefits. No consent obtained
           under this provision shall be valid unless the Participant has
           received notice as provided in Section 7.05 below.

      (e)  QPSA Election Period
           --------------------

<PAGE>

           A Participant (and the Participant's spouse) may waive the QPSA at
           any time during the "QPSA election period." The "QPSA election
           period" is the period beginning on the first day of the Plan Year in
           which the Participant attains age 35 and ending on the date of the
           Participant's death. If a Participant separates from service prior to
           the first day of the Plan Year in which age 35 is attained, with
           respect to the Account balance as of the date of separation, the
           "QPSA election period" begins on the date of separation.

      (f)  Pre-Age 35 Waiver
           -----------------

           A Participant who as not yet attained age 35 as of the end of a Plan
           Year may make a special "qualified election" to waive, with spousal
           consent, the QPSA for the period beginning on the date of such
           election and ending on the first day of the Plan Year in which the
           Participant will attain age 35. Such election is not valid unless the
           Participant receives the proper notice required under Section 7.04
           below. QPSA coverage is automatically reinstated as of the first day
           of the Plan Year in which the Participant attains age 35. Any new
           waiver on or after such date must satisfy all the requirements for a
           "qualified election".

7.04  Notice Requirements
      -------------------

      (a)  For Qualified Joint and Survivor Annuity ("QJSA")

           In the case of a QJSA, the Plan Administrator shall provide each
           Participant with a written explanation of: (1) the terms and
           conditions of the QJSA; (2) the Participant's right to make and the
           effect of an election to waive the QJSA form of benefit; (3) the
           rights of the Participant's spouse; and (4) the right to make, and
           the effect of, a revocation of a previous election to waive the QJSA.
           The notice must be provided to each Participant under the Plan no
           less than 30 days and no more than 90 days prior to the "annuity
           starting date".

           A Participant may commence receiving a distribution in a form other
           than a QJSA less than 30 days after receipt of a written explanation
           described in the preceding paragraph provided: (1) the Participant
           has been provided with information that clearly indicates that the
           Participant has at least 30 days to consider whether to waive the
           QJSA and elect (with spousal consent) a form of distribution other
           than a QJSA; (2) the Participant is permitted to revoke any
           affirmative distribution election at least until the "annuity
           starting date" or, if later, at any time prior to the expiration of
           the 7-day period that begins the day after the explanation of the
           QJSA is provided to the Participant; and (3) the "annuity starting
           date" is after the date the written explanation was provided to the
           Participant. The "annuity starting date" may be a date prior to the
           date the written explanation is provided to the Participant if the
           distribution does not commence until at least 30 days after such
           written explanation is provided, subject to the waiver of the 30-day
           period.

      (b)  For Qualified Pre-retirement Survivor Annuity ("QPSA")

           In the case of a QPSA, the Plan Administrator shall provide each
           Participant within the applicable period for such Participant a
           written explanation of the QPSA in such terms and in such manner as
           would be comparable to the explanation provided for the QJSA in
           Section (a) above. The applicable period for a

<PAGE>

           Participant is whichever of the following periods ends last: (1) the
           period beginning with the first day of the Plan Year in which the
           Participant attains age 32 and ending with the close of the Plan Year
           preceding the Plan Year in which the Participant attains age 35; (2)
           a reasonable period ending after the individual becomes a
           Participant; or (3) a reasonable period ending after the joint and
           survivor annuity requirements first apply to the Participant.
           Notwithstanding the foregoing, notice must be provided within a
           reasonable period ending after separation from service in the case of
           a Participant who separates from service before attaining age 35.

           For purposes of applying the preceding paragraph, a reasonable period
           ending after the enumerated events described in (2) and (3) is the
           end of the two-year period beginning one year prior to the date the
           applicable event occurs, and ending one year after that date. In the
           case of a Participant who separates from service before the Plan Year
           in which age 35 is attained, notice shall be provided within the
           two-year period beginning one year prior to separation and ending one
           year after separation. If such a Participant thereafter returns to
           employment with the employer, the applicable period for such
           Participant shall be redetermined.

7.05  Exception to the Joint and Survivor Annuity Requirements
      --------------------------------------------------------

      If as of the "annuity starting date", the vested Account balance (if the
      QJSA is payable) or the value of the QPSA death benefit does not exceed
      $5,000, the Participant or surviving spouse, as applicable, will receive a
      lump sum distribution pursuant to Section 6.09, in lieu of any QJSA or
      QPSA benefits. If a Participant's vested Account Balance exceeds $5,000 at
      the time of any distribution from the Plan, the Participant's vested
      Account Balance is deemed to exceed $5,000 for purposes of determining
      whether the QJSA is payable. The rule in the preceding sentences is known
      as the "lookback rule." The lookback rule will not apply to the QJSA or
      QPSA requirements after the effective date of any repeal of the lookback
      rule that is announced in final regulations issued by the Internal Revenue
      Service.

<PAGE>

                                  ARTICLE VIII

                              TOP-HEAVY PROVISIONS
                              --------------------

The provisions of this Article VIll shall not apply to Participants who are
members of Teamsters Local 743.

8.01  Definitions
      -----------

      For the purpose of this Article VILL, the following terms, when used with
      initial capital letters, shall have the following respective meanings:

      (a)  Aggregation Group
           -----------------

           Permissive Aggregation Group or Required Aggregation Group, as the
           context shall require.

      (b)  Compensation
           ------------

           The amount of Compensation from an Employer that would be stated on a
           Participant's Form W-2 for federal income tax purposes for the
           calendar year that ends with or within the Plan Year.

      (c)  Determination Date
           ------------------

           For any Plan Year, the last day of the immediately preceding Plan
           Year, except that in the case of the first Plan Year, the
           Determination Date shall be the last day of such first Plan Year.

      (d)  Extra Top-Heavy Group
           ---------------------

           An Aggregation Group if, as of the Determination Date, the sum of the
           present value of the aggregate accrued benefits for Key Employees
           under all defined benefit plans included in the Aggregation Group and
           benefit plans included in the Aggregation Group and the aggregate of
           the accounts of Key Employees under all defined contribution plans
           included in the Aggregation Group is more than ninety percent (90%)
           of a similar sum determined for all Employees in such plans. For
           purposes of determining such sums, aggregate distributions made to
           any Employee during the five (5) consecutive Plan Years ending with
           the Plan Year that includes the Determination Date shall be included.
           The aggregate accrued benefits and/or the aggregate of accounts of
           former Employees who have not performed any service for an Employer
           maintaining the Plan at any time during the five-year period ending
           on the Determination Date shall be excluded from the foregoing
           calculation.

      (e)  Extra Top-Heavy Plan
           --------------------

           (1)  Except as provided by paragraph (2) of this subsection, the Plan
                shall be an Extra Top-Heavy Plan if as of a Determination Date:

<PAGE>

                (A)  the aggregate of Top-Heavy Account Balances for Key
                     Employees is more than ninety percent (90%) of the
                     aggregate of the Top-Heavy Account Balances for all
                     Employees, excluding for this purpose the aggregate
                     Top-Heavy Account Balances of Former Key Employees; or

                (B)  the Plan is included in a Required Aggregation Group which
                     is an Extra Top-Heavy Group.

           (2)  If the Plan is included in a Permissive Aggregation Group which
                is not an Extra Top-Heavy Group, the Plan shall not be an Extra
                Top-Heavy Plan notwithstanding the fact that the Plan would
                otherwise be an Extra Top-Heavy Plan under paragraph (1) of
                this subsection.

      (f)  Former Key Employee
           -------------------

           A Non-Key Employee with respect to a Plan Year who was a Key Employee
           in a prior Plan Year. Such term shall also include his Beneficiary in
           the event of his death.

      (g)  Key Employee
           ------------

           An Employee or former Employee (and the Beneficiaries of such
           Employee) who, at any time during the current Plan Year or any of the
           four preceding Plan Years, is:

           (1)  an officer of the Employer having an annual Compensation greater
                than 150% of the amount in effect under Section 415(b)(1)(A) of
                the Code for any such Plan Year (limited to no more than fifty
                (50) Employees or, if lesser, the greater of three (3) or ten
                percent (10%) of the Employees);

           (2)  one of the ten (10) Employees who, (A) owns (or are considered
                as owning within the meaning of Section 318 of the Code) during
                the Plan Year containing the Determination Date or any of the
                four preceding Plan Years the largest percentage ownership
                interests in value of the Employer and (B) have, during the Plan
                Year of ownership, annual Compensation from the Employer of more
                than the limitation in effect under Section 415(c)(1)(A) of the
                Code for the calendar year in which such Plan Year ends;

           (3)  a five percent (5%) owner (as such term is defined in Section
                16(i)(1)(B)(i) of the Code); or

           (4)  a one percent (1%) owner (as such term is defined in Section
                416(i)(1)(B)(ii) of the Code) having an annual Compensation of
                more than $150,000.

           The term "Key Employee" shall also include such Employee's
           Beneficiary in the event of his death.

      (h)  Non-Key Employee
           ----------------

<PAGE>

           An Employee or former Employee who is not a Key Employee. Such term
           shall also include his Beneficiary in the event of his death.

      (i)  Permissive Aggregation Group
           ----------------------------

           The group of qualified plans of an Employer consisting of:

           (1)  the plans in the Required Aggregation Group; plus

           (2)  one (1) or more plans designated from time to time by the
                Employer that are not part of the Required Aggregation Group but
                that satisfy the requirements of Sections 401(a)(4) and 410 of
                the Code when considered with the Required Aggregation Group.

      (j)  Required Aggregation Group
           --------------------------

           The group of qualified plans of an Employer consisting of:

           (1)  each plan in which a Key Employee participates in the Plan Year
                containing the Determination Date, or any of the four (4)
                preceding Plan Years, plus

           (2)  each other plan which enables a plan in which a Key Employee
                participates to meet the requirements of Section 401(a)(4) or
                410 of the Code.

      (k)  Top-Heavy Account Balances
           --------------------------

           An Employee's or former Employee's (or his Beneficiary's) aggregate
           balance standing to his Account as of the Valuation Date coinciding
           with or immediately preceding the Determination Date (as adjusted by
           the amount of any Employer Discretionary Contributions made or due to
           be made after such Valuation Date but before the expiration of the
           extended payment period in Section 412(c)(10) of the Code), provided,
           however, that such balance shall include the aggregate distributions
           made to such Employee or former Employee (or Beneficiary) during the
           five (5) consecutive Plan Years ending with the Plan Year that
           includes the Determination Date. The Account of a former Employee who
           had not performed any service with any Employer during the five-year
           period ending on the Determination Date shall be excluded in
           determining Top-Heavy Account Balances under the Plan.

      (l)  Top-Heavy Group
           ---------------

           An Aggregation Group if, as of the Determination Date, the sum of the
           present value of the aggregate accrued benefits for Key Employees
           under all defined benefit plans included in the Aggregation Group and
           the aggregate of the Accounts of Key Employees under all defined
           contribution plans included in the Aggregation Group is more than
           sixty percent (60%) of a similar sum determined for all Employees in
           such plans. For purposes of determining such sums, aggregate
           distributions made to any Employee during the five (5) consecutive

<PAGE>

           Plan Years ending with the Plan Year that includes that Determination
           Date shall be included. The aggregate accrued benefits and/or the
           aggregate of Accounts of former Employees who have not performed any
           service for any Employer maintaining the Plan at any time during the
           five-year period ending on the Determination Date shall be excluded
           from the foregoing calculation.

      (m)  Top-Heavy Plan
           --------------

           (1)  Except as provided by paragraph (2) of this subsection, the Plan
                shall be a Top-Heavy Plan, if as of a Determination Date:

                (A)  the aggregate of Top-Heavy Account Balances for Key
                     Employees is more than sixty percent (60%) of the aggregate
                     of the Top-Heavy Account Balances for all Employees,
                     excluding for this purpose the aggregate Top-Heavy Account
                     Balances for Former Key Employees; or

                (B)  the Plan is included in a Required Aggregation Group which
                     is a Top-Heavy Group.

           (2)  If the Plan is included in a Permissive Aggregation Group which
                is not a Top-Heavy Group, the Plan shall not be a Top-Heavy Plan
                notwithstanding the fact that the Plan would otherwise be a
                Top-Heavy Plan under paragraph (1) of this subsection.

8.02  Top-Heavy Plan Requirements
      ---------------------------

      Notwithstanding any other provisions of the Plan to the contrary, if the
      Plan is a Top-Heavy Plan for any Plan Year, the Plan shall then satisfy
      the following requirements for such Plan Year:

      (a)  the minimum vesting requirement as set forth in Section 8.03;

      (b)  the minimum contribution requirement as set forth in Section 8.04;

      (c)  the adjustment to maximum benefits and allocations as set forth in
           Section 8.05.

8.03  Minimum Vesting Requirement
      ---------------------------

      A Participant or former Participant shall at all times be one hundred
      percent (100%) vested in his Accounts.

8.04  Minimum Contribution Requirement
      --------------------------------

      (a)  If the Plan is a Top-Heavy Plan for any Plan Year, then each
           Participant who is a Non-Key Employee shall be entitled to an
           allocation from Employer Base Contributions which is at least equal
           to three percent (3%) of his Compensation for such Plan Year).

      (b)  The percentage minimum contribution requirement set forth in
           paragraph (a) with respect to a Plan Year shall not exceed the
           percentage at which Employer

<PAGE>

                  Discretionary Contributions, including Pre-Tax Contributions,
                  are made (or required to be made) under the Plan for such Plan
                  Year for the Key Employee for whom such percentage is the
                  highest for such Plan Year. The determination referred to in
                  the immediately preceding sentence shall be determined for
                  each Key Employee by dividing the Employer Discretionary
                  Contributions (including amounts that the Employee elects to
                  defer pursuant to Section 401(k) of the Code) allocated to
                  such Key Employee in that Plan Year by such Key Employee's
                  Compensation for such Plan Year.

         (c)      The percentage minimum contribution requirement as set forth
                  in paragraph (a) above may also be reduced or eliminated in
                  accordance with Section 8.05.

         (d)      For purposes of paragraph (b) above, contributions taken into
                  account shall include like contributions under all other
                  defined contribution plans in the Required Aggregation Group,
                  excluding any such plan in the Required Aggregation Group if
                  that plan enables a defined benefit plan in such Required
                  Aggregation Group to meet the requirements of Section
                  401(a)(4) or Section 410 of the Code.

         (e)      The minimum benefit provided for herein shall be made even
                  though, under other Plan provisions, the Participant would not
                  otherwise be entitled to receive an allocation, or would have
                  received a lesser allocation for the Plan Year because of:

                  (1)    the Participant's failure to complete 1,000 Hours of
                         Service; or

                  (2)    Compensation less than a stated amount.

                  The preceding sentence shall not apply to any Participant who
                  was not employed by the Employer on the last day of the Plan
                  Year. Further, said sentence shall not apply to any
                  Participant to the extent the Participant is covered under any
                  other plan or plans of an Employer and the minimum allocation
                  of benefit requirement applicable to Top-Heavy Plans will be
                  met in the other plan or plans.

                  In the event that a Participant participates in both a defined
                  benefit and a defined contribution plan sponsored by an
                  Employer, the minimum contribution/benefit required by Section
                  416(c) of the Code shall be provided under the defined benefit
                  plan.

8.05     Coordination with Other Plans
         -----------------------------

         (a)      In applying this Article VIII, an Employer required to be
                  combined under Section 414(b), (c), or (m) of the Code shall
                  be treated as a single employer, and the qualified plans
                  maintained by such single employer shall be taken into
                  account.

         (b)      In the event that another defined contribution plan or defined
                  benefit plan maintained by an Employer provides contributions
                  or benefits on behalf of Participants in this Plan, such other
                  plan(s) shall be taken into account in determining whether
                  this Plan satisfies Section 8.02; and the minimum contribution
                  required for a Non-Key Employee in this Plan under Section
                  8.04 will be reduced or eliminated, in accordance with the
                  requirements of Section 416 of

<PAGE>

                  the Code and the Regulations thereunder, if a minimum
                  contribution or benefit is made or accrued in whole or in part
                  in respect of such other plan(s).

<PAGE>

                                     ARTICLE

                               MANAGEMENT OF FUNDS
                               -------------------

9.01     Trust Agreement
         ---------------

         The Employer has entered into a Trust with the Trustee to hold the fund
         necessary to provide the benefits under this Plan. The Trust shall be
         deemed to form a part of the Plan, and all rights of Participants or
         others under this Plan shall be subject to the provisions of the Trust.

9.02     Exclusive Benefit
         -----------------

         Contributions and earnings thereon shall be received, held in Trust,
         and disbursed by the Trustee in accordance with the provisions of the
         Trust and this Plan. No part of the Trust shall be used for or diverted
         to purposes other than for the exclusive benefit of Participants,
         former Participants, retired Participants, disabled Participants or
         their Beneficiaries under this Plan, except as provided in Section 3.17
         and 13.04. 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 and the Trust.

9.03     Removal of Trustee
         ------------------

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

9.04     Powers
         ------

         The Trustee shall have such powers to hold, invest, reinvest, or to
         control and disburse the funds as at that time shall be set forth in
         the Trust or in this Plan.

9.05     Settlement of Accounts
         ----------------------

         The Trust may contain provisions granting authority to an Employer to
         settle the Accounts of the Trustee on behalf of all persons having or
         claiming an interest in the Trust.

<PAGE>

                                    ARTICLE X

                               PLAN ADMINISTRATION
                               -------------------

10.01    Committee
         ---------

         The Board shall appoint an administrative committee, to be known as the
         "Committee," to assist the Company (which is the Plan Administrator) in
         the administration of the Plan, to keep records of Accounts, and to
         notify each Participant, former Participant, or Beneficiary of his
         benefit. The members of the Committee shall serve at the pleasure of
         the Board; they may be officers, directors, or employees of an Employer
         or any other individuals. Any member may resign by delivering his
         written resignation to the Board. Vacancies arising by resignation,
         death, removal or otherwise shall be filled by the Board. The Company
         shall advise the Trustee in writing of the names of the members of the
         Committee and of any changes in membership. The Committee shall consist
         of up to three (3) persons.

10.02    Powers and Duties of the Committee
         ----------------------------------

         The Committee shall administer the Plan in accordance with its terms
         and shall have all powers necessary to carry out the provisions of the
         Plan. The Committee shall direct the Trustee in writing concerning all
         payments that shall be made out of the Trust pursuant to the Plan. Such
         written order to the Trustee shall specify the name of the person, his
         address, and the amount and frequency of payments. The Committee shall
         make recommendations to the Board with respect to the appointment and
         dismissal of investment managers under the Trust and will review the
         performance of the investment managers periodically. The Committee
         shall interpret the Plan and shall determine all questions arising in
         the administration, interpretation, and application of the Plan,
         including but not limited to questions of eligibility and the status
         and rights of Participants, former Participants, Beneficiaries, and
         other persons. Any such determination by the Committee shall be
         conclusive and binding upon all persons. The regularly kept records of
         the Employers shall be conclusive and binding upon all persons with
         respect to an Employee's Years of Service, date and length of
         employment, amount of Compensation, type and length of any absence from
         work and all other matters contained therein relating to Employees. All
         rules and determinations of the Committee shall be uniformly and
         consistently applied to all persons in similar circumstances. If
         challenged in court, the Committee's determinations shall not be
         subject to de novo review and shall not be overturned unless proven to
         be arbitrary and capricious based on the evidence considered by the
         Committee at the time of such determination. The Committee may take any
         steps it deems necessary and advisable pursuant to the Internal Revenue
         Service's Administrative Policy Regarding Self Correction program to
         correct any operational violations that occur in the administration of
         the Plan.

10.03    Exercise of the Committee's Duties
         ----------------------------------

         The Committee and the Trustee shall discharge their duties:

         (a)    For the exclusive purpose of providing benefits to Plan
                Participants, former Participants, and Beneficiaries; and

<PAGE>

         (b)      With the care, skill, prudence, and diligence under the
                  circumstances then prevailing that a prudent man acting in a
                  like capacity and familiar with such matters would use in the
                  conduct of an enterprise of a like character and with like
                  aims.

10.04    Organization and Operations of the Committee
         --------------------------------------------

         (a)      The Committee may adopt such by-laws and regulations as it
                  deems desirable for the conduct of its affairs and, with the
                  consent of the Company may appoint such accountants, counsel,
                  actuaries, and other person as it deems necessary or desirable
                  in connection with the administration of this Plan. The
                  Committee shall be entitled to rely conclusively upon, and
                  shall be fully protected in any action taken by it in good
                  faith in relying upon, any opinions or reports that shall be
                  furnished to it by any such accountant, counsel, actuary, or
                  other specialist.

         (b)      The Committee shall act by a majority vote of its members at
                  the time in office, and such action may be taken either by a
                  vote at a meeting or in writing without a meeting. The
                  signature of any one of the members will be sufficient to
                  authorize Committee action. A Committee member shall not
                  participate in discussions of or vote upon matters pertaining
                  to his own participation in the Plan, except to the extent
                  such matters affect Participants generally.

         (c)      The Committee may authorize any one of its members or any
                  other person to execute any document or documents on behalf of
                  the Committee, in which event the Committee shall notify the
                  Trustee in writing of such action and the name or names of
                  such member or person. The Trustee thereafter shall accept and
                  rely upon any document executed by such member or person as
                  representing action by the Committee, until the Committee
                  shall file with the Trustee a written revocation of such
                  designation.

10.05    Records and Reports of the Committee
         ------------------------------------

         The Committee shall keep a record of all its proceedings and acts and
         shall keep all such records and other data as may be necessary for the
         proper administration of the Plan. The Committee shall notify the
         Trustee of any action taken by the Committee relative to the Trustee's
         role hereunder and, when required, shall notify any other interested
         person or persons.

10.06    Compensation and Expenses of the Committee
         ------------------------------------------

         The members of the Committee shall serve without compensation for
         service as such, but all proper expenses incurred by the Committee
         incident to the functioning of the Plan shall be paid by the Trust,
         unless such expenses are paid by the Employers.

10.07    Indemnity of the Committee Members
         ----------------------------------

         The Employer shall indemnify and defend each member of the Committee
         against any and all claims, losses, damages, expenses (including
         reasonable attorneys' fees), and liability arising from any action or
         failure to act in connection with the administration of the Plan,
         except when the same is judicially determined or admitted by the
         Committee member to be due to the gross negligence or willful
         misconduct of such member.

<PAGE>

                                     ARTICLE

                                CLAIMS PROCEDURE
                                ----------------

11.01    Informal Review
         ---------------

         Any Participant, former Participant, or Beneficiary who wishes to
         request an informal review of a claim for benefits or who wishes an
         explanation of a benefit or its denial may direct to the Committee a
         written request for an informal review. The Committee shall respond to
         the request by issuing a notice to the claimant as soon as possible but
         in no event later than sixty (60) days from the date of the request.
         This notice furnished by the Committee shall be written in a manner
         calculated to be understood by the claimant and shall include the
         following:

         (a)    The specific reason or reasons for denial of benefits;

         (b)    The specific Plan provisions on which any denial is based;

         (c)    A description of any further material or information which is
                necessary for the claimant to perfect his claim and an
                explanation of why the material or information is needed; and

         (d)    An explanation of the Plan's formal claim review procedure.

         If the claimant does not respond to the notice, posted by first class
         mail to the address of record of the claimant, within one hundred
         twenty (120) days from the posting of the notice, the claimant shall be
         considered satisfied in all respects. If the Committee fails to respond
         to the claimant's written request for an informal review, the claimant
         shall be entitled to proceed to the formal claim review procedure
         described in Section 11.02.

11.02    Formal Review
         -------------

         In the event that the notice concerning the informal review is
         insufficient to satisfy the claimant, the claimant or his duly
         authorized representative shall submit to the Committee within one
         hundred twenty (120) days of the posting of the notice, a written
         notification of appeal of the claim denial. The notification of appeal
         of the claim denial shall permit the claimant or his duly authorized
         representative to utilize the following formal claim review procedures:

         (a)    To review pertinent documents; and

         (b)    To submit issues and comments in writing to which the Committee
                shall respond.

         The Committee shall furnish a written decision on formal review not
         Iater than sixty (60) days after receipt of the notification of appeal,
         unless special circumstances require an extension of the time for
         processing the appeal. In no event, however, shall the Committee
         respond later than one hundred twenty (120) days after a request for a
         formal review. The decision on formal review shall be in writing and
         shall include specific reasons for the decision, and shall be written
         in a manner calculated to be understood by the claimant and contain
         specific reference to the pertinent Plan provisions on which the
         decision is based.

<PAGE>

                                   ARTICLE XII

                            AMENDMENT AND TERMINATION
                            -------------------------

12.01    Amendment
         ---------

         The Company reserves the right, at any time and from time to time, to
         amend the whole or part either retroactively or prospectively any or
         all of the provisions of this Plan without the consent of any
         Participant or Beneficiary hereunder. Such amendment shall be stated in
         an instrument executed by each Employer in the same manner and form as
         this document and upon the execution thereof, this Plan as adopted by
         such Employer shall be deemed to have been amended in the manner
         therein set forth. Neither the Company nor the Trustee shall have the
         right to amend the Plan document in the following respects:

         (a)    No amendment shall authorize, cause or permit any part of the
                Trust (other than such part as if required to pay taxes and
                administration expenses) to be used or diverted for purposes
                other than the exclusive benefit of the Participants, former
                Participants or Beneficiaries;

         (b)    No amendment shall have the effect of vesting in an Employer any
                interest in or control over any part of the Trust subject to the
                terms of this Plan;

         (c)    No amendment shall affect the rights, duties, or
                responsibilities of the Trustee without its consent;

         (d)    No amendment shall have any retroactive effect so as to deprive
                any Participant of his nonforfeitable interest already accrued,
                save only that any amendment may be made retroactive which is
                necessary to conform the Plan to mandatory provisions of federal
                or state law, regulations or rulings; or

         (e)    No amendment shall decrease a Participant's account balance or
                eliminate an optional form of distribution.

12.02    Plan Termination or Discontinuance of Contributions
         ---------------------------------------------------

         (a)    Each Employer by a resolution of its board of directors may
                terminate its participation in the Plan. If the Plan is
                terminated by fewer than all Employers, it shall continue in
                effect for Participants employed by the remaining Employers.

         (b)    In the event an Employer terminates the Plan but does not
                terminate the Trust, the Trustee in its sole discretion, may
                either continue to maintain and administer the Trust or
                terminate the same. No termination of the Plan or Trust shall
                have the effect of vesting in an Employer any interest in or
                control over any part of the Trust subject to the terms of
                this Plan.

         (c)    An affected participant shall receive 100% of his or her Account
                upon Plan termination, partial termination, or termination due
                to a complete discontinuance of contributions. An "affected
                participant" is an employee who has an Account at the time the
                Plan terminated.

<PAGE>

12.03    Procedure for Becoming an Employer
         ----------------------------------

         An Employer may become a party to this Plan and Trust and an Employer
         hereunder by adopting a resolution of its board of directors approving
         such action and executing an adoption agreement specifying which Plan
         provision, if any, will not be adopted by such Employer and specifying
         any additional Plan provisions which will be adopted by such Related
         Employer. Such Employer shall become an Employer hereunder as of an
         effective date specified in the adoption agreement and shall be subject
         to the terms and provisions of this Plan and the Trust so adopted as
         then in effect or thereafter amended.

<PAGE>

                                  ARTICLE XIII

                                  MISCELLANEOUS
                                  -------------

13.01    No Contract of Employment
         -------------------------

         Nothing herein contained shall be construed to constitute a contract of
         employment between the Company, any Employer and/or any Employee. The
         employment records of the Employers and the Trustee shall be final and
         binding upon all Employees as to liability and participation.

13.02    Merger or Consolidation of Plan, Transfer of Assets
         ---------------------------------------------------

         Any merger or consolidation of the Plan with another plan, or transfer
         of Plan assets or liabilities to any other plan, shall be effected in
         accordance with such regulations, if any, as may be issued pursuant to
         Section 208 of ERISA, in such manner that each Plan Participant would
         receive, if the merged, consolidated, or transferred Plan were
         terminated immediately following such event, a benefit which is equal
         to or greater than the benefit he would have been entitled to receive
         if the Plan had terminated immediately before such event.

13.03    Data
         ----

         It shall be a condition precedent to the payment of all benefits under
         the Plan that each Participant, former Participant, and Beneficiary
         must furnish to the Employer such documents evidence or information as
         the Employer considers necessary or desirable for the purposes of
         administering the Plan, or to protect an Employer or Trustee.

13.04    Restrictions Upon Assignments and Creditors' Claims
         ---------------------------------------------------

         (a)    Except as in the Plan otherwise provided, no Participant,
                former Participant, or Beneficiary, or the estate of any such
                person, shall have any power to assign, pledge, encumber, or
                transfer any interest in the Trust Fund while the same shall
                be in the possession of the Trustee. Any such attempt at
                alienation shall be void. No such interest shall be subject to
                attachment, garnishment, execution, levy, or any other legal
                or equitable proceeding or process and any attempt to so
                subject such interest shall be void.

         (b)    Notwithstanding the foregoing, this Section 13.04 shall not
                apply to a qualified domestic relations order as defined in
                Section 414(p) of the Code. The Committee shall establish a
                procedure to determine the qualified status of domestic relation
                orders and to administer distributions under such qualified
                orders. Further, to the extent provided under a qualified
                domestic relations order, a former spouse of a Participant shall
                be treated as the spouse or surviving spouse for all purposes
                under the Plan.

         (c)    Notwithstanding the foregoing, a Participant's Accounts may be
                reduced due to a crime involving the Plan, a civil judgment in
                connection with ERISA fiduciary

<PAGE>

                violation, or settlement agreement between the Department of
                Labor and the Participant in connection with a violation of
                ERISA's fiduciary provisions.

13.05    Allocation of Fiduciary Duties
         ------------------------------

         Each Employer shall be responsible for the administration and
         management of the Plan as adopted by the Employer except for those
         duties specifically allocated to the Company, the Trustee or the
         Committee. The Trustee shall have exclusive responsibility for all
         matters specifically delegated to it by an Employer and this Plan. Each
         fiduciary shall be responsible only for the specific duties assigned to
         it and shall not be directly or indirectly responsible for the duties
         assigned to another fiduciary. The Company shall be deemed the
         administrator for the purposes of ERISA.

13.06    Applicable Law
         --------------

         The Plan shall be construed and administered in accordance with ERISA
         and with the laves of the State of Delaware to the extent that such
         laws are not preempted by ERISA.

13.07    Restriction of Claims Against Trust Fund
         ----------------------------------------

         The Trust Fund under this Plan and Trust from its inception shall be a
         separate entity aside and apart from each Employer and its assets. The
         Trust Fund and the corpus and income thereof shall in no event and in
         no manner whatsoever be subject to the rights or claims of any creditor
         of an Employer. Neither the establishment of the Trust Fund, the
         modification thereof, the creation of any fund or account, nor the
         payment of any benefits shall be construed as giving any Participant or
         any other person whomsoever any legal or equitable rights against an
         Employer or the Trustee unless the same shall be specifically provided
         for in this Plan.

13.08    Named Fiduciaries
         -----------------

         For the purpose of Part 4 of Title I of ERISA, the Employer, the
         Trustee, the Committee and those parties to whom any investment
         management duties are allocated pursuant to the Trust shall each be
         named fiduciaries. All actions by named fiduciaries shall be in
         accordance with the terms of this Plan and of the Trust insofar as such
         documents are consistent with the provisions of Title I of ERISA. Each
         named fiduciary shall act solely in the interest of Participants,
         former Participants and Beneficiaries and for the exclusive purpose of
         providing benefits and defraying reasonable administrative expenses.
         Each named fiduciary shall discharge his respective duties hereunder
         with the care, skill, prudence and diligence under the circumstances
         then prevailing that a prudent man acting in a like capacity and
         familiar with such matters would use in the conduct of an enterprise of
         a like character and with like aims.

13.09    Benefits Payable by Trust Fund
         ------------------------------

         All benefits payable under the Plan shall be paid or provided for
         solely from the Trust, and the Company and Employers assume no
         liability or responsibility therefor.

13.10    Successor to Employer or Company
         --------------------------------

         In the event that any successor to the Company or an Employer, by
         merger, consolidation, purchase or otherwise, shall elect to adopt the
         Plan, such successor shall

<PAGE>

         be substituted hereunder for the Company or such Employer upon filing
         in writing with the Trustee of its election to do so.

13.11    Internal Revenue Service Approval
         ---------------------------------

         This Plan shall be effective as of January 1, 2000, provided that the
         Company shall obtain a favorable determination letter from the Internal
         Revenue Service that this Plan and the related Trust qualify under
         Sections 401(a) and 501(a) of the Code. Any modification or amendment
         of this Plan may be made retroactive as necessary or appropriate in
         order to satisfy such qualification requirements.

13.12    Deductibility of Employer Discretionary Contributions
         -----------------------------------------------------

         All contributions under this Plan shall be paid to the Trustee and
         deposited in the Trust. However, all contributions made by an Employer
         are expressly conditioned upon the continued qualified status of the
         Plan under the Code, including any amendments to the Plan, and upon
         their deductibility under Section 404 of the Code. In the event the
         Plan would require contributions to be made to the Trust which would
         not be deductible under Section 404 of the Code, such contributions
         shall be reduced in the same manner and in the same order as provided
         in Section 4.05(b).

IN WITNESS THEREOF, the Company has caused this Plan to be executed by a duly
authorized officer this 28th day of February , 2002.
                        ----        --------

                                          PACKAGING DYNAMICS, LLC

                                          By:/s/ Michael F Arduino
                                             ----------------------------------

<PAGE>

                                    APPENDIX

This Appendix provides specific Plan terms applicable to certain divisions of
Packaging Dynamics, LLC. Those divisions are:

         A.       BAGCRAFT
         B.       IPMC
         C.       ICI

A.       BAGCRAFT

Notwithstanding the foregoing, the following Plan provisions are supplemented as
follows for employees of Bagcraft:

1.11     Compensation: The term Compensation means wages, tips and other
         ------------
         compensation actually paid and reported on Form W-2 excluding
         reimbursements or other expense allowances, fringe benefits (cash or
         non_cash) moving expenses, deferred compensation and welfare benefits.
         In addition, Compensation shall include bonuses and all salary deferral
         elections under this Plan and any other Code Section 401(k) or Code
         Section 125 plan.

1.22     Hour of Service. Each Participant will receive 45 Hours of Service
         --------------
         for each week during which he performs an Hour of Service.

1.25     Normal Retirement Age. The Participant's attainment of age 65.
         ---------------------

1.26     Normal Retirement Date. The first day of the month coinciding
         ---------------------
         with or next following the Participant's attainment of Normal
         Retirement Age.

1.36     Total and Permanent Disability. The inability to engage in any
         ------------------------------
         substantial gainful activity by reason of any medically determinable
         physical or mental impairment that can be expected to last for a
         continuous period of not less than twelve (12) consecutive months. The
         disability must be determined by a licensed physician chosen by the
         Plan Administrator. However, if the condition qualifies as a disability
         under the Social Security Act, the Plan Administrator may rely upon
         such determination.

3.02     A Participant's pre-tax salary reduction agreement shall be effective
         as of the first day of any month.

3.03     A Participant may make Pre-Tax Contributions on any amount between
         two percent (2%) of his Compensation and sixteen percent (16%) of his
         Compensation.

3.05     Participants may modify the amount of their Pre-Tax Contributions
         as of the first day of any month. Participants may suspend their
         Pre-Tax Contributions at any time. Participants may resume their
         Pre-Tax Contributions as of the first day of any month.

3.09     Employer Matching Contributions - If a Participant elects to make
         Pre-Tax Contributions, the Employer may make an Employer Matching
         Contribution in a discretionary amount to be determined by the Board.
         Only Pre-Tax Contributions up to 8% of a non-union Participant's

<PAGE>

         Compensation will be matched. In determining Employer Matching
         Contributions, only Pre-Tax Contributions of 5% of a union
         Participant's Compensation will be matched.

         All Participants shall share in the Employer Matching Contributions,
         regardless of Hours of Service or termination of employment.

3.15     The Employer is not permitted to make an Employer Discretionary
         Contribution.

5.02     A Participant's interest in his Employer Discretionary Contribution and
         Matching Contribution Accounts, if applicable, shall vest according to
         the following schedule:

                         Years of Service        Vested Percentage
                    ------------------------ ------------------------
                             0-2 years                  0%
                    ------------------------ ------------------------
                             3 or more                100%
                    ------------------------ ------------------------

6.03     Distributions under the Plan shall be made in one of the following
         forms:

                (a)      Single sum;
                (b)      Cash-out; or
                (c)      Direct rollover.

         Distributions may be made in cash.

<PAGE>

B.       IPMC

         Notwithstanding the foregoing, the following Plan provisions are
         supplemented as follows for employees of IPMC:

1.11     Compensation: The term Compensation means earned income, wages,
         ------------
         salaries, fees for professional services and other amounts received for
         personal services rendered (including commissions, compensation for
         services, tips and bonuses. In addition, Compensation shall include
         bonuses and deferrals for Code Sections 125, 402(a)(8) or 4024(h). The
         following items are excluded from the definition of Compensation:
         Amounts realized from the exercise of non- qualified stock options or
         restricted stock (which is freely transferable), amounts realized from
         the sale, exchange or disposition of stock under a qualified stock
         option, incentive bonus or compensation paid to key employees.

1.25     Normal Retirement Age. The Participant's attainment of age 59-1/2.
         ---------------------

1.26     Normal Retirement Date. The Participant's attainment of his Normal
         ----------------------
         Retirement Age.

1.36     Total and Permanent Disability. The incapacity from disease or bodily
         ------------------------------
         injury where:

         (i)    the incapacity lasts for at least three (3) months; or
         (ii)   the irrevocable loss of sight or both eyes or loss by severance
                of both hands above the wrists or both feet above the ankles or
                the loss of one hand above the wrist and one foot above the
                ankle.

3.02     A Participant's pre-tax salary reduction agreement shall be effective
         as of the first day of any month.

3.03     A Participant may make Pre-Tax Contributions on any amount between 2%
         of his Compensation and 16% of his Compensation.

3.05     Participants may modify the amount of their Pre-Tax Contributions
         as of the first day of any month. Participants may suspend future
         Pre-Tax Contributions as of the first day of any month. Participants
         may resume their Pre-Tax Contributions as of the first day of any
         month.

3.09     Employer Matching Contributions - If a Participant elects to make
         Pre-Tax Contributions, the Employer will contribute a match on such
         Participant's behalf based on the following:

                     Years of Participation      Max. Percentage of Eligible Pay
                 ------------------------------- -------------------------------
                           Up to 1                           2%
                 ------------------------------- -------------------------------
                       1 but less than 2                     3%
                 ------------------------------- -------------------------------
                       2 but less than 3                     4%
                 ------------------------------- -------------------------------
                          3 or more                          5%
                 ------------------------------- -------------------------------

             A Participant shall share in a monthly Employer Matching
             Contribution if the Participant is employed by the Employer at
             the end of such quarter or is no longer employed due to death,
             Total and Permanent Disability, or death.

<PAGE>

3.15     The Employer is permitted to make a discretionary Employer
         Discretionary Contribution to the Plan.

4.04     If an Employer Discretionary Contribution is made, it will be made
         following the end of the Plan Year. Participants will share in the
         allocation of the Employer Discretionary Contribution, if any, if they
         are Eligible Employees at the end of the Plan Year or if they have
         terminated employment with the Company during the Plan Year due to
         death, Total and Permanent Disability or the attainment of Normal
         Retirement Age.

Article VII The provisions of Article VII shall apply to Participant's employed
by IPMC.

5.02     A Participant's interest in his Employer Discretionary Contribution
         and Matching Contribution Accounts, if applicable, shall vest according
         to the following schedule:

                       Years of Service                    Vested Percentage
                  ----------------------------------- -------------------------
                          Less than 2                             20%
                  ----------------------------------- -------------------------
                        2 but less than 3                         40%
                  ----------------------------------- -------------------------
                        3 but less than 4                         60%
                  ----------------------------------- -------------------------
                        4 but less than 5                         80%
                  ----------------------------------- -------------------------
                          5 or more                              100%
                  ----------------------------------- -------------------------

         Notwithstanding the foregoing, an Employee that was employed by the
         Employer on July 1, 1991 shall be fully vested.

6.03     Distributions from the Plan shall be paid in the form a single life
         annuity to single Participants and in the form of a Qualified Joint
         and Survivor Annuity for married Participants as provided in Article
         VII of the Plan. The Participant may elect one of the following
         optional forms of distribution, subject to the terms of Article VII:

         (a)    Single sum;
         (b)    Partial single sum distribution with remainder paid later;
         (c)    Periodic installment payments over a period not to exceed the
                life expectancy of the Participant or his Beneficiary;
         (d)    Cash-out; or
         (e)    Direct rollover.

         All distributions will be paid in cash.

<PAGE>

C.       ICI

         Notwithstanding the foregoing, the following Plan provisions are
         supplemented as follows for employees of ICI:

1.11     Compensation: The term Compensation means the total salary, pay or
         ------------
         earned income from the Employer (including Compensation for services on
         the basis of profits); provided, however, the following items are
         excluded: amounts realized from the exercise of non-qualified stock
         options or the disposition of stock under a qualified stock option;
         other amounts which receive special tax benefits or contributions made
         by the Employer under a Code Section 403(b) plan; reimbursements or
         other expense allowances; fringe benefits (whether cash or non cash);
         moving expenses; deferred compensation; and welfare benefits (even if
         includible in gross income). Compensation for Plan purposes includes
         401(k) deferrals and 125 deferrals.

1.25     Normal Retirement Age: The Participant's attainment of age 62:
         ---------------------

1.26     Normal Retirement Date: The Participant's attainment of his Normal
         ----------------------
         Retirement Age.

1.28     Participation Date: The term Participation Date means the first
         ------------------
         January 1 or July 1 coinciding with or next following the date on which
         the Employee completes 90 days of service.

1.36     Total and Permanent Disability: The term disability means an illness or
         ------------------------------
         injury of a potentially permanent nature, expected to last for a
         continuous period of not less than 12 months, certified by a physician
         selected by or satisfactory to the Employer, which prevents the
         Employee from engaging in any occupation for wage or profit for which
         the Employee is reasonably fitted by training, education or experience.

2.01     An Employee will be eligible to participate in the Plan upon the later
         of the Effective Date or upon the Employee's attainment of age 18 and
         completion of a quarter of a Year of Service.

3.02     A Participant's pre-tax salary reduction agreement shall be effective
         as of the first day of the next payroll period.

3.03     A Participant may agree to make Pre_Tax Contributions equal to at least
         two percent (2%) of his Compensation, up to the maximum of fifteen
         (15%) of his Compensation.

3.05     Participants may modify or suspend their Pre-Tax Contributions as of
         the first day of the next payroll period.

3.09     Matching. If a Participant elects to make Pre-Tax Contributions,
         --------
         the Employer shall make an Employer Matching Contribution of 100% of
         the Participant's Pre-Tax Contributions; not to exceed 5% of the
         Participant's Compensation. However, no Employer Matching Contribution
         or Employer Discretionary Contribution shall be made on behalf of a
         Participant who is no longer employed by the Employer on the last day
         of the Plan Year unless his termination of service was due to
         retirement after reaching his Normal Retirement Date under the Plan,
         death or Total and Permanent Disability.

3.14     The Employer is authorized to make additional contributions, QNECs
         and QMACs, to the Plan to satisfy the ADP test and/or the ACP test.
         Also, the Employer is permitted to designate all or a portion of
         Employer Matching Contributions as "qualified."

<PAGE>

3.15     The Employer is permitted to make a discretionary Employer
         Discretionary Contribution to the Plan.

4.04     To the extent Employer Discretionary Contributions are made, a
         Participant will receive an allocation of such Employer Discretionary
         Contribution if he is employed on the last day of the Plan Year without
         regard to Hours of Service or separated from service with more than 500
         Hours of Service or due to death, Total and Permanent Disability, or
         death.

5.02     A Participant's interest in his Employer Discretionary Contribution and
         Matching Contribution Accounts, if applicable, shall vest according to
         the following schedule:

                    Years of Service             Vested Percentage
                 ---------------------- -------------------------------
                           1                            0%
                 ---------------------- -------------------------------
                           2                           25%
                 ---------------------- -------------------------------
                           3                           50%
                 ---------------------- -------------------------------
                           4                           75%
                 ---------------------- -------------------------------
                           5                          100%
                 ---------------------- -------------------------------

         Any forfeitures shall be used to reduce the next Employer Matching
         Contribution to the Plan.

6.03     Distributions from the Plan shall be paid in the form a single
         life annuity to single Participants and in the form of a Qualified
         Joint and Survivor Annuity for married Participants as provided in
         Article VII of the Plan. The Participant may elect one of the following
         optional forms of distribution, subject to the terms of Article VII:

         (a)    Single sum;
         (b)    Joint and 50% Survivor Annuity;
         (c)    Cash-out; or
         (d)    Direct rollover.

Distributions will be paid in cash.

<PAGE>

                                 Trust Agreement

<PAGE>

V. Mid-Market Trust Agreement
--------------------------------------------------------------------------------

NOTE: The Employer must complete the blanks below (except shaded areas) and have
an authorized party complete and sign both signature pages at the end of this
Trust Agreement. This Trust Agreement is NOT used if the Employer will be using
a Merrill Lynch prototype plan. The shaded areas of the Trust Agreement will be
completed by Merrill Lynch Trust.

         TRUST AGREEMENT between Merrill Lynch Trust ________________________,
as the Trustee, and Packaging Dynamics L.L.C., as the Employer.
Trust Agreement entered into as of 1 July, 1999 by and between the above-named
employer (the "Employer") and Merrill Lynch Trust _________________, a
________________ corporation (the "Trustee"), with respect to a trust ("Trust")
forming part of the Packaging Dynamics L.L.C. Plan (the "Plan").

The Employer and the Trustee hereby agree as follows:

ARTICLE I

Status of Trust and Appointment and Acceptance of Trustee

1.01     Status of Trust. The Trust is intended to be a qualified trust under
         section 401(a) of the Internal Revenue Code of 1986, as amended from
         time to time (the "Code"), and exempt from taxation pursuant to section
         501(a) of the Code.

1.02     Appointment of Trustee. The Employer represents that all necessary
         action has been taken for the appointment of the Trustee as trustee of
         the Trust and that the Trust Agreement constitutes a legal, valid and
         binding obligation of the Employer.

1.03     Acceptance of Appointment. The Trustee accepts its appointment as
         trustee of the Trust.

1.04     Title of Trust. The Trust shall be known as the ______________________
         Trust.

1.05     Effectiveness. This Trust Agreement shall not become effective until
         executed and delivered by both the Employer and the Trustee.

Article II

Administrative Investment Fiduciaries

2.01     Named Administrative and Investment Fiduciaries. For purposes of this
         Trust Agreement, the term "Named Administrative Fiduciary" refers to
         the person named or provided for in the Plan as responsible for the
         administration and operation of the Plan and the term "Named Investment
         Fiduciary" refers to the person provided for in the Plan as responsible
         for the investment and management of Plan assets to the extent provided
         for in this Trust Agreement. The Named Administrative Fiduciary and the
         Named Investment Fiduciary may be the same person. If any such person
         is not named or provided for in the Plan, or if so named or provided
         for, is not then serving, the Employer shall be the Named
         Administrative Fiduciary or the Named Investment Fiduciary or both, as
         the case may be.

<PAGE>

2.02     Identification of Named Fiduciaries and Designees. The Named
         Administrative Fiduciary and the Named Investment Fiduciary under the
         Plan shall each be identified to the Trustee in writing by the
         Employer, and specimen signatures of each, or of each member thereof,
         as appropriate, shall be provided to the Trustee by the Employer. The
         Employer shall promptly give written notice to the Trustee of a change
         in the identity either of the Named Administrative Fiduciary or Named
         Investment Fiduciary, or any member thereof, as appropriate, and until
         such notice is received by the Trustee, the Trustee shall be fully
         protected in assuming that the identity of the Named Administrative
         Fiduciary or Named Investment Fiduciary, and the members thereof, as
         appropriate, is unchanged. Each person authorized in accordance with
         the Plan to give a direction to the Trustee on behalf of the Named
         Administrative Fiduciary or the Named Investment Fiduciary shall be
         identified to the Trustee by written notice from the Employer or the
         Named Administrative Fiduciary or the Named Investment Fiduciary, as
         the case may be, and such notice shall contain a specimen of the
         signature. The Trustee shall be entitled to rely upon each such written
         notice as evidence of the identity and authority of the persons
         appointed until a written cancellation of the appointment, or the
         written appointment of a successor, is received by the Trustee from the
         Employer, the Named Administrative Fiduciary or the Named Investment
         Fiduciary, as the case may be.

Article III

Receipts and Trust Fund

3.01     Receipt by Trustee. The Trustee shall receive in cash or other assets
         acceptable to the Trustee all contributions paid or delivered to it
         which are allocable under the Plan and to the Trust and all transfers
         paid or delivered under the Plan to the Trust from a predecessor
         trustee or another trust (including a trust forming part of another
         plan qualified under section 401(a) of the Code), provided that the
         Trustee shall not be obligated to receive any such contribution or
         transfer unless prior thereto or coincident therewith, as the Trustee
         may specify, the Trustee has received such reconciliation, allocation,
         investment or other information concerning, or such direction,
         instruction or representation with respect to, the contribution or
         transfer or the source thereof as the Trustee may require. The Trustee
         shall not no duty or authority to (a) require any contributions or
         transfers to be made under the Plan or to the Trustee, (b) compute any
         amount to be contributed or transferred under the Plan to the Trustee,
         or (c) determine whether amounts received by the Trustee comply with
         the Plan.

3.02     Trust Fund. For purposes of this Trust Agreement, the "Trust Fund"
         consists of all money and other property received by the Trustee
         pursuant to Section 3.01 hereof, increased by any income or gains on or
         increment in such assets and decreased by any investment loss or
         expense, benefit or disbursement paid pursuant to this Trust Agreement.
         The Trustee shall hold the Trust Fund, without distinction between
         principal and income, as a nondiscretionary trustee pursuant to the
         terms of this Trust Agreement. Assets of the Trust may be held in an
         account maintained with an affiliate of the Trustee.

3.03     Additional Trust Fund. Notwithstanding any other provision of this
         Trust Agreement, to the extent that assets of the Plan are held in
         trust by a trustee other than the Trustee (such other trustee to be
         referred to as a "Second Trustee"), the Employer shall have created two
         trust funds under the Plan. The appointment of a Second Trustee shall
         be deemed a representation by the Employer that the Plan contains all
         appropriate provisions relating to the Second Trustee. The Trustee (i)
         shall discharge its duties and responsibilities hereunder solely with
         respect to those assets delivered into its possession, (ii) shall have
         no duties, responsibilities or obligations with respect to assets held
         in trust by the Second Trustee unless and until such assets are
         delivered to the

<PAGE>

         Trustee and (iii) except as otherwise required under the Employee
         Retirement Income Security Act of 1974, as amended from time to time
         ("ERISA"), shall have no liability or responsibility for the acts or
         omissions of the Second Trustee. To the extent that assets of the Plan
         are held in trust by multiple trustees other than the Trustee, the
         foregoing shall apply to each such other trustee.

Article IV

Payments, Administrative Directions and Expenses

4.01     Payments by Trustee. Payments of money or property from the Trust Fund
         shall be made by the Trustee upon direction from the Named
         Administrative Fiduciary or its designee. Payments by the Trustee shall
         be transmitted to the Named Administrative Fiduciary or its designee
         for delivery to the proper payees or to payee addresses supplied by the
         Named Administrative Fiduciary or its designee, and the Trustee's
         obligation to make such payment shall be satisfied upon such
         transmittal. The Trustee shall have no obligation to determine the
         identity of persons entitled to payments under the Plan or their
         addresses.

4.02     Named Administrative Fiduciary's Directions. Directions from or on
         behalf of the Named Administrative Fiduciary or its designee shall be
         communicated to the Trustee or the Trustee's designee only in a manner
         and in accordance with procedures acceptable to the Trustee. The
         Trustee's designee shall not, however, be empowered to implement any
         such directions except in accordance with procedures acceptable to the
         Trustee. The Trustee shall have no liability for following any such
         directions or failing to act in the absence of any such directions. The
         Trustee shall have no liability for the acts or omissions of any person
         making or failing to make any direction under the Plan or this Trust
         Agreement nor any duty or obligation to review any such direction, act
         or omission.

4.03     Disputed Payments. If a dispute arises over the propriety of the
         Trustee making any payment from the Trust Fund, the Trustee may
         withhold the payment until the dispute has been resolved by a court of
         competent jurisdiction or settled by the parties to the dispute. The
         Trustee may consult legal counsel and shall be fully protected in
         acting upon the advice of counsel.

4.04     Trustee's Compensation and Expenses. If the Employer so elects in a
         manner satisfactory to the Trustee, the Employer shall (a) pay the
         Trustee compensation for its services under this Trust Agreement in
         accordance with the Trustee's fee schedule in effect and applicable at
         the time such compensation becomes payable, and (b) pay or reimburse
         the Trustee for all expenses incurred by the Trustee in connection with
         or relating to the performance of its duties under this Trust Agreement
         or its status as Trustee, including reasonable attorneys' fees. If the
         Employer does not so elect, such compensation and expenses shall be
         charged against and withdrawn from the Trust Fund as provided below.

         Until paid by the Employer or charged against and withdrawn from the
         Trust Fund, as the case may be, the Trustee's compensation and expenses
         shall be a lien upon the Trust Fund. The Trustee is authorized to
         charge the Trust Fund for and withdraw from the Trust Fund, without
         direction from the Named Administrative Fiduciary or any other person,
         the amount of any such fees or expenses which the Employer has so
         elected to pay but which remain unpaid for a period of 60 days after
         presentation of a statement for such amount to the Employer. Trust Fund
         assets shall be applicable to pay such fees and expenses in the
         following priority by asset category to the extent thereof held at the
         time of withdrawal in the Trust Fund subfund or account to which the
         fee or expense is allocated: (i) uninvested cash balances: (ii) shares
         of any money market fund or

<PAGE>

         funds held in the Trust Fund; and (iii) any other Trust Fund assets.
         The Trustee is authorized to allocate its fees and expenses among these
         subfunds or accounts to which the fees or expenses pertain in such
         manner as the Trustee deems appropriate under the circumstances unless
         prior to such allocation the Employer or the Named Administrative
         Fiduciary specifies the manner in which the allocation is to be made.
         The Trustee is also authorized but not required to sell any shares or
         other assets referred to above to the extent necessary for the purpose.

         By signing this Trust Agreement, the Employer authorizes the Trustee
         and/or its affiliates to receive payments from certain mutual funds
         (and/or collective trusts) for which no affiliate of the Trustee acts
         as investment manager or advisor (or from the principal distributors
         and/or advisors of those funds or trusts), in connection with the
         performance of reasonable and necessary services (including
         recordkeeping, subaccounting, account maintenance, administrative and
         other shareholder services). Because different mutual funds for
         collective trusts may be subject to different fee arrangements, the
         Employer should contact the Trustee or its designee to obtain further
         details on any specified fee arrangements that may be applicable to
         investments under the Plan.

4.05     Taxes. The Trustee is authorized, with or without direction from the
         Named Administrative Fiduciary or any other person, to withdraw from
         the Trust Fund and pay any federal, state or local taxes, charges or
         assessments of any kind levied or assessed against the Trust or assets
         thereof. Until paid, such taxes shall be a lien against the Trust Fund.
         The Trustee shall give notice to the Named Administrative Fiduciary of
         its receipt of a demand for any such taxes, charges or assessments. The
         trustee shall not be personally liable for any such taxes, charges or
         assessments.

4.06     Expenses of Administration. Expenses incurred by the Employer, the
         Named Administrative Fiduciary, the Named Investment Fiduciary, any
         Investment Manager designated pursuant to Section 5.02 or any other
         persons designated to act on behalf of the Employer, the Named
         Administrative Fiduciary or the Named Investment Fiduciary, including
         reimbursement for expenses incurred in the performance of their
         respective duties, shall be the obligation of the Employer or other
         person specified in the Plan. Such expenses, however, may be paid from
         the Trust Fund upon the written direction to the Trustee of the Named
         Administrative Fiduciary.

4.07     Restriction on Alienation. Except as provided in Section 4.08 or under
         section 401(a)(13) of the Code, the interest of any Plan participant or
         beneficiary in the Trust Fund shall not be subject to the claims of
         such person's creditors and may not be assigned, sold, transferred,
         alienated or encumbered. Any attempt to do so shall be void; and the
         Trustee shall disregard any attempt. Trust assets shall not in any
         manner be liable for or subject to debts, contracts, liabilities,
         engagement or torts of any Plan participant or beneficiary and benefits
         shall not be considered an asset of any such person in the event of the
         person's insolvency or bankruptcy.

4.08     Payment on Court Order. The Trustee is authorized to make any payments
         directed by court order in any action in which the Trustee is a party
         or pursuant to a "qualified domestic relations order" under section
         414(p) of the Code; provided that the Trustee shall not make such
         payment if the Trustee is indemnified and held harmless by the Employer
         in a manner satisfactory to the Trustee against all consequences of
         such failure to pay. The Trustee is not obligated to defend actions in
         which the Trustee is named but shall notify the Employer or Named
         Administrative Fiduciary of any such action and may tender defense of
         the action to the Employer, the Named Administrative Fiduciary or the
         participant or beneficiary whose interest is affected. The Trustee may
         in its discretion defend any action in which the Trustee is named and
         any expenses, including

<PAGE>

         reasonable attorneys' fees, incurred by the Trustee in that connection
         shall be paid or reimbursed in accordance with Section 4.04 hereof.

Article V

Investments

5.01     Investment Management. The Named Investment Fiduciary shall manage the
         investment of the Trust fund except insofar as (a) a person (an
         "Investment Manager") who meets the requirements of section 3(38) of
         ERISA has authority to manage Trust assets as referred to in Section
         5.02 hereof or (b) the Plan provides for participant or beneficiary
         direction of the investment of assets allocable under the Plan to the
         accounts of such participants and beneficiaries. In the latter
         situation, a list of the participants and beneficiaries and such
         information concerning them as the Trustee may specify shall be
         provided by the Employer or the Named Administrative Fiduciary to the
         Trustee and/or such person(s) as are necessary for the implementation
         of the directions in accordance with procedures acceptable to the
         Trustee. Except as required by ERISA, the Trustee shall invest the
         Trust Fund as directed by the Named Investment Fiduciary, an Investment
         Manager or a Plan participant or beneficiary, as the case may be, and
         the Trustee shall have no discretionary control over, nor any other
         discretion regarding, the investment or reinvestment of any asset of
         the Trust. The Trustee may limit the categories of assets in which the
         Trust Fund may be invested.

         It is understood that the Trustee may, from time to time, have on hand
         funds which are received as contributions or transfers to the Trust
         which are awaiting investment or funds from the sale of Trust assets
         which are awaiting reinvestment or disbursement. Absent receipt by the
         Trustee of a direction from the proper person for the investment or
         reinvestment of such funds or otherwise prior to the application of
         funds in implementation of such a direction the Trustee shall in
         accordance with the Trustee's normal procedures in this regard cause
         such funds to be invested in shares of the applicable money market
         fund. Any such fund may be sponsored, managed or distribution by an
         affiliate of the Trustee. The Employer or the Named Investment
         Fiduciary, as the case may be, hereby acknowledges that it has read the
         current prospectus for the applicable fund, as supplied by the Trustee
         or its designee.

5.02     Investment Managers. The Employer or the Named Investment Fiduciary may
         appoint one or more Investment Managers, who may be an affiliates of
         the Trustee, to direct the Trustee in the investment of all or a
         specified portion of the assets of the Trust. Any such Investment
         Manager shall be directed by the Employer or the Named Investment
         Fiduciary, as the case may be, to act in accordance with the procedures
         referred to in Section 5.04. The Named Investment Fiduciary shall
         notify the Trustee in writing before the effectiveness of the
         appointment or removal of any Investment Manager.

         If there is more than one Investment Manager whose appointment is
         effective under the Plan at any one time, the Trustee shall, upon
         written instructions from the Employer or the Named Investment
         Fiduciary, establish separate funds for control by each such Investment
         Manager. The funds shall consist of those Trust assets designated by
         the Employer or the named Investment Fiduciary.

5.03     Direction of Voting and Other Rights. The voting and other rights in
         securities or other assets held in the Trust shall be exercised by the
         Trustee as directed by the Named Investment Fiduciary or other person
         who at the time has the right as referred to in Section 5.01 hereof to
         direct the investment or reinvestment of the security or other asset
         involved, provided that notwithstanding

<PAGE>

         any provision of the Plan to the contrary, (a) except as provided in
         clause (b) of this Section, such voting and other rights in any such
         security or other asset selected by the Employer or the Named
         Investment Fiduciary shall be exercised by the Named Investment
         Fiduciary and (b) such voting and other rights in any "employer
         security" with respect to the Plan within the meaning of Section
         407(d)(1) of ERISA ("Employer Securities") which is held in an account
         under the Plan over which a Plan participant or beneficiary has control
         as to specific assets to be held therein or which is held in an account
         which consists solely or primarily of Employer Securities shall be
         exercised by the participants or beneficiaries having interest in that
         account. Notwithstanding any provision hereof or of the plan to the
         contrary, (i) in the event a Plan participant or beneficiary or an
         Investment Manager with the right to direct a voting or other decision
         with respect to any security or other asset held in the Trust does not
         communicate any decision on the matter to the Trustee or the Trustee's
         designee by the time prescribed by the Trustee or the Trustee's
         designee for that purpose or if the Trustee notifies the named
         Investment Fiduciary either that it does not have precise information
         as to the securities or other assets involved allocated on the
         applicable record date to the accounts of all participants and
         beneficiaries or that time constraints make it unlikely that
         participant, beneficiary or Investment Manager direction, as the case
         may be, can be received on a timely basis, the decision shall be the
         responsibility of the Named Investment Fiduciary and shall be
         communicated to the Trustee on a timely basis, and (ii) in the event
         the Named Investment Fiduciary with any right under the Plan or
         hereunder to direct a voting or other decision with respect to any
         security or other asset held in the Trust, including any such right
         under clause (a) or clause (i) of this Section, does not communicate
         any decision on the matter to the Trustee or directions the Trustee's
         designee by the time prescribed by the Trustee for that purpose, the
         Trustee may, at the cost of the Employer, obtain advice from a bank,
         insurance company, investment adviser or other investment professional
         (including any affiliate of the Trustee) or retain an Investment
         Manager or independent fiduciary with full discretion to make the
         decision. Except as required by ERISA, the Trustee shall (a) follow all
         directions above-referred to in this Section and (b) shall have no duty
         to exercise voting or other rights relating to any such security or
         other asset.

5.04     Investment Directions. Directions for the investment or reinvestment of
         Trust assets or directions of a type referred to in Section 5.03 from
         the Employer, the Named Investment Fiduciary, an Investment Manager or
         a Plan participant or beneficiary, as the case may be, shall, in a
         manner and in accordance with procedures acceptable to the Trustee, be
         communicated to and implemented by, as the case may be, the Trustee,
         the Trustee's designee or, with the Trustee's consent, the
         broker/dealer designated for the purpose by the Employer or the Named
         Investment Fiduciary. Communication of any such direction to such a
         designee or broker/dealer shall conclusively be deemed an authorization
         to the designee or broker/dealer to implement the direction even though
         coming from a person other than the Trustee. The Trustee shall have no
         liability for its or any other person's following such directions or
         failing to act in the absence of any such directions. The Trustee shall
         have no liability for the acts or omissions of any person directing the
         investment or reinvestment of Trust Fund assets or making or failing to
         make any direction referred to in Section 5.03. Neither shall the
         Trustee have any duty or obligation to review any such investment or
         other direction, act or omission or, except upon receipt of a proper
         direction, to invest or otherwise manage any asset of the Trust which
         is subject to the control of any such person or to exercise any voting
         or other right referred to in Section 5.03.

5.05     Communication of Proxy and Other Materials. The Employer or Named
         Administrative Fiduciary shall establish a procedure acceptable to the
         Trustee for the timely dissemination to each person entitled to direct
         the Trustee or its designee as to a voting or other decision called for
         thereby or referred to therein of all proxy and other materials bearing
         on the decision. In the case of Employer Securities, at such time as
         proxy or other materials bearing thereon are disseminated

<PAGE>

         generally to owners of Employer Securities in accordance with appliable
         law, the Employer shall cause a copy of such proxy or other materials
         to be delivered directly to the Trustee and, thereafter, shall promptly
         deliver to the Trustee such number of additional copies of the proxy or
         other materials as the Trustee may request.

5.06     Common and Collective Trust Funds. Any person authorized to direct the
         investment of Trust assets may, if the Trustee and the Named Investment
         Fiduciary so permit, direct the Trustee to invest such assets in a
         common or collective trust maintained by the Trustee or its affiliate
         for the investment of assets of qualified trusts under section 401(a)
         of the Code, individual retirement accounts under section 408(a) of the
         Code and plans or governmental units described in section 818(a)(6) of
         the Code. The documents governing any such common or collective trust
         fund maintained by the Trustee, or its affiliate and in which Trust
         assets have been invested, are hereby incorporated into this Trust
         Agreement by reference.

Article VI

Responsibilities and Indemnity

6.01     Relationship of Fiduciaries. Each fiduciary of the Plan and the Trust
         shall be solely responsible for its own acts or omissions. The Trustee
         shall have no duty to question any other Plan fiduciary's performance
         of fiduciary duties allocated to such other fiduciary pursuant to the
         Plan. The Trustee shall not be responsible for the breach of
         responsibility by any other Plan fiduciary except as required under
         ERISA.

6.02     Benefit of Participants. Each fiduciary shall, within the meaning of
         the Code and ERISA, discharge its duties with respect to the Trust
         solely in the interest of participants in the Plan and their
         beneficiaries and for the exclusive purpose of providing benefits to
         such participants and beneficiaries and defraying reasonable expenses
         of administering the Plan.

6.03     Status of Trustee. The Trustee acknowledges its status as a "fiduciary"
         of the Plan within the meaning of ERISA.

6.04     Location of Indicia of Ownership. Except as permitted by ERISA, the
         Trustee shall not maintain the indicia of ownership of any assets of
         the Trust outside the jurisdiction of the district courts of the United
         States.

6.05     Trustee's Reliance. The Trustee shall have no duty to inquire whether
         directions by the Employer, the Named Administrative Fiduciary the
         Named Investment Fiduciary or any other person conform to the Plan, and
         the Trustee shall be fully protected in relying on any such direction
         communicated in accordance with procedures acceptable to the Trustee
         from any person who the Trustee reasonably believes is a proper person
         to give the direction. The Trustee shall have no liability to any
         participation, any beneficiary or any other person for payments made,
         any failure to make payments, or any discontinuance of payments, on
         direction of the Named Administrative Fiduciary, the Named Investment
         Fiduciary or any designee of either of them or for any failure to make
         payments in the absence of directions from the Named Administrative
         Fiduciary or any person responsible for or purporting to be responsible
         for directing the investment of Trust assets. The Trustee shall have no
         obligation to request proper directions from any person. The Trustee
         may request instructions from the Named Administrative Fiduciary or the
         Named Investment Fiduciary and shall have no duty to act or liability
         for failure to act if such instructions are not forthcoming. The
         Trustee shall have no responsibility to determine whether the Trust
         Fund is sufficient to meet the liabilities under the Plan, and shall
         not be liable for payments or Plan liabilities in excess of the Trust
         Fund.

<PAGE>

6.06     Indemnification. The Employer hereby indemnifies the Trustee against,
         and shall hold the Trustee harmless from, any and all loss, claims,
         liability and expense, including reasonable attorneys' fees, imposed
         upon the Trustee or incurred by the Trustee as a result of any acts
         taken, or any failure to act, in accordance with the directions from
         the Named Administrative Fiduciary, Named Investment Fiduciary,
         Investment Manager or any other person specified in Article IV or V
         hereof, or any designee of any such person, or by reason of the
         Trustee's good faith execution of its duties with respect to the Trust,
         including, but not limited to, its holding of assets of the Trust as
         provided for in Section 3.02, the Employer's obligations in the
         foregoing regard to be satisfied promptly on request by the Trustee,
         unless the loss, claim, liability or expense involved resulted from the
         negligence or willful misconduct of the Trustee.

6.07     Protection of Designees. To the extent that any designee of the Trustee
         is performing a function of the Trustee under this Trust Agreement, the
         designee shall have the benefit of all of the applicable limitations on
         the scope of the Trustee's duties and liabilities, all applicable
         rights of indemnification granted hereunder to the Trustee and all
         other applicable protections of any nature afforded to the Trustee.

Article VII

Powers of Trustee

7.01     Nondiscretionary Investment Powers. At the direction of the person
         authorized to direct such action as referred to in Article V hereof,
         but limited to those assets or categories of assets acceptable to the
         Trustee as referred to in Section 5.01, the Trustee, or the Trustee's
         designee or a broker/dealer as referred to in Section 5.04, is
         authorized and empowered:

         (a)   To invest and reinvest the Trust Fund, together with the income
               therefrom, in common stock, preferred stock, convertible
               preferred stock, bonds, debentures, convertible debentures and
               bonds, mortgages, notes, commercial paper and other evidences of
               indebtedness (including those issued by the Trustee), shares of
               mutual funds (which funds may be sponsored, managed or offered by
               an affiliate of the Trustee), guaranteed investment contracts,
               bank investment contracts, other securities, policies of life
               insurance, annuity contracts, options, options to buy or sell
               securities or other assets and all other property of any type
               (personal, real or mixed, and tangible or intangible);

         (b)   To deposit or invest all or any part of the assets of the Trust
               in savings accounts or certificates of deposit or other deposits
               in a bank or savings and loan association or other depository
               institution, including the Trustee or any of its affiliates;
               provided that with respect to such deposits with the Trustee or
               an affiliate, the deposits bear a reasonable interest rate;

         (c)   To hold, manage, improve, repair and control all property, real
               or personal, forming part of the Trust Fund: to sell, convey,
               transfer, exchange, partition, lease for any term, even extending
               beyond the duration of this Trust, and otherwise dispose of the
               same from time to time;

         (d)   To have, respecting securities, all the rights, powers and
               privileges of an owner, including the power to give proxies, pay
               assessments and other sums deemed by the Trustee necessary for
               the protection of the Trust Fund: to vote any corporate stock
               either in person or by proxy, with or without power of
               substitution, for any purpose; to participate in voting trusts,
               pooling agreements, foreclosures, reorganizations, consolidation,
               mergers

<PAGE>

               and liquidations, and in connection therewith to deposit
               securities with or transfer title to any protective or other
               committee; to exercise or sell stock subscriptions or conversion
               rights; and, regardless of any limitation elsewhere in this
               instrument relative to investments by the Trustee, to accept and
               retain as an investment any securities or other property received
               through the exercise of any of the foregoing powers;

         (e)   Subject to Section 5.01 hereof, to hold in cash such portion of
               the Trust Fund which it is directed to so hold pending
               investments, or payment of expenses, or the distribution of
               benefits;

         (f)   To take such actions as may be necessary or desirable to protect
               the Trust from loss due to the default on mortgages held in the
               Trust including the appointment of agents or trustees in such
               other jurisdictions as may seem desirable, to transfer property
               to such agents or trustees, to grant to such agents such powers
               as are necessary or desirable to protect the Trust Fund, to
               direct such agent or trustee, or to delegate such power to
               direct, and to remove such agent or trustee;

         (g)   To settle, compromise or abandon all claims and demands in favor
               of or against the Trust Fund;

         (h)   To invest in any common or collective trust fund of the type
               referred to in Section 5.06 hereof maintained by the Trustee or
               its affiliate;

         (i)   To exercise all of the further rights, powers, options and
               privileges granted, provided for, or vested in trustees generally
               under the laws of the state in which the Trustee is incorporated
               as set forth above, so that the powers conferred upon the Trustee
               herein shall not be in limitation of any authority conferred by
               law, but shall be in addition thereto;

         (j)   To borrow money from any source and to execute promissory notes,
               mortgages or other obligations and to pledge or mortgage any
               trust assets as security, subject to applicable requirements of
               the Code and ERISA; and

         (k)   To maintain accounts at, execute transactions through, and lend
               on an adequately secured basis stocks, bonds or other securities
               to, any brokerage or other firm, including any firm which is an
               affiliate of the Trustee.

7.02     Additional Powers of Trustee. To the extent necessary or which it deems
         appropriate to implement its powers under Section 7.01 or otherwise to
         fulfill any of its duties and responsibilities as trustee of the Trust
         Fund, the Trustee shall have the following additional powers and
         authority;

         (a)   to register securities, or any other property, in its name or in
               the name of any nominee, including the name of any affiliate or
               the nominee name designated by any affiliate, with or without
               indication of the capacity in which property shall be held, or to
               hold securities in bearer form and to deposit any securities or
               other property in a depository or clearing corporation;

         (b)   to designate and engage the services of, and to delegate powers
               and responsibilities to, such agents, representatives, advisors,
               counsel and accountants as the Trustee considers necessary or
               appropriate, any of whom may be an affiliate of the Trustee or a
               person who renders services to such an affiliate, and, as a part
               of its expenses under this Trust Agreement, to pay their
               reasonable expenses and compensation;

<PAGE>

         (c)   to make, execute and deliver, as Trustee, any and all deeds,
               leases, mortgages, conveyances, waivers, releases or other
               instruments in writing necessary or appropriate for the
               accomplishment of any of the powers listed in this Trust
               Agreement; and
         (d)   generally to do all other acts which the Trustee deems necessary
               or appropriate for the protection of the Trust Fund.

Article VIII

Records, Accountings and Valuations

8.01     Records. The Trustee shall maintain or cause to be maintained accurate
         records and accounts of all Trust transactions and assets. The records
         and accounts shall be available at reasonable times during normal
         business hours for inspection or audit by the Named Administrative
         Fiduciary and the Named Investment Fiduciary or any person designated
         for the purpose by either of them.

8.02     Accountings. Within 90 days following the close of each fiscal year of
         the Plan or the effective date of the removal or resignation of the
         Trustee, the Trustee shall file with the Named Administrative Fiduciary
         a written accounting setting forth all transactions since the end of
         the period covered by the last previous accounting. The accounting
         shall include a listing of the assets of the Trust showing the value of
         such assets at the close of the period covered by the accounting. On
         direction of the Named Administrative Fiduciary, and if previously
         agreed to by the Trustee, the Trustee shall submit to the Named
         Administrative Fiduciary interim valuations, reports or other
         information pertaining to the Trust.

         The Named Administrative Fiduciary may approve the accounting by
         written approval delivered to the Trustee or by failure to deliver
         written objections to the Trustee within 60 days after receipt of the
         accounting. Any such approval shall be binding on the Employer, the
         Named Administrative Fiduciary, the Named Investment Fiduciary and, to
         the extent permitted by ERISA, all other persons.

8.03     Valuation. The assets of the Trust shall be valued as of each valuation
         date under the Plan at fair market value as determined by the Trustee
         based upon such sources of information as it may deem reliable,
         including, but not limited to, stock market quotations, statistical
         evaluation services, newspapers of general circulation, financial
         publications, advice from investment counselors or brokerage firms, or
         any combination of sources. The reasonable costs incurred in
         establishing values of the Trust Fund shall be a charge against the
         Trust Fund, unless paid by the Employer.

         When The Trustee is unable to arrive at a value based upon information
         from independent sources, it may rely upon information from the
         Employer, Named Administrative Fiduciary, Named Investment Fiduciary,
         appraisers, or other sources, and shall not incur any liability for
         inaccurate valuation based in good faith upon such information.

8.04     Loans. In the event that participant loans are available under the
         Plan, the Trustee shall reflect one aggregate balance for participant
         loans under the Plan and shall reflect changes thereto only as directed
         by the Employer or Named Administrative Fiduciary. The Trustee has no
         responsibility with respect to maintenance of promissory notes or
         monitoring of loan amortization schedules.

Article IX

Resignation and Removal of Trustee

<PAGE>

9.01     Resignation. The Trustee may resign at any time upon at least 30 days'
         written notice to the Employer.

9.02     Removal. The Employer may remove the Trustee upon at least 30 days'
         written notice to the Trustee.

9.03     Appointment of a Successor. Upon resignation or removal of the Trustee,
         the Employer shall appoint a successor trustee. Upon failure of the
         Employer to appoint, or the failure of the effectiveness of the
         appointment by the Employer of, a successor trustee by the effective
         date of the resignation or removal, the Trustee may apply to any court
         of competent jurisdiction for the appointment of a successor.

         Promptly after receipt by the Trustee of notice of the effectiveness of
         the appointment of the successor trustee, the Trustee shall deliver to
         the successor trustee such records as may be reasonably requested to
         enable the successor trustee to properly administer the Trust Fund and
         all property of the Trust after deducting therefrom such amounts as the
         Trustee deems necessary to provide for expenses, taxes, compensation or
         other amounts due to or by the Trustee pursuant to Sections 4.04 or
         5.03 hereof not paid by the Employer prior to the delivery.

9.04     Settlement of Account. Upon resignation or removal of the Trustee,
         the Trustee shall have the right to a settlement of its account, which
         settlement shall be made, at the Trustee's option, either by an
         agreement of settlement between the Trustee and the Employer or by a
         judicial settlement in an action instituted by the Trustee.

9.05     Expenses and Compensation. The Trustee shall not be obligated to
         transfer Trust assets until the Trustee is provided assurance by the
         Employer satisfactory to the Trustee that all fees and expenses
         reasonably anticipated will be paid.

9.06     Termination of Responsibility and Liability. Upon settlement of the
         account and transfer of the Trust Fund to the successor trustee, all
         rights and privileges under this Trust Agreement shall vest in the
         successor trustee and all responsibility and liability of the Trustee
         with respect to the Trust and assets thereof shall, except as otherwise
         required by ERISA, terminate subject only to the requirement that the
         Trustee execute all necessary documents to transfer the Trust assets to
         the successor Trustee.

Article X

Amendment and Termination

10.01    Amendment. The Employer reserves the right to amend this Trust
         Agreement, provided that no amendment of this Trust Agreement or the
         Plan shall be effective which would (a) cause any assets of the Trust
         Fund to be used for, or diverted to, purposes other than the exclusive
         benefit of Plan participants or their beneficiaries other than an
         amendment permissible under the Code and ERISA, or (b) affect the
         rights, duties, responsibilities, obligations or liabilities of the
         Trustee without the Trustee's written consent. The Employer shall amend
         this Trust Agreement as requested by the Trustee to reflect changes in
         law which counsel for the Trustee advises the Trustee require such
         changes. Amendments to the Trust Agreement or a certified copy of the
         amendments shall be delivered to the Trustee promptly after adoption,
         and if practicable under the circumstances, any proposed amendment
         under consideration by the Employer shall be communicated to the
         Trustee to permit the Trustee to review and comment thereon in due
         course before the Employer acts on the proposed amendment.

<PAGE>

10.02    Termination. The Trust may be terminated by the Employer upon at
         least 60 days' written notice to the Trustee. Upon such termination,
         and subject to Section 11.01 hereof, the Trust Fund shall be
         distributed as directed by the Named Administrative Fiduciary.

Article XI

Miscellaneous

11.01    Exclusive Benefit Rule. Except as provided in Section 11.02, or as
         otherwise permitted or required by ERISA or the Code, no asset of the
         Trust shall be used for, or diverted to, purposes other than the
         exclusive benefit of Plan participants or their beneficiaries or for
         the reasonable expenses of administering the Plan and Trust until all
         liabilities for benefits due Plan participants or their beneficiaries
         have been satisfied.

11.02    Refunds to Employer. The Trustee shall, upon the written direction of
         the Named Administrative Fiduciary which shall include a certification
         that such action is proper under the Plan, ERISA and the Code
         specifying any relevant sections thereof, return to the Employer any
         amount referred to in Section 403(e)(2) of ERISA.

11.03    Authorized Action. Any action to be taken under this Trust Agreement
         by an Employer or other person which is: (a) a corporation shall be
         taken by the board of directors of the corporation or any person or
         persons duly empowered by the board of directors to take the action
         involved, (b) a partnership shall be taken by an authorized general
         partner of the partnership, and (c) a sole proprietorship by the sole
         proprietor.

11.04    Text of Plan. The Employer represents that, prior to the execution of
         this Trust Agreement by both parties, it delivered to the Trustee the
         text of the Plan as in effect as of the date of this Trust Agreement.
         The Employer shall deliver to the Trustee promptly after adoption
         thereof a certified copy of any amendment of the Plan.

11.05    Conflict with Plan. The rights, duties, responsibilities, obligations
         and liabilities of the Trustee are as set forth in this Trust
         Agreement, and no provision of the Plan or any other document shall be
         deemed to affect such rights, duties, responsibilities, obligations and
         liabilities. If there is a conflict between provisions of the Plan and
         this Trust Agreement with respect to any subject involving the Trustee,
         including but not limited to the responsibility, authority or powers of
         the Trustee, the provisions of this Trust Agreement shall be
         controlling.

11.06    Failure to Maintain Qualification. If the Trust fails to qualify as a
         qualified trust under section 401(a) of the Code, or loses its status
         as such a qualified trust, the Employer shall immediately so notify the
         Trustee, and the Trustee shall, without further notice or direction,
         remove the Trust assets from any common or collective trust fund
         maintained by the Trustee or its affiliate for investments by qualified
         trusts.

11.07    Governing Law and Construction. This Trust Agreement and the Trust
         shall be construed, administered and governed under ERISA and other
         pertinent federal law, and to the extent that federal law is
         inapplicable, under the laws of the state in which the Trustee is
         incorporated as set forth above. If any provision of this Trust
         Agreement is susceptible to more than one interpretation, the
         interpretation to be given is that which is consistent with the Trust
         being a qualified trust under section 401(a) of the Code. If any
         provision of this Trust Agreement is held by a court of competent
         jurisdiction to be invalid or unenforceable, the remaining provisions
         shall continue to be fully effective to the extent possible under the
         circumstances.

<PAGE>

11.08    Successors and Assigns. This Trust Agreement shall inure to the
         benefit of and be binding upon the parties hereto and their respective
         successors and assigns.

11.09    Gender. As used in this Trust Agreement, the masculine gender shall
         include the feminine and the neuter genders and the singular shall
         include the plural and the plural the singular, as the context
         requires.

11.10    Headings. Headings and subheadings in this Trust Agreement are for
         convenience of reference only and are not to be considered in the
         construction of the provisions of the Trust Agreement.

11.11    Counterparts. This Trust Agreement may be executed in several
         counterparts, each of which shall be deemed an original, and these
         counterparts shall constitute one and the same instrument which may be
         sufficiently evidenced by any one counterpart.

<PAGE>

IN WITNESS WHEREOF, the Employer and the Trustee have executed this Trust
Agreement each by action of a duly authorized person.

Employer:_______________________________________________________________________

By (signature):_________________________________________________________________

Name:___________________________________________________________________________

Title:__________________________________________________________________________

-------------------------------------------------------------------------------
         Merrill Lynch Trust____________________________________

         By:_____________________________________________________________

         Name:___________________________________________________________

         Title:__________________________________________________________
-------------------------------------------------------------------------------

Plan Sponsor Copy

   The shaded areas will be completed by Merrill Lynch Trust.

<PAGE>

IN WITNESS WHEREOF, the Employer and the Trustee have executed this Trust
Agreement each by action of a duly authorized person.

Employer:______________________________________________________________________

By (signature):________________________________________________________________

Name:__________________________________________________________________________

Title:_________________________________________________________________________

--------------------------------------------------------------------------------
         Merrill Lynch Trust_____________________________

         By:__________________________________________________________

         Name:________________________________________________________

         Title:_______________________________________________________
--------------------------------------------------------------------------------

Merrill Lynch Trust Copy

   The shaded areas will be completed by Merrill Lynch Trust.<PAGE>
                                                                     EXHIBIT 4.1

=============================================================================

                           AMERICHOICE CORPORATION

                                     and

                            [NAME OF RIGHTS AGENT]

                                      as

                                 Rights Agent

                               RIGHTS AGREEMENT

                       Dated as of ______________, 2002

=============================================================================

<PAGE>

                              TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section                                                                                   Page
-------
<S>           <C>
   Section 1.  Certain Definitions...........................................................1

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

   Section 3.  Issuance of Right Certificates................................................5

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

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

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

   Section 7.  Exercise of Rights; Purchase Price; Expiration Date of Rights.................9

   Section 8.  Cancellation and Destruction of Right Certificates...........................11

   Section 9.  Reservation and Availability of Capital Stock................................11

   Section 10. Preferred Stock Record Date..................................................12

   Section 11. Adjustments to Number and Kind of Shares, Number of Rights or Purchase Price.13

   Section 12. Certification of Adjustments.................................................20

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

   Section 14. Fractional Rights and Fractional Shares......................................24

   Section 15. Rights of Action.............................................................25

   Section 16. Agreement of Right Holders...................................................25

   Section 17. Right Certificate Holder Not Deemed a Stockholder............................26

   Section 18. Concerning the Rights Agent..................................................26

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

   Section 20. Duties of Rights Agent.......................................................27

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

   Section 22. Issuance of New Right Certificates...........................................29

   Section 23. Redemption...................................................................30
</TABLE>

<PAGE>

<TABLE>
<S>           <C>
   Section 24. Exchange.....................................................................30

   Section 25. Notice of Proposed Actions...................................................31

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

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

   Section 28. Determinations and Actions by the Board......................................33

   Section 29. Successors...................................................................34

   Section 30. Benefits of this Rights Agreement............................................34

   Section 31. Delaware Contract............................................................34

   Section 32. Counterparts.................................................................34

   Section 33. Descriptive Headings.........................................................34

   Section 34. Severability.................................................................34
</TABLE>

Exhibit A  --  Form of Certificate of Designation

Exhibit B -- Form of Right Certificate

Exhibit C  --  Form of Summary of Rights

                                      ii

<PAGE>

                               RIGHTS AGREEMENT

        This RIGHTS AGREEMENT (this "RIGHTS AGREEMENT"), dated as of
__________, 2002, between AMERICHOICE CORPORATION, a Delaware corporation (the
"COMPANY"), and [NAME OF RIGHTS AGENT], a _______________ banking corporation
(the "RIGHTS AGENT").

                             W I T N E S S E T H:
                             - - - - - - - - - -

        WHEREAS, the Board of Directors of the Company has (i) authorized the
issuance and declared a dividend of one right (a "RIGHT") for each share of
the common stock, par value $.01 per share ("COMMON STOCK"), of the Company
outstanding as of the Close of Business (as defined herein) on _______, 2002
(the "RECORD DATE"), each Right initially representing the right to purchase
one one-thousandth of a share of Preferred Stock (as defined herein) of the
Company upon the terms and subject to the conditions hereafter set forth, and
(ii) further authorized the issuance of one Right with respect to each share
of Common Stock of the Company that shall become outstanding between the
Record Date and the earliest of the Distribution Date, the Expiration Date and
the Final Expiration Date (each such term as defined herein).

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

          SECTION 1.     CERTAIN DEFINITIONS.  For purposes of this Agreement,
the following terms shall have the meanings indicated:

        (a) "ACQUIRING PERSON" shall mean any Person that, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of 15%
or more of the outstanding Common Stock; provided, however, that (i) the term
"ACQUIRING PERSON" shall not include an Exempt Person (so long as such Person
remains an Exempt Person) or a Permitted Holder; (ii) a Person shall not be
deemed to have become an Acquiring Person for any purpose of this Agreement if
the Board of Directors in its good faith judgment determines that a Person has
inadvertently become the Beneficial Owner of 15% or more of the outstanding
Common Stock (or in the case of a Permitted Holder, has inadvertently acquired
additional shares of Common Stock so that it is no longer a Permitted Holder)
and within ten days after the date upon which the Company shall first become
aware of the occurrence of such an event, the Board of Directors in its sole
discretion provides such Person with a five-day period to divest a sufficient
number of shares so that such Person no longer is the Beneficial Owner of 15%
or more of the outstanding Common Stock (or in the case of a Permitted Holder,
to divest all shares of Common Stock that prevent such Person from being a
Permitted Holder), and such Person has so divested such shares of Common Stock
at the end of any such five-day period and has not acquired any additional
shares of Common Stock prior to the end of such five-day period; and (iii)
shares of Common Stock Beneficially Owned by the Company or any Subsidiary of
the Company shall not be considered outstanding for purposes of calculating
any Person's percentage ownership of the outstanding Common Stock.

        (b)  "ADJUSTMENT SHARES" shall have the meaning set forth in Section
11(a)(ii) hereof.

<PAGE>

        (c)    "AFFILIATE" and "ASSOCIATE" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), as
in effect on the date of this Rights Agreement.

        (d)    A Person shall be deemed the "BENEFICIAL OWNER" of, and shall
be deemed to "BENEFICIALLY OWN," any securities:

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

               (ii)   which such Person or any of such Person's Affiliates or
        Associates, directly or indirectly has (A) 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, rights (other than these Rights),
        warrants or options, or otherwise; provided, however, that a Person
        shall 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 pursuant to, and in accordance with, the applicable rules
        and regulations promulgated under the Exchange Act, until such
        tendered securities are accepted for purchase or exchange; or (B) the
        right to vote pursuant to any agreement, arrangement or understanding
        (whether or not in writing); provided, however, that a Person shall
        not be deemed the "BENEFICIAL OWNER" of, or to "BENEFICIALLY OWN", any
        securities if the agreement, arrangement or understanding to vote such
        security (1) arises solely from a revocable proxy or consent 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 by
        such Person on Schedule 13D or Schedule 13G under the Exchange Act (or
        any comparable or successor report); or

               (iii)   which are beneficially owned, directly or indirectly,
        by any other Person (or any Affiliates or Associates thereof) with
        which such Person or any of such Person's Affiliates or Associates has
        any agreement, arrangement or understanding (whether or not in
        writing) for the purpose of acquiring, holding, voting (except as
        described in the proviso to clause (B) of subparagraph (ii) of this
        paragraph (d)) or disposing of any securities of the Company;

provided, however, that nothing in this paragraph (d) shall 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 a firm commitment underwriting until the
expiration of 40 days after the date of such acquisition.

Notwithstanding anything in this definition of Beneficial Ownership to the
contrary, (i) the phrase "THEN OUTSTANDING", when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding that such Person
would be deemed to Beneficially Own under this Agreement.

                                      2
<PAGE>

        (e)    "BUSINESS DAY" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.

        (f)    "CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M.,
Eastern Time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Eastern Time, on the next succeeding
Business Day.

        (g)    "COMMON STOCK," when used with reference to the Company, shall
mean the common stock, par value $.01 per share, of the Company and, when used
with reference to any Person other than the Company, shall mean the capital
stock or other equity interests with the greatest per share or per unit voting
power of such other Person or, if such other Person is a Subsidiary of or is
controlled by another Person, the Person or Persons that ultimately controls
such first-mentioned Person.

        (h)    "COMMON STOCK EQUIVALENTS" shall have the meaning set forth in
Section 11(a)(iii) hereof.

        (i)    "CURRENT MARKET PRICE" shall have the meaning set forth in
Section 11(d) hereof.

        (j)    "CURRENT VALUE" shall have the meaning set forth in Section
11(a)(iii) hereof.

        (k)    "DISTRIBUTION DATE" shall have the meaning set forth in Section
3(a) hereof.

        (l)    "EQUIVALENT PREFERRED STOCK" shall have the meaning set forth
in Section 11(b) hereof.

        (m)    "EXCHANGE ACT" shall have the meaning set forth in Section l(c)
hereof.

        (n)    "EXCHANGE RATIO" shall have the meaning set forth in Section
24(a) hereof.

        (o)     "EXEMPT PERSON" shall mean:

                (i)     the Company, any Subsidiary of the Company, any
        employee benefit plan or employee stock plan of the Company or of any
        Subsidiary of the Company, or any Person or entity organized,
        appointed, established or holding Common Stock for or pursuant to the
        terms of any such plan;

               (ii)    (a)       those stockholders listed on Schedule I
        hereto or any stockholder who is a descendant of such stockholders
        (each, an "ORIGINAL STOCKHOLDER", and together, the "ORIGINAL
        STOCKHOLDERS"), (b) any stockholder who is an Affiliate or Associate
        of an Original Stockholder, or (c) any Person who would otherwise
        become an Acquiring Person as a result of the acquisition of Common
        Stock or a Beneficial Interest in Common Stock from an Original
        Stockholder (or from any Affiliate or Associate of an Original
        Stockholder) by way of gift, devise, descent or distribution;
        provided, however, that no Person described in the foregoing clauses
        (a), (b) or (c) shall be an Exempt Person if such Person (together
        with all Affiliates and Associates of such Person) is the Beneficial
        Owner of more than 30% of the outstanding Common Stock; and

                                      3
<PAGE>

               (iii)   any Person who as of the date hereof was the Beneficial
        Owner of 15% or more of the outstanding Common Stock; provided,
        however, that such Person shall not be an Exempt Person if subsequent
        to the date hereof such Person becomes the Beneficial Owner of any
        additional shares of Common Stock.

        (p)    "EXPIRATION DATE" shall have the meaning set forth in Section
7(a) hereof.

        (q)    "FINAL EXPIRATION DATE" shall have the meaning set forth in
Section 7(a) hereof.

        (r)    "NASDAQ" shall have the meaning set forth in Section 9(b)
hereof.

        (s)    "PERMITTED HOLDER" shall mean any Person who would otherwise
become an Acquiring Person solely by virtue of a reduction in the number of
outstanding shares of Common Stock; provided, however, that such Person shall
not be a Permitted Holder if, subsequent to such reduction, such Person shall
become the Beneficial Owner of any additional shares of Common Stock.

        (t)    "PERSON" shall mean any individual, firm, corporation,
partnership, joint venture, limited liability company, association, trust,
unincorporated organization or other entity, and shall include any successor
(by merger or otherwise) of such entity, as well as any syndicate or group
deemed to be a person under Section 14(d)(2) of the Exchange Act.

        (u)    "PREFERRED STOCK" shall mean shares of Series A Junior
Participating Preferred Stock, par value $0.01 per share, of the Company,
having the rights, preferences and limitations set forth in the Certificate of
Designation attached to this Rights Agreement as Exhibit C, and, to the extent
there are not a sufficient number of shares of Series A Junior Participating
Preferred Stock authorized to permit the full exercise of the then outstanding
Rights, any other series of preferred stock of the Company containing terms
substantially similar to the terms of the Series A Junior Participating
Preferred Stock.

        (v)    "PRINCIPAL PARTY" shall have the meaning set forth in Section
13(b) hereof.

        (w)    "PURCHASE PRICE" shall have the meaning set forth in Section
4(a) hereof.

        (x)    "RECORD DATE" shall have the meaning set forth in the recitals
clause at the beginning of this Rights Agreement.

        (y)    "REDEMPTION PRICE" shall have the meaning set forth in Section
23(a) hereof.

        (z)    "RIGHT CERTIFICATE" shall have the meaning set forth in Section
3(a) hereof.

        (aa)   "SECTION 11(a)(ii) EVENT" shall mean an event described in
Section 11(a)(ii) hereof.

        (bb)   "SECTION 13 EVENT" shall mean any event described in clause
(x), (y) or (z) of Section 13(a) hereof.

        (cc)   "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.

                                      4
<PAGE>

        (dd)   "STOCK ACQUISITION DATE" shall mean the first date of a public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) or (g) under the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has become
such; provided, however, that if such Person is determined not to have become
an Acquiring Person pursuant to Section 1(a), then no Stock Acquisition Date
shall be deemed to have occurred.

        (ee)   "SUBSIDIARY" of a Person shall mean any corporation or other
entity of which securities or other ownership interests having ordinary voting
power sufficient to elect a majority of the board of directors or other
persons performing similar functions are Beneficially Owned, directly or
indirectly, by such Person.

        (ff)   "SUBSTITUTION PERIOD" shall have the meaning set forth in
Section 11(a)(iii) hereof.

        (gg)   "SUMMARY OF RIGHTS" shall have the meaning set forth in Section
3(b) hereof.

        (hh)   "TRADING DAY" shall have the meaning set forth in Section 11(d)
hereof.

        (ii)   "TRIGGERING EVENT" shall mean any event described in Section
11(a)(ii) or Section 13 hereof.

         SECTION 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 hereof, shall prior to the Distribution
Date also be the holders of the Common Stock) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable. If the Company appoints one or more co-Rights Agents,
the respective duties of the Rights Agent and any co-Rights Agents shall be as
the Company shall determine.

          SECTION 3. ISSUANCE OF RIGHT CERTIFICATES.

        (a) Until the earlier of (i) the Close of Business on the tenth day
after the Stock Acquisition Date and (ii) the Close of Business on the tenth
Business Day (or such later date as may be determined by action of the Board
of Directors prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement by any Person (other than an Exempt Person)
of, or the first public announcement of the intent of any Person (other than
an Exempt Person) to commence, a tender or exchange offer upon the successful
consummation of which such Person, together with its Affiliates and
Associates, would be the Beneficial Owner of 15% or more of the outstanding
Common Stock (irrespective of whether any shares are actually purchased
pursuant to such offer) (the earlier of such dates described in clauses (i)
and (ii) being referred to herein as the "DISTRIBUTION DATE"), (x) the Rights
will be evidenced (subject to the provisions of Section 3(c) hereof) by the
certificates for the Common Stock registered in the names of the holders of
the Common Stock (which certificates for Common Stock shall be deemed also to
be certificates for Rights) and not by separate Right Certificates, and (y)
each Right (and the right to receive separate Right Certificates) will be
transferable only in connection with the transfer of a share (subject to
adjustment as hereinafter provided) of Common Stock. As soon as practicable
after the Distribution Date, the Company will prepare and execute, and

                                      5
<PAGE>

the Rights Agent will send, by first-class, insured, postage prepaid mail, to
each record holder of the Common Stock as of the Close of Business on the
Distribution Date, as shown by the records of the Company, at the address of
such holder shown on such records, a Right Certificate in substantially the
form of Exhibit B hereto ("RIGHT CERTIFICATE") evidencing one Right for each
share of Common Stock 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 and will be transferable separately from the Common Stock.

        (b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights to Purchase Preferred Stock,
substantially in the form attached hereto as Exhibit C ("SUMMARY OF RIGHTS"),
by first-class, postage prepaid mail, to each record holder of Common Stock as
of the Close of Business on the Record Date at the address of such holder
shown on the records of the Company.

        (c) With respect to certificates for Common Stock outstanding as of
the Record Date until the Distribution Date (or, if earlier, the Expiration
Date or the Final Expiration Date), the Rights will be evidenced by
certificates for Common Stock registered in the names of the holders thereof
together with a copy of the Summary of Rights. Until the Distribution Date
(or, if earlier, the Expiration Date or the Final Expiration Date), the
surrender for transfer of any certificate for Common Stock outstanding on the
Record Date, with or without a copy of the Summary of Rights, shall also
constitute the surrender for transfer of the Rights associated with the Common
Stock represented thereby.

        (d) Certificates issued for Common Stock (including, without
limitation, certificates issued upon transfer or exchange of Common Stock)
after the Record Date, but prior to the earliest of the Distribution Date, the
Expiration Date or the Final Expiration Date, shall have impressed on, printed
on, written on or otherwise affixed to them the following legend:

        This certificate also evidences and entitles the holder hereof to
        certain Rights as set forth in a Rights Agreement between AmeriChoice
        Corporation and ________, as Rights Agent, dated as of _____, 2002
        (the "RIGHTS AGREEMENT"), the terms of which are incorporated herein
        by reference and a copy of which is on file at the principal executive
        office of AmeriChoice Corporation. Under certain circumstances, as set
        forth in the Rights Agreement, such Rights will be evidenced by
        separate certificates and will no longer be evidenced by this
        certificate. AmeriChoice Corporation will mail to the holder of this
        certificate a copy of the Rights Agreement without charge after
        receipt by it of a written request therefor. Under certain
        circumstances as provided in the Rights Agreement, Rights issued to or
        beneficially owned by Acquiring Persons or their Associates or
        Affiliates (as defined in the Rights Agreement) or any subsequent
        holder of such Rights will become null and void.

With respect to such certificates containing the foregoing legend, the Rights
associated with the Common Stock represented by such certificates shall, until
the earliest of the Distribution Date, the Expiration Date or the Final
Expiration Date, be evidenced by such certificates alone, and the surrender
for transfer of any such certificate shall also constitute the surrender for
transfer of the Rights associated with the Common Stock represented thereby.
If the Company purchases or

                                      6
<PAGE>

acquires any Common Stock after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Stock shall be deemed canceled
and retired so that the Company shall not be entitled to exercise any Rights
associated with shares of Common Stock that are no longer outstanding.

         SECTION 4.     FORM OF RIGHT CERTIFICATES.

        (a) The Right Certificates (and the forms of election to purchase
shares and of assignment to be printed on the reverse thereof), when, as and
if issued, shall be substantially in the form set forth in Exhibit B hereto
and may have such 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 Rights Agreement, or
as may be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange or
trading system on which the Rights may from time to time be listed or traded,
or to conform to usage. Subject to the provisions of Sections 11 and 22
hereof, the Right Certificates whenever distributed shall be dated as of the
Record Date and on their face shall entitle the holders thereof to purchase
such number of one one-thousandths of a share of Preferred Stock, as shall be
set forth therein at the price per one-thousandth of a share of Preferred
Stock (the "PURCHASE PRICE"), but the amount and type of securities
purchasable upon exercise of each Right and the Purchase Price thereof shall
be subject to adjustment as provided therein and in this Rights Agreement.

        (b) Notwithstanding any other provision of this Rights Agreement, any
Right Certificate that represents Rights that are or were at any time on or
after the Distribution Date Beneficially Owned by an Acquiring Person or any
Affiliate or Associate thereof (or any transferee of such Rights) shall have
impressed on, printed on, written on or otherwise affixed to it (if the
Company or the Rights Agent has knowledge that such Person is an Acquiring
Person or an Associate or Affiliate thereof or transferee of such Persons or a
nominee of any of the foregoing) the following legend:

        The beneficial owner of the Rights represented by this Right
        Certificate is an Acquiring Person or an Affiliate or Associate (as
        such terms are defined in the Rights Agreement) of an Acquiring Person
        or a subsequent holder of such Right Certificate beneficially owned by
        such Persons. Accordingly, under circumstances specified in the Rights
        Agreement, this Right Certificate and the Rights represented hereby
        will become null and void.

Notwithstanding the above provision, failure to place such legend on any Right
Certificate representing Rights that are otherwise null and void pursuant to
the terms of this Rights Agreement shall not affect the null and void status
of such Rights.

         SECTION 5.     COUNTERSIGNATURE AND REGISTRATION

        (a) The Right Certificates shall be executed on behalf of the Company
by its Chief Executive Officer, President or any Vice President, either
manually or by facsimile signature, and shall have affixed thereto the
Company's seal or a facsimile thereof that shall be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile

                                      7
<PAGE>

signature. The Right Certificates shall be countersigned (which
countersignature may be a facsimile) by the Rights Agent and shall not be
valid for any purpose unless so countersigned. If any officer of the Company
who shall have signed any of the Right Certificates shall cease 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 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, shall be 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 an officer.

        (b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office, books for registration and transfer
of the Right Certificates issued hereunder. Such books shall 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, the date of
each of the Right Certificates, and the certificate numbers for each of the
Right Certificates.

         SECTION 6.     TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.

        (a) Subject to the provisions of Section 14 hereof, at any time after
the Close of Business on the Distribution Date and at or prior to the Close of
Business on the earlier of the Expiration Date or the Final Expiration Date,
any Right Certificate or Right Certificates may be (a) transferred or (b)
split up, combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number of one
one-thousandths of a share of Preferred Stock (or, following a Triggering
Event, Common Stock or other securities, cash or other assets, as the case may
be) as the Right Certificate or Right Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to transfer any Right
Certificate shall surrender the Right Certificate at the principal office of
the Rights Agent with the form of assignment on the reverse side thereof (or
enclose with such Right Certificate a written instrument of transfer in a form
satisfactory to the Company and the Rights Agent), duly executed by the
registered holder thereof or his attorney duly authorized in writing, and with
such signature duly guaranteed. Any registered holder desiring to split up,
combine or exchange any Right Certificate shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right Certificate or
Right Certificates to be split up, combined or exchanged at the principal
office of the Rights Agent. Thereupon the Rights Agent shall countersign
(which countersignature may be a facsimile) and deliver to the person entitled
thereto 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

                                      8
<PAGE>

reasonable expenses incidental thereto, and upon surrender to the Rights Agent
and cancellation of the Right Certificate if mutilated, the Company will
execute and deliver a new Right Certificate of like tenor to the Rights Agent
for delivery to the registered holder in lieu of the Right Certificate so
lost, stolen, destroyed or mutilated.

         SECTION 7.     EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.

        (a) Subject to Section 7(e), the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein, including, without limitation, the restrictions on
exercisability set forth in Section 9(b), Section 11(a)(iii) and Section
23(a)), in whole or in part at any time after the Distribution Date upon
surrender of the Right Certificate, with the form of election to purchase on
the reverse side thereof duly executed (with such signature duly guaranteed),
to the Rights Agent at the principal office of the Rights Agent designated for
such purpose, together with payment of the aggregate Purchase Price with
respect to each Right exercised, subject to adjustment as hereinafter
provided, at or prior to the earlier of (i) the Close of Business on February
20, 2012 (the "FINAL EXPIRATION DATE"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (such date being herein referred to
as the "EXPIRATION DATE") and (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.

        (b) The Purchase Price shall initially be $75 for each one
one-thousandth of a share of Preferred Stock issued pursuant to the exercise
of a Right. The Purchase Price and the number of one one-thousandths of a
share of Preferred Stock or other securities or consideration to be acquired
upon exercise of a Right shall be subject to adjustment from time to time as
provided in Sections 11 and 13 hereof. The Purchase Price shall be payable in
lawful money of the United States of America, in accordance with Section 7(c)
hereof.

        (c) Except as provided in Section 7(d) hereof, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase and the Right Certificate duly executed, accompanied by payment of
the Purchase Price or so much thereof as is necessary for the shares or other
securities or assets to be purchased and an amount equal to any applicable
transfer tax, by cash, certified check or official bank check payable to the
order of the Company or the Rights Agent, the Rights Agent subject to Section
20(j) shall thereupon promptly (i) (A) requisition from any transfer agent of
the Preferred Stock (or make available, if the Rights Agent is the transfer
agent for such shares) certificates for the number of shares of Preferred
Stock so elected to be purchased and the Company will comply and hereby
authorizes and directs such transfer agent to comply with all such requests,
or (B) if the Company shall have elected to deposit the total number of shares
of Preferred Stock issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent depositary receipts
representing such number of shares of Preferred Stock as are to be purchased
(in which case certificates for the shares of Preferred Stock represented by
such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company will direct the depositary agent to comply with such
request, (ii) when appropriate, requisition from the Company the amount of
cash, if any, to be paid in lieu of issuance of fractional shares in
accordance with Section 14(b) hereof, or the depositary receipts, (iii)
promptly after receipt of such certificates or depositary receipts, 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, and

                                      9
<PAGE>

(iv) after receipt promptly deliver such cash to or upon the order of the
registered holder of such Right Certificate; provided, however, that in the
case of a purchase of securities, other than Preferred Stock, pursuant to
Section 13 hereof, the Rights Agent shall promptly take the appropriate
actions corresponding to the foregoing clauses (i) through (iv). In the event
that the Company is obligated to issue other securities of the Company, pay
cash and/or distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such other securities,
cash and/or other property are available for distribution by the Rights Agent,
if and when appropriate. The Company reserves the right to require prior to
the occurrence of a Triggering Event that, upon any exercise of Rights, a
number of Rights be exercised so that only whole shares of Preferred Stock
would be issued. Subject to Section 24, the payment of the Purchase Price (as
such amount may be reduced pursuant to Section 11(a)(iii)) may be made in cash
or by certified or bank check payable to the order of the Company, or by wire
transfer of immediately available funds to the account of the Company
(provided that notice of such wire transfer shall be given by the holder of
the related Right to the Rights Agent).

        (d) If the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14 hereof.

        (e) Notwithstanding anything in this Rights Agreement to the contrary,
from and after the first occurrence of any Triggering Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) that becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) that becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and that receives such Rights pursuant
to either (A) a transfer (whether or not for consideration) from the Acquiring
Person (or any such Associate or Affiliate) to holders of equity interests in
such Acquiring Person (or such Associate or Affiliate) or to any Person with
whom such Acquiring Person (or such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding the transferred Rights,
shares of Common Stock or the Company or (B) a transfer that a majority of the
Board of Directors has determined to be part of a plan, arrangement or
understanding that has as a primary purpose or effect the avoidance of this
Section 7(e), shall be null and void without any further action, and no holder
of such Rights shall have any rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or otherwise. The Company shall
use all reasonable efforts to ensure that the provisions of this Section 7(e)
and Section 4(b) are complied with, but shall have no liability to any holder
of Rights or any other Person as a result of its failure to make any
determination under this Section 7(e) or Section 4(b) with respect to an
Acquiring Person or its Affiliates, Associates or transferees.

        (f) Notwithstanding anything in this Rights Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side of the Right
Certificate surrendered for

                                      10
<PAGE>

such 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 shall reasonably request.

         SECTION 8.     CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.

        All Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the
Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights Agent,
shall be cancelled by it, and no Right Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this Rights
Agreement. The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy or cause to be destroyed such cancelled Right Certificates, and in
such case shall deliver a certificate of destruction thereof to the Company.

         SECTION 9.     RESERVATION AND AVAILABILITY OF CAPITAL STOCK.

        (a) Subject to the Company's rights under Section 11(a)(iii) to
otherwise fulfill its obligations hereunder, the Company covenants and agrees
that it will cause to be reserved and kept available, out of and to the extent
of its authorized and unissued shares of Preferred Stock not reserved for
another purpose (and, following the occurrence of a Triggering Event, out of
its authorized and unissued shares of Common Stock or other securities) or
shares held in its treasury, the number of shares of Preferred Stock (and,
following the occurrence of a Triggering Event, shares of Common Stock or
other securities) that, as provided in this Rights Agreement, including
Section 11(a)(iii) hereof, will be sufficient to permit the exercise in full
of all outstanding Rights; provided, however, that the Company shall not be
required to reserve and keep available shares of Common Stock or other
securities sufficient to permit the exercise in full of all outstanding Rights
pursuant to the adjustments set forth in Section 11(a)(ii), Section 11(a)(iii)
or Section 13 hereof unless, and only to the extent that, the Rights become
exercisable pursuant to Section 7(a) following such adjustments.

        (b) The Company shall (i) use its best efforts to cause, from and
after such time as the Rights become exercisable, the Rights and all shares of
Preferred Stock (and following the occurrence of a Triggering Event, Common
Stock or other securities) issued or reserved for issuance upon exercise
thereof to be listed on The Nasdaq Stock Market's National Market ("NASDAQ")
or any other national securities exchange upon notice of issuance upon such
exercise and (ii) if then necessary to permit the offer and issuance of such
shares of Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock or other securities), register and qualify such shares of
Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock or other securities) under the Securities Act and any applicable state
securities or "blue sky" laws (to the extent exemptions therefrom are not
available), cause such registration statement and qualifications to become
effective as soon as practicable after such filing and keep such registration
and qualifications effective until the earlier of the Expiration Date or the
Final Expiration Date of the Rights. The Company may temporarily suspend, for
a period of time not

                                      11
<PAGE>

to exceed 180 days, the exercisability of the Rights in order to prepare and
file a registration statement under the Securities Act and permit it to become
effective. Upon any such suspension, the Company shall 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 any provision of this
Rights Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall
have been obtained and until a registration statement under the Securities Act
(if required) shall have been declared effective.

        (c) The Company covenants and agrees that it will take all such action
as may be necessary to insure that all shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock or other
securities) delivered upon exercise of Rights shall, at the time of delivery
of the certificates for such shares (subject to payment of the Purchase Price
in respect thereof), be duly and validly authorized and issued and fully paid
and nonassessable shares in accordance with applicable law.

        (d) The Company further covenants and agrees that 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 or
of any shares of Preferred Stock (or shares of Common Stock or other
securities, as the case may be) upon the exercise of Rights. The Company shall
not, however, be required to pay any transfer tax that 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 for Preferred Stock (or
shares of Common Stock or other securities, as the case may be) upon exercise
of Rights in a name other than that of, the registered holder of the Right
Certificate, and the Company shall not be required to issue or deliver a Right
Certificate or certificate for Preferred Stock (or shares of Common Stock or
other securities, as the case may be) to a person other than such registered
holder until any such tax shall have been paid (any such tax being payable by
the holder of such Right Certificate at the time of surrender) or until it has
been established to the Company's satisfaction that no such tax is due.

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

                                      12
<PAGE>

         SECTION 11.    ADJUSTMENTS TO NUMBER AND KIND OF SHARES, NUMBER OF
RIGHTS OR PURCHASE PRICE.

        The number and kind of shares subject to purchase upon the exercise of
each Right, the number of Rights outstanding and the Purchase Price are
subject to adjustment from time to time as provided in this Section 11.

               (a)     (i) If the Company shall at any time after the Record
        Date (A) declare or pay any dividend on Preferred Stock payable in
        shares of Preferred Stock, (B) subdivide or split the outstanding
        shares of Preferred Stock into a greater number of shares, (C) combine
        or consolidate the outstanding shares of Preferred Stock into a
        smaller number of shares or effect a reverse split of the outstanding
        shares of Preferred Stock or (D) issue any shares of its capital stock
        in a reclassification of the Preferred Stock (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 Section 7(e) or 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 the number and kind of shares of Preferred Stock
        or capital stock, as the case may be, issuable on such date, shall be
        proportionately adjusted so that the holder of any Right exercised
        after such time shall be entitled to receive, upon payment of the
        Purchase Price then in effect, the aggregate number and kind of shares
        of Preferred Stock or capital stock, as the case may be, which, if
        such Right had been exercised immediately prior to such date, the
        holder thereof would have owned upon such exercise and 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 such Right be less
        than the per share par value of the shares of capital stock of the
        Company issuable upon exercise of the Right.  If an event occurs that
        would require an adjustment under both this Section 11(a)(i) and
        Section 11(a)(ii) hereof, the adjustment provided for in this Section
        11(a)(i) shall be in addition to, and shall be made prior to, any
        adjustment required pursuant to Section 11(a)(ii).

               (ii) Subject to Section 23(a) and Section 24, if any Person
        shall at any time after the date of this Agreement become an Acquiring
        Person (a "SECTION 11(a)(II) EVENT"), then, except as otherwise
        provided in this Section 11, promptly following the occurrence of such
        event, proper provision shall be made so that each holder of a Right
        (except as provided in Section 7(e)) shall thereafter have the right
        to receive, upon exercise thereof at the then current Purchase Price
        in accordance with the terms of this Rights Agreement in lieu of the
        number of one one-thousandths of a share of Preferred Stock, such
        number of shares of Common Stock of the Company as shall equal the
        result obtained by (x) multiplying the then current Purchase Price by
        the then number of one one-thousandths of a share of Preferred Stock
        for which a Right was exercisable immediately prior to the first
        occurrence of a Section 11(a)(ii) Event, and (y) dividing that product
        (such product, following such first occurrence, shall be referred to
        as the "PURCHASE PRICE" with respect to each Right for all purposes of
        this Agreement) by 50% of the Current Market Price (determined
        pursuant to Section 11(d)) per share of such class of Common Stock for
        which a Right is exercisable on the date of such first occurrence
        (such number of shares is herein called the "ADJUSTMENT SHARES");
        provided

                                      13
<PAGE>

        that the Purchase Price and the number of Adjustment Shares shall be
        further adjusted as provided in this Rights Agreement to reflect any
        events occurring after the date of such first occurrence; and
        provided, further, that if the transaction that would otherwise give
        rise to the foregoing adjustment is also subject to the provisions of
        Section 13, then only the provisions of Section 13 shall apply and no
        adjustment shall be made pursuant to this Section 11(a)(ii).
        Notwithstanding the foregoing, upon the occurrence of a Section
        11(a)(ii) Event, any Rights that are or were at any time, on or after
        the earlier of the Stock Acquisition Date or the Distribution Date,
        Beneficially Owned by the Acquiring Person or any Associate or
        Affiliate of the Acquiring Person shall become null and void and any
        holder of such Rights shall thereafter have no right to exercise such
        Rights under any provision of this Rights Agreement.

               (iii) If the number of shares of Common Stock that are
        authorized by the Company's certificate of incorporation but that are
        not outstanding or reserved for issuance for purposes other than upon
        exercise of the Rights is not sufficient to permit the exercise in
        full of the Rights in accordance with Section 11(a)(ii) and the Rights
        shall become so exercisable, the Company shall take all such action as
        may be necessary (including seeking stockholder approval for the
        authorization of additional shares) to authorize additional shares of
        Common Stock for issuance upon exercise in full of the Rights;
        provided, however, that if the Company after using its reasonable best
        efforts to do so is unable to cause the authorization of a sufficient
        number of additional shares of Common Stock within 120 days (the
        "SUBSTITUTION PERIOD"), the Company shall: (A) determine the value of
        the Adjustment Shares issuable upon the exercise of a Right (the
        "CURRENT VALUE") and (B) with respect to each Right (subject to
        Section 7(e)), upon the exercise of such Right and payment of the
        applicable Purchase Price, make adequate provision to substitute for
        the Adjustment Shares (1) cash, (2) a reduction in the Purchase Price,
        (3) equity securities other than shares of Common Stock of the Company
        (including, without limitation, shares, or units of shares, of
        preferred stock of the Company that, by virtue of having dividend,
        voting and liquidation rights substantially comparable to the class of
        shares of Common Stock of the Company for which a Right is exercisable
        are deemed in good faith by the Board of Directors of the Company to
        have essentially the same value as the class of shares of Common Stock
        of the Company for which a Right is exercisable (such shares or units
        of shares of preferred stock are herein called "COMMON STOCK
        EQUIVALENTS")), (4) debt securities of the Company, (5) other assets,
        or (6) any combination of the foregoing, having an aggregate value
        that, when added to the value of the shares of Common Stock of the
        Company actually issued upon exercise of such Right, shall have an
        aggregate value equal to the Current Value (less the amount of any
        reduction in the Purchase Price), where such aggregate value has been
        determined in good faith by the Board of Directors of the Company
        based upon the advice of a nationally recognized independent
        investment banking firm selected in good faith by the Board of
        Directors of the Company; provided, however, that if the Company shall
        not have made adequate provision to deliver value pursuant to clause
        (B) above within 120 days following the later of (x) the first
        occurrence of a Section 11(a)(ii) Event and (y) the date on which the
        Company's right of redemption pursuant to Section 23(a) expires, then
        the Company shall be obligated to deliver, upon the surrender for
        exercise of a Right and without requiring payment of the Purchase
        Price, the shares of Common Stock of the Company for which a Right is
        exercisable (to the extent available) and then,

                                      14
<PAGE>

        if necessary, cash or shares of capital stock of the Company, which
        shares and/or cash have an aggregate value equal to the excess of the
        Current Value over the Purchase Price. To the extent that the Company
        determines that some action need be taken pursuant to the first
        sentence of this Section 11(a)(iii), the Company (x) shall provide,
        subject to Section 7(e), that such action shall apply uniformly to all
        outstanding Rights, and (y) may suspend the exercisability of the
        Rights until the expiration of the Substitution Period in order to
        seek any authorization of additional shares and/or to decide the
        appropriate form of distribution to be made pursuant to such first
        sentence and to determine the value thereof. In the event of any such
        suspension, the Company shall 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. For purposes of this Section 11(a)(iii), the value
        of each Adjustment Share shall be the Current Market Price per share
        of Common Stock of the Company on the date of occurrence of the
        Section 11(a)(ii) Event and the per share or per unit value of any
        Common Stock Equivalent shall be deemed to equal the Current Market
        Price per share of Common Stock of the Company on such date.

        (b) If the Company shall fix a record date for the issuance of rights
(other than the Rights), options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period expiring within 45
calendar days after such record date) Preferred Stock, shares having the same
rights, privileges and preferences as the Preferred Stock ("EQUIVALENT
PREFERRED STOCK") or securities convertible into Preferred Stock or Equivalent
Preferred Stock at a price per share of Preferred Stock or Equivalent
Preferred Stock (or having a conversion price per share, if a security
convertible into Preferred Stock or Equivalent Preferred Stock) less than the
Current Market Price per share of Preferred Stock on such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of shares of
Preferred Stock outstanding on such record date, plus the number of shares of
Preferred Stock that the aggregate offering price of the total number of
shares of Preferred Stock and/or Equivalent Preferred Stock (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such Current Market Price, and the denominator of
which shall be the number of shares of Preferred Stock outstanding on such
record date, plus the number of additional shares of Preferred Stock and/or
Equivalent Preferred Stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible).
In case such subscription price may be paid by delivery of consideration part
or all of which may be in a form other than cash, the value of such non-cash
consideration shall be as determined in good faith by the Board of Directors
of the Company, whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent and the holders
of the Rights. Shares of Preferred Stock owned by or held for the account of
the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed, and in the event that such rights or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price that
would then be in effect if such record date had not been fixed.

        (c) If the Company shall fix a record date for a distribution to all
holders of Preferred Stock (including any such distribution made in connection
with a consolidation or merger in

                                      15
<PAGE>

which the Company is the continuing corporation) of evidences of indebtedness,
cash (other than a regular quarterly cash dividend out of the earnings or
retained earnings of the Company), assets (other than a dividend payable in
Preferred Stock, but including any dividend payable in stock other than
Preferred Stock) or subscription rights or warrants (excluding those referred
to in Section 11(b) hereof), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the Current Market Price per share of Preferred Stock on such record
date, less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription rights
or warrants applicable to a share of Preferred Stock and the denominator of
which shall be such Current Market Price per share of Preferred Stock. Such
adjustments shall be made successively whenever such a record date is fixed;
and in the event that such distribution is not so made, the Purchase Price
shall be adjusted to be the Purchase Price that would have been in effect if
such record date had not been fixed.

        (d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "CURRENT MARKET
PRICE" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of the Common Stock for the 30
consecutive Trading Days (as such term is hereinafter defined) immediately
prior to such date, and for purpose of computations made pursuant to Section
11(a)(iii) hereof, the "CURRENT MARKET PRICE" per share of the Common Stock on
any date shall be deemed to be the average of the daily closing prices per
share of the Common Stock for the ten consecutive Trading Days immediately
following such date; provided, however, that in the event that the Current
Market Price per share of the Common Stock is determined during a period
following the announcement by the issuer of such Common Stock of (i) any
dividend or distribution on the Common Stock (other than a regular quarterly
cash dividend and other than the Rights), or (ii) any subdivision, combination
or reclassification of the Common Stock, and prior to the expiration of the
requisite 30 Trading Day or ten Trading Day period, as set forth above, the
ex-dividend date for such dividend or distribution, or the record date for
such subdivision, combination or reclassification occurs, then, and in each
such case, the Current Market Price shall be properly adjusted to take into
account ex-dividend trading. The closing price for each day shall 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 Nasdaq or, if the
shares of Common Stock are not listed or admitted to trading on Nasdaq, as
reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading or, if the
shares of Common Stock are not listed or admitted to trading on any national
securities exchange, the last quoted sale 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 such other system then in use, or, if on any such date the
shares of Common Stock 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 Stock selected by the Board of Directors of the
Company. If on any such date no market maker is making a market in the Common
Stock, the fair value of such shares on such date as determined in good faith
by the Board of Directors of the Company shall be used. The term "TRADING DAY"
shall mean a day on

                                      16
<PAGE>

which the principal national securities exchange or national market system on
which the shares of Common Stock are listed or admitted to trading is open for
the transaction of business or, if the shares of Common Stock are not listed
or admitted to trading on any national securities exchange or national market
system, a Business Day. If the Common Stock is not publicly held or not so
listed or traded, "CURRENT MARKET PRICE" per share shall mean the fair value
per share as determined in good faith by the Board of Directors of the Company
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.

        (ii) For the purpose of any computation hereunder, the "CURRENT MARKET
PRICE" per share of Preferred Stock shall be determined in the same manner as
set forth for the Common Stock in Section 11(d)(i) hereof (other than the last
sentence thereof). If the Current Market Price per share or one one-thousandth
of a share of Preferred Stock cannot be determined in the manner provided
above or if the Preferred Stock is not publicly held or listed or traded in a
manner described in Section 11(d)(i) hereof, the "CURRENT MARKET PRICE" per
share of Preferred Stock shall be conclusively deemed to be an amount equal to
1000 (as such number may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to the Common Stock
occurring after the date of this Rights Agreement) multiplied by the Current
Market Price per share of the Common Stock. If neither the Common Stock nor
the Preferred Stock is publicly held or so listed or traded, "CURRENT MARKET
PRICE" per share of the Preferred Stock shall mean the fair value per share as
determined in good faith by the Company, acting by resolution of its Board of
Directors, whose determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes. For all purposes of
this Agreement, the "CURRENT MARKET PRICE" of one one-thousandth of a share of
Preferred Stock shall be equal to the "CURRENT MARKET PRICE" of one share of
Preferred Stock divided by 1000.

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

        (f) If as a result of an adjustment made pursuant to Section 11(a)(ii)
or Section 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than Preferred
Stock, thereafter the number of such other shares so receivable upon exercise
of any Right and the Purchase Price thereof shall 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 shares of Preferred Stock contained in
Section 11(a), (b), (c), (e), (g), (h), (i), (j), (k), (l) and (m) hereof, and
the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the
Preferred Stock shall apply on like terms to any such other shares.

                                      17
<PAGE>

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

        (h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of
the calculations made in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of one
one-thousandths of a share of Preferred Stock (calculated to the nearest
one-millionth) obtained by (i) multiplying (x) the number of shares covered by
a Right immediately prior to this adjustment, 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 or any adjustment to the number of one one-thousandths of a
share of Preferred Stock for which a Right may be exercised, to adjust the
number of Rights, in lieu of any adjustment in the number of one
one-thousandths of a share of Preferred Stock purchasable upon the exercise of
a Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of one one-thousandths of a share
of Preferred Stock for which such Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest
ten-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 shall 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. This 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, shall be at least ten 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
shall, as promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall 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 shall be entitled after such adjustment. Right Certificates so to be
distributed shall 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 shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.

        (j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-thousandths of a share of Preferred Stock issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one one-thousandths of a
share of Preferred Stock and the number of one one-thousandths of a share

                                      18
<PAGE>

of Preferred Stock that were expressed in the initial Right Certificates
issued hereunder without prejudice to any such adjustment or change.

        (k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value of the number of one
one-thousandths of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action, including using its
reasonable best efforts to obtain any required stockholder approvals, which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable one one-thousandths of
a share of Preferred Stock at such adjusted Purchase Price.

        (l) In any case in which this Section 11 shall require 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
of the number of one one-thousandths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such
exercise over and above the one one-thousandths of a share of Preferred Stock
and other capital stock or 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 shall deliver to such holder a
due bill or other appropriate instrument evidencing such holder's right to
receive such additional shares (fractional or otherwise) or securities upon
the occurrence of the event requiring such adjustment.

        (m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall 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 Board of Directors of the
Company shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of any
shares of Preferred Stock at less than the Current Market Price, (iii)
issuance wholly for cash of shares of Preferred Stock or securities which by
their terms are convertible into or exchangeable for shares of Preferred
Stock, (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 Stock shall not be taxable to such stockholders.

        (n) The Company covenants and agrees that it shall not, at any time
after the Stock Acquisition Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction not prohibited by Section
11(o)), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction not prohibited by Section 11(o)), or (iii) sell
or transfer (or permit any Subsidiary to sell or transfer), in one transaction
or a series of related transactions not in the ordinary course of the
Company's business, assets, cash flow or earning power aggregating more than
50% of the assets, cash flow or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of
which is not prohibited by Section 11(o)), if (x) at the time of or
immediately after such consolidation, merger or sale there are any rights,
warrants or other instruments or securities outstanding or agreements in
effect that would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights or (y) prior to, simultaneously with or
immediately after such consolidation, merger or

                                      19
<PAGE>

sale, the stockholders of the Person who constitutes, or would constitute, the
Principal Party for purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of its
Affiliates and Associates; provided, however, this 11(n) shall not affect the
ability of any Subsidiary of the Company to consolidate with, merge with or
into, or sell or transfer assets or earning power to, any other Subsidiary of
the Company.

        (o) The Company covenants and agrees that, after the Stock Acquisition
Date, it will not, except as permitted by Section 23 or Section 27 hereof,
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 diminish
substantially or otherwise eliminate the benefits intended to be afforded by
the Rights

        (p) Anything in this Rights Agreement to the contrary, in the event
that the Company shall at any time after the date of this Rights Agreement and
prior to the Distribution Date (i) declare a dividend on the outstanding
shares of Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding shares of Common Stock, (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, or (iv) issue any shares of its
capital stock in a reclassification of Common Stock (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 share of Common Stock then outstanding, or issued or
delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated
with each share of Common Stock following any such event shall equal the
result obtained by multiplying the number of Rights associated with each share
of Common Stock immediately prior to such event by a fraction the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock outstanding immediately
following the occurrence of such event.

         SECTION 12. CERTIFICATION OF ADJUSTMENTS. Whenever an adjustment is
made as provided in Sections 11 and 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief statement of
the facts giving rise to such adjustment, (b) promptly file with the Rights
Agent and with the transfer agent for the Common Stock or Preferred Stock a
copy of such certificate and (c) mail a brief summary thereof to each holder
of a Right Certificate (or, if prior to the Distribution Date, to each holder
of a certificate representing shares of Common Stock) in accordance with
Section 26 hereof. Notwithstanding the foregoing sentence, the failure of the
Company to give such notice shall not affect the validity of or the force or
effect of or the requirement for such adjustment. The Rights Agent shall be
fully protected in relying on any certificate prepared by the Company pursuant
to Sections 11 and 13 and on any adjustment therein contained. Any adjustment
to be made pursuant to Sections 11 and 13 of this Rights Agreement shall be
effective as of the date of the event giving rise to such adjustment.

         SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.

        (a) If at any time on or after the Stock Acquisition Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and into,
any other Person or Persons (other than

                                      20
<PAGE>

a Subsidiary of the Company in a transaction not prohibited by Section 11(o)),
and the Company shall not be the surviving or continuing corporation of such
consolidation or merger, (y) any Person or Persons (other than a Subsidiary of
the Company in a transaction not prohibited by Section 11(o)) shall
consolidate with, or merge with and into, the Company, and the Company shall
be the continuing or surviving corporation of such consolidation or merger
and, in connection with such consolidation or merger, all or part of the
outstanding shares of Common Stock shall be converted into or exchanged for
stock or other securities of any other Person or of the Company or cash or any
other property, or (z) the Company or one or more of its Subsidiaries shall
sell or otherwise transfer to any other Person or any Affiliate or Associate
of such Person (other than the Company or any Subsidiary of the Company, in
one or more transactions not prohibited by Section 11(o)), in one transaction
or a series of related transactions not in the ordinary course of the
Company's business, assets, cash flow or earning power aggregating more than
50% of the assets, cash flow or earning power of the Company and its
Subsidiaries (taken as a whole), then, on the first occurrence of any such
event, proper provision shall be made so that (i) each holder of record of a
Right, except as provided in Section 7(e), shall thereafter have the right to
receive, upon the exercise thereof and payment of the Purchase Price in
accordance with the terms of this Rights Agreement, such number of shares of
validly issued, fully paid and nonassessable and freely tradable Common Stock
of the Principal Party, not subject to any liens, encumbrances, rights of
first refusal or other adverse claims, as shall be equal to the result
obtained by (1) multiplying the then current Purchase Price by the number of
one one-thousandths of a share of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section 13 Event
(or, if a Section 11(a)(ii) Event has occurred prior to the first occurrence
of a Section 13 Event, multiplying the Purchase Price in effect immediately
prior to the first occurrence of a Section 11(a)(ii) Event by the number of
one one-thousandths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such first occurrence of a Section 11(a)(ii)
Event) and (2) dividing that product (such product, following the first
occurrence of a Section 13 Event, shall be referred to as the "PURCHASE PRICE"
for each Right and for all purposes of this Agreement) by 50% of the Current
Market Price (determined as provided in Section 11(d) hereof with respect to
the Common Stock) per share of the Common Stock of such Principal Party on the
date of consummation of such Section 13 Event (or the fair market value on
such date of other securities or property of the Principal Party, as provided
for herein); provided that the Purchase Price and the number of shares of
Common Stock of such Principal Party issuable upon exercise of each Right
shall be further adjusted as provided in this Rights Agreement to reflect any
events occurring after the date of the first occurrence of a Section 13 Event;
(ii) such Principal Party shall thereafter be liable for, and shall assume, by
virtue of such Section 13 Event, all the obligations and duties of the Company
pursuant to this Rights Agreement; (iii) the term "COMPANY" for all purposes
of this Rights Agreement shall thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of Section 11 hereof
shall only apply to such Principal Party following the first occurrence of a
Section 13 Event; and (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock in accordance with Section 9 hereof) in connection
with the consummation of any such transaction as may be necessary to assure
that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its shares of Common Stock thereafter
deliverable upon the exercise of the Rights; provided, however, that, upon the
subsequent occurrence of any merger, consolidation, sale of all or
substantially all assets, recapitalization,

                                      21
<PAGE>

reclassification of shares, reorganization or other extraordinary transaction
in respect of such Principal Party, each holder of a Right shall thereupon be
entitled to receive, upon exercise of a Right and payment of the Purchase
Price, such cash, shares, rights, warrants and other property that such holder
would have been entitled to receive had such holder, at the time of such
transaction, owned the shares of Common Stock of the Principal Party
purchasable upon the exercise of a Right, and such Principal Party shall take
such steps (including, but not limited to, reservation of shares of stock) as
may be necessary to permit the subsequent exercise of the Rights in accordance
with the terms hereof for such cash, shares, rights, warrants and other
property. The provisions of Section 11(a)(ii) shall be of no effect following
the first occurrence of any Section 13 Event.

        (b)    "PRINCIPAL PARTY" shall mean

               (i)     in the case of any transaction described in clause (x)
        or (y) of the first sentence of Section 13(a) hereof:  (A) the Person
        that is the issuer of any securities into which shares of Common Stock
        of the Company are converted in such merger or consolidation, or, if
        there is more than one such issuer, the issuer of the Common Stock of
        which has the greatest market value or (B) if no securities are so
        issued, (x) the Person that is the other party to the merger or
        consolidation and that survives said merger or consolidation, or, if
        there is more than one such Person, the Person the Common Stock of
        which has the greatest market value or (y) if the Person that is the
        other party to the merger or consolidation does not survive the merger
        or consolidation, the Person that does survive the merger or
        consolidation (including the Company if it survives); and

               (ii)    in the case of any transaction described in clause (z)
        of the first sentence in Section 13(a) hereof, the Person that is the
        party receiving the greatest portion of the assets, cash flow or
        earning power transferred pursuant to such transaction or
        transactions, or, if each Person that is a party to such transaction
        or transactions receives the same portion of the assets, cash flow or
        earning power so transferred or if the Person receiving the greatest
        portion of the assets, cash flow or earning power cannot be
        determined, whichever of such Persons as is the issuer of Common Stock
        having the greatest market value of shares outstanding;

provided, however, that in any such case described in the foregoing (b)(i) or
(b)(ii), if the Common Stock of such Person is not at such time and has not
been continuously over the preceding 12-month period registered under Section
12 of the Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so registered, the
term "PRINCIPAL PARTY" shall refer to such other Person, or if such Person is
a Subsidiary, directly or indirectly, of more than one Person, the Common
Stock of which are and have been so registered, the term "PRINCIPAL PARTY"
shall refer to whichever of such Persons is the issuer of the Common Stock
having the greatest market value of shares outstanding.

        (c) The Company shall not consummate any consolidation, merger, sale
or transfer referred to in Section 13(a) unless the Principal Party shall have
a sufficient number of authorized shares of its Common Stock that 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 thereto the Company
and the Principal Party involved therein shall have executed and delivered

                                      22
<PAGE>

to the Rights Agent an agreement confirming that the requirements of Sections
13(a) and (b) hereof shall promptly be performed in accordance with their
terms and that such consolidation, merger, sale or transfer of assets shall
not result in a default by the Principal Party under this Rights Agreement as
the same shall have been assumed by the Principal Party pursuant to Sections
13(a) and (b) hereof and further providing that, as soon as practicable after
executing such agreement pursuant to this Section 13, the Principal Party
will:

               (i)     prepare and file a registration statement under the
        Securities Act, if necessary, with respect to the Rights and the
        securities purchasable upon exercise of the Rights on an appropriate
        form, use its best efforts to cause such registration statement to
        become effective as soon as practicable after such filing and use its
        best efforts to cause such registration statement to remain effective
        (with a prospectus at all times meeting the requirements of the
        Securities Act) until the date of expiration of the Rights, and
        similarly comply with applicable state securities laws;

               (ii)    use its best efforts, if the Common Stock of the
        Principal Party shall become listed on a national securities exchange,
        to list (or continue the listing of) the Rights and the securities
        purchasable upon exercise of the Rights on such securities exchange
        and, if the Common Stock of the Principal Party shall not be listed on
        a national securities exchange, to cause the Rights and the securities
        purchasable upon exercise of the Rights to be listed by a national
        securities exchange or admitted for trading on Nasdaq;

               (iii)   deliver to holders of the Rights historical financial
        statements for the Principal Party and each of its Affiliates that
        comply in all respects with the requirements for registration on Form
        10 (or any successor form) under the Exchange Act; and

               (iv)    obtain waivers of any rights of first refusal or
        preemptive rights in respect of the shares of Common Stock of the
        Principal Party subject to purchase upon exercise of outstanding
        Rights.

If any of the transactions described in Section 13(a) hereof shall occur at
any time after the occurrence of a transaction described in Section 11(a)(ii)
hereof, the Rights that have not theretofore been exercised shall thereafter
be exercisable in the manner described in Section 13(a). The provisions of
this Section 13 shall similarly apply to all successive mergers,
consolidations, sales, transfers or other Section 13 Events.

        (d) Furthermore, if the Principal Party that is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its certificate or articles of incorporation,
bylaws or other instrument governing its corporate affairs, which provision
would have the effect of (i) causing such Principal Party to issue, in
connection with, or as a consequence of, the consummation of a transaction
referred to in this Section 13, shares of Common Stock of such Principal Party
at less than the then Current Market Price per share (determined pursuant to
Section 11(d) hereof) or securities exercisable for, or convertible into,
Common Stock of such Principal Party at less than such then Current Market
Price (other than to holders of Rights pursuant to this Section 13) or (ii)
providing for any special payment, tax or similar provisions in connection
with the issuance of the Common Stock of such Principal Party pursuant to the
provisions of this Section 13, then, in such event, the Company hereby agrees

                                      23
<PAGE>

with each holder of Rights that it shall not consummate any such transaction
unless prior thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement providing that the
provision in question of such Principal Party shall have been canceled, waived
or amended, or that the authorized securities shall be redeemed, so that the
applicable provision will have no effect in connection with, or as a
consequence of, the consummation of the proposed transaction.

         SECTION 14.    FRACTIONAL RIGHTS AND FRACTIONAL SHARES.

        (a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates that evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the holders of record of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the then current
market value of a whole Right. For the purposes of this Section 14(a), the
then current market value of a whole Right shall be determined in the same
manner as the Current Market Price of a share of Common Stock shall be
determined pursuant to Section 11(d) hereof.

        (b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions that are integral multiples of one
one-thousandths of a share of Preferred Stock) upon exercise of the Rights, or
to exchange the Rights pursuant to Section 24 of this Agreement for fractions
of Common Stock. Fractions of shares of Preferred Stock in integral multiples
of one one-thousandth of a share of Preferred Stock 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 shall provide that the holders of such depositary receipts
shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the shares of Preferred Stock. With respect
to fractional shares of Preferred Stock that are not integral multiples of one
one-thousandth of a share of Preferred Stock, if the Company does not issue
fractional shares or depositary receipts in lieu thereof, the Company shall
pay to the registered holders of Right Certificates at the time such Right
Certificates are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of one one-thousandth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market value
of one one-thousandth of a share of Preferred Stock shall be the Current
Market Price of one one-thousandth of a share of Preferred Stock (as
determined pursuant to Section 11(d)(ii)).

        (c) Following the occurrence of a Triggering Event, the Company shall
not be required to issue fractions of shares of Common Stock upon exercise of
the Rights or to distribute certificates that evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company may
pay to the registered holders of Right Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the same fraction
of the current market value of one share of Common Stock. For the purposes of
this Section 14(c), the current market value of one share of Common Stock
shall be the Current Market Price of a share of Common Stock (as determined
pursuant to Section 11(d)(i) hereof).

        (d) The holder of a Right by the acceptance of a Right expressly
waives his right to receive any fractional Right or any fractional shares
(other than fractions that are integral multiples of one one-thousandths of a
share of Preferred Stock) upon exercise of a Right.

                                      24
<PAGE>

         SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this
Rights Agreement are vested in the respective holders of record of the Right
Certificates (and, prior to the Distribution Date, the holders of record of
the Common Stock); and any holder of record of any Right Certificate (or,
prior to the Distribution Date, of the Common Stock), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Common Stock), may, in such holder's own behalf
and for such holder's own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company or any other Person to enforce,
or otherwise act in respect of, such holder's right to exercise the Rights
evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Rights 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 Rights Agreement and, accordingly, that they will
be entitled to specific performance of the obligations under, and injunctive
relief against actual or threatened violations of, the obligations of any
Person subject to this Rights Agreement.

         SECTION 16. AGREEMENT OF RIGHT 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 will not be evidenced
by a Right Certificate and will be transferable only in connection with the
transfer of Common Stock;

        (b) after the Distribution Date, the Right Certificates will be
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, 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 Stock 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 Stock
certificate made by anyone other than the Company or the Rights Agent or the
transfer agent of the Common Stock) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to the
contrary; and

        (d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or a beneficial interest in 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, the Company must use its reasonable efforts to
have any such order, decree or ruling lifted or otherwise overturned as soon
as possible.

                                      25
<PAGE>

         SECTION 17.    RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.

        No holder of a Right or a Right Certificate, as such, shall be
entitled to vote, receive dividends in respect of or be deemed for any purpose
to be the holder of Preferred Stock or any other securities of the Company
that may at any time be issuable upon the exercise of the Rights, nor shall
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
stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as set forth in
Section 25 hereof), or to receive dividends or subscription rights in respect
of any such stock or securities, or otherwise until the Right or Rights
evidenced by such Right Certificate shall have been exercised in accordance
with the provisions of this Rights Agreement.

         SECTION 18.    CONCERNING THE RIGHTS AGENT.

        (a) The Company agrees to 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
Rights Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability 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 in connection with the acceptance
and administration of this Rights Agreement including the costs and expenses
of defending against any claim of liability.

        (b) The Rights Agent shall be protected by the indemnity provided in
this Section 18 and shall incur no liability for or in respect of any action
taken, suffered or omitted by it in connection with its administration of this
Rights Agreement in reliance upon any Right Certificate, certificate for
Common Stock or other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement or other paper or document believed
by it to be genuine and to be signed, executed and, where necessary,
guaranteed, verified or acknowledged, by the proper Person or Persons.

         SECTION 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 shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Rights 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 hereof. If at the time such successor
Rights Agent shall succeed to the agency created by this Rights Agreement, any
of the Right Certificates shall have been countersigned but not delivered, any
such successor Rights Agent

                                      26
<PAGE>

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 shall have the full force provided in the Right
Certificates and in this Rights Agreement.

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

         SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Rights Agreement upon the following
terms and conditions, by all of which the Company and the holders of Right
Certificates (or, if prior to the Distribution Date, the holders of Common
Stock), by their acceptance thereof, shall be bound:

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

        (b) Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem 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 of
the Board, Chief Executive Officer, President or any Vice President, the
Secretary or any Assistant Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the
provisions of this Rights Agreement in reliance upon such certificate.

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

        (d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Rights 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 shall be deemed
to have been made by the Company only.

        (e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Rights Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any

                                      27
<PAGE>

covenant or condition contained in this Rights Agreement or in any Right
Certificate; nor shall it be responsible for any change in the exercisability
of the Rights or any adjustment required under the provisions hereof or
responsible for the manner, method or amount of any such change or adjustment
or the ascertaining of the existence of facts that would require any such
change or adjustment (except with respect to the exercise of Rights evidenced
by Right Certificates after actual notice of any such change or adjustment);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Common Stock
or other securities to be issued pursuant to this Rights Agreement or any
Right Certificate or as to whether any shares of Common Stock or other
securities will, when issued, be validly authorized and issued, fully paid and
nonassessable.

        (f) The Company agrees that it 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 Rights 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 of the Board, Chief Executive Officer, President, any Vice
President, the Secretary, any Assistant Secretary of the Company, and to apply
to such officers for advice or instructions in connection with its duties, and
it shall 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.

        (h) The Rights Agent and any stockholder, 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 the Rights Agent under this Rights Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the Company or
for any other entity.

        (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 shall 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 reasonable care was
exercised in the selection and continued employment thereof.

        (j) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form
of assignment or the form of election to purchase set forth on the reverse
thereof, as the case may be, has either not been completed or indicates an
affirmative response to clause 1 and/or 2 thereof, the Rights Agent shall not
take any further action with respect to such requested exercise or transfer
without first consulting with the Company.

         SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Rights
Agreement upon 30 days' notice in writing mailed to the Company and to the
transfer agent of the Common Stock and the

                                      28
<PAGE>

Preferred Stock 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 (with or without cause) upon 30 days'
notice in writing, mailed to the Rights Agent or successor Rights Agent, as
the case may be, and to the transfer agent of the Common Stock and the
Preferred Stock by registered or certified mail, and to the holders of the
Right Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. Notwithstanding the foregoing
provisions of this Section 21, in no event shall the resignation or removal of
a Rights Agent be effective until a successor Rights Agent shall have been
appointed and have accepted such appointment. If the Company shall fail to
make such appointment within a period of 30 days after 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 shall, with such notice, submit his Right Certificate for
inspection by the Company), then the incumbent Rights Agent or the holder of
record 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, shall be a
corporation organized and doing business under the laws of the United States
or any State thereof, in good standing, that 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 that has, or
together with its parent entity has, at the time of its appointment as Rights
Agent a combined capital and surplus of at least $100,000,000. After
appointment, the successor Rights Agent shall 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
shall 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 shall file notice thereof
in writing with the predecessor Rights Agent and the transfer agent of the
Common Stock and the Preferred Stock, 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, shall 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.

         SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any
of the provisions of this Rights 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 Board of Directors to reflect any
adjustment or change in the Expiration Date, the Purchase Price per share and
the number or kind of class of shares of stock or other securities or property
purchasable under the Right Certificates made in accordance with the
provisions of this Rights Agreement. In addition, in connection with the
issuance or sale of shares of Common Stock following the Distribution Date and
prior to the redemption or expiration of the Rights, the Company (a) shall,
with respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, or upon
the exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company, issue Right Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Right Certificate shall be issued if, and
to

                                      29

<PAGE>

the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Right Certificate would be issued, and (ii)
no such Right Certificate shall be issued, if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.

         SECTION 23.    REDEMPTION.

        (a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (i) the Close of Business on the tenth day
following the Stock Acquisition Date (or, if the Stock Acquisition Date shall
have occurred prior to the Record Date, the Close of Business on the tenth day
following the Record Date), and (ii) the Close of Business on the Final
Expiration Date, redeem all but not less than all of the then outstanding
Rights at a redemption price of $0.001 per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "REDEMPTION PRICE"). The Company may, at its
option, pay the Redemption Price in cash, shares of Common Stock (based on the
Current Market Price, as defined in Section 11(d)(i), of the Common Stock at
the time of redemption) or any other form of consideration deemed appropriate
by the Board of Directors of the Company.

        (b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, evidence of which shall have
been filed with the Rights Agent 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 shall be to receive the Redemption Price,
without any interest thereon, for each Right so held. The Company shall
promptly give public notice of any such redemption; provided, however, that
the failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. Within ten days after the action of the Board of
Directors ordering the redemption of the Rights, the Company shall give notice
of such redemption to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to all such holders at each holder's last
address as it appears upon the registry books of the Rights Agent or, prior to
the Distribution Date, on the registry books of the transfer agent of the
Common Stock. Any notice that is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of redemption will state the method by which the payment of the Redemption
Price will be made. The failure to give notice required by this Section 23(b)
or any defect therein shall not affect the legality or validity of any
redemption hereunder. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in this Section 23 or in
Section 24 hereof, and other than in connection with the purchase of Common
Stock prior to the Distribution Date.

         SECTION 24.    EXCHANGE.

        (a) The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become null and void pursuant to the provisions of Section 7(e)) for
shares of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted to reflect any stock split, stock dividend or

                                      30
<PAGE>

similar transaction occurring after the date of this Rights Agreement (such
exchange ratio being hereinafter referred to as the "EXCHANGE RATIO").
Notwithstanding the foregoing, the Board of Directors shall not be empowered
to effect such exchange at any time after any Person (other than an Exempt
Person), together with all Affiliates and Associates of such Person, becomes
the Beneficial Owner of shares of Common Stock representing 50% or more of the
shares of the Common Stock then outstanding.

        (b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to Section 24(a) and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common Stock or Common
Stock Equivalents equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public
notice of any such exchange; provided, however, that the failure to give, or
any defect in, such notice shall not affect the validity of such exchange. The
Company shall promptly mail a notice of any such exchange to all of the
holders of such Rights at the last address of each holder as it appears upon
the registry books of the Rights Agent. Any notice that is mailed in the
manner herein provided shall 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 shares of Common Stock or Common Stock Equivalents
for Rights will be effected and, in the event of any partial exchange, the
number and kind of Rights that will be exchanged. The failure to give notice
required by this Section 24 or any defect therein shall not affect the
legality or validity of any exchange hereunder. Any partial exchange shall be
effected pro rata based on the number of Rights being exchanged (other than
Rights that have become void pursuant to the provisions of Section 7(e)) held
by each holder of such Rights.

        (c) If the number of shares of Common Stock that are authorized by the
Company's certificate of incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights are not
sufficient to permit any exchange of Rights as contemplated in accordance with
this Section 24, the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock for issuance upon exchange of the
Rights.

        (d) The Company shall not be required to issue fractions of a share of
Common Stock or to distribute certificates that evidence fractional shares of
Common Stock. In lieu of such fractional shares, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional shares would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of such whole shares of Common
Stock. For purposes of this Section 24(d), the current market value of a whole
share of Common Stock shall be the closing price of a share of Common Stock
(as determined pursuant to the second sentence of Section 11(d)(i)) for the
Trading Day immediately prior to the date of exchange pursuant to this Section
24.

         SECTION 25.    NOTICE OF PROPOSED ACTIONS.

        (a) If the Company, after the Stock Acquisition Date, shall propose to
(i) effect any of the transactions referred to in Section 11(a)(i) or to pay
any dividend to the holders of record of its Preferred Stock payable in stock
of any class or to make any other distribution to the holders

                                      31
<PAGE>

of record of its Preferred Stock (other than a regular periodic cash
dividend), (ii) offer to the holders of record of its Preferred Stock options,
warrants, or other rights to subscribe for or to purchase shares of Preferred
Stock (including any security convertible into or exchangeable for Preferred
Stock) or shares of stock of any class or any other securities, options,
warrants, convertible or exchangeable securities or other rights, (iii) effect
any reclassification of its Preferred Stock or any recapitalization or
reorganization of the Company, (iv) effect any consolidation or merger with or
into, 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 transaction or a
series of related transactions not in the ordinary course of the Company's
business, of more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person or Persons, or (v)
effect the liquidation, dissolution or winding up of the Company, then, in
each such case, the Company shall give to each holder of record of Rights, in
accordance with Section 26 hereof, notice of such proposed action, which shall
specify the record date for the purposes of such transaction referred to in
Section 11(a)(i), or such dividend or distribution, or the date on which such
reclassification, recapitalization, reorganization, consolidation, merger,
sale or transfer of assets, liquidation, dissolution, or winding up is to take
place and the record date for determining participation therein by the holders
of record of Preferred Stock, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i) or (ii)
above at least ten days prior to the record date for determining holders of
record of the Preferred Stock for purposes of such action, and in the case of
any such other action, at least ten days prior to the date of the taking of
such proposed action or the date of participation therein by the holders of
record of Preferred Stock, whichever shall be the earlier. The failure to give
notice required by this Section 25 or any defect therein shall not affect the
legality or validity of the action taken by the Company or the vote upon any
such action.

        (b) If any of the transactions referred to in Section 11(a)(ii) or
Section 13 of this Rights Agreement are proposed, then, in any such case, the
Company shall give to each holder of Rights, in accordance with Section 26
hereof, notice of the proposal of such transaction at least ten days prior to
consummating such transaction, which notice shall specify the proposed event
and the consequences of the event to holders of Rights under Section 11(a)(ii)
or Section 13 hereof, as the case may be, and, upon consummating such
transaction, shall similarly give notice thereof to each holder of Rights.

        (c) If any Section 11(a)(ii) Event shall occur, then all references in
this Section 25 to Preferred Stock shall be deemed thereafter to refer to
Common Stock or other securities for which the Rights are then exercisable.

         SECTION 26. NOTICES. Notices or demands authorized by this Rights
Agreement to be given or made by the Rights Agent or by the holder of record
of any Right Certificate or Right to or on behalf of the Company shall 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:

                             AmeriChoice Corporation
                             8045 Leesburg Pike, Suite 650
                             Vienna, Virginia  22182
                             Attn:  Edgar G. Rios

                                      32
<PAGE>

                             with a copy to:

                             King & Spalding
                             1185 Avenue of the Americas
                             New York, New York  10036
                             Attn:  E. William Bates, II

Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Rights Agreement to be given or made by the Company or by
the holder of record of any Right Certificate or Right to or on the Rights
Agent shall 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:

                      [NAME AND ADDRESS OF RIGHTS AGENT]

Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of record of any Right
Certificate or Right shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as it appears upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent of
the Common Stock and the Preferred Stock.

         SECTION 27. SUPPLEMENTS AND AMENDMENTS. Prior to the Stock
Acquisition Date and except as provided in the third sentence of this Section
27, the Company may in its sole and absolute discretion and the Rights Agent
shall, if the Company so directs, supplement or amend any provision of this
Rights Agreement without the approval of any holders of the Rights or the
Common Stock. From and after the Stock Acquisition Date, the Company may and
the Rights Agent shall, if the Company so directs, supplement or amend this
Rights Agreement without the approval of any holders of Right Certificates in
order to (i) cure any ambiguity, (ii) correct or supplement any provision
contained herein that may be defective or inconsistent with any other
provisions herein, or (iii) change or supplement the provisions hereunder in
any manner that the Company may deem necessary or desirable; provided, that no
such supplement or amendment shall adversely affect the interests of the
holders of Rights (other than any interest of an Acquiring Person or an
Affiliate or Associate of an Acquiring Person). Prior to the Distribution
Date, the interests of the holders of Rights shall be deemed coincident with
the interests of the holders of Common Stock. Upon the delivery of a
certificate from an appropriate officer of the Company that states that the
proposed supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment.

         SECTION 28. DETERMINATIONS AND ACTIONS BY THE BOARD. The Board of
Directors of the Company shall have the exclusive power and authority to
administer this Rights Agreement and to exercise all rights and powers
specifically granted to the Board or to the Company or as may be necessary or
advisable in the administration of this Rights Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this Rights
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Rights

                                      33
<PAGE>

Agreement (including a determination to redeem or not redeem the Rights or to
amend this Rights Agreement). All such actions, calculations, interpretations
and determinations (including, for purposes of clause (y) below, all omissions
with respect to the foregoing) that are done or made by the Board in good
faith shall (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 Board to any liability to the holders of the Rights.

         SECTION 29. SUCCESSORS. All of the covenants and provisions of this
Rights Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and assigns
hereunder.

         SECTION 30. BENEFITS OF THIS RIGHTS AGREEMENT. Nothing in this Rights
Agreement shall 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 Stock) any legal or equitable right,
remedy or claim under this Rights Agreement; but this Rights Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
holders of record of the Right Certificates (and, prior to the Distribution
Date, the Common Stock).

         SECTION 31. DELAWARE CONTRACT. This Rights Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.

         SECTION 32. COUNTERPARTS. This Rights Agreement may be executed in
any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.

         SECTION 33. DESCRIPTIVE HEADINGS.  Descriptive headings of the
several sections of this Rights Agreement are inserted for convenience only
and shall not control or affect the meaning or construction of any of the
provisions hereof.

         SECTION 34. SEVERABILITY. If any term, provision, covenant or
restriction of this Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Rights Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.

                                      34
<PAGE>

        IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the day and year first above written.

Attest:                                            AMERICHOICE CORPORATION

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

Attest:                                            [RIGHTS AGENT]

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

                                      35
<PAGE>

                                                                    SCHEDULE I

                        LIST OF ORIGINAL STOCKHOLDERS

Anthony Welters

Jess E. Sweely

Edgar G. Rios

<PAGE>
                                                                      EXHIBIT A

                                     FORM

                                      OF

                         CERTIFICATE OF DESIGNATIONS

                                      OF

                SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                                      OF

                           AMERICHOICE CORPORATION

      (Pursuant to Section 151 of the Delaware General Corporation Law)

         AmeriChoice Corporation, a corporation organized and existing under
the General Corporation Law of the State of Delaware (hereinafter called the
"CORPORATION"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 151 of the
General Corporation Law at a meeting duly called and held on February 20,
2002:

         RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "BOARD OF
DIRECTORS" or the "BOARD") in accordance with the provisions of the
Corporation's Certificate of Incorporation, as amended (the "CERTIFICATE OF
INCORPORATION") the Board of Directors hereby creates a series of Preferred
Stock, par value $0.01 per share (the "PREFERRED STOCK"), of the Corporation
and hereby states the designation and number of shares, and fixes the relative
rights, preferences, and limitations thereof as follows:

         Series A Junior Participating Preferred Stock:

         Section 1.        Designation and Amount. The shares of such series
shall be designated as "SERIES A JUNIOR PARTICIPATING PREFERRED STOCK" (the
"SERIES A PREFERRED STOCK") and the number of shares constituting the Series A
Preferred Stock shall be 50,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series A Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.

         Section 2.        Dividends and Distributions.

              (A)          Subject to the rights of the holders of any shares
     of any series of Preferred

                                     A-1

<PAGE>

     Stock (or any similar stock) ranking prior and superior to the Series A
     Preferred Stock with respect to dividends, the holders of shares of
     Series A Preferred Stock, in preference to the holders of common stock,
     par value $0.01 per share (the "COMMON STOCK"), of the Corporation, 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 first day of March,
     June, September and December in each year (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) $1.00 and
     (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 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 Corporation shall at any time declare or pay any
     dividend on the 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 than by payment of a
     dividend in shares of Common Stock) 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
     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.

              (B)          The Corporation shall declare a dividend or
     distribution on the Series A Preferred Stock as provided in paragraph (A)
     of this Section immediately after it declares a dividend or distribution
     on the Common Stock (other than a dividend payable in shares of 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 $1.00 per share on the Series A
     Preferred Stock shall nevertheless be payable on such subsequent
     Quarterly Dividend Payment Date.

              (C)          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,
     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

                                     A-2

<PAGE>

     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.

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

              (A)          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
     stockholders of the Corporation. In the event the Corporation shall at
     any time declare or pay any dividend on the 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 than by payment of a dividend in shares of
     Common Stock) 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 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.

              (B)          Except as otherwise provided herein, in any other
     Certificate of Designations creating a series of Preferred Stock or any
     similar stock, or by law, the holders of shares of Series A Preferred
     Stock and the holders of Common Stock and any other capital stock of the
     Corporation having general voting rights shall vote together as one class
     on all matters submitted to a vote of stockholders of the Corporation.

              (C)          Except as set forth herein, or as otherwise
     provided by law, 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 as set
     forth herein) for taking any corporate action.

     Section 4.  Certain Restrictions.

              (A)          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
     Corporation shall not:

                           (i)      declare or pay dividends, 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;

                           (ii)     declare or pay dividends, or make any
              other distributions, on any shares of stock ranking on parity
              (either as to dividends or upon liquidation, dissolution or
              winding up) with the Series A Preferred Stock, except dividends
              paid

                                     A-3

<PAGE>

              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;

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

                           (iv)     redeem or 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.

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

         Section 5.        Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation 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 subject to the conditions and restrictions on issuance set
forth herein, in the Certificate of Incorporation, or in any other Certificate
of Designations creating a series of Preferred Stock or any similar stock or
as otherwise required by law.

         Section 6.        Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution
shall be made (1) to the holders of shares of stock 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
shares of Common Stock, or (2) to the holders of 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 distributions made ratably on the
Series A Preferred Stock and all 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.

                                     A-4

<PAGE>

In the event the Corporation shall at any time declare or pay any dividend on
the 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 than by payment of a dividend in shares of
Common Stock) 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 (1) of the preceding sentence 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.

         Section 7.        Consolidation, Merger, etc. In case the Corporation
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 or any other property, then in any such case each
share of Series A Preferred Stock shall at the same time be similarly
exchanged or changed into 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 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 Corporation shall at any time declare or pay any
dividend on the 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 than by payment of a dividend
in shares of Common Stock) 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.

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

         Section 9.        Rank. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets, junior to
all series of any other class of the Corporation's Preferred Stock.

         Section 10.       Amendment. The Certificate of Incorporation 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 at least
two-thirds of the outstanding shares of Series A Preferred Stock, voting
together as a single class.

         Section 11.       Fractional Shares. The Series A Preferred Stock may
be issued in fractions of a share that shall entitle the holder, in proportion
to such holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all other
rights of holders of the Series A Preferred Stock.

                                     A-5

<PAGE>

         IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its Chairman of the Board and attested by its
Secretary this [___] day of [__________] 2002.

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

                                       Chairman of the Board

Attest:

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

Secretary

                                     A-6

<PAGE>

                                                                      EXHIBIT B

                         [FORM OF RIGHT CERTIFICATE]

Certificate No. R-                                              ________ Rights

         NOT EXERCISABLE AFTER February 20, 2012 OR UNDER CERTAIN
         CIRCUMSTANCES EARLIER. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
         OPTION OF THE COMPANY, AT $0.001 PER RIGHT ON THE TERMS SET FORTH IN
         THE RIGHTS AGREEMENT. IN THE EVENT THAT THE RIGHTS REPRESENTED BY
         THIS CERTIFICATE ARE ISSUED TO A PERSON WHO IS AN ACQUIRING PERSON OR
         AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON OR A TRANSFEREE OF
         THE RIGHTS PREVIOUSLY OWNED BY SUCH PERSONS, THIS RIGHT CERTIFICATE
         AND THE RIGHTS REPRESENTED HEREBY WILL BECOME NULL AND VOID.

                              Right Certificate

                           AMERICHOICE CORPORATION

         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 ______, 2002 (the "RIGHTS AGREEMENT") between
AmeriChoice Corporation, a Delaware corporation (the "COMPANY"), and
_____________________, a ____________ banking corporation (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 February 20, 2012 at the principal office of the Rights
Agent, or its successors as Rights Agent, one one-thousandth fully paid and
nonassessable share of Series A Junior Participating Preferred Stock, par
value $.01 per share ("PREFERRED STOCK"), of the Company at a purchase price
of $____ as the same may from time to time be adjusted in accordance with the
Rights Agreement (the "PURCHASE PRICE"), upon presentation and surrender of
this Right Certificate with the Form of Election to Purchase duly executed.
The number of Rights evidenced by this Right Certificate (and the number of
shares of Preferred Stock that may be purchased upon exercise hereof) set
forth above, and the Purchase Price set forth above, are the number and
Purchase Price as of ________ __, 2002 (the "RECORD DATE") based on the shares
of Preferred Stock of the Company as constituted at such date.

         As provided in the Rights Agreement, the Purchase Price and the
number of one one-thousandths of a share of Preferred Stock that may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain
events and, upon the happening of certain events, securities other than shares
of Preferred Stock, or other property, may be acquired upon exercise of the
Rights evidenced by this Right Certificate, as provided by the Rights
Agreement.

                                     B-1

<PAGE>

         This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of record of the Right Certificates. Copies of the
Rights Agreement are on file at the principal executive office of the Company
and the above-mentioned offices of the Rights Agent.

         This Right Certificate, with or without other Right Certificates,
upon surrender at the principal office of the Rights Agent, may be exchanged
for another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder of record to purchase a like aggregate
number of one one-thousandths of a share of Preferred Stock as the Rights
evidenced by the Right Certificate or Right Certificates surrendered shall
have entitled such holder to purchase. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender
hereof, another Right Certificate or Right Certificates for the number of
whole Rights not exercised.

         Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at its option
at a redemption price of $0.001 per Right or (ii) may be exchanged in whole or
in part for shares of Common Stock or common stock equivalents.

         No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby, except as provided in the
Rights Agreement, and in lieu thereof, as provided in the Rights Agreement,
fractions of shares of Preferred Stock shall receive an amount in cash equal
to the same fraction of the then current market value of a share of Preferred
Stock.

         No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Preferred Stock
or of any other securities of the Company that may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the election
of directors, or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action or to receive
notice of meetings (except as provided in the Rights Agreement) or other
actions affecting stockholders or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by this Right Certificate
shall have been exercised as provided in the Rights Agreement.

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

                                     B-2

<PAGE>

                  WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal, dated as of _____________________, 20__.

ATTEST:                                           AMERICHOICE CORPORATION

                                                  By:
---------------------------------------              ---------------------------
Secretary                                             Title:

Countersigned:

[RIGHTS AGENT], as Rights Agent

By:
   ------------------------------------
     Authorized signature

                                     B-3

<PAGE>

                 [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)

Rights evidenced by 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: _______________, 20__

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

Signature Guaranteed:

Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.

                                     B-4

<PAGE>

                                 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 and transferred by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined pursuant to the Rights Agreement); and

         (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 or was an Acquiring Person or an Affiliate or Associate
of an Acquiring Person or any transferee of such Persons.

Dated: _______________, 20___

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

                                    NOTICE

The signature to the foregoing Assignment 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.

                                     B-5

<PAGE>

                         FORM OF ELECTION TO PURCHASE

               (To be executed if registered holder desires to
                       Exercise the Right Certificate.)

To:      AmeriChoice Corporation

         The undersigned hereby irrevocably elects to exercise
_____________________ Rights represented by this Right Certificate to purchase
the shares of Preferred Stock issuable upon the exercise of such Rights and
requests that certificates for such share(s) be issued in the name:

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

--------------------------------------------------------------------------------
         (Please insert social security or other identifying number)

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

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

--------------------------------------------------------------------------------
         (Please insert social security or other identifying number)

Dated: ___________________, 20____

                                     ------------------------------------------
                                     Signature
                                     (Signature must conform in all respects to
                                     name of holder as specified on the face of
                                     this Right Certificate)

                                      B-6

<PAGE>

Signature Guaranteed:

Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.

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

                                 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 Acquiring Person (as such
terms are defined pursuant to the Rights Agreement); and

         (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 or was an Acquiring Person or an Affiliate
or Associate of an Acquiring Person or any transferee of such Persons.

Dated: ___________________, 20____

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

                                     B-7

<PAGE>

                                                                      EXHIBIT C

                           AMERICHOICE CORPORATION

                        SUMMARY OF RIGHTS TO PURCHASE

                               PREFERRED STOCK

         On February 20, 2002, the Board of Directors of AmeriChoice
Corporation (the "COMPANY") adopted a Rights Agreement (the "RIGHTS
AGREEMENT") and authorized and declared a dividend of one Preferred Stock
Purchase Right (a "RIGHT") with respect to each outstanding share of common
stock, par value $.01 per share ("COMMON STOCK"), of the Company. The dividend
is payable on ___________, 2002 to the stockholders of record on that date
(the "RECORD DATE"), and to each holder of Common Stock issued thereafter
until the Distribution Date (as hereinafter defined) or the expiration or
earlier redemption or exchange of the Rights. Except as set forth below, each
Right entitles the registered holder thereof to purchase from the Company at
any time after the Distribution Date one one-thousandth of a share of Series A
Junior Participating Preferred Stock, par value $.01 per share ("PREFERRED
STOCK") at a price of $75 per one one-thousandth of a share, subject to
adjustment (the "PURCHASE PRICE"). The description and terms of the Rights are
set forth in the Rights Agreement.

         Initially, the Rights will attach to all certificates representing
shares of Common Stock, then outstanding and no separate Right Certificates
(as hereinafter defined) will be distributed. The Rights will become
exercisable and separate from the shares of Common Stock upon the earlier to
occur of (i) ten days after the date (the "STOCK ACQUISITION DATE") of a
public announcement that a person or group of affiliated or associated persons
has acquired beneficial ownership of 15% or more of the outstanding shares of
Common Stock (such person or group being hereinafter referred to as an
"ACQUIRING PERSON"(1)); and (ii) ten business days (or such later date as the
Board may determine) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer, the consummation of which
would result in a person or group becoming the beneficial owner of 15% or more
of the outstanding shares of

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

(1)      Each of the following persons will not be deemed to be an Acquiring
         Person even if they have acquired, or obtained the right to acquire,
         beneficial ownership of 15% or more of the outstanding Common Stock:
         (i) the Company, any subsidiary of the Company, or any employee
         benefit plan or employee stock plan of the Company or of any
         subsidiary of the Company; (ii) certain stockholders of the Company
         and descendants of such stockholders (each an "Original Stockholder,"
         and together, the "Original Stockholders"), any stockholder who is
         affiliated or associated with an Original Stockholder and any person
         who would otherwise become an Acquiring Person as a result of the
         receipt of Common Stock or a beneficial interest in Common Stock from
         an Original Stockholder by way of gift, devise, descent or
         distribution, but not by way of sale, unless any such person,
         together with his affiliates and associates, becomes the beneficial
         owner of more than 30% of the outstanding shares of Common Stock;
         (iii) any person who would otherwise become an Acquiring Person
         solely by virtue of a reduction in the number of outstanding shares
         of Common Stock unless and until such person shall become the
         beneficial owner of any additional shares of Common Stock; and (iv)
         any person who as of the Record Date was the beneficial owner of 15%
         or more of the outstanding Common Stock unless and until such person
         shall become the beneficial owner of any additional shares of Common
         Stock.

<PAGE>

Common Stock (the earlier of such dates in clauses (i) and (ii) being called
the "DISTRIBUTION DATE"). Shares of Common Stock beneficially owned by the
Company or any subsidiary of the Company will not be considered outstanding
for purposes of calculating the percentage ownership of any person.

         Until the Distribution Date (or earlier redemption or expiration of
the Rights), (i) the Rights will be transferred with, and only with, the
shares of Common Stock, (ii) new Common Stock certificates issued after the
Record Date upon transfer or new issuance of shares of Common Stock will
contain a notation incorporating the Rights Agreement by reference, and (iii)
the surrender for transfer of any certificates for shares of Common Stock
outstanding as of the Record Date, even without such notation, will also
constitute the transfer of the Rights associated with the shares of Common
Stock represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights (collectively,
the "RIGHT CERTIFICATES") will be mailed to holders of record of the shares of
Common Stock as of the close of business on the Distribution Date, and such
separate Right Certificates alone will evidence the Rights. The Rights are not
exercisable until the Distribution Date. The Rights will expire at the close
of business on February 20, 2012 unless earlier redeemed by the Company as
described below.

         If any person becomes an Acquiring Person, each holder of a Right
will thereafter have the right (the "FLIP-IN RIGHT") to receive in lieu of
shares of Preferred Stock, upon payment of the Purchase Price, shares of
Common Stock (or in certain circumstances, cash, property or other securities
of the Company) having a value equal to two times the Purchase Price of the
Right. Notwithstanding the foregoing, all Rights that are, or were,
beneficially owned by an Acquiring Person or any affiliate or associate
thereof will be null and void and not exercisable.

         If, at any time on or after the Stock Acquisition Date, (i) the
Company is acquired in a merger or other business combination transaction in
which the holders of all of the outstanding shares of Common Stock immediately
prior to the consummation of the transaction are not the holders of all of the
surviving corporation's voting power, or (ii) more than 50% of the Company's
assets, cash flow or earning power is sold or transferred other than in the
ordinary course of the Company's business, then each holder of a Right (except
Rights that have previously been voided as set forth above) shall thereafter
have the right (the "FLIP-OVER RIGHT") to receive, in lieu of shares of
Preferred Stock and upon exercise and payment of the Purchase Price, shares of
common stock of the acquiring company having a value equal to two times the
Purchase Price. If a transaction would otherwise result in a holder's having a
Flip-In as well as a Flip-Over Right, then only the Flip-Over Right will be
exercisable. If a transaction results in a holder's having a Flip-Over Right
subsequent to a transaction resulting in a holder's having a Flip-In Right, a
holder will have Flip-Over Rights only to the extent such holder's Flip-In
Rights have not been exercised.

         The Purchase Price payable, and the number of shares of Preferred
Stock or other securities or property issuable, upon exercise of the Rights
are subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders of
the Preferred Stock of certain rights or warrants to subscribe for Preferred
Stock or convertible securities at less than the current market price of the
Preferred Stock or (iii) upon the distribution to holders of the

                                     C-2

<PAGE>

Preferred Stock of evidences of indebtedness or assets (excluding dividends
payable in Preferred Stock) or of subscription rights or warrants (other than
those referred to above). However, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1%.

         The number of outstanding Rights and the number of one
one-thousandths of a share of Preferred Stock issuable upon exercise of each
Right are also subject to adjustment in the event of a stock split of the
Common Stock or a stock dividend on the Common Stock payable in Common Stock
or subdivisions, consolidations or combinations of the Common Stock occurring,
in any such case, prior to the Distribution Date.

         Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Preferred Stock will be entitled to a minimum
preferential quarterly dividend payment of $1.00 per share but will be
entitled to an aggregate dividend of 1,000 times the dividend declared per
share of Common Stock. In the event of liquidation, the holders of the
Preferred Stock will be entitled to a minimum preferential liquidation payment
of $1,000 per share but will be entitled to an aggregate payment of 1,000
times the payment made per share of Common Stock. Each share of Preferred
Stock will have 1,000 votes, voting together with the Common Stock. Finally,
in the event of any merger, consolidation or other transaction in which shares
of Common Stock are exchanged, each share of Preferred Stock will be entitled
to receive 1,000 times the amount received per share of Common Stock. These
rights are protected by customary antidilution provisions.

         Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the value of the one one-thousandth interest in a share of
Preferred Stock purchasable upon exercise of each Right should approximate the
value of one share of Common Stock.

         If, after the triggering of Flip-In Rights, insufficient shares of
Common Stock are available for the exercise in full of the Rights, the Company
shall take all such action as may be necessary to authorize additional shares
of Common Stock for issuance upon exercise in full of the Rights. If, after
the expiration of 120 days after the triggering of Flip-In Rights,
insufficient shares of Common Stock are available for the exercise in full of
the Rights, holders of Rights will receive upon exercise shares of Common
Stock to the extent available and then cash, property or other securities of
the Company, in proportions determined by the Company, so that the aggregate
value received is equal to twice the Purchase Price.

         The Company is not required to issue fractional shares of Preferred
Stock (other than fractions that are integral multiples of one one-thousandths
of a share of Preferred Stock that may, at the election of the Company, be
evidenced by depositary receipts) and in lieu thereof, a payment in cash will
be made to the holder of such Rights equal to the same fraction of the current
value of one one-thousandth of a share of Preferred Stock. Following the
triggering of the Flip-In Rights, the Company will not be required to issue
fractional shares of Common Stock upon exercise of the Rights and, in lieu
thereof, a payment in cash will be made to the holder of such Rights equal to
the same fraction of the current market value of a share of Common Stock.

         At any time prior to the Distribution Date, the Board of Directors of
the Company may redeem all, but not less than all, of the then outstanding
Rights at a price of $.001 per Right

                                     C-3

<PAGE>

(subject to adjustment) (the "REDEMPTION PRICE"), at any time before the close
of business on the Stock Acquisition Date.

         At any time after a Person becomes an Acquiring Person and prior to
the acquisition by any person of 50% or more of the outstanding shares of
Common Stock, the Company may exchange the then outstanding and exercisable
Rights (other than Rights owned by an Acquiring Person that will have become
null and void), in whole or in part, for shares of Common Stock, each Right
being exchangeable for one share of Common Stock, or common stock equivalents
equal to one share of Common Stock, subject to adjustment.

         Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.

         The issuance of the Rights is not taxable to the Company or to
stockholders under presently existing federal income tax law, and will not
change the way in which stockholders can presently trade the Company's shares
of Common Stock. If the Rights should become exercisable, stockholders,
depending on then existing circumstances, may recognize taxable income.

         Prior to the Stock Acquisition Date, the Rights Agreement generally
may be amended by the Board of Directors of the Company without the consent of
the holders of the Rights or the Common Stock. On or after the Stock
Acquisition Date, the Company may amend the Rights Agreement only to (i) cure
any ambiguity, (ii) correct or supplement any provision that may be defective
or inconsistent with the other provisions of the Rights Agreement, or (iii)
change or supplement the Rights Agreement in any other manner that the Company
may deem necessary or desirable, provided that no amendment shall adversely
affect the interests of the holders of Rights (other than any interest of an
Acquiring Person or an affiliate or associate of an Acquiring Person).

         The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a Person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors. Accordingly, the
existence of the Rights may deter certain acquirors from making takeover
proposals or tender offers. However, the Rights Agreement helps ensure that
the Company's stockholders receive fair and equal treatment in the event of
any proposed takeover of the Company. The Rights should not interfere with any
merger or other business combination approved by the Board of Directors
because the Rights may be redeemed by the Company at the Redemption Price
prior to the time that a person or group has acquired beneficial ownership of
15% or more of the outstanding Common Stock. The adoption of the Rights
Agreement is not in response to any specific takeover threat or proposal, but
is a precaution taken to protect the rights of the Company's stockholders.

         A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights
Agreement, that is incorporated in this summary description by reference.

                                     C-4

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