Document:

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                                                                    EXHIBIT 10.2

                      FORM OF COMMON STOCK PURCHASE WARRANT

THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR FOREIGN JURISDICTION.
NEITHER THIS WARRANT, SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT AND APPLICABLE STATE AND FOREIGN SECURITIES LAWS OR PURSUANT TO AN
APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH
LAWS.

2003-___

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

                                 PROXYMED, INC.
                          COMMON STOCK PURCHASE WARRANT

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

                  This certifies that, for good and valuable consideration,
ProxyMed, Inc., a Florida corporation (the "Company"), grants to
_________________, a _________________ (the "Warrantholder"), the right to
subscribe for and purchase from the Company, during the applicable Exercise
Period (as hereinafter defined), up to _______ validly issued, fully paid and
nonassessable shares, par value $0.001, of Common Stock of the Company (the
"Warrant Shares"), in three (3) annual allotments of _______shares (each an
"Annual Allotment") at the exercise price per share of $16.50, subject to
adjustment pursuant to Section 5 hereof (the "Exercise Price"), all subject to
the terms, conditions and adjustments herein set forth. Capitalized terms used
herein shall have the meanings ascribed to such terms in Section 9 below.

                  1. ISSUANCE OF WARRANT; VESTING; DETERMINATION OF INCLUDED
REVENUE.

                           1.1 Reserved.

                           1.2 VESTING. The Warrantholder's right to exercise
each Annual Allotment shall become vested and exercisable if, and only if, the
following amounts of Included Revenue (as determined in accordance with Section
1.3) are achieved during the applicable Measurement Period:

   MEASUREMENT PERIOD             INCLUDED REVENUE       ANNUAL ALLOTMENT

First Measurement Period             $10,000,000          ______ shares

Second Measurement Period            $20,000,000          ______ shares

Third Measurement Period             $30,000,000          ______ shares

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Any right of exercise that has vested pursuant to this Section 1.2, but which
has not been exercised on or before the expiration of the applicable Exercise
Period (as defined in Section 2.1) shall become null and void and of no further
force or effect immediately at such expiration with no further action required
from either party.

                           1.3 DETERMINATION OF INCLUDED REVENUE. As promptly as
practicable, and in any event not later than the fifteenth day after each
Measurement Period, the Company's Chief Financial Officer ("CFO") shall deliver
to the Warrantholder a certificate (the "Annual Certification") setting forth in
reasonable detail the calculation of the amount of Included Revenue for the
applicable Measurement Period and a certification by the CFO that such
calculations are true and correct. The Annual Certification shall be conclusive
evidence of such Included Revenue, unless Warrantholder in good faith objects in
writing to the calculation of Included Revenue set forth in the Annual
Certification no later than five (5) Business Days after its receipt. The
foregoing written objection shall state with specificity any and all of the
grounds on which the Warrantholder objects. The Company and the Warrantholder
shall use their respective reasonable best efforts to resolve any such
objections within five (5) Business Days after the receipt by the Company of
Warrantholders objection. If the Company and the Warrantholder shall fail to
agree on the amount of Included Revenue for a particular Measurement Period
within such five (5) day period, the amount of Included Revenue for such
Measurement Period shall be determined by a certified public accountant ("CPA")
independent of the Company and the Warrantholder, chosen by the Board of
Directors and reasonably acceptable to the Warrantholder. The amount of Included
Revenue determined by the CPA shall be final and binding on each of the Company
and the Warrantholder. The cost of the CPA's certification shall be borne by the
Warrantholder unless the Included Revenue certified by the Company's CFO is
understated by more than five (5) percent, as compared to the Included Revenue
certified by the CPA, in which case the Company shall bear or reimburse the
Warrantholder for the cost of the CPA's certification of Included Revenue. The
Company and the Warrantholder shall cooperate to promptly provide the CPA with
such information as the CPA may reasonably request, and shall use their best
efforts to cause the CPA to complete its certification of Included Revenue
within twenty (20) days after engagement of the CPA.

                           1.4 TERM OF WARRANT. The term of this Warrant shall
commence on the date on which it is executed by the parties and shall expire on
the day after the last day of the Exercise Period following the Third
Measurement Period. The term of this Warrant shall not renew under any
circumstances.

                  2. EXERCISE OF WARRANT; PAYMENT OF TAXES.

                           2.1 EXERCISE OF WARRANT. Subject to the terms and
conditions set forth herein, provided Warrantholder's right to exercise has
vested pursuant to Section 1.2 of this Warrant, each Annual Allotment may be
exercised by the Warrantholder during the period commencing upon receipt of each
Annual Certification and ending on the later of (X) the sixtieth day following
the end of the preceding Measurement Period or (Y) if the CPA is engaged
pursuant to Section 1.3, the tenth day following the certification of the
Included Revenue by the CPA (the "Exercise Period"), provided that such exercise

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would not constitute a Prohibited Exercise, in which case the Exercise Period
shall be extended until the fifth Business Day following the first date upon
which such exercise would not constitute a Prohibited Exercise, by:

                                    (a) the delivery to the Company of a duly
executed Exercise Form, and

                                    (b) the delivery of payment to the Company,
for the account of the Company, by wire transfer or any other means approved by
the Company, of the aggregate Exercise Price for exercise in lawful money of the
United States of America.

The Company agrees that the Warrant Shares shall be deemed to be issued to the
Warrantholder as the record holder of such Warrant Shares as of the close of
business on the date on which payment is made for the Warrant Shares as
aforesaid. For the avoidance of doubt, cashless exercises of the Warrant shall
not be permitted. Warrantholder shall also surrender this Warrant to the Company
upon the earlier of Warrantholder's permitted exercise in full of the third
Annual Allotment or the termination of this Warrant as per Section 1.4.

                           2.2 WARRANT SHARE CERTIFICATES. A stock certificate
or certificates for the Warrant Shares specified in each Exercise Form shall be
delivered to the Warrantholder within five (5) Business Days after receipt of
both the Exercise Form by the Company and the payment by the Warrantholder of
the aggregate Exercise Price.

                           2.3 PAYMENT OF TAXES. The Company will pay all
documentary stamp or other issuance taxes, if any, attributable to the issuance
of Warrant Shares upon the exercise of this Warrant; PROVIDED, HOWEVER, that the
Company shall not be required to pay any tax or taxes which may be payable in
respect of any transfer involved in the issue or delivery of any Warrants or
Warrant certificates or Warrant Shares in a name other than that of the then
Warrantholder as reflected upon the books of the Company.

                  3. RESTRICTIVE LEGEND. Except as otherwise permitted by this
Section 3, each Warrant (and each Warrant issued in substitution for any Warrant
pursuant to Section 6) shall be stamped or otherwise imprinted with a legend in
substantially the form as set forth on the cover of this Warrant.
Notwithstanding the foregoing, the Warrantholder may require the Company to
issue a Warrant or a certificate for Warrant Shares, in each case without a
legend, if either (i) such Warrant or such Warrant Shares, as the case may be,
have been registered for resale under the Securities Act, (ii) the Warrantholder
has delivered to the Company an opinion of legal counsel (from a firm reasonably
satisfactory to the Company) which opinion shall be addressed to the Company and
be reasonably satisfactory in form and substance to the Company's counsel, to
the effect that such registration is not required with respect to such Warrant
or such Warrant Shares, as the case may be or (iii) such Warrant or Warrant
Shares may be sold in accordance with Rule 144 of the Securities Act (or any
successor provision then in effect) under the Securities Act.

                  4. RESERVATION AND REGISTRATION OF SHARES. The Company
covenants and agrees as follows:

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                                    (a) All Warrant Shares that are issued upon
the exercise of this Warrant shall, upon issuance, be validly issued, fully-paid
and nonassessable, and not subject to any preemptive rights, and be free from
all taxes, liens, security interests, charges, and other encumbrances with
respect to the issuance thereof, other than taxes in respect of any transfer
occurring contemporaneously with such issue.

                                    (b) The Company shall at all times have
authorized and reserved, and shall keep available and free from preemptive
rights, a sufficient number of shares of Common Stock to provide for the
exercise of the rights represented by this Warrant.

                                    (c) The Company shall not, by amendment of
its Articles of Incorporation or through any reorganization, transfer of assets,
spin-off, consolidation, merger, dissolution, issue or sale of securities or any
other action or inaction, seek to avoid the observance or performance of any of
the terms of this Warrant, and shall at all times in good faith assist in
performing and giving effect to the terms hereof.

                  5. ANTI-DILUTION ADJUSTMENTS. The Exercise Price and the
number of Warrant Shares to be received upon exercise of this Warrant shall be
subject to adjustment as follows:

                           5.1 DIVIDEND, SUBDIVISION, COMBINATION OR
RECLASSIFICATION OF COMMON STOCK. In the event that the Company shall at any
time or from time to time, after the issuance of this Warrant but prior to the
full exercise of all Annual Allotments, (w) make a dividend or distribution on
the outstanding shares of Common Stock payable in Capital Stock, (x) subdivide
the outstanding shares of Common Stock into a larger number of shares, (y)
combine the outstanding shares of Common Stock into a smaller number of shares
or (z) issue any shares of its Capital Stock in a reclassification of the Common
Stock (other than any such event for which an adjustment is made pursuant to
another clause of this Section 5), then, and in each such case, (A) the
aggregate number of Warrant Shares for which this Warrant is exercisable (the
"Warrant Share Number") immediately prior to such event shall be adjusted (and
any other appropriate actions shall be taken by the Company) so that the
Warrantholder shall be entitled to receive upon exercise of this Warrant the
number of shares of Common Stock or other securities of the Company that it
would have owned or would have been entitled to receive upon or by reason of any
of the events described above, had this Warrant been exercised immediately prior
to the occurrence of such event and (B) the Exercise Price payable upon the
exercise of this Warrant shall be adjusted by multiplying such Exercise Price
immediately prior to such adjustment by a fraction, the numerator of which shall
be the number of Warrant Shares issuable upon the exercise of this Warrant
immediately prior to such adjustment, and the denominator of which shall be the
number of Warrant Shares issuable immediately thereafter. An adjustment made
pursuant to this Section 5.1 shall become effective retroactively (x) in the
case of any such dividend or distribution, to a date immediately following the
close of business on the record date for the determination of holders of shares
of Common Stock entitled to receive such dividend or distribution or (y) in the
case of any such subdivision, combination or reclassification, to the close of
business on the day upon which such corporate action becomes effective.

                           5.2 CERTAIN DISTRIBUTIONS. In case the Company shall
at any time or from time to time, after the issuance of this Warrant but prior
to the full exercise of all Annual Allotments, distribute to all holders of

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shares of Common Stock (including any such distribution made in connection with
a merger or consolidation in which the Company is the resulting or surviving
Person and shares of Common Stock are not changed or exchanged) cash, evidences
of indebtedness of the Company or another issuer, securities of the Company or
another issuer or other assets (excluding dividends or distributions payable in
shares of Common Stock for which adjustment is made under Section 5.1) or rights
or warrants to subscribe for or purchase any of the foregoing, THEN, and in each
such case, (A) the Exercise Price then in effect shall be adjusted (and any
other appropriate actions shall be taken by the Company) by multiplying the
Exercise Price in effect prior to the date of distribution by a fraction (i) the
numerator of which shall be such Current Market Price of Common Stock
immediately prior to the date of distribution less the then fair market value
(as determined by the Board of Directors in the exercise of their fiduciary
duties) of the portion of the cash, evidences of indebtedness, securities or
other assets so distributed or of such rights or warrants applicable to one
share of Common Stock and (ii) the denominator of which shall be the Current
Market Price of the Common Stock immediately prior to the date of distribution
(but such fraction shall not be greater than one) and (B) the Warrant Share
Number shall be increased by being multiplied by a fraction (i) the numerator of
which shall be the Current Market Price of one share of Common Stock immediately
prior to the record date for the distribution of such cash, evidences of
indebtedness, securities, other assets or rights or warrants and (ii) the
denominator of which shall be the Current Market Price of one share of Common
Stock immediately prior to such record date less the fair market value (as
determined by the Board of Directors in the exercise of their fiduciary duties)
of the portion of such cash, evidences of indebtedness, securities, other assets
or rights or warrants so distributed. Such adjustment shall be made whenever any
such distribution is made and shall become effective retroactively to a date
immediately following the close of business on the record date for the
determination of stockholders entitled to receive such distribution.

                           5.3 OTHER CHANGES. In case the Company at any time or
from time to time, after the issuance of this Warrant but prior to the full
exercise of all Annual Allotments, shall take any action affecting its Common
Stock similar to or having an effect similar to any of the actions described in
any of Sections 5.1, 5.2 or 5.7 (but not including any action described in any
such Section) and the Board of Directors in good faith determines that it would
be equitable in the circumstances to adjust the Exercise Price and Warrant Share
Number as a result of such action, then, and in each such case, the Exercise
Price and Warrant Share Number shall be adjusted in such manner and at such time
as the Board of Directors in good faith determines would be equitable in the
circumstances (such determination to be evidenced in a resolution, a certified
copy of which shall be mailed to the Warrantholder).

                           5.4 NO ADJUSTMENT; PAR VALUE MINIMUM. Notwithstanding
anything herein to the contrary, no adjustment under this Section 5 need be made
to the Exercise Price or Warrant Share Number if the company receives written
notice from the Warrantholder that no such adjustment is required.
Notwithstanding any other provision of this Warrant, the Exercise Price shall
not be adjusted below the par value of a share of Common Stock.

                           5.5 ABANDONMENT. If the Company shall take a record
of the holders of shares of its Common Stock for the purpose of entitling them
to receive a dividend or other distribution, and shall thereafter and before the
distribution to stockholders thereof legally abandon its plan to pay or deliver

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such dividend or distribution, then no adjustment in the Exercise Price or
Warrant Share Number shall be required by reason of the taking of such record.

                           5.6 CERTIFICATE AS TO ADJUSTMENTS. Upon any
adjustment in the Exercise Price or Warrant Share Number, the Company shall
within a reasonable period (not to exceed ten (10) days) following any of the
foregoing transactions deliver to the Warrantholder a certificate, signed by (i)
the Chief Executive Officer of the Company and (ii) the Chief Financial Officer
of the Company, setting forth in reasonable detail the event requiring the
adjustment and the method by which such adjustment was calculated and specifying
the adjusted Exercise Price and Warrant Share Number then in effect following
such adjustment.

                           5.7 SPIN-OFF; REORGANIZATION, RECLASSIFICATION,
MERGER OR SALE TRANSACTION.

                                    (a) In case of any spin-off by the Company
of another Person (the "Spin-off Entity") at any time after the issuance of this
Warrant but prior to the exercise hereof, the Company shall issue to the
Warrantholder a new warrant, in form and substance satisfactory to the Company
and the Warrantholder, entitling the Warrantholder to purchase, at the exercise
price equal to the excess of the Exercise Price in effect immediately prior to
such spin-off over the adjusted Exercise Price pursuant to Section 5.2, the
number of shares of common stock or other proprietary interest in the Spin-off
Entity that the Warrantholder would have owned had the Warrantholder,
immediately prior to such spin-off, fully exercised any unexpired Annual
Allotment under this Warrant.

                                    (b) In case of any capital reorganization,
reclassification, Sale Transaction, merger or consolidation (other than a Sale
Transaction or a merger or consolidation of the Company in which the Company is
the surviving corporation) of the Company or other change of outstanding shares
of Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value) (each, a "Transaction") at any time
after the issuance of this Warrant but prior to the exercise hereof, the Company
shall execute and deliver to the Warrantholder at least twenty (20) Business
Days prior to effecting such Transaction a certificate stating that,
notwithstanding the vesting requirements of Section 1.3, each unexpired Annual
Allotment shall be deemed to be vested and exercisable and the Warrantholder
shall have the right thereafter to exercise this Warrant for the kind and amount
of shares of stock or other securities, property or cash receivable upon such
Transaction by a holder of the number of shares of Common Stock into which this
Warrant could have been exercised immediately prior to such Transaction, and
provision shall be made therefor in the agreement, if any, relating to such
Transaction. Such certificate shall provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section 5. The provisions of this Section 5.7 and any equivalent thereof in any
such certificate similarly shall apply to successive transactions.

                           5.8 NOTICES. In case at any time or from time to
time:

                                    (a) the Company shall declare a dividend (or
any other distribution) on its shares of Common Stock;

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                                    (b) the Company shall authorize the granting
to the holders of shares of its Common Stock rights or warrants to subscribe for
or purchase any shares of Capital Stock or any other rights or warrants;

                                    (c) there shall occur a spin-off or
Transaction; or

                                    (d) the Company shall take any other action
that would require a vote of the Company's stockholders;

then the Company shall mail to the Warrantholder, as promptly as possible but in
any event at least ten (10) days prior to the applicable date hereinafter
specified, a notice stating (A) the date on which a record is to be taken for
the purpose of such dividend, distribution or granting of rights or warrants or,
if a record is not to be taken, the date as of which the holders of Common Stock
of record to be entitled to such dividend, distribution or granting of rights or
warrants are to be determined, or (B) the date on which such spin-off or
Transaction is expected to become effective and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their Common Stock for shares of stock or other securities or property or cash
deliverable upon such spin-off or Transaction. Notwithstanding the foregoing, in
the case of any event to which Section 5.7 is applicable, the Company shall also
deliver the certificate described in such Section 5.7 to the Warrantholder at
least twenty (20) Business Days prior to effecting such reorganization or
reclassification as aforesaid.

                  6. LOSS OR DESTRUCTION OF WARRANT. Subject to the terms and
conditions hereof, upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft or destruction, of such bond or indemnification
as the Company may reasonably require, and, in the case of such mutilation, upon
surrender and cancellation of this Warrant, the Company will execute and deliver
a new Warrant of like tenor.

                  7. OWNERSHIP OF WARRANT. The Company may deem and treat the
person in whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary, until presentation of this Warrant for registration of
transfer.

                  8. AMENDMENTS. Any provision of this Warrant may be amended
and the observance thereof waived only with the written consent of the Company
and the Warrantholder.

                  9. DEFINITIONS. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:

                  "AFFILIATE" shall mean any Person who is an "affiliate" as
defined in Rule 12b-2 of the General Rules and Regulations under the Securities
Exchange Act. of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission thereunder.

                  "BOARD OF DIRECTORS" means the Board of Directors of the
Company.

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                  "BUSINESS DAY" means any day other than a Saturday, Sunday or
other day on which commercial banks in the State of New York are authorized or
required by law or executive order to close.

                  "CAPITAL STOCK" means, with respect to any Person, any and all
shares, interests, participations, rights in, or other equivalents (however
designated and whether voting or non-voting) of such Person's capital stock and
any and all rights, warrants or options exchangeable for or convertible into
such capital stock (but excluding any debt security whether or not it is
exchangeable for or convertible into such capital stock).

                  "COMMERCIAL AGREEMENT" means Master Joint Marketing Agreement
dated of even date herewith between the Company and First Data Resources Inc.,
as such agreement may be amended, modified or supplemented from time to time.

                  "COMMON STOCK" means the Common Stock, par value $0.001 per
share, of the Company.

                  "COMMON STOCK EQUIVALENT" means any security or obligation
which is by its terms convertible into or exercisable into shares of Common
Stock, including, without limitation, any option, warrant or other subscription
or purchase right with respect to Common Stock.

                  "COMPANY" has the meaning set forth in the first paragraph of
this Warrant.

                  "CURRENT MARKET PRICE" means, as of the date of determination,
(a) the average of the daily Market Price under clause (a), (b) or (c) of the
definition thereof of the Common Stock during the immediately preceding five (5)
trading days ending on such date, and (b) if the Common Stock is not then listed
or admitted to trading on any national securities exchange or quoted in the
over-the-counter market, then the Market Price under clause (d) of the
definition thereof on such date.

                   "EXERCISE FORM" means an Exercise Form in the form annexed
hereto as EXHIBIT A.

                  "EXERCISE PERIOD" has the meaning set forth in Section 2.1 of
this Warrant.

                  "EXERCISE PRICE" has the meaning set forth in the first
paragraph of this Warrant.

                  "GOVERNMENTAL AUTHORITY" means the government of any nation,
state, city, locality or other political subdivision thereof, any entity,
including, without limitation, the Nasdaq Stock Market, Inc. and its regulatory
arm, the National Association of Securities Dealers, Inc., exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.

                  "INCLUDED REVENUE" means the combined gross revenue (excluding
revenue related to postage or any other similar costs that are pass-throughs) of
the Company and its subsidiaries (as determined under generally accepted
accounting principles consistently applied) derived from services provided by

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the Company to its customers as a result of the Commercial Agreement during the
applicable Measurement Period, without any reduction in such gross revenue for
rebates or other revenue sharing payments paid or payable to First Data
Corporation or any of its Affiliates or to any third party. For the avoidance of
doubt, Included Revenue in a given Measurement Period shall be calculated on a
non-cumulative basis and shall not include any revenue recognized in any other
Measurement Period.

                  "MARKET PRICE" means, as of the date of determination, (a) if
the Common Stock is listed on a national securities exchange, the closing price
per share of Common Stock on such date published in THE WALL STREET JOURNAL
(NATIONAL EDITION) or, if no such closing price on such date is published in THE
WALL STREET JOURNAL (NATIONAL EDITION), the average of the closing bid and asked
prices on such date, as officially reported on the principal national securities
exchange on which the Common Stock is then listed or admitted to trading; or (b)
if the Common Stock is not then listed or admitted to trading on any national
securities exchange but is designated as a national market system security by
the National Association of Securities Dealers, Inc., the last trading price of
the Common Stock on such date; or (c) if there shall have been no trading on
such date or if the Common Stock is not designated as a national market system
security by the National Association or Securities Dealers, Inc., the average of
the reported closing bid and asked prices of the Common Stock on such date as
shown by the National Market System of the National Association of Securities
Dealers, Inc. Automated Quotations System and reported by any member firm of the
New York Stock Exchange selected by the Company; or (d) if none of (a), (b) or
(c) is applicable, a market price per share determined mutually by the Board of
Directors and the Warrantholder or, if the Board of Directors and the
Warrantholder shall fail to agree, at the Company's expense by an appraiser
chosen by the Board of Directors and reasonably acceptable to the Warrantholder.
Any determination of the Market Price by an appraiser shall be based on a
valuation of the Company as an entirety without regard to any discount for
minority interests or disparate voting rights among classes of capital stock.

                  "MEASUREMENT PERIOD" means the following measurement periods
for measuring Included Revenue: the "First Measurement Period" shall be the
period commencing July 7, 2003 and ending December 31, 2004, inclusive; the
"Second Measurement Period" shall be the period commencing January 1, 2005 and
ending December 31, 2005, inclusive; and the "Third Measurement Period" shall be
the period commencing January 1, 2006 and ending December 31, 2006, inclusive.
For the avoidance of doubt, each Measurement Period is intended to establish the
beginning and ending date for the measurement of Included Revenue, and no excess
Included Revenue from one Measurement Period shall be included in the
calculation of Included Revenue for any other Measurement Period.

                  "PERSON" means any individual, firm, corporation, partnership,
limited liability company, trust, incorporated or unincorporated association,
joint venture, joint stock company, governmental body or other entity of any
kind.

                  "PROHIBITED EXERCISE" means any exercise of this Warrant which
would result in the Warrantholder violating any Requirement of Law, any rule or
regulation of any Governmental Authority, or the Company's Insider Trading
Policy, as modified in good faith by the Company and communicated to the
Warrantholder from time to time.

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                  "REQUIREMENT OF LAW" means, as to any Person, any law,
environmental law, statute, treaty, rule, regulation, right, privilege,
qualification, license or franchise or determination of an arbitrator or a court
or other Governmental Authority or stock exchange, in each case applicable or
binding upon such Person or any of its property or to which such Person or any
of its property is subject or pertaining to any or all of the transactions
contemplated or referred to herein.

                   "SALE TRANSACTION" shall mean (a) (i) the merger or
consolidation of the Company into or with one or more Persons, (ii) the merger
or consolidation of one or more Persons into or with the Company or (iii) a
tender offer or other business combination if, in the case of (i), (ii) or
(iii), the stockholders of the Company prior to such merger or consolidation do
not retain at least a majority of the voting power of the surviving Person or
(b) the voluntary sale, conveyance, exchange or transfer to another Person of
(i) the voting Capital Stock of the Company if, after such sale, conveyance,
exchange or transfer, the stockholders of the Company prior to such sale,
conveyance, exchange or transfer do not retain at least a majority of the voting
power of the Company or (ii) all or substantially all of the assets of the
Company.

                  "SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and regulations of the Securities and Exchange Commission
thereunder.

                  "SPIN-OFF ENTITY" has the meaning set forth in Section 5.7 of
this Warrant.

                  "TRANSACTION" has the meaning set forth in Section 5.7 of this
Warrant.

                  "WARRANT SHARE NUMBER" has the meaning set forth in Section
5.1 of this Warrant.

                  "WARRANT SHARES" has the meaning set forth in the first
paragraph of this Warrant.

                  "WARRANTHOLDER" has the meaning set forth in the first
paragraph of this Warrant.

                  10. MISCELLANEOUS.

                           10.1 ENTIRE AGREEMENT. This Warrant constitutes the
entire agreement between the Company and the Warrantholder with respect to the
Warrant and supersedes all prior agreements and understanding with respects to
the subject matter of this Warrant.

                           10.2 BINDING EFFECT; BENEFITS. This Warrant shall
inure to the benefit of and shall be binding upon the Company and the
Warrantholder and their respective permitted successors and assigns. Nothing in
this Warrant, expressed or implied, is intended to or shall confer on any person
other than the Company and the Warrantholder, or their respective permitted
successors or assigns, any rights, remedies, obligations or liabilities under or
by reason of this Warrant.

                           10.3 HEADINGS. The headings in this Warrant are for
convenience of reference only and shall not limit or otherwise affect the
meaning of this Warrant.

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                           10.4 NOTICES. All notices, demands and other
communications provided for or permitted hereunder shall be made in writing and
shall be by registered or certified first-class mail, return receipt requested,
telecopier, courier service or personal delivery:

                           (a)      if to the Company:
                                    ProxyMed, Inc.
                                    2555 Davie Rd., Suite 110
                                    Fort Lauderdale, FL  33317
                                    Telecopy:  (954) 473-2341
                                    Attention:  Michael K. Hoover, Chief
                                                Executive Officer
                                                Rafael G. Rodriguez,
                                                Senior Corporate Counsel

                                    with a copy to:

                                    Holland & Knight LLP
                                    701 Brickell Avenue, Suite 3000
                                    Miami, FL  33131
                                    Telecopy:  (305) 789-7799
                                    Attention:  Steven Sonberg, Esq.

                           (b)      if to the Warrantholder:

                                    c/o General Atlantic Service Corporation
                                    3 Pickwick Plaza
                                    Greenwich, CT  06830
                                    Telecopy:  (203) 618-9207
                                    Attention:  Matthew Nimetz

                                    with a copy to:

                                    Paul, Weiss, Rifkind, Wharton & Garrison LLP
                                    1285 Avenue of the Americas
                                    New York, NY 10019-6064
                                    Telecopy:  (212) 757-3990
                                    Attention:  Douglas A. Cifu, Esq.

All such notices, demands and other communications shall be deemed to have been
duly given when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial courier service; five (5) Business Days
after being deposited in the mail, postage prepaid, if mailed; and when receipt
is mechanically acknowledged, if telecopied. Any party may by notice given in
accordance with this Section 10.4 designate another address or Person for
receipt of notices hereunder.

                                       11
<PAGE>

                           10.5 SEVERABILITY. Any term or provision of this
Warrant which is invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the terms and
provisions of this Warrant or affecting the validity or enforceability of any of
the terms or provisions of this Warrant in any other jurisdiction.

                           10.6 GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA WITHOUT REGARD
TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.

                           10.7 NO RIGHTS OR LIABILITIES AS STOCKHOLDERS.
Nothing contained in this Warrant shall be determined as conferring upon the
Warrantholder any rights as a stockholder of the Company or as imposing any
liabilities on the Warrantholder to purchase any securities whether such
liabilities are asserted by the Company or by creditors or stockholders of the
Company or otherwise.

                [Remainder of this page intentionally left blank]

                                       12
<PAGE>

                  IN WITNESS  WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officer.

                                        PROXYMED, INC.

                                        By: ________________________________
                                            Name: Judson E. Schmid
                                            Title: EVP & Chief Financial Officer

Dated: July ___, 2003

                                       13
<PAGE>

                                    EXHIBIT A

                                  EXERCISE FORM

                 (To be executed upon exercise of this Warrant)

                  The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant, to purchase [________] shares of Common
Stock and herewith tenders payment for such shares to the order of the Company
in the amount of $[______] in accordance with the terms of this Warrant. The
undersigned requests that a certificate for such Warrant Shares be registered in
the name of the undersigned and that such certificates be delivered to the
undersigned's address below.

                  The undersigned represents that it is acquiring such shares
for its own account for investment and not with a view to or for sale in
connection with any distribution thereof (subject, however, to any requirement
of law that the disposition thereof shall at all times be within its control).

Dated:

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

                                                   -----------------------------
                                                   (Print Name)

                                                   -----------------------------
                                                   (Street Address)

                                                   -----------------------------
                                                   (City)   (State)   (Zip Code)Exhibit 4.1

                             INTER-TEL, INCORPORATED

                 TAX DEFERRED SAVINGS PLAN AND RETIREMENT TRUST

                                December 15, 1990

                           [Effective January 1, 1989]
<PAGE>
                                   CERTIFICATE

     Ralph Marsh, Secretary of Inter-Tel,  Incorporated, an Arizona corporation,
hereby  certifies that the attached  document is a complete and accurate copy of
the Inter-Tel,  Incorporated Tax Deferred Savings Plan and Retirement  Trust, to
be effective January 1, 1989.

     DATED: December 15, 1990.

                                        /s/ Ralph Marsh
                                        ----------------------------------------
                                        Ralph Marsh, Secretary
<PAGE>
                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----
ARTICLE 1 -   NAME, DESIGNATION AND PURPOSE                                  1-1

              1.01 - Name of Plan and Trust                                  1-1
              1.02 - Designation of Type of Plan                             1-1
              1.03 - Purpose                                                 1-1

ARTICLE 2 -   DEFINITIONS                                                    2-1

              2.01 - Accrued Benefit                                         2-1
              2.02 - Advisory Committee                                      2-1
              2.03 - Anniversary Date                                        2-1
              2.04 - Break in Service                                        2-1
              2.05 - Compensation                                            2-1
              2.06 - Contribution                                            2-2
              2.07 - Disability                                              2-2
              2.08 - Early Retirement Age and Early Retirement Date          2-2
              2.09 - Earned Income                                           2-2
              2.10 - Effective Date                                          2-2
              2.11 - Employee                                                2-2
              2.12 - Employer                                                2-3
              2.13 - Fiduciary                                               2-3
              2.14 - Forfeiture                                              2-3
              2.15 - Highly Compensated Employee                             2-3
              2.16 - Hour of Service                                         2-4
              2.17 - Investment Manager                                      2-6
              2.18 - Leased Employee                                         2-6
              2.19 - Net Income                                              2-7
              2.20 - Normal Retirement Age and Normal Retirement Date        2-7
              2.21 - Owner-Employee                                          2-7
              2.22 - Participant                                             2-7
              2.23 - Plan                                                    2-7
              2.24 - Plan Administrator                                      2-7
              2.25 - Plan Year                                               2-7
              2.26 - Related Employer                                        2-7
              2.27 - Self-Employed Individual                                2-8
              2.28 - Shareholder-Employee                                    2-8
              2.29 - Top Heavy Plan                                          2-8
              2.30 - Trust Fund                                             2-13
              2.31 - Trustee                                                2-13
              2.32 - Year of Service                                        2-13

ARTICLE 3 -   ELIGIBILITY AND PARTICIPATION                                  3-1

              3.01 - Eligibility to Participate                              3-1
              3.02 - Reemployment Before Break in Service                    3-1
              3.03 - Reemployment After Break in Service                     3-1
              3.04 - Determination of Eligibility                            3-1

                                        i
<PAGE>
              3.05 - Participation of Employees                              3-2
              3.06 - Participation for Employees Making Voluntary
                     Participant Deferrals                                   3-3

ARTICLE 4 -   CONTRIBUTIONS                                                  4-1

              4.01 - Participant Elective Deferrals                          4-1
              4.02 - Participant Voluntary Contributions                     4-8
              4.03 - Employer Contributions                                  4-9
              4.04 - Limitations on Employee Contributions and Matching
                     Contributions                                           4-9
              4.05 - Payment                                                4-15
              4.06 - No Responsibility for Collection or Verification       4-15
              4.07 - Rollovers and Transfers                                4-15
              4.08 - Top Heavy Plan Minimum Contribution                    4-16

ARTICLE 5 -   ALLOCATIONS TO ACCOUNTS                                        5-1

              5.01 - Participants' Accounts                                  5-1
              5.02 - Contributions Credited on Last Day of Plan Year         5-1
              5.03 - Allocation of Employer Contributions                    5-1
              5.04 - Valuation and Adjustment of Accounts                    5-2
              5.05 - Application of Forfeitures                              5-2
              5.06 - Charging of Distributions                               5-3
              5.07 - Limitations on Annual Additions and Benefits            5-3

ARTICLE 6 -   VESTING, DISTRIBUTIONS AND WITHDRAWALS                         6-1

              6.01 - Vesting                                                 6-1
              6.02 - Forfeitures                                             6-2
              6.03 - Payments to Participants and Beneficiaries; Joint
                     and Survivor Annuity Requirements                       6-3
              6.04 - When Payments are Made                                  6-9
              6.05 - Selection of Method of Payment                         6-21
              6.06 - Designation of Beneficiary                             6-21
              6.07 - Withdrawal of Participant Contributions, Rollovers
                     and Transfers, Elective Deferrals                      6-22
              6.08 - Facility of Payment                                    6-23
              6.09 - Segregation of Participant's Accounts                  6-24
              6.10 - Qualified Domestic Relations Orders                    6-24

ARTICLE 7 -   LIFE INSURANCE                                                 7-1

              7.01 - Purchase of Life Insurance Policies                     7-1
              7.02 - Ownership of Policies                                   7-1
              7.03 - Dividends or Credits                                    7-2
              7.04 - Payment of Premiums                                     7-2
              7.05 - Accounting for Policies                                 7-2
              7.06 - Discrimination                                          7-2

                                       ii
<PAGE>
              7.07 - Disposition of Policies upon Termination Other
                     than by Death                                           7-2
              7.08 - Disposition of Policies upon Death                      7-3
              7.09 - Conflict Between Insurance Policy and Plan              7-3
              7.10 - Status as Directed Investment                           7-3

ARTICLE 8 -   LOANS TO PARTICIPANTS                                          8-1

              8.01 - Application to Advisory Committee                       8-1
              8.02 - Required Documentation and Terms                        8-1
              8.03 - Implementation and Servicing of Loan                    8-3
              8.04 - Charges and Fees                                        8-3
              8.05 - Status as Directed Investment                           8-3

ARTICLE 9 -   PARTICIPANT DIRECTED INVESTMENTS                               9-1

              9.01 - Direction by Participant                                9-1
              9.02 - Investment Options Limited by Employer                  9-1
              9.03 - Investment Options Not Limited by Employer              9-1
              9.04 - Investment Control Survives Death                       9-2
              9.05 - Revesting of Investment Control in Trustee              9-2
              9.06 - Charges and Fees                                        9-2

ARTICLE 10 -  ADMINISTRATION                                                10-1

              10.01 - Basic Responsibilities of Employer                    10-1
              10.02 - Organization and Membership of Advisory Committee     10-1
              10.03 - Powers and Responsibilities of the Advisory
                      Committee                                             10-2
              10.04 - Records of Advisory Committee                         10-2
              10.05 - Liability of Advisory Committee                       10-2
              10.06 - Designation of Agents and Allocation of
                      Responsibilities                                      10-3

ARTICLE 11 -  TRUST AND TRUSTEE                                             11-1

              11.01 - Investment of Trust Fund                              11-1
              11.02 - Commingling of Trust Assets                           11-1
              11.03 - Valuation of Trust Fund                               11-1
              11.04 - Trustee to Hold Trust Assets                          11-1
              11.05 - General Powers of Trustee                             11-2
              11.06 - Expenses and Compensation of Trustee                  11-4
              11.07 - Distributions                                         11-4
              11.08 - Limitation on Duties of Trustee                       11-4
              11.09 - Actions Conclusive                                    11-5
              11.10 - Bond Not Required                                     11-5
              11.11 - Uniform Accounting Act                                11-5
              11.12 - Multiple Trust Funds                                  11-5
              11.13 - Trustee Entitled to Consultation                      11-5

                                       iii
<PAGE>
              11.14 - Taxes Chargeable to Accounts                          11-5
              11.15 - Records and Accounts                                  11-5
              11.16 - Disputes                                              11-6
              11.17 - Limitation on Liability                               11-6
              11.18 - Resignation and Removal; Appointment of Successor
                      Trustee                                               11-6
              11.19 - Multiple Trustees                                     11-7
              11.20 - Actions Against Trustee                               11-7

ARTICLE 12 -  FIDUCIARY RESPONSIBILITIES AND LIABILITIES                    12-1
              12.01 - Fiduciary Responsibility                              12-1
              12.02 - Prohibited Transactions                               12-1
              12.03 - Limitation of Liability; Indemnification              12-1
              12.04 - Benefits Payable Solely from Trust Fund               12-2

ARTICLE 13 -  PARTICIPANTS' RIGHTS-AND LIMITATIONS                          13-1

              13.01 - Dismissal                                             13-1
              13.02 - Alienation                                            13-1
              13.03 - Distributions to Persons Under Legal Disability       13-2
              13.04 - Procedure When Trustee Is Unable to Locate
                      Distributee                                           13-2
              13.05 - Claims Procedure                                      13-3
              13.06 - Portability                                           13-4
              13.07 - Employer and Trustee Only Necessary Parties to
                      Litigation                                            13-4
              13.08 - Execution of Receipts and Releases                    13-4

ARTICLE 14 -  AMENDMENT AND TERMINATION                                     14-1

              14.01 - Amendment of Plan                                     14-1
              14.02 - Termination of the Plan                               14-2
              14.03 - Procedure upon Termination of the Plan                14-2
              14.04 - Consolidation, Merger, Division or Sale               14-2
              14.05 - Dissolution or Liquidation of Employer                14-3
              14.06 - Predecessor Plan                                      14-3

ARTICLE 15 -  MISCELLANEOUS PROVISIONS                                      15-1

              15.01 - Reversion of Contributions                            15-1
              15.02 - Rule Against Perpetuities                             15-1
              15.03 - Notices                                               15-1
              15.04 - Text to Prevail over Headings                         15-2
              15.05 - Applicable Law                                        15-2
              15.06 - Counterparts                                          15-2
              15.07 - Binding upon Successors, Etc                          15-2

                                       iv
<PAGE>
              15.08 - Copies of Plan                                        15-2
              15.09 - Gender and Number                                     15-2

ARTICLE 16 -  RELATED OR OTHER EMPLOYERS

              16.01 - Adoption by Related or Other Employers                16-1
              16.02 - Requirements of Adopting Employers                    16-1
              16.03 - Designation of Agent                                  16-1
              16.04 - Plan Administrator's Authority                        16-1

                                        V
<PAGE>
                              AMENDED AND RESTATED
                             INTER-TEL. INCORPORATED
                 TAX DEFERRED SAVINGS PLAN AND RETIREMENT TRUST
                                    AGREEMENT

     THIS AMENDMENT,  made and entered into on December 15, 1990, by and between
INTER-TEL,  INCORPORATED, an Arizona corporation (the "Employer"), and STEVEN G.
MIHAYLO, RALPH MARSH and M. THOMAS PEIFFER, as Trustees (hereinafter referred to
as "Trustees").

                              W I T N E S S E T H:

     WHEREAS,  the  Employer  and the Trustee  established  an  employees'  plan
effective December 1, 1984, as amended (the "Prior Plan"); and

     WHEREAS,  the  Employer  has  reserved the right to amend the Prior Plan in
whole or in part; and

     WHEREAS,  the  Employer  desires to amend and restate the Prior Plan in its
entirety,  as set forth herein,  to continue to qualify under the  provisions of
Sections 401 et seq. and 501 et seq. of the  Internal  Revenue Code of 1986,  as
amended (the "Code") and the Employee Retirement Income Security Act of 1974, as
amended ("ERISA").

     NOW,  THEREFORE,  in  consideration  of the premises  and mutual  covenants
herein  contained,  the parties  hereto do hereby agree to amend and restate the
Prior Plan as follows:
<PAGE>
     1. NAME, DESIGNATION AND PURPOSE

     1.01 NAME OF PLAN AND  TRUST.  This  Plan and  Trust  shall be known as the
"Inter-Tel,  Incorporated Tax Deferred  Savings Plan and Retirement  Trust" (the
"Plan").  The  trust  established  as part of this  Plan  shall  be known as the
"Inter-Tel, Incorporated Tax Deferred Savings Trust" (the "Trust").

     1.02  DESIGNATION  OF TYPE OF PLAN.  This  Plan is  designated  as a profit
sharing  plan  with a  Section  401 (k)  cash or  deferred  arrangement  for all
purposes under the Code and ERISA.

     1.03  PURPOSE.  This  Plan is  created  for the sole  purpose  of  enabling
Participants  to accumulate  funds for their  retirement or  disability,  and to
provide  benefits to  Participants'  Beneficiaries  in the event of death. In no
event  shall any part of the  principal  or  income  of the Trust  revert to the
Employer,  or be used for, or diverted to, purposes other than for the exclusive
benefit of Participants and their Beneficiaries, except as specifically provided
in Sections 11.04 and 15.01 of this Plan. This Plan is intended to qualify as an
employee pension benefit plan, under the terms of the Code.

                                       1-1
<PAGE>
     2. DEFINITIONS

          The  following  terms,  as used  in this  Agreement,  shall  have  the
definitions  set forth in this Article 2, unless the context  clearly  indicates
that a different meaning is required:

     2.01 ACCRUED BENEFIT. The term "Accrued Benefit" shall mean the amount in a
Participant's  account or accounts under this or any other defined  contribution
plan, or the  actuarially  determined  accrued  benefit under a defined  benefit
plan, as of any date,  derived from both Employer  contributions and Participant
contributions, if any.

     2.02 ADVISORY COMMITTEE.  The term "Advisory  Committee" shall refer to the
committee appointed by the Employer pursuant to Section 10.02 of this Plan.

     2.03 ANNIVERSARY DATE. The term "Anniversary  Date" shall mean the last day
of each Plan Year ending after the Effective Date.

     2.04 BREAK IN SERVICE.  The term  "Break in Service"  shall mean any twelve
(12)  consecutive  month period defined for purposes of a Year of Service during
which an  Employee  does not  complete  more than five  hundred  (500)  Hours of
Service.

     2.05  COMPENSATION.   The  term  "Compensation"  shall  mean  all  of  each
Participant's  total cash  compensation  actually paid to the Participant by the
Employer for the Plan Year,  excluding all  contributions to or benefits paid by
any pension or profit sharing plan and also excluding deferred compensation, and
any cash paid to a participant  as a car allowance.  Notwithstanding  the above,
Compensation  shall  include any amount  which is  contributed  by the  Employer
pursuant to a salary  reduction  agreement  and which is not  includable  in the
gross income of the Employee under Sections 125, 402(a)(8),  402(h) or 403(b) of
the Code.  Notwithstanding the above.  Compensation shall include  contributions
made to a cash or deferred plan  qualified  under Section  401(k) of the Code as
salary reduction contributions. If an Employee becomes a Participant in the Plan
during the Plan Year,  Compensation shall be counted only from the date on which
the Employee  became a Participant  in the Plan. In the case of a  Self-Employed
Individual,  if any, "Compensation" shall mean Earned Income. For any Plan Year,
the "Compensation" of any Employee shall not exceed Two Hundred Thousand Dollars
($200,000) (or such larger amount as the  Commissioner  of Internal  Revenue may
prescribe) for purposes of determining  Contributions  or Forfeitures  under the
Plan. In  determining  the  Compensation  of a Participant  for purposes of this
limitation,  the  Compensation  of the  Participant  and of  any  family  member
aggregated with the Participant under the rules of Section 414(q)(6) of the Code
shall be  combined,  except in applying  such  rules,  the term  "family"  shall
include only the spouse of the  Participant  and any lineal  descendants  of the
Participant  who have not attained age 19 before the close of the year. If, as a
result of the application of such rules the adjusted $200,000 limitation

                                       2-1
<PAGE>
is  exceeded,   then  (except  for  purposes  of  determining   the  portion  of
Compensation  up to the  integration  level if this Plan  provides for permitted
disparity),  the limitation shall be prorated among the affected Participants in
proportion to each such  Participant's  Compensation  as  determined  under this
Section prior to the  application of this  limitation.  Any Participant who is a
shareholder, officer, Owner-Employee, or a Highly Compensated Employee may elect
for any Plan Year, on a form prescribed by the Advisory Committee,  to limit his
Compensation for all purposes under this Plan.

     2.06  CONTRIBUTION.  The  term  "Contribution"  shall  mean  money or other
property paid or designated to be paid by the Employer to the Trust Fund.

     2.07  DISABILITY.  The term  "Disability"  shall mean any  illness or other
physical or mental  condition of a  Participant  which  renders the  Participant
incapable of performing his customary and usual duties for the Employer,  or any
medically  determinable  illness or other physical or mental condition resulting
from a bodily injury,  disease,  or mental disorder which in the judgment of the
Advisory Committee is permanent and continuous in nature. The Advisory Committee
may require  such medical or other  evidence as it deems  necessary to judge the
nature and permanency of the Participant's condition.

     2.08 EARLY  RETIREMENT  AGE AND EARLY  RETIREMENT  DATE.  There is no Early
Retirement Age or Date under this Plan.

     2.09  EARNED  INCOME.  The term  "Earned  Income"  shall mean net  earnings
derived by a person who is a Self-Employed Person from any unincorporated trade,
business,   or  professional   activity  with  respect  to  which  the  Plan  is
established,   if  the   personal   services  of  such  person  are  a  material
income-producing  factor in the trade,  business,  or practice.  "Net  Earnings"
shall be computed  without  regard to items not included in gross income and the
deductions allocable to those items, and after taking into account the deduction
allowed  by the Code for  contributions  to a  tax-qualified  plan on  behalf of
Employees  other than  Self-Employed  Persons.  Net earnings shall be determined
with regard to the  deduction  allowed to the Employer by Section 164 (f) of the
Code for taxable years beginning after December 31, 1989.

     2.10  EFFECTIVE  DATE. The term  "Effective  Date" shall mean the effective
date of this amended and restated Plan/ i.e., January 1, 1989.

     2.11 EMPLOYEE. The term "Employee" shall mean any person who is employed by
the  Employer  maintaining  the Plan or by any Related  Employer  required to be
aggregated  with the Employer  under  Sections 414 (b), (c) , (m), or (o) of the
Code. The term "Employee" shall also include any Leased Employee who is required
to be treated as an Employee under Sections 414(n) or (o) of the Code, and shall

                                       2-2
<PAGE>
include any Self-Employed  Individual in the case of any sole  proprietorship or
partnership which adopts this Plan.

     2.12 EMPLOYER.  The term "Employer" shall mean the employer who adopts this
Plan, and any Related Employer or other employer designated by the Employer with
respect to whom service is counted for the purposes of this Plan.

     2.13 FIDUCIARY.  The term "Fiduciary11  shall mean any person who exercises
any  discretionary  authority or control with respect to the  management  of the
Plan; or who  exercises any authority or control with respect to the  management
or  disposition  of its assets;  or who renders  investment  advice for a fee or
other compensation,  directly or indirectly, with respect to any monies or other
property of the Plan,  or has any authority or  responsibility  to do so; or who
has  any  discretionary   authority  or  discretionary   responsibility  in  the
administration of the Plan; or who acts to carry out a fiduciary responsibility,
when designated by a named Fiduciary  pursuant to authority granted by the Plan;
provided,  however  that  the  foregoing  definition  shall  be  subject  to any
exception  granted  directly or  indirectly  by the  provisions  of ERISA or any
regulation promulgated thereunder.

     2.14  FORFEITURE.  The term  "Forfeiture"  shall  mean  that  portion  of a
Participant's  account  which is not  vested  in the  Participant,  and which is
forfeited pursuant to Section 6.02 of the Plan.

     2.15 HIGHLY COMPENSATED  EMPLOYEE.  The term "Highly Compensated  Employee"
means an Employee  who,  during the Plan Year or during the  preceding  12-month
period:

          (a) is a more than 5% owner of the Employer (applying the constructive
     ownership  rules of Section 318 of the Code and applying the  principles of
     Code Section 318, for an unincorporated entity);

          (b)  has  Compensation  in  excess  of  $81,720  (as  adjusted  by the
     Commissioner of Internal Revenue for the relevant year);

          (c)  has  Compensation  in  excess  of  $54,480  (as  adjusted  by the
     Commissioner of Internal  Revenue for the relevant year) and is part of the
     top-paid 20% group of  employees  (based on  Compensation  for the relevant
     year);

          (d) has Compensation in excess of 50% of the dollar amount  prescribed
     in Code Section 415(b)(l)(A) and is an officer of the Employer.

     If an Employee  satisfies  the  definition in clause (b), (c) or (d) in the
Plan Year but not  during the  preceding  12-month  period and does not  satisfy
clause (a) in either period, the Employee is a Highly Compensated  Employee only
if he is one of the

                                       2-3
<PAGE>
100  most  highly  compensated  Employees  for the  Plan  Year.  If no  Employee
satisfies the compensation  requirement in clause (d) for the relevant year, the
Advisory  Committee will treat the highest paid officer as satisfying clause (d)
for that year.

     The term "Highly  Compensated  Employee" also includes any former  Employee
who separated  from service (or was deemed to have  separated  from service,  as
determined  under  Treasury  Regulations)  prior to the Plan Year,  performs  no
service  for the  Employer  during the Plan Year,  and was a Highly  Compensated
Employee  either for the separation year or any Plan Year ending on or after his
55th birthday.

     For purposes of this Section 2.15,  "Compensation"  means  Compensation  as
defined in Section  415(C)(3) of the Code, and  Compensation  must include:  (i)
elective deferrals under a Code Section 401(k) arrangement or under a Simplified
Employee  Pension  maintained  by the  Employer;  and (ii)  amounts  paid by the
Employer  which are not  currently  includable  in the  Employee's  gross income
because of Sections 125 (cafeteria plans) or 403(b) (tax-sheltered annuities) of
the Code.

     The  Advisory  Committee  must  make the  determination  of who is a Highly
Compensated Employee, including the determinations of the number and identity of
the top paid 20%  group,  the top 100 paid  Employees,  the  number of  officers
includable in clause (d) and the relevant compensation,  consistent with Section
414(q) of the Code and Regulations  issued  thereunder.  The Employer may make a
calendar  year election to determine  the Highly  Compensated  Employees for the
Plan Year, as prescribed in Treasury Regulations.  A calendar year election must
apply to all plans and arrangements of the Employer.

     For purposes of applying any nondiscrimination test required under the Plan
or under the Code, in a manner consistent with applicable Treasury  Regulations,
the Advisory  Committee will not treat as a separate employee a family member (a
spouse,  lineal  ascendant  or  descendant,  or spouse of a lineal  ascendant or
descendant)  of a Highly  Compensated  Employee  described in clause (a) of this
Section, or a family member of one of the ten Highly Compensated  Employees with
the  greatest  Compensation  for the  Plan  Year,  but  will  treat  the  Highly
Compensated  Employee  and all  family  members as a single  Highly  Compensated
Employee.  This  aggregation rule applies to a family member even if that family
member is a Highly Compensated Employee without family aggregation. In addition,
employers  aggregated  under Sections  414(b),  (c), (m), or (o) of the Code are
treated as a single Employer.

     2.16 Hour of Service.

          (a)  The tern "Hour of Service" shall mean:

               (i)   Each hour for which an  Employee  is paid,  or  entitled to
                     payment, for the performance of

                                       2-4
<PAGE>
                     duties for the  Employer.  These hours shall be credited to
                     the Employee for the computation period or periods in which
                     the  duties  are  performed.  Each  overtime  hour shall be
                     credited as a single hour  irrespective  of any increase in
                     the rate of pay for such hour; and

               (ii)  Each hour for which an  Employee  is paid,  or  entitled to
                     payment,  by the  Employer  on  account of a period of time
                     during  which no  duties  are  performed  (irrespective  of
                     whether the employment  relationship has terminated) due to
                     vacation,    holiday,   illness,    incapacity   (including
                     disability),  layoff, jury duty, military duty, or leave of
                     absence.  No more  than  501  hours  of  service  shall  be
                     credited  under  this  Section  2.16(a)(ii)  for any single
                     continuous  period  (whether or not such period occurs in a
                     single  computation  period).   Hours  under  this  Section
                     2.16(a)(ii)  shall be calculated  and credited  pursuant to
                     Section  2530.200b-2  of Department  of Labor  Regulations,
                     which are incorporated herein by this reference; and

               (iii) Each hour for which back pay, irrespective of mitigation of
                     damages,  is either  awarded or agreed to by the  Employer.
                     The same hours of service  shall not be credited both under
                     Section  2.16(a)(i) or Section ^  2.16(a)(ii),  as the case
                     may be, and under this  Section  2.16(a)(iii).  These hours
                     shall be credited to an Employee for the computation period
                     or periods to which the award or agreement  pertains  other
                     than the computation period in which the award,  agreement,
                     or payment is made.

          (b)  The number of Hours of Service  credited to an Employee  shall be
determined on the basis of the actual Hours of Service of the Employee.

          (c)  Service with the Employer for purposes of  eligibility,  vesting,
and  contributions  shall  include  service  with any Related  Employer or other
employer  specified  by  the  Employer  in  Sections  3.01  (eligibility),  6.01
(vesting), or 5.03 (allocations of contributions).

          (d)  Solely for purposes of determining whether a Break in Service (as
defined in Section 2.04) has occurred in a computation  period,  for purposes of
participation  and vesting,  an Employee who is absent from work for purposes of
maternity or

                                       2-5
<PAGE>
paternity  shall receive  credit for the Hours of Service which would  otherwise
have been credited to the Employee but for such absence, or in any case in which
such hours cannot be determined, eight (8) Hours of Service for each day of such
absence.  For purposes of this  paragraph,  an absence from work for purposes of
maternity  or  paternity  means  an  absence  (i) by  reason  of the  Employee's
pregnancy;  (ii) by reason of the birth of the Employee's child; (iii) by reason
of the placement of a child with the Employee in connection with the adoption of
such child by such Employee; or (iv) 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 prevent a
Break in Service in that period,  or (ii) in all other cases,  in the  following
computation  period.  If the elapsed  time method is used,  the  severance  from
service  date of an  Employee  who is  absent  from  service  beyond  the  first
anniversary  of the first day of absence  by reason of  maternity  or  paternity
absence  is the second  anniversary  of the first  date of  absence.  The period
between the first and second  anniversary will be treated as neither a period of
service nor a period of severance.

     2.17  INVESTMENT  MANAGER.  The term  "Investment  Manager"  shall  mean an
"investment manager" as defined by Section 3(38) of ERISA.

     2.18 LEASED  EMPLOYEE.  The term "Leased  Employee" means any person (other
than an employee of the  Employer)  who  pursuant  to an  agreement  between the
Employer and any other person ("leasing  organization")  has performed  services
for  the  Employer  [or for the  Employer  and  related  persons  determined  in
accordance  with 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 of a type
historically  performed  by employees  in the  business  field of the  Employer.
Contributions or benefits provided a Leased Employee by the leasing organization
which are  attributable to services  performed for the Employer shall be treated
as provided by the Employer.

     A Leased Employee shall not be considered an Employee of the Employer if:

          (a)  such  employee  is  covered  by a  money  purchase  pension  plan
     providing:

               (i)   a non-integrated employer contribution rate of at least ten
                     percent  (10%)  of  compensation,  as  defined  in  Section
                     415(C)(3) of the Code,  but including  amounts  contributed
                     pursuant  to  a  salary   reduction   agreement  which  are
                     excludable  from the employee's  gross income under Section
                     125, Section 402(a)(8), Section 402(h) or Section 403(b) of
                     the Code,

                                       2-6
<PAGE>
               (ii)  immediate participation, and

               (iii) full and immediate vesting; and

          (b)  Leased Employees do not constitute more than twenty percent (20%)
     of the Employer's nonhighly compensated Employees.

     2.19 NET  INCOME.  The term  "Net  Income"  shall  mean net  income  of the
Employer  prior to income taxes  (including but not limited to federal and state
income taxes) as reflected by the  Employer's  federal income tax return for the
period, as originally filed, before deduction of the Employer's  Contribution to
the Trust Fund (but after the  deduction  of any  Employer  Contribution  to any
pension  trust  established  by the  Employer),  and  without  giving  effect to
dividends received by the Employer from stock held in other corporations.

     2.20 NORMAL  RETIREMENT  AGE AND NORMAL  RETIREMENT  DATE. The term "Normal
Retirement Age" shall be the -date on which a Participant attains age sixty-five
(65).  The term  "Normal  Retirement  Date"  shall be the first day of the month
coincident with or next following the Normal Retirement Age under the Plan.

     2.21 OWNER-EMPLOYEE.  The term "Owner-Employee"  shall mean, in the case of
an employer who adopts this Plan or is specified by the Plan, a sole  proprietor
or practitioner,  or, if the employer is a partnership,  a partner who owns more
than  ten  percent  (10%)  of  either  a  capital  or  profit  interest  in  the
partnership.

     2.22  PARTICIPANT.  The term  "Participant"  shall  mean any  Employee  who
becomes  eligible to  participate  in accordance  with the provisions of Section
3.01 of the Plan.

     2.23  Plan.  The term  "Plan"  shall  mean the  plan  embodied  in this Tax
Deferred Savings Plan and Trust Agreement.

     2.24 PLAN  ADMINISTRATOR.  The term  "Plan  Administrator"  shall  mean the
Employer.  The Plan  Administrator  shall  constitute  a "named  Fiduciary"  for
purposes of Section 402(a)(2) of ERISA.

     2.25 PLAN YEAR.  Effective January 1, 1990, the term "Plan Year" shall mean
the twelve (12) consecutive month period ending December 31. The Plan Year shall
constitute  the Plan's  "limitation  year" for the purpose of measuring  maximum
allocations to Participants under the Plan.

     2.26  RELATED  EMPLOYER.   The  term  "Related  Employer"  shall  mean  any
corporation  which is a member  of a  "controlled  group  of  corporations"  [as
defined  in Section  414(b) of the Code] of which the  Employer  is a  component
member,  and each trade,  business,  or practice  (whether or not  incorporated)
which is under "common control" with the Employer [as defined in Section 414 (c)
of the Code]. The term "Related Employer" shall also mean any

                                       2-7
<PAGE>
corporation,  partnership,  or  other  organization  which  is a  member  of  an
"affiliated  service  group" [as defined in Section 414(B) of the Code] of which
the Employer is a component  member;  and any organization  which is required by
regulations  issued under Section  414(o) of the Code to be treated as a Related
Employer.

     2.27 SELF-EMPLOYED  INDIVIDUAL.  The term "Self-Employed  Individual" shall
mean,  in the case of any  employer  who adopts this Plan or is specified by the
Plan, any individual employer who has Earned Income from any trade, business, or
practice  (or who would have had Earned  Income but for the fact that the trade,
business, or practice had no net profits for the Employer's taxable year).

     2.28 SHAREHOLDER-EMPLOYEE.  The term "Shareholder-Employee"  shall mean, in
the case of any employer who adopts this Plan or is specified by this Plan,  and
who is an electing "small business  corporation"  [as defined in Section 137l(b)
of the Code],  any  employee or officer of the employer who owns or is deemed to
own more than five percent (5%) of the outstanding  stock of the employer on any
day during the taxable year of such corporation.

     2.29 TOP HEAVY PLAN.

          (a)  A plan  is a "Top  Heavy  Plan"  for a Plan  Year,  if any of the
     following conditions exists:

               (i)   If the top heavy ratio for this Plan exceeds  sixty percent
                     (60%) and this Plan is not part of any Required Aggregation
                     Group or Permissive Aggregation Group of plans.

               (ii)  If this Plan is a part of a Required  Aggregation  Group of
                     plans but not part of a  Permissive  Aggregation  Group and
                     the top heavy  ratio for the group of plans  exceeds  sixty
                     percent (60%).

               (iii) If this Plan is a part of a Required  Aggregation Group and
                     part of a Permissive Aggregation Group of plans and the top
                     heavy ratio for the  Permissive  Aggregation  Group exceeds
                     sixty percent (60%) .

The "top heavy  ratio" for  purposes  of  determining  whether the Plan is a Top
Heavy  Plan is a  fraction,  the  numerator  of which is the sum of the  Account
Balances or Present Value of Accrued  Benefits of Key Employees  under this Plan
and any plan of an  Aggregation  Group,  as of the  Determination  Date, and the
denominator of which is a similar sum determined for all  Participants.  The top
heavy ratio shall be calculated  without regard to any Non-Key  Employee who was
formerly a Key  Employee.  The top heavy ratio shall be calculated in accordance
with Section 416 of the Code and applicable Regulations.

                                       2-8
<PAGE>
          (b)  If the Employer maintains any other tax-qualified plan (including
     any simplified  employee pension plan),  this Plan (and any other plan with
     the relevant  Aggregation  Group) is a Top Heavy Plan only if it is part of
     the Required Aggregation Group, and the Required Aggregation Group is a Top
     Heavy Group.  An Aggregation  Group is a "Top Heavy Group" if the top heavy
     ratio  (determined  as of the  Determination  Date)  for both the  Required
     Aggregation  Group  and the  Permissive  Aggregation  Group  exceeds  sixty
     percent (60%) . The "top heavy ratio" for purposes of  determining  whether
     an Aggregation Group is a "Top Heavy Group" is a fraction, the numerator of
     which is the sum of the Present Value of Accrued  Benefits of Key Employees
     under all defined  benefit  plans  within the  Aggregation  Group,  and the
     Account  Balances of Key  Employees  under the defined  contribution  plans
     within  the  Aggregation  Group,  as of the  Determination  Date,  and  the
     denominator of which is a similar sum determined for all Participants.  The
     top heavy ratio shall be calculated  without regard to any Non-Key Employee
     who was  formerly a Key  Employee.  In addition,  for Plan Years  beginning
     after  December 31, 1984, if a Participant  or former  Participant  has not
     performed  services  for the  Employer  maintaining  the Plan  (other  than
     benefits  provided  under  the Plan) at any time  during  the five (5) year
     period  ending on the  Determination  Date,  the  Account  Balances  and/or
     Present  Value  of  Accrued   Benefits  for  such   Participant  or  former
     Participant  shall not be taken into  account for  purposes of  determining
     whether this Plan is a Top Heavy Plan. When aggregating plans, the value of
     Account  Balances and Accrued Benefits will be calculated with reference to
     the  Determination  Dates that fall  within  the same  calendar  year.  The
     Accrued  Benefit of a  Participant  (other  than a Key  Employee)  shall be
     determined under (a) the method, if any, that uniformly applies for accrual
     purposes under all defined benefit plans maintained by the Employer, or (b)
     if there is no such  method,  as if such  benefit  accrued not more rapidly
     than the  slowest  accrual  rate  permitted  under the  fractional  rule of
     Section 411(b)(l)(C) of the Code.

          (c)  For purposes of this Section 2.29:

               (i)   The term "Required  Aggregation  Group" shall mean (A) each
                     qualified  plan of the  Employer  in  which a Key  Employee
                     participates   or  participated  at  any  time  during  the
                     determination  period  (regardless  of whether the Plan has
                     terminated)  ; and  (B)  any  other  qualified  plan of the
                     Employer  which enables a plan described in (A) to meet the
                     requirements of Sections 401(a) (4) or 410 of the Code.

               (ii)  The term  "Permissive  Aggregation  Group"  shall  mean the
                     Required  Aggregation  Group plus any other qualified plans
                     maintained  by the  Employer,  but only if such group would
                     satisfy in the aggregate the requirements of

                                       2-9
<PAGE>
                     Sections  401(a)(4)  and  410 of  the  Code.  The  Advisory
                     Committee  shall determine which plans to take into account
                     in determining the Permissive Aggregation Group.

               (iii) The term  "Determination  Date"  shall  mean,  for any Plan
                     Year, the  Anniversary  Date of the preceding Plan Year or,
                     in the  case  of the  first  Plan  Year  of the  Plan,  the
                     Anniversary Date of that Plan Year.

               (iv)  The term "Employer" shall mean the Employer and any Related
                     Employer.

               (v)   The term "valuation  date" shall mean the Anniversary  Date
                     of this Plan, or the date elected by an employer  under any
                     other plan included within an Aggregation Group as of which
                     Account   Balances  or  Accrued  Benefits  are  valued  for
                     purposes of calculating the top heavy ratio.

               (vi)  The term "Key Employee" shall mean, as of any Determination
                     Date (as defined  above),  any Employee or former  Employee
                     (and the  Beneficiary  or  Beneficiaries  of such Employee)
                     who, at any time during the Plan Year (which  includes  the
                     Determination  Date) or  during  the  preceding  four  Plan
                     Years,  is an  officer  of the  Employer  who has an annual
                     Compensation greater than fifty percent (50%) of the amount
                     in effect under  Section  415(b)(l)(A)  of the Code for any
                     such Plan Year;  one of the ten (10)  Employees  owning the
                     largest   interests  in  the  Employer  and  having  annual
                     Compensation  from the Employer of more than the limitation
                     in effect under  Section  415(c)(l)(A)  of the Code; a more
                     than five  percent  (5%) owner of the  Employer;  or a more
                     than one percent  (1%) owner of the Employer who has annual
                     Compensation  of  more  than  One  Hundred  Fifty  Thousand
                     Dollars ($150,000).  Annual Compensation means compensation
                     as defined in Section  415(c)(3) of the Code, but including
                     amounts  contributed  by the Employer  pursuant to a salary
                     reduction   agreement   which  are   excludable   from  the
                     Employee's  gross income under Section 125,  Section 402(a)
                     (8),  Section  402(h) or  Section  403(b) of the Code.  The
                     constructive ownership rules of Section 318 of the Code (or
                     the  principles  of  that  Section,   in  the  case  of  an
                     unincorporated Employer) will

                                      2-10
<PAGE>
                     apply  for  purposes  of   determining   ownership  in  the
                     Employer.  A "five  percent  (5>>) owner" or a "one percent
                     (It) owner" means any person who owns (or is  considered as
                     owning  within the meaning of Code  Section  318) more than
                     five percent (5%) or one percent (1%), respectively, of the
                     outstanding stock of the Employer, or stock possessing more
                     than five percent (5>>) or one percent (1%),  respectively,
                     of the  total  combined  voting  power of all  stock of the
                     Employer or, in the case of an unincorporated business, any
                     person who owns more than five  percent (5%) or one percent
                     (1%),  respectively,  of the capital or profits interest in
                     the Employer.  In  determining  the percentage of ownership
                     under this  paragraph,  employers  that would  otherwise be
                     aggregated under Code-Sections 414 (b), (c) , and (m) shall
                     be treated as separate  employers.  However, in determining
                     whether an individual has annual  Compensation of more than
                     $150,000,  Compensation  from each employer  required to be
                     aggregated under Code Sections 414(b),  (c) , and (m) shall
                     be taken into account.  The  determination of an Employee's
                     status  as a Key  Employee  shall  be made by the  Advisory
                     Committee,  in  accordance  with rules set forth in Section
                     416(i)(1) of the Code and applicable Regulations.

               (vii) The  term  "Non-Key   Employee"   shall  mean,  as  of  any
                     Determination Date, any Employee who is not a Key Employee.

          (d)  For  purposes of this  Section  2.29,  a  Participant's  "Account
     Balance" as of the Determination Date is the sum of:

               (i)   The balance in his  Employer  account as of the most recent
                     valuation  occurring  within a  twelve  (12)  month  period
                     ending on the Determination Date.

               (ii)  An  adjustment  for  any   Contributions   due  as  of  the
                     Determination  Date. Such adjustment shall be the amount of
                     any  Contributions  actually made after the valuation  date
                     but before  the  Determination  Date,  except for the first
                     Plan Year when  such  adjustment  shall  also  reflect  the
                     amount of any  Contributions  made after the  Determination
                     Date that are  allocated  as of a date in that  first  Plan
                     Year.

                                      2-11
<PAGE>
               (iii) Any  distributions  made within the Plan Year that includes
                     the  Determination  Date or within  the four (4)  preceding
                     Plan  Years.  However,  in the case of  distributions  made
                     after the  valuation  date and  prior to the  Determination
                     Date, such  distributions are not included as distributions
                     for  top   heavy   purposes   to  the   extent   that  such
                     distributions  are already  included  in the  Participant's
                     Account Balance as of the valuation  date.  Notwithstanding
                     any  contrary  provision to this Plan,  all  distributions,
                     including  distributions made prior to January 1, 1984, and
                     distributions  made under a terminated plan which,  but for
                     its termination, would have been required to be included in
                     an Aggregation Group, will be counted.

               (iv)  Any Employee  contributions,  except deductible Participant
                     contributions.

               (v)   With respect to unrelated  rollovers and  transfers  (which
                     are both  initiated  by the  Employee  and made from a plan
                     maintained by one employer to a plan  maintained by another
                     employer),   if  this  Plan   provides  for   rollovers  or
                     transfers,  it  shall  always  consider  such  rollover  or
                     transfer as a distribution for the purposes of this Section
                     2.29. If this Plan is the plan  accepting such rollovers or
                     transfers,   it  shall  not  consider  such   rollovers  or
                     transfers  accepted after December 31, 1983, as part of the
                     Participant's  Account  Balance.   However,   rollovers  or
                     transfers  accepted  prior to  January  1,  1984,  shall be
                     considered as part of the Participant's Account Balance.

               (vi)  With respect to related rollovers and transfers (either not
                     initiated by the Employee or made to a plan  maintained  by
                     the same  employer) , if this Plan provides the rollover or
                     transfer,  it shall not be  counted as a  distribution  for
                     purposes  of this  Section  2.29.  If this Plan is the plan
                     accepting such rollover or transfer, it shall consider such
                     rollover or transfer as part of the  Participant's  Account
                     Balance, irrespective of the date on which such rollover or
                     transfer is accepted.

                                      2-12
<PAGE>
          (e)  For purposes of this Section 2.29, a Participant's "Present Value
     of Accrued  Benefit,"  in the case of any defined  benefit  plan,  shall be
     determined:

               (i)   As of the most recent "actuarial  valuation date," which is
                     the most recent  valuation  date within a twelve (12) month
                     period ending on the Determination Date.

               (ii)  For  the  first  Plan  Year,  as  if  (A)  the  Participant
                     terminated service as of the Determination Date; or (B) the
                     Participant   terminated   service  as  of  the   actuarial
                     valuation  date,  but taking  into  account  the  estimated
                     Present Value of Accrued  Benefits as of the  Determination
                     Date.

               (iii) For any other Plan Year, as if the  Participant  terminated
                     service as of-the actuarial valuation date.

               (iv)  The actuarial valuation date must be the same date used for
                     computing the defined  benefit plan minimum  funding costs,
                     regardless  of whether a valuation is  performed  that Plan
                     Year.

          (f)  For purposes of this Section 2.29, a Participant's "Present Value
     of  Accrued  Benefit",  in the case of a  defined  benefit  plan,  shall be
     determined under the top heavy provisions of the applicable defined benefit
     plan.

          (g)  Notwithstanding  any  contrary  provision,  the top  heavy  rules
     described in this Section 2.29 shall be applied in accordance  with Section
     416 of the Code and applicable regulations.

     2.30 TRUST FUND.  The term "Trust Fund" shall mean the fund  established by
the Trustee under this Plan,  consisting of contributions,  and any increases or
decreases  in the value of the same.  The  Trustee  may  combine the trust funds
created under the plans of all employers designated by the Employer with respect
to this Plan into a single Trust Fund for investment purposes.

     2.31 TRUSTEE.  The term  "Trustee"  shall mean the person(s)  named in this
Plan to act as Trustee or any successor.

     2.32 YEAR OF SERVICE. The term "Year of Service" shall mean the twelve (12)
consecutive  month  periods  specified  in the Plan for  purposes  of  measuring
eligibility for participation (Section 3.01) and vesting (Section 6.01).

                                      2-13
<PAGE>
     3. ELIGIBILITY AND PARTICIPATION

     3.01 ELIGIBILITY TO PARTICIPATE.

          (a)  Each  Employee  who has  completed  at least  six (6)  months  of
Service and has elected to make Participant Elective Deferrals to the Plan shall
become a Participant on the first day of the Plan Year, i.e.,  January 1, or the
first day of the seventh month of the Plan Year,  i.e.,  July l, coincident with
or  next  following  the  date  on  which  the  Employee  completes  all  of the
eligibility requirements of this Plan.

          (b)  For  purposes of  eligibility,  the term "Year of Service"  shall
mean a twelve (12) consecutive  month period during which an Employee  completes
at least one  thousand  (1,000)  Hours of  Service,  measured  from the date the
Employee completes his first Hour of Service (or any anniversary of that date) .
For purposes of determining  eligibility,  all service with the Employer and all
Related Employers shall be counted.

          (c)  Any Employee who was a  participant  in the Prior Plan on the day
before the Effective  Date of this Plan shall  continue as a Participant  in the
Plan.

     3.02 REEMPLOYMENT BEFORE BREAK IN SERVICE. If an Employee's employment with
the Employer  terminates and he is  subsequently  reemployed  before he incurs a
one-year Break in Service,  his Years of Service and his employment  will not be
deemed to have been interrupted during such year and, if he was a Participant in
the Plan (or otherwise satisfied the requirements for participation specified in
Section 3.01 of the Plan), he will remain (or become) a Participant  immediately
upon his  reemployment by the Employer.  If he was not a Participant in the Plan
but otherwise satisfied the requirements for participation  specified in Section
3.01 of the Plan, he will become a Participant on the later of the date he would
have entered the Plan had he not terminated employment or upon his reemployment.

     3.03  REEMPLOYMENT  AFTER BREAK IN SERVICE.  If a  Participant  completes a
one-year Break in Service and is  subsequently  reemployed by the Employer,  the
former Participant shall be considered a new Employee, for eligibility purposes,
and shall be required to complete the requirements  specified in Section 3.01 of
the Plan  [provided the service  requirement in Section 3.01 does not exceed one
(1) Year of Service] to become a  Participant.  A Participant  who completes the
eligibility  requirements in accordance with this provision shall again become a
Participant  as of the date of his  reemployment  (i.e.,  the date upon which he
completed  his first  Hour of Service  following  his Break in  Service)  by the
Employer.

     3.04  DETERMINATION  OF  ELIGIBILITY.  The records of the Employer as to an
Employee's or Participant's employment. Hours of

                                       3-1
<PAGE>
Service,  Years of  Service,  Breaks  in  Service,  termination  of  employment,
reemployment,  leaves of absence,  and  Compensation  will be  conclusive on all
persons unless demonstrated to the Employer's satisfaction to be incorrect.  All
doubtful  cases of  eligibility to participate in this Plan shall be resolved by
the Advisory  Committee,  whose  determination in such cases shall be conclusive
and binding upon all persons, except as otherwise provided by law.

     3.05  PARTICIPATION  OF EMPLOYEES.  Notwithstanding  any other provision of
this Plan. no Owner-Employee  shall become a Participant under this Plan if such
Owner-Employee,   either  alone  or  in  conjunction  with  one  or  more  other
Owner-Employees:  (i) controls an unincorporated  trade,  business,  or practice
other  than the  trade,  business,  or  practice  of the  Employer,  unless  the
Employees of such other trade,  business,  or practice are included under a plan
which meets the  requirements  of Sections  401(a) and (d) of the Code and which
provides  contributions  and  benefits  which  are not less  favorable  than the
contributions  and benefits provided for  Owner-Employees  under this Plan; (ii)
controls both the trade,  business, or practice of the Employer, and one or more
other  unincorporated  trades,  businesses,  or  practices,   unless  plans  are
established  with  respect to such other  unincorporated  trades,  business,  or
practices and such plans and this Plan, in combination, would form a single plan
which meets the  requirements  of Sections  401(a) and (d) of the Code; or (iii)
controls  the trade,  business  or practice  of the  Employer,  unless this Plan
provides  contributions  and benefits  which are not less  favorable  than those
provided by any other plans  under  which such  Owner-Employee  is covered as an
Owner-Employee.  If an Employee is covered as an Owner-Employee  under the plans
of two or more trades, businesses or practices which are not controlled, and the
Employee  controls a trade,  business or  practice,  then the  contributions  or
benefits of the Employees under the plan of the trades,  businesses or practices
which are  controlled  must be as favorable  as those  provided for the Employee
under the most  favorable  plan of the trade,  business or practice which is not
controlled. For purposes of these limitations, an Owner-Employee, or two or more
Owner-Employees, will be considered to control a trade, business, or practice if
the Owner-Employee, or two or more Owner-Employees together:

          (a)  own the entire interest in an unincorporated trade,  business, or
     practice; or

          (b)  in the case of a  partnership,  own more than fifty percent (50%)
     of either a capital or profit interest in the partnership.

For  purposes  of the  preceding  sentence,  an  Owner-Employee,  or two or more
Owner-Employees,  shall be treated as owning any interest in a partnership which
is owned, directly or indirectly, by a partnership which such Owner-Employee, or
such two or more  Owner-Employees,  are considered to control within the meaning
of the preceding sentence. In the event an Owner-Employee  becomes a Participant
and, thereafter, at any time fails to meet the

                                       3-2
<PAGE>
requirements  of this Section 3.05,  that person shall cease to be a Participant
for all  purposes  under  this Plan until  such time as he again  satisfies  the
limitations under this Section.

     3.06 PARTICIPATION FOR EMPLOYEES MAKING PARTICIPANT ELECTIVE DEFERRALS.

          (a)  An  Employee  must,  as  a  condition  of   participation,   make
Participant Elective Deferrals under the Plan, subject to his termination or the
suspension of his ability to make such  Deferrals.  The Employer shall give each
Employee  written  notice  of his  eligibility  to  participate  in the  Plan in
sufficient  time to enable  such  Employee to elect to  participate  in the Plan
prior to the  close of the Plan  Year in  which  he first  becomes  an  eligible
Employee,  in accordance with the provisions of this Section 3.06 and of Section
4.01 of the Plan.

          (b)  Each  Employee  who is  eligible  to  become  a  Participant  may
participate by completing  and signing a Participant  election form furnished by
the Employer and by  delivering  the form to the  Employer.  The Employee  shall
designate on the form the amount of his Participant Elective Deferrals,  if any,
as  provided  in  Section  4.01 of the Plan.  All forms to be  delivered  to the
Employer  pursuant to this Section 3.06 and Section 4.01 must be received by the
Employer  within such  reasonable  and  uniformly  applied  time  periods as the
Employer may  prescribe for the receipt of forms as a condition of giving effect
to or implementing such instructions.  If a written  instruction cannot be given
effect or  implemented  for a particular  Plan entry date, it shall be effective
for the next succeeding Plan entry date. Each Participant may, by written notice
received by the Employer  prior to the  expiration of such uniform period as the
Employer   shall   prescribe   for  giving   effect  to  such  notice,   decline
participation,  in  which  event  the  Participant  shall  become  an  "Inactive
Participant."  If such notice cannot be given effect for a particular Plan entry
date, it shall be effective for the next succeeding Plan entry date. Such notice
shall be effective  until the Employer  receives a new form from the Participant
pursuant to this Section 3.06 and Section 4.01 of the Plan. Any notice declining
participation shall be binding on the Participant's  spouse, heirs, assigns, and
beneficiaries.

                                       3-3
<PAGE>
     4. CONTRIBUTIONS

     4.01 Participant Elective Deferrals.

          (a)  ELECTION TO DEFER.  Each Participant may elect to defer a portion
of his pre-tax  Compensation for each Plan Year, as an Elective Deferral,  in an
amount not greater than ten percent  (10%) nor less than one percent (1%) of his
Compensation.  A  Maximum  Elective  Deferral  (expressed  as  a  percentage  of
Compensation)  may be  established  by the Advisory  Committee  and announced to
Participants  from time to time.  However,  a Participant's  Elective  Deferrals
shall,  in no event  exceed  Seven  Thousand  Six Hundred  Twenty-Seven  Dollars
($7,627) for any taxable year of the  Participant  (or such larger amount as may
at any time be determined under Section 402 (g) (5) of the Code in effect at the
beginning  of such  taxable  year).  Notwithstanding  the  above,  the  Advisory
Committee  may limit the  percentage  of  Compensation  which may be deferred by
Highly  Compensated  Employees in any Plan Year in order to assure that the Plan
does not discriminate in favor of Highly Compensated Employees.

               (i)   The portion of Compensation  which a Participant  elects to
                     defer under this Section 4.01 shall be  transferred  to the
                     Trustee, and credited to an Elective Deferral account. Each
                     Participant's  Elective Deferral account shall share in the
                     earnings  and losses of the Trust Fund,  and shall be fully
                     vested at all times.

               (ii)  Elective  Deferrals  shall  be  made  in  whole  percentage
                     increments of  Compensation  for a Plan Year.  The Employer
                     shall  have the right to direct  that  such  increments  of
                     Compensation shall be rounded to the next lowest or highest
                     dollar.

               (iii) If  the  payroll   deduction   method  is  utilized,   each
                     Participant  shall  specify  the  amount  of  his  Elective
                     Deferral by  designating  a  percentage  amount,  on a form
                     provided by and  delivered to the  Employer.  Such Elective
                     Deferral   shall  be   deducted  by   withholding   from  a
                     Participant's  Compensation for a payroll period, and shall
                     be  transmitted  to the Trustee  within a  reasonable  time
                     after the  payroll  period  for which  deductions  are made
                     occurs.  Payment  of  Elective  Deferrals  through  payroll
                     deduction   shall  be  subject  to  such   reasonable   and
                     nondiscriminatory  restrictions  regarding the frequency of
                     change of percentage amounts to be withheld as the Advisory
                     Committee and Employer shall

                                       4-1
<PAGE>
                     determine and announce in writing to the Participants.

               (iv)  All designations or changes of designation of the amount of
                     Elective  Deferrals  to be  withheld  by payroll  deduction
                     shall be made on forms supplied by the Employer,  signed by
                     the   Participant,   and  delivered  to  the  Employer.   A
                     designation  shall  be  effective  in  accordance  with the
                     uniform  rules   prescribed   by  the  Advisory   Committee
                     concerning   elections  to  defer.   A  payroll   deduction
                     designation  form shall be effective  until it is succeeded
                     by another valid payroll deduction  designation form, until
                     the  Participant   ceases   participation,   or  until  the
                     Participant's   deferrals   are   otherwise   suspended  or
                     terminated.

               (v)   For any Plan Year,  a  Participant  may  formally  elect to
                     suspend Elective  Deferrals  pursuant to this Section 4.01.
                     Suspension  of Elective  Deferrals  shall be made on a form
                     supplied by the Employer,  signed by the  Participant,  and
                     delivered  to  the  Employer  prior  to  expiration  of the
                     uniform  period  prescribed  by the Advisory  Committee for
                     such notice to be given effect for such  period.  If notice
                     is not timely  received,  such  notice  shall be  effective
                     commencing  with  the  next   succeeding   payroll  period.
                     Recommencement of Elective  Deferrals shall occur only when
                     the Participant  subsequently  delivers a new election form
                     to the Employer pursuant to the uniform rules prescribed by
                     the  Advisory  Committee.  While  a  Participant  is  on an
                     authorized leave of absence from the Employer,  he shall be
                     deemed  to  have  suspended  Elective  Deferrals,  and  may
                     recommence  Elective  Deferrals  following  his  return  to
                     active employment.

          (b)  DISTRIBUTION  OF  EXCESS  ELECTIVE  DEFERRALS.  In  the  event  a
Participant participates in more than one plan which permits Elective Deferrals,
such  Participant  may assign to the Plan any  Excess  Elective  Deferrals  made
during a calendar year by notifying the Plan  Administrator on or before March 1
of the following calendar year of the amount of the Excess Elective Deferrals to
be assigned to the Plan.  Notwithstanding the immediately  preceding sentence, a
Participant  may be  deemed  to have  notified  the Plan  Administrator,  or the
Employer may notify the Plan  Administrator of the amount of the Excess Elective
Deferral.  Notwithstanding  any other  provision  of the Plan,  Excess  Elective
Deferrals, plus any income and minus any loss allocable thereto,

                                       4-2
<PAGE>
shall be distributed no later than April 15 to any  Participant to whose account
Excess  Elective  Deferrals  were assigned for the preceding year and who claims
Excess Elective Deferrals for such calendar year.

               (i)   For  purposes  of  this   Section   4.01,   the   following
                     definitions shall apply:

                     (A) "Elective    Deferrals"   shall   mean   any   Employer
                         Contributions  made to the Plan at the  election of the
                         Participant,  in lieu of cash  compensation,  and shall
                         include   contributions   made  pursuant  to  a  salary
                         reduction agreement or other deferral  mechanism.  With
                         respect to any taxable year, a  Participant's  Elective
                         Deferral is the sum of all Employer  Contributions made
                         on behalf of~ such Participant  pursuant to an election
                         to  defer   under  any   qualified   cash  or  deferred
                         arrangement as described in Section 401(k) of the Code,
                         any  simplified   employee  pension  cash  or  deferred
                         arrangement as described in Code Section  402(h)(1)(B),
                         any  eligible  deferred  compensation  plan  under Code
                         Section 457,  any plan as described  under Code Section
                         501(c)(18),  and  any  Employer  Contributions  made on
                         behalf of a Participant  for the purchase of an annuity
                         contract under Code Section 403(b) pursuant to a salary
                         reduction agreement.

                     (B) "Excess  Elective  Deferrals" shall mean those Elective
                         Deferrals that are includable in a Participant's  gross
                         income under  Section  402(g) of the Code to the extent
                         such  Participant's  Elective  Deferrals for a calendar
                         year exceed  Seven  Thousand  Six Hundred  Twenty-Seven
                         Dollars  ($7,627),  or  such  larger  amount  as may be
                         determined under Section  402(g)(5) of the Code for the
                         calendar  year.  Excess  Elective  Deferrals  shall  be
                         treated as Annual Additions under the Plan.

               (ii)  Excess Elective  Deferrals shall be adjusted for any income
                     or loss up to the date of distribution.  The income or loss
                     allocable to Excess  Elective  Deferrals is the sum of: (A)
                     income  or loss  allocable  to the  Participant's  Elective
                     Deferrals for the

                                       4-3
<PAGE>
                     taxable year  multiplied  by a fraction,  the  numerator of
                     which is such  Participant's  Excess Elective Deferrals for
                     the year and the denominator is the  Participant's  account
                     balance  attributable to Elective  Deferrals without regard
                     to any income or loss  occurring  during such taxable year;
                     and (B) ten  percent  of the  amount  determined  under (A)
                     multiplied by the number of whole  calendar  months between
                     the end of the  Participant's  taxable year and the date of
                     distribution,   counting  the  month  of   distribution  if
                     distribution occurs after the 15th of such month.

          (c) ACTUAL DEFERRAL  PERCENTAGE  TEST. The Actual Deferral  Percentage
(hereinafter "ADP") for Employees who are Highly Compensated  Employees for each
Plan Year and the ADP for all other  eligible  Employees  for the same Plan Year
must satisfy one of the following tests:

               (i)   The ADP for eligible Highly  Compensated  Employees for the
                     Plan Year shall not  exceed the ADP for all other  eligible
                     Employees for the same Plan Year multiplied by 1.25, or

               (ii)  The ADP for eligible Highly  Compensated  Employees for the
                     Plan Year shall not  exceed the ADP for all other  eligible
                     Employees  for  the  same  Plan  Year  multiplied  by  2.0,
                     provided  that  the ADP  for  eligible  Highly  Compensated
                     Employees does not exceed the ADP for  Participants who are
                     Non-Highly  Compensated  Employees  by  more  than  two (2)
                     percentage points or such lesser amount as the Secretary of
                     the Treasury shall prescribe to prevent the multiple use of
                     this  alternative  limitation  with  respect  to any Highly
                     Compensated Employee.

                    (A)  Special Rules:

                    (1)  The ADP for any eligible  Highly  Compensated  Employee
                         for the Plan  Year  who is  eligible  to have  Elective
                         Deferrals allocated to his or her accounts under two or
                         more  arrangements  described in Section 401 (k) of the
                         Code,  that are  maintained by the  Employer,  shall be
                         determined  as if such  Elective  Deferrals  were  made
                         under a single  arrangement.  If a  Highly  Compensated
                         Employee  participates  in two

                                      4-4
<PAGE>

                         or  more  cash  or  deferred   arrangements  that  have
                         different Plan Years, all cash or deferred arrangements
                         ending with or within the same  calendar  year shall be
                         treated as a single arrangement.

                    (2)  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 Section shall be applied by determining
                         the ADP of Employees as if all such plans were a single
                         plan. 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 sane Plan Year.

                    (3)  For  purposes  of  determining  the ADP of an  eligible
                         Employee who is a five percent  owner or one of the ten
                         most  highly  paid Highly  Compensated  Employees,  the
                         Elective  Deferrals and  Compensation  of such Employee
                         shall include the Elective  Deferrals and  Compensation
                         for the Plan Year of family members (as defined in Code
                         Section 414(q)(6)(B)).  Family members, with respect to
                         such Highly Compensated Employees, shall be disregarded
                         as separate  Employees in determining  the ADP both for
                         eligible  Highly  Compensated  Employees  and all other
                         eligible Employees.

                    (4)  For  purposes  of  determining  the ADP test.  Elective
                         Deferrals  must  be made  before  the  last  day of the
                         twelve month period immediately following the Plan Year
                         to which the contributions apply.

                    (5)  The  Employer  shall  maintain  records  sufficient  to
                         demonstrate satisfaction of the ADP test.

                                       4-5
<PAGE>
                    (6)  The  determination  and treatment of the ADP amounts of
                         any Employee shall satisfy such other  requirements  as
                         may be prescribed by the Secretary of the Treasury.

              (iii) For  purposes of this Article 4, the  following  definitions
                    shall apply:

                    (A)  The term "Highly  Compensated  Employee" shall have the
                         meaning set forth in Section 2.15 of the Plan.

                    (B)  The term "Actual  Deferral  Percentage" for a specified
                         group of eligible  Employees for a Plan Year shall mean
                         the average of the actual deferral  ratios,  calculated
                         separately  for each ` ` Employee in the group,  of (1)
                         the amount of Elective Deferrals made on behalf of each
                         Employee  for the  Plan  Year  but  excluding  Elective
                         Deferrals   that  are  taken   into   account   in  the
                         Contribution  Percentage Test (provided the ADP test is
                         satisfied  both  with or  without  exclusion  of  these
                         Elective Deferrals) to (2) the Employee's  Compensation
                         for the Plan Year  (whether or not the  Employee  was a
                         Participant  for the entire  Plan  Year) . Such  actual
                         deferral ratios and the Actual Deferral  Percentage for
                         each  group   shall  be   calculated   to  the  nearest
                         one-hundredth   of  one   percent  of  the   Employee's
                         Compensation.  The actual deferral ratio of an eligible
                         employee who makes no Elective Deferral is zero.

          (d)  DISTRIBUTION OF EXCESS  CONTRIBUTIONS.  Notwithstanding any other
               provision of this Plan, Excess Contributions, plus any income and
               minus any loss allocable  thereto,  shall be distributed no later
               than the  last day of each  Plan  Year to  Participants  to whose
               accounts  such  Excess   Contributions  were  allocated  for  the
               preceding Plan Year. 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 percent (10%) excise tax will be
               imposed on the Employer maintaining the Plan with respect to such
               amounts.  Such distributions  shall be made to Highly Compensated
               Employees on the basis of the  respective  portions of the Excess
               Contributions  attributable to each of such Employees. The amount
               of Excess  Contributions  to be  distributed  shall be reduced by
               Excess Elective Deferrals previously  distributed for the taxable
               year ending in the same Plan Year and Excess  Elective  Deferrals
               to be distributed for a taxable year will

                                      4-6
<PAGE>
 be reduced by Excess  Contributions  previously  distributed  for the Plan Year
 beginning in such taxable  year.  In addition.  Excess  Contributions  shall be
 allocated  to  Participants  who are subject to the family  member  aggregation
 rules  of  Section  414(q)(6)  of the  Code  in the  manner  prescribed  by the
 regulations.

               (i)  "Excess  Contributions" shall mean, with respect to any Plan
                    Year, the excess of:

                    (A)  The  aggregate  amount of Elective  Deferrals  actually
                         taken  into  account  in  computing  the ADP of  Highly
                         Compensated Employees for such Plan Year, over

                    (B)  The maximum amount of such  contributions  permitted by
                         the ADP test (determined by reducing contributions made
                         on behalf of Highly Compensated Employees in - order of
                         the  ADPs,   beginning   with  the   highest   of  such
                         percentages) .

               (ii) Excess  Contributions  shall be  adjusted  for any income or
                    loss up to the  date of  distribution.  The  income  or loss
                    allocable to Excess  Contributions is the sum of: (A) income
                    or loss allocable to the  Participant's  Elective  Deferrals
                    for the Plan Year multiplied by a fraction, the numerator of
                    which is such  Participant's  Excess  Contributions  for the
                    year  and  the  denominator  is  the  Participant's  account
                    balance attributable to Elective Deferrals without regard to
                    any income or loss occurring  during such Plan Year; and (B)
                    ten  percent  (10%)  of  the  amount  determined  under  (A)
                    multiplied by the number of whole  calendar  months  between
                    the  end of the  Plan  Year  and the  date of  distribution,
                    counting the month of distribution  if  distribution  occurs
                    after the 15th of such month.

              (iii) AMOUNT  OF  EXCESS  CONTRIBUTIONS.   The  amount  of  Excess
                    Contributions for a Highly  Compensated  Employee for a Plan
                    Year is to be determined by the following  leveling  method,
                    under  which  the  Actual   Deferral  ratio  of  the  Highly
                    Compensated  Employee with the highest Actual Deferral ratio
                    is reduced to the extent required to:

                    (A)  Enable the  arrangement to satisfy the Actual  Deferral
                         Percentage test, or

                                      4-7
<PAGE>
                    (B)  Cause  such  Highly   Compensated   Employee's   actual
                         deferral  ratio  to  equal  the  ratio  of  the  Highly
                         Compensated  Employee  with  the  next  highest  actual
                         deferral ratio.

                    This  process  must be  repeated  until the cash or deferred
                    arrangement  satisfies the Actual Deferral  Percentage test.
                    For each Highly Compensated  Employee,  the amount of Excess
                    Contributions is equal to the total Elective Deferral of the
                    Employee  [determined  prior  to  the  application  of  this
                    Section   4.01(d)(iii)   minus  the  amount   determined  by
                    multiplying the Employee's actual deferral ratio [determined
                    after  application  of  this  Section  4.01(d)(iii)  by  his
                    Compensation used in determining such ratio.

     4.02 Participants' Voluntary Contributions.

          (a) Effective  with the Plan Year in which this Plan is adopted by the
Employer,  this Plan will not accept Participant  voluntary  contributions.  For
Plan Years beginning after December 31, 1986, if any, any Participant  voluntary
contributions together with any matching contributions as defined in Section 401
(m) of the Code,  will be  limited so as to meet the  nondiscrimination  test of
Section 401(m) as set forth in Section 4.05 of the Plan.

          (b) If the Plan  includes  Participant  voluntary  contributions  made
prior to the Effective Date of this Plan, a separate account shall be maintained
by  the  Trustee  for  the   nondeductible   voluntary   contributions  of  each
Participant. Such accounts will be valued at least annually at fair market value
as of the last day of the Plan  Year and the  earnings  and  losses of the Trust
attributable   to   the   accumulated    nondeductible   Participant   voluntary
contributions  will be allocated to each Participant's  nondeductible  voluntary
contributions  account in the ratio that such account  balance bears to all such
account balances. Such separate accounts shall be nonforfeitable at all times.

          (c)  The  Plan  does  not  accept  Participant   voluntary  deductible
contributions.  If  the  Plan  includes  or  permits  rollovers  of  Participant
voluntary  deductible  contributions  made prior to April 15, 1987, they will be
maintained in a separate account which will be nonforfeitable at all times. Such
accounts  will be valued at least  annually at fair market  value as of the last
day of the Plan Year and the  earnings and losses of the Trust  attributable  to
the accumulated deductible Participant voluntary contributions will be allocated
to each Participant's  deductible voluntary  contributions  account in the ratio
that such account  balance  bears to all such account  balances.  No part of the
Participant deductible voluntary contribution account may be used

                                      4-8
<PAGE>
to  purchase  life  insurance.  A  Participant  may  withdraw  any  part  of his
deductible voluntary contribution account by making a written application to the
Advisory Committee, pursuant to Section 6.07 of the Plan.

     4.03 Employer Contributions.

          (a)  PROFIT SHARING CONTRIBUTION. The Employer may make a Contribution
               to the Plan,  for any Plan Year while this Plan is in effect,  in
               an amount determined in the sole discretion of the Employer.

          (b)  MATCHING  CONTRIBUTION.  The Employer may make Employer  Matching
               Contributions with respect to Elective  Deferrals,  for each Plan
               Year while this Plan is in effect,  in an amount to be determined
               in the sole  discretion of the Employer.  Such Employer  Matching
               Contribution  shall be  allocated  in the ratio that the Elective
               Deferrals  made  and not  withdrawn  by each  Participant  in the
               period  for  which  the   contribution   is  made  bears  to  the
               unwithdrawn  Elective  Deferrals  of all  Participants  for  such
               period.

          (c)  The  Employer's  Contribution,  if  any,  may  consist  of  cash,
               qualifying  employer  securities"  or  "qualifying  employer real
               property"  [as  defined in Section  407 (d) of ERISA],  or of any
               other property acceptable to the Trustee.

          (d)  The Employer's  Contribution,  if any, shall be made  exclusively
               from the  Employer's  current Net Income or from the  accumulated
               earnings of the Employer.

          (e)  The  Employer's  total  Contributions  for a Plan Year  shall not
               exceed the maximum amount deductible on account of the Employer's
               Contribution  for its  corresponding  taxable  year  for  federal
               income tax  purposes.  In the event the  Employer has adopted any
               other  employee  pension  benefit plan or plans  qualified  under
               Section 401 of the Code,  covering the same Employees  covered by
               this Plan,  the total  contributions  made in any Plan Year under
               all such plans  shall not exceed the  amounts  deductible  by the
               Employer under the Code.

     4.04 Limitations on Employee Contributions and Matching Contributions.

          (a) The Average Contribution Percentage for eligible Employees who are
Highly  Compensated  Employees  for each Plan Year and the Average  Contribution
Percentage for all other eligible  Employees for the same Plan Year must satisfy
one of the following tests:

               (i)  The Average  Contribution  Percentage  for  eligible  Highly
                    Compensated Employees for the Plan Year shall not exceed the
                    Average Contribution Percentage for all other

                                      4-9
<PAGE>
                    eligible Employees for the sane Plan Year by 1.25; or

               (ii) The Average  Contribution  Percentage  for  eligible  Highly
                    Compensated Employees for the Plan Year shall not exceed the
                    Average  Contribution  Percentage  for  all  other  eligible
                    Employees  for the same  Plan Year  multiplied  by two (2) ,
                    provided  that  the  Average  Contribution   Percentage  for
                    eligible  Highly  Compensated  Employees does not exceed the
                    Average  Contribution  Percentage  for  all  other  eligible
                    Employees  by more  than two (2)  percentage  points or such
                    lesser  amount  as  the  Secretary  of  the  Treasury  shall
                    prescribe to prevent the  multiple  use of this  alternative
                    limitation with respect to any eligible  Highly  Compensated
                    Employee.

          (b)  Special Rules:

               (i)  For purposes of this Section,  the  Contribution  Percentage
                    for any eligible Highly Compensated Employee who is eligible
                    to have Contribution  Percentage Amounts allocated to his or
                    her  account  under two or more plans  described  in Section
                    401(a) of the Code,  or  arrangements  described  in Section
                    401(k) of the Code,  that are  maintained  by the  Employer,
                    shall be  determined  as if the  total of such  Contribution
                    Percentage  Amounts  was made under  each plan.  If a Highly
                    Compensated  Employee  participates  in two or more  cash or
                    deferred  arrangements  that have different plan years,  all
                    cash or deferred arrangements ending with or within the same
                    calendar year shall be treated as a single arrangement.

               (ii) In the event that this Plan  satisfies the  requirements  of
                    Section  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  Section   410(b)  of  the  Code  only  if
                    aggregated  with  this  Plan,  then  this  Section  shall be
                    applied  by  determining  the  Contribution   Percentage  of
                    Employees as if all such plans were a single Plan.  For Plan
                    Years  beginning  after  December  31,  1989,  plans  may be
                    aggregated  in order to satisfy  Section 401 (m) of the Code
                    only if they have the same Plan Year.

                                      4-10
<PAGE>
              (iii) For purposes of determining the  Contribution  Percentage of
                    an eligible  Employee who is a five percent  owner or one of
                    the ten most highly paid Highly Compensated  Employees,  the
                    Contribution  Percentage  Amounts and  Compensation  of such
                    Employee shall include the Contribution  Percentage  Amounts
                    and  Compensation  of family  members  (as  defined  in Code
                    Section  414(q)  (6)(B)).  Family  members,  with respect to
                    eligible Highly Compensated Employees,  shall be disregarded
                    as  separate   Employees  in  determining  the  Contribution
                    Percentage  both for eligible Highly  Compensated  Employees
                    and for all other eligible Employees.

               (iv) For purposes of  determining  the  Contribution  Percentage,
                    Employee  Contributions  are considered to have been made in
                    the-Plan Year in which  contributed  to the trust.  Matching
                    Contributions  will be  considered  made for a Plan  Year if
                    made no  later  than  the  end of the  twelve  month  period
                    beginning  on the day  after  the close of the Plan Year and
                    allocated to a Participant's  account for the Plan Year. The
                    Employer  shall maintain  records  sufficient to demonstrate
                    satisfaction  of the ADP test and the  amount  of  Qualified
                    Nonelective     Contributions    or    Qualified    Matching
                    Contributions, or both, used in such test, if any.

               (v)  The  Employer   shall   maintain   records   sufficient   to
                    demonstrate   satisfaction   of  the  Average   Contribution
                    Percentage  test and the  amount  of  Qualified  Nonelective
                    Contributions or Qualified Matching Contributions,  or both,
                    used in such test, if any.

               (vi) The   determination   and  treatment  of  the   Contribution
                    Percentage of any eligible Employee shall satisfy such other
                    requirements  as may be  prescribed  by the Secretary of the
                    Treasury.

              (vii) Multiple  Use: If one or more Highly  Compensated  Employees
                    participate in both a CODA and a plan subject to the Average
                    Contribution   Percentage   (ACP)  test  maintained  by  the
                    Employer  and the sum of the  ADP  and ACP of  those  Highly
                    Compensated  Employees  subject  to  either  or  both  tests
                    exceeds the Aggregate Limit, then the ACP of

                                      4-11
<PAGE>
                    those Highly Compensated Employees who also participate in a
                    CODA will be reduced (beginning with such Highly Compensated
                    Employee  whose ACP is the highest) so that the limit is not
                    exceeded.  The  amount  by  which  each  Highly  Compensated
                    Employee's  Contribution Percentage Amounts is reduced shall
                    be treated as an Excess Aggregate Contribution.  The ADP and
                    ACP of the Highly Compensated Employees are determined after
                    any  corrections  required  to meet  the ADP and ACP  tests.
                    Multiple  use does not  occur if both the ADP and ACP of the
                    Highly Compensated Employees does not exceed 1.25 multiplied
                    by the ADP and ACP of the Nonhighly Compensated Employees.

          (c)  For purposes of this  Section,  the following  definitions  shall
               apply:

               (i)  "Aggregate  Limit"  shall  mean  the sum of (A)  125% of the
                    greater of the ADP of the  Nonhighly  Compensated  Employees
                    for  the  Plan  Year  or the  ACP of  Nonhighly  Compensated
                    Employees  under the Plan subject to the Code Section 401(m)
                    for the Plan Year  beginning with or within the Plan Year of
                    the CODA and (B) the  lesser of 200% or two plus the  lesser
                    of such ADP or ACP.

               (ii) "Average  Contribution  Percentage"  shall mean the  average
                    (expressed as a percentage) of the Contribution  Percentages
                    of the eligible Employees in a group.

              (iii) "Contribution  Percentage"  shall mean the ratio  (expressed
                    as a  percentage)  of the Eligible  Employee's  Contribution
                    Percentage Amounts to the Eligible  Employee's  Compensation
                    for  the  Plan  Year  (whether  or not  the  Employee  was a
                    Participant for the entire Plan Year).

               (iv) "Contribution  Percentage Amounts" shall mean the sum of the
                    Employee  Contributions  and Matching  Contributions (to the
                    extent not taken into  account for purposes of the ADP test)
                    under the Plan on behalf of the  Eligible  Employee  for the
                    Plan Year. If so elected,  the Employer may include,  in the
                    Contribution  Percentage  Amounts,   Elective  Deferrals  or
                    Qualified Nonelective Contributions, or both, as provided by
                    regulations. Elective Deferrals in the

                                      4-12
<PAGE>
                    Contribution  Percentage  Amounts may be used as long as the
                    ADP test is met before the  Elective  Deferrals  are used in
                    the ACP test and continues to be met following the exclusion
                    of those  Elective  Deferrals  that are used to meet the ACP
                    test.

               (v)  "Eligible  Employee" shall mean any Employee who is eligible
                    to make an Employee  Contribution,  or an Elective  Deferral
                    (if the Employer so takes into account in the calculation of
                    the  Contribution  Percentage),  or to  receive  a  Matching
                    Contribution  or a Qualified  Matching  Contribution.  If an
                    Employee   Contribution   is  required  as  a  condition  of
                    participation  in the  Plan,  any  Employee  who  would be a
                    Participant  in  the  Plan  if  such  Employee  made  such a
                    contribution  shall be treated as `an  Eligible  Employee on
                    behalf of whom no Employee Contributions are made.

               (vi) "Employee  Contribution" shall mean any contribution made to
                    the Plan by or on behalf of a  Participant  that is included
                    in the Participant's  gross income in the year in which made
                    and that is  maintained  under a  separate  account to which
                    earnings and losses are allocated.

              (vii) "Matching  Contribution" shall mean an Employer Contribution
                    made to the Plan, or any other defined contribution plan, on
                    behalf  of  a   Participant   on  account  of  an   Employee
                    Contribution  made by such  Participant,  or on account of a
                    Participant's Elective Deferral,  under a plan maintained by
                    the Employer.

          (d)  DISTRIBUTION OF EXCESS AGGREGATE  CONTRIBUTIONS.  Notwithstanding
any other provision of this Plan, Excess Aggregate Contributions plus any income
and minus any loss allocable thereto shall be forfeited,  if forfeitable,  or if
not forfeitable (as in the case of Employee  Contributions) shall be distributed
no later than the last day of each Plan Year to  Participants  to whose accounts
such Excess Aggregate  Contributions were allocated for the preceding Plan Year.
Excess  Aggregate  Contributions  shall be  allocated  to  Participants  who are
subject to the family member  aggregation  rules of Section  414(q)(6)(B) of the
Code in the manner  prescribed  by the  regulations.  If such  Excess  Aggregate
Contributions  are distributed  more than 2-1/2 months after the last day of the
Plan Year in which such excess  amounts  arose,  a ten percent  (10%) excise tax
will be  imposed  on the  Employer  maintaining  the Plan with  respect to those
amounts. Excess

                                      4-13
<PAGE>
Aggregate Contributions shall be treated as Annual Additions under the Plan.

               (i)  The Excess  Aggregate  Contributions  shall be adjusted  for
                    income or loss up to the date of distribution. The income or
                    loss allocable to Excess Aggregate  Contributions is the sun
                    of:  (A)  income  or  loss  allocable  to the  Participant's
                    Matching  Contribution  account (if any,  and if all amounts
                    therein  are not used in the ADP test) and,  if  applicable.
                    Qualified  Nonelective  Contribution  account  (if  any) and
                    Employee  Contribution  account for the Plan Year multiplied
                    by a fraction,  the numerator of which is such Participant's
                    Excess  Aggregate   Contributions   for  the  year  and  the
                    denominator   is  the   Participant's   account   balance(s)
                    attributable  to  Contribution  Percentage  Amounts  without
                    regard to any  income  or loss  occurring  during  such Plan
                    Year;  and (B) ten  percent  (10%) of the amount  determined
                    under (A) multiplied by the number of whole calendar  months
                    between   the  end  of  the  Plan   Year  and  the  date  of
                    distribution,   counting  the  month  of   distribution   if
                    distribution occurs after the 15th of such month.

               (ii) Excess  Aggregate  Contributions  shall be  distributed on a
                    pro-rata basis from the Participant's  Employee Contribution
                    account  and  Matching   Contribution   account   (and,   if
                    applicable,    the   Participant's   Qualified   Nonelective
                    Contribution account).

              (iii) For   purposes   of   this   Section,    "Excess   Aggregate
                    Contributions"  shall mean,  with  respect to any Plan Year,
                    the excess of:

                    (A)  The  aggregate  Contribution  Percentage  Amounts taken
                         into  account  in  computing   the   numerator  of  the
                         Contribution  Percentage  actually  made on  behalf  of
                         Highly Compensated Employees for such Plan Year, over

                    (B)  The maximum  Contribution  Percentage Amounts permitted
                         by the Average Contribution Percentage test (determined
                         by  reducing  contributions  made on  behalf  of Highly
                         Compensated Employees in order of their Contribution

                                      4-14
<PAGE>

                         Percentages   beginning   with  the   highest  of  such
                         percentages).

                         Such   determination   shall   be  made   after   first
                         determining   Excess  Elective  Deferrals  pursuant  to
                         Section   4.01(b)   and   then    determining    Excess
                         Contributions pursuant to Section 4.01(d) of the Plan.

     4.05 PAYMENT.  All Contributions  shall be paid directly to the Trustee and
may be made on any date or dates  selected by the Employer;  provided,  however,
that the total annual Contribution for each Plan Year shall be paid on or before
the date on which the Employer is required to file its federal income tax return
for the  corresponding  taxable year of the Employer,  including any  extensions
thereof.

     4.06 NO  RESPONSIBILITY  FOR COLLECTION OR VERIFICATION.  The Trustee shall
have no responsibility or obligation to collect any Contribution under the Plan,
or to verify the correctness of the amount of any Contribution under the Plan.

     4.07 ROLLOVERS AND TRANSFERS.

     (a) The Advisory  Committee may direct the Trustee to receive and hold, for
the benefit of any  Employee of the  Employer,  amounts  transferred  from other
qualified  plans  provided that the trust from which such funds are  transferred
permits the transfer to be made and the  transfer  will not  jeopardize  the tax
exempt status of the Plan or create adverse tax consequences for the Employer. A
transferred   contribution   shall  be  held  by  the  Trustee  in  a  separate,
nonforfeitable  account (a  "rollover/transfer  account") for the benefit of the
Participant  which will be fully vested at all times and shall not be subject to
forfeitures for any reason.

     (b) For the purposes of this Section 4.07, the term "qualified  plan" shall
mean any tax  qualified  plans under Code Section  401(a).  The phrase  "amounts
transferred from other qualified plans" shall mean:

               (i)  amounts  transferred  to this  Plan  directly  from  another
                    qualified plan;

               (ii) lump-sum  distributions received by an Employee from another
                    qualified  plan which are eligible  for tax-free  "rollover"
                    treatment  under the Code and which are  transferred  by the
                    Employee to this Plan within sixty (60) days  following  his
                    receipt thereof;

              (iii) amounts  transferred to this Plan from a conduit  individual
                    retirement account,

                                      4-15
<PAGE>
                    provided that the conduit individual  retirement account has
                    no  assets   other  than   assets   which  were   previously
                    distributed  to the  Employee  from another  qualified  plan
                    (other  than  a plan  for  self-employed  individuals  or an
                    individual  retirement  account) as a lump-sum  distribution
                    which were  eligible for tax-free  rollover  treatment,  and
                    which were deposited in such conduit  individual  retirement
                    account  within  sixty  (60) days of  receipt  thereof,  and
                    earnings on those assets;

               (iv) amounts   distributed   to  the  Employee   from  a  conduit
                    individual  retirement  account meeting the  requirements of
                    item (iii) above,  and  transferred  by the Employee to this
                    Plan within sixty (60) days of his receipt thereof from such
                    conduit individual retirement account;

               (iv) accumulated voluntary deductible employee contributions; and

               (vi) any other amounts which may be transferred to the Trustee as
                    tax-qualified transfers under the provisions of the Code.

          (c) Prior to  accepting  any  rollovers  or  transfers  to which  this
Section  applies,  the Advisory  Committee may require the Employee to establish
that the amounts to be  transferred to this Plan meet the  requirements  of this
Section  and may also  require  the  Employee  to  provide an opinion of counsel
satisfactory  to the  Employer  that  the  amounts  to be  transferred  meet the
requirements of this Section.

          (d)  Notwithstanding  anything  herein  to the  contrary,  a  transfer
directly to this Plan from another  qualified plan (or a transaction  having the
effect of such a transfer)  shall only be permitted if it will not result in the
elimination  or reduction of any protected  benefit under Section  411(d) of the
Code.

     4.08 TOP HEAVY MINIMUM CONTRIBUTION.

          (a) If this Plan is a Top Heavy Plan, the Employer shall contribute an
amount equal to three percent (3%) of the Compensation for each Non-Key Employee
who is a Participant employed by the Employer on each Anniversary Date occurring
within the Plan Year.  For  purposes of this Section  4.08,  a Non-Key  Employee
Participant  includes any Employee otherwise eligible to participate in the Plan
but who is not entitled to receive an allocation of the Employer's  Contribution
for any Plan Year  because  of (i) the  Participant's  failure to  complete  any
minimum  Hours of Service,  or (ii)  Compensation  less than a stated  amount or
(iii)

                                      4-16
<PAGE>
failure to make any Elective Deferral under Section 4.01 of the Plan.

          (b) If the Employer  contribution  rate for the Key Employee  with the
highest  contribution  rate is less than  three  percent  (3%),  the  guaranteed
minimum  contribution for Non-Key Employees shall equal the highest contribution
rate received by a Key Employee.  The  contribution  rate is the sum of Employer
contributions  (not including  Employer  contributions  to Social  Security) and
Forfeitures allocated to the Participant's Account for the Plan Year, divided by
his  Compensation  for the Plan Year. To determine the  contribution  rate,  the
Advisory  Committee  shall  consider all qualified  defined  contribution  plans
maintained  by the Employer as a single  plan.  [Notwithstanding  the  preceding
provisions  of this Section 4.08,  if a defined  benefit plan  maintained by the
Employer  which  benefits a Key  Employee  depends  on this Plan to satisfy  the
anti-discrimination  rules of Section 401 (a) (4) of the Code,  or the  coverage
rules of Section 410 (or another plan  benefiting the Key Employee so depends on
such defined benefit plan),  the guaranteed  minimum  contribution for a Non-Key
Employee  is  three  percent  (3%)  of  his   Compensation   regardless  of  the
contribution rate for the Key Employees.]

          (c) If the  contribution  rate of the  Plan  Year  with  respect  to a
Non-Key  Employee  described  in this  Section  4.08 is less  than  the  minimum
contribution,  the Employer will increase its  contribution for such Employee to
the extent necessary so his  contribution  rate for the Plan Year will equal the
guaranteed  minimum  contribution.  Any such  additional  contribution  shall be
allocated to the accounts of the Non-Key  Employees for whom the Employer  makes
the additional contribution.

          (d) For purposes of this Section 4.08, the term  "Compensation"  shall
have the  meaning  defined in Section  415 of the Code and  Section  2.05 of the
Plan.

          (e) In lieu of the above, if a Non-Key  Employee  participates in this
Plan and a defined benefit pension plan included in a Required Aggregation Group
which is top heavy,  a minimum  allocation of five percent (5%) of  Compensation
shall be provided under this Plan.

                                      4-17
<PAGE>
     5. ALLOCATIONS TO ACCOUNTS

     5.01  PARTICIPANTS'   ACCOUNTS.  The  Trustee  shall  maintain  a  separate
"Employer account" in the name of each Participant, which will reflect his share
of Employer  Contributions and Forfeitures,  if any, arising under the Plan, and
the  earnings,  losses,  appreciation,  and  depreciation  attributable  to such
amounts.  The Trustee shall also maintain a separate  "Participant  account" for
rollovers and transfers, if any, or Participant voluntary contributions, if any,
in the name of each such Participant, which will reflect his rollover amounts or
voluntary contributions and the earnings, losses, appreciation, and depreciation
attributable  to such  contributions.  The Trustee  shall  maintain  subaccounts
reflecting  the  portion  of  each  Participant's   Employer  account  (and,  if
applicable,  Participant  accounts)  invested  pursuant to the  direction of the
Participant  in  accordance  with  Article 9 of the Plan.  The  Trustee may also
maintain such other  accounts or  subaccounts  in the names of  Participants  or
otherwise in  accordance  with Article 4 of the Plan and as it deems  advisable.
Unless the context  indicates  otherwise,  the term "accounts",  as used in this
Plan, shall include all accounts (and subaccounts) maintained by the Trustee for
a  Participant.  Each such  account  shall be valued and adjusted as provided in
this Article 5 to reflect any withdrawals and distributions and any appreciation
and  depreciation  in the value of the assets of the Trust Fund. The maintenance
and  establishment  of  separate  accounts  for each  Participant  shall  not be
construed as giving any person an interest in any  specific  assets of the Trust
Fund, the whole of which,  for investment  purposes,  shall be administered as a
single fund except to the extent otherwise provided in this Plan.

     5.02  CONTRIBUTIONS  CREDITED ON LAST DAY OF PLAN YEAR. For purposes of the
valuations   and   adjustments   made  pursuant  to  this  Article  5,  Employer
Contributions  made to the Plan for any Plan Year  shall be  credited  as of the
last day of such year,  regardless of when  actually  paid to the Trustee.  Each
Participant contribution made pursuant to Article 4 of the Plan, if any, will be
credited to the  relevant  Participant's  account as of the last day of the Plan
Year in which such  contribution  was made, or on any more frequent dates as may
be  specified  by uniform and  nondiscriminatory  rules  adopted by the Advisory
Committee for this purpose.

     5.03 ALLOCATION OF EMPLOYER CONTRIBUTIONS.

          (a) All Participants  employed by the Employer during a Plan Year (but
excluding  Participants whose employment with the Employer terminated during but
prior to the last day of the Plan Year for a reason other than  retirement at or
after the Normal  Retirement  Date,  Disability,  or death) shall be eligible to
share in the  allocation of the Employer's  Contribution,  if any, for such Plan
Year. Subject to the Top Heavy minimum  contribution rules under Section 4.08 of
the Plan,  and the  limitations  on annual  additions and benefits  specified in
Section 5.07, the Employer's

                                      5-1
<PAGE>
Contribution  for each Plan Year shall be  allocated  as of the last day of such
Plan Year, to the Employer accounts of eligible  Participants as of such date in
the ratio that each such  Participant's  Compensation for the Plan Year bears to
the  total   Compensation   of  all  such   Participants   for  the  Plan  Year.
Notwithstanding any contrary provision, Employer Contributions (and, in the case
of certain  plans.  Forfeitures)  shall be allocated to each Non-Key  Employee's
Employer account subject to and consistent with the minimum Top Heavy Plan rules
of Section 4.08 of the Plan.

          (b) Employer Matching  Contribution shall be allocated to the Employer
accounts of eligible Participants in accordance with Section 4.03 of the Plan.

     5.04  VALUATION  AND  ADJUSTMENT  OF  ACCOUNTS.  Accounts may be valued and
adjusted  on an  annual  or more  frequent  basis  pursuant  to such  rules  and
procedures as may be established by the Advisory Committee,  from -time to time,
and applied in a uniform and  nondiscriminatory  manner.  As soon as practicable
following  the end of each  period  for  which a  valuation  is to be made  (the
"valuation  period"),  the  accounts  of each  Participant  shall be valued  and
adjusted  as of the last day of such  period (the  "periodic  valuation  date").
Following the valuation and adjustment of the Participants' accounts, and within
a reasonable  time  following  the end of each  valuation  period,  the Advisory
Committee  shall  notify  each  Participant  with  respect  to the status of his
account as of the periodic valuation date.  Accounts which are invested pursuant
to the direction of  Participants in accordance with Article 9 of the Plan shall
be valued and credited at fair market value on an  individual  basis.  All other
accounts  shall be  adjusted  on a pro rata basis to reflect  changes in the net
fair market value of the Trust Fund. In the absence of any contrary  instruction
by the Advisory  Committee,  the Plan Administrator  shall value and adjust each
account which is not directed by  Participants  pursuant to Article 9, as of the
periodic  valuation  date, on the basis of the account  balance as of the latest
preceding periodic valuation date, minus amounts distributed or withdrawn by the
Participant,  or applied to pay insurance premiums for any policy on the life of
the Participant, plus one-half of any Elective Deferrals made by the Participant
during the valuation  period,  and if Employer  Matching  Contributions are made
contemporaneously  with  Elective  Deferrals,   one-half  of  Employer  Matching
Contributions  made during the valuation  period,  in accordance with the policy
determined   by  the  Advisory   Committee  to  be  applied  on  a  uniform  and
nondiscriminatory basis.

     5.05  APPLICATION OF FORFEITURES.  Any  Forfeitures  arising under Sections
6.01 and 6.02 of the Plan shall be allocated to those  Participants  entitled to
an  allocation  of  Employer  Contributions  for  the  Plan  Year in  which  the
Forfeiture  occurs.  Forfeitures  under the Plan shall be  allocated in the same
manner Employer  Contributions  are allocated as provided in Section 5.03 of the
Plan.

                                      5-2
<PAGE>
     5.06 CHARGING OF  DISTRIBUTIONS.  All payments or  distributions  made to a
Participant or his  Beneficiary  shall be charged to his accounts when made. The
Advisory Committee shall determine which of the Participant's  accounts shall be
so charged.

     5.07 LIMITATIONS ON ANNUAL ADDITIONS AND BENEFITS.

          (a) For the purposes of this Section 5.07,  the following  terms shall
have the definitions set forth below:

               (i)  ALLOCATION DATE. The term  "Allocation  Date" shall mean the
                    date  with  respect  to  which  all  or  a  portion  of  the
                    Employer's and  Participants'  Contributions  or Forfeitures
                    are allocated to Participants' accounts.

               (ii) ANNUAL ADDITIONS. The term "Annual Additions" shall mean the
                    sum  of  the  following  amounts,  if  any,  credited  to  a
                    Participant's account for the Limitation Year:

                    (A)  Employer Contribution;

                    (B)  Forfeitures;

                    (C)  Employee  Contributions  (as  determined  under Section
                         415(C)(2) of the Code); and

                    (D)  Amounts   allocated   after  March  31,  1984,   to  an
                         individual  medical  account,  as  defined  in  Section
                         415(1)  (2) of the Code,  which is part of a pension or
                         annuity plan  maintained by the  Employer,  and amounts
                         derived  from   contributions  paid  or  accrued  after
                         December 31, 1985,  in taxable  years ending after such
                         date, which are attributable to post-retirement medical
                         benefits  allocated  to the  separate  account of a Key
                         Employee, as defined in Section 419A(d)(3) of the Code,
                         which is part of a welfare  benefit fund, as defined in
                         Section 419(e) of the Code, maintained by the Employer,
                         will  be  considered  Annual  Additions  to  a  Defined
                         Contribution Plan.

     For purposes of this Section  5.07,  any Excess  Amount  applied under this
Section 5.07 in any Limitation  Year to reduce  Employer  Contributions  will be
included in Annual Additions for such Limitation Year.

                                      5-3
<PAGE>
              (iii) COMPENSATION.   The  term   "Compensation"   shall   mean  a
                    Participant's  earned  income,  wages,  salaries,  fees  for
                    professional service and other amounts received for personal
                    services  actually rendered in the course of employment with
                    the  Employer  maintaining  the  Plan  (including,  but  not
                    limited to,  commissions,  compensation  for services on the
                    basis of a  percentage  of profits,  tips and bonuses) . The
                    term "Compensation" shall not include:

                    (A)  Employer   contributions,   to  a  plan   of   deferred
                         compensation,  to the extent the  contributions are not
                         included in the gross  income of the  Employee  for the
                         taxable  year in  which  the  contributions  are  made;
                         Employer   contributions  on  behalf  of  an  Employee,
                         through a salary  reduction  arrangement,  to a cash or
                         deferred plan  described in Section 401 (k) of the Code
                         or a tax-deferred  annuity  described in Section 403(b)
                         of the Code, or to a simplified  employee  pension plan
                         described in Section 408 (k) of the Code, to the extent
                         such contributions are deductible by the Employee under
                         Section  219(b)(7) of the Code;  and any  distributions
                         from a plan of  deferred  compensation,  regardless  of
                         whether such amounts are includable in the gross income
                         of the Employee when distributed;

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

                    (C)  Amounts  realized  from  the  sale,  exchange  or other
                         disposition of stock  acquired under a qualified  stock
                         option;

                    (D)  Other amounts which receive special tax benefits,  such
                         as premiums for group term life  insurance (but only to
                         the extent that the premiums are not  includable in the
                         gross income of the Employee), or contributions made by
                         an Employer (whether or not under a salary

                                      5-4
<PAGE>
                         reduction agreement) towards the purchase of an annuity
                         contract  described  in  Section  403  (b) of the  Code
                         (whether or not the  contributions  are excludable from
                         the gross income of the Employee).

               The provisions of this paragraph (iii) shall apply solely to this
          Section 5.07.  Amounts  included as Compensation  under this paragraph
          (iii) are those amounts  actually paid to a Participant  or includable
          in his gross income within the Limitation  Year.  Notwithstanding  the
          preceding  sentence.  Compensation  for  a  Participant  in a  Defined
          Contribution  Plan who is permanently and totally disabled (as defined
          in Section 22(e) (3) of the Internal Revenue Code) is the Compensation
          such  Participant  would have received for the Limitation  Year if the
          Participant  had  been  paid  -at  the  rate  of   Compensation   paid
          immediately  before becoming  permanently and totally  disabled;  such
          imputed  Compensation  for the disabled  Participant may be taken into
          account only if the Participant is not a Highly  Compensated  Employee
          (as defined in Section 414 (q) of the Code) and Contributions  made on
          behalf of such Participant are nonforfeitable when made.

               (iv) DEFINED  BENEFIT   FRACTION.   The  term  "Defined   Benefit
                    Fraction"  shall mean a fraction,  the numerator of which is
                    the sum of the Participant's Projected Annual Benefits under
                    all the defined  benefit plans  (whether or not  terminated)
                    maintained by the Employer,  and the denominator of which is
                    the lesser of one hundred  twenty-five percent (125%) of the
                    dollar  limitation  determined for the Limitation Year under
                    Sections  415 (b) and (d) of the Code or one  hundred  forty
                    percent  (140%)  of  the   Participant's   highest   average
                    compensation, including any adjustments under Section 415(b)
                    of the Code. For purposes of this Section, the term "highest
                    average  compensation"  shall mean the average  Compensation
                    for the three consecutive Years of Service that produces the
                    highest average.

                    Notwithstanding   the  above,   if  the  Participant  was  a
               participant  as of the  first day of the  first  Limitation  Year
               beginning after December 31, 1986, in one or more Defined Benefit
               Plans maintained by the Employer which were in

                                      5-5
<PAGE>
               existence on May 6, 1986,  the  denominator of this fraction will
               not be less than one hundred  twenty-five  percent  (125%) of the
               sum of the annual benefits under such plans which the Participant
               had accrued as of the close of the last Limitation Year beginning
               before January 1, 1987, disregarding any changes in the terms and
               conditions of the Plan after May 5, 1986. The preceding  sentence
               applies only if the Defined Benefit Plans individually and in the
               aggregate  satisfied the requirements of Section 415 of the Code,
               for all Limitation Years beginning before January 1, 1987.

               (v)  DEFINED BENEFIT PLAN. The term "Defined  Benefit Plan" shall
                    mean a retirement plan which does not provide for individual
                    accounts for  Employer  contributions.  All Defined  Benefit
                    Plans (whether or not terminated) maintained by the Employer
                    shall be treated as a single plan.

               (vi) DEFINED   CONTRIBUTION    FRACTION.    The   term   "Defined
                    Contribution  Fraction" shall mean a fraction, the numerator
                    of  which  is  the  sum  of  the  Annual  Additions  to  the
                    Participant's  accounts  under all the Defined  Contribution
                    Plans (whether or not terminated) maintained by the Employer
                    for the current and all prior  Limitation  Years  (including
                    the  Annual  Additions  attributable  to  the  Participant's
                    nondeductible  voluntary contributions to this and all other
                    Defined  Contribution  Plans and all Defined  Benefit Plans,
                    whether  or  not  terminated,   and  the  Annual   Additions
                    attributable  to all welfare  benefit  funds,  as defined in
                    Section  419  (e)  of  the  Code,  and  individual   medical
                    accounts,  as  defined  in  Section  415(1) (2) of the Code,
                    maintained by the Employer) , and the  denominator  of which
                    is the sum of the Maximum  Aggregate Amounts for the current
                    and all prior Limitation Years with the Employer (regardless
                    of whether a Defined Contribution Plan was maintained by the
                    Employer).  The Maximum  Aggregate  Amount in any Limitation
                    Year is the lesser of one hundred twenty-five percent (125%)
                    of  the   dollar   limitation   in  effect   under   Section
                    415(c)(1)(A)  of the Code, or  thirty-five  percent (35%) of
                    the Participant's Compensation for such year.

               Notwithstanding  the above,  if the Employee was a participant as
               of the end of the first day of

                                      5-6
<PAGE>
               the first  Limitation  Year beginning after December 31, 1986, in
               one or more Defined Contribution Plans maintained by the Employer
               which were in  existence  on May 5, 1986,  the  numerator of this
               fraction  will be  adjusted if the sum of this  fraction  and the
               Defined Benefit  Fraction would otherwise  exceed one (1.0) under
               the terms of this Plan. Under the adjustment,  an amount equal to
               the  product of (A) the excess of the sum of the  fractions  over
               one (1.0) times (B) the  denominator  of this  fraction,  will be
               permanently  subtracted from the numerator of this fraction.  The
               adjustment  is  calculated  using the  fractions as they would be
               computed  as of the end of the  last  Limitation  Year  beginning
               before January 1, 1987, and disregarding any changes in the terms
               and  conditions of the Plan made after May 5, 1986, but using the
               Section 415 limitation  applicable to the first  Limitation  Year
               beginning on or after  January 1, 1987.  The Annual  Addition for
               any Limitation Year beginning  before January 1, 1987,  shall not
               be  recomputed  to treat  all  Employee  Contributions  as Annual
               Additions.

              (vii) DEFINED  CONTRIBUTION  PLAN. The term "Defined  Contribution
                    Plan"  shall  mean a  retirement  plan  which  provides  for
                    individual accounts for employee contributions, and includes
                    an  employee   stock   ownership  plan  that  satisfies  the
                    requirements  of Section  301(d) of the Tax Reduction Act of
                    1975.  All  Defined   Contribution  Plans  (whether  or  not
                    terminated) maintained by the Employer shall be treated as a
                    single plan. For purposes of the limitations of this Section
                    5.07 only, employee  contributions made to a Defined Benefit
                    Plan  maintained  by the  Employer  shall  be  treated  as a
                    Defined Contribution Plan.

             (viii) EMPLOYER.  For  purposes of  this  Section  5.07,  the term
                    "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) of the Code,  as
                    modified by Section  415(h)] or an affiliated  service group
                    [as  defined  in  Section  414(m)  of the Code] of which the
                    adopting  Employer is a part, and any other entity  required
                    to be aggregated with the

                                      5-7
<PAGE>

                    Employer pursuant to regulations under Section 414(o) of the
                    Code.

               (ix) EXCESS  AMOUNT.  The term  "Excess  Amount"  shall  mean the
                    excess  of  the  Participant's   Annual  Additions  for  the
                    Limitation Year over the Maximum Permissible Amount.

               (x)  LIMITATION YEAR. The term  "Limitation  Year" shall mean the
                    Plan Year or other  twelve  (12)  consecutive  month  period
                    specified by the  Employer in Section 2.23 of the Plan.  All
                    qualified plans maintained by the Employer must use the same
                    Limitation Year. If the Limitation Year is amended,  the new
                    Limitation  Year must begin on a date within the  Limitation
                    Year in which the amendment is made.

               (xi) MAXIMUM  PERMISSIBLE  AMOUNT. The term "Maximum  Permissible
                    Amount" shall mean the maximum  annual  addition that may be
                    contributed  or allocated to a  Participant's  account under
                    the Plan for any  Limitation  Year and shall not  exceed the
                    lesser of:

                    (A)  Thirty  Thousand  Dollars  ($30,000)  [or,  if greater,
                         one-fourth of the defined benefit dollar limitation set
                         forth in Section 415(b)(l) of the Code as in effect for
                         the Limitation Year], or

                    (B)  Twenty-five   percent   (25%)   of  the   Participant's
                         Compensation for the Limitation Year.

                    The  compensation  limitation  referred  to in (B) shall not
                    apply for any  contribution for medical benefits (within the
                    meaning of Section 401(h) or Section 419A(f)(2) of the Code)
                    which is  otherwise  treated  as an  annual  addition  under
                    Section  415(l)(1) or Section  419A(d)(2)  of the Code. If a
                    short  Limitation  Year is created  because of an  amendment
                    changing the Limitation Year to a different Limitation Year,
                    the Maximum Permissible Amount will not exceed the lesser of
                    (A)  Thirty  Thousand  Dollars  ($30,000)  multiplied  by  a
                    fraction,  the numerator of which is the number of months in
                    the short  Limitation  Year and the  denominator of which is
                    twelve  (12),  or  (B)  Twenty-five  percent  (25%)  of  the
                    Participant's Compensation for the short Limitation

                                      5-8
<PAGE>

                    Year.  The dollar  limitations of this Section 5.07 shall be
                    automatically  adjusted as of the first day of the  calendar
                    year for any year for which  the  Commissioner  of  Internal
                    Revenue publishes an adjustment.  The adjusted  limitations,
                    if any,  shall apply to the  Limitation  Year ending with or
                    within  the  calendar  year for  which the  Commissioner  of
                    Internal Revenue makes the adjustment.

              (xii) PROJECTED  ANNUAL  BENEFIT.   The  term  "Projected   Annual
                    Benefit" shall mean the annual retirement  benefit (adjusted
                    to an actuarially  equivalent straight life annuity, if such
                    benefit is  expressed  in a form other than a straight  life
                    annuity or qualified  joint and  survivor  annuity) to which
                    the  Participant  would be  entitled  under the terms of the
                    Plan assuming:

                    (A)  the  Participant  will  continue  employment  until the
                         Normal  Retirement Date under the Plan (or current age,
                         if later), and

                    (B)  the   Participant's   Compensation   for  the   current
                         Limitation Year and all other relevant  factors used to
                         determine  benefits under the Plan will remain constant
                         for all future Limitation Years.

          (b)  (i)  If the Participant  does not  participate  in, and has never
                    participated  in another  qualified  plan  maintained by the
                    Employer or a welfare  benefit  fund,  as defined in Section
                    419  (e) of the  Code  maintained  by  the  Employer,  or an
                    individual medical account,  as defined in Section 415(1)(2)
                    of the Code,  maintained by the Employer,  which provides an
                    Annual  Addition  as  defined in  Section  5.07(a)(ii),  the
                    amount of Annual  Additions  which  may be  credited  to the
                    Participant's  account  for any  Limitation  Year  will  not
                    exceed the lesser of the Maximum  Permissible  Amount or any
                    other  limitation  contained  in this Plan.  If the Employer
                    contribution   that  would   otherwise  be   contributed  or
                    allocated  to the  Participant's  account  would  cause  the
                    Annual  Additions  for the  Limitation  Year to  exceed  the
                    Maximum   Permissible  Amount,  the  amount  contributed  or
                    allocated will be reduced so that the

                                      5-9
<PAGE>
                    Annual  Additions  for the  Limitation  Year will  equal the
                    Maximum  Permissible   Amount.   Prior  to  determining  the
                    Participant's  actual  Compensation for the Limitation Year,
                    the Employer may  determine the Maximum  Permissible  Amount
                    for a Participant on the basis of a reasonable estimation of
                    the  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.

               (ii) If pursuant to (i) above or as a result of the allocation of
                    Forfeitures,  there is an excess amount,  the excess will be
                    disposed of as follows:

                    (A)  First,  any  Elective   Deferrals  and,   second,   any
                         nondeductible voluntary employee contributions,  to the
                         extent  they would  reduce the Excess  Amount,  will be
                         returned to the Participant;

                    (B)  If after the  application  of  paragraph  (A) 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 Contributions (including any allocation
                         of  Forfeitures)  for  such  Participant  in  the  next
                         Limitation Year, and each succeeding Limitation Year if
                         necessary.

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

                                      5-10
<PAGE>
                    (D)  If a  suspense  account  is in  existence  at any  time
                         during a Limitation  Year pursuant to this Section,  it
                         will not  participate  in the allocation of the Trust's
                         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  Contributions  or any  Participant
                         contributions   may  be  made  to  the  Plan  for  that
                         Limitation Year.  Excess amounts may not be distributed
                         to Participants or former Participants.

          (c)  (i)  This subsection  applies if, in  addition to this Plan,  the
                    Participant is covered under a qualified master or prototype
                    Defined  Contribution  Plan  maintained by the  Employer,  a
                    welfare  benefit fund,  as defined in Section  419(e) of the
                    Code  maintained by the Employer,  or an individual  medical
                    account,  as  defined  in  Section  415(1)(2)  of  the  Code
                    maintained  by  the  Employer,   or  an  individual  medical
                    account,  as  defined  in  Section  415(1)(2)  of the  Code,
                    maintained  by  the  Employer,   which  provides  an  Annual
                    Addition  as  defined  in  Section  5.07(a)(ii)  during  any
                    Limitation  Year. The Annual Additions which may be credited
                    to a  Participant's  account  under  this  Plan for any such
                    Limitation  Year will not  exceed  the  Maximum  Permissible
                    Amount  reduced  by  the  Annual  Additions  credited  to  a
                    Participant's  account  under  the other  plans and  welfare
                    benefit  funds for the same  Limitation  Year. If the Annual
                    Additions  with  respect  to  the  Participant  under  other
                    Defined   Contribution   Plans  and  welfare  benefit  funds
                    maintained  by  the  Employer  are  less  than  the  Maximum
                    Permissible Amount and the Employer  Contribution that would
                    otherwise be contributed  or allocated to the  Participant's
                    account under this Plan would cause the Annual Additions for
                    the Limitation  Year to exceed this  limitation,  the amount
                    contributed  or allocated will be reduced so that the Annual
                    Additions  under all such plans and funds for the Limitation
                    Year  will  equal the  Maximum  Permissible  Amount.  If the
                    Annual Additions with respect to the Participant  under such
                    other

                                      5-11
<PAGE>
                    Defined  Contribution Plans and welfare benefit funds in the
                    aggregate   are  equal  to  or  greater   than  the  Maximum
                    Permissible   Amount,  no  amount  will  be  contributed  or
                    allocated to the  Participant's  account under this Plan for
                    the Limitation Year. Prior to determining the  Participant's
                    actual  Compensation  for the Limitation  Year, the Employer
                    may   determine  the  Maximum   Permissible   Amount  for  a
                    Participant in the manner described in Section (b)(i) above.
                    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.

               (ii) If,  pursuant to (i) above or as a result of the  allocation
                    of Forfeitures,  a Participant's Annual Additions under this
                    Plan and such other plans would  result in an Excess  Amount
                    for a Limitation  Year,  the Excess Amount will be deemed to
                    consist of the Annual Additions last allocated,  except that
                    Annual  Additions  attributable to a welfare benefit fund or
                    individual  medical  account  will be  deemed  to have  been
                    allocated first regardless of the actual Allocation Date.

              (iii) If an Excess  Amount was  allocated to a  Participant  on an
                    Allocation  Date  of  this  Plan  which  coincides  with  an
                    allocation   date  of  another   plan,   the  Excess  Amount
                    attributed to this Plan will be the product of,

                    (A)  the total  Excess  Amount  allocated  as of such  date,
                         times

                    (B)  the ratio of (1) the Annual Additions  allocated to the
                         Participant  for the  Limitation  Year as of such  date
                         under  this  Plan to (2)  the  total  Annual  Additions
                         allocated to the Participant for the Limitation Year as
                         of such date  under  this and all the  other  qualified
                         master or prototype Defined Contribution Plans.

               (iv) Any Excess  Amount  attributed to this Plan will be disposed
                    of in the manner described in subsection (b)(ii) above.

                                      5-12
<PAGE>

          (d) If the  Participant  is covered  under another  qualified  Defined
Contribution Plan maintained by the Employer, which is not a master or prototype
plan, Annual Additions which may be credited to the Participant's  account under
this Plan for any Limitation Year will be limited in accordance with Subsections
(C) (i) through (iv) as though the other plan were a master or prototype plan.

          (e) If the Employer maintains, or at any time maintained,  a qualified
Defined  Benefit Plan  covering  any  Participant  in this Plan,  the sum of the
Participant's  Defined  Benefit  Plan  Fraction  and Defined  Contribution  Plan
Fraction will not exceed one (1.0) in any Limitation Year. If, in any Limitation
Year  the sum of the  Defined  Benefit  Fraction  and the  Defined  Contribution
Fraction on behalf of a  Participant  does exceed one (1.0),  then the  Employer
shall  reduce  its  contribution  on behalf of such  Participant  to adjust  the
numerator of the Defined Benefit Fraction to the extent necessary to prevent the
sum of the Defined Contribution  Fraction and the- Defined Benefit Fraction from
exceeding one (1.0).

          (f) If, during any Limitation  Year, a Participant is a participant in
both a Defined  Contribution Plan and a Defined Benefit Plan which are a part of
a Top Heavy Group, the limitations of this Section 5.07 shall be applied to such
Participant  by  substituting  "one  hundred  percent  (100%)" for "one  hundred
twenty-five percent (125%)" each place it appears in Subsection (a).

          The above  limitation  shall not apply if,  for any Plan Year in which
the Top Heavy ratio  determined  under  Section 2.29 of the Plan does not exceed
ninety percent (90%) , the minimum Top Heavy  contribution  set forth in Section
4.08 of the Plan for each  Non-Key  Employee who is a  Participant  only in this
Plan is  increased  to four  percent  (4%)  rather  than three  percent  (3%) of
Compensation  as described in Section 4.08 of the Plan, or the minimum Top Heavy
contribution  for each Non-Key  Employee who is a Participant  in both this Plan
and the Defined  Benefit Plan is  increased  to seven and one-half  percent (P^)
rather than five percent (5%) as described in Section 4.08.

          (g)  Notwithstanding  anything  contained  in this Section 5.07 to the
contrary, the limitations, adjustments and other requirements prescribed in this
Section shall at all times comply with the provisions of Section 415 of the Code
and the Regulations thereunder, the terms of which are specifically incorporated
herein by reference.

                                      5-13
<PAGE>
     6. VESTING, DISTRIBUTIONS AND WITHDRAWALS

     6.01 VESTING.

          (a) The interest of each  Participant  in his Employer  account  shall
vest and become nonforfeitable up to a maximum of one hundred percent (100%), as
follows:

              (i)   Pursuant to the following vesting schedule:

                    YEARS OF SERVICE        VESTED PERCENTAGE
                    ----------------        -----------------
                    Less than 1                        0%
                    1 but less than 2                 10%
                    2 but less than 3                 20%
                    3 but less than 4                 30%
                    4 but less than 5                 50%
                    5 but less than 6                 70%
                    6 or more                        100%

              (ii)  One hundred percent (100%) when the Participant  reaches the
                    Normal Retirement Age.

              (iii) One hundred percent (100%) upon the  Participant's  death or
                    Disability.

          (b) The  interest of each  Participant  in his  Participant  voluntary
contribution.   Participant   Elective   Deferral,   and  rollover  or  transfer
account(s), if any, shall at all times be fully vested and nonforfeitable.

          (c) For the purposes of determining a  Participant's  vested  interest
under the Plan, the term "Year of Service" shall mean the completion of at least
one thousand  (1,000) Hours of Service by a Participant  during a Plan Year. For
purposes of determining  vesting,  all of a Participant's  Years of Service with
the  Employer  and all  Related  Employers  except  Interconnect  Communications
Corporation shall be counted.

          (d) If a Participant  completes a one-year  Break in Service he shall,
upon  subsequent  re-employment  by the  Employer,  be required to resatisfy the
participation  requirements  of Section 3.01 of the Plan  [provided  the service
requirement  in Section 3.01 does not exceed one (1) Year of Service]  before he
is  eligible  to receive  vesting  credit for any Years of Service  prior to his
Break in Service.  Once an Employee has again  satisfied  the  requirements  for
participation  in the  Plan,  his  pre-break  and  post-break  service  shall be
aggregated  for  purposes  of  determining  his vested  interest  subject to the
following  provisions.  In the  case of a  Participant  who has five (5) or more
consecutive  one (1) year  Breaks in  Service,  all Years of Service  after such
Breaks in Service will be disregarded for purposes of determining the Employee's
vested

                                      6-1
<PAGE>
interest  in the  portion of his  Employer  account  which  accrued  before such
consecutive  breaks,  but both pre-break and  post-break  service will count for
purposes of determining the Participant's  vested interest in the portion of his
Employer  account which accrues after such breaks.  In the case of a Participant
who does not have five (5) consecutive one (1) year Breaks in Service,  both the
pre-break and  post-break  service shall be aggregated in  determining  both the
pre-break and post-break portions of the Participant's Employer account.

          (e) If the  Employer  makes a  permissible  amendment  to the  vesting
schedule,  each Participant  having at least three (3) Years of Service with the
Employer may elect to have the vested (nonforfeitable) percentage of his account
computed under the Plan without regard to the amendment.  The  Participant  must
file his  election  with the  Advisory  Committee  within sixty (60) days of the
latest of (i) the Employer's adoption of the amendment;  (ii) the effective date
of the amendment; or (iii) his receipt of a copy of the amendment.  The Advisory
Committee,  as soon as practicable,  shall communicate the change to the vesting
schedule to each  affected  Participant,  together  with an  explanation  of the
effect of the amendment,  the  appropriate  form upon which the  Participant nay
make an election to remain under the vesting  schedule  provided  under the Plan
prior to the amendment and notice of the time within which the Participant  must
make an election to remain  under the prior  vesting  schedule.  For purposes of
this Section,  an amendment to the vesting schedule  includes any Plan amendment
which  directly or  indirectly  affects the  computation  of the  nonforfeitable
percentage  of an  Employee's  rights  to  his  Employer  Contribution  account.
Furthermore,  if the  Plan  is  amended,  in the  case of an  Employee  who is a
Participant as of the later of the date such amendment is adopted or the date it
becomes effective, the nonforfeitable percentage (determined as of such date) of
such Employee's right to his  Employer-derived  Accrued Benefit will not be less
than his percentage  computed  under the Plan without regard to such  amendment.

          (f)  The  vested  percentage  of any  Participant  covered  under  the
provisions  of the Prior Plan shall not be less than the vested  percentage  the
Participant  would have had if the  provisions  of the Prior Plan had  continued
without change.

     6.02 FORFEITURES.  After a Participant's termination of employment with the
Employer,  and the  distribution  of his entire  vested  account  balance,  that
portion of the  Participant's  Employer account which is not fully vested in the
Participant,  if  any,  pursuant  to  Section  6.01  of  the  Plan,  shall  be a
"Forfeiture",  and shall be applied in accordance with the provisions of Section
5.05 of the Plan.  Notwithstanding the above, Forfeitures shall not be allocated
to Self-Employed Individuals.

                                      6-2
<PAGE>
     6.03 PAYMENTS TO PARTICIPANTS AND BENEFICIARIES; JOINT AND SURVIVOR ANNUITY
REQUIREMENTS.

          (a) Within the time periods specified in Section 6.04 of the Plan, and
after a  Participant's  (i) retirement on or after the Normal  Retirement  Date,
(ii)  death,  (iii)  termination  of  employment  with  the  Employer,  or  (iv)
termination of employment due to Disability,  the Participant's  vested interest
in his accounts shall be valued and adjusted to reflect the changes,  if any, in
the net fair market value of the Trust Fund which have not yet been reflected in
the  Participant's  accounts as of the last day of the last Plan Year, and shall
then be distributed  to the  Participant  or, in the event of his death,  to his
Beneficiary, by any of the following methods:

               (i)  By payment in a lump sum.

               (ii) By payment in equal or  substantially  equal  annual or more
                    frequent  installments  over no longer  than ten (10)  years
                    (but  in no  event  exceeding  the  life  expectancy  of the
                    Participant,   or  the  joint  life   expectancies   of  the
                    Participant and his Spouse).

              (iii) If, and only to the extent required by Section  6.03(b),  an
                    annuity  or  any  installment  option  under  any  insurance
                    contract.  Any annuity  contract  distributed  from the Plan
                    must be  nontransferable.  The terms of any annuity contract
                    purchased and  distributed  by the Plan to a Participant  or
                    Spouse shall comply with the requirements of this Plan.

          (b) JOINT AND SURVIVOR  ANNUITY  REQUIREMENTS.  The Joint and Survivor
Annuity  Requirements  set forth in this Section  6.03(b) shall be applicable to
all distributions from the Plan unless the following conditions are met: (i) the
Plan is a profit sharing plan or the  distribution is made on or after the first
day of the first Plan Year  beginning  after  December  31, 1988 from a separate
account attributable solely to accumulated deductible employee contributions, as
defined  in  Section  72(o)(5)(B)  of the Code,  and  maintained  on behalf of a
Participant in a money purchase  pension plan (including a target benefit plan);
(ii) the Participant cannot elect payments in the form of a life annuity;  (iii)
on the  death of the  Participant,  the  Participant's  vested  account  balance
(reduced by any security  interest held by the Plan for any loan  outstanding to
such  Participant) will be paid to the  Participant's  Surviving Spouse,  but if
there is no Surviving  Spouse,  or if the Surviving Spouse has already consented
in a  manner  conforming  to a  Qualified  Election,  then to the  Participant's
Designated Beneficiary; and (iv) the Plan will not accept any direct or indirect
transfer of assets from any plan which is not exempt  from the  Qualified  Joint
and Survivor Annuity  Requirements of Section  401(a)(11) and Section 417 of the
Code. The Participant may waive the spousal

                                      6-3
<PAGE>
death benefit at any time provided that no such waiver shall be effective unless
it  satisfies  the  conditions  of  Section   6.03(b)(iv)(C)   (other  than  the
notification   requirement   referred  to  therein)  that  would  apply  to  the
Participant's  waiver  of the  Qualified  Preretirement  Survivor  Annuity.  For
purposes of this paragraph,  vested account balance shall mean, in the case of a
money purchase pension plan or a target benefit plan, the Participant's separate
account  balance   attributable   solely  to  accumulated   deductible  employee
contributions within the meaning of Section 72(o)(5)(B) of the Code. In the case
of a profit-sharing  plan, vested account balance shall have the same meaning as
provided in Section 6.03(b)(iv)(F).

     If one or more of the above conditions are not met, then:

               (i)  The provisions of this Section 6.03(b) shall take precedence
                    over any  conflicting  provision  in this  _Plan.  Except as
                    provided  above,  the provisions of this Section shall apply
                    to any Participant who is credited with at least one Hour of
                    Service with the Employer on or after August 23, 1984;

               (ii) Unless an optional form of benefit is selected pursuant to a
                    Qualified  Election within the ninety (90) day period ending
                    on the annuity  starting date, a Participant  who is married
                    on the annuity starting date and who does not die before the
                    annuity  starting date shall receive the value of his Vested
                    Account  Balance  in  the  form  of a  Qualified  Joint  and
                    Survivor  Annuity.  Unless an  optional  form of  benefit is
                    selected pursuant to a Qualified  Election within the ninety
                    (90) day period  ending on the  annuity  starting  date,  an
                    unmarried  Participant's Vested Account Balance will be paid
                    in the form of an immediate  annuity.  The  Participant  may
                    elect to have such annuity  distributed  upon  attainment of
                    the Earliest  Retirement Age under the Plan. For purposes of
                    this Section,  the term `annuity  starting  date' shall mean
                    the  first day of the  first  period  for which an amount is
                    payable  as an  annuity  or in the  case  of a  benefit  not
                    payable  in the form of an  annuity,  the first day on which
                    all events have occurred which  entitles the  Participant to
                    such  benefit.  The  annuity  starting  date for  disability
                    benefits  shall be the date such  benefits  commence  if the
                    disability benefit is not an auxiliary benefit. An auxiliary
                    benefit is a  disability  benefit  which does not reduce the
                    benefit payable at Normal Retirement Age;

                                      6-4
<PAGE>
              (iii) Unless an optional  form of benefit is  selected  within the
                    Election  Period  pursuant  to a  Qualified  Election,  if a
                    Participant  dies  before the  annuity  starting  date,  the
                    Participant's  Surviving  Spouse  (if any)  will  receive  a
                    "Qualified  Preretirement  Survivor Annuity," which shall be
                    the Participant's  Vested Account Balance applied toward the
                    purchase of a life  annuity for the  Surviving  Spouse.  The
                    Surviving  Spouse may elect to commence  payment  under such
                    annuity within a reasonable  period after the  Participant's
                    death.

               (iv) For purposes of this Section  6.03(b),  the following  terms
                    shall have the definitions set forth below:

                    (A)  ELECTION PERIOD.  The term "Election Period" shall mean
                         the  period  which  begins on the first day of the Plan
                         Year in which the  Participant  attains age thirty-five
                         (35) and ends 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  thirty-five
                         (35) is attained,  with respect to the account  balance
                         as of the date of separation, the Election Period shall
                         begin on the date of separation. A Participant who will
                         not yet attain age 35 as of the end of any current Plan
                         Year may make a special Qualified Election to waive the
                         Qualified Preretirement Survivor Annuity 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  shall not be valid
                         unless the Participant  receives a written  explanation
                         of the Qualified Preretirement Survivor Annuity in such
                         terms as are  comparable  to the  explanation  required
                         under  Section  6.03(b)(v).   Qualified   Preretirement
                         Survivor   Annuity   coverage  will  be   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  shall  be  subject  to the  full
                         requirements of this Section.

                                      6-5
<PAGE>
                    (B)  EARLIEST RETIREMENT AGE. The term "Earliest  Retirement
                         Age" shall mean the earliest  date on which,  under the
                         Plan, the Participant could elect to receive retirement
                         benefits under this Plan.

                    (C)  QUALIFIED ELECTION. The term "Qualified Election" shall
                         mean a waiver of a Qualified Joint and Survivor Annuity
                         or a  Qualified  Preretirement  Survivor  Annuity.  The
                         waiver must be in writing and must be  consented  to by
                         the Participant's  Spouse.  The waiver must designate a
                         beneficiary(ies)  and form of benefits which may not be
                         changed  without  spousal  consent  unless the  spousal
                         consent   expressly   permits   designations   by   the
                         Participant  without any requirement of further consent
                         by  the  Spouse.   A  spousal   consent   that  permits
                         designations by the Participant without any requirement
                         of further consent by such Spouse must acknowledge that
                         the Spouse has the right to limit consent to a specific
                         Beneficiary,  and a  specific  form  of  benefit  where
                         applicable,  and that the Spouse  voluntarily elects to
                         relinquish either or both of such rights.  The Spouse's
                         consent to a waiver must be  witnessed  by the Advisory
                         Committee or by a notary public.  Notwithstanding  this
                         consent requirement,  if the Participant establishes to
                         the  satisfaction  of the Advisory  Committee that such
                         written consent may not be obtained because there is no
                         Spouse or the Spouse  cannot be located,  a waiver will
                         be deemed a Qualified  Election.  Any consent  required
                         under this provision will be valid only with respect to
                         the Spouse who signs the consent,  or in the event of a
                         deemed Qualified  Election,  the designated  Spouse. In
                         addition, 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. The number of
                         revocations  shall not be limited.  No consent obtained
                         under this provision shall be valid unless

                                      6-6
<PAGE>

                         the  Participant  has received  notice  as provided  in
                         subparagraph (v) below.

                    (D)  QUALIFIED   JOINT  AND  SURVIVOR   ANNUITY.   The  term
                         "Qualified  Joint and Survivor  Annuity"  shall mean an
                         immediate  annuity for the life of the Participant with
                         a survivor  annuity for the life of the Spouse which is
                         not less than fifty percent (50%) and not more than one
                         hundred  percent  (100%) of the  amount of the  annuity
                         which  is  payable   during  the  joint  lives  of  the
                         Participant  and the  Spouse and which is the amount of
                         benefit which can be purchased  with the  Participant's
                         vested account balance.  For purposes of this Plan, the
                         term Joint and  Survivor  Annuity  shall be a Joint and
                         50% Survivor Annuity.

                    (E)  SPOUSE.   SURVIVING  SPOUSE.  The  terms  "Spouse"  and
                         "Surviving  Spouse"  shall mean the spouse or surviving
                         spouse, respectively, of the Participant, provided that
                         a  former  spouse  will be  treated  as the  Spouse  or
                         Surviving   Spouse  to  the  extent  provided  under  a
                         qualified  domestic  relations  order as  described  in
                         Section 414(p) of the Code.

                    (F)  VESTED  ACCOUNT  BALANCE.  The  aggregate  value of the
                         Participant's  vested  account  balances  derived  from
                         Employer   and   Employee   contributions    (including
                         rollovers),   whether  vested  before  or  upon  death,
                         including the proceeds of insurance contracts,  if any,
                         on the  Participant's  life.  The  provisions  of  this
                         Section shall apply to a  Participant  who is vested in
                         amounts   attributable   to   Employer   contributions,
                         Employee  contributions  (or both) at the time of death
                         or distribution.

               (v)  In the case of a  Qualified  Joint and  Survivor  Annuity as
                    described above,  the Advisory  Committee shall provide each
                    Participant  no less than  thirty (30) days and no more than
                    ninety  (90) days  prior to the  annuity  starting  date,  a
                    written  explanation  of: (A) the terms and  conditions of a
                    Qualified Joint and Survivor Annuity;  (B) the Participant's
                    right to

                                      6-7
<PAGE>

                    make,  and the effect of, an election to waive the Qualified
                    Joint and Survivor  Annuity form of benefit;  (C) the rights
                    of a  Participant's  Spouse;  (D) the right to make, and the
                    effect of, a revocation of a previous  election to waive the
                    Qualified Joint and Survivor  Annuity;  and (E) the relative
                    values of various optional forms of benefits under the Plan.

                    In the case of a Qualified Preretirement Survivor Annuity as
                    described above,  the Advisory  Committee shall provide each
                    Participant   a  written   explanation   of  the   Qualified
                    Preretirement  Survivor  Annuity  in such  terms and in such
                    manner as would be  comparable to the  explanation  provided
                    for meeting the requirements applicable to a Qualified Joint
                    and Survivor Annuity, no later than (i) the period beginning
                    on the first  day of the Plan Year in which the  Participant
                    attains age thirty-two (32) and ending with the close of the
                    Plan Year  preceding the Plan Year in which the  Participant
                    attains age thirty-five  (35), (ii) a reasonable time ending
                    after the Employee becomes a Participant, (iii) a reasonable
                    time ending after the Preretirement  Survivor Annuity ceases
                    to be a fully  subsidized  benefit,  (iv) a reasonable  time
                    ending after the Joint and Survivor  rules become  effective
                    to the Participant or (v) a reasonable time ending after the
                    Participant separates from service before attaining age 35.

                    For purposes of the preceding paragraph, a reasonable period
                    ending after the enumerated  events  described  above 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.

                    Notwithstanding  the  other  requirements  of  this  Section
                    6.03(b)(v), the respective

                                      6-8
<PAGE>
                    notices  prescribed  by this  Section need not be given to a
                    Participant  if the Plan "fully  subsidizes"  the costs of a
                    Qualified   Joint  and   Survivor   Annuity   or   Qualified
                    Preretirement  Survivor  Annuity  and  does  not  offer  the
                    Participant  an  election  to waive the Annuity and does not
                    allow  a  married   Participant  to  designate  a  nonspouse
                    Beneficiary.  A Plan fully subsidizes the costs of a benefit
                    if,  under the Plan,  the failure to waive such benefit by a
                    Participant  would  not  result  in a  decrease  in any Plan
                    benefit  with  respect  to such  Participant  and  would not
                    result  in  increased  contributions  from the  Participant.
                    Prior to the time the Plan allows the  Participant  to waive
                    the Qualified  Preretirement Survivor Annuity, the Plan may"
                    not charge the  Participant  for the cost of such benefit by
                    reducing the Participant's benefits under the Plan or by any
                    other method.

              (vi)  The  Qualified  Joint  and  Survivor  Annuity   Requirements
                    contained in the Plan are applicable to any benefit  payable
                    under the Plan,  including benefits payable to a Participant
                    under a contract  purchased  by the Plan and paid by a third
                    party.  The  Qualified  Joint and  Survivor  Annuity must be
                    provided for any benefit  payable under the Plan  (including
                    benefits  payable to Participants  who terminate for reasons
                    other  than  normal or early  retirement)  ,  subject to the
                    Participant's  right to a waiver under Code  Section  417(a)
                    and  the  Three  Thousand  Five  Hundred   Dollar   ($3,500)
                    exception of Code Section 417(e).

              (vii) For  purposes of  determining  the  benefits  subject to the
                    Qualified Joint and Survivor Annuity Requirements under Code
                    Sections   401(a)(11)  and  417,  the   determination  of  a
                    Participant's    vested   account   balance   includes   all
                    Participant  contributions,  if any  (excluding  Participant
                    deductible voluntary contributions, if any).

     6.04 WHEN PAYMENTS ARE MADE.

          (a) In the case of a  Participant  who  retires on or after the Normal
Retirement  Date, or whose  employment  is  terminated  by death or  Disability,
payment of the  Participant's  Employer and  Participant  accounts shall be made
(or, in the case of installment

                                      6-9
<PAGE>
payments,  shall begin) not later than (unless the Participant otherwise elects)
sixty  (60) days  following  the end of the Plan  Year in which the  Participant
terminates  his  employment  with the  Employer.  Notwithstanding  any  contrary
provision, a Participant may not elect to defer receipt of benefits to an extent
that he creates a death benefit that is more than incidental.

          (b) In the case of a Participant  who terminates  his employment  with
the Employer  other than for death.  Disability  or  retirement  on or after the
Normal Retirement Date:

               (i)  Payment of the Participant's  Participant  account,  if any,
                    shall  be made  (or,  in the case of  installment  payments,
                    shall begin) (unless the  Participant  otherwise  elects) as
                    soon as  practicable  following  the end of the Plan Year in
                    which he terminates his employment with the Employer; and

               (ii) Payment of the Participant's vested interest in his Employer
                    account  shall  be made  (or,  in the  case  of  installment
                    payments,  shall begin) as soon as practicable following the
                    end of the Plan  Year in which  the  Participant  terminates
                    employment, but not (without the consent of the Participant)
                    later  than sixty  (60) days  following  the end of the Plan
                    Year in which the latest of the  following  occurs:  (A) the
                    Participant  reaches  the  Normal  Retirement  Date [or,  if
                    earlier,  age  sixty-five  (65)];  or  (B)  the  Participant
                    terminates  his  employment  with the  Employer;  or (C) the
                    tenth   (10th)   anniversary   of  the  year  in  which  the
                    Participant    commenced    participation   in   the   Plan;
                    notwithstanding   this   subparagraph,   the  failure  of  a
                    Participant  (and Spouse,  if  applicable),  to consent to a
                    distribution  while a benefit is immediately  distributable,
                    within the meaning of Section 6.04(c) of the Plan,  shall be
                    deemed to be an election to defer commencement of payment of
                    any benefit sufficient to satisfy this subparagraph.

              (iii) If  a  distribution  of  the  Participant's   entire  vested
                    interest is made at a time when a Participant  has less than
                    a  one  hundred   percent  (100%)  vested   (nonforfeitable)
                    interest in his Employer account:

                                      6-10
<PAGE>
                    (A)  The nonvested portion of the Participant's account will
                         be treated as a Forfeiture.

                    (B)  If the value of a Participant's  vested account balance
                         is  zero,  the  Participant  shall  be  deemed  to have
                         received a distribution of such vested account balance.

                    (C)  If the  Participant is reemployed by the Employer,  the
                         Participant  may  repay  the  full  amount   previously
                         distributed to him, or deemed to have been  distributed
                         to  him,   other   than   his   Participant   voluntary
                         contributions, if any, on or before the earlier of five
                         (5)   consecutive   one  (1)  year  Breaks  in  Service
                         following the date of  distribution,  or five (5) years
                         from the date of re-employment with the Employer.  Upon
                         such repayment,  the forfeitable amount of his Employer
                         account  must be  restored in full,  unadjusted  by any
                         subsequent gains or losses.

          (c)  Notwithstanding  anything else  contained in this Section 6.04 to
the  contrary,  if the  Participant  has more than Three  Thousand  Five Hundred
Dollars  ($3,500)  credited  to his  account  and such  account  is  immediately
distributable,  then such Participant's account may not be currently distributed
to him without the consent of the Participant (and the Participant's  Spouse, if
this Plan is subject to the Joint and Survivor  Annuity  Requirements).  Written
consent of the  Participant  to the  distribution  must be  obtained  within the
ninety (90) day period ending on the annuity starting date. The annuity starting
date is the  first  day of the  first  period  for which an amount is paid as an
annuity or any other form.  The Employer  shall notify the  Participant  and the
Participant's   Spouse  of  the  right  to  defer  any  distribution  until  the
Participant's  account  balance  is no longer  immediately  distributable.  Such
notification shall include a general  description of the material features,  and
an  explanation  of the  relative  values  of,  the  optional  forms of  benefit
available under the Plan in a manner that would satisfy the notice  requirements
of Section  417(a)(3) of the Code and shall be provided no less than thirty (30)
days and no more than ninety (90) .days prior to the annuity starting date.

          Notwithstanding  the foregoing,  only the Participant  need consent to
the commencement of a distribution in the form of a Qualified Joint and Survivor
Annuity while the account balance is immediately distributable. (Furthermore, if
payment in the form of a Qualified  Joint and  Survivor  Annuity is not required
with respect to the Participant pursuant to Section 6.03 of the Plan, only the

                                      6-11
<PAGE>
Participant  need  consent to the  distribution  of an account  balance  that is
immediately  distributable.)  Neither  the  consent of the  Participant  nor the
Participant's  Spouse  shall be required to the extent  that a  distribution  is
required to satisfy  Section  401(a)(9) or Section 415 of the Code. In addition,
upon  termination  of this  Plan if the Plan does not  offer an  annuity  option
(purchased from a commercial  provider),  the Participant's account balance may,
without  the  Participant's  consent,  be  distributed  to  the  Participant  or
transferred to another defined  contribution  plan [other than an employee stock
ownership  plan as defined in Section  4975(e)(7)  of the Code]  within the same
controlled group.

          If the Participant has Three Thousand Five Hundred Dollars ($3,500) or
less  credited  to his  vested  account,  then  such  amount  will be  currently
distributed  to him without  regard to the  Participant's  consent in a lump sum
payment.  Notwithstanding  the  above,  no  distribution  may be made  after the
annuity  starting date  regardless  of the dollar amount of the Accrued  Benefit
unless the Participant consents in writing to such distribution. For purposes of
this  paragraph,   a   Participant's   account  shall  include  all  Participant
contributions, if any (excluding Participant deductible voluntary contributions,
if any).  Also,  a  distribution  of such  account is  immediately  or currently
distributable  if any  part  of it may be  distributed  to the  Participant  (or
Surviving Spouse) before the Participant attains (or would have attained, if not
deceased)  the  later  of the  normal  retirement  age [as  defined  in  Section
4ll(a)(8) of the Code], or age sixty-two (62).

          (d) subject to Section 6.03(b) of the Plan, Joint and Survivor Annuity
Requirements,  the  requirements of this Section shall apply to any distribution
of a  Participant's  interest  and will take  precedence  over any  inconsistent
provisions of this Plan.  Unless  otherwise  specified,  the  provisions of this
Section  apply  to  calendar  years  beginning  after  December  31,  1984.  All
distributions  required  under  this  Section  shall be  determined  and made in
accordance with the Proposed  Regulations  under Section  401(a)(9) of the Code,
including the minimum  distribution  incidental  benefit  requirement of Section
1.401(a)(9)-2 of the Proposed Regulations.

               (i)  REQUIRED  BEGINNING  DATE. A  Participant's  benefit must be
                    distributed  or begin to be  distributed  no later  than his
                    Required  Beginning Date which generally is the first day of
                    April of the calendar  year  following  the calendar year in
                    which the  Participant  attains age 70-1/2.  Notwithstanding
                    the above, the following transition rules shall apply:

                    (A)  The  Required  Beginning  Date  of  a  Participant  who
                         attains age 70-1/2 before January 1, 1988, shall be

                                      6-12
<PAGE>
                         determined in accordance with (1) or (2) below:

                    (1)  Non  5%  owners.  The  Required  Beginning  Date  of  a
                         Participant  who is not a 5% owner is the  first day of
                         April of the calendar year  following the calendar year
                         in which the later of  retirement  or attainment of age
                         70-1/2 occurs.

                    (2)  5% owners. The Required Beginning Date of a Participant
                         who is a 5%  owner  during  any  year  beginning  after
                         December 31, 1979, is the first day of April  following
                         the later of:

                         (a)  the calendar year in which the Participant attains
                              age 70-1/2, or

                         (b)  the earlier of the  calendar  year  with or within
                              which ends the Plan Year in which the  Participant
                              becomes a 5% owner, or the  calendar year in which
                              the Participant retires.

               (B)  The Required Beginning Date of a Participant who is not a 5%
                    owner,  who attains age 70-1/2 during 1988,  and who has not
                    retired as of January 1, 1989, is April 1, 1990.

               (C)  A Participant  is treated as a 5% owner for purposes of this
                    Section  if such  Participant  is a 5% owner as  defined  in
                    Section 416(i) of the Code  (determined  in accordance  with
                    Section  416 of the Code but  without  regard to whether the
                    Plan is Top Heavy) at any time  during the Plan Year  ending
                    with or within the calendar year in which such owner attains
                    age 66-1/2 or any subsequent Plan Year.

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

                                      6-13
<PAGE>
               (ii) DETERMINATION  OF AMOUNT TO BE DISTRIBUTED EACH YEAR. If the
                    Participant's  benefit is to be  distributed in other than a
                    single sum, the following minimum  distribution  rules shall
                    apply on or after the Required Beginning Date:

                    (A)  If a  Participant's  benefit is to be distributed  over
                         (1) a period not extending  beyond the life  expectancy
                         of the  Participant or the joint life and last survivor
                         expectancy  of the  Participant  and the  Participant's
                         Designated  Beneficiary  or (2) a period not  extending
                         beyond   the   life   expectancy   of  the   Designated
                         Beneficiary,  the amount required to be distributed for
                         each calendar year,  beginning with  distributions  for
                         the first  distribution  calendar  year,  must at least
                         equal   the   quotient   obtained   by   dividing   the
                         Participant's    benefit   by   the   applicable   life
                         expectancy.

                    (B)  For calendar years beginning before January 1, 1989, if
                         the   Participant's   Spouse  is  not  the   Designated
                         Beneficiary,  the method of distribution  selected must
                         assure  that at least 50% of the  present  value of the
                         amount  available for  distribution  is paid within the
                         life expectancy of the Participant.

                    (C)  For calendar years  beginning  after December 31, 1988,
                         the amount to be distributed each year,  beginning with
                         distributions for the first distribution  calendar year
                         shall  not  be  less  than  the  quotient  obtained  by
                         dividing the Participant's benefit by the lesser of (1)
                         the   applicable   life   expectancy   or  (2)  if  the
                         Participant's Spouse is not the Designated Beneficiary,
                         the applicable  divisor  determined  from the table set
                         forth  in  Q&A-4  of  Section  1.401  (a)  (9)-2 of the
                         Proposed Regulations.  Distributions after the death of
                         the   Participant   shall  be  distributed   using  the
                         applicable  life  expectancy in (A) above as a relevant
                         divisor without regard to Proposed  Regulations Section
                         1.401(a)(9)-2.

                                      6-14
<PAGE>
                    (D)  The minimum distribution required for the Participant's
                         first  distribution  calendar  year  must be made on or
                         before the Participant's  Required  Beginning Date. The
                         minimum   distribution   for  other   calendar   years,
                         including the minimum distribution for the distribution
                         calendar  year  in  which  the  Participant's  Required
                         Beginning  Date  occurs,  must  be  made  on or  before
                         December 31 of that distribution calendar year.

                    (E)  As   of   the   first   distribution   calendar   year,
                         distributions, if not made in a single sum, may only be
                         made  over  one  of  the   following   periods   (or  a
                         combination thereof):

                         (1)  the life of the Participant,

                         (2)  the life  of  the  Participant  and  a  Designated
                              Beneficiary,

                         (3)  a  period  certain not extending beyond  the  life
                              expectancy of the Participant, or

                         (4)  a  period  certain not  extending beyond the joint
                              and last  survivor  expectancy of  the Participant
                              and a Designated Beneficiary.

                    (F)  If the Participant's benefit is distributed in the form
                         of an  annuity  purchased  from an  insurance  company,
                         distributions  thereunder  shall be made in  accordance
                         with the  requirements  of  Section  401 (a) (9) of the
                         Code and the Proposed Regulations thereunder.

              (iii) Death Distribution Provisions.

                    (A)  DISTRIBUTION BEGINNING BEFORE DEATH. If the Participant
                         dies after  distribution of his benefit has begun,  the
                         remaining  portion of such benefit will  continue to be
                         distributed  at least as rapidly as under the method of
                         distribution  being  used  prior  to the  Participant's
                         death.

                    (B)  DISTRIBUTION  BEGINNING AFTER DEATH. If the Participant
                         dies before

                                      6-15
<PAGE>
                         distribution of his benefit begins, distribution of the
                         Participant's  entire  benefit  shall be  completed  by
                         December 31 of the calendar year  containing  the fifth
                         anniversary  of the  Participant's  death except to the
                         extent   that  an   election   is   made   to   receive
                         distributions in accordance with (1) or (2) below:

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

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

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

                                      6-16
<PAGE>
                         method   of    distribution,    distribution   of   the
                         Participant's  entire  benefit  must  be  completed  by
                         December 31 of the calendar year  containing  the fifth
                         anniversary of the Participant's death.

                    (C)  For purposes of (B) above, if the Surviving Spouse dies
                         after the  Participant,  but  before  payments  to such
                         Spouse begin,  the  provisions  of (B) above,  with the
                         exception of paragraph (2) therein, shall be applied as
                         if the Surviving Spouse were the Participant.

                    (D)  For purposes of this Section  6.04(d)(iii),  any amount
                         paid to a child of the  Participant  will be treated as
                         if it had  been  paid to the  Surviving  Spouse  if the
                         amount becomes payable to the Surviving Spouse when the
                         child reaches the age of majority.

                    (E)  For  the   purposes  of  this   Section   6.04(d)(iii),
                         distribution of a  Participant's  benefit is considered
                         to begin on the Participant's  Required  Beginning Date
                         [or, if (C) above is applicable,  the date distribution
                         is required to begin to the Surviving  Spouse  pursuant
                         to  (B)  above].  If  distribution  in the  form  of an
                         annuity irrevocably commences to the Participant before
                         the Required  Beginning Date, the date  distribution is
                         considered to begin is the date  distribution  actually
                         commences.

               (iv) DEFINITIONS

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

                                      6-17
<PAGE>
                         expectancy is being  recalculated,  the applicable life
                         expectancy   shall  be  the  life   expectancy   as  so
                         recalculated. The applicable calendar year shall be the
                         first   distribution   calendar   year,   and  if  life
                         expectancy  is  being   recalculated   such  succeeding
                         calendar year.

                    (B)  Designated  Beneficiary.  The Designated Beneficiary is
                         the  individual  who is designated  as the  Beneficiary
                         under the Plan in accordance with Section  401(a)(9) of
                         the Code and the Proposed Regulations thereunder.

                    (C)  Distribution  calendar year. The distribution  calendar
                         year  is  a   calendar   year  for   which  a   minimum
                         distribution is required.  For distributions  beginning
                         before the Participant's  death, the first distribution
                         calendar   year  is  the  calendar   year   immediately
                         preceding   the  calendar   year  which   contains  the
                         Participant's     Required    Beginning    Date.    For
                         distributions  beginning after the Participant's death,
                         the first  distribution  calendar  year is the calendar
                         year in  which  distributions  are  required  to  begin
                         pursuant to Section 6.04(d)(iii) above.

                    (D)  Life  expectancy.  Life  expectancy  and joint and last
                         survivor expectancy are computed by use of the expected
                         return  multiples in Tables V and VI of Section  1.72-9
                         of the Income Tax Regulations.

                         Unless otherwise elected by the Participant [or Spouse,
                         in the  case  of  distributions  described  in  Section
                         6.04(d)(iii)  above]  by  the  time  distributions  are
                         required   to  begin,   life   expectancies   shall  be
                         recalculated   annually.   Such   election   shall   be
                         irrevocable as to the Participant (or Spouse) and shall
                         apply to all subsequent years. The life expectancy of a
                         nonspouse Beneficiary may not be recalculated.

                    (E)  Participant's benefit.

                                      6-18
<PAGE>
                         (1)  A Participants'  benefit is his account balance as
                              of the last  valuation  date in the calendar  year
                              immediately  preceding the  distribution  calendar
                              year  (valuation  calendar year)  increased by the
                              amount  of  any   contributions   or   forfeitures
                              allocated  to the  account  balance as of dates in
                              the  valuation  calendar  year after the valuation
                              date and  decreased by  distributions  made in the
                              valuation calendar year after the valuation date.

                         (2)  For  purposes  of  paragraph  (1)  above,  if  any
                              portion of the minimum  distribution for the first
                              distribution  calendar  year is made in the second
                              distribution   calendar  year  on  or  before  the
                              Required Beginning Date, the amount of the minimum
                              distribution  made  in  the  second   distribution
                              calendar  year  shall be treated as if it had been
                              made  in the  immediately  preceding  distribution
                              calendar year.

               (v)  (A)  Notwithstanding  the other requirements of this Section
                         6.04(d)  and  subject  to the  requirements  of Section
                         6.03(b),  distributions  on behalf of any  Participant,
                         including a 5% owner,  may be made in  accordance  with
                         all of the following  requirements  (regardless of when
                         the distribution actually commences):

                         (1)  The  distribution  by the Trust is one which would
                              not have  disqualified  such Trust  under  Section
                              401(a)(9)  of  the  Internal  Revenue  Code  as in
                              effect prior to amendment by the Deficit Reduction
                              Act of 1984.

                         (2)  The distribution is in accordance with a method of
                              distribution  designated by the Participant  whose
                              interest in the Trust is being  distributed or, if

                                      6-19
<PAGE>
                              the  Participant is  deceased, by a Beneficiary of
                              such Participant.

                         (3)  Such designation was in writing, was signed by the
                              Participant  or  the  Beneficiary,  and  was  made
                              before January 1, 1984, in accordance with Section
                              242(b)(2)   of   the   Tax   Equity   and   Fiscal
                              Responsibility Act of 1982 and IRS Notice 83-23.

                         (4)  The  Participant  had accrued a benefit  under the
                              plan as of December 31, 1983.

                         (5)  The  method  of  distribution  designated  by  the
                              Participant or the Beneficiary  specifies the time
                              at which  distribution  will commence,  the period
                              over which  distributions will be made, and in the
                              case of any  distribution  upon the  Participant's
                              death, the Beneficiaries of the Participant listed
                              in order of priority.

                    (B)  A  distribution  upon death will not be covered by this
                         transitional   rule  unless  the   information  in  the
                         designation contains the required information described
                         above with respect to the distributions to be made upon
                         the death of the Participant.

                    (C)  For any distribution  which commences before January 1,
                         1984,  but  continues  after  December  31,  1983,  the
                         Participant,   or  the   Beneficiary,   to  whom   such
                         distribution  is being  made,  will be presumed to have
                         designated the method of  distribution  under which the
                         distribution   is   being   made  if  the   method   of
                         distribution   was   specified   in  writing   and  the
                         distribution  satisfies the requirements in subsections
                         (iv)(A)(1) and (5).

                    (D)  If   a   designation   is   revoked,   any   subsequent
                         distributions  must satisfy the requirements of Section
                         401(a)(9)  of the  Code as  amended  and  the  Proposed
                         Regulations  thereunder.  If a  designation  is revoked
                         subsequent to

                                      6-20
<PAGE>
                         the date distributions are required to begin, the Trust
                         must  distribute  by  the  end  of  the  calendar  year
                         following  the  calendar  year in which the  revocation
                         occurs the total amount not yet distributed which would
                         have been required to have been  distributed to satisfy
                         Section   401(a)(9)   of  the  Code  and  the  Proposed
                         Regulations  thereunder,   but  for  the  Code  Section
                         242(b)(2) election.  For calendar years beginning after
                         December 31, 1988,  such  distributions  roust meet the
                         minimum distribution incidental benefit requirements in
                         Section 1.401(a)(9)-2 of the Proposed Regulations.  Any
                         changes in the  designation  will be considered to be a
                         revocation  of the  designation.  -  However,  the mere
                         substitution  or addition of another  Beneficiary  (one
                         not named in the  designation)  under  the  designation
                         will  not  be  considered  to be a  revocation  of  the
                         designation,  so long as such  substitution or addition
                         does not alter the period over which  distributions are
                         to  be  made  under  the   designation,   directly   or
                         indirectly  (for  example,  by  altering  the  relevant
                         measuring  life).  In the case in which  an  amount  is
                         transferred  or rolled  over  from one plan to  another
                         plan,  the rules in Q&A J-2 and Q&A J-3 of the Proposed
                         Regulations shall apply.

     6.05 SELECTION OF METHOD OF PAYMENT.  The Participant and the Participant's
Spouse,  if any, or where the Participant is dead, the Surviving Spouse, if any,
shall  decide  the  manner  in which  the  Participant's  accounts  will be paid
pursuant to  Sections  6.03 and 6.04 of the Plan.  The  Trustee  shall make such
distributions in cash or in property,  or both,  provided that any such property
is distributed at its fair market value as of the date of  distribution.  In the
case of a Participant  who was  directing the  investment of all or a portion of
his account (s) pursuant to Article 9 of the Plan, property attributable to such
directed investments shall be distributed in kind pursuant to this Section 6.05.

     6.06 Designation of Beneficiary.

          Subject to the provisions of Section 6.03 of the Plan:

          (a) Each Participant  may, from time to time,  designate the person or
persons (who may be designated concurrently,

                                      6-21
<PAGE>
contingently,  or successively) to whom his accounts are to be paid if he should
die  before  his  accounts  are  fully  distributed  to  him.  Each  beneficiary
designation  shall cancel all prior  beneficiary  designations  made by the same
Participant,  shall  be  in a  written  form  prescribed  by  the  Participant's
Employer,  and shall be effective only when signed by the  Participant and filed
with the Employer  while the  Participant is living.  If a Participant  fails to
designate a Beneficiary as provided above, his Surviving  Spouse, if any; or, if
none,  his  surviving  child or  children,  in equal  shares;  or, if none,  his
surviving  parent or parents,  in equal shares;  or, if none, the  Participant's
personal representative,  executor, or administrator,  as the case may be, shall
be the Beneficiary or Beneficiaries of the Participant's accounts.

          (b) A Participant may specify,  in his beneficiary  designation  filed
with the Employer  pursuant to this Section  6.06,  that his accounts be paid to
his Designated Beneficiary in any method of payment described in Section 6.03 of
the Plan.

          (c) The term "Designated  Beneficiary" shall mean the natural or legal
person or persons (including a Trustee or other legal representative acting in a
fiduciary  capacity)  designated by a Participant as his beneficiary in the last
effective  beneficiary  designation  form  filed  with the  Employer  under this
Section 6.06. The term  "Beneficiary"  shall mean the natural or legal person or
persons to whom a deceased Participant's benefits are payable under this Section
6.06.

     6.07  Withdrawal of  Participant  Contributions.  Rollovers and  Transfers.
Elective Deferrals.

          (a) During the thirty (30) day period  immediately  preceding the last
day of any Plan Year, or otherwise with the consent of the Advisory Committee, a
Participant  may withdraw an amount not exceeding the balance in his Participant
voluntary contribution account, if any. Any Participant making a withdrawal must
file a written  request with the Advisory  Committee,  and the Trustee shall pay
such  amounts to the  Participant  upon the written  direction  of the  Advisory
Committee.

          (b) During the thirty (30) day period  immediately  preceding the last
day of any Plan Year, a  Participant  may withdraw an amount not  exceeding  the
balance in his  rollover/transfer  account.  Any Participant making a withdrawal
must file a written  request with the Advisory  Committee in a form  approved by
the  Advisory  Committee,  and  the  Trustee  shall  pay  such  amounts  to  the
Participant  upon the receipt of such request.  Notwithstanding  the above,  any
amounts received as a rollover/transfer  from a qualified plan maintained by the
Employer or any Related  Employer shall be  distributed  in accordance  with the
provisions of Section 6.04 of the Plan rather than this Section.

          (c) No  withdrawal  of Elective  Deferrals  shall be made prior to the
Participant's disability, retirement, or severance of

                                      6-22
<PAGE>
employment,  except where the  Participant  evidences a financial  hardship,  as
determined by the Advisory Committee in its sole discretion and according to its
nondiscriminatory  written  policy,  which shall be separate and apart from this
Plan.  Withdrawals  shall be limited  solely to Elective  Deferrals for all Plan
Years without  regard to earnings on such Elective  Deferrals and without regard
to Qualified  Matching  Contributions and Qualified  Nonelective  Contributions.
Notwithstanding  the preceding  sentence,  if a Participant's  December 31, 1988
account  attributable to Elective Deferrals (the "frozen amount") suffers a loss
subsequent  to December 31, 1988 that brings the value of the account  below the
frozen  amount,  then  the  Qualified  Matching  Contributions,   and  Qualified
Nonelective  Contributions  and  earnings  may be  withdrawn  due  to  financial
hardship to the extent  necessary  to reach the frozen  amount.  If the Advisory
Committee  determines that a Participant's  request for a hardship  distribution
meets the Committee's requirements, then the Advisory Committee shall direct the
Trustee to pay such amounts to the Participant upon receipt from the Participant
of such written request or form as may be required by the Advisory Committee.

          (d) No more than one (1) withdrawal  pursuant to this Section 6.07 may
be made in any Plan Year  without the  consent of the  Advisory  Committee.  Any
withdrawal  shall be made pursuant to forms supplied by the Employer,  signed by
the  Participant,  and delivered to the Employer.  The Advisory  Committee shall
adopt  uniform,  nondiscriminatory  rules  regarding  withdrawals,  the  form of
notification,  and  the  minimum  amounts  (if  any)  which  may  be  withdrawn.
Withdrawals  made  pursuant  to Section  6.07 shall be paid in cash or, with the
consent of the Participant, in the form of other property.

          (e) No  Forfeiture  shall occur solely as a result of a  Participant's
withdrawal of Participant contributions, or rollovers and transfers, or Elective
Deferrals.

          (f)   Notwithstanding   the  above,   withdrawals   from   Participant
contribution,  or rollover and transfer,  or Elective  Deferral  accounts as set
forth above,  shall be subject to the spousal consent rules described in Section
6.03 of the Plan if such accounts are subject to the Joint and Survivor  Annuity
Requirements of Sections 401(a)(11) and 417 of the Code.

     6.08 FACILITY OF PAYMENT. When, in the opinion of the Advisory Committee, a
Participant or his Beneficiary is under a legal  disability or is  incapacitated
in any way so as to be unable to manage  his  financial  affairs,  the  Advisory
Committee  may direct the  Trustee to make  payments to the  Participant  or his
Beneficiary,  or his legal  representative,  or to a  relative  or friend of the
Participant or Beneficiary for his benefit, or the Advisory Committee may direct
the  Trustee  to  apply  the  payment  for the  benefit  of the  Participant  or
Beneficiary in any way the Advisory Committee considers  advisable.  Any payment
made in accordance with

                                      6-23
<PAGE>
this Section 6.08 shall be a full and complete discharge of any liability to any
person for such payment under the Plan.

     6.09   SEGREGATION  OF  PARTICIPANT'S   ACCOUNTS.   After  a  Participant's
termination  of employment  with the Employer,  other than for retirement at the
Normal or Early Retirement Date,  Disability,  or death, the Trustee may, in its
sole and complete discretion, applied in a uniform and nondiscriminatory manner,
and in the best  interest of the  remaining  Participants,  segregate the vested
portion of the terminated  Participant's accounts from the general assets of the
Trust Fund,  and treat such  segregated  account or  accounts as a  "Participant
directed investment" pursuant to Article 9 of the Plan. Such Participant (or, if
applicable,   his  Beneficiary)  shall  thereafter  exercise  control  over  the
investment of the assets of such account in the manner described in Article 9 of
the Plan,  until such time as the assets are distributed to him pursuant to this
Article 6.

     6.10 QUALIFIED  DOMESTIC  RELATIONS  ORDERS.  Notwithstanding  any contrary
provision  of  this  Article  6,  or  otherwise  in  this  Plan,   if  the  Plan
Administrator  receives a domestic  relations  order  issued  pursuant  to state
domestic relations law with respect to a Participant, and the Plan Administrator
determines that order is a "Qualified  Domestic  Relations  Order" ("QDRO") , as
defined under and which complies with the  requirements of Section  206(d)(3) of
ERISA and Section  414(p) of the Code,  then a  distribution  may be made to the
alternate payee named in the Qualified Domestic Relations Order at any time, and
in any manner specified or contemplated by the QDRO, and such distribution shall
not violate the prohibition  against  alienation  provided for in Article 13 nor
any  provision  in this  Article 6. This  provision  is  intended to comply with
Section  414 (p)  (10)  of the  Internal  Revenue  Code of  1986  and  shall  be
interpreted by reference to that statute, regulations promulgated thereunder and
the intent of the Congress as expressed in the Conference Report addressing such
statute.

                                      6-24
<PAGE>
     7. LIFE INSURANCE

     7.01 PURCHASE OF LIFE INSURANCE  POLICIES.  Assets of the Trust Fund may be
invested  in   nontransferable   life  insurance   contracts  on  the  lives  of
Participants.  At the instruction of a Participant,  the Advisory  Committee may
direct the Trustee to purchase one or more life  insurance  policies on the life
of any Participant.  Any such life insurance policy shall be the property of the
Trustee,  and  the  beneficiary  of any  such  policy  shall  be  chosen  by the
Participant as provided in this Article 7. The maximum premiums that the Trustee
may pay in any Plan Year for any such policy or policies  shall be determined by
the Advisory  Committee,  in a uniform and  nondiscriminatory  manner, but in no
event shall:

          (a)  the aggregate  premiums for all policies of ordinary (whole) life
               insurance  insuring the life of any Participant exceed forty-nine
               percent (49%) of the Contributions allocated to the Participant's
               Employer account; or

          (b)  the aggregate  premiums for all policies of term and/or universal
               life  insurance  insuring  the  life  of any  Participant  exceed
               twenty-four  percent (24%) of the Contributions  allocated to the
               Participant's Employer account; or

          (c)  the  sum  of  one-half  (1/2)  of  the  aggregate  ordinary  life
               insurance  premiums and all other life insurance premiums for all
               combinations  of policies of ordinary and term (and/or  universal
               life)  insurance  insuring  the  life of any  Participant  exceed
               twenty-four  percent (24%) of the Contributions  allocated to the
               Participant's Employer account.

          In no event shall any policy of life  insurance be purchased in a face
amount of less than One Thousand Dollars ($1,000).

     7.02  OWNERSHIP OF POLICIES.  The Trustee  shall be the  applicant  for any
policy  purchased  pursuant to this Article 7. Each  Participant for whom such a
policy is purchased shall direct in writing that the Trustee shall be recognized
by the  insurance  company  as the  owner  of the  policy,  with  exclusive  and
continuing  power  to  have  and  exercise  all  rights,  privileges,   options,
elections,  and other  incidents of ownership  granted by or permitted under the
policy,  including the right to change the Participant's  Beneficiary.  However,
the  Participant  for whom such a policy is  purchased  shall  have the right to
designate and to change the beneficiary  named under the policy,  subject to the
limitation  described in the last sentence of this Section  7.02,  and to advise
the Advisory  Committee in writing of such designation or change, in which event
the  Advisory  Committee  shall  instruct  the  Trustee to notify the  insurance
company  of such  designation  or change  of  beneficiary.  Notwithstanding  the
foregoing,  the  Participant's  Spouse shall be the  Beneficiary of the proceeds
from any insurance

                                      7-1
<PAGE>
policy issued on the life of the Participant, unless the Spouse has consented in
writing   (witnessed  by  the  Advisory  Committee  or  notary  public)  to  the
designation  of another  beneficiary  in  accordance  with the  consent  rule in
Section 6.03 of the Plan.

     7.03 DIVIDENDS OR CREDITS.  Any life insurance  policy purchased under this
Article 7 shall provide that any  dividends or other  credits  payable under the
policy shall be applied to reduce premiums.

     7.04 PAYMENT OF PREMIUMS. The Advisory Committee shall direct the insurance
company or  companies  selected by it to notify the  Advisory  Committee  of all
premiums due or to become due, the respective amounts of any such premiums,  and
the  respective  dates when the same are due, and the Advisory  Committee  shall
verify  the names of the  individual  Participants,  if any,  upon  whose  lives
policies  have been  purchased.  The  Advisory  Committee  shall  deliver to the
Trustee  all  such  premium  notices,  together  with the  Advisory  Committee's
verification  of  covered  Participants,  and a  written  direction  to pay such
premiums  not less than five (5) bank working days prior to the date or dates on
which any of such premiums may be due. In the event that the Advisory  Committee
does not strictly  comply with the  provisions of this Section 7.04, the Trustee
shall have no duty nor  liability  with respect to the payment of any premium in
connection  with any policy,  and shall be entitled to presume that the Advisory
Committee has made a determination to allow such policy or policies to lapse.

     7.05  ACCOUNTING FOR POLICIES.  The value of any policies  purchased by the
Trustee  pursuant to this Article 7 shall be excluded from the  evaluations  and
accountings  made  pursuant to Article 5 or Article 6 of the Plan,  both for the
purpose of  determining  any increase or decrease in the value of the Trust Fund
and for the purpose of determining  allocations to the  Participant's  accounts.
The premium or premiums for any policy  purchased  shall be charged  against the
accounts of the Participant with respect to whom such policy was purchased.

     7.06  DISCRIMINATION.  To  the  extent  that  policies  are  purchased  for
individual  Participants  as  provided  in this  Article  7,  there  shall be no
discrimination  among  Participants as to the form,  value,  optional methods of
settlement, or other provisions of said policies.

     7.07 DISPOSITION OF POLICIES UPON  TERMINATION  OTHER THAN BY DEATH. In the
event any Participant  with respect to whom an individual life insurance  policy
is held by the Trustee  terminates  employment  with the Employer  other than by
reason of his death,  and in the event the  Participant is entitled to receive a
distribution  pursuant  to Article 6 of the Plan,  the  Trustee,  subject to the
written  direction  of the Advisory  Committee  (acting in its sole and complete
discretion),  shall make one of the  following  dispositions  of such  policy or
policies:

                                      7-2
<PAGE>

          (a)  Convert each such cash value policy to cash,  and  distribute all
               or a portion of such cash to the  Participant in accordance  with
               the provisions of Article 6 of the Plan; or

          (b)  Offer to such  Participant  all  such  policies  at a price  (the
               "purchase price") equal to the cash value of such policies at the
               time of  termination,  minus the value of his vested  interest in
               such policies  determined in  accordance  with the  provisions of
               Section 6.01 of this Plan. If the Participant accepts such offer,
               the  purchase  price,  if  any,  shall  be  charged  against  the
               Participant's vested interest in that portion of his accounts not
               represented  by such  policies,  and any excess of such  purchase
               price over such vested  interest shall be paid by the Participant
               to the Trustee in cash within ten (10) days after  accepting such
               offer. If the offer is so accepted and any required payment made,
               the Trustee  shall  transfer  ownership  of such  policies to the
               Participant.  If such Participant  shall elect not to purchase or
               accept such  policies,  or shall fail to make AN election  within
               thirty  (30)  days  after   written   notice  from  the  Advisory
               Committee, the Trustee may take any necessary action to liquidate
               such  policies in order to  distribute  to such  Participant  the
               amount to which the  Participant  is  entitled  pursuant  to this
               Plan.

     7.08  DISPOSITION OF POLICIES UPON DEATH.  Upon the death of a Participant,
the proceeds of any life insurance policy or policies  purchased with respect to
such Participant shall be paid to his beneficiary designated pursuant to Section
7.02 of the  Plan,  or,  if no such  designation  is  made,  to the  Beneficiary
determined under Section 6.06 of the Plan.

     7.09  CONFLICT  BETWEEN  INSURANCE  POLICY  AND PLAN.  In the event  that a
conflict  should arise  between the  provisions  of an insurance  policy and the
provisions of this Plan, the provisions of the Plan shall control.

     7.10  STATUS AS  DIRECTED  INVESTMENT.  Any  investment  in life  insurance
contracts  shall  be a  participant-directed  investment  made  pursuant  to the
provisions of Article 9 of this Plan.

                                      7-3
<PAGE>
     8. LOANS TO PARTICIPANTS

     8.01 APPLICATION TO ADVISORY  COMMITTEE.  The Advisory Committee may direct
the Trustee to make loans to  Participants or  Beneficiaries  (provided they are
parties in interest  under Section  408(b)(l) of ERISA) in accordance  with this
Article  8.  A  Participant  may  make a  written  application  to the  Advisory
Committee for a loan from the Trust Fund. The Advisory  Committee shall exercise
its sole discretion in granting or denying such loan applications,  in a uniform
and nondiscriminatory manner, taking into consideration the creditworthiness and
financial need of the applicant.  No loan shall be made pursuant to this Article
8 to the extent  that such loan,  when added to the  outstanding  balance of all
other loans to the Participant (or Beneficiary), would exceed the lesser of:

          (a) Fifty Thousand Dollars ($50,000) reduced by the excess (if any) of
the highest outstanding balance of loans from the Plan to the Participant during
the one year  period  ending on the day  before  the date on which  such loan is
made, over the outstanding  balance of loans from the Plan to the Participant on
the date on which such loan was made, or

          (b) One-half  (1/2) of the present value of the  Participant's  vested
account balances (excluding any Participant  deductible  voluntary  contribution
account,  if any)  under  this  Plan,  but not less  than Ten  Thousand  Dollars
($10,000).

For purposes of this limit,  all plans of the Employer  shall be considered  one
plan.

     8.02 REQUIRED DOCUMENTATION AND TERMS.

          (a) In  connection  with any loan made  pursuant to this Article 8, an
applicant   shall  execute  such   promissory   notes  or  other   evidences  of
indebtedness,  security,  and other instruments as the Advisory Committee may in
its discretion require.  Each loan shall be secured by adequate  collateral,  in
the form of an  applicant's  assignment to the Trustee of fifty percent (50%) of
his entire vested interest in the Trust Fund and such other security, if any, as
the  Advisory  Committee  deems  advisable.  Each loan shall bear  interest at a
reasonable  rate fixed by the Advisory  Committee which provides the Plan with a
return  commensurate with the prevailing interest rate charged by persons in the
business  of  lending  money  for  loans  which  would  be  made  under  similar
circumstances,  not in excess of that  permitted by law. Any loan shall,  by its
terms,  provide  for  level  amortization  with  payments  to be made  not  less
frequently  than quarterly over a period not to exceed five (5) years.  However,
any loan used to acquire any dwelling unit which,  within a reasonable  time, is
to be used (determined at the time the loan is made) as a principal residence of
the Participant shall provide for periodic repayment over a reasonable period of
time that may exceed five (5) years. Notwith-

                                      8-1
<PAGE>
standing the  foregoing,  loans made prior to January 1, 1987 which were used to
acquire, construct,  reconstruct or substantially rehabilitate any dwelling unit
which,  within a reasonable period of time is to be used (determined at the time
the loan was made) as a principal  residence of the  Participant  or a member of
his family (within the meaning of Code Section  267(C)(4)) may have provided for
periodic  repayment  over a  reasonable  period of time that may exceed five (5)
years.

          (b) No loan shall be made available to Participants  or  Beneficiaries
who are not "parties in interest"  to the Plan,  as defined in Section  3(14) of
ERISA.

          (c) No loan shall be made  available to Highly  Compensated  Employees
[as defined in Section  414(q) of the Code] in an amount greater than the amount
made available to other Employees.

          (d) No loan shall be made to a  Participant  under this Article 8, and
no outstanding loan shall be renewed or extended,  on or after the date on which
the Participant terminates his employment or reaches the Normal Retirement Date.

          (e) No loan may be made to any Owner-Employee or Shareholder-Employee,
or to  any  member  of his  family  (including  spouse,  brothers  and  sisters,
ancestors, or lineal descendants).

          (f) Prior to the making of any loan to a Participant,  the Participant
(and,  if this Plan is subject to the Joint and Survivor  Annuity  Requirements,
the Participant's  Spouse) must consent in writing to the loan, and the possible
reduction  in any  accrued  benefit  as a result of  default,  within the 90-day
period before the making or renewal of such loan.  The consent must  acknowledge
the effect of the loan and must be witnessed by a Plan  representative or notary
public.  Such consent shall thereafter be binding with respect to the consenting
Spouse or any  subsequent  Spouse  with  respect to that loan.  A new consent is
required if the account balance is used for renegotiation,  extension,  renewal,
or other revision of the loan. This requirement  applies to all loans made on or
renewed  after  August 19, 1985.  The Spouse's  consent must be made in a manner
consistent with Section 6.03(b) (iv) (C) of the Plan.

          (g) If a valid Spousal  consent has been  obtained in accordance  with
(f) above, then,  notwithstanding  any other provision of this Plan, the portion
of the  Participant's  vested  account  balance  used as a security for the loan
outstanding  to the  Participant  shall be taken into  account  for  purposes of
determining  the amount of the account  balance  payable at the time of death or
distribution,  but only if the  reduction is used as  repayment of the loan.  If
less than 100% of the Participant's  vested account balance  (determined without
regard to the preceding  sentence) is payable to the Surviving Spouse,  then the
account  balance shall be adjusted by first reducing the vested account  balance
by the amount

                                      8-2
<PAGE>

of the security used as repayment of the loan, and then  determining the benefit
payable to the Surviving Spouse.

          (h) Additional  provisions,  including  provisions  inconsistent  with
those set forth in this Section 8.02,  may be adopted by the Advisory  Committee
from time to time, as set forth in a separate  document which shall be deemed to
form a part of this Plan.

     8.03 Implementation and Servicing of Loan.

          (a) The Trustee, upon receipt of the written direction of the Advisory
Committee and of the appropriate  notes or other evidences of indebtedness  from
the Advisory Committee, shall advance the amount of the loan to the Participant,
and shall consider such loan an investment of the Trust Fund.

          (b) In the event that the  Participant  should  fail to repay any such
loan  (including  any unpaid  interest) when due, the Trustee may exercise every
creditor's  right  at law or  equity  which  may be  available  to the  Trustee,
including  but  not  limited  to the  deduction  of such  amount  due  from  the
Participant's  accounts  or from  any  payment  or  distribution  to  which  the
Participant  or his  Beneficiary  would  otherwise  be entitled.  However,  such
deduction shall not take place prior to a distributable event under the Plan.

          (c) No distribution shall be made from the Plan to any Participant, or
any Beneficiary,  until the entire outstanding balance of any loan or loans made
to the Participant  pursuant to this Article 8 have first been repaid, or unless
the distribution is first reduced by the amount of the outstanding loan balance.

     8.04  CHARGES  AND FEES.  Any  charge or fee  which may be  imposed  by the
Trustee or by any broker,  investment  advisor,  or otherwise,  including  legal
fees,  incurred in connection  with a  Participant's  loan made pursuant to this
Article 8 shall be  charged  to and paid from the  assets of such  Participant's
accounts.

     8.05 STATUS AS DIRECTED  INVESTMENT.  Any loan to a Participant  shall be a
participant-directed  investment made pursuant to the provisions of Article 9 of
this Plan.

                                      8-3
<PAGE>
     9. PARTICIPANT DIRECTED INVESTMENTS

     9.01 DIRECTION BY PARTICIPANT. Any Participant whose vested account balance
equals or exceeds Five Thousand Dollars ($5,000) may direct the investment of up
to one hundred percent (100%) of his vested accounts (subject to the limitations
of this  Section  9.01) . For the  purposes of this  Article 9, a  Participant's
account  shall not include  any  unallocated  share of  Employer  Contributions,
Forfeitures,  income,  or  appreciation  of the Trust  Fund for the Plan Year in
which the Participant directs the investment of his accounts;  or any portion of
the accounts  which is currently  being invested  pursuant to the  Participant's
direction, or any portion of the account which secures a Participant's loan with
the Trust.

     A Participant's  investment  direction shall be made in writing,  in a form
acceptable to the Plan Administrator,  and filed with the Plan Administrator for
delivery to the  Trustee.  The Plan  Administrator,  upon receipt of the written
direction of the Participant and of the appropriate instruments,  shall instruct
the Trustee to release  investment  control  over the  specified  portion of the
Participant's  account to the Participant,  subject to the terms of this Article
9.

     9.02  INVESTMENT  OPTIONS  LIMITED BY EMPLOYER.  The Employer may limit the
investment  options  available to  Participants.  If the investment  options are
limited to those  approved by the Employer,  such options shall be  specifically
described in materials furnished by the Employer to the Participants. Investment
options  may be  changed  at the times and in the  increments  specified  by the
Employer in the  materials  provided to the  Participant.  Investment  elections
shall be made by filing an  election  form with the Plan  Administrator.  In the
event a Participant fails to make a timely investment  election pursuant to this
Section,  he shall be  considered to have made an election to invest one hundred
percent (100%) of his accounts in an investment  option the primary objective of
which is the preservation of principal until such time as an investment election
by the Participant becomes effective.

     9.03 INVESTMENT OPTIONS NOT LIMITED BY EMPLOYER.  If the investment options
are not limited to those  approved by the  Employer,  the Trustee,  the Advisory
Committee,  and the Employer shall have no duty either to make any evaluation or
to advise anyone of the suitability or propriety of the  Participant's  exercise
of control  involving his account in any  transaction,  or of the suitability or
propriety  of its  retaining  any purchase  for such  account,  and shall not be
responsible  for  any  loss  resulting  from  any  investment  directed  by  the
Participant  or  for  the  breach  of  any  law  or  regulation  arising  from a
Participant  directed  investment.  However,  the Trustee shall have the express
power to refuse any  investment  directed by a  Participant  if such  investment
would be administratively  burdensome, or if for any reason the Trustee believes
that such  investment  would or might  constitute a "prohibited  transaction" as
defined in Section 406 of ERISA or Section 4975 of the Code.

                                      9-1
<PAGE>
     9.04 INVESTMENT CONTROL SURVIVES DEATH. If a Participant who has elected to
direct the  investment  of his  account  pursuant  to this  Article 9 should die
before his account is totally  distributed to him, his investment  control shall
immediately  vest in his  Beneficiary  as determined  under Section 6.06 of this
Plan.

     9.05  REVESTING  OF  INVESTMENT  CONTROL IN TRUSTEE.  In no event shall any
investment  control  which is  exercised by a  Participant  under this Article 9
revest in the  Trustee,  without  its  consent,  by reason of the  Participant's
voluntary relinquishment of such control, his termination of employment with the
Employer, or otherwise.  As a condition of reaccepting investment control from a
Participant,  the Trustee may require that the assets over which the Participant
exercised  control be converted to cash or to some other form of property  which
the Trustee, in its sole and complete discretion, deems acceptable.

     9.06  CHARGES  AND FEES.  Any  charge or fee  which may be  imposed  by the
Trustee or by any broker,  investment  advisor,  or otherwise,  including  legal
fees,  incurred in  connection  with a  Participant's  direction of his accounts
pursuant to this  Article 9 shall be charged to and paid from the assets of such
Participant's accounts.

                                      9-2
<PAGE>
     10. ADMINISTRATION

     10.01 BASIC  RESPONSIBILITIES OF EMPLOYER. The Employer shall establish and
carry out a funding policy and method based upon its determination of the Plan's
needs for  liquidity,  appreciation,  and stability.  The Employer,  through the
Advisory Committee,  shall communicate such goals and needs to the Trustee,  who
shall then coordinate such expressed goals and needs with its investment policy.

     In  addition,   the  Employer  shall  have  the  following   categories  of
responsibility:

          (a) To periodically  review the performance of Fiduciaries to whom any
allocation  or  delegation  of duties  has been made,  whether or not  involving
management and control of Plan assets;

          (b) To maintain and retain  records on matters on which  disclosure to
the Departments of Labor and Treasury and to Participants is required;

          (c) To prepare and furnish to Participants  all  information  required
under the provisions of this Plan or under federal law to be furnished to them;

          (d) To prepare  and file or publish  with the  appropriate  government
agencies  all reports and other  information  required to be filed or  published
under federal or state law;

          (e) To recommend a successor Trustee, if necessary.

     10.02 ORGANIZATION AND MEMBERSHIP OF ADVISORY COMMITTEE. The Employer shall
appoint  one (1) or more  members to a  committee  to be known as the  "Advisory
Committee,"  which  shall serve  subject to the  Employer.  The initial  members
designated to serve as the Advisory  Committee  shall be those  specified by the
Employer in writing and  communicated  to the  Trustee.  Members of the Advisory
Committee need not be  Participants,  and officers and directors of the Employer
shall not be prohibited  from serving as members.  A member shall serve until he
tenders his  resignation  to the  Employer or until the  Employer  removes  such
member or appoints his successor,  whichever  shall first occur. In the event of
any vacancy arising by reason of the death, removal, or resignation of a member,
the Employer may, but shall not be required to,  appoint a successor to serve in
his place.  The Advisory  Committee shall select a Chairman and a Secretary from
among its members.  The members  shall serve as such without  compensation.  The
Advisory  Committee  shall act by  majority  vote.  The proper  expenses  of the
Advisory  Committee,  and the compensation of its agents  appointed  pursuant to
Section 10.06 of the Plan, if any, shall be paid directly by the Employer.

                                      10-1
<PAGE>
     10.03 POWERS AND RESPONSIBILITIES OF THE ADVISORY COMMITTEE.

          (a) Except as provided in the following paragraph and in Section 10.06
herein,  and subject to the standards of conduct  described in Article 12 of the
Plan, the Advisory  Committee shall have complete control of the  administration
of the Plan,  with all powers  necessary  to enable it properly to carry out its
duties in such respect.  Without  limiting the generality of the foregoing,  the
Advisory  Committee shall have the power to construe the provisions of this Plan
and to determine all questions  which may arise  hereunder,  and shall also have
all the powers conferred upon it elsewhere in this Plan. The Advisory  Committee
shall, from time to time,  communicate the funding policy and method established
by the Employer to the Trustee,  and may confer with the Trustee  regarding  the
investment  and  management  of the  assets  of the  Trust  Fund.  The  Advisory
Committee  shall,  according  to rules and  procedures  established  by it,  and
applied in a uniform and nondiscriminatory manner, decide all questions relating
to the  eligibility  and  participation  of  -Employees  in the  Plan,  and  all
disbursements  by  the  Trustee,   except  for  the  ordinary  expenses  of  the
administration  of this Plan, shall be made upon the written  instruction of the
Advisory  Committee.  Except as otherwise provided in Section 13.05 of the Plan,
all decisions of the Advisory  Committee  made within the scope of its authority
shall be final.

          (b) The  Advisory  Committee  shall  prepare (or cause the Employer to
prepare) and furnish to the Trustee a statement of the amount of the  Employer's
contributions  for each  Plan Year and  employee  data in a form  sufficient  to
enable  the  Trustee  to  maintain  accounts  for the  Participants  and to make
required  allocations and payments of benefits in accordance with the provisions
of this Plan.

     10.04 RECORDS OF ADVISORY  COMMITTEE.  All acts and  determinations  of the
Advisory Committee shall be duly recorded by the Secretary thereof, or under his
supervision,  and all such records, together with such other documents as may be
necessary for the  administration of the Plan, shall be preserved in the custody
of the Secretary or his successor.

     10.05 LIABILITY OF ADVISORY COMMITTEE.  No member of the Advisory Committee
shall  incur any  liability  for any action or failure  to act,  excepting  only
liability  for his  negligence  in  accordance  with  the  standard  of  conduct
described  in  Article  12 of the  Plan.  The  Employer  shall and  hereby  does
indemnify  each  member of the  Advisory  Committee  against any and all claims,
losses, damages, expenses, attorneys' fees, and liabilities arising from any act
or failure to act by the Advisory  Committee,  its officers and members,  except
when the same is judicially determined to be due to the gross negligence of such
person or persons. If the investment  decisions hereunder have been allocated to
a  professional  investment  advisor  pursuant to Section 10.06 of the Plan, the
Advisory Committee shall be relieved from any liability

                                      10-2
<PAGE>
for  investment  decisions  made by such  manager,  provided  that the  Board of
Directors of the Employer has acted prudently in appointing such advisor.

     10.06 DESIGNATION OF AGENTS AND ALLOCATION OF RESPONSIBILITIES.

          (a)  The  Employer  or the  Advisory  Committee  may  delegate  to the
Advisory  Committee  or to one or more  qualified  "Investment  Manager(s)"  the
responsibility  and  authority  to invest  the  assets of the Trust  Fund.  Such
delegation  shall be in writing,  and shall  specify the role of the  Investment
Manager  in  making  investment  decisions  on  behalf  of the  Plan.  Any named
Investment Manager shall accept his or its responsibility in writing,  and shall
acknowledge  in writing that it is a Fiduciary with respect to the investment of
assets of the Trust Fund.  If an Investment  Manager is  designated  pursuant to
this Section 10.06, a copy of the  delegation,  acceptance,  and  acknowledgment
shall be provided to the Trustee by the Advisory  Committee,  and the Trustee is
authorized and entitled to rely upon such delegation.  If an Investment  Manager
is designated pursuant to this Section 10.06, such Investment  Manager,  and not
the Trustee or the Advisory  Committee,  shall be the Fiduciary  with respect to
the investment,  management,  and control of the assets of the Trust Fund within
the scope of its authority.

          (b) The  Employer  and the  Advisory  Committee  may  designate  other
persons  to carry out  fiduciary  duties  [other  than  duties of an  Investment
Manager  appointed  pursuant to Subsection  (a) or the duties of the Trustee set
forth in  Article  11 of the  Plan],  to  render  advice  (including  legal  and
investment  advice),  and to perform  other  services,  as the  Employer  or the
Advisory Committee may, in their sole discretion, deem necessary and appropriate
for the effective performance of their duties here-under, whether ministerial or
discretionary.  Such designated  persons may receive  compensation  fixed by the
Employer or the Advisory Committee,  within limitations set by the Employer. The
allocation of such  responsibilities  shall be effective upon the date specified
in the delegation by the Advisory Committee or the Employer,  subject to written
acceptance by the delegate.  Any such  delegation  shall be  communicated to the
Participants or to Beneficiaries, where required by ERISA.

                                      10-3
<PAGE>
     11. TRUST AND TRUSTEE

     11.01  INVESTMENT OF TRUST FUND. The Trust Fund, as defined in Section 2.30
of the Plan, shall be held, administered, and invested in the manner provided in
this Article 11, as a single fund,  unless  otherwise  specifically  provided in
this Plan. The Trust Fund may be invested, held, and reinvested in every and all
forms of real, personal, or mixed property and any interest therein, as provided
in Section 11.05 of the Plan, subject to the fiduciary responsibilities provided
in Article 12 of the Plan.  The Trustee  shall invest,  manage,  and control the
assets of the Trust Fund. Cash may be held uninvested at any time, and from time
to time, and in such amounts as may be deemed advisable by the Trustee,  subject
to the  direction  of  the  Advisory  Committee  or of  any  Investment  Manager
appointed pursuant to Section 10.06(a) of the Plan.

     11.02 COMMINGLING OF TRUST ASSETS.  Notwithstanding  any other provision of
this  instrument,  the Trustee shall have the full power and authority to invest
and  reinvest  any assets of this Trust Fund in  qualified  common  trust  funds
established  by the Trustee,  and to  commingle  moneys and assets of this Trust
with moneys and assets of other  trusts in such  qualified  common  trust funds.
Pursuant to the direction of the Advisory  Committee or the Plan  Administrator,
the Trustee shall combine the assets of this Trust Fund for investment  purposes
with the  assets of any  other  tax-qualified  employee  pension  benefit  trust
established  by the Employer or any Related  Employer,  provided  that  separate
accounts and records are maintained for each trust fund.

     11.03  VALUATION OF TRUST FUND.  As of the last day of each Plan Year,  and
upon such other more  frequent  dates as the Trustee and the Advisory  Committee
shall agree, the Trustee shall determine the fair market value of the Trust Fund
and shall adjust the value of the Participants'  accounts in accordance with the
provisions  of Article 5 of the Plan.  The Trustee shall prepare and furnish the
Advisory  Committee  with a statement  of account,  including  its  valuation as
provided in Section 11.15 of the Plan. The Trustee, in its sole discretion,  may
require the Employer to furnish a written independent  appraisal of the value of
any employer  securities  or employer  real  property  held as part of the Trust
Fund, in a form acceptable to the Trustee,  and the Trustee shall be entitled to
rely exclusively  upon such appraisal in making its valuation.  Any valuation by
the Trustee shall be conclusive  and binding on any person having an interest in
the Trust Fund.

     11.04  TRUSTEE TO HOLD TRUST  ASSETS.  Title to all the assets of the Trust
Fund shall be and remain in the  Trustee.  Except where assets are invested by a
designated investment advisor pursuant to Section 10.06 of the Plan, the Trustee
shall have the custody and care of all of the assets of the Trust Fund.  No part
of the Trust Fund shall revert to the  Employer,  or be used or diverted for any
purpose  other  than for the  exclusive  benefit of the  Participants  and their
Beneficiaries, except in the case of charges and fees

                                      11-1
<PAGE>
properly paid in connection  with the Plan, and except as otherwise  provided in
Section 15.01 herein.

     11.05 GENERAL POWERS OF TRUSTEE. The Trustee is authorized and empowered:

          (a) To invest all or any portion of the Trust Fund in any common trust
fund  established  by the Trustee,  or in any savings  account or certificate of
deposit,  or any similar account or instrument,  with any financial  institution
(including any bank or other institution which may, at any time, act as Trustee)
;

          (b) To  purchase  bonds,  notes,  debentures,  stocks,  options  (both
covered  and  uncovered),  interests  in  mutual  and  index  funds,  fixed  and
guaranteed  income  funds,  mortgages  (including  mortgage  funds  and  pools),
leaseholds,  limited  or general  partnership  interests,  "qualifying  employer
securities"  or  "qualifying  employer real property" [as defined in Section 407
(d) of ERISA,  to the extent of up to ninety  percent (90%) of the assets of the
Trust Fund],  vendors' interests in contracts for sale, cash value and term life
insurance  or annuity or endowment  contracts on the lives of the  Participants,
equipment,  options  and other  interests,  and any and all other forms of real,
personal, or mixed property;

          (c) To pledge or mortgage,  assign, lease, contract to lease, sell for
cash or on credit,  convert,  redeem,  exchange  for other  securities  or other
property in which the Trust may be invested under this Plan,  write call options
against,  or otherwise  dispose of any  securities or other property at any time
held by it;

          (d) To settle, compromise, or submit to arbitration any claims, debts,
or damages due or owing from the Trust,  to  commence  or defend  suits or legal
proceedings, and to represent the Trust in all suits or legal proceedings;

          (e)  To  exercise  any  conversion  privilege  or  subscription  right
available in connection  with any securities or property at any time held by it;
to consent to the reorganization,  consolidation, merger, or readjustment of the
finances of any corporation,  company, or association, or to the sale, mortgage,
pledge,  or lease of the property of any corporation,  company,  or association,
any of the  securities of which may at any time be held by it, and to do any act
with reference thereto,  including the exercise of options, making of agreements
or  subscriptions,  and the  payment  of  expenses  deemed  to be  necessary  or
advisable in connection  therewith,  and to hold and to retain any securities or
other property which it may so acquire;

          (f) To borrow  money from the  Trustee  or from other  sources in such
amounts and upon such terms and conditions as

                                      11-2
<PAGE>
may be deemed advisable or proper to carry out the purposes of the Trust;

          (g) To vote any  corporate  stock  belonging  to the Trust Fund and to
give  proxies for the purpose of such voting to other  persons,  with or without
power of substitution,  provided,  however,  that qualifying employer securities
shall be voted at such time and in such manner as the Advisory  Committee  shall
direct;

          (h) To improve,  manage,  protect,  subdivide,  and partition any real
estate  forming a part of the Trust  Fund;  to  dedicate  to the  public use and
vacate all or any part  thereof;  to grant options to lease and to lease for any
term  [including  leases  for  ninety-nine  (99)  years or any longer or shorter
periods of time] even  though  such term  extends  beyond the  duration  of this
Trust,  upon such terms and conditions as may be deemed to be proper;  to renew,
cancel,  and  amend  or  extend  leases,  and  consent  to  the  assignment  and
modification  of any  lease on any terms  which  may be deemed to be  necessary,
proper, or advisable;

          (i) To collect the income, rents, issues, profits, and increase of the
Trust Fund;

          (j) To employ agents,  attorneys, and professional investment managers
and advisors,  and to pay their reasonable  compensation  and expenses,  without
incurring  liability  for the acts or  defaults  of such  agents  and  attorneys
selected  by it with due care,  and being  fully  protected  in acting  upon the
advice  of  counsel  on  questions  of  law  arising  in  connection   with  the
administration of this Trust Fund;

          (k) To register any  securities  held by it under this Plan in its own
name, or in the name of a nominee, and to hold any securities in bearer form;

          (l) To make,  execute,  and deliver as Trustee any and all instruments
as may be  necessary  or  proper  for the  accomplishment  of any of the  powers
specified in this Section 11.05;

          (m)  To  require  indemnity  from  the  Employer,   to  the  Trustee's
satisfaction,  before  taking  any  action  for which the  Trustee,  in its sole
discretion, reasonably requires such indemnification;

          (n) To loan money to a Participant pursuant to the terms of the Plan;

          (o) Subject to the provisions and  limitations  expressly set forth in
this Plan,  to do and  perform  any and all acts and things in  relation  to the
Trust Fund in the same manner and to

                                      11-3
<PAGE>
the  extent  that an  individual  might  or  could  do with  respect  to his own
property;

          (p) To have  and to  exercise  all  rights,  powers,  and  authorities
necessary to perform its duties  under this Plan or now or  hereafter  conferred
upon  trustees  generally  by the  laws of the  state  in  which  the  Trustee's
principal place of business is located.

          No  enumeration  of specific  powers  herein  shall be  construed as a
limitation  upon the foregoing  general powers of the Trustee,  nor shall any of
the powers conferred upon the Trustee be exhausted by the use thereof, but shall
be continuing.

     11.06  EXPENSES AND  COMPENSATION  OF TRUSTEE.  The  Employer  shall pay or
reimburse  the Trustee for all  reasonable  and necessary  expenses  incurred in
administering the Trust Fund,  including Trustee's fees, for each Plan Year. The
Trustee's  compensation  shall be in an amount  agreed upon from time to time by
the Trustee and the Employer.  If, and to the extent,  such fees and charges are
not paid directly by the Employer,  the Trustee may deduct such amounts, as well
as all  other  reasonable  and  necessary  expenses,  charges,  costs,  and fees
incurred  in  connection  with  the  administration  of the  Trust  Fund  or the
operation of the Plan, from the assets of the Trust Fund.

     11.07 DISTRIBUTIONS.  The Trustee shall make all distributions and payments
out of the Trust Fund to Participants or their  beneficiaries in such manner, in
such amounts, and for such purposes as may be necessary and proper in accordance
with the provisions of the Plan.

     11.08 LIMITATION ON DUTIES OF TRUSTEE. The Trustee shall be responsible for
the  safekeeping  and  administration  of the  assets  of the Plan and  Trust in
accordance  with the provisions of this  instrument and any amendments  thereof.
The  duties of the  Trustee  under the Plan  shall be  determined  solely by the
express  provisions  of this  instrument,  and no other  or  further  duties  or
responsibilities shall be implied. Subject to the terms of the Plan, the Trustee
shall be fully protected and shall incur no liability in acting in reliance upon
the written instructions,  directions,  or accountings (including allocations of
Employer  contributions) of the Advisory Committee,  the Plan  Administrator,  a
qualified Investment Manager appointed pursuant to Section 10.06(a) of the Plan,
or any other named  administrator  or  Fiduciary.  The Trustee shall be under no
obligation whatsoever to determine whether contributions  delivered to it comply
with the  provisions  of the Plan,  and shall be  obligated  only to receive and
administer such contributions pursuant to the terms of the Plan. It shall be the
obligation of the Advisory Committee to notify the Trustee,  in writing,  of all
facts which may be necessary in order to determine  the proper  allocation of an
Employer  contribution,   and  in  order  to  determine  the  basis  upon  which
distributions  of  any  kind  are  to be  made,  including  length  of  service,
compensation,

                                      11-4
<PAGE>
dates of death or Disability,  leaves of absence,  and termination of employment
by resignation,  death, Disability,  or retirement,  to the extent that the same
may be  necessary  for the Trustee to perform its duties  under the terms of the
Plan.  The  Trustee is hereby  authorized  to act solely  upon the basis of such
notification and facts received from the Advisory Committee.

     11.09 ACTIONS  CONCLUSIVE.  Any exercise by the Trustee of its  discretion,
vested in it either  expressly or by  implication  pursuant to the provisions of
the Plan,  shall,  except as may otherwise be determined by a court of competent
jurisdiction,  be conclusive and binding upon all persons directly or indirectly
affected,  without  restricting,  however, the Trustee's right to reconsider and
redetermine its actions.

     11.10 BOND NOT REQUIRED. The Trustee shall not be required to give bond for
the faithful  performance  of its duties  hereunder,  except as may otherwise be
provided by law.

     11.11 UNIFORM  ACCOUNTING  ACT. The Trustee is relieved of all duties which
it might  otherwise have by virtue of the Uniform  Trustees'  Accounting Act, as
amended, or any similar act.

     11.12 MULTIPLE TRUST FUNDS. If the assets of the Plan are held in more than
one trust fund, the Trustee shall not be liable except with respect to the trust
fund or funds of which it is trustee.

     11.13 TRUSTEE ENTITLED TO CONSULTATION.  With the exception of those powers
and duties  specifically  allocated  to the Trustee by the express  terms of the
Plan, it shall not be the  responsibility  of the Trustee to interpret the terms
of the Plan, and the Trustee may request,  and is entitled to receive,  guidance
and written  direction from the Advisory  Committee on any matter  requiring the
construction or interpretation of the Plan documents.

     11.14 TAXES  CHARGEABLE TO ACCOUNTS.  If the whole or any part of the Trust
shall become liable for the payment of any estate, inheritance, income, or other
tax which the  Trustee  shall be required  to pay,  the Trustee  shall have full
power and  authority to pay such tax out of any monies or other  property in its
control for the account of the  Participant  or other  person in whose  interest
such payment is made. Prior to making any such payment,  the Trustee may require
such releases or other  documents  from any lawful taxing  authority as it deems
necessary.  The Trustee  shall not be liable for any  nonpayment  of tax when it
distributes  an interest  under this Plan upon the  instruction  of the Advisory
Committee.

     11.15 RECORDS AND ACCOUNTS.  The Trustee shall keep a full,  accurate,  and
detailed record of all  transactions  of the Trust which the Advisory  Committee
may examine at any time during the Trustee's  regular business hours. As soon as
practicable  following  the later of (a) the end of each Plan  Year,  or (b) the
filing by

                                      11-5
<PAGE>
the  Employer  of its  federal  income  tax  return  for such  Plan Year (or the
corresponding  taxable  year of the  Employer) , the Trustee  shall  furnish the
Advisory Committee with a statement of account. This account shall set forth all
receipts,  disbursements,  and other transactions effected by the Trustee during
the Plan Year.  The  Advisory  Committee  shall  promptly  notify the Trustee in
writing of its  approval  or  disapproval  of such  statement  of  account.  The
Advisory  Committee's  failure to disapprove  the account within sixty (60) days
after  receipt  shall be  considered  an approval.  The approval by the Advisory
Committee shall be binding as to all matters disclosed in any statement,  to the
same extent as if the  accounting  of the Trustee had been settled by a judgment
or decree of a court of competent jurisdiction under which the Trustee, Advisory
Committee,  Employer,  and all persons  having or claiming  any  interest in the
Trust were parties; provided,  however, that the Trustee may have its accounting
judicially settled if it so desires.

     11.16 DISPUTES. If at any time there shall be a dispute as to the person to
whom payment or delivery of moneys or property should be made by the Trustee, or
regarding  any action to be taken by the Trustee,  the Trustee may postpone such
payment,  delivery,  or action,  retaining the funds or property  involved until
such dispute  shall have been resolved by a court of competent  jurisdiction  or
until the Trustee shall have been indemnified to its reasonable  satisfaction or
shall have received a written direction from the Advisory Committee.

     11.17  LIMITATION  ON  LIABILITY.  The Employer  shall  indemnify  and hold
harmless the Trustee of and from any liability,  loss,  cost, or expense arising
from or in any way connected with its acting upon the directions of the Advisory
Committee or the Plan Administrator or failing to act because of the lack of any
direction from the Advisory Committee or the Plan Administrator.

     11.18 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR TRUSTEE.

          (a) The Trustee may resign at any time by delivering to the Employer a
written notice of its resignation,  to take effect at a date specified  therein,
which shall not be less than ten (10) days after the  delivery  thereof,  unless
notice is waived.  The Trustee  may be removed by the  Employer by delivery of a
written  notice of such  removal,  to take effect at a date  specified  therein,
which shall not be less than ten (10) days after delivery thereof, unless notice
is waived.

          (b) Upon the resignation or removal of the Trustee,  the Trustee shall
have the right to a settlement of its account,  which may be made, at the option
of the Trustee, either (i) by judicial settlement in an action instituted by the
Trustee in a court of  competent  jurisdiction,  or (ii)  pursuant  to a written
settlement  agreement between the Trustee and the Employer.  Upon the settlement
of its account, all right, title, and interest of the

                                      11-6
<PAGE>
Trustee in the assets of the Trust Fund, and all rights,  privileges, and duties
under the Plan  theretofore  vested in the Trustee,  shall vest in the successor
Trustee, and all future liability of the Trustee shall terminate.

          (c) The Employer,  upon receipt of a notice of the  resignation of the
Trustee,  or upon  its  removal  of the  Trustee,  shall  promptly  designate  a
successor  trustee,  whose  appointment is subject to its written  acceptance of
this Plan and Trust.

          (d) Reference in this instrument to the term "Trustee" shall be deemed
to include not only the  original  Trustee,  but also any  successor  trustee or
co-trustees,  and each successor trustee shall, without the necessity of any act
of  transfer or action by any court,  become  vested with title to the assets of
the Trust Fund and have all the same powers and obligations as if such successor
were the original Trustee.

     11.19 MULTIPLE TRUSTEES.  If the assets of the Plan are at any time held by
two or more trustees:

          (a) Each  shall  use  reasonable  care to  prevent a  co-trustee  from
committing a breach of fiduciary responsibilities; and

          (b) They  shall  jointly  manage  and  control  the assets of the Plan
subject to the approval of the Advisory Committee (or of an Investment  Manager,
if approved by the Employer) as provided in this Plan,  except that the trustees
are  expressly  permitted  to  enter  into  an  agreement   allocating  specific
responsibilities,  obligations,  or  duties  among  trustees,  in which  event a
trustee to whom certain responsibilities,  obligations,  or duties have not been
allocated  shall  not  be  liable  by  reason  of  this  Section  11.19,  either
individually  or in its capacity as trustee,  for any loss resulting to the Plan
arising from the acts or  omissions on the part of another  trustee to whom such
responsibilities, obligations, or duties have been specifically allocated.

          (c) In the event  that any  Trustee is unable or refuses to accept his
or its appointment as Trustee, or having accepted,  ceases to act as Trustee for
any reason,  including,  but not limited to, disability,  death, or any legal or
other incapacity, the surviving or remaining Trustee(s) shall perform all of the
functions  of Trustee  and  succeed  to all  powers,  duties  and  discretionary
authority given to the Trustees jointly.

     11.20 ACTIONS AGAINST  TRUSTEE.  No person or  organization  other than the
Employer, whether having an interest in the Trust Fund or otherwise, may require
an accounting or bring any action  against the Trustee with respect to the Trust
Fund or any actions of the Trustee with respect to the same.

                                      11-7
<PAGE>

     12. FIDUCIARY RESPONSIBILITIES AND LIABILITIES

     12.01 FIDUCIARY RESPONSIBILITY. Every Fiduciary of the Plan shall discharge
his  duties  hereunder  solely in the  interest  of the  Participants  and their
Beneficiaries, and:

          (a) For the exclusive  purpose of providing  benefits to  Participants
and their Beneficiaries,  and for defraying reasonable expenses of administering
the Trust; and

          (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 like
character and with like aims; and

          (c) By  diversifying  its  investments  of  the  Trust  Fund  so as to
minimize the risk of large losses,  unless under the circumstances it is clearly
prudent not to do so.

          However, if any Participant shall exercise control over his account as
provided in Section 9 of the Plan:

          (d) Such Participant shall not be deemed to be a Fiduciary of the Plan
by reason of such exercise,  and shall not be subject to the standard of conduct
described in this Section 12.01; and

          (e) No person who is otherwise a Fiduciary of the Plan shall be liable
for any loss, or by reason of any breach,  which results from the  Participant's
exercise of control.

          Liability  under the terms of this Plan for a breach of fiduciary duty
shall be limited  to the  period of time  during  which the  Fiduciary  actually
serves in such capacity with respect to this Plan.

     12.02 PROHIBITED TRANSACTIONS.  No Fiduciary with respect to the Plan shall
engage in any prohibited transaction,  as defined in Section 4975 of the Code or
Section 406 of ERISA. No investment  shall be made or directed which would cause
(a) a loss of qualification of the Plan under the provisions of the Code; or (b)
a loss of the  deductibility  of the Employer's  contributions to the Plan under
the provisions of the Code; or (c) a Participant to become liable for income tax
under the provisions of the Code, prior to the distribution of the Participant's
interest  in his  account  (except  with  respect  to the  purchase  of  certain
insurance  contracts  as provided by the Code) ; or (d) a loss of the income tax
exemption with respect to the Trust Fund under the provisions of the Code.

     12.03  LIMITATION  OF  LIABILITY;  INDEMNIFICATION.  In  addition to and in
furtherance of the limitations provided in Sections 10.06 and 11.19 of the Plan,
and to the extent permitted by applicable

                                      12-1
<PAGE>
law, the Employer shall  indemnify and hold harmless its Board of Directors (and
individual members), if any, the Trustee, the Advisory Committee (and individual
members), against and with respect to any and all expenses, losses, liabilities,
costs,  and claims,  including legal fees to defend against such liabilities and
claims,  arising out of their good-faith discharge of responsibilities  under or
incident to the Plan,  excepting  only expenses and  liabilities  resulting from
willful  misconduct.  This indemnity shall not preclude such further indemnities
as may be  available  under  insurance  purchased  by the  Employer or as may be
provided by the Employer under any by-law,  agreement,  vote of  shareholders or
disinterested  directors,  or otherwise, as such indemnities are permitted under
state law.  Payments  with respect to any  indemnity  and payment of expenses or
fees under this  Section  12.03 shall be made only from assets of the  Employer,
and shall not be made directly or indirectly from assets of the Trust Fund.

     12.04 BENEFITS  PAYABLE SOLELY FROM TRUST FUND. All benefits  payable under
this Plan shall be paid or  provided  for solely  from the Trust  Fund,  and the
Employer assumes no liability or responsibility therefor.

                                      12-2
<PAGE>
     13. PARTICIPANTS' RIGHTS AND LIMITATIONS

     13.01 DISMISSAL.  Neither the adoption of the Plan by the Employer, nor any
action taken by the Employer, the Advisory Committee,  or the Trustee, under the
provisions of the Plan,  shall be construed to give any Employee the right to be
retained in the Employer's employ or any right to any payment whatsoever, except
to the extent of the  benefits  to which he is  entitled  under the terms of the
Plan.  The Employer  expressly  reserves the right,  at any time, to dismiss any
Employee, without any liability for any claim either against the Employer or the
Trust Fund for any payment  whatsoever (except to the extent provided for in the
Plan).

     13.02 ALIENATION.

          (a) No benefit  which  shall be  payable  out of the Trust Fund to any
person  (including a  Participant  or his  Beneficiary)  shall be subject in any
manner  to  anticipation,   alienation,  sale,  transfer,   assignment,  pledge,
encumbrance, or charge, and any attempt to anticipate, alienate, sell, transfer,
assign, pledge,  encumber, or charge the same shall be void; and no such benefit
shall in any  manner be  liable  for,  or  subject  to,  the  debts,  contracts,
liabilities,  engagements,  or torts of any such person, nor shall it be subject
to attachment  or legal  process for or against such person,  and the same shall
not be  recognized  by the Trustee,  except to such extent as may be required by
law. The preceding  sentence  shall also apply to the creation,  assignment,  or
recognition  of a right to any benefit  payable  with  respect to a  Participant
pursuant to a domestic relations order,  unless such order is determined to be a
"qualified  domestic relations order", as defined in Section 414(p) of the Code,
or any domestic relations order entered before January 1, 1985.

          (b) This prohibition  against alienation shall not apply to the extent
a Participant or Beneficiary is indebted to the Plan, for any reason,  under any
provision of this Plan, and at the time a  distribution  is to be made to or for
his  benefit,  such  proportion  of the amount  distributed  as shall equal such
indebtedness  shall be paid by the Trustee to the Trustee,  to apply  against or
discharge such indebtedness. Prior to making a payment, however, the Participant
or  Beneficiary  must be given  written  notice by the  Administrator  that such
indebtedness is to be deducted in whole or part from his  Participant's  Accrued
Benefit.  If the Participant or Beneficiary does not agree that the indebtedness
is a valid claim against his vested  Participant's  Accrued Benefit, he shall be
entitled to a review of the validity of the claim in accordance  with procedures
provided in Section 13.05 of the Plan.

          (c)  Notwithstanding  any provision in this Section 13.02, if the Plan
Administrator  receives a domestic  relations  order  issued  pursuant  to State
domestic relations law with respect to a Participant; and the Plan Administrator
determines that such is a Qualified Domestic Relations Order which complies with
the requirements of Section 206(d)(3) of ERISA, then the payment to an

                                      13-1
<PAGE>
alternate  payee  named in the  Qualified  Domestic  Relations  Order  shall not
violate the prohibition against alienation provided for in this Section.

     13.03  DISTRIBUTIONS  TO PERSONS UNDER LEGAL  DISABILITY.  Distributions to
minors or persons under legal disability may be made by the Trustee either:

          (a) Directly to said persons, or

          (b) To the legal guardians or conservators of said persons.

     The Trustee  shall not be required  to see to the  application  of any such
distributions so made to any of said persons, but his or their receipt therefore
shall fully discharge the Trustee from any liability with respect to the same.

     13.04  PROCEDURE  WHEN  TRUSTEE  IS  UNABLE  TO  LOCATE  DISTRIBUTEE.   Any
communication,  statement,  benefit  distribution,  or  notice  addressed  to  a
Participant  or Beneficiary at his last known post office address filed with the
Employer  and/or the Advisory  Committee  shall be binding on the Participant or
Beneficiary  for all  purposes  under  the  Plan.  The  Employer,  the  Advisory
Committee,  and the  Trustee  shall not be  required to search for or locate any
Participant or Beneficiary under the Plan. If the Advisory  Committee notifies a
Participant  or  Beneficiary  that he is  entitled to a  distribution,  and also
notifies him of the provisions of this Section 13.04, and if such Participant or
Beneficiary  fails to claim his benefits under the Plan or make his  whereabouts
known within five (5) calendar years after such notification,  the Participant's
or Beneficiary's benefits under the Plan shall be reallocated in the same manner
as a Forfeiture  under Section 5.05 of this Plan. In the event such  Participant
or Beneficiary subsequently makes a claim for his benefit, such benefit shall be
restored,  unadjusted  for  any  gains  or  losses  subsequent  to the  date  of
Forfeiture.

     The Advisory  Committee shall make the restoration  during the Plan Year in
which the Participant or Beneficiary makes the claim, from the following sources
(in order of priority): (a) first, Participant Forfeitures which would otherwise
be allocated for the Plan Year; (b) next.  Trust Fund net income or gain for the
Plan Year; and (c) finally, the amount, or additional amount, the Employer shall
contribute to make the required restoration. The Advisory Committee shall direct
the Trustee to distribute the  Participant's or  Beneficiary's  restored Accrued
Benefit not later than sixty (60) days after the close of the Plan Year in which
the Advisory  Committee  restores the forfeited Accrued Benefit.  The forfeiture
provisions  of this Section  shall apply solely to the  Participant's  or to the
Beneficiary's Accrued Benefit derived from Employer Contributions.

                                      13-2
<PAGE>
     13.05   CLAIMS   PROCEDURE.   The   Advisory   Committee   shall  make  all
determinations as to the right of any person to benefits. Any Advisory Committee
denial of a claim by a Participant or a Beneficiary  for benefits under the Plan
shall be stated in writing by the Advisory  Committee  and shall be delivered or
mailed to the  Participant or Beneficiary  within sixty (60) days of the receipt
of the Participant's or Beneficiary's  written claim by the Advisory  Committee.
Such  notice of denial  shall set forth the  specific  reasons  for the  denial,
written to the best of the Advisory  Committee's ability in a manner that may be
understood by the Participant or Beneficiary without legal or actuarial counsel,
and shall also set forth procedures, if appropriate, for resubmitting the denied
claim. In the event that a Participant or Beneficiary  should wish to appeal the
final decision of the Advisory Committee,  such Participant or Beneficiary shall
file a written appeal with the Plan Administrator within sixty (60) days of such
Participant's  receipt of the Advisory  Committee's  written decision.  The Plan
Administrator's  decision, in writing,  shall be delivered to the Participant or
Beneficiary  within sixty (60) days after  the-Plan  Administrator  receives the
Participant's  or  Beneficiary's  written  appeal.  Except as  provided  in this
Section  13.05,  and to the extent  permitted  by law,  the decision of the Plan
Administrator shall be final and binding upon all persons.

     In the event that a Participant or Beneficiary should desire to contest the
final decision of the Plan  Administrator,  the  Participant or Beneficiary  may
file a  written  request  for  arbitration  with the Plan  Administrator  within
fifteen  (15) days  after the  written  decision  of the Plan  Administrator  is
received by the Participant or  Beneficiary.  The Participant or Beneficiary and
the Plan  Administrator  shall each name an  arbitrator  within twenty (20) days
after the Plan Administrator receives a request for arbitration, and the two (2)
arbitrators  shall  jointly  name a third  arbitrator.  If either party fails to
select an  arbitrator  within  the  twenty  (20) day  period,  or if the two (2)
arbitrators  fail to select a third  arbitrator  within  fifteen (15) days after
their  appointment,  then  the  Presiding  Judge  of the  county  court  (or its
equivalent)  in the  county in which the  principal  office of the  Employer  is
located shall  appoint such other  arbitrator or  arbitrators.  The  arbitrators
shall render a decision within sixty (60) days after their appointment and shall
conduct  all  proceedings  pursuant  to the  laws  of the  state  in  which  the
Employer's  principal place of business is located and the then current Rules of
the American Arbitration Association governing commercial  transactions,  to the
extent that such rules are not inconsistent  with applicable state law. The cost
of the  arbitration  procedure  shall be borne by the  losing  party  or, if the
decision is not  clearly in favor of one party or the other,  then in the manner
determined by the  arbitrators.  The  arbitration  proceeding  set forth in this
Section  13.05  shall be the sole  and  exclusive  remedy  of a  Participant  or
Beneficiary  to  appeal  a  decision  of the  Advisory  Committee  and the  Plan
Administrator under this Plan.

                                      13-3
<PAGE>
     13.06  PORTABILITY.  If a Participant  who is entitled to receive  benefits
under this Plan is subsequently  employed by another  employer which maintains a
tax-qualified  employee pension benefit plan, the Advisory Committee may, in its
sole discretion applied in a uniform and consistent  manner,  direct the Trustee
to transfer the Participant's  vested interest under this Plan to the trustee of
the Plan of the Participant's new employer, if:

          (a) The  trustee  of such  other  plan is  authorized  to  accept  the
transfer of benefits from this Plan;

          (b) The  Participant's  transferred  assets are to be  maintained in a
separate account in the other plan;

          (c) The  Participant's  transferred  assets will not be forfeitable or
reduce in any way the  obligation  of the new employer with respect to its plan,
and

          (d) The transfer does not violate Section 411(d)(6) of the Code.

     13.07  EMPLOYER AND TRUSTEE ONLY NECESSARY  PARTIES TO  LITIGATION.  In any
application  to or  proceeding  or action in any court  pertaining to this Plan,
only the Employer and the Trustee shall be necessary partiean inteno Participant
or any other  person  having or  claiming  an interest in the Trust Fund need be
made a party  to or  shall  be  entitled  to any  notice  of  such  application,
proceeding,  action, or service of process in connection therewith. Any judgment
entered  into in any such  proceeding  or action  shall be  conclusive  upon all
persons claiming any rights under the Plan.

     13.08 EXECUTION OF RECEIPTS AND RELEASES. Any payment to any Participant or
Beneficiary  made, in accordance  with the provisions of the Plan shall,  to the
extent  thereof,  be in full  satisfaction of all claims  hereunder  against the
Plan,  and the Advisory  Committee or Trustee may require  such  Participant  or
Beneficiary,  as a condition precedent to such payment, to execute a receipt and
release  therefore  in such form as the  Advisory  Committee  or  Trustee  shall
determine.

                                      13-4
<PAGE>
     14. AMENDMENT AND TERMINATION

     14.01  AMENDMENT OF PLAN.  The  Employer may at any time,  and from time to
tine, amend the Plan in whole or in part (either prospectively or retroactively)
by  delivering  to the Trustee a written  copy of such  amendment  signed by the
Employer and approved by the Employer's Board of Directors;  provided,  however,
that:

          (a) The  Employer  shall  have no power  to  amend  the Plan in such a
manner as would  cause or permit  any part of the assets of the Trust Fund to be
diverted to purposes  other than for the exclusive  benefit of  Participants  or
their  Beneficiaries,  or as would cause or permit any portion of such assets to
revert to or become the property of the Employer.

          (b)  The  Employer  shall  not  have  the  right  to  amend  the  Plan
retroactively  in such a manner as to deprive any  Participant or Beneficiary of
any benefit to which he was entitled  under the Plan by reason of  contributions
made by the Employer prior to the amendment,  unless such amendment is necessary
to conform  the Plan to, or satisfy  the  conditions  of, any law,  governmental
regulation,  or  ruling,  and to  permit  the Plan to meet the  requirements  of
Sections 401 and 501 of the Code.

          (c) No amendment to the vesting  schedule  shall deprive a Participant
of his  nonforfeitable  rights to benefits accrued to the date of the amendment.
Further,  if the vesting  schedule is amended,  or if the Plan is amended in any
way that  directly or  indirectly  affects the  computation  of a  Participant's
nonforfeitable  percentage,  each  Participant  with at least three (3) Years of
Service  may  elect,  within a  reasonable  period  after  the  adoption  of the
amendment, to have his nonforfeitable percentage computed under the Plan without
regard to such amendment. The period during which the election may be made shall
commence with the date the amendment is adopted and shall end on the later of:

               (i)   Sixty (60) days after the amendment is adopted;

               (ii)  Sixty (60) days after the amendment becomes effective; or

               (iii) Sixty  (60) days  after the  Participant is issued  written
                     notice   of  the   amendment   by  the  Employer   or  Plan
                     Administrator.

          (d) No amendment  shall increase the duties of the Trustee without its
written consent.

          (e) The  Employer  shall  not  have the  right  to  amend  the Plan to
eliminate any optional form of distribution.

                                      14-1
<PAGE>
          (f) No  amendment to the Plan shall be effective to the extent that it
has the effect of decreasing a Participant's  Accrued  Benefit.  Notwithstanding
the preceding  sentence,  a Participant's  account balance may be reduced to the
extent  permitted  under  Section  412(C)(8)  of the Code.  For purposes of this
paragraph,  a Plan amendment  which has the effect of decreasing a Participant's
account  balance or  eliminating  an optional  form of benefit,  with respect to
benefits  attributable  to  service  before  the  amendment  shall be treated as
reducing an Accrued Benefit.

          Notwithstanding the foregoing limitations,  the Plan may be amended at
any time to conform with the Internal  Revenue  Code and ERISA,  and  applicable
rules, regulations, and procedures of federal and state law.

     14.02  TERMINATION OF THE PLAN. The Employer has  established the Plan with
the bona fide intention and expectation  that it will make  Contributions to the
Plan indefinitely, but the Employer is not and shall not be under any obligation
or liability  whatsoever to continue its  Contributions  or to maintain the Plan
for any  given  length  of time and may,  in its sole and  absolute  discretion,
discontinue  such  Contributions  or terminate  the Plan at any time without any
liability whatsoever for such discontinuance or termination. In the event of any
termination or partial termination of the Plan, or of a complete  discontinuance
of  Contributions   hereunder,   all  of  the  affected  Participants  or  their
Beneficiaries   shall  be  fully  vested  in  their  accounts  at  the  date  of
termination,  partial termination,  or discontinuance.  The Plan shall terminate
upon the occurrence of any of the following events:

          (a) Delivery to the Trustee of a notice of termination executed by the
Employer, specifying the date as of which the Plan shall terminate; or

          (b) Adjudication of the Employer as a bankrupt,  general assignment by
the Employer to or for the benefit of creditors, or dissolution of the Employer,
written notice of which shall be given promptly by the Employer to the Trustee.

     14.03 PROCEDURE UPON TERMINATION OF THE PLAN.  Unless the Employer provides
by  amendment  for  the   liquidation  of  the  Trust  Fund  and  the  immediate
distribution  of all assets,  the  termination of the Plan shall in no way alter
the time and manner of payment  provided  under Article 6 of the Plan. The Trust
shall  continue  until all the  assets of the Trust  Fund have been  distributed
pursuant to the terms of the Plan.

     14.04 CONSOLIDATION.  MERGER,  DIVISION OR SALE. Nothing in this Plan shall
prevent the consolidation, merger, division, or sale of the Employer with, into,
or to any other  employer,  or prevent  the sale by the  Employer  of any of its
property.  A successor  corporate  employer  formed and resulting  from any such
consolidation, merger, division or purchase of the Employer or its

                                      14-2
<PAGE>
assets shall have the right to become a party to the Plan or any successor plan,
by adopting appropriate resolutions and by executing this Plan or an appropriate
amendment to this Plan. If within  ninety (90) days from the  effective  date of
such consolidation,  merger, division or sale of the Employer or its assets, the
new employer does not become a party to the Plan,  the Plan shall  automatically
be deemed terminated as of the date of such consolidation,  merger,  division or
sale.  In the case of any  merger or  consolidation  with,  or the  division  or
transfer of assets and liabilities to, any other tax-qualified  employee pension
benefit plan,  provisions  shall be made so that each Participant in the Plan on
the  relevant  date  will  receive  a  benefit  immediately  after  the  merger,
consolidation,  division  or  transfer  which is equal  to or  greater  than the
benefit he would have been entitled to receive  immediately prior to the merger,
consolidation, division or transfer if the Plan had then terminated.

     14.05  DISSOLUTION  OR  LIQUIDATION  OF  EMPLOYER.  In the  event  that the
Employer  is" legally  dissolved or  liquidated  by any  procedure  other than a
consolidation,  merger,  division or sale,  the Plan shall  terminate  as of the
effective date of such dissolution or liquidation.

     14.06 PREDECESSOR  PLAN. This Plan shall constitute a continuation,  and an
amendment and restatement, of a plan (the "predecessor plan") previously adopted
and  maintained  by the  Employer,  which also was a plan  intended  to meet the
requirements  of  Section  401  of the  Code.  Since  this  Plan  constitutes  a
continuation  of a predecessor  plan, each Employee who was a Participant in the
predecessor plan immediately prior to the applicable Effective Date of this Plan
will  continue  as a  Participant  in  this  Plan,  subject  to  its  terms  and
conditions.  Furthermore,  in the case of a Participant in the predecessor  plan
immediately   prior  to  the  Effective   Date  of  this  Plan,  the  vested  or
nonforfeitable  percentage of such Participant's  benefits under this Plan shall
in no event be less than the vested or  nonforfeitable  percentage  which he was
entitled  to  receive  under  such  predecessor  plan.  Upon such  Participant's
termination  of  employment  under this Plan,  he shall be entitled to receive a
vested or nonforfeitable percentage of his benefits under this Plan which is not
less than the vested or  nonforfeitable  percentage he would have received under
the predecessor plan had the vested provisions of such plan continued in effect.

                                      14-3
<PAGE>
     15. MISCELLANEOUS PROVISIONS

     15.01 REVERSION OF  CONTRIBUTIONS.  While it is intended that the assets of
the Plan shall never inure to the benefit of the  Employer and shall be held for
the  exclusive   purposes  of  providing  benefits  to  Participants  and  their
beneficiaries and defraying  reasonable  expenses of administering the Plan, the
Employer  reserves  the  right to  retrieve  Contributions  made  under  certain
conditions pursuant to Section 403(C) of ERISA, as follows:

          (a) A Contribution  made by a mistake of fact shall be returned to the
Employer within one (1) year after the payment of such Contribution.

          (b) A Contribution  which is conditioned on initial  qualification  of
the Plan under the Code shall be returned to the Company should the Plan fail to
qualify  within  one (1) year  after the date of  denial  of such  qualification
provided - the application for determination  relating to initial  qualification
is filed by the due date of the Employer's  return for the taxable year in which
the Plan is adopted.  Upon the return of such Contribution to the Employer,  the
Plan shall  terminate and the Trustee shall be discharged  from all  obligations
under the Trust.

          (c) A Contribution  which is conditioned on the current  deductibility
of the  Contribution  under  Section  404 of the Code shall be  returned  to the
Employer,  -to the extent that it is  disallowed,  within one (1) year after the
disallowance of the deduction.

          Earnings   attributable  to  such  Contributions   described  in  sub-
paragraphs  (a) and (c)  above may not be  returned  to the  Employer;  however,
losses attributable thereto must reduce the amount to be returned.

     15.02 RULE AGAINST PERPETUITIES.  This Plan shall continue until terminated
pursuant  to Article  14 of the Plan,  unless its  continuance  into  perpetuity
violates  any law of the  state  in  which  the  Employer's  principal  place of
business is located which limits the duration of trusts, if applicable, in which
case the  Plan  shall  terminate  upon the  death  of the last  survivor  of the
Employees  of the  Employer  who are living as of the date of  execution  of the
Plan.

     15.03 NOTICES. Any notices,  documents, or forms required to be given to or
filed with the Trustee  shall be delivered or mailed by  registered or certified
mail,  postage prepaid,  to the Trustee at its principal  business  office.  Any
notices,  documents, or forms required to be given to or filed with the Advisory
Committee or the Employer shall be delivered or shall be mailed by registered or
certified mail, postage prepaid, to the Employer's principal business office.

                                      15-1
<PAGE>
     15.04 TEXT TO PREVAIL OVER HEADINGS. The headings appearing in the Plan are
included  solely for  convenience of reference,  and do not constitute a part of
the Plan.

     15.05 APPLICABLE LAW. Except where otherwise  preempted by federal law, all
legal  questions  pertaining to the Plan shall be determined in accordance  with
the  procedural  and  substantive  laws of the  state  in which  the  Employer's
principal  place of  business is located and all  contributions  made  hereunder
shall be deemed to have been made in such state.

     15.06   COUNTERPARTS.   This   instrument   may  be   executed  in  several
counterparts,  each of which shall be deemed an original,  and said counterparts
shall  constitute  but one and the same  instrument,  which may be  sufficiently
evidenced by any one counterpart.

     15.07  BINDING  UPON  SUCCESSORS.  ETC.  The Plan shall be binding upon all
Participants and their Beneficiaries, heirs, executors, and administrators, upon
the  Employer  and its  successors  and  assigns,  and upon the  Trustee and its
successors.

     15.08 COPIES OF PLAN. A copy of this instrument shall be made available for
inspection by any Participant or other  interested party at the principal office
of the Employer, during its normal business hours.

     15.09  GENDER AND NUMBER.  The  masculine  gender,  where it appears in the
Plan, shall be deemed to include the feminine gender, unless the context clearly
indicates to the contrary. The words "hereof", "herein",  "hereunder", and other
similar  compounds  of the word "here"  shall mean and refer to the entire Plan,
and not to any particular provision of the Plan.

                                      15-2
<PAGE>
     16. RELATED OR OTHER EMPLOYERS

     16.01  ADOPTION BY RELATED OR OTHER  EMPLOYERS.  Any other  corporation  or
entity,  whether  related or not,  may adopt  this Plan with the  consent of the
Employer, and be known as an Adopting Employer by properly executing an adoption
agreement or amendment and resolutions with respect to the same.

     16.02 REQUIREMENTS OF ADOPTING EMPLOYERS.

          (a) Each such  Adopting  Employer  shall be  required  to use the same
Trustee as provided in this Plan.

          (b) The Trustee may, but shall not be required to, commingle, hold and
invest as one Trust Fund all contributions made by Adopting Employers.  However,
the assets of the Plan shall,  on an ongoing basis, be available to pay benefits
to all  Participants  and  Beneficiaries  under the Plan  without  regard to the
Employer or Adopting Employer who contributed such assets. -

          (c) The transfer of any Participant from or to any Adopting  Employer,
whether he be an Employee of the Employer or an Employer,  shall not affect such
Participant's  rights under the Plan, and his service with and Compensation from
each Employer shall be used for purposes of determining benefits under the Plan.

          (d) Unless  otherwise  agreed by the  parties,  or required by law, no
Employer shall have any obligation to make  contributions to this Plan for or on
behalf of the  Employees  of any other  Employer.  If an Employee is employed by
more than one Employer, any contribution made to the Plan on his behalf shall be
prorated  between  the  Employers  on the basis of his  Compensation  from each.
Notwithstanding the foregoing, in the event any such Employer shall be unable to
make a  contribution  for any  Plan  Year,  any  Related  Employer  may  make an
additional  contribution on behalf of any Employee of a noncontributing  Related
Employer.

          (e) Amendment of this Plan by the Employer at any time shall be deemed
accepted by the Adopting Employer.

     16.03  DESIGNATION OF AGENT. Each Adopting Employer shall be deemed to be a
part of this Plan; provided,  however, that with respect to all of its relations
with the  Trustee  and Plan  Administrator  for the  purpose of this Plan,  each
Adopting Employer shall be deemed to have designated irrevocably the Employer as
its agent.  Unless the context of the Plan clearly  indicates the contrary,  the
word "Employer"  shall be deemed to include each Adopting  Employer  pursuant to
its adoption of the Plan.

     16.04 PLAN  ADMINISTRATOR'S  AUTHORITY.  The Plan Administrator  shall have
authority to make any and all necessary rules or  regulations,  binding upon all
Adopting  Employers  and all  Participants,  to  effectuate  the purpose of this
Article.

                                      16-1
<PAGE>
     IN WITNESS WHEREOF,  INTER-TEL,  INCORPORATED,  an Arizona corporation,  as
Employer, and STEVEN G. MIHAYLO, RALPH MARSH, and N. THOMAS PEIFFER, as Trustee,
have caused this Plan to be signed by their duly qualified officers respectively
authorized to do so the day, month, and year first above written.

                                        INTER-TEL, INCORPORATED, an
                                        Arizona corporation

                                        /s/ Steven G. Mihaylo
                                        ----------------------------------------
                                        Steven G. Mihaylo, President "Employer"

ATTEST:

/s/ Ralph Marsh
------------------------------------
Ralph Marsh, Secretary

                                        /s/ Steven G. Mihaylo
                                        ----------------------------------------
                                        Steven G. Mihaylo

                                        /s/ Ralph Marsh
                                        ----------------------------------------
                                        Ralph Marsh

                                        /s/ N. Thomas Peiffer
                                        ----------------------------------------
                                        N. Thomas Peiffer

                                                                       "Trustee"
<PAGE>
                             FIRST AMENDMENT TO THE
                              AMENDED AND RESTATED
              INTER-TEL. INCORPORATED TAX DEFERRED SAVINGS PLAN AND
                           RETIREMENT TRUST AGREEMENT

     THIS  AMENDMENT,  made and  entered  into this 2nd day of March,  1994,  by
INTER-TEL,  INCORPORATED, an Arizona corporation (hereinafter referred to as the
"Employer"),  and  JEFFREY  T.  FORD,  RALPH  MARSH and N.  THOMAS  PIEFFER,  as
Trustee(s) (hereinafter collectively referred to as "Trustee").

                              W I T N E S S E T H:

     WHEREAS,  the  Employer  and the Trustee  have  heretofore  entered into an
employees'  plan  effective  December 1, 1984, as amended,  and an Amendment and
Restatement  thereof  dated  December 15, 1990,  effective  January 1, 1989 (the
"Plan"); and

     WHEREAS, the Employer has reserved the right to amend said Plan in whole or
in part; and

     WHEREAS,  the  Employer  now desires to amend said Plan to include  certain
401(k) final regulations.

     WHEREAS,  the  Employer now desires to amend said Plan to include the Model
Amendment  provided in IRS Rev.  Proc.  93-12  regarding the new rollover  rules
under Section 401(a)(31) of the Internal Revenue Code.

     WHEREAS,  the  Employer now desires to amend said Plan to include the Model
Amendment  provided in Rev. Proc.  93-47  regarding  waiving the thirty (30) day
notice requirement for certain distributions.

     WHEREAS,  the Employer  also desires to amend the Plan to include the Model
Amendment provided in Rev. Proc. 94-13 regarding the new compensation limit.
<PAGE>
     NOW,  THEREFORE,  in  consideration  of the  foregoing  premises and mutual
covenants  hereinafter  contained,  the  Employer  and Trustee  hereby  agree as
follows:

     1. Section 2.05 of the Plan is hereby amended by adding the following
thereto:

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

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

          If  Compensation  for any prior  determination  period  is taken  into
account in determining an Employee's benefits accruing in the current Plan Year,
the Compensation for that prior determination  period is subject to the OBRA `93
annual  compensation  limit in effect for that prior  determination  period. For
this purpose,  for  determination  periods beginning before the first day of the
first Plan Year  beginning  on or after  January  1,  1994,  the OBRA `93 annual
compensation limit is $150,000."

     2. Effective January 1, 1994, the first sentence of Section 4.01 (a) of the
Plan is hereby amended to read as follows:

          "Each  Participant  may  elect  to  defer  a  portion  of his  pre-tax
Compensation  for each Plan  Year,  as an  Elective  Deferral,  in an amount not
greater  than  fifteen  percent  (15%)  nor less  than one  percent  (1%) of his
Compensation."

     3.  Section  4.01(b)(ii)  of the Plan is hereby  amended in its entirety to
read as follows:

              "(ii) Excess  Elective  Deferrals shall be adjusted for any income
                    or loss up to the date of  distribution  in accordance  with
                    Section 5.04 of the Plan."

                                      -2-
<PAGE>
     4.  Section  4.01(C)(iii)(B)(2)  of the Plan is hereby  amended  to read as
follows:

          "(2) the  Employee's   Compensation   for  the  Plan  Year,   while  a
               Participant in the Plan."

     5. The last sentence of the first  paragraph of Section 4.01(d) of the Plan
is hereby amended to read as follows:

          "In addition,  Excess Contributions of Participants who are subject to
the family member  aggregation  rules of Section  414(q)(6) of the Code shall be
allocated among the family members in proportion to the Elective  Deferrals (and
amounts treated as Elective Deferrals) of each family member that is combined to
determine the combined ADP."

     6. Section 4.04(b) of the Plan is hereby amended by amending and adding the
following paragraphs thereto:

         (vii) Multiple  Use:  If  one  or  more  Highly  Compensated  Employees
               participate in both a cash or deferred arrangement (`CODA') and a
               plan subject to the Average  Contribution  Percentage  (ACP) test
               maintained  by the  Employer  and  the  sum of the ADP and ACP of
               those  Highly  Compensated  Employees  subject  to either or both
               tests exceeds the Aggregate Limit, then, at the discretion of the
               Advisory Committee, either the ACP and/or the ADP of those Highly
               Compensated  Employees  who also  participate  in a CODA  will be
               reduced  (beginning with such Highly  Compensated  Employee whose
               ACP or ADP is  highest)  so that the limit is not  exceeded.  The
               amount by which each Highly Compensated  Employee's  Contribution
               Percentage  Amounts  is  reduced  shall be  treated  as an Excess
               Aggregate Contribution. The ADP and ACP of the Highly Compensated
               Employees are determined  after any corrections  required to meet
               the ADP and ACP  tests.  Multiple  use does not occur if both the
               ADP and ACP of the Highly  Compensated  Employees does not exceed
               1.25  multiplied by the ADP and ACP of the Nonhighly  Compensated
               Employees.

        (viii) For  purposes  of  determining  the  Contribution  Percentage,  a
               Matching    Contribution    (including   a   Qualified   Matching
               Contribution,  if  any)  that  is  forfeited  to  correct  Excess
               Aggregate Contributions,  or because the contribution to which it
               relates is treated as an Excess Contribution, Excess Deferral, or
               Excess Aggregate Contribution, is not taken into account."

                                      -3-
<PAGE>
     7. The second  sentence of Section 4.04(d) of the Plan is hereby amended to
read as follows:

               "Excess  Aggregate  Contributions of Participants who are subject
          to the family member aggregation rules of Section  414(q)(6)(B) of the
          Code shall be allocated  among the family members in proportion to the
          Employee and Matching  Contributions  (or amounts  treated as Matching
          Contributions) of each family member that is combined to determine the
          combined ACP."

     8. Effective January 1, 1994, Section 6.02 of the Plan is hereby amended to
read as follows:

               "6.02  FORFEITURES.  That portion of the  Participant's  Employer
          account which is not fully vested in the Participant, if any, pursuant
          to Section  6.01 of the Plan,  shall be a  `Forfeiture',  and shall be
          applied in accordance  with the provisions of Section 5.05 of the Plan
          on the earlier of:

               (a) the distribution of the  Participant's  entire vested account
          balance upon his termination of employment with the Employer, or

               (b) the last day of the Plan Year in which the Participant incurs
          five consecutive One Year Breaks in Service."

     9. The first paragraph of Section 6.03 (a) of the Plan is hereby amended to
read as follows:

               "Within the time  periods  specified in Section 6.04 of the Plan,
          and  after a  Participant's  (i)  retirement  on or after  the  Normal
          Retirement Date, (ii) death,  (iii) termination of employment with the
          Employer,  or (iv)  termination of employment  due to Disability,  the
          Participant's  vested  interest  in his  accounts  shall be valued and
          adjusted as of the most recent periodic  valuation date (as defined in
          Section 5.04 of the Plan) to reflect the  changes,  if any, in the net
          fair market value of the Trust Fund,  and shall then be distributed to
          the Participant or, in the event of his death, to his Beneficiary,  by
          any of the following methods:"

     10. Effective January 1, 1994, Section 6.04(C)of the Plan is hereby amended
by adding the following paragraph thereto:

               "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 thirty  (30) days after the notice  required  under  Section
          1.411(a)-11(c) of the Income Tax Regulations is given, provided that:

                                      -4-
<PAGE>
               (1) the Plan  Administrator  clearly informs the Participant that
          the  Participant  has a right to a period of at least thirty (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. "

     11. The first sentence of Section  6.07(b) of the Plan is hereby amended to
read as follows:

               "(a) During the thirty (30) day period immediately  preceding the
     last day of any Plan Year,  or  otherwise  with the consent of the Advisory
     Committee,  a Participant  may withdraw an amount not exceeding the balance
     in his rollover/transfer account, if any."

     12. Article 6 of the Plan is hereby amended by adding the following Section
6.11 thereto:

     "6.11 ELIGIBLE ROLLOVER DISTRIBUTIONS.

          (a) This Section applies to distributions  made on or after January 1,
     1993.  Notwithstanding any provision of the Plan to the contrary that would
     otherwise limit a distributee's  election under this Article, a distributee
     may  elect,  at the  time  and in the  manner  prescribed  by the  Advisory
     Committee,  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.

               (i)  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; and
          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).

                                      -5-
<PAGE>
               (ii) 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.

               (iii) 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.

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

     13. Unless otherwise stated,  the Effective Date of this Amendment shall be
January 1, 1993.

     14. Effective  January 14, 1994, and pursuant to Section 11.18 of the Plan,
Steven G.  Mihaylo  is removed  as a Trustee  and  Jeffery T. Ford is added as a
Trustee.

     15. Except as hereinabove  amended,  all of the terms and conditions of the
Plan shall remain in full force and effect.

                                      -6-
<PAGE>
     IN WITNESS WHEREOF,  INTER-TEL,  INCORPORATED,  as Employer, and JEFFREY T.
FORD, RALPH MARSH and N. THOMAS PIEFFER, as Trustee, have signed or caused these
presents to be signed by their duly qualified officers  respectively  authorized
to do so the date first above written.

                                        INTER-TEL, INCORPORATED, an Arizona
                                        corporation

                                        /s/ Steven G. Mihaylo
                                        ----------------------------------------
                                        Steven G. Mihaylo, President "Employer"

ATTEST:

/s/ Ralph Marsh
------------------------------------
Ralph Marsh, Secretary

                                        /s/ Steven G. Mihaylo
                                        ----------------------------------------
                                        Steven G. Mihaylo

                                        /s/ Ralph Marsh
                                        ----------------------------------------
                                        Ralph Marsh

                                        /s/ N. Thomas Peiffer
                                        ----------------------------------------
                                        N. Thomas Peiffer

                                                                       "Trustee"

                                      -7-
<PAGE>
                             SECOND AMENDMENT TO THE
                              AMENDED AND RESTATED
                             INTER-TEL, INCORPORATED
            TAX DEFERRED SAVINGS PLAN AND RETIREMENT TRUST AGREEMENT

     THIS  AMENDMENT,  made and  entered  into  effective  April  12,  1995,  by
INTER-TEL,  INCORPORATED, an Arizona corporation (hereinafter referred to as the
"Employer"), and JEFFREY T. FORD, RALPH MARSH and N. THOMAS PEIFFER, as Trustees
(hereinafter collectively referred to as "Trustee").

                              W I T N E S S E T H:

     WHEREAS,  the  Employer  and the Trustee  have  heretofore  entered into an
employees'  plan  effective  December 1, 1984,  as  amended,  an  Amendment  and
Restatement  thereof  dated  December 15, 1990  effective  January 1, 1989 and a
First  Amendment  thereto  dated March 2, 1994 (the  "Plan");  and

     WHEREAS, the Employer has reserved the right to amend said Plan in whole or
in part; and

     WHEREAS, the Employer now desires to amend said Plan.

     NOW,  THEREFORE,  in  consideration  of the  foregoing  premises and mutual
covenants  hereinafter  contained,  the  Employer  and Trustee  hereby  agree as
follows:

          1. Pursuant to Section 11.18 of the Plan,  Ralph Marsh is removed as a
co-trustee  of the  Plan  and  Bradford  A.  Wallace  is  named  as a  successor
co-trustee of the Plan.

          2. Except as hereinabove  amended,  all of the terms and conditions of
the Plan shall remain in full force and effect.
<PAGE>
     IN WITNESS WHEREOF,  INTER-TEL,  INCORPORATED,  as Employer, and JEFFREY T.
FORD,  N. THOMAS  PEIFPER and BRADFORD A.  WALLACE,  as Trustee,  have signed or
caused these presents to be signed by their duly qualified officers respectively
authorized to do so the date first above written.

                                        INTER-TEL, INCORPORATED, an Arizona
                                        corporation

                                        /s/ Thomas C. Parise
                                        ----------------------------------------
                                        Thomas C. Parise, President

                                                                      "Employer"

ATTEST:

/s/ Kurt R. Kneip
------------------------------------
Kurt R. Kneip, Secretary

                                        Jeffrey T. Ford
                                        ----------------------------------------
                                        Jeffrey T. Ford

                                        N. Thomas Peiffer
                                        ----------------------------------------
                                        N. Thomas Peiffer

                                        Bradford A. Wallace
                                        ----------------------------------------
                                        Bradford A. Wallace

                                                                       "Trustee"
<PAGE>
                 ACTION BY CONSENT OF THE BOARD OF DIRECTORS OF
                            INTER-TEL. INCORPORATED

     The undersigned, being all of the Directors of Inter-Tel,  Incorporated, an
Arizona corporation,  hereby consent in writing, without a meeting,  pursuant to
Section 10-044 of the Arizona Revised Statutes, to the following action:

          RESOLVED,   that   pursuant  to  Section   11.18  of  the   Inter-Tel,
     Incorporated  Tax Deferred  Savings Plan and Trust (the "Plan") Ralph Marsh
     shall be removed as a co-trustee of the Plan. Bradford A. Wallace is hereby
     appointed as a successor co-trustee of the Plan.

          FURTHER RESOLVED, that Ralph Marsh shall be removed as a member of the
     Advisory Committee of the Plan and Bradford A. Wallace is hereby named as a
     successor Advisory Committee member, pursuant to Section 10.02 of the Plan.

     DATED: APRIL 12 1995.

                                        /s/ Steven G. Mihaylo
                                        ----------------------------------------
                                        Steven G. Mihaylo

                                        /s/ Gary D. Edens
                                        ----------------------------------------
                                        Gary D. Edens

                                        /s/ Maurice H. Esperseth
                                        ----------------------------------------
                                        Maurice H. Esperseth

                                        /s/ C. Roland Haden
                                        ----------------------------------------
                                        C. Roland Haden

                                        /s/ Norman Stout
                                        ----------------------------------------
                                        Norman Stout

                                        /s/ Kathleen R. Wade
                                        ----------------------------------------
                                        Kathleen R. Wade

                                                            "Board of Directors"
<PAGE>
         CERTIFIED COPY OF RESOLUTIONS ADOPTED BY THE BOARD OF DIRECTORS
                           OF INTER-TEL, INCORPORATED

          RESOLVED,   that   pursuant  to  Section   11.18  of  the   Inter-Tel,
     Incorporated  Tax Deferred  Savings Plan and Trust (the "Plan") Ralph Marsh
     shall be removed as a co-trustee of the Plan. Bradford A. Wallace is hereby
     appointed as a successor co-trustee of the Plan.

          FURTHER RESOLVED, that Ralph Marsh shall be removed as a member of the
     Advisory Committee of the Plan and Bradford A. Wallace is hereby named as a
     successor Advisory Committee member, pursuant to Section 10.02 of the Plan.

                                   CERTIFICATE

     I  hereby  certify  that I am  the  duly  elected,  qualified,  and  acting
Secretary of Inter-Tel, Incorporated, an Arizona corporation, and that the above
is a true and correct copy of the  Resolutions  adopted by unanimous  consent of
the Directors of said corporation,  on April 12, 1995, and that said Resolutions
are in full force and effect and have not been repealed, amended, or canceled.

DATED: May 4, 1995.

                                        /s/ Kurt R. Kneip
                                        ----------------------------------------
                                        Kurt R. Kneip, Secretary
<PAGE>
                              ACCEPTANCE BY TRUSTEE

     I, Bradford A. Wallace, hereby accept my appointment as a successor trustee
of the Inter-Tel,  Incorporated Tax Deferred Savings Plan and Trust, pursuant to
Section 11.18 of the Plan, effective April 12, 1995 .

                                        /s/ Bradford Wallace
                                        ----------------------------------------
                                        Bradford A. Wallace

                                                             "Successor Trustee"
<PAGE>
                             THIRD AMENDMENT TO THE
      INTER-TEL, INCORPORATED TAX DEFERRED SAVINGS PLAN AND TRUST AGREEMENT

     THIS AMENDMENT is made as of June 30, 1997, by INTER-TEL,  INCORPORATED, an
Arizona corporation ("Employer").

                              W I T N E S S E T H:

     A. The  Employer  wishes to amend this plan  ("Plan")  to include the Model
Amendment  provided in Revenue  Procedure 96-49,  regarding  compliance with the
USERRA requirements; and

     B. The  Employer  also  wishes  to  amend  the Plan to  include  the  Model
Amendment  provided in Revenue  Procedure  96-55 regarding the status of amounts
transferred from money purchase pension plans.

     THEREFORE, the Employer amends the Plan, as follows:

          1. The Plan is hereby amended by adding the following:

               "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. Loan  repayments,  if any, will be suspended under this Plan
          as permitted under Section 414(u)(4) of the Code."

          2. The Plan is hereby amended by adding the following:

               "Notwithstanding  any provision of this Plan to the contrary,  to
          the extent that any optional form of benefit under this Plan permits a
          distribution prior to the Employee's retirement, death, disability, or
          severance  from  employment,  and  prior  to  Plan  termination,  that
          optional form is not available  with respect to benefits  attributable
          to  assets   (including  the   post-transfer   earnings  thereon)  and
          liabilities that are transferred, within the meaning of Section 414(1)
          of the Code, to this Plan from a money purchase pension plan qualified
          under  Section  401 (a) of the Code  (other  than any portion of those
          assets   and   liabilities    attributable   to   voluntary   employee
          contributions)."
<PAGE>
          3.  Section 1 of this  Amendment  shall be  effective  with respect to
     re-employments  initiated on or after December  12,1994.  Section 2 of this
     Amendment shall be effective the first day of the first Plan year beginning
     on or after December 12,1994 or, if later, March 12,1995.

     IN WITNESS WHEREOF,  the Employer has caused this Amendment to be signed by
its duly qualified officer.

                                        INTER-TEL, INCORPORATED, an Arizona
                                        corporation

                                        /s/ Steven G. Mihaylo
                                        ----------------------------------------
                                        Steven G. Mihaylo, President

                                                                      "Employer"
<PAGE>
       CERTIFIED COPY OF RESOLUTIONS ADOPTED BY THE BOARD OF DIRECTORS OF
                             INTER-TEL, INCORPORATED

          RESOLVED,   that  the  attached  Third  Amendment  to  the  Inter-Tel,
     Incorporated Tax Deferred  Savings Plan and Retirement Trust Agreement,  in
     the form attached to these resolutions, is hereby approved and adopted; and

          FURTHER  RESOLVED,  that  the  actions  of the  appropriate  executive
     officer of this Corporation in executing the Amendment, are hereby ratified
     and approved.

                                   CERTIFICATE

     I  hereby  certify  that I am  the  duly  elected,  qualified,  and  acting
Secretary of Inter-Tel, Incorporated, an Arizona corporation, and that the above
is a true and correct copy of the  Resolutions  adopted by unanimous  consent of
the Directors of said  corporation,  on April ^, 1999, and that said Resolutions
are in full force and effect and have not been repealed, amended, or canceled.

DATED: April 26, 1999.

                                        /s/ Kurt R. Kneip
                                        ----------------------------------------
                                        Kurt R. Kneip, Secretary
<PAGE>
                             FOURTH AMENDMENT TO THE
                             INTER-TEL, INCORPORATED
            TAX DEFERRED SAVINGS PLAN AND RETIREMENT TRUST AGREEMENT

     THIS  AMENDMENT,  made and entered  into on April 26, 1999,  by  INTER-TEL,
INCORPORATED,   an  Arizona   corporation   (hereinafter   referred  to  as  the
"Employer"),  and JEFFREY T. FORD, BRADFORD A. WALLACE and N. THOMAS PEIFFER, as
Trustees (hereinafter collectively referred to as "Trustee").

                              W I T N E S S E T H:

     1. The Employer maintains the Inter-Tel,  Incorporated Tax Deferred Savings
Plan and Retirement Trust Agreement ("Plan");

     2. The  Employer  has  reserved  the right to amend the Plan in whole or in
part; and

     3. The Employer intends to amend the Plan.

     THEREFORE, the Employer hereby adopts this Amendment as follows:

     1.  Section  4.01(a) of the Plan is amended  to clarify  the  Participant's
election to defer under the Plan. Therefore, effective January 1, 1989, Sections
4.01 (a)(i) and (ii) read as follows:

          (a)  ELECTION  TO DEFER.  A  Participant  may  elect to make  Elective
     Deferrals  to  the  Plan,  in  an  amount  not  greater  than  15%  of  his
     Compensation. A smaller or larger "Maximum Elective Deferral" (expressed as
     a percentage of Compensation) may be established by the Plan Administrator.
     A Participant's Elective Deferrals may not, however,  exceed $7,627 for any
     taxable year of the  Participant  (or such larger amount as may at any time
     be determined  under Code Section 402(g) in effect at the beginning of such
     taxable year). In addition,  the Plan  Administrator  may further limit the
     Elective  Deferrals  of Highly  Compensated  Employees  for any Plan  Year.
     Subject to any limitations imposed by the Advisory Committee:

               (i)  Elective   Deferrals  shall  be  credited  to  an  "Elective
                    Deferral  Account."  Each  Participant's  Elective  Deferral
                    Account shall share in the earnings and losses of the Trust,
                    and shall be fully vested at all times.

               (ii) Elective   Deferrals   may  be  made  in  whole   percentage
                    increments  of   Compensation  or  specific  dollar  amounts
                    designated  by  the  Participant  for  the  Plan  Year.  The
                    Employer shall have the right to direct that such increments
                    of  Compensation  shall be  rounded  to the next  lowest  or
                    highest dollar. The Advisory Committee may,
<PAGE>
                    according  to uniform  and  nondiscriminatory  rules,  allow
                    Participants  to make lump sum  Elective  Deferrals  payable
                    during a period  designated  by the Advisory  Committee,  in
                    lieu  of or in  addition  to the  payroll  deduction  method
                    described  above,  in order to allow  the  maximum  Elective
                    Deferral.

     2. The first sentence of Section 6.01 (C) of the Plan is amended  effective
January  1,1989  to  clarify  the  computation  period  used for  determining  a
Participant's vested percentage as follows:

          (c) For purposes of vesting, "Year of Service" means the completion of
     at least 1,000 Hours of Service by a Participant  during the 12 consecutive
     month period  measured  from the date the  Participant  completes his first
     Hour of Service (or any anniversary of that date).

     3. Except as  hereinabove  amended,  all of the terms and conditions of the
Plan shall remain in full force and effect.

     IN WITNESS WHEREOF,  INTER-TEL,  INCORPORATED,  as Employer, and JEFFREY T.
FORD,  N. THOMAS  PEIFFER and BRADFORD A.  WALLACE,  as Trustee,  have signed or
caused these presents to be signed by their duly qualified officers respectively
authorized to do so the date first above written.

                                        INTER-TEL, INCORPORATED, an Arizona
                                        corporation

                                        /s/ Steven G. Mihaylo
                                        ----------------------------------------
                                        Steven G. Mihaylo, President

                                        /s/ Jeffrey T. Ford
                                        ----------------------------------------
                                        Jeffrey T. Ford

                                        /s/ N. Thomas Peiffer
                                        ----------------------------------------
                                        N. Thomas Peiffer

                                        /s/ Bradford A. Wallace
                                        ----------------------------------------
                                        Bradford A. Wallace

                                                                       "Trustee"

                                      -2-
<PAGE>
                          CERTIFIED COPY OF RESOLUTIONS
                      ADOPTED BY THE BOARD OF DIRECTORS OF
                             INTER-TEL, INCORPORATED

          RESOLVED, that the Fourth Amendment to the Inter-Tel, Incorporated Tax
     Deferred Savings Plan and Retirement Trust Agreement,  in the form attached
     to these resolutions, is hereby approved and adopted; and

          FURTHER  RESOLVED,  that the appropriate  officers of this Corporation
     are hereby authorized,  empowered, and directed, for an din the name and on
     behalf of this Corporation, to execute the Amendment and to take such other
     actions as they,  in their sole and complete  discretion,  deem  necessary,
     appropriate, or desirable to effect the intent of these resolutions.

                                   CERTIFICATE

     I  hereby  certify  that I am  the  duly  elected,  qualified,  and  acting
Secretary of Inter-Tel, Incorporated, an Arizona corporation, and that the above
is a true and correct copy of the  Resolutions  adopted by unanimous  consent of
the Directors of said corporation, on April 26., 1999, and that said Resolutions
are in full force and effect and have not been repealed, amended, or canceled.

DATED: April 26, 1999.

                                        /s/ Kurt R. Kneip
                                        ----------------------------------------
                                        Kurt R. Kneip, Secretary
<PAGE>
     ACTION BY CONSENT OF THE BOARD OF DIRECTORS OF INTER-TEL, INCORPORATED

     The undersigned Board of Directors of Inter-Tel,  Incorporated,  an Arizona
professional  corporation,  hereby  consents  in  writing,  without  a  meeting,
pursuant to the authority of Section 10-821 of the Arizona Revised Statutes,  to
the following action:

          RESOLVED,  that the  Third and  Fourth  Amendments  to the  Inter-Tel,
     Incorporated Tax Deferred  Savings Plan and Retirement Trust Agreement,  in
     the forms attached to these  resolutions,  are hereby approved and adopted;
     and

          FURTHER  RESOLVED,  that the appropriate  officers of this Corporation
     are hereby authorized,  empowered, and directed, for and in the name and on
     behalf of this  Corporation,  to execute  the  Amendments  and to take such
     other  actions  as  they,  in  their  sole and  complete  discretion,  deem
     necessary,  appropriate,  or  desirable  to  effect  the  intent  of  these
     resolutions.

          DATED: April 26, 1999.

                                        /s/ Steven G. Mihaylo
                                        ----------------------------------------
                                        Steven G. Mihaylo

                                        /s/ J. Robert Anderson
                                        ----------------------------------------
                                        J. Robert Anderson

                                        /s/ Gary D. Edens
                                        ----------------------------------------
                                        Gary D. Edens

                                        /s/ Maurice H. Esperseth
                                        ----------------------------------------
                                        Maurice H. Esperseth

                                        /s/ C. Roland Haden
                                        ----------------------------------------
                                        C. Roland Haden

                                                            "Board of Directors"
<PAGE>
                             FIFTH AMENDMENT TO THE
                             INTER-TEL, INCORPORATED
            TAX DEFERRED SAVINGS PLAN AND RETIREMENT TRUST AGREEMENT

     THIS  AMENDMENT,  made and entered into on November 29, 1999, by INTER-TEL,
INCORPORATED,   an  Arizona   corporation   (hereinafter   referred  to  as  the
"Employer").

                                  WITNESSETH:

     1. The Employer maintains the Inter-Tel,  Incorporated Tax Deferred Savings
Plan and Retirement Trust Agreement ("Plan");

     2. The  Employer  has  reserved-the  right to amend the Plan in whole or in
part; and

     3. The Employer intends to amend the Plan.

     THEREFORE, the Employer hereby adopts this Amendment as follows:

     1. Section 3.01 of the Plan is amended by adding the following subsections:

          "(d)   Notwithstanding   the  above,   for  purposes  of   determining
          eligibility,  all service with Executone  Information  Systems or with
          companies that are acquired by Inter-Tel, Incorporated through a stock
          acquisition shall be counted. In addition, such Employees shall become
          a Participant as of the first payroll period  coincident  with or next
          following the date of the acquisition provided they have completed the
          eligibility  requirements  of the  Plan as of the  most  recent  prior
          January 1 or July 1 of the Plan Year."

     2. Section 6.01(C) of the Plan is amended to add the following thereto:

          "Notwithstanding  the above, for purposes of determining  vesting, all
          service with Executone  Information Systems or with companies that are
          acquired by Inter-Tel,  Incorporated through a stock acquisition shall
          be counted."

     3. The Effective Date of this amendment is January 1, 1999.

     4. Except as  hereinabove  amended,  all of the terms and conditions of the
Plan shall remain in full force and effect.
<PAGE>
     IN WITNESS WHEREOF,  INTER-TEL,  INCORPORATED,  as Employer,  has signed or
caused these presents to be signed by its duly qualified officers  authorized to
do so the date first above written.

                                        INTER-TEL, INCORPORATED, an Arizona
                                        Corporation

                                        /s/ Steven G. Mihaylo
                                        ----------------------------------------
                                        Steven G. Mihaylo, President

                                                                      "Employer"
<PAGE>
                  CERTIFIED COPY OF RESOLUTIONS ADOPTED BY THE
                 BOARD OF DIRECTORS OF INTER-TEL, INCORPORATED

          RESOLVED, that the Fifth Amendment to the Inter-Tel,  Incorporated Tax
     Deferred Savings Plan and Retirement Trust Agreement ("Plan"),  in the form
     attached to these resolutions, is hereby approved and adopted; and

          FURTHER  RESOLVED,  that the appropriate  officers of this Corporation
     are hereby authorized,  empowered, and directed, for and in the name and on
     behalf of this Corporation, to execute the Amendment and to take such other
     actions as they,  in their sole and complete  discretion,  deem  necessary,
     appropriate, or desirable to effect the intent of these resolutions.

                                   CERTIFICATE

     I  hereby  certify  that I am  the  duly  elected,  qualified,  and  acting
Secretary of INTER-TEL,  INCORPORATED,  an Arizona  corporation;  that this is a
true and correct  copy of  resolutions  adopted by the Board of Directors of the
Corporation on November 29, 1999; and that these  resolutions  are in full force
and effect and have not been repealed, amended, or canceled.

     DATED: November 29, 1999.

                                        /s/ Kurt R. Kneip
                                        ----------------------------------------
                                        Kurt R. Kneip, Secretary
<PAGE>
     ACTION BY CONSENT OF THE BOARD OF DIRECTORS OF INTER-TEL, INCORPORATED

     The undersigned Board of Directors of Inter-Tel,  Incorporated,  an Arizona
professional  corporation,  hereby  consents  in  writing,  without  a  meeting,
pursuant to the authority of Section 10-821 of the Arizona Revised Statutes,  to
the following action:

          RESOLVED, that the Fifth Amendment to the Inter-Tel,  Incorporated Tax
     Deferred Savings Plan and Retirement Trust Agreement,  in the form attached
     to these resolutions, is hereby approved and adopted; and

          FURTHER  RESOLVED,  that the appropriate  officers of this Corporation
     are hereby authorized,  empowered, and directed, for and in the name and on
     behalf of this Corporation, to execute the Amendment and to take such other
     actions as they,  in their sole and complete  discretion,  deem  necessary,
     appropriate, or desirable to effect the intent of these resolutions.

          DATED: November 29,1999.

                                        /s/ Steven G. Mihaylo
                                        ----------------------------------------
                                        Steven G. Mihaylo

                                        /s/ J. Robert Anderson
                                        ----------------------------------------
                                        J. Robert Anderson

                                        /s/ Gary D. Edens
                                        ----------------------------------------
                                        Gary D. Edens

                                        /s/ Maurice H. Esperseth
                                        ----------------------------------------
                                        Maurice H. Esperseth

                                        /s/ C. Roland Haden
                                        ----------------------------------------
                                        C. Roland Haden

                                                            "Board of Directors"
<PAGE>
                 SIXTH AMENDMENT TO THE INTER-TEL, INCORPORATED
            TAX DEFERRED SAVINGS PLAN AND RETIREMENT TRUST AGREEMENT

     THIS  AMENDMENT,  made and entered into on January  20,2000,  by INTER-TEL,
INCORPORATED,   an  Arizona   corporation   (hereinafter   referred  to  as  the
"Employer").

                                   WITNESSETH:

     1. The Employer maintains the Inter-Tel,  Incorporated Tax Deferred Savings
Plan and Retirement Trust Agreement ("Plan");

     2. The  Employer  has  reserved  the right to amend the Plan in whole or in
part; and

     3. The Employer intends to amend the Plan.

     THEREFORE, the Employer hereby adopts this Amendment as follows:

     1. Section 3.01(a) of the Plan is amended to read as follows:

          "(a)  Each  Employee  who has  completed  at least  six (6)  months of
          Service  shall  become a  Participant  on the first day of the payroll
          period  following  the  date  on  which  the  Employee  completes  the
          eligibility requirements of this Plan."

     2. Section 3.01 (d) of the Plan is amended to read as follows:

          "(d)   Notwithstanding   the  above,   for  purposes  of   determining
          eligibility,  all service with Executone  Information  Systems or with
          companies that are acquired by Inter-Tel, Incorporated through a stock
          acquisition shall be counted. In addition, such Employees shall become
          a Participant as of the first payroll period  coincident  with or next
          following the date of the acquisition provided they have completed the
          eligibility requirements of the Plan."

     3. The Effective Date of this amendment is January 1, 2000.

     4. Except as  hereinabove  amended,  all of the terms and conditions of the
Plan shall remain in full force and effect.
<PAGE>
     IN WITNESS WHEREOF,  INTER-TEL,  INCORPORATED,  as Employer,  has signed or
caused these presents to be signed by its duly qualified officers  authorized to
do so the date first above written.

                                        INTER-TEL, INCORPORATED, an Arizona
                                        Corporation

                                        /s/ Steven G. Mihaylo
                                        ----------------------------------------
                                        Steven G. Mihaylo, President

                                                                      "Employer"

                                       2
<PAGE>
                  CERTIFIED COPY OF RESOLUTIONS ADOPTED BY THE
                 BOARD OF DIRECTORS OF INTER-TEL, INCORPORATED

          RESOLVED, that the Sixth Amendment to the Inter-Tel,  Incorporated Tax
     Deferred Savings Plan and Retirement Trust Agreement ("Plan"),  in the form
     attached to these resolutions, is hereby approved and adopted; and

          FURTHER  RESOLVED,  that the appropriate  officers of this Corporation
     are hereby authorized,  empowered, and directed, for and in the name and on
     behalf of this Corporation, to execute the Amendment and to take such other
     actions as they,  in their sole and complete  discretion,  deem  necessary,
     appropriate, or desirable to effect the intent of these resolutions.

                                   CERTIFICATE

     I  hereby  certify  that I am  the  duly  elected,  qualified,  and  acting
Secretary of INTER-TEL,  INCORPORATED,  an Arizona  corporation;  that this is a
true and correct  copy of  resolutions  adopted by the Board of Directors of the
Corporation on January 20,2000; and that these resolutions are in fall force and
effect and have not been repealed, amended, or canceled.

          DATED: January 20, 2000.

                                        /s/ Kurt R. Kneip
                                        ----------------------------------------
                                        Kurt R. Kneip, Secretary
<PAGE>
     ACTION BY CONSENT OF THE BOARD OF DIRECTORS OF INTER-TEL, INCORPORATED

     The undersigned Board of Directors of Inter-Tel,  Incorporated,  an Arizona
professional  corporation,  hereby  consents  in  writing,  without  a  meeting,
pursuant to the authority of Section 10-821 of the Arizona Revised Statutes,  to
the following action:

          RESOLVED, that the Sixth Amendment to the Inter-Tel,  Incorporated Tax
     Deferred Savings Plan and Retirement Trust Agreement,  in the form attached
     to these resolutions, is hereby approved and adopted; and

          FURTHER  RESOLVED,  that the appropriate  officers of this Corporation
     are hereby authorized,  empowered, and directed, for and in the name and on
     behalf of this Corporation, to execute the Amendment and to take such other
     actions as they,  in their sole and complete  discretion,  deem  necessary,
     appropriate, or desirable to effect the intent of these resolutions.

          DATED: January 20, 1999.

                                        /s/ Steven G. Mihaylo
                                        ----------------------------------------
                                        Steven G. Mihaylo

                                        /s/ J. Robert Anderson
                                        ----------------------------------------
                                        J. Robert Anderson

                                        /s/ Gary D. Edens
                                        ----------------------------------------
                                        Gary D. Edens

                                        /s/ Maurice H. Esperseth
                                        ----------------------------------------
                                        Maurice H. Esperseth

                                        /s/ C. Roland Haden
                                        ----------------------------------------
                                        C. Roland Haden

                                                            "Board of Directors"
<PAGE>
                SEVENTH AMENDMENT TO THE INTER-TEL INCORPORATED,
                 TAX DEFERRED SAVINGS PLAN AND RETIREMENT TRUST

     THIS  AMENDMENT,  made and  entered  into on August 8. 2000,  by  INTER-TEL
INCORPORATED, an Arizona corporation ("Employer").

                                    RECITALS:

     1. The Employer maintains the Inter-Tel Incorporated,  Tax Deferred Savings
Plan and Retirement Trust ("Plan");

     2. The  Employer  has  reserved  the right to amend the Plan in whole or in
part; and

     3. The Employer intends to amend the Plan.

     THEREFORE, the Employer hereby adopts this Amendment as follows:

     1. Section 4.03(b) of the Plan is amended to read as follows:

          "(b) MATCHING CONTRIBUTION.  The Employer may, in its sole discretion,
               make "Employer Matching  Contributions"  with respect to Elective
               Deferrals  made by  Participants  who are  eligible to receive an
               allocation  under  Section  5.03 of the Plan.  Employer  Matching
               Contributions  may  be  made  in  an  amount  up  to  100%  of  a
               Participant's  Elective  Deferral  (or such larger  amount as the
               Employer may determine) made and not withdrawn  during the period
               for which the  Matching  Contribution  is made.  The Employer may
               limit  the  amount  contributed  to  a  specified  percentage  of
               Compensation deferred."

     2. Section 5.03(b) of the Plan is amended to read as follows:

          "(b) All Participants  employed by the Employer during a Plan Year who
               make Elective Deferrals and who are eligible to participate under
               Section  3.01 of this  Plan  shall  be  eligible  to share in the
               allocation of the Employer's Matching Contributions,  if any, for
               the  Plan  Year  in  accordance   with  Section  4.03.   However,
               Participants who have terminated employment prior to the last day
               of the period for which any  Employer  Matching  Contribution  is
               made for reasons other than death.  Disability,  or retirement at
               or after  the  Normal  Retirement  Date  shall  not  share in the
               allocation."
<PAGE>
     3. The Effective Date of this Amendment shall be January 1, 2000.

     4. Except as  amended,  all of the terms and  conditions  of the Plan shall
remain in full force and effect.

                                        INTER-TEL, INCORPORATED, an Arizona
                                        Corporation

                                        /s/ Steven G. Mihaylo
                                        ----------------------------------------
                                        Steven G. Mihaylo, President

                                                                      "Employer"
<PAGE>
                  CERTIFIED COPY OF RESOLUTIONS ADOPTED BY THE
                  BOARD OF DIRECTORS OF INTER-TEL INCORPORATED

          RESOLVED,  that the Seventh  Amendment to the Inter-Tel,  Incorporated
     Tax  Deferred  Savings  Plan and  Retirement  Trust  ("Plan"),  in the form
     attached to these resolutions, is hereby approved and adopted; and

          FURTHER  RESOLVED,  that the appropriate  officers of this Corporation
     are hereby authorized,  empowered, and directed, for and in the name and on
     behalf of this Corporation, to execute the Amendment and to take such other
     actions as they,  in their sole and complete  discretion,  deem  necessary,
     appropriate, or desirable to effect the intent of these resolutions.

                                   CERTIFICATE

     I  hereby  certify  that I am  the  duly  elected,  qualified,  and  acting
Secretary of Inter-Tel,  Incorporated,  an Arizona  corporation;  that this is a
true and correct  copy of  resolutions  adopted by the Board of Directors of the
Corporation on August 8, 2000; and that these  resolutions are in full force and
effect and have not been repealed, amended, or canceled.

          DATED: August 8, 2000.

                                        /s/ Kurt R. Kneip
                                        ----------------------------------------
                                        Kurt R. Kneip, Secretary
<PAGE>
     ACTION BY CONSENT OF THE BOARD OF DIRECTORS OF INTER-TEL, INCORPORATED

     The undersigned Board of Directors of Inter-Tel,  Incorporated,  an Arizona
corporation,  hereby  consents  in writing,  without a meeting,  pursuant to the
authority of Section 10-821 of the Arizona  Revised  Statutes,  to the following
action:

          RESOLVED,  that the Seventh  Amendment to the Inter-Tel,  Incorporated
     Tax  Deferred  Savings  Plan and  Retirement  Trust  ("Plan"),  in the form
     attached to these resolutions, is hereby approved and adopted; and

          FURTHER  RESOLVED,  that the appropriate  officers of this Corporation
     are hereby authorized,  empowered, and directed, for and in the name and on
     behalf of this Corporation, to execute the Amendment and to take such other
     actions as they,  in their sole and complete  discretion,  deem  necessary,
     appropriate, or desirable to effect the intent of these resolutions.

          DATED: August 8, 2000.

                                        /s/ Steven G. Mihaylo
                                        ----------------------------------------
                                        Steven G. Mihaylo

                                        /s/ J. Robert Anderson
                                        ----------------------------------------
                                        J. Robert Anderson

                                        /s/ Gary D. Edens
                                        ----------------------------------------
                                        Gary D. Edens

                                        /s/ Maurice H. Esperseth
                                        ----------------------------------------
                                        Maurice H. Esperseth

                                        /s/ C. Roland Haden
                                        ----------------------------------------
                                        C. Roland Haden

                                                            "Board of Directors"
<PAGE>
                 EIGHTH AMENDMENT TO THE INTER-TEL, INCORPORATED
                 TAX DEFERRED SAVINGS PLAN AND RETIREMENT TRUST

     THIS  AMENDMENT,  made and entered into on December 20, 2001, by Inter-Tel,
Incorporated, an Arizona corporation, ("Employer").

                                    RECITALS:

     1. The Employer maintains the Inter-Tel,  Incorporated Tax Deferred Savings
Plan and Retirement Trust ("Plan");

     2. The  Employer  has  reserved  the right to amend the Plan in whole or in
part; and

     3. The Employer intends to amend the Plan.

     4. This amendment is adopted to reflect certain  provisions of the Economic
Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA"); and

     5.  This  amendment  is  intended  as  good  faith   compliance   with  the
requirements  of EGTRRA and is to be  construed  in  accordance  with EGTRRA and
guidance issued thereunder.

     THEREFORE, the Employer hereby adopts this Amendment as follows:

     1.  Effective  March 1, 2001,  and  pursuant to Section  11.18 of the Plan,
Bradford A. Wallace is removed as a Trustee.

     2.  Effective  January 1, 2001,  Section  3.01(a) of the Plan is amended to
read as follows:

          (a)  Each Employee  shall become a Participant on the first day of the
               payroll period following the date on which the Employee completes
               at least one Hour of Service with the Employer.

     3.  Effective  January  1,2001,  Section 5.05 of the Plan is amended in its
entirety to read as follows:

          5.05 Application of Forfeitures. Any Forfeitures arising under Section
          6.01 of the Plan since the last Anniversary Date may (a) be
<PAGE>
          made available to reinstate  previously  forfeited Account balances to
          former   Participants,    if   any,   in   accordance   with   Section
          6.04(b)(iii)(C);  (b) be used to pay  Plan  expenses  not  paid by the
          Employer or not specifically  chargeable to a Participant's Account in
          accordance  with  Article  9 of the  Plan;  and (c) be used to  reduce
          Employer  Contributions.  Any Forfeitures from Employer Profit Sharing
          Contributions,  and  Employer  Matching  Contributions,  respectively,
          shall be used to reduce the respective Contributions.

     4. LIMITATIONS ON CONTRIBUTIONS

          a.  Effective  date.  This section shall be effective  for  limitation
years beginning after December 31,2001.

          b.  Maximum  annual  addition.  Except to the extent  permitted  under
section 7 of this amendment and Code Section 414(v),  if applicable,  the annual
addition that may be contributed or allocated to a  participant's  account under
the plan for any limitation year shall not exceed the lesser of:

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

               (ii) 100 percent of the  participant's  compensation,  within the
          meaning of Code Section 415(C)(3), for the limitation year.

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

     5. INCREASE IN COMPENSATION LIMIT

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

     6. ELECTIVE DEFERRALS - CONTRIBUTION LIMITATION

No  participant  shall be permitted to have elective  deferrals  made under this
plan, or any other  qualified plan maintained by the employer during any taxable
year, in excess of the dollar limitation contained in section 402(g) of the Code
in effect for such taxable year,  except to the extent permitted under section 7
of this amendment and Code Section 414(v), if applicable.  The elective deferral
limit under this plan will increase to the maximum permitted by law.
<PAGE>
     7. CATCH-UP CONTRIBUTIONS

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

     8. ROLLOVERS FROM OTHER PLANS

Effective  January  1,  2002,  the  plan  will  accept  the  following  types of
participant rollover contributions and/or direct rollovers of distributions made
after December 31, 2001:
<PAGE>
          a. A direct rollover of an eligible rollover distribution from:

               (i) a qualified plan described in Code Section 401 (a) or 403(a),
          excluding after-tax employee contributions.

               (ii) a  qualified  plan  described  in  Code  Section  401 (a) or
          403(a), including after-tax employee contributions.

               (iii) an annuity  contract  described  in Code  Section  403 (b),
          excluding after-tax employee contributions.

               (iv)  an  eligible  plan  under  Code  Section  457(b)  which  is
          maintained by a state, political subdivision of a state, or any agency
          or instrumentality of a state or political subdivision of a state.

          b. A participant contribution of an eligible rollover distribution
from:

               (i) a qualified plan described in Code Section 401 (a) or 403(a).

               (ii) an annuity contract described in Code Section 403(b).

               (iii) an  eligible  plan  under  Code  Section  457 (V)  which is
          maintained by a state, political subdivision of a state, or any agency
          or instrumentality of a state or political subdivision of a state.

          c. The plan will accept a  participant  rollover  contribution  of the
portion  of a  distribution  from an  individual  retirement  account or annuity
described  in Code  Section  408(a) or 408(b) that is eligible to be rolled over
and would otherwise be includible in gross income.

     9. DIRECT ROLLOVERS OF PLAN DISTRIBUTIONS

          a.  Effective  date.  This section shall apply to  distributions  made
after December 31,2001.

          b.  Modification  of  definition  of  eligible  retirement  plan.  For
purposes of the provisions in the plan relating to  distributions in the form of
direct  rollovers,  an  eligible  retirement  plan  shall  also mean an  annuity
contract  described  in section 403 (b) of the Code and an  eligible  plan under
section 457(b) of the Code which is maintained by a state, political subdivision
of a state, or any agency or instrumentality of a state or political subdivision
of a state and which agrees to separately  account for amounts  transferred into
such plan from this plan. The definition of eligible  retirement plan shall also
apply in the case of a  distribution  to a surviving  spouse,  or to a spouse or
former spouse who is the  alternate  payee under a qualified  domestic  relation
order, as defined in section 414(p) of the Code.
<PAGE>
          c.  Modification  of definition of eligible  rollover  distribution to
exclude hardship  distributions.  For purposes of the direct rollover provisions
in the plan,  any amount that is distributed on account of hardship shall not be
an eligible rollover  distribution and the distributee may not elect to have any
portion of such a distribution paid directly to an eligible retirement plan.

          d.  Modification  of definition of eligible  rollover  distribution to
include after-tax employee contributions.  For purposes of the provisions in the
plan relating to distributions in the form of direct  rollovers,  a portion of a
distribution  shall  not fail to be an  eligible  rollover  distribution  merely
because the portion consists of after-tax employee  contributions  which are not
includible in gross income.  However, such portion may be transferred only to an
individual  retirement  account or annuity  described in Code Section  408(a) or
(b), or to a qualified  defined  contribution plan described in Code Section 401
(a) or 403 (a) that agrees to  separately  account  for amounts so  transferred,
including  separately  accounting for the portion of such distribution  which is
includible in gross income and the portion of such distribution  which is not so
includible.

     10. VESTING OF EMPLOYER CONTRIBUTIONS

          a.  Applicability.  This  section  shall  apply to  participants  with
accrued  benefits  derived from employer  contributions  who complete an hour of
service under the plan in a plan year  beginning  after December  31,2001.  This
section  shall apply only to  employer  contributions  for plan years  beginning
after December 31,2001.

          b. Vesting  schedule.  A  participant's  accrued  benefit derived from
employer  contributions  shall vest as provided  below.  The section of the plan
that provides for the election of the former vesting schedule under Code Section
41 l(a)(10) shall apply.

This section, Vesting of Employer Contributions, shall apply to all participants
with accrued benefits derived from employer contributions.

The Vesting Schedule for Employer Contributions is as follows:
<PAGE>
     A participant's  accrued benefit derived from employer  contributions shall
     vest according to the following schedule:

            Years of vesting service         Nonforfeitable percentage

                       1                                10
                       2                                20
                       3                                40
                       4                                60
                       5                                80
                       6                               100

     11. SUSPENSION PERIOD FOLLOWING HARDSHIP DISTRIBUTION

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

     12. REPEAL OF MULTIPLE USE TEST

The multiple use test described in Treasury Regulation section 1.401(m)-2 and in
the plan shall not apply for plan years beginning after December 31, 2001.

     13. MODIFICATION OF TOP HEAVY RULES

          a.  Effective   date.   This  section  shall  apply  for  purposes  of
determining  whether the plan is a top heavy plan under Code Section  416(g) for
plan years beginning after December 31, 2001, and whether the plan satisfies the
minimum benefits requirements of section 416(C) of the Code for such years. This
section amends the section of the plan that contains the top heavy provisions.

          b. Determination of top heavy status.

               (i) Key  employee.  Key  employee  means any  employee  or former
          employee  (including any deceased employee) who at any time during the
          plan year that includes the  determination  date was an officer of the
          employer having annual compensation greater than $130,000 (as adjusted
          under Code Section  416(i)(l) for plan years  beginning after December
          31, 2002), a 5 percent owner of the employer, or a 1 -percent owner of
          the employer  having annual  compensation  of more than $150,000.  For
          this  purpose,  annual  compensation  means  compensation  within  the
          meaning of Code Section  415(c)(3).  The determination of who is a key
          employee

<PAGE>
          will  be  made in  accordance  with  Code  Section  416(i)(l)  and the
          applicable  regulations  and other  guidance of general  applicability
          issued thereunder.

               (ii)   Determination   of  present   values  and  amounts.   This
          subparagraph  shall  apply for  purposes  of  determining  the present
          values of accrued  benefits  and the  amounts of account  balances  of
          employees as of the determination date.

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

               (iv) Employees not performing  services during year ending on the
          determination   date.  The  accrued   benefits  and  accounts  of  any
          individual who has not performed  services for the employer during the
          1 year period ending on the determination date shall not be taken into
          account.

          c. Minimum benefits

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

               (ii)  Contributions  under other plans.  The employer may provide
          below that the  minimum  benefit  requirement  shall be met in another
          plan  (including  another  plan  that  consists  solely  of a cash  or
          deferred  arrangement  which meets the  requirements  of Code  Section
          401(k)(12)  and  matching  contributions  with  respect  to which  the
          requirements of Code Section 401(m)(l 1) are met):

                    The  employer  will not  provide  that the  minimum  benefit
                    requirement shall be met in another plan.
<PAGE>
     14. MODIFICATION OF TOP HEAVY RULES

The top heavy  requirements  of Code Section 416 and in the plan shall not apply
in any year beginning after December 31, 2001, in which the plan consists solely
of a cash or deferred  arrangement  which meets the requirements of Code Section
401(k)(12) and matching  contributions with respect to which the requirements of
Code Section 401(m)(l 1) are met.

     15. PLAN LOANS FOR OWNER-EMPLOYEES AND SHAREHOLDER EMPLOYEES

Effective  for plan loans  made  after  December  31,2001,  any plan  provisions
prohibiting loans to any owner-employee or  shareholder-employee  shall cease to
apply.

     16. Except as otherwise  provided,  this amendment shall be effective as of
the first day of the first Plan Year beginning after December 31, 2001.

     17. This amendment shall supersede the provisions of the Plan to the extent
those provisions are inconsistent with the provisions of this amendment.  Except
as amended,  all of the terms and  conditions  of the Plan shall  remain in full
force and effect.

                                        INTER-TEL, INCORPORATED, an Arizona
                                        corporation

                                        /s/ Steven G. Mihaylo
                                        ----------------------------------------
                                        Steven G. Mihaylo, President

                                                                      "Employer"
<PAGE>
     ACTION BY CONSENT OF THE BOARD OF DIRECTORS OF INTER-TEL, INCORPORATED

     The undersigned, being all of the Directors of Inter-Tel,  Incorporated, an
Arizona corporation,  hereby consent in writing, without a meeting,  pursuant to
Section 10-821 of the Arizona Revised Statutes, to the following action:

               RESOLVED,  that  pursuant  to  Section  11.18  of the  Inter-Tel,
          Incorporated  Tax  Deferred  Savings  Plan and  Retirement  Trust (the
          "Plan")  Bradford  A.  Wallace  was  removed as a trustee of the Plan,
          effective March 1, 2001.

               FURTHER  RESOLVED,  that  Bradford  A.  Wallace  was removed as a
          member of the  Advisory  Committee  of the Plan,  pursuant  to Section
          10.02 of the Plan, effective March 1, 2001.

               FURTHER  RESOLVED,  that the Eighth  Amendment to the  Inter-Tel,
          Incorporated  Tax Deferred  Savings Plan and  Retirement  Trust in the
          form attached hereto and by this reference made and a part hereof, be,
          and the same is hereby, approved and adopted; and

               FURTHER   RESOLVED,   that  the  appropriate   officers  of  this
          Corporation are hereby,  authorized,  empowered, and directed, for and
          in the  name  and on  behalf  of  this  Corporation,  to  execute  the
          Amendment in the form  attached  hereto and by  reference  made a part
          hereof; and to execute such additional instruments and take such other
          steps or actions as they, in their sole and complete discretion,  deem
          appropriate to effect the intent of these Resolutions.

          DATED: December 20, 2001.

                                        /s/ Steven G. Mihaylo
                                        ----------------------------------------
                                        Steven G. Mihaylo

                                        /s/ J. Robert Anderson
                                        ----------------------------------------
                                        J. Robert Anderson

                                        /s/ Gary D. Edens
                                        ----------------------------------------
                                        Gary D. Edens

                                        /s/ Maurice H. Esperseth
                                        ----------------------------------------
                                        Maurice H. Esperseth

                                        /s/ C. Roland Haden
                                        ----------------------------------------
                                        C. Roland Haden

                                                            "Board of Directors"
<PAGE>
                             NINTH AMENDMENT TO THE
     INTER-TEL, INCORPORATED TAX DEFERRED SAVINGS PLAN AND RETIREMENT TRUST

     THIS  AMENDMENT,  made and entered  into on March 27, 2002,  by  INTER-TEL,
INCORPORATED, an Arizona corporation ("Employer").

                                    RECITALS:

     1. The Employer maintains the Inter-Tel,  Incorporated Tax Deferred Savings
Plan and Retirement Trust ("Plan");

     2. The  Employer  has  reserved  the right to amend the Plan in whole or in
part; and

     3. The Employer intends to amend the Plan.

     THEREFORE, the Employer hereby adopts this Amendment as follows:

     1. Effective April 1, 2002,  pursuant to Section 11.18 of the Plan, Jeffrey
T. Ford is removed as a Trustee.

     2.  Effective  April 1, 2002,  pursuant to Section  11.18 of the Plan,  Ray
McCloud and R. Stephen Wolfe shall be added as Co-Trustees of the Plan.

     3. Except as  amended,  all of the terms and  conditions  of the Plan shall
remain in full force and effect.

                                        INTER-TEL, INCORPORATED, an Arizona
                                        corporation

                                        /s/ Steven G. Mihaylo
                                        ----------------------------------------
                                        Steven G. Mihaylo, President

                                                                      "Employer"
<PAGE>
                               TRUSTEE ACCEPTANCE

     The undersigned, Ray McCloud, hereby agrees and consents to his appointment
as  Co-Trustee  of the  Inter-Tel,  Incorporated  Tax Deferred  Savings Plan and
Retirement Trust effective April 1, 2002.

/s/ Ray McCloud
------------------------------------
Ray McCloud

     The  undersigned,  R.  Stephen  Wolfe,  hereby  agrees and  consents to his
appointment as Co-Trustee of the Inter-Tel,  Incorporated  Tax Deferred  Savings
Plan and Retirement Trust effective April 1,2002.

R. Stephen Wolfe
------------------------------------
R. Stephen Wolfe
<PAGE>
     ACTION BY CONSENT OF THE BOARD OF DIRECTORS OF INTER-TEL, INCORPORATED

     The undersigned Board of Directors of Inter-Tel,  Incorporated,  an Arizona
corporation,  hereby  consents  in writing,  without a meeting,  pursuant to the
authority of Section 10-821 of the Arizona  Revised  Statutes,  to the following
action:

          1.  RESOLVED,  that  pursuant  to  Section  11.18  of  the  Inter-Tel,
     Incorporated  Tax Deferred  Savings Plan and Retirement Trust (the "Plan"),
     Jeffrey T. Ford will be removed as a trustee of the Plan effective April 1,
     2002; and

          2. FURTHER RESOLVED,  that Jeffrey T. Ford will be removed as a member
     of the  Advisory  Committee of the Plan,  pursuant to Section  10.02 of the
     Plan effective April 1, 2002.

          3.  RESOLVED,  that pursuant to Section 11.18 of the Plan, Ray McCloud
     and R. Stephen Wolfe are  appointed as  Co-Trustees  of the Plan  effective
     April 1,2002; and

          4. FURTHER  RESOLVED,  that pursuant to Section 10.02 of the Plan, Ray
     McCloud  and R.  Stephen  Wolfe are  appointed  as  members  of the  Plan's
     Advisory Committee effective April 1, 2002.

          5. RESOLVED,  that the Ninth Amendment to the Inter-Tel,  Incorporated
     Tax Deferred  Savings Plan and Retirement Trust in the form attached hereto
     and by this  reference  made a part  hereof,  be,  and the same is  hereby,
     approved and adopted; and

          6. FURTHER RESOLVED, that the appropriate officers of this Corporation
     are hereby authorized,  empowered, and directed, for and in the name and on
     behalf of this  Corporation,  to execute the Amendment in the form attached
     hereto and by reference made a part hereof;  and to execute such additional
     instruments and take such other steps or actions as they, in their sole and
     complete  discretion,  deem  appropriate  to  effect  the  intent  of these
     Resolutions.

     DATED: March 27, 2002.

                                        /s/ Steven G. Mihaylo
                                        ----------------------------------------
                                        Steven G. Mihaylo

                                        /s/ J. Robert Anderson
                                        ----------------------------------------
                                        J. Robert Anderson

                                        /s/ Gary D. Edens
                                        ----------------------------------------
                                        Gary D. Edens

                                        /s/ C. Roland Haden
                                        ----------------------------------------
                                        C. Roland Haden

                                        /s/ Jerry W. Chapman
                                        ----------------------------------------
                                        Jerry W. Chapman

                                                            "Board of Directors"

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