Document:

<PAGE>

                                                        Exhibit 4.1 to Form 8-A,
                                                        dated April 11, 2000, of
                                                        Specialty Catalog Corp.

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

                             SPECIALTY CATALOG CORP.

                                       and

                   CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
                                 as Rights Agent

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

                                RIGHTS AGREEMENT

                           Dated as of April 11, 2000

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

                                        7

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                                TABLE OF CONTENTS
                                -----------------

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

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

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

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

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

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

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

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

Section 9.      Availability of Shares of Preferred Stock..................................................10

Section 10.     Preferred Stock Record Date................................................................11

Section 11.     Adjustment of Purchase Price, Number and Kind of Shares and Number of Rights...............11

Section 12.     Certificate of Adjusted Purchase Price or Number of Shares.................................18

Section 13.     Consolidation, Merger or Sale or Transfer of Assets or Earning Power.......................18

Section 14.     Fractional Rights and Fractional Shares....................................................21

Section 15.     Rights of Action...........................................................................22

Section 16.     Agreement of Right Holders.................................................................23

Section 17.     Right Certificate Holder Not Deemed a Stockholder..........................................23

Section 18.     Concerning the Rights Agent................................................................23

Section 19.     Merger or Consolidation or Change of Name of Rights Agent..................................24

Section 20.     Duties of Rights Agent.....................................................................24
</TABLE>

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<TABLE>
<CAPTION>
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<S>             <C>                                                                                     <C>
Section 21.     Change of Rights Agent.....................................................................26

Section 22.     Issuance of New Right Certificates.........................................................27

Section 23.     Redemption.................................................................................27

Section 24.     Exchange...................................................................................28

Section 25.     Notice of Certain Events...................................................................29

Section 26.     Notices....................................................................................29

Section 27.     Supplements and Amendments.................................................................30

Section 28.     Successors.................................................................................30

Section 29.     Benefits of this Agreement.................................................................30

Section 30.     Determinations and Actions by the Board of Directors.......................................30

Section 31.     Severability...............................................................................31

Section 32.     Governing Law..............................................................................31

Section 33.     Counterparts...............................................................................31

Section 34.     Descriptive Headings.......................................................................31
</TABLE>

                                       ii

<PAGE>

                                RIGHTS AGREEMENT
                                ----------------

     Rights Agreement, dated as of April 11, 2000 ("Agreement"), between
Specialty Catalog Corp., a Delaware corporation (the "Company"), and Continental
Stock Transfer & Trust Company, as Rights Agent (the "Rights Agent").

     The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each share of
Common Stock (as hereinafter defined) of the Company outstanding as of the Close
of Business (as defined below) on April 28, 2000 (the "Record Date"), each Right
representing the right to purchase one one-thousandth (subject to adjustment) of
a share of Preferred Stock (as hereinafter defined), upon the terms and subject
to the conditions herein set forth, and has further authorized and directed the
issuance of one Right (subject to adjustment as provided herein) with respect to
each share of Common Stock that shall become outstanding between the Record Date
and the earlier of the Distribution Date and the Expiration Date (as such terms
are hereinafter defined); provided, however, that Rights may be issued with
respect to shares of Common Stock that shall become outstanding after the
Distribution Date and prior to the Expiration Date in accordance with Section
22.

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

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

     (a) "Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which shall be the Beneficial Owner (as such term is hereinafter
defined) of 15% or more of the shares of Common Stock then outstanding, but
shall not include an Exempt Person (as such term is hereinafter defined);
provided, however, that (i) if the Board of Directors of the Company determines
in good faith that a Person who would otherwise be an "Acquiring Person" became
the Beneficial Owner of a number of shares of Common Stock such that the Person
would otherwise qualify as an "Acquiring Person" inadvertently (including,
without limitation, because (A) such Person was unaware that it beneficially
owned a percentage of Common Stock that would otherwise cause such Person to be
an "Acquiring Person" or (B) such Person was aware of the extent of its
Beneficial Ownership of Common Stock but had no actual knowledge of the
consequences of such Beneficial Ownership under this Agreement) and without any
intention of changing or influencing control of the Company, then such Person
shall not be deemed to be or to have become an "Acquiring Person" for any
purposes of this Agreement unless and until such Person shall have failed to
divest itself, as soon as practicable (as determined, in good faith, by the
Board of Directors of the Company), of Beneficial Ownership of a sufficient
number of shares of Common Stock so that such Person would no longer otherwise
qualify as an "Acquiring Person"; (ii) if, as of the date hereof or prior to the
first public announcement of the adoption of this Agreement, any Person is or
becomes the Beneficial Owner of 15% or more of the shares of Common Stock
outstanding, such Person shall not be deemed to be or to become an "Acquiring
Person" unless and until such time as such Person shall, after the first public
announcement of the adoption of this Agreement, become the Beneficial Owner of
additional shares of Common Stock (other than pursuant to a dividend or
distribution paid or made by the Company on the outstanding Common Stock or
pursuant to a split or subdivision of the outstanding Common Stock), unless,
upon becoming the Beneficial Owner of

                                        1

<PAGE>

such additional shares of Common Stock, such Person is not then the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding; and (iii)
no Person shall become an "Acquiring Person" as the result of an acquisition of
shares of Common Stock by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares of Common Stock
beneficially owned by such Person to 15% or more of the shares of Common Stock
then outstanding, provided, however, that if a Person shall become the
Beneficial Owner of 15% or more of the shares of Common Stock then outstanding
by reason of such share acquisitions by the Company and shall thereafter become
the Beneficial Owner of any additional shares of Common Stock (other than
pursuant to a dividend or distribution paid or made by the Company on the
outstanding Common Stock or pursuant to a split or subdivision of the
outstanding Common Stock), then such Person shall be deemed to be an "Acquiring
Person" unless upon becoming the Beneficial Owner of such additional shares of
Common Stock such Person does not beneficially own 15% or more of the shares of
Common Stock then outstanding. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding at any
particular time, including for purposes of determining the particular percentage
of such outstanding shares of Common Stock of which any Person is the Beneficial
Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i)
of the General Rules and Regulations under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), as in effect on the date hereof.

     (b) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act, as in effect on the date hereof.

     (c) A Person shall be deemed the "Beneficial Owner" of, shall be deemed to
have "Beneficial Ownership" of and shall be deemed to "beneficially own" any
securities:

          (i) which such Person or any of such Person's Affiliates or Associates
is deemed to beneficially own, directly or indirectly, within the meaning of
Rule l3d-3 of the General Rules and Regulations under the Exchange Act as in
effect on the date hereof;

          (ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially own, (x)
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase, (y) securities which such Person
has a right to acquire upon the exercise of Rights at any time prior to the time
that any Person becomes an Acquiring Person or (z) securities issuable upon the
exercise of Rights from and after the time that any Person becomes an Acquiring
Person if such Rights were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or pursuant to Section
3(a) or Section 22 hereof ("Original Rights") or pursuant to Section 11(i) or
Section 11(n) with respect to an adjustment to Original Rights; or (B) the right
to vote pursuant to any agreement, arrangement or understanding; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security by

                                        2

<PAGE>

reason of such agreement, arrangement or understanding if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations promulgated under the Exchange Act and (2) is not also
then reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report); or

          (iii) which are beneficially owned, directly or indirectly, by any
other Person and with respect to which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent contemplated by the
proviso to Section 1(c)(ii)(B)) or disposing of such securities of the Company;

provided, however, that no Person who is an officer, director or employee of an
Exempt Person shall be deemed, solely by reason of such Person's status or
authority as such, to be the "Beneficial Owner" of, to have "Beneficial
Ownership" of or to "beneficially own" any securities that are "beneficially
owned" (as defined in this Section l(c)), including, without limitation, in a
fiduciary capacity, by an Exempt Person or by any other such officer, director
or employee of an Exempt Person.

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

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

     (f) "Common Stock" when used with reference to the Company shall mean the
Common Stock, presently par value $.01 per share, of the Company. "Common Stock"
when used with reference to any Person other than the Company shall mean the
common stock (or, in the case of an unincorporated entity, the equivalent equity
interest) with the greatest voting power of such other Person or, if such other
Person is a Subsidiary of another Person, the Person or Persons which ultimately
control such first-mentioned Person.

     (g) "Common Stock Equivalents" shall have the meaning set forth in Section
11(a)(iii) hereof.

     (h) "Current Value" shall have the meaning set forth in Section 11(a)(iii)
hereof.

     (i) "Distribution Date" shall have the meaning set forth in Section 3
hereof.

     (j) "Equivalent Preferred Shares" shall have the meaning set forth in
Section 11(b) hereof.

                                        3

<PAGE>

     (k) "Exempt Person" shall mean the Company or any Subsidiary (as such term
is hereinafter defined) of the Company, in each case including, without
limitation, in its fiduciary capacity, or any employee benefit plan of the
Company or of any Subsidiary of the Company, or any entity or trustee holding
Common Stock for or pursuant to the terms of any such plan or for the purpose of
funding any such plan or funding other employee benefits for employees of the
Company or of any Subsidiary of the Company.

     (l) "Exchange Ratio" shall have the meaning set forth in Section 24 hereof.

     (m) "Expiration Date" shall have the meaning set forth in Section 7 hereof.

     (n) "Final Expiration Date" shall have the meaning set forth in Section 7
hereof.

     (o) "Flip-In Event" shall have the meaning set forth in Section 11(a)(ii)
hereof.

     (p) "NASDAQ" shall mean The Nasdaq Stock Market.

     (q) "New York Stock Exchange" shall mean the New York Stock Exchange, Inc.

     (r) "Person" shall mean any individual, firm, corporation, partnership,
limited liability company, trust or other entity, and shall include any
successor (by merger or otherwise) to such entity.

     (s) "Preferred Stock" shall mean the Series A Junior Participating
Preferred Stock, par value $1.00 per share, of the Company having the rights and
preferences set forth in the Form of Certificate of Designation attached to this
Agreement as Exhibit A.

     (t) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.

     (u) "Purchase Price" shall have the meaning set forth in Section 7(b)
hereof.

     (v) "Redemption Date" shall have the meaning set forth in Section 7 hereof.

     (w) "Redemption Price" shall have the meaning set forth in Section 23
hereof.

     (x) "Right Certificate" shall have the meaning set forth in Section 3
hereof.

     (y) "Securities Act" shall mean the Securities Act of 1933, as amended.

     (z) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth in
Section 11(a)(iii) hereof.

     (aa) "Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.

     (bb) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to

                                        4

<PAGE>

Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such, or such earlier date as a majority of the
Board of Directors shall become aware of the existence of an Acquiring Person.

     (cc) "Subsidiary" of any Person shall mean any corporation or other entity
of which securities or other ownership interests having ordinary voting power
sufficient to elect a majority of the board of directors or other persons
performing similar functions are beneficially owned, directly or indirectly, by
such Person, and any corporation or other entity that is otherwise controlled by
such Person.

     (dd) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.

     (ee) "Summary of Rights" shall have the meaning set forth in Section 3
hereof.

     (ff) "Trading Day" shall have the meaning set forth in Section 11(d)(i)
hereof.

     Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date be the
holders of Common Stock) in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company may from time to
time appoint such co-Rights Agents as it may deem necessary or desirable.

     Section 3. Issue of Right Certificates.

     (a) Until the Close of Business on the earlier of (i) the tenth day after
the Stock Acquisition Date or (ii) the tenth Business Day (or such later date as
may be determined by action of the Board of Directors prior to such time as any
Person becomes an Acquiring Person) after the date of the commencement by any
Person (other than an Exempt Person) of, or of the first public announcement of
the intention of such Person (other than an Exempt Person) to commence, a tender
or exchange offer the consummation of which would result in any Person (other
than an Exempt Person) becoming the Beneficial Owner of shares of Common Stock
aggregating 15% or more of the Common Stock then outstanding (the earlier of
such dates being herein referred to as the "Distribution Date", provided,
however, that if either of such dates occurs after the date of this Agreement
and on or prior to the Record Date, then the Distribution Date shall be the
Record Date), (x) the Rights will be evidenced (subject to the provisions of
Section 3(b) hereof) by the certificates for Common Stock registered in the
names of the holders thereof and not by separate Right Certificates, and (y) the
Rights will be transferable only in connection with the transfer of Common
Stock. As soon as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign and the Company will send
or cause to be sent (and the Rights Agent will, if requested, send) by
first-class, insured, postage-prepaid mail, to each record holder of Common
Stock as of the close of business on the Distribution Date (other than any
Acquiring Person or any Associate or Affiliate of an Acquiring Person), at the
address of such holder shown on the records of the Company, a Right Certificate,
in substantially the form of Exhibit B hereto (a "Right Certificate"),
evidencing one Right (subject to adjustment as provided herein) for each share
of

                                        5

<PAGE>

Common Stock so held. As of the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.

     (b) On the Record Date, or as soon as practicable thereafter, the Company
will send a copy of a Summary of Rights to Purchase Shares of Preferred Stock,
in substantially the form of Exhibit C hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of Common Stock as of
the Close of Business on the Record Date (other than any Acquiring Person or any
Associate or Affiliate of any Acquiring Person), at the address of such holder
shown on the records of the Company. With respect to certificates for Common
Stock outstanding as of the Record Date, until the Distribution Date, the Rights
will be evidenced by such certificates registered in the names of the holders
thereof together with the Summary of Rights. Until the Distribution Date (or, if
earlier, the Expiration Date), the surrender for transfer of any certificate for
Common Stock outstanding on the Record Date, with or without a copy of the
Summary of Rights, shall also constitute the transfer of the Rights associated
with the Common Stock represented thereby.

     (c) Rights shall be issued in respect of all shares of Common Stock issued
or disposed of (including, without limitation, upon disposition of Common Stock
out of treasury stock or issuance or reissuance of Common Stock out of
authorized but unissued shares) after the Record Date but prior to the earlier
of the Distribution Date and the Expiration Date, or in certain circumstances
provided in Section 22 hereof, after the Distribution Date. Certificates issued
for Common Stock (including, without limitation, upon transfer of outstanding
Common Stock, disposition of Common Stock out of treasury stock or issuance or
reissuance of Common Stock out of authorized but unissued shares) after the
Record Date but prior to the earlier of the Distribution Date and the Expiration
Date shall have impressed on, printed on, written on or otherwise affixed to
them the following legend:

     This certificate also evidences and entitles the holder hereof to
     certain rights as set forth in a Rights Agreement between Specialty
     Catalog Corp. (the "Company") and Continental Stock Transfer & Trust
     Company, as Rights Agent, dated as of April 11, 2000 and as amended
     from time to time (the "Rights Agreement"), the terms of which are
     hereby incorporated herein by reference and a copy of which is on
     file at the principal executive offices of the Company. Under certain
     circumstances, as set forth in the Rights Agreement, such Rights will
     be evidenced by separate certificates and will no longer be evidenced
     by this certificate. The Company will mail to the holder of this
     certificate a copy of the Rights Agreement without charge after
     receipt of a written request therefor. Under certain circumstances,
     as set forth in the Rights Agreement, Rights owned by or transferred
     to any Person who is or becomes an Acquiring Person (as defined in
     the Rights Agreement) and certain transferees thereof will become
     null and void and will no longer be transferable.

With respect to such certificates containing the foregoing legend, until the
Distribution Date the Rights associated with the Common Stock represented by
such certificates shall be evidenced by

                                        6

<PAGE>

such certificates alone, and the surrender for transfer of any such certificate,
except as otherwise provided herein, shall also constitute the transfer of the
Rights associated with the Common Stock represented thereby. In the event that
the Company purchases or otherwise acquires any Common Stock after the Record
Date but prior to the Distribution Date, any Rights associated with such Common
Stock shall be deemed canceled and retired so that the Company shall not be
entitled to exercise any Rights associated with the Common Stock which are no
longer outstanding.

     Notwithstanding this paragraph (c), the omission of a legend shall not
affect the enforceability of any part of this Agreement or the rights of any
holder of the Rights.

     Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially in the form set forth in Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange or interdealer quotation system on which the Rights may from time to
time be listed or quoted, or to conform to usage. Subject to the provisions of
this Agreement, the Right Certificates shall entitle the holders thereof to
purchase such number of one one-thousandths of a share of Preferred Stock as
shall be set forth therein at the Purchase Price, but the number of such one
one-thousandths of a share of Preferred Stock and the Purchase Price shall be
subject to adjustment as provided herein.

     Section 5. Countersignature and Registration.

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

     (b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at an office or agency designated for such purpose, books for
registration and transfer of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.

     Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates;

                                        7

<PAGE>

Mutilated, Destroyed, Lost or Stolen Right Certificates.

     (a) Subject to the provisions of this Agreement, at any time after the
Distribution Date and prior to the Expiration Date, any Right Certificate or
Right Certificates may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the registered holder
to purchase a like number of one one-thousandths of a share of Preferred Stock
as the Right Certificate or Right Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate or Right Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the office or agency of the Rights Agent designated for such
purpose. Thereupon the Rights Agent shall countersign and deliver to the Person
entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Company may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.

     (b) Subject to the provisions of this Agreement, at any time after the
Distribution Date and prior to the Expiration Date, upon receipt by the Company
and the Rights Agent of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Right Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to them,
and, at the Company's request, reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Right Certificate if mutilated, the Company will
make and deliver a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.

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

     (a) Except as otherwise provided herein, the Rights shall become
exercisable on the Distribution Date, and thereafter the registered holder of
any Right Certificate may, subject to Section 11(a)(ii) hereof and except as
otherwise provided herein, exercise the Rights evidenced thereby in whole or in
part upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights Agent at the
office or agency of the Rights Agent designated for such purpose, together with
payment of the aggregate Purchase Price with respect to the total number of one
one-thousandths of a share of Preferred Stock (or other securities, cash or
other assets, as the case may be) as to which the Rights are exercised, at any
time which is both after the Distribution Date and prior to the time (the
"Expiration Date") that is the earliest of (i) the Close of Business on April
11, 2010 (the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date") or (iii) the
time at which such Rights are exchanged as provided in Section 24 hereof.

     (b) The Purchase Price shall be initially $15 for each one one-thousandth
of a share of Preferred Stock purchasable upon the exercise of a Right. The
Purchase Price and the number of one one-thousandths of a share of Preferred
Stock or other securities or property to be acquired upon exercise of a Right
shall be subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful money of the United States of America
in

                                        8

<PAGE>

accordance with paragraph (c) of this Section 7.

     (c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of the aggregate Purchase Price
for the shares of Preferred Stock to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof, in cash or by certified check,
cashier's check or money order payable to the order of the Company, the Rights
Agent shall thereupon promptly (i) (A) requisition from any transfer agent of
the Preferred Stock, or make available if the Rights Agent is the transfer agent
for the Preferred Stock, certificates for the number of shares of Preferred
Stock to be purchased, and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, or (B) requisition from a
depositary agent appointed by the Company depositary receipts representing
interests in such number of one one-thousandths of a share of Preferred Stock as
are to be purchased (in which case certificates for the Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the
depositary agent), and the Company hereby directs any such depositary agent to
comply with such request, (ii) when appropriate, requisition from the Company
the amount of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (iii) promptly after receipt of such
certificates or depositary receipts, cause the same to be delivered to or upon
the order of the registered holder of such Right Certificate, registered in such
name or names as may be designated by such holder and (iv) when appropriate,
after receipt, promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate.

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

     (e) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder of Rights upon the occurrence of any purported
transfer or exercise of Rights pursuant to Section 6 hereof or this Section 7
unless such registered holder shall have (i) completed and signed the
certificate contained in the form of assignment or form of election to purchase
set forth on the reverse side of the Rights Certificate surrendered for such
transfer or exercise and (ii) provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) thereof as the Company
shall reasonably request.

     Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such

                                        9

<PAGE>

canceled Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.

     Section 9. Availability of Shares of Preferred Stock.

     (a) The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued shares of Preferred Stock or
any shares of Preferred Stock held in its treasury, the number of shares of
Preferred Stock that will be sufficient to permit the exercise in full of all
outstanding Rights.

     (b) So long as the shares of Preferred Stock issuable upon the exercise of
Rights may be listed or admitted to trading on any national securities exchange,
or quoted on NASDAQ, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares reserved for such
issuance to be listed or admitted to trading on such exchange, or quoted on
NASDAQ, upon official notice of issuance upon such exercise.

     (c) From and after such time as the Rights become exercisable, the Company
shall use its best efforts, if then necessary to permit the issuance of shares
of Preferred Stock upon the exercise of Rights, to register and qualify such
shares of Preferred Stock under the Securities Act and any applicable state
securities or "Blue Sky" laws (to the extent exemptions therefrom are not
available), cause such registration statement and qualifications to become
effective as soon as possible after such filing and keep such registration and
qualifications effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the earlier of the date as of which
the Rights are no longer exercisable for such securities and the Expiration
Date. The Company may temporarily suspend, for a period of time not to exceed 90
days, the exercisability of the Rights in order to prepare and file a
registration statement under the Securities Act and permit it to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction unless the
requisite qualification in such jurisdiction shall have been obtained and until
a registration statement under the Securities Act shall have been declared
effective, unless an exemption therefrom is available.

     (d) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all shares of Preferred Stock delivered upon
exercise of Rights shall, at the time of delivery of the certificates therefor
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.

     (e) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any shares of Preferred Stock upon the exercise of Rights. The Company shall
not, however, be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Right Certificates to a Person other
than, or the issuance or delivery of certificates or depositary receipts for the
Preferred Stock in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or deliver
any certificates or depositary receipts for Preferred Stock upon the exercise of
any

                                       10

<PAGE>

Rights until any such tax shall have been paid (any such tax being payable by
that holder of such Right Certificate at the time of surrender) or until it has
been established to the Company's reasonable satisfaction that no such tax is
due.

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

     Section 11. Adjustment of Purchase Price, Number and Kind of Shares and
Number of Rights. The Purchase Price, the number of shares of Preferred Stock or
other securities or property purchasable upon exercise of each Right and the
number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.

     (a)(i) In the event the Company shall at any time after the date of this
Agreement (A) declare and pay a dividend on the Preferred Stock payable in
shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C)
combine the outstanding Preferred Stock into a smaller number of shares of
Preferred Stock or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), except as otherwise provided in this Section 11(a),
the number and kind of shares of capital stock issuable upon exercise of a Right
as of the record date for such dividend or the effective date of such
subdivision, combination or reclassification shall be proportionately adjusted
so that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time when the
Preferred Stock transfer books of the Company were open, the holder would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification.

     (ii) Subject to Section 24 of this Agreement, in the event any Person
becomes an Acquiring Person (the first occurrence of such event being referred
to hereinafter as the "Flip-In Event"), then (A) the Purchase Price shall be
adjusted to be the Purchase Price in effect immediately prior to the Flip-In
Event multiplied by the number of one one-thousandths of a share of Preferred
Stock for which a Right was exercisable immediately prior to such Flip-In Event,
whether or not such Right was then exercisable, and (B) each holder of a Right,
except as otherwise provided in this Section 11(a)(ii) and Section 11(a)(iii)
hereof, shall thereafter have the right to receive, upon exercise thereof at a
price equal to the Purchase Price (as so adjusted), in accordance with the terms
of this Agreement and in lieu of shares of Preferred Stock, such number of
shares of Common Stock as

                                       11

<PAGE>

shall equal the result obtained by dividing the Purchase Price (as so adjusted)
by 50% of the current per share market price of the Common Stock (determined
pursuant to Section 11(d) hereof) on the date of such Flip-In Event; provided,
however, that the Purchase Price (as so adjusted) and the number of shares of
Common Stock so receivable upon exercise of a Right shall, following the Flip-
In Event, be subject to further adjustment as appropriate in accordance with
Section 11(f) hereof. Notwithstanding anything in this Agreement to the
contrary, however, from and after the Flip-In Event, any Rights that are
beneficially owned by (x) any Acquiring Person (or any Affiliate or Associate of
any Acquiring Person), (y) a transferee of any Acquiring Person (or any such
Affiliate or Associate) who becomes a transferee after the Flip-In Event or (z)
a transferee of any Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the Flip-In Event pursuant to
either (I) a transfer from the Acquiring Person to holders of its equity
securities or to any Person with whom it has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (II) a transfer
which the Board of Directors has determined is part of a plan, arrangement or
understanding which has the purpose or effect of avoiding the provisions of this
paragraph, and subsequent transferees of such Persons, shall be void without any
further action and any holder of such Rights shall thereafter have no rights
whatsoever with respect to such Rights under any provision of this Agreement.
The Company shall use all reasonable efforts to ensure that the provisions of
this Section 11(a)(ii) are complied with, but shall have no liability to any
holder of Right Certificates or other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder. From and after the Flip-In Event, no Right
Certificate shall be issued pursuant to Section 3 or Section 6 hereof that
represents Rights that are or have become void pursuant to the provisions of
this paragraph, and any Right Certificate delivered to the Rights Agent that
represents Rights that are or have become void pursuant to the provisions of
this paragraph shall be canceled. From and after the occurrence of an event
specified in Section 13(a) hereof, any Rights that theretofore have not been
exercised pursuant to this Section 11(a)(ii) shall thereafter be exercisable
only in accordance with Section 13 and not pursuant to this Section 11(a)(ii).

     (iii) The Company may at its option substitute for a share of Common Stock
issuable upon the exercise of Rights in accordance with the foregoing
subparagraph (ii) a number of shares of Preferred Stock or fraction thereof such
that the current per share market price of one share of Preferred Stock
multiplied by such number or fraction is equal to the current per share market
price of one share of Common Stock. In the event that there shall not be
sufficient shares of Common Stock issued but not outstanding or authorized but
unissued to permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii), the Board of Directors shall, with respect to such
deficiency, to the extent permitted by applicable law and any material
agreements then in effect to which the Company is a party, (A) determine the
excess (such excess, the "Spread") of (1) the value of the shares of Common
Stock issuable upon the exercise of a Right in accordance with the foregoing
subparagraph (ii) (the "Current Value") over (2) the Purchase Price (as adjusted
in accordance with the foregoing subparagraph (ii)), and (B) with respect to
each Right (other than Rights which have become void pursuant to the foregoing
subparagraph (ii)), make adequate provision to substitute for the shares of
Common Stock issuable in accordance with the foregoing subparagraph (ii) upon
exercise of the Right and payment of the Purchase Price (as adjusted in
accordance therewith), (1) cash, (2) a reduction in such Purchase Price, (3)
shares of Preferred Stock or other equity securities of the Company (including,
without limitation, shares or fractions of shares of preferred stock which, by
virtue of having dividend, voting and liquidation

                                       12

<PAGE>

rights substantially comparable to those of the shares of Common Stock, are
deemed in good faith by the Board of Directors to have substantially the same
value as the shares of Common Stock (such shares of Preferred Stock and shares
or fractions of shares of preferred stock are hereinafter referred to as "Common
Stock Equivalents")), (4) debt securities of the Company, (5) other assets, or
(6) any combination of the foregoing, having a value which, when added to the
value of the shares of Common Stock issued upon exercise of such Right, shall
have an aggregate value equal to the Current Value (less the amount of any
reduction in such Purchase Price), where such aggregate value has been
determined by the Board of Directors upon the advice of a nationally recognized
investment banking firm selected in good faith by the Board of Directors;
provided, however, that if the Company shall not make adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days following the
Flip-In Event (the date of the Flip-In Event being the "Section 11(a)(ii)
Trigger Date"), then the Company shall be obligated to deliver, to the extent
permitted by applicable law and any material agreements then in effect to which
the Company is a party, upon the surrender for exercise of a Right and without
requiring payment of such Purchase Price, shares of Common Stock (to the extent
available), and then, if necessary, such number or fractions of shares of
Preferred Stock (to the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread. If, upon the
occurrence of the Flip-In Event, the Board of Directors shall determine in good
faith that it is likely that sufficient additional shares of Common Stock could
be authorized for issuance upon exercise in full of the Rights, then, if the
Board of Directors so elects, the thirty (30) day period set forth above may be
extended to the extent necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares (such thirty (30) day
period, as it may be extended, is herein called the "Substitution Period"). To
the extent that the Company determines that some action need be taken pursuant
to the second and/or third sentence of this Section 11(a)(iii), the Company (x)
shall provide, subject to Section 11(a)(ii) hereof and the last sentence of this
Section 11(a)(iii) hereof, that such action shall apply uniformly to all
outstanding Rights and (y) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of distribution to be
made pursuant to such second sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value of the shares of
Common Stock shall be the current per share market price (as determined pursuant
to Section 11(d)(i)) on the Section 11(a)(ii) Trigger Date and the per share or
fractional value of any "Common Stock Equivalent" shall be deemed to equal the
current per share market price of the Common Stock. The Board of Directors of
the Company may, but shall not be required to, establish procedures to allocate
the right to receive shares of Common Stock upon the exercise of the Rights
among holders of Rights pursuant to this Section 11(a)(iii).

     (b) In case the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Stock entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe for
or purchase Preferred Stock (or shares having the same rights, privileges and
preferences as the Preferred Stock ("Equivalent Preferred Shares")) or
securities convertible into Preferred Stock or Equivalent Preferred Shares at a
price per share of Preferred Stock or Equivalent Preferred Shares (or having a
conversion price per share, if a security convertible into shares of Preferred
Stock or Equivalent Preferred Shares) less than the then current

                                       13

<PAGE>

per share market price of the Preferred Stock (determined pursuant to Section
11(d) hereof) on such record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Preferred Stock and Equivalent Preferred Shares
outstanding on such record date plus the number of shares of Preferred Stock and
Equivalent Preferred Shares which the aggregate offering price of the total
number of shares of Preferred Stock and/or Equivalent Preferred Shares so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price, and
the denominator of which shall be the number of shares of Preferred Stock and
Equivalent Preferred Shares outstanding on such record date plus the number of
additional shares of Preferred Stock and/or Equivalent Preferred Shares to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible); provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent. Shares of Preferred Stock and Equivalent Preferred
Shares owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that
such rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.

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

     (d)(i) Except as otherwise provided herein, for the purpose of any
computation hereunder, the "current per share market price" of any security (a
"Security" for the purpose of this Section 11(d)(i)) on any date shall be deemed
to be the average of the daily closing prices per share

                                       14

<PAGE>

of such Security for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; provided, however, that in
the event that the current per share market price of the Security is determined
during a period following the announcement by the issuer of such Security of (A)
a dividend or distribution on such Security payable in shares of such Security
or securities convertible into such shares, or (B) any subdivision, combination
or reclassification of such Security, and prior to the expiration of 30 Trading
Days after the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification, then, and in each
such case, the current per share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of such Security. The
closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported by the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Security is not
listed or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Security is
listed or admitted to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use, or, if on any
such date the Security is not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Security selected by the Board of Directors of the
Company. The term "Trading Day" shall mean a day on which the principal national
securities exchange on which the Security is listed or admitted to trading is
open for the transaction of business or, if the Security is not listed or
admitted to trading on any national securities exchange, a Business Day.

     (ii) For the purpose of any computation hereunder, if the Preferred Stock
is publicly traded, the "current per share market price" of the Preferred Stock
shall be determined in accordance with the method set forth in Section 11(d)(i).
If the Preferred Stock is not publicly traded but the Common Stock is publicly
traded, the "current per share market price" of the Preferred Stock shall be
conclusively deemed to be the current per share market price of the Common Stock
as determined pursuant to Section 11(d)(i) multiplied by the then applicable
Adjustment Number (as defined in and determined in accordance with the
Certificate of Designation for the Preferred Stock). If neither the Common Stock
nor the Preferred Stock is publicly traded, "current per share market price"
shall mean the fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent.

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

                                       15

<PAGE>

     (f) If as a result of an adjustment made pursuant to Section 11(a) hereof,
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than the Preferred Stock,
thereafter the Purchase Price and the number of such other shares so receivable
upon exercise of a Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Sections 11(a), 11(b), 11(c), 11(e),
11(h), 11(i) and 11(m) hereof, as applicable, and the provisions of Sections 7,
9, 10, 13 and 14 hereof with respect to the Preferred Stock shall apply on like
terms to any such other shares.

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

     (h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and 11(c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of one one-
thousandths of a share of Preferred Stock (calculated to the nearest one
hundred-thousandth of a share of Preferred Stock) obtained by (i) multiplying
(x) the number of one one-thousandths of a share purchasable upon the exercise
of a Right immediately prior to such adjustment by (y) the Purchase Price in
effect immediately prior to such adjustment and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment.

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

                                       16

<PAGE>

countersigned in the manner provided for herein and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.

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

     (k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the fraction of Preferred
Stock or other shares of capital stock issuable upon exercise of a Right, the
Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable shares of Preferred Stock or other such shares at
such adjusted Purchase Price.

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

     (m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such adjustments in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Stock, issuance
wholly for cash of any shares of Preferred Stock at less than the current market
price, issuance wholly for cash of Preferred Stock or securities which by their
terms are convertible into or exchangeable for Preferred Stock, dividends on
Preferred Stock payable in shares of Preferred Stock or issuance of rights,
options or warrants referred to hereinabove in Section 11(b), hereafter made by
the Company to holders of its Preferred Stock shall not be taxable to such
stockholders.

     (n) Anything in this Agreement to the contrary notwithstanding, in the
event that at any time after the date of this Agreement and prior to the
Distribution Date, the Company shall (i) declare and pay any dividend on the
Common Stock payable in Common Stock or (ii) effect a subdivision, combination
or consolidation of the Common Stock (by reclassification or otherwise than by
payment of a dividend payable in Common Stock) into a greater or lesser number
of shares of Common Stock, then, in each such case, the number of Rights
associated with each share of Common Stock then outstanding, or issued or
delivered thereafter, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such event by a
fraction the numerator of which shall

                                       17

<PAGE>

be the total number of shares of Common Stock outstanding immediately prior to
the occurrence of the event and the denominator of which shall be the total
number of shares of Common Stock outstanding immediately following the
occurrence of such event.

     (o) The Company agrees that, after the earlier of the Distribution Date or
the Stock Acquisition Date, it will not, except as permitted by Sections 23, 24
or 27 hereof, take (or permit any Subsidiary to take) any action if at the time
such action is taken it is reasonably foreseeable that such action will diminish
substantially or eliminate the benefits intended to be afforded by the Rights.

     Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Common Stock and the
Preferred Stock a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate in accordance with Section 25 hereof (if
so required under Section 25 hereof). The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment therein contained and
shall not be deemed to have knowledge of any such adjustment unless and until it
shall have received such certificate.

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

     (a) In the event, directly or indirectly, at any time after the Flip-In
Event (i) the Company shall consolidate with or shall merge into any other
Person, (ii) any Person shall merge with and into the Company and the Company
shall be the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Common Stock shall be changed
into or exchanged for stock or other securities of any other Person (or of the
Company) or cash or any other property, or (iii) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person (other than the Company or one or more
wholly-owned Subsidiaries of the Company), then upon the first occurrence of
such event, proper provision shall be made so that: (A) each holder of a Right
(other than Rights which have become void pursuant to Section 11(a)(ii) hereof)
shall thereafter have the right to receive, upon the exercise thereof at the
Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii)
hereof), in accordance with the terms of this Agreement and in lieu of shares of
Preferred Stock or Common Stock of the Company, such number of validly
authorized and issued, fully paid, non-assessable and freely tradeable shares of
Common Stock of the Principal Party (as such term is hereinafter defined), not
subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as shall equal the result obtained by dividing the Purchase Price (as
theretofore adjusted in accordance with Section 11(a)(ii) hereof) by 50% of the
current per share market price of the Common Stock of such Principal Party
(determined pursuant to Section 11(d) hereof) on the date of consummation of
such consolidation, merger, sale or transfer; provided, however, that the
Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii)
hereof) and the number of shares of Common Stock of such Principal Party so
receivable upon exercise of a Right shall be subject to further adjustment as
appropriate in accordance with Section 11(f) hereof to reflect any events
occurring in respect of the

                                       18

<PAGE>

Common Stock of such Principal Party after the occurrence of such consolidation,
merger, sale or transfer; (B) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant to this
Agreement; (C) the term "Company" shall thereafter be deemed to refer to such
Principal Party; and (D) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of its shares of
Common Stock in accordance with Section 9 hereof) in connection with such
consummation of any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to the shares of its Common Stock thereafter deliverable upon
the exercise of the Rights; provided that, upon the subsequent occurrence of any
consolidation, merger, sale or transfer of assets or other extraordinary
transaction in respect of such Principal Party, each holder of a Right shall
thereupon be entitled to receive, upon exercise of a Right and payment of the
Purchase Price as provided in this Section 13(a), such cash, shares, rights,
warrants and other property which such holder would have been entitled to
receive had such holder, at the time of such transaction, owned the Common Stock
of the Principal Party receivable upon the exercise of a Right pursuant to this
Section 13(a), and such Principal Party shall take such steps (including, but
not limited to, reservation of shares of stock) as may be necessary to permit
the subsequent exercise of the Rights in accordance with the terms hereof for
such cash, shares, rights, warrants and other property.

     (b) "Principal Party" shall mean:

          (i) in the case of any transaction described in (i) or (ii) of the
first sentence of Section 13(a) hereof: (A) the Person that is the issuer of the
securities into which the shares of Common Stock are converted in such merger or
consolidation, or, if there is more than one such issuer, the issuer the shares
of Common Stock of which have the greatest aggregate market value of shares
outstanding, or (B) if no securities are so issued, (x) the Person that is the
other party to the merger, if such Person survives said merger, or, if there is
more than one such Person, the Person the shares of Common Stock of which have
the greatest aggregate market value of shares outstanding or (y) if the Person
that is the other party to the merger does not survive the merger, the Person
that does survive the merger (including the Company if it survives) or (z) the
Person resulting from the consolidation; and

          (ii) in the case of any transaction described in (iii) of the first
sentence of Section 13(a) hereof, the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion of the
assets or earning power cannot be determined, whichever of such Persons is the
issuer of Common Stock having the greatest aggregate market value of shares
outstanding;

provided, however, that in any such case described in the foregoing clause
(b)(i) or (b)(ii), if the Common Stock of such Person is not at such time or has
not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, then (1) if such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has been so
registered, the term "Principal Party" shall refer to such other Person, or (2)
if such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Stock of all of which is and has been

                                       19

<PAGE>

so registered, the term "Principal Party" shall refer to whichever of such
Persons is the issuer of Common Stock having the greatest aggregate market value
of shares outstanding, or (3) if such Person is owned, directly or indirectly,
by a joint venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in clauses (1) and (2) above
shall apply to each of the owners having an interest in the venture as if the
Person owned by the joint venture was a Subsidiary of both or all of such joint
venturers, and the Principal Party in each such case shall bear the obligations
set forth in this Section 13 in the same ratio as its interest in such Person
bears to the total of such interests.

     (c) The Company shall not consummate any consolidation, merger, sale or
transfer referred to in Section 13(a) hereof unless prior thereto the Company
and the Principal Party involved therein shall have executed and delivered to
the Rights Agent an agreement confirming that the requirements of Sections 13(a)
and (b) hereof shall promptly be performed in accordance with their terms and
that such consolidation, merger, sale or transfer of assets shall not result in
a default by the Principal Party under this Agreement as the same shall have
been assumed by the Principal Party pursuant to Sections 13(a) and (b) hereof
and providing that, as soon as practicable after executing such agreement
pursuant to this Section 13, the Principal Party will:

          (i) prepare and file a registration statement under the Securities
Act, if necessary, with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, use its best efforts to
cause such registration statement to become effective as soon as practicable
after such filing and use its best efforts to cause such registration statement
to remain effective (with a prospectus at all times meeting the requirements of
the Securities Act) until the Expiration Date and similarly comply with
applicable state securities laws;

          (ii) use its best efforts, if the Common Stock of the Principal Party
shall be listed or admitted to trading on the New York Stock Exchange or on
another national securities exchange, to list or admit to trading (or continue
the listing of) the Rights and the securities purchasable upon exercise of the
Rights on the New York Stock Exchange or such securities exchange, or, if the
Common Stock of the Principal Party shall not be listed or admitted to trading
on the New York Stock Exchange or a national securities exchange, to cause the
Rights and the securities receivable upon exercise of the Rights to be
authorized for quotation on NASDAQ or on such other system then in use;

          (iii) deliver to holders of the Rights historical financial statements
for the Principal Party which comply in all respects with the requirements for
registration on Form 10 (or any successor form) under the Exchange Act; and

          (iv) obtain waivers of any rights of first refusal or preemptive
rights in respect of the Common Stock of the Principal Party subject to purchase
upon exercise of outstanding Rights.

     (d) In case the Principal Party has a provision in any of its authorized
securities or in its certificate of incorporation or by-laws or other instrument
governing its affairs, which provision would have the effect of (i) causing such
Principal Party to issue (other than to holders of Rights pursuant to this
Section 13), in connection with, or as a consequence of, the consummation

                                       20

<PAGE>

of a transaction referred to in this Section 13, shares of Common Stock or
Common Stock Equivalents of such Principal Party at less than the then current
market price per share thereof (determined pursuant to Section 11(d) hereof) or
securities exercisable for, or convertible into, Common Stock or Common Stock
Equivalents of such Principal Party at less than such then current market price,
or (ii) providing for any special payment, tax or similar provision in
connection with the issuance of the Common Stock of such Principal Party
pursuant to the provisions of Section 13, then, in such event, the Company
hereby agrees with each holder of Rights that it shall not consummate any such
transaction unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement providing
that the provision in question of such Principal Party shall have been canceled,
waived or amended, or that the authorized securities shall be redeemed, so that
the applicable provision will have no effect in connection with, or as a
consequence of, the consummation of the proposed transaction.

     (e) The Company covenants and agrees that it shall not, at any time after
the Flip- In Event, enter into any transaction of the type described in clauses
(i) through (iii) of Section 13(a) hereof if (i) at the time of or immediately
after such consolidation, merger, sale, transfer or other transaction there are
any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights, (ii) prior to,
simultaneously with or immediately after such consolidation, merger, sale,
transfer or other transaction, the stockholders of the Person who constitutes,
or would constitute, the Principal Party for purposes of Section 13(b) hereof
shall have received a distribution of Rights previously owned by such Person or
any of its Affiliates or Associates or (iii) the form or nature of organization
of the Principal Party would preclude or limit the exercisability of the Rights.

     Section 14. Fractional Rights and Fractional Shares.

     (a) The Company shall not be required to issue fractions of Rights (except
prior to the Distribution Date in accordance with Section 11(n) hereof) or to
distribute Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker is making a

                                       21

<PAGE>

market in the Rights, the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used.

     (b) The Company shall not be required to issue fractions of Preferred Stock
(other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock) or to distribute certificates which evidence
fractional shares of Preferred Stock (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock) upon the exercise
or exchange of Rights. Interests in fractions of Preferred Stock in integral
multiples of one one- thousandth of a share of Preferred Stock may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it;
provided, that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Stock represented by such
depositary receipts. In lieu of fractional shares of Preferred Stock that are
not integral multiples of one one-thousandth of a share of Preferred Stock, the
Company shall pay to the registered holders of Right Certificates at the time
such Rights are exercised or exchanged as herein provided an amount in cash
equal to the same fraction of the current market value of a whole share of
Preferred Stock (as determined in accordance with Section 14(a) hereof) for the
Trading Day immediately prior to the date of such exercise or exchange.

     (c) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock upon the exercise or exchange of Rights. In lieu of such fractional
shares of Common Stock, the Company shall pay to the registered holders of the
Right Certificates with regard to which such fractional shares of Common Stock
would otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole share of Common Stock (as determined in
accordance with Section 14(a) hereof) for the Trading Day immediately prior to
the date of such exercise or exchange.

     (d) The holder of a Right by the acceptance of the Right expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise or exchange of a Right (except as provided above).

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

                                       22

<PAGE>

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

     (a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of the Common Stock;

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

     (c) the Company and the Rights Agent may deem and treat the Person in whose
name the Right Certificate (or, prior to the Distribution Date, the Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the Common Stock certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent, subject to Section 7(e) hereof, shall be affected
by any notice to the contrary.

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

     Section 18. Concerning the Rights Agent.

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

     (b) The Rights Agent shall be protected and shall incur no liability for,
or in respect of any action taken, suffered or omitted by it in connection with,
its administration of this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Stock or Common

                                       23

<PAGE>

Stock or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons, or otherwise upon the advice of
counsel as set forth in Section 20 hereof.

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

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

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

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

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

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

                                       24

<PAGE>

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

     (c) The Rights Agent shall be liable hereunder to the Company and any other
Person only for its own gross negligence, bad faith or willful misconduct.

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

     (e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in
the terms of the Rights provided for in Sections 3, 11, 13, 23 and 24, or the
ascertaining of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after receipt of a certificate furnished pursuant to Section 12,
describing such change or adjustment); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any shares of Preferred Stock or other securities to be issued
pursuant to this Agreement or any Right Certificate or as to whether any shares
of Preferred Stock or other securities will, when issued, be validly authorized
and issued, fully paid and nonassessable.

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

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

                                       25

<PAGE>

have received written instructions in response to such application specifying
the action to be taken or omitted.

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

     (i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.

     (j) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse thereof,
as the case may be, has not been completed to certify the holder is not an
Acquiring Person (or an Affiliate or Associate thereof) or a transferee thereof,
the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.

     Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Stock or Preferred Stock by registered or certified mail, and,
following the Distribution Date, to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock or Preferred Stock by registered or certified mail, and, following
the Distribution Date, to the holders of the Right Certificates by first- class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the registered holder of
any Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or the laws of any state of the
United States or the District of Columbia, in good standing, having an office in
the State of Massachusetts or the State of New York, which is authorized under
such laws to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million. After appointment, the successor Rights Agent shall be vested
with

                                       26

<PAGE>

the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock or Preferred Stock, and, following the Distribution Date, mail
a notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.

     Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such forms as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or
sale of Common Stock following the Distribution Date and prior to the Expiration
Date, the Company may with respect to shares of Common Stock so issued or sold
pursuant to (i) the exercise of stock options, (ii) under any employee plan or
arrangement, (iii) upon the exercise, conversion or exchange of securities,
notes or debentures issued by the Company or (iv) a contractual obligation of
the Company, in each case existing prior to the Distribution Date, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale.

     Section 23. Redemption.

     (a) The Board of Directors of the Company may, at any time prior to the
Flip-In Event, redeem all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring in respect of the Common
Stock after the date hereof (the redemption price being hereinafter referred to
as the "Redemption Price"). The redemption of the Rights may be made effective
at such time, on such basis and with such conditions as the Board of Directors
in its sole discretion may establish. The Redemption Price shall be payable, at
the option of the Company, in cash, shares of Common Stock, or such other form
of consideration as the Board of Directors shall determine.

     (b) Immediately upon the action of the Board of Directors ordering the
redemption of the Rights pursuant to paragraph (a) of this Section 23 (or at
such later time as the Board of Directors may establish for the effectiveness of
such redemption), and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price. The Company shall
promptly give public notice of any such redemption; provided, however, that the
failure to give, or any defect in, any such notice shall not affect the validity
of such redemption. Within 10 days after such action of the Board of Directors
ordering the redemption of the Rights (or such later time as the Board of
Directors may establish for the effectiveness of such redemption), the Company
shall mail a notice of redemption to all the holders of the then outstanding
Rights at their last addresses as they

                                       27

<PAGE>

appear upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Common Stock. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption
shall state the method by which the payment of the Redemption Price will be
made.

     Section 24. Exchange.

     (a) The Board of Directors of the Company may, at its option, at any time
after the Flip-In Event, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 11(a)(ii) hereof) for Common Stock at an
exchange ratio of one share of Common Stock per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring in
respect of the Common Stock after the date hereof (such amount per Right being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after an Acquiring Person shall have become the Beneficial Owner of shares
of Common Stock aggregating 50% or more of the shares of Common Stock then
outstanding. From and after the occurrence of an event specified in Section
13(a) hereof, any Rights that theretofore have not been exchanged pursuant to
this Section 24(a) shall thereafter be exercisable only in accordance with
Section 13 and may not be exchanged pursuant to this Section 24(a). The exchange
of the Rights by the Board of Directors may be made effective at such time, on
such basis and with such conditions as the Board of Directors in its sole
discretion may establish.

     (b) Immediately upon the effectiveness of the action of the Board of
Directors of the Company ordering the exchange of any Rights pursuant to
paragraph (a) of this Section 24 and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that number of shares
of Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public notice
of any such exchange; provided, however, that the failure to give, or any defect
in, such notice shall not affect the validity of such exchange. The Company
shall promptly mail a notice of any such exchange to all of the holders of the
Rights so exchanged at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the exchange of the
shares of Common Stock for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 11(a)(ii)
hereof) held by each holder of Rights.

     (c) The Company may at its option substitute, and, in the event that there
shall not be sufficient shares of Common Stock issued but not outstanding or
authorized but unissued to permit an exchange of Rights for Common Stock as
contemplated in accordance with this Section 24, the Company shall substitute to
the extent of such insufficiency, for each share of Common Stock that would
otherwise be issuable upon exchange of a Right, a number of shares of Preferred
Stock or fraction thereof (or Equivalent Preferred Shares, as such term is
defined in Section 11(b)) such that the current per share market price
(determined pursuant to Section 11(d) hereof) of one share of Preferred Stock
(or Equivalent Preferred Share) multiplied by such number or fraction is equal

                                       28

<PAGE>

to the current per share market price of one share of Common Stock (determined
pursuant to Section 11(d) hereof) as of the date of such exchange.

     Section 25. Notice of Certain Events.

     (a) In case the Company shall at any time after the earlier of the
Distribution Date or the Stock Acquisition Date propose (i) to pay any dividend
payable in stock of any class to the holders of its Preferred Stock or to make
any other distribution to the holders of its Preferred Stock (other than a
regular quarterly cash dividend), (ii) to offer to the holders of its Preferred
Stock rights or warrants to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision or combination of
outstanding Preferred Stock), (iv) to effect the liquidation, dissolution or
winding up of the Company, or (v) to pay any dividend on the Common Stock
payable in Common Stock or to effect a subdivision, combination or consolidation
of the Common Stock (by reclassification or otherwise than by payment of
dividends in Common Stock), then, in each such case, the Company shall give to
each holder of a Right Certificate, in accordance with Section 26 hereof, a
notice of such proposed action, which shall specify the record date for the
purposes of such dividend or distribution or offering of rights or warrants, or
the date on which such liquidation, dissolution, winding up, reclassification,
subdivision, combination or consolidation is to take place and the date of
participation therein by the holders of the Common Stock and/or Preferred Stock,
if any such date is to be fixed, and such notice shall be so given in the case
of any action covered by clause (i) or (ii) above at least 10 days prior to the
record date for determining holders of the Preferred Stock for purposes of such
action, and in the case of any such other action, at least 10 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the Common Stock and/or Preferred Stock, whichever shall be
the earlier.

     (b) In case any event described in Section 11(a)(ii) or Section 13 shall
occur then the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate (or if occurring prior to the Distribution Date,
the holders of the Common Stock) in accordance with Section 26 hereof, a notice
of the occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii) and
Section 13 hereof.

     Section 26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:

                             Specialty Catalog Corp.
                             21 Bristol Drive
                             South Easton, Massachusetts  02375
                             Attention: Chief Financial Officer

Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights

                                       29

<PAGE>

Agent shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Company)
as follows:

                            Continental Stock Transfer & Trust Company
                            2 Broadway
                            New York, New York 10004
                            Attention: Compliance Department

Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.

     Section 27. Supplements and Amendments. Except as provided in the
penultimate sentence of this Section 27, for so long as the Rights are then
redeemable, the Company may in its sole and absolute discretion, and the Rights
Agent shall if the Company so directs, supplement or amend any provision of this
Agreement in any respect without the approval of any holders of the Rights. At
any time when the Rights are no longer redeemable, except as provided in the
penultimate sentence of this Section 27, the Company may, and the Rights Agent
shall, if the Company so directs, supplement or amend this Agreement without the
approval of any holders of Rights, provided that no such supplement or amendment
may (a) adversely affect the interests of the holders of Rights as such (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person),
(b) cause this Agreement again to become amendable other than in accordance with
this sentence or (c) cause the Rights again to become redeemable.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price. Upon
the delivery of a certificate from an appropriate officer of the Company which
states that the supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment,
provided that any supplement or amendment that does not amend Sections 18, 19,
20 or 21 hereof in a manner adverse to the Rights Agent shall become effective
immediately upon execution by the Company, whether or not also executed by the
Rights Agent.

     Section 28. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.

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

     Section 30. Determinations and Actions by the Board of Directors. The Board
of Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise the rights and powers specifically
granted to the Board of Directors of the Company

                                       30

<PAGE>

or to the Company, or as may be necessary or advisable in the administration of
this Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Agreement and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including, without limitation, a determination to redeem or not redeem the
Rights or to amend or not amend this Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) that are done or made by the Board
of Directors of the Company in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights, as such,
and all other parties, and (y) not subject the Board of Directors to any
liability to the holders of the Rights.

     Section 31. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.

     Section 32. Governing Law. This Agreement and each Right Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Delaware and for all purposes shall be governed by and construed in accordance
with the laws of such State applicable to contracts to be made and performed
entirely within such State.

     Section 33. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.

     Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

                                       31

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.

                                            SPECIALTY CATALOG CORP.

                                            By: /s/ Thomas McCain
                                                ----------------------------
                                                Name: Thomas McCain
                                                Title: Senior Vice President

                                            CONTINENTAL STOCK TRANSFER &
                                            TRUST COMPANY,
                                            as Rights Agent

                                            By: /s/ R. Bernhammer
                                                ----------------------------
                                                Name: R. Bernhammer
                                                Title: Vice President

                                       32

<PAGE>

                                                                Exhibit A to the
                                                                Rights Agreement

                                     FORM OF
                           CERTIFICATE OF DESIGNATION

                                       of

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                                       of

                             SPECIALTY CATALOG CORP.

             Pursuant to Section 151 of the General Corporation Law
                            of the State of Delaware

     Specialty Catalog Corp., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), in
accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY:

     That pursuant to the authority vested in the Board of Directors in
accordance with the provisions of the Certificate of Incorporation of the said
Corporation, the said Board of Directors on April 11, 2000 adopted the following
resolution creating a series of 4,400 shares of Preferred Stock designated as
"Series A Junior Participating Preferred Stock":

          RESOLVED, that pursuant to the authority vested in the Board
     of Directors of this Corporation in accordance with the provisions
     of the Certificate of Incorporation, a series of Preferred Stock,
     par value $1.00 per share, of the Corporation be and hereby is
     created, and that the designation and number of shares thereof and
     the voting and other powers, preferences and relative, participating,
     optional or other rights of the shares of such series and the
     qualifications, limitations and restrictions thereof are as follows:

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

     1. Designation and Amount. There shall be a series of Preferred Stock that
shall be designated as "Series A Junior Participating Preferred Stock," and the
number of shares constituting such series shall be 4,400. Such number of shares
may be increased or decreased by resolution of the Board of Directors; provided,
however, that no decrease shall reduce the number of shares of Series A Junior
Participating Preferred Stock to less than the number of shares then issued and
outstanding plus the number of shares issuable upon exercise of outstanding
rights, options or warrants or upon conversion of outstanding securities issued
by the Corporation.

                                       A-1

<PAGE>

     2. Dividends and Distribution.

          (A) Subject to the prior and superior rights of the holders of any
shares of any class or series of stock of the Corporation ranking prior and
superior to the shares of Series A Junior Participating Preferred Stock with
respect to dividends, the holders of shares of Series A Junior Participating
Preferred Stock, in preference to the holders of shares of any class or series
of stock of the Corporation ranking junior to the Series A Junior Participating
Preferred Stock in respect thereof, shall be entitled to receive, when, as and
if declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the 15th day of March, June,
September and December, in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series A Junior Participating Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $10 or (b) the Adjustment
Number (as defined below) times the aggregate per share amount of all cash
dividends, and the Adjustment Number times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on the
Common Stock, par value $.01 per share, of the Corporation (the "Common Stock")
since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series A Junior Participating Preferred
Stock. The "Adjustment Number" shall initially be 1000. In the event the
Corporation shall at any time after April 11, 2000 (i) declare and pay any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the Adjustment Number in effect
immediately prior to such event shall be adjusted by multiplying such Adjustment
Number by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.

          (B) The Corporation shall declare a dividend or distribution on the
Series A Junior Participating Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock).

          (C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Junior Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of Series
A Junior Participating Preferred Stock, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the date of issue
of such shares, or unless the date of issue is a Quarterly Dividend Payment Date
or is a date after the record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Junior Participating
Preferred Stock in an amount less than the total amount

                                       A-2

<PAGE>

of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series A Junior Participating Preferred Stock entitled
to receive payment of a dividend or distribution declared thereon, which record
date shall be no more than 60 days prior to the date fixed for the payment
thereof.

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

          (A) Each share of Series A Junior Participating Preferred Stock shall
entitle the holder thereof to a number of votes equal to the Adjustment Number
on all matters submitted to a vote of the stockholders of the Corporation.

          (B) Except as required by law, by Section 3(C) and by Section 10
hereof, holders of Series A Junior Participating Preferred Stock shall have no
special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.

          (C) If, at the time of any annual meeting of stockholders for the
election of directors, the equivalent of six quarterly dividends (whether or not
consecutive) payable on any share or shares of Series A Junior Participating
Preferred Stock are in default, the number of directors constituting the Board
of Directors of the Corporation shall be increased by two. In addition to voting
together with the holders of Common Stock for the election of other directors of
the Corporation, the holders of record of the Series A Junior Participating
Preferred Stock, voting separately as a class to the exclusion of the holders of
Common Stock, shall be entitled at said meeting of stockholders (and at each
subsequent annual meeting of stockholders), unless all dividends in arrears on
the Series A Junior Participating Preferred Stock have been paid or declared and
set apart for payment prior thereto, to vote for the election of two directors
of the Corporation, the holders of any Series A Junior Participating Preferred
Stock being entitled to cast a number of votes per share of Series A Junior
Participating Preferred Stock as is specified in paragraph (A) of this Section
3. Until the default in payments of all dividends which permitted the election
of said directors shall cease to exist, any director who shall have been so
elected pursuant to the provisions of this Section 3(C) may be removed at any
time, without cause, only by the affirmative vote of the holders of the shares
of Series A Junior Participating Preferred Stock at the time entitled to cast a
majority of the votes entitled to be cast for the election of any such director
at a special meeting of such holders called for that purpose, and any vacancy
thereby created may be filled by the vote of such holders. If and when such
default shall cease to exist, the holders of the Series A Junior Participating
Preferred Stock shall be divested of the foregoing special voting rights,
subject to revesting in the event of each and every subsequent like default in
payments of dividends. Upon the termination of the foregoing special voting
rights, the terms of office of all persons who may have been elected directors
pursuant to said special voting rights shall forthwith terminate, and the number
of directors constituting the Board of Directors shall be reduced by two. The
voting rights granted by this Section 3(C) shall be in addition to any other
voting rights granted to the holders of the Series A Junior Participating
Preferred Stock in this Section 3.

                                       A-3

<PAGE>

     4. Certain Restrictions.

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

               (i) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration any shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock;

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

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

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

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

     6. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation,
dissolution or winding up of the Corporation, voluntary or otherwise, no
distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation,

                                       A-4

<PAGE>

dissolution or winding up) to the Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Series A Junior Participating
Preferred Stock shall have received an amount per share (the "Series A
Liquidation Preference") equal to the greater of (i) $10 plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, or (ii) the Adjustment Number times the per share
amount of all cash and other property to be distributed in respect of the Common
Stock upon such liquidation, dissolution or winding up of the Corporation.

          (B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other classes and series of stock of the
Corporation, if any, that rank on a parity with the Series A Junior
Participating Preferred Stock in respect thereof, then the assets available for
such distribution shall be distributed ratably to the holders of the Series A
Junior Participating Preferred Stock and the holders of such parity shares in
proportion to their respective liquidation preferences.

          (C) Neither the merger or consolidation of the Corporation into or
with another corporation nor the merger or consolidation of any other
corporation into or with the Corporation shall be deemed to be a liquidation,
dissolution or winding up of the Corporation within the meaning of this
Section 6.

     7. Consolidation, Merger, Etc. In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the outstanding
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share equal to the Adjustment
Number times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged.

     8. No Redemption. Shares of Series A Junior Participating Preferred Stock
shall not be subject to redemption by the Corporation.

     9. Ranking. The Series A Junior Participating Preferred Stock shall rank
junior to all other series of the Preferred Stock as to the payment of dividends
and as to the distribution of assets upon liquidation, dissolution or winding
up, unless the terms of any such series shall provide otherwise, and shall rank
senior to the Common Stock as to such matters.

     10. Amendment. At any time that any shares of Series A Junior Participating
Preferred Stock are outstanding, the Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Junior
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of two-thirds of the outstanding shares of
Series A Junior Participating Preferred Stock, voting separately as a class.

     11. Fractional Shares. Series A Junior Participating Preferred Stock may be
issued in fractions of a share that shall entitle the holder, in proportion to
such holder's fractional

                                       A-5

<PAGE>

shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of Series A
Junior Participating Preferred Stock.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate this 11th
day of April, 2000.

                                                     SPECIALTY CATALOG CORP.

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

                                       A-6

<PAGE>

                                                                Exhibit B to the
                                                                Rights Agreement

                            Form of Right Certificate

Certificate No. R-______

               NOT EXERCISABLE AFTER APRIL 11, 2010 OR EARLIER IF
               REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT
               TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE
               TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
               CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT,
               RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR
               BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS
               AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME
               NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.

                                RIGHT CERTIFICATE

                             SPECIALTY CATALOG CORP.

     This certifies that ____________________________ or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of April 11, 2000, as the same may be amended
from time to time (the "Rights Agreement"), between Specialty Catalog Corp., a
Delaware corporation (the "Company"), and Continental Stock Transfer & Trust
Company, as Rights Agent (the "Rights Agent"), to purchase from the Company at
any time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M., New York City time, on April 11, 2010 at the
office or agency of the Rights Agent designated for such purpose, or of its
successor as Rights Agent, one one-thousandth of a fully paid non-assessable
share of Series A Junior Participating Preferred Stock, par value $1.00 per
share (the "Preferred Stock"), of the Company at a purchase price of $15 per one
one-thousandth of a share of Preferred Stock (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of one one-thousandths of a share of Preferred Stock
which may be purchased upon exercise hereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of April 11, 2000,
based on the Preferred Stock as constituted at such date. As provided in the
Rights Agreement, the Purchase Price, the number of one one-thousandths of a
share of Preferred Stock (or other securities or property) which may be
purchased upon the exercise of the Rights and the number of Rights evidenced by
this Right Certificate are subject to modification and adjustment

                                       B-1

<PAGE>

upon the happening of certain events.

     This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned office or agency of the Rights Agent. The
Company will mail to the holder of this Right Certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor.

     This Right Certificate, with or without other Right Certificates, upon
surrender at the office or agency of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates of
like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Preferred Stock as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.

     Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Company at a redemption price of
$.01 per Right or (ii) may be exchanged in whole or in part for shares of the
Company's Common Stock, par value $.01 per share, or shares of Preferred Stock.

     No fractional shares of Preferred Stock or Common Stock will be issued upon
the exercise or exchange of any Right or Rights evidenced hereby (other than
fractions of Preferred Stock which are integral multiples of one one-thousandth
of a share of Preferred Stock, which may, at the election of the Company, be
evidenced by depository receipts), but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.

     No holder of this Right Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred Stock
or of any other securities of the Company which may at any time be issuable on
the exercise or exchange hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement) or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised or exchanged as provided in the Rights
Agreement.

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

                                       B-2

<PAGE>

     WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of April 11, 2000.

                                                   SPECIALTY CATALOG CORP.

                                                   By:
                                                       ------------------------
                                                              [Title]

ATTEST:

-------------------------------------------
[Title]

Countersigned:

CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
as Rights Agent

By
  -----------------------------------------
         [Title]

                                       B-3

<PAGE>

                    Form of Reverse Side of Right Certificate

                               FORM OF ASSIGNMENT
                               ------------------

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

     FOR VALUE RECEIVED __________________________ hereby sells, assigns and
transfers unto ______________________________________________________ (Please
print name and address of transferee)

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

Dated:
      ------------------------------
                                            ------------------------------------
                                                 Signature

Signature Guaranteed:

     Signatures must be guaranteed by a bank, trust company, broker, dealer or
other eligible institution participating in a recognized signature guarantee
medallion program.

 ....................................................
                          (To be completed)

     The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by, were not acquired by the undersigned
from, and are not being assigned to an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).

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

                                       B-4

<PAGE>

              Form of Reverse Side of Right Certificate - continued

                          FORM OF ELECTION TO PURCHASE
                          ----------------------------

                  (To be executed if holder desires to exercise
                  Rights represented by the Rights Certificate)

To SPECIALTY CATALOG CORP.:

     The undersigned hereby irrevocably elects to exercise ________ Rights
represented by this Right Certificate to purchase the shares of Preferred Stock
(or other securities or property) issuable upon the exercise of such Rights and
requests that certificates for such shares of Preferred Stock (or such other
securities) be issued in the name of:

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

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

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

Please insert social security
or other identifying number

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

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

Dated:
      ----------------------------

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

        (Signature must conform to holder specified on Right Certificate)

Signature Guaranteed:

     Signature must be guaranteed by a bank, trust company, broker, dealer or
other eligible institution participating in a recognized signature guarantee
medallion program.

                                       B-5

<PAGE>

              Form of Reverse Side of Right Certificate - continued

     ----------------------------------------------------------------------
                                (To be completed)

     The undersigned certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by, and were not acquired by the
undersigned from, an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement).

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

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

                                     NOTICE
                                     ------

     The signature in the Form of Assignment or Form of Election to Purchase, as
the case may be, must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.

     In the event the certification set forth above in the Form of Assignment or
the Form of Election to Purchase, as the case may be, is not completed, such
Assignment or Election to Purchase will not be honored.

                                       B-6

<PAGE>

                                                                Exhibit C to the
                                                                Rights Agreement

          UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
          AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON
          WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE
          RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL
          BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.

                          SUMMARY OF RIGHTS TO PURCHASE
                          SHARES OF PREFERRED STOCK OF
                             SPECIALTY CATALOG CORP.

     On April 11, 2000, the Board of Directors of Specialty Catalog Corp. (the
"Company") declared a dividend of one preferred share purchase right (a "Right")
for each outstanding share of common stock, par value $.01 per share, of the
Company (the "Common Stock"). The dividend is payable on April 28, 2000 (the
"Record Date") to the stockholders of record on that date. Each Right entitles
the registered holder to purchase from the Company one one-thousandth of a share
of Series A Junior Participating Preferred Stock, par value $1.00 per share, of
the Company (the "Preferred Stock") at a price of $15 per one one-thousandth of
a share of Preferred Stock (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement dated as
of April 11, 2000, as the same may be amended from time to time (the "Rights
Agreement"), between the Company and Continental Stock Transfer & Trust Company,
as Rights Agent (the "Rights Agent").

     Until the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (with certain
exceptions, an "Acquiring Person") has acquired beneficial ownership of 15% or
more of the outstanding shares of Common Stock or (ii) 10 business days (or such
later date as may be determined by action of the Board of Directors prior to
such time as any person or group of affiliated persons becomes an Acquiring
Person) following the commencement of, or announcement of an intention to make,
a tender offer or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 15% or more of the outstanding
shares of Common Stock (the earlier of such dates being called the "Distribution
Date"), the Rights will be evidenced, with respect to any of the Common Stock
certificates outstanding as of the Record Date, by such Common Stock certificate
together with this Summary of Rights.

     The Rights Agreement provides that, until the Distribution Date (or earlier
expiration of the Rights), the Rights will be transferred with and only with the
Common Stock. Until the Distribution Date (or earlier expiration of the Rights),
new Common Stock certificates issued after the Record Date upon transfer or new
issuances of Common Stock will contain a notation

                                       C-1

<PAGE>

incorporating the Rights Agreement by reference. Until the Distribution Date (or
earlier expiration of the Rights), the surrender for transfer of any
certificates for shares of Common Stock outstanding as of the Record Date, even
without such notation or a copy of this Summary of Rights, will also constitute
the transfer of the Rights associated with the shares of Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and such separate Right Certificates
alone will evidence the Rights.

     The Rights are not exercisable until the Distribution Date. The Rights will
expire on April 11, 2010 (the "Final Expiration Date"), unless the Final
Expiration Date is advanced or extended or unless the Rights are earlier
redeemed or exchanged by the Company, in each case as described below.

     The Purchase Price payable, and the number of shares of Preferred Stock or
other securities or property issuable, upon exercise of the Rights is subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights
or warrants to subscribe for or purchase Preferred Stock at a price, or
securities convertible into Preferred Stock with a conversion price, less than
the then-current market price of the Preferred Stock or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular periodic cash dividends or dividends payable in
Preferred Stock) or of subscription rights or warrants (other than those
referred to above).

     The number of outstanding Rights is subject to adjustment in the event of a
stock dividend on the Common Stock payable in shares of Common Stock or
subdivisions, consolidations or combinations of the Common Stock occurring, in
any such case, prior to the Distribution Date.

     Shares of Preferred Stock purchasable upon exercise of the Rights will not
be redeemable. Each share of Preferred Stock will be entitled, when, as and if
declared, to a minimum preferential quarterly dividend payment of the greater of
(a) $10 per share, and (b) an amount equal to 1000 times the dividend declared
per share of Common Stock. In the event of liquidation, dissolution or winding
up of the Company, the holders of the Preferred Stock will be entitled to a
minimum preferential payment of the greater of (a) $10 per share (plus any
accrued but unpaid dividends), and (b) an amount equal to 1000 times the payment
made per share of Common Stock. Each share of Preferred Stock will have 1000
votes, voting together with the Common Stock. Finally, in the event of any
merger, consolidation or other transaction in which outstanding shares of Common
Stock are converted or exchanged, each share of Preferred Stock will be entitled
to receive 1000 times the amount received per share of Common Stock. These
rights are protected by customary antidilution provisions.

     Because of the nature of the Preferred Stock's dividend, liquidation and
voting rights, the value of the one one-thousandth interest in a share of
Preferred Stock purchasable upon exercise

                                       C-2

<PAGE>

of each Right should approximate the value of one share of Common Stock.

     In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereupon become void),
will thereafter have the right to receive upon exercise of a Right that number
of shares of Common Stock having a market value of two times the exercise price
of the Right.

     In the event that, after a person or group has become an Acquiring Person,
the Company is acquired in a merger or other business combination transaction or
50% or more of its consolidated assets or earning power are sold, proper
provisions will be made so that each holder of a Right (other than Rights
beneficially owned by an Acquiring Person which will have become void) will
thereafter have the right to receive upon the exercise of a Right that number of
shares of common stock of the person with whom the Company has engaged in the
foregoing transaction (or its parent) that at the time of such transaction have
a market value of two times the exercise price of the Right.

     At any time after any person or group becomes an Acquiring Person and prior
to the earlier of one of the events described in the previous paragraph or the
acquisition by such Acquiring Person of 50% or more of the outstanding shares of
Common Stock, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such Acquiring Person which will have become void),
in whole or in part, for shares of Common Stock or Preferred Stock (or a series
of the Company's preferred stock having equivalent rights, preferences and
privileges), at an exchange ratio of one share of Common Stock, or a fractional
share of Preferred Stock (or other preferred stock) equivalent in value thereto,
per Right.

     With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Preferred Stock or Common Stock
will be issued (other than fractions of Preferred Stock which are integral
multiples of one one-thousandth of a share of Preferred Stock, which may, at the
election of the Company, be evidenced by depositary receipts), and in lieu
thereof an adjustment in cash will be made based on the current market price of
the Preferred Stock or the Common Stock.

     At any time prior to the time an Acquiring Person becomes such, the Board
of Directors of the Company may redeem the Rights in whole, but not in part, at
a price of $.01 per Right (the "Redemption Price") payable, at the option of the
Company, in cash, shares of Common Stock or such other form of consideration as
the Board of Directors of the Company shall determine. The redemption of the
Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.

     For so long as the Rights are then redeemable, the Company may, except with
respect

                                       C-3

<PAGE>

to the Redemption Price, amend the Rights Agreement in any manner. After the
Rights are no longer redeemable, the Company may, except with respect to the
Redemption Price, amend the Rights Agreement in any manner that does not
adversely affect the interests of holders of the Rights.

     Until a Right is exercised or exchanged, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.

     A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
April 11, 2000. A copy of the Rights Agreement is available free of charge from
the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
as the same may be amended from time to time, which is hereby incorporated
herein by reference.

                                       C-4<PAGE>   1
                                                                     EXHIBIT 4.4

Wallace Computer Services, Inc. Profit Sharing and Retirement Plan
<PAGE>   2

                   WALLACE PROFIT SHARING AND RETIREMENT PLAN

                            Effective January 1, 1998
                    Except as Specifically Provided Otherwise

<PAGE>   3

                                                     TABLE OF CONTENTS

                                                                    PAGE
ARTICLE 1 General .................................................    1
    1.1  Purpose ..................................................    1
    1.2  Source of Funds ..........................................    1
    1.3  Effective Date ...........................................    1
    1.4  Definitions ..............................................    1

ARTICLE 2 Eligibility and Participation ...........................    9
    2.1  Eligibility Requirements .................................    9
    2.2  Leaves of Absence ........................................    9
    2.3  Qualified Military Service ...............................   10

ARTICLE 3 Contributions ...........................................   11
    3.1  Contributions by Employer ................................   11
    3.2  Participant Contributions ................................   11
    3.3  Limitations on Before-Tax Contributions ..................   12
    3.4  Limitation on After-Tax Contributions ....................   15
    3.5  Multiple Use .............................................   17
    3.6  Rollover Contribution ....................................   18

ARTICLE 4 Accounting Provisions and Allocations ...................   19
    4.1  Participant's Accounts ...................................   19
    4.2  Investment Funds .........................................   19
    4.3  Allocation Procedure .....................................   20
    4.4  Determination of Value of Trust Fund .....................   21
    4.5  Allocation of Net Earnings or Losses .....................   21
    4.6  Eligibility to Share in the Employer's
         Contribution and Forfeitures .............................   21
    4.7  Allocation of Before-Tax Contributions ...................   22
    4.8  Allocation of After-Tax Contributions ....................   22
    4.9  Allocation of Employer Contribution
         and Forfeitures ..........................................   23
    4.10 Provisional Annual Addition ..............................   23
    4.11 Limitation on Annual Additions ...........................   24
    4.12 Special Limitation on Maximum Contributions ..............   25
    4.13 Transfer of Fund Balances ................................   26

ARTICLE 5 Amount of Payments to Participants ......................   28
    5.1  General Rule .............................................   28
    5.2  Retirement ...............................................   28
    5.3  Death ....................................................   28
    5.4  Vesting ..................................................   28

<PAGE>   4

    5.5  Resignation or Dismissal .................................   28
    5.6  Computation of Period of Service .........................   29
    5.7  Treatment of Forfeitures .................................   29

ARTICLE 6 Distributions ...........................................   31
    6.1  Commencement and Form of Distributions ...................   31
    6.2  Distributions to Beneficiaries ...........................   33
    6.3  Beneficiaries ............................................   34
    6.4  Installment or Deferred Distributions ....................   35
    6.5  Form of Elections and Applications
         for Benefits .............................................   35
    6.6  Unclaimed Distributions ..................................   35
    6.7  Withdrawals ..............................................   35
    6.8  Loans ....................................................   37
    6.9  Facility of Payment ......................................   39
    6.10 Claims Procedure .........................................   39
    6.11 Eligible Rollover Distributions ..........................   40

ARTICLE 7 Top-Heavy Plan Requirements .............................   42
    7.1  Definitions ..............................................   42
    7.2  Top-Heavy Plan Requirements ..............................   44

ARTICLE 8 Stockholder Rights with Respect to Company Stock ........   46
    8.1  Voting Shares of Company Stock ...........................   46
    8.2  Tender Offers ............................................   46
    8.3  Designation of Participants and
         Beneficiaries as Named Fiduciaries .......................   48

ARTICLE 9 Change of Control .......................................   49
    9.1  Application ..............................................   49
    9.2  Investment of Trust Fund .................................   49
    9.3  Administration of Plan and Trust .........................   49
    9.4  Maintenance of the Plan and Trust ........................   49
    9.5  Change of Control Defined ................................   50
    9.6  Related Company Defined ..................................   51
    9.7  Attorneys' Fees and Other
         Costs and Expenses .......................................   51
    9.8  Binding on Successors ....................................   51
    9.9  Amendment of Article 9 ...................................   52

ARTICLE 10 Powers and Duties of Profit Sharing Committee ..........   53
   10.1  Appointment of Profit Sharing Committee ..................   53
   10.2  Powers and Duties of Committee ...........................   53
   10.3  Committee Procedures .....................................   54
   10.4  Consultation with Advisors ...............................   54
   10.5  Committee Members as Participants ........................   55
   10.6  Records and Reports ......................................   55

<PAGE>   5

   10.7  Investment Policy ........................................   55
   10.8  Designation of Other Fiduciaries .........................   55
   10.9  Obligations of Committee .................................   56
   10.10 Indemnification of Committee .............................   56

ARTICLE 11 Trustee and Trust Fund .................................   57
   11.1  Trust Fund ...............................................   57
   11.2  Payments to Trust Fund and Expenses ......................   57
   11.3  Trustee's Responsibilities ...............................   57
   11.4  Reversion to the Employer ................................   57

ARTICLE 12 Amendment or Termination ...............................   58
   12.1  Amendment ................................................   58
   12.2  Termination ..............................................   58
   12.3  Form of Amendment, Discontinuance of
         Employer Contributions, and Termination ..................   58
   12.4  Limitations on Amendments ................................   58
   12.5  Level of Benefits Upon Merger ............................   59
   12.6  Vesting Upon Termination or
         Discontinuance of Employer Contributions;
         Liquidation of Trust .....................................   59

ARTICLE 13 Miscellaneous ..........................................   61
   13.1  No Guarantee of Employment, Etc ..........................   61
   13.2  Nonalienation ............................................   61
   13.3  Qualified Domestic Relations Order .......................   61
   13.4  Controlling Law ..........................................   61
   13.5  Severability .............................................   61
   13.6  Notification of Addresses ................................   62
   13.7  Gender and Number ........................................   62

ARTICLE 14 Adoption by Affiliates .................................   63
   14.1  Adoption of Plan .........................................   63
   14.2  The Company as Agent for Employer ........................   63
   14.3  Adoption of Amendments ...................................   63
   14.4  Termination ..............................................   63
   14.5  Data to Be Furnished by Employers ........................   63
   14.6  Joint Employees ..........................................   64
   14.7  Expenses .................................................   64
   14.8  Withdrawal ...............................................   64
   14.9  Prior Plans ..............................................   64

<PAGE>   6

                               I. ARTICLE General

A. Purpose . It is the intention of the Employer to provide the Wallace Profit
Sharing and Retirement Plan, and a Trust Fund in conjunction therewith, for the
benefit of eligible employees of the Employer, in accordance with the provisions
of Code Sections 401 and 501 and in accordance with other provisions of law
relating to profit sharing plans containing a Code Section 401(k) arrangement.
Except as otherwise provided in this Plan or the Trust, upon the transfer by the
Employer of any funds to the Trust Fund in accordance with the provisions of
this Plan, all interest of the Employer therein shall cease and terminate, and
no part of the Trust Fund shall be used for, or diverted to, purposes other than
the exclusive benefit of Participants and their beneficiaries.

A. Source of Funds . The Trust Fund shall be created, funded and maintained by
contributions of the Employer, by contributions of the Participants, and by such
net earnings or losses as are obtained from the investment of the funds of the
Trust Fund.
B.
C. Effective Date . The provisions of the Plan as herein restated shall be
effective as of January 1, 1998, except for certain provisions the effective
dates of which are set forth therein. Except as may be required by ERISA or the
Code, the rights of any person whose status as an employee of the Employer and
all Affiliates has terminated shall be determined pursuant to the Plan as in
effect on the date such employment terminated, unless a subsequently adopted
provision of the Plan is made specifically applicable to such person.
D.
E. Definitions . Certain terms are capitalized and have the respective meanings
set forth in the Plan.
F. G. "Account" means each of the individual accounts established pursuant to
Article 4 representing a Participant's allocable share of the Trust Fund.
H.
I. "Accounts" means the collective individual accounts established pursuant to
Article 4.
J.
K. "Active Participant" means a Participant who, on a given date, is employed by
the Employer as an Eligible Employee.
L.
M. "Actual Deferral Percentage" and "Actual Deferral Percentage Tests" are
described in Section 3.3.
N.
O. "Affiliate" means any corporation or enterprise, other than the Company,
which, as of a given date, is a member of the same controlled group of
corporations, the same group of trades or businesses under common control or the
same affiliated service group, determined in accordance with Code Sections
414(b), (c), (m) or (o), as is the Company. For purposes of determining the
amount of a Participant's Annual Addition or Total Compensation and applying the
limitations of Code Section 415 set forth in Article 4, "Affiliate" shall
include any

                                       1
<PAGE>   7

corporation or enterprise, other than the Company, which, as of a given date, is
a member of the same controlled group of corporations or the same group of
trades or businesses under common control, determined in accordance with Code
Sections 414(b) or (c) as modified by Code Section 415(h), as is the Company.
P.
Q. "After-Tax Contributions" mean, with respect to a Participant, the
contributions made by such Participant pursuant to Section 3.2, and, with
respect to the Employer, the sum of all such contributions made by Participants.
R.
S. "Annual Addition" means for any Limitation Year, the sum of (a) all
Before-Tax Contributions, Employer Contributions, forfeitures and After-Tax
Contributions allocated to the Accounts of a Participant under this Plan; (b)
any employer contributions, forfeitures and employee after-tax contributions
allocated to such Participant under any other defined contribution plan
maintained by the Employer or an Affiliate; and (c) amounts allocated to an
individual medical account as defined in Code Section 415(l)(2) and amounts
attributable to post-retirement medical benefits allocated to an account
described in Code Section 419A(d)(2) maintained by the Employer or an Affiliate.
T.
U. "Before-Tax Contributions" means, with respect to a Participant, the
contributions withheld from the earnings of such Participant and made by the
Employer as described in Section 3.2 and, with respect to the Employer, the sum
of all such contributions made on behalf of all Participants.
V.
W. "Business Day" means each day on which the Federal Reserve and the New York
Stock Exchange are open for business.
X.
Y. "Code" means the Internal Revenue Code of 1986, as from time to time amended.
Z.
AA. "Committee" means the plan administrator and named fiduciary appointed
pursuant to Section 10.1.
BB.
CC. "Company" means Wallace Computer Services, Inc., a Delaware corporation, a
predecessor of such corporation, or any successor to it in ownership of all or
substantially all of its assets.
DD.
EE. "Compensation" means a Participant's "Considered Compensation" or "Total
Compensation," as follows:
FF.

GG. (a) "Considered Compensation" for a period is the Participant's Total
Compensation for such period paid while he was an Active Participant including
the Participant's Before-Tax Contributions and elective contributions to a plan
of the Employer established under Code Section 125 and amounts paid to the
Participant from any unfunded, nonqualified deferred compensation plan of the
Employer, but excluding reimbursements or other expense allowances, fringe
benefits (cash and non-cash), moving expenses, deferred

                                       2
<PAGE>   8

compensation contributions, disability pay and welfare benefits; provided,
however, that Considered Compensation shall not include any amount in excess of
$160,000 as adjusted by the Commissioner for increases in the cost of living in
accordance with Code Section 401(a)(17)(B). 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
annual compensation limit will be multiplied by a fraction, the numerator of
which is the number of days in the determination period, and the denominator of
which is 365, or if the determination period includes February 29, the
denominator shall be 366.
HH.
II. (b) "Total Compensation" for a period is the Participant's wages, as defined
in Code Section 3401(a) for purposes of income tax withholding at the source,
and all other payments of compensation to the Participant by the Employer for
which the Employer is required to furnish the Participant a written statement
under Code Sections 6041(d), 6051(a)(3) and 6052, but determined without regard
to any rules under Code Section 3401(a) that limit the remuneration included in
wages based on the nature or location of the employment or the services
performed but excluding amounts paid or reimbursed by the Employer for moving
expenses incurred by the Participant; effective with the 1998 Plan Year, plus
amounts excluded from the Participant's income for the period under Code
Sections 125, 401(k) or 403(b).
JJ.
KK. "Contribution Percentage" and "Contribution Percentage Tests" are described
in Section 3.4.
LL.
MM. "Defined Contribution Dollar Limitation" means an amount equal to $30,000,
prorated for any Limitation Year of less than 12 months; provided that, for
purposes of Section 4.11(a)(ii), such amount shall be reduced by the amounts
allocated to any medical accounts described in subsection (c) of "Annual
Addition."
NN.
OO. "Early Retirement Date" means the earliest of the following:
PP.
QQ. (a) the date the Participant's employment by the Employer is terminated for
any reason after the date on which the Participant attained the age of 60 years;
or
RR.
SS. (b) the date the Participant's employment is terminated for any reason prior
to attaining age 60, but after the date on which the Participant attains age 55
years and has completed 20 Years of Service. For purposes of this subsection,
service will include any service with a subsidiary of the Company or with any
business entity acquired by the Company or any of its subsidiaries; or TT.
UU. (c) the date the Participant's employment is terminated because of physical
or mental disability (as determined by a duly trained physician appointed by the
Company).
VV.

                                       3
<PAGE>   9

WW. "Eligible Employee" means any employee of an Employer who is not a Leased
Employee or a Member of a Collective Bargaining Unit, or an individual treated
by an Employer as an independent contractor.
XX.
YY. "Eligible Participant" is a Participant as defined in Section 4.6.
ZZ.
AAA. "Eligibility Period" is a one-year period used for the purpose of
determining when an employee is eligible to participate in the Plan. An
employee's first Eligibility Period shall commence on the date on which he first
completes an Hour of Service. Subsequent Eligibility Periods shall commence on
the anniversary of such date. Notwithstanding the foregoing, the initial
Eligibility Period of a former employee who is reemployed after incurring one or
more One-Year Breaks in Service and who is not eligible for immediate
participation pursuant to Section 2.1(d), shall commence on the date on which he
first completes an Hour of Service after such One-Year Break in Service, and
subsequent Eligibility Periods shall commence on the anniversary of such date.
BBB.
CCC. "Employer" means the Company and any Affiliate which adopts this Plan
pursuant to Article 14.
DDD.
EEE. "Employer Contribution" means the Employer Contribution determined under
Section 3.1(a)(ii).
FFF.
GGG. "Employment Commencement Date" means the first date on which an individual
performs duties for the Employer or an Affiliate as an employee; provided that
in the case of an employee who returns to service following his Severance Date,
the employee's "Employment Commencement Date" is the first date on which he
performs duties for the Employer or an Affiliate as an employee following such
Severance Date.
HHH.
III. "Entry Date" means the first day of each month.
JJJ.
KKK. "ERISA" means the Employee Retirement Income Security Act of 1974, as from
time to time amended.
LLL.
MMM. "Fiscal Year" means a 12-month period beginning on August 1 and ending on
July 31.
NNN.
OOO. "Five-Percent Owner" means an employee described in Code Section 416(i)(1).
PPP.
QQQ. "Highly Compensated Employee" means, effective January 1, 1997, an employee
of the Employer or an Affiliate who was a Participant eligible during the Plan
Year to make Before-Tax Contributions and/or After-Tax Contributions and who:
RRR.
SSS. (a) was a Five-Percent Owner at any time during the Plan Year or the
preceding Plan Year; or
TTT.

                                       4
<PAGE>   10

UUU. (b) received Total Compensation in excess of $80,000 (as adjusted for
increases in the cost of living by the Secretary of the Treasury) during the
preceding Plan Year and was among the top 20% of the employees (disregarding
those employees excludable under Code Section 414(q)(5)) when ranked on the
basis of Section 415 Compensation paid for that year.
VVV.
WWW. To the extent required by Code Section 414(q)(6), a former employee who was
a Highly Compensated Employee when he separated from service with the Employer
and all Affiliates or at any time after attaining age 55 shall be treated as a
Highly Compensated Employee.
XXX.
YYY. For purposes of determining a Highly Compensated Employee, Total
Compensation shall include amounts excluded under Code Sections 125, 402(e)(3),
402(h)(1)(B), and employee contributions made pursuant to a salary reduction
agreement under Code Section 403(b).
       "Hour of Service" is:

          (a) each hour for which an employee is paid or entitled to payment for
the performance of duties for the Employer or an Affiliate;

          (b) each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer or an Affiliate; and

          (c) each hour for which an employee is paid or entitled to payment for
a period during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday, illness,
incapacity, layoff, jury duty, military duty, or leave of absence. In crediting
Hours of Service pursuant to this subparagraph (c), all payments made or due
shall be taken into account, whether such payments are made directly by the
Employer or an Affiliate or indirectly (e.g., through a trust fund or insurer to
which the Employer or an Affiliate makes payments, or otherwise), except that:

               (i) no more than 501 such Hours of Service shall be credited for
          any continuous period during which the employee performs no duties;

               (ii) no such Hours of Service shall be credited if payments are
          made or due under a plan maintained solely for the purpose of
          complying with any workers' compensation, unemployment compensation or
          disability insurance laws; and

               (iii) no such Hours of Service shall be credited for payments
          which are made solely to reimburse the employee for medical or
          medically related expenses.

The Hours of Service, if any, for which an employee is credited for a period in
which he performs no duties shall be computed and credited to computation
periods in accordance with 29 C.F.R. 2530.200b-2 and other applicable
regulations promulgated by the Secretary of Labor. For purposes of computing the
Hours of Service to be credited to an employee for whom a record of

                                       5
<PAGE>   11

hours worked is not maintained, an employee shall be credited with 45 Hours of
Service for each week in which he completes at least one Hour of Service. In
addition, an employee shall be credited with Hours of Service for each week the
employee is on a leave of absence in accordance with Section 2.2.

         "Leased Employee" means any individual who is not carried on the
payroll of the Employer or an Affiliate and who provides services for the
Employer or an Affiliate if:

          (a) such services are provided pursuant to an agreement between the
Employer or an Affiliate and any other person ("leasing organization");

          (b) such individual has performed such services for the Employer or an
Affiliate (or a related person within the meaning of Code Section 144(a)(3)) on
a substantially full-time basis for a period of at least one year; and

          (c) such services have been performed under the primary direction or
control of the Employer or an Affiliate.

     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. To the extent and for the purposes
required by Code Sections 414(n) and (o), a Leased Employee shall be deemed to
be an Employee of the Employer, unless: (i) he is covered by a money purchase
pension plan providing (1) a nonintegrated employer contribution rate of at
least 10 percent of compensation, as defined in Code Section 415(c)(3), but
including amounts contributed pursuant to a salary reduction agreement which are
excludable from the Employee's gross income under Code Sections 125, 402(e)(3),
402(h) or 403(b), (2) immediate participation, and (3) full and immediate
vesting; and (ii) Leased Employees do not constitute more than 20 percent of the
Employer's nonhighly compensated workforce.

     "Limitation Year" means the Plan Year.

     "Member of a Collective Bargaining Unit" means any employee who is included
in a collective bargaining unit and whose terms and conditions of employment are
or were covered by a collective bargaining agreement if there is evidence that
retirement benefits were the subject of good-faith bargaining between
representatives of such employee and the Employer, unless such collective
bargaining agreement makes this Plan applicable to such employee.

     "Multiple Use" is defined in Section 3.5.

     "Non-Highly Compensated Employee" means, for any Plan Year, any employee of
the Employer or Affiliate who (a) at any time during the Plan Year was a
Participant eligible to make Before-Tax Contributions and/or After-Tax
Contributions, and (b) was not a Highly Compensated Employee for such Plan Year.

                                       6
<PAGE>   12

     "Normal Retirement Date" means a Participant's 65th birthday.

     "One-Percent Owner" means an employee described in Code Section 416(i)(1).

     "One-Year Break in Service" is a one-year period during which an employee
does not perform duties for the Employer or an Affiliate. Such period shall
commence on the later of the employee's Severance Date or the date on which he
ceases to be employed by either the Employer or an Affiliate. Solely for
purposes of determining whether a One-Year Break in Service has occurred,
absences shall be disregarded if the employee otherwise would normally have been
credited with service but for the employee's absence on a maternity or paternity
absence. No more than one year of absence on a single maternity or paternity
absence shall be so disregarded. A maternity or paternity absence is an absence
from work:

          (a) by reason of the pregnancy of the employee;

          (b) by reason of the birth of a child of the employee;

          (c) by reason of the placement of a child with the employee in
connection with the adoption of such child by the employee; or

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

Any employee requesting such credit shall promptly furnish the Committee such
information as the Committee requires to show that the absence from work is a
maternity or paternity absence, and the number of days for which there was such
an absence.

     "Participant" means:

          (a) a current employee of the Employer or an Affiliate who has become
a Participant in the Plan pursuant to Section 2.1 or;

          (b) a former employee for whose benefit an Account in the Trust Fund
is maintained.

     "Plan" means the Wallace Profit Sharing and Retirement Plan.

     "Plan Year" means a 12-month period beginning on January 1 and ending on
December 31.

     "Primary Employer Contribution" means the Primary Employer Contribution
determined under Section 3.1.

     "Provisional Annual Addition" is the amount described in Section 4.10.

                                       7
<PAGE>   13

     "Required Beginning Date" means:

          (a) for a Participant who is not a Five-Percent Owner, the April 1
following the later of the calendar year in which the Participant attains age
70-1/2 or the calendar year in which his employment terminates;

          (b) for a Participant who at any time during or after the calendar
year in which he attained age 66-1/2 was or became a Five-Percent Owner, the
April 1 following the later of (i) the calendar year in which he attained age
70-1/2 or (ii) the earlier of the calendar year in which he became a
Five-Percent Owner or his employment terminates.

     "Rollover Contribution" means amounts rolled over directly to this Plan by
the trustee of another qualified plan pursuant to the provisions of Code Section
401(a)(31) and to any other related laws and regulations as in effect at the
time of such direct rollover.

     "Severance Date" for an employee is the earlier of:

          (a) the date on which he quits, retires, dies or is discharged; or

          (b) the first day following any one-year period during which he
performed no duties for the Employer and all Affiliates.

     "Supplemental Employer Contribution" means the Supplemental Employer
Contribution determined under Section 3.1.

     "The 1.25 Test" is the test described in Sections 3.3(b)(i)(A) and
3.4(a)(i).

     "The 2.0 Test" is the test described in Sections 3.3(b)(i)(B) and
3.4(a)(ii).

     "Trust" or "Trust Fund" means the Trust established in accordance with
Article 11.

     "Trustee" means the Trustee or Trustees under the Trust referred to in
Article 11.

     "Valuation Date" means each Business Day on which the value of each Account
is determined.

     "Year of Service" is a unit of service credited to an employee for purposes
of determining the percentage of the balance in a Participant's Employer Account
which is nonforfeitable and the total amount available for loans and
withdrawals. An employee who is reemployed shall retain service credited to him
in his previous employment with the Employer or an Affiliate, except as
otherwise provided in the Plan.

          (a) An employee shall be credited with one Year of Service for each
full year in the period commencing on his Employment Commencement Date and
ending on his

                                       8
<PAGE>   14

Severance Date. An employee shall also be credited with 1/365 of a Year of
Service for each additional day in such period for which he did not receive
credit pursuant to the preceding sentence.

          (b) A former employee who is reemployed and who performs duties for
the Employer or an Affiliate within one year after the date he last performed
duties for the Employer or an Affiliate shall also be credited with 1/365 of a
Year of Service for each day in the period commencing on his Severance Date and
ending on his Employment Commencement Date following such Severance Date. I.

                                       9
<PAGE>   15

                     ARTICLE Eligibility and Participation

A. Eligibility Requirements .
B.
1. Every Participant on the first day of the 1998 Plan Year shall continue as
such subject to the provisions of the Plan.

1. An Eligible Employee shall first be eligible to participate with respect to
the ability to make Voluntary Contributions pursuant to Section 3.2(b), if he is
then employed by the Employer on the Entry Date coinciding with or next
following the earlier of the date the Eligible Employee has completed (i) 31
days as an employee whose customary employment is both more than 20 hours per
week and more than 6 months in a Plan Year or, (ii) the end of the first
Eligibility Period in which the Eligible Employee completes 1,000 Hours of
Service. 2.
3. An Eligible Employee shall first be eligible to participate with respect to
the right to be credited with Employer Contributions and forfeitures pursuant to
Section 3.1(a)(ii), if he is then employed by the Employer on the Entry Date
coinciding with or next following the end of the first Eligibility Period in
which the Eligible Employee completes 1,000 Hours of Service. Upon eligibility
to participate with respect to the right to be credited with Employer
Contributions and forfeitures pursuant to Section 3.1(a)(ii), an Eligible
Employee shall make the Required Contribution described in Section 3.2.
4.
5. Any former employee of the Employer or an Affiliate who was a Participant or
could have become a Participant under subsections (b) or (c) above had he been
employed on a prior Entry Date, and is reemployed by the Employer as an Eligible
Employee, shall be eligible to participate immediately on the date of such
reemployment, (i) with respect to the ability to make Voluntary Contributions if
the Eligible Employee was or could have become a Participant under subsection
(b) only and (ii) with respect to the right to be credited with Employer
Contributions and forfeitures, and the corresponding obligation to make the
Required Contribution, if the Eligible Employee was or could have become a
Participant under subsection (c).
6.
7. Notwithstanding any provisions of this Plan to the contrary, any individual
who was providing services to the Employer in the capacity of, or who was
designated by the Employer as an independent contractor, or a Leased Employee,
and who is subsequently re-classified as an Eligible Employee for the purposes
of this Plan (regardless of whether such re-classification is retrospective or
prospective), shall be eligible to participate in the Plan on a prospective
basis only from the date of the re-classification and shall not have any
retroactive claim for benefits.
8.
B. Leaves of Absence . An employee shall be credited with 40 Hours of Service
for each full week the employee is on a leave of absence if he is not otherwise
credited with such Hours of Service; however, if an employee customarily worked
fewer than 40 hours per week in the 6 months immediately preceding the inception
of his leave of absence, then he shall be credited,

                                       10

<PAGE>   16
for each full week of such leave of absence, with the number of hours he
customarily worked per week during such 6 month period, if he is not otherwise
credited with such Hours of Service. Any such leave of absence must be granted
in writing and pursuant to the Employer's established leave policy, which shall
be administered in a uniform and nondiscriminatory manner to similarly situated
employees.
C.
D. Qualified Military Service . 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 Code Section
414(u).

                                       11
<PAGE>   17

                          II. ARTICLE Contributions

A. Contributions by Employer .
B.
1. Subject to the right reserved to the Employer to alter, amend or discontinue
this Plan and the Trust, the Employer shall pay to the Trustee for each Plan
Year:

     a.   the aggregate amount of Required and Voluntary Contributions made on a
          Before-Tax basis by Participants, as described in Sections 3.2(a) and
          (b); and

     a.   the Employer Contribution, which shall be equal to or greater than, as
          the Board of Directors may determine, the aggregate amount of all
          Required Contributions, as described in Section 3.2(a), of those
          participants entitled to an allocation of the Employer Contribution in
          accord with Section 2.1(c). This amount may include a Primary Employer
          Contribution, for basic retirement income of the Participants, and a
          Supplemental Employer Contribution, for supplemental retiree medical
          and other financial needs of the Participants.

1. Notwithstanding the foregoing, the Employer Contribution shall be conditioned
on qualification of the Plan under Section 401(a) of the Code.
2.
3. The failure of the Employer to make the Employer Contribution for any reason
shall not be deemed to effect a termination of the Trust or of this Plan.
4.
5. In no event shall the amount of the contributions made by the Employer under
Section 3.1(a) for any Plan Year exceed the maximum amount allowable as a
deduction in computing its taxable income for that year for federal income tax
purposes.
6. The Employer Contribution may be made in cash or securities. If any Employer
Contribution is made in securities, the securities shall be valued at their fair
market value as of the date of the Employer Contribution for purposes of
determining the amount of such Employer Contribution.

                                       12
<PAGE>   18

A. Participant Contributions .

B.
1. Required Contribution. Subject to the provisions of Sections 3.3 and 3.4,
each Participant, upon the satisfaction of the eligibility standards set forth
in Section 2.1(c), shall make a Required Contribution in an amount which shall
be equal to 3% (rounded to the nearest dollar) of his Considered Compensation.
The Required Contribution may be made on either a Before-Tax basis or an
After-Tax basis, or partially on either basis with each part expressed as a
whole percentage of his Considered Compensation, as the Participant elects in
writing on a form approved by the Committee. An Active Participant may change
his or her election once a month by filing written notice with the Committee,
subject to such limitations and conditions as the Committee shall prescribe. Any
such election may either discontinue or change the form of such contributions
effective as of the first subsequent payday, provided that the request is
received by the time prescribed by the Committee; otherwise such election will
not be effective until such later date as shall be determined by the Committee.

1. Voluntary Contribution. Each Active Participant may for each Plan Year elect
to make a Voluntary Contribution in an amount not in excess of 10% (rounded to
the nearest dollar) of his Considered Compensation. This Voluntary Contribution
may be made on a Before-Tax basis or an After-Tax basis, or partially on either
basis with each part expressed as a whole percentage of his Considered
Compensation, as the Participant elects in writing on a form approved by the
Committee. An Active Participant may change his or her election once a month by
filing written notice with the Committee, subject to such limitations and
conditions as the Committee shall prescribe. Any such election may either
discontinue or change such contributions effective as of the first subsequent
payday, provided that the request is received by the time prescribed by the
Committee; otherwise such election will not be effective until such later date
as shall be determined by the Committee.
2.
3. Payment of Participant Contributions. Participant Contributions will be paid
to the Trust Fund no later than the fifteenth business day next following the
month in which the Participant Contributions were made and will be credited to
the Participant's Before-Tax Account and After-Tax Account, as appropriate.

                                       13
<PAGE>   19

A. Limitations on Before-Tax Contributions .
B.
1. In no event shall a Participant's total Before-Tax Contributions (contributed
on both a Required Basis and on a Voluntary Basis) during any calendar year
exceed the dollar limitation contained in Code Section 402(g) in effect at the
beginning of such calendar year. If a Participant's Before-Tax Contributions,
together with any additional elective contributions to a qualified cash or
deferred arrangement, and any elective deferrals under a tax-sheltered annuity
program or a simplified employee pension plan, exceed such dollar limitation for
any calendar year, such excess, and any earnings allocable thereto, shall be
distributed to the Participant by April 15 of the following year; provided that,
if such excess contributions were made to a plan or arrangement not maintained
by the Employer or an Affiliate, the Participant must first notify the Committee
of the amount of such excess allocable to this Plan by March 1 of the following
year.

1. Notwithstanding any other provision of this Plan to the contrary, the
Before-Tax Contributions for the Highly Compensated Employees for the Plan Year
shall be reduced in accordance with the following provisions:

2.

     a.   The Before-Tax Contributions of the Highly Compensated Employees shall
          be reduced if neither of the Actual Deferral Percentage Tests set
          forth in (A) or (B) below is satisfied after taking into account the
          provisions of subsection (g):

               (1) The 1.25 Test. The Actual Deferral Percentage of the Highly
               Compensated Employees is not more than the Actual Deferral
               Percentage of the Non-Highly Compensated Employees multiplied by
               1.25.

               (1) The 2.0 Test. The Actual Deferral Percentage of the Highly
               Compensated Employees is not more than 2 percentage points
               greater than the Actual Deferral Percentage of the Non-Highly
               Compensated Employees and the Actual Deferral Percentage of the
               Highly Compensated Employees is not more than the Actual Deferral
               Percentage of the Non-Highly Compensated Employees multiplied by
               2.0.

               (1) As used in this subsection, "Actual Deferral Percentage"
               means:

                    (a) With respect to Non-Highly Compensated Employees, the
                    average of the ratios of each Non-Highly Compensated
                    Employee's Before-Tax Contributions with respect to the
                    prior Plan Year to each such Participant's Considered
                    Compensation for such Plan Year; and

                    (a) With respect to Highly Compensated Employees, the
                    average of the ratios of each Highly Compensated Employee's
                    Before-Tax Contributions with respect to the current Plan
                    Year to each such Participant's Considered Compensation for
                    such Plan Year.

                                       14
<PAGE>   20

                    (1) All Before-Tax Contributions made under this Plan and
                    all before-tax contributions made under any other plan that
                    is aggregated with this Plan for purposes of Code Sections
                    401(a)(4) and 410(b) shall be treated as made under a single
                    plan. If any plan is permissively aggregated with this Plan
                    for purposes of Code Section 401(k), the aggregated plans
                    must also satisfy Code Sections 401(a)(4) and 410(b) as
                    though they were a single plan. The Actual Deferral
                    Percentage ratios of any Highly Compensated Employee will be
                    determined by treating all plans subject to Code Section
                    401(k) under which the Highly Compensated Employee is
                    eligible as a single plan.

               a. If neither Actual Deferral Percentage test is satisfied as of
               the end of the Plan Year, the Committee shall cause the voluntary
               Before-Tax Contributions for the Highly Compensated Employees to
               be reduced and refunded to each Highly Compensated Employee until
               either Actual Deferred Percentage Test is satisfied. The sequence
               of such reductions and refunds shall begin with Highly
               Compensated Employees who elected to defer the greatest dollar
               amount, then the second greatest dollar amount, continuing until
               either Actual Deferred Percentage Test is satisfied.
               Notwithstanding anything in the foregoing to the contrary, if a
               lesser reduction, when added to the total dollar amount
               previously reduced would equal the total excess contributions,
               such lesser reduction shall be utilized. Once such reductions
               have been determined, the Committee shall direct the Trustee to
               distribute to the appropriate Highly Compensated Employees the
               amount of the reduction of the voluntary Before-Tax Contributions
               of each such Highly Compensated Employee, together with the net
               earnings or losses allocable thereto. The Committee shall
               designate such distribution as a distribution of excess
               contributions, determine the amount of the allocable net earnings
               or losses to be distributed in accordance with subsection (c)
               below, and cause such distributions to occur prior to the end of
               the Plan Year following the Plan Year in which the excess
               Before-Tax Contributions were made.

               a. Notwithstanding anything in this subsection (b) to the
               contrary, the provisions of this subsection shall apply
               separately with respect to each group of employees who are
               Members of a Collective Bargaining Unit (if any) and the group of
               employees who are not Members of a Collective Bargaining Unit.

1. Net earnings or losses to be refunded with the excess voluntary Before-Tax
Contributions shall be equal to the net earnings or losses on such contributions
for the Plan Year in which the contributions were made, determined in the manner
set forth in Article 4.
2.
3. For the purpose of avoiding the necessity of adjustments pursuant to this
Section or Section 4.12, or to comply with any applicable law or regulation:
4.

     a.   The Committee may adopt such rules as it deems necessary or desirable
          to:

                                       15
<PAGE>   21

               (1) impose limitations during a Plan Year on the percentage of
               Before-Tax Contributions elected by Participants pursuant to
               Section 3.2; or

               (1) increase during a Plan Year the percentage of Considered
               Compensation with respect to which a Participant may elect a
               Before-Tax Contribution for the purpose of providing Participants
               with the opportunity to increase their Before-Tax Contributions
               within the limitations of this Section 3.3;

          a. The Employer may at its sole discretion make fully vested
          contributions to the Plan which will be allocated to the Before-Tax
          Accounts of one or more Participants who are Non-Highly Compensated
          Employees in such amounts as the Employer directs for the purpose of
          complying with the applicable limits on Before-Tax Contributions in
          the Code.

1. The amount of the Before-Tax Contributions to be made pursuant to a
Participant's election shall reduce the compensation otherwise payable to him by
the Employer.
2.
3. The amount of each Participant's Before-Tax Contributions as determined under
this Section 3.3 is subject to the provisions of Section 4.12.
4.
B. Limitation on After-Tax Contributions . Notwithstanding any other provision
to the contrary, the After-Tax Contributions of the Highly Compensated Employees
shall be reduced in accordance with the following provisions:
C.
1. The After-Tax Contributions of the Highly Compensated Employees shall be
reduced if neither of the Contribution Percentage Tests set forth in (i) or (ii)
below is satisfied after taking into account the provisions of subsection (g):

     a.   The 1.25 Test. The Contribution Percentage of the Highly Compensated
          Employees is not more than the Contribution Percentage of all
          Non-Highly Compensated Employees multiplied by 1.25.

     a.   The 2.0 Test. The Contribution Percentage of the Highly Compensated
          Employees is not more than 2 percentage points greater than the
          Contribution Percentage of all Non-Highly Compensated Employees, and
          the Contribution Percentage of the Highly Compensated Employees is not
          more than the Contribution Percentage of all Non-Highly Compensated
          Employees multiplied by 2.0.

     1.   As used in this Section 3.4, "Contribution Percentage" means:

          (1) With respect to Non-Highly Compensated Employees, the average of
          the ratios of each Non-Highly Compensated Employee's After-Tax
          Contributions with respect to the prior Plan Year to each such
          Participant's Considered Compensation for such Plan Year; and

                                       16
<PAGE>   22

          (1) With respect to Highly Compensated Employees, the average of the
          ratios of each Highly Compensated Employee's After-Tax Contributions
          with respect to the current Plan Year to each such Participant's
          Considered Compensation for such Plan Year.

     a. All After-Tax Contributions made under this Plan and all employee
     contributions and matching contributions made under any other plan that is
     aggregated with this Plan for purposes of Code Sections 401(a)(4) and
     410(b) shall be treated as made under a single plan. If any plan is
     permissively aggregated with this Plan for purposes of Code Section 401(m),
     the aggregated plans must also satisfy Code Sections 401(a)(4) and 410(b)
     as though they were a single plan. The Contribution Percentage ratio of any
     Highly Compensated Employee will be determined by treating all plans
     subject to Code Section 401(m) under which the Highly Compensated Employee
     is eligible as a single plan.

1. To the extent necessary, and solely for the exclusive purpose of satisfying
the Contribution Percentage Test in Section 3.4(a), all or part of the
Before-Tax Contributions of Participants may be treated by the Committee as
After-Tax Contributions ("Designated Before-Tax Contributions"), provided that
each of the following is satisfied:
2.

     a. The Before-Tax Contributions, including Designated Before-Tax
     Contributions, satisfy the requirements of Section 3.3(b); and

     a. The Before-Tax Contributions, excluding Designated Before-Tax
     Contributions, satisfy the requirements of Section 3.3(b).

     a. If neither Contribution Percentage Test is satisfied as of the end of
     the Plan Year, the Committee shall cause the After-Tax Contributions of the
     Highly Compensated Employees to be reduced and refunded to each affected
     Highly Compensated Employee until either Contribution Percentage Test is
     satisfied. The sequence of such reductions and refunds shall begin with
     Highly Compensated Employees who elected the greatest dollar amount, and
     then shall proceed with each lesser dollar amount until either contribution
     Percentage Test is satisfied (notwithstanding anything in the foregoing to
     the contrary, if a lesser reduction, when added to the dollar amount
     previously received would equal the total excess contributions, such lesser
     reduction shall be utilized).

     a. Once either Contribution Percentage Test is satisfied, the Committee
     shall direct the Trustee to distribute to the appropriate Highly
     Compensated Employees the amount of the reduction of the After-Tax
     Contribution of each such Highly Compensated Employee, together with the
     net earnings or losses allocable thereto. The Committee shall designate
     such distribution as a distribution of excess contributions, determine the
     amount of the allocable net earnings or losses to be distributed in
     accordance with

                                       17
<PAGE>   23

     subsection (f) below, and cause such distributions to occur prior to the
     end of the Plan Year following the Plan Year in which such excess After-Tax
     Contributions were made.

1. Notwithstanding anything in this Section 3.4 to the contrary, the provisions
of subsection (a) shall apply separately with respect to each group of employees
who are Members of a Collective Bargaining Unit (if any) and the group of
employees who are not Members of a Collective Bargaining Unit.
2.
3. Net earnings or losses to be refunded with the excess After-Tax Contributions
shall be equal to the net earnings or losses on such contributions for the Plan
Year in which the contributions were made. Net earnings or losses shall be
determined in the same manner as in Section 3.3(c), except that the phrase
"After-Tax Contributions" shall be substituted for the phrase "Before-Tax
Contributions" wherever used therein.
4.
5. For the purpose of avoiding the necessity of adjustments pursuant to this
Section or Section 4.12, or to comply with any applicable laws or regulation:
6.

     a. the Committee may adopt such rules as it deems necessary or desirable to
     impose limitations during a Plan Year on the percentage of After-Tax
     Contributions made by Participants pursuant to Section 3.2; or

     a. the Employer may in its sole discretion make fully vested contributions
     to the Plan, which will be allocated to the Employer Accounts of one or
     more Participants who are Non-Highly Compensated Employees, in such amounts
     as the Employer directs for the purpose of complying with applicable limits
     on Employer Contributions in the Code.

1. The amount of each Participant's After-Tax Contributions as determined under
this Section 3.4 is subject to the provisions of Section 4.12.

A. Multiple Use .
B.
1. This Section 3.5 will be applicable if The 2.0 Test is used to satisfy both
the Actual Deferral Percentage Test and the Contribution Percentage Test. If
this Section 3.5 is applicable, the Committee shall determine whether a
"Multiple Use" has occurred, and if such a Multiple Use has occurred, the
After-Tax Contributions of the Highly Compensated Employees shall be reduced in
accordance with the provisions of subsection (c) below.

1. A Multiple Use occurs when for the Highly Compensated Employees, the sum of
the Actual Deferral Percentage used to satisfy The 2.0 Test plus the
Contribution Percentage used to satisfy The 2.0 Test exceeds the "Aggregate
Limit." The Aggregate Limit is the greater of (i) or (ii) below, determined as
follows:
2.

                                       18
<PAGE>   24

          (1) First, multiply 1.25 by the greater of (I) the Actual Deferral
          Percentage, or (II) the Contribution Percentage of the Non-Highly
          Compensated Employees;

          (1) Second, add 2.0 to the lesser of (I) or (II) above provided that
          such sum shall not exceed 2 times the lesser of (I) or (II) above; and

          (1) Finally, add the results from (A) and (B) to determine the
          Aggregate Limit; or

          (1) First, multiply 1.25 by the lesser of (I) the Actual Deferral
          Percentage, or (II) the Contribution Percentage of the Non-Highly
          Compensated Employees;

          (1) Second, add 2.0 to the greater of (I) or (II) above provided that
          such sum shall not exceed 2 times the greater of (I) or (II) above;
          and

          (1) Finally, add the results from (A) and (B) to determine the
          Aggregate Limit.

1. If a Multiple Use has occurred, such Multiple Use shall be corrected by
reducing the Contribution Percentage of Highly Compensated Employees in
accordance with the provisions of Section 3.4(d) until the sum of the Actual
Deferral Percentage plus the Contribution Percentage for the Highly Compensated
Employees equals the Aggregate Limit.
2.
3. Net earnings or losses to be refunded with the excess After-Tax Contributions
shall be equal to the net earnings or losses on such contributions for the Plan
Year in which the contributions were made. Net earnings or losses shall be
determined in the same manner as in Section 3.3(c) except that the phrase
"After-Tax Contributions" shall be substituted for the phrase "Before-Tax
Contributions" wherever used therein.

A. Rollover Contribution .
B.
1. A Rollover Contribution may be rolled over in cash to the Trust Fund for the
benefit of a Participant with the permission of the Committee. Prior to
accepting any transfer which is intended to be a Rollover Contribution, the
Committee may require the Participant to establish that the amount to be rolled
over meets the definition of a Rollover Contribution and any other limitations
of the Code applicable to such rollovers.

1. An Eligible Employee who is not eligible to participate in the Plan solely by
reason of failing to meet the eligibility requirements of Article 2 and who
reasonably expects to become a Participant when such requirements are met, may
be a Participant in the Plan solely for the limited purposes of making a
Rollover Contribution, and taking actions with respect to his Rollover Account
for the purposes of loans in accordance with Article 6, investment options in
accordance with Section 4.2, and the withdrawal of Rollover Contributions in
accordance with (e) below, subject to the same conditions as any other
Participant.

                                       19
<PAGE>   25

2.
3. If the Committee determines after a Rollover Contribution has been made that
such Rollover Contribution did not in fact constitute a Rollover Contribution as
defined in Section 1.4, the amount of such Rollover Contribution and any
earnings thereon shall be returned to the employee.
4.
5. Each Participant's Rollover Contribution shall be credited to his Rollover
Account and invested in accordance with Section 4.2. A Participant's Rollover
Account shall be fully vested and nonforfeitable.
6.
7. Amounts may be distributed from a Participant's Rollover Account under the
same terms and conditions and subject to the same restrictions as apply to
distributions of a Participant's After-Tax Account pursuant to Article 6.
8.
9. The Rollover Contribution of a Participant shall be allocated to his Rollover
Account as of the Valuation Date coinciding with or next succeeding the date on
which such amounts are received by the Trustee.
10.

                                       20
<PAGE>   26

                I. ARTICLE Accounting Provisions and Allocations

A. Participant's Accounts . For each Participant there shall be maintained as
appropriate a separate Employer Account, Before-Tax Account, After-Tax Account
and Rollover Account. Each Account shall be credited with the amount of
contributions, forfeitures, interest and earnings of the Trust Fund allocated to
such Account and shall be charged with all distributions, withdrawals and losses
of the Trust Fund allocated to such Account.

A. Investment Funds .
B.
1. The Trust Fund shall be divided into separate investment funds (each a
"Fund"), as provided in this Section 4.2. Each Fund, as may from time to time be
established, shall be a common fund in which each Participant shall have an
undivided interest in the respective assets of the Fund. Except as otherwise
provided, the value of each Participant's Accounts in such Funds shall be
measured by the proportion that the net credits to his Accounts bear to the
total net credits to the Accounts of all Participants and beneficiaries as of
the date that such share is being determined. For purposes of allocation of
income and valuation, each Fund shall be considered separately. No Fund shall
share in the gains and losses of any other, and no Fund shall be valued by
taking into account any assets or distributions from any other.

1. Each Fund shall be established and invested by the Trustee in accordance with
investment policies determined, or as the Trustee may be directed, from time to
time by the Committee. The Committee may from time to time also direct that
Funds with similar investment objectives be consolidated.
2.
3. The Funds established and managed under subsections 4.2(a) and (b) consist of
Fund A and Fund B, although these Funds may be changed, added to or eliminated
at any time.
4.

          a. The assets allocated to Fund A shall be invested to achieve the
          highest total investment return consistent with prudent risk through a
          fully managed investment policy. Total investment return shall mean
          the aggregate of income and capital value changes. The assets of Fund
          A may be invested in such proportions of common stock, straight debt
          securities, convertible issues, and other prudent forms of investment
          as from time to time appear appropriate to achieve highest total
          investment return. To motivate employees toward increased Company
          profits, it is contemplated that Fund A may, at any given time, be
          invested as much as 100% in Company securities. However, any
          investment in Company securities which after giving effect thereto
          would result in the market value of Company securities exceeding 25%
          of the market value of Fund A, must be authorized by the Board of
          Directors of the Company.

          a. The assets allocated to Fund B shall be invested to achieve stable
          income, consistent with preservation of capital and prudent risk. The
          assets of Fund B may be invested in prudent forms of investment as
          from time to time appear appropriate to achieve the objective of this
          Fund.

                                       21
<PAGE>   27

2. Contributions shall be credited as follows:
3.

     a.   Employer Contribution -- One hundred percent (100%) of the Employer
          Contribution shall be allocated to Fund A.

     a.   Participant Contributions -- One hundred percent (100%) of a
          Participant's Required Contribution shall be allocated to Fund B. With
          respect to a Voluntary Contribution, a Participant may elect, in whole
          percentages, to allocate such contribution between Fund A and Fund B.
          The Participant may change the allocation for future contributions as
          of the first day of each month, subject to such limitations and
          conditions as the Committee shall proscribe. Notwithstanding the
          foregoing, no Voluntary Contribution may be allocated to Fund A if it
          is possible that an amount in excess of the Employer Contribution may
          be allocated to the purchase of securities issued by the Employer, or
          any entity directly or indirectly controlling, controlled by or under
          common control with the Employer.

               (iii) Rollover Contributions -- A Participant may elect to
          allocate his Rollover Contribution to Fund A, Fund B, or, in whole
          percentages, between Fund A and Fund B. Such election shall be made
          within 31 days from the date of receipt by the Trust Fund of the
          Rollover Contribution, and in the absence of an election or prior to
          when an election is received, all Rollover Contributions shall be
          allocated to Fund B. Notwithstanding the foregoing, no Rollover
          Contribution may be allocated to Fund A if it is possible that an
          amount in excess of the Employer Contribution may be allocated to the
          purchase of securities issued by the Employer, or any entity directly
          or indirectly controlling, controlled by or under common control with
          the Employer.

1. Wherever in this Section 4.2 the term "Participant" is used, it shall be
deemed to include, where applicable, (i) the beneficiary of a deceased
Participant who is entitled to any portion of the deceased Participant's
Accounts, and (ii) an alternate payee under a qualified domestic relations order
described in Code Section 414(p).

A. Allocation Procedure .

B.
1. As of each Valuation Date, the Committee shall:

     a. first, allocate the net earnings or losses of the Trust Fund pursuant to
     Section 4.5;

     a. second, allocate Before-Tax Contributions pursuant to Section 4.7;

     a. third, allocate After-Tax Contributions pursuant to Section 4.8;

     a. fourth, allocate the Employer Contribution and forfeitures pursuant to
     Section 4.9; and

                                       22
<PAGE>   28

     a. fifth, allocate Rollover Contributions pursuant to Section 3.6(f).

1. All contributions to the Trust made by or on behalf of a Participant shall be
deposited in the form of cash or other acceptable assets in the Trust Fund and
shall be credited to the appropriate Accounts of such Participant as of the
Valuation Date received by the Trust Fund; provided that, any contributions made
with respect to a Plan Year must be credited to the appropriate Accounts of such
Participant no later than the last day of such Plan Year. All contributions to
the Trust shall be credited at the values determined as of the date received by
the Trust Fund.
2.
B. Determination of Value of Trust Fund . As of each Valuation Date the Trustee
shall determine for the period then ended the sum of the net earnings or losses
of the Trust Fund which shall reflect accrued but unpaid interest, dividends,
gains or losses realized from the sale, exchange or collection of assets, other
income received, appreciation or depreciation in the fair market value of
assets, administration expenses, and taxes and other expenses paid. Gains or
losses realized and adjustments for appreciation or depreciation in fair market
value shall be computed with respect to the difference between such value as of
the preceding Valuation Date or date of purchase, whichever is later, and the
value as of the date of disposition or the current Valuation Date, whichever is
earlier. To the extent that any assets of the Trust have been invested in one or
more separate investment trusts, mutual funds, investment contracts or similar
investment media, the net earnings or losses attributable to such investments
shall be determined in accordance with the procedures of such investment media.

A. Allocation of Net Earnings or Losses . As of each Valuation Date, the net
earnings or losses of the Trust Fund for the period then ending shall be
allocated to the Accounts of all Participants (or beneficiaries of deceased
Participants) having credits in the Fund both on such date and at the beginning
of such period. Such allocation shall be in the ratio that (i) the net credits
to each such Account of each such Participant on the first day of such period,
less the total amount of any distributions from such Account to such Participant
during such period, bears to (ii) the total net credits to all such Accounts of
all Participants on said first day of the period, less the total amount of
distributions from all such Accounts to all Participants during such period.
Notwithstanding the foregoing, to the extent the assets of the Trust have been
invested in one or more separate investment trusts, mutual funds, investment
contracts or similar investment media, the net earnings or losses attributable
to such investments shall be allocated to the Accounts of Participants or
beneficiaries on the basis of the balances of such Accounts but in accordance
with the procedures of the respective investment media in which such assets are
invested.

                                       23
<PAGE>   29

A. Eligibility to Share in the Employer's Contribution and Forfeitures .
B.
1. An Active Participant shall be eligible to share in the Employer Contribution
and forfeitures for the Plan Year as of the last day of which such Employer
Contribution or forfeitures are being allocated if he is then employed by the
Employer as an Eligible Employee and has met the requirements of Section 2.1(c).
A Participant who, during a Plan Year, retires on or after his Normal Retirement
Date, dies or is initially deemed to be totally and permanently disabled shall
also be eligible to share in the Employer Contribution and forfeitures for said
Plan Year. A Participant who is eligible to share in the Employer Contribution
and forfeitures shall be known as an "Eligible Participant."

1. Notwithstanding anything in the Plan to the contrary, if the Plan would
otherwise fail to meet the requirements of Code Section 410(b) and the
regulations thereunder because Employer Contributions have not been allocated to
a sufficient number or percentage of Participants for a Plan Year, then the
following rules will apply:
2.

     a. The group of Eligible Participants will be expanded to include the
     minimum number of Participants who would not otherwise be eligible as are
     necessary to satisfy the applicable test specified above. The specific
     Participants who will become eligible under the terms of this paragraph
     will be those who are actively employed on the last day of the Plan Year
     and, when compared to similarly situated Participants, have completed the
     greatest period of Service in the Plan Year.

     a. If after application of the previous paragraph, the applicable test is
     still not satisfied, then the group of Eligible Participants will be
     further expanded to include the minimum number of former Participants who
     are (a) not employed on the last day of the Plan Year, (b) Non-Highly
     Compensated Employees and (c) are vested or partially vested in their
     Accounts, as are necessary to satisfy the applicable test. The specific
     former Participants who will become eligible under the terms of this
     paragraph will be those former Participants, when compared to similarly
     situated former Participants, who have completed the greatest period of
     Service in the Plan Year before terminating employment.

     a. Nothing in this Section will permit the reduction of a Participant's
     benefit. Therefore any amounts that have previously been allocated to
     Participants may not be reallocated to satisfy these requirements. In the
     event allocations to additional Participants or former Participants are
     required, the Employer will make an additional contribution equal to the
     amount such persons would have received had they been included in the
     allocations, even if it exceeds the amount which would be deductible under
     Code Section 404. Any adjustment to the allocations pursuant to this
     Section will be made by the 15th day of the tenth month after the end of
     the Plan Year and will be considered a retroactive amendment adopted by the
     last day of the Plan Year.

                                       24
<PAGE>   30

A. Allocation of Before-Tax Contributions . As of each Valuation Date, the
Before-Tax Contributions made on behalf of each Participant since the prior
Valuation Date shall be allocated to such Participant's Before-Tax Account.
B.
C. Allocation of After-Tax Contributions . As of each Valuation Date, the
After-Tax Contributions of a Participant received since the prior Valuation Date
shall be allocated to such Participant's After-Tax Account.
A. Allocation of Employer Contribution and Forfeitures .
B.
1. As of the last day of each Plan Year, the Primary Employer Contribution under
Section 3.1(a) and the amounts which become allocable as forfeitures during the
Plan Year shall be allocated among the Eligible Participants in the proportion
that each such Participant's Considered Compensation for the Fiscal Year ending
within the Plan Year bears to all such Eligible Participant's Considered
Compensation for that Fiscal Year.

1. As of the last day of each Plan Year, the Supplemental Employer Contribution
under Section 3.1(a) shall be allocated among the Eligible Participants. Each
Eligible Participant's share in the Supplemental Employer Contribution shall be
determined as follows:
2.

     a. Each Eligible Participant's Considered Compensation for the Fiscal Year
     ending within the Plan Year shall be adjusted by the applicable multiplier
     based upon age at the end of the Plan Year, as listed below ("Adjusted
     Considered Compensation"):

          Age            Under 35    35-44      45-54       Over 54
          ---

          Multiplier     1.0         2.0        4.0         10.0
          ----------

          a. All Eligible Participants shall share in 66% of the Supplemental
          Employer Contribution on the basis of each Eligible Participant's
          Adjusted Considered Compensation for such Fiscal Year as a percentage
          of all Eligible Participants' Adjusted Considered Compensation for
          such Fiscal Year.

          a. Each Eligible Participant who has not elected to be covered by the
          transitional rules applicable to retiree medical benefits adopted by
          the Company's Board of Directors on August 5, 1993 (a "Non-Electing
          Participant") shall share 33% of the Supplemental Employer
          Contribution on the basis of each Non-Electing Participant's Adjusted
          Considered Compensation for such Fiscal Year as a percentage of all
          Non-Electing Participants' Adjusted Considered Compensation for such
          Fiscal Year. No other Eligible Participant shall share in any part of
          the amount set forth in this Section 4.9(b)(iii).

                                       25
<PAGE>   31

          a. Notwithstanding the foregoing, in the event that the allocation of
          the Supplemental Employer Contribution as provided for above, results
          in discrimination in favor of Highly Compensated Employees, as
          prohibited by Section 401(a)(4) or any other applicable provision of
          the Code, an adjustment on allocation shall be made so as to satisfy
          the non-discrimination requirements of the Code.

A. Provisional Annual Addition . The sum of the amounts allocated to the
Accounts of the Participants pursuant to Sections 4.7, 4.8 and 4.9 for a Plan
Year shall be known as the "Provisional Annual Addition" and shall be subject to
the limitation on Annual Additions in Section 4.11.

A. Limitation on Annual Additions .
B.
1. For the purpose of complying with the restrictions on Annual Additions to
defined contribution plans imposed by Code Section 415, for each Eligible
Participant and each other Participant who has made Before-Tax Contributions
and/or After-Tax Contributions during the Plan Year, there shall be computed a
Maximum Annual Addition, which shall be the lesser of

          a.   25% of his Total Compensation for the Plan Year; or

          a.   the Defined Contribution Dollar Limitation for the Plan Year.

1. If the Maximum Annual Addition for a Participant equals or exceeds the
Provisional Annual Addition for that Participant, an amount equal to the
Provisional Annual Addition shall be allocated to the Participant's respective
Accounts.
2.
3. If the Provisional Annual Addition exceeds the Maximum Annual Addition for
that Participant, the Provisional Annual Addition shall be reduced as set forth
below until the Provisional Annual Addition as so reduced equals the Maximum
Annual Addition for such Participant:
4.

          a. first, there shall be refunded to such Participant a portion or all
          of his voluntary After-Tax Contribution allocated to Fund A;

          a. second, there shall be refunded to such Participant a portion or
          all of his voluntary After-Tax Contribution allocated to Fund B;

          a. third, there shall be refunded to such Participant a portion or all
          of his required After-Tax Contribution allocated to Fund B;

          a. fourth, there shall be refunded to such Participant a portion of
          all of his voluntary Before-Tax Contribution allocated to Fund A;

                                       26
<PAGE>   32

          a. fifth, there shall be refunded to such Participant a portion of all
          of his voluntary Before-Tax Contribution allocated to Fund B;

          a. sixth, there shall be refunded to such Participant a portion or all
          of his required Before-Tax Contribution allocated to Fund B;

          a. seventh, the Employer Contribution allocable to such Participant's
          respective Accounts shall be reduced; and

          a. eighth, the amount of forfeiture allocable to the Participant's
          Employer Account shall be reduced.

The Provisional Annual Addition remaining after such reductions shall be
allocated to the Participant's respective Accounts.

1. Any contributions or forfeiture which cannot be allocated under the Plan and
is not refunded under (a) above because of the application of the above limit
shall be held in a Suspense Account for such Plan Year. In the next succeeding
Plan Year the amounts included in such Account shall be treated as a forfeiture
for such Plan Year and shall be allocated to the Eligible Participants' Employer
Accounts in accordance with the provisions of Section 4.9 (and as such will be
again subject to the limitations of this Section 4.11 for such Plan Year).
Amounts which are included in the Suspense Account as of the end of a Plan Year
shall be treated as a liability of the Trust Fund. Upon termination of the Plan,
amounts then held in the Suspense Account which cannot be allocated pursuant to
this Section shall revert to the Employer.
2.
3. Notwithstanding anything to the contrary in this Plan, any After-Tax or
Before-Tax Contributions reduced in accordance with subsection (c) above shall
be distributed to the Participant with allocable earnings in accordance with
Treasury Regulation Section 1.415-6(b)(6)(iv).

A. Special Limitation on Maximum Contributions .
B.
1. In the case of any Participant who is or was also a participant in a defined
benefit plan maintained by the Employer or an Affiliate, the sum of the Defined
Contribution Fraction and Defined Benefit Fraction (each as determined below) as
of the end of any Plan Year shall not exceed 1.0. In the event that the sum of
such Fractions would otherwise exceed 1.0, then the amount determined under
Section 4.11(a)(i) or (ii), whichever is applicable, in determining the Maximum
Annual Addition under Section 4.11(a) shall be equal to such applicable amount
multiplied by the difference between 1.0 and the Defined Benefit Fraction.

1. The "Defined Benefit Fraction" applicable to a Participant for any Limitation
Year is a fraction, the numerator of which is the sum of the Projected Annual
Benefit (as determined below) of the Participant under all of the defined
benefit plans maintained or previously maintained by the Employer or an
Affiliate in which the Participant was a participant

                                       27
<PAGE>   33

(determined as of the close of the Limitation Year) and the denominator of which
is the lesser of (i) the product of 1.25 multiplied by the maximum dollar
limitation on a Participant's Projected Annual Benefit if the plan provided the
maximum benefit allowable under Code Section 415(b) for such Limitation Year or
(ii) the product of 1.4 multiplied by 100% of the Participant's Highest Average
Compensation (as determined below). 2.
3. The "Defined Contribution Fraction" applicable to a Participant for any
Limitation Year is a fraction, the numerator of which is the sum of the
Participant's Annual Additions as of the close of such Limitation Year for that
Limitation Year and for all prior Limitation Years under this Plan and all other
defined contribution plans maintained by the Employer or an Affiliate, and the
denominator of which is the sum of the lesser of the following amounts
(determined for such Limitation Year and for each prior Limitation Year during
which the Participant performed services as an employee of the Employer or an
Affiliate regardless of whether a plan was in existence during those years): (i)
the product of 1.25 multiplied by the Defined Contribution Dollar Limitation (as
defined above) for the Limitation Year or (ii) the product of 1.4 multiplied by
25% of the Participant's Section 415 Compensation for the Limitation Year.
4.
5. In accordance with regulations issued by the Secretary of the Treasury or his
delegate pursuant to Section 1106(i)(4) of the Tax Reform Act of 1986, an amount
shall be subtracted from the numerator of the Defined Contribution Fraction (not
exceeding such numerator) so that the sum of the Defined Benefit Fraction and
the Defined Contribution Fraction does not exceed 1.0 as of December 31, 1986.
To the extent provided under applicable law and regulations, adjustments shall
be made to the Defined Benefit Fraction or the Defined Contribution Fraction
with respect to previous transition rules.
6.

     a. "Highest Average Compensation" means the average of a Participant's
     Total Compensation from the Employer and all Affiliates for the high three
     consecutive Limitation Years (determined as of the close of the Limitation
     Year) of employment with the Employer or an Affiliate (or the actual number
     of years of employment for a Participant who is employed for less than 3
     consecutive years for which the Participant's Total Compensation is the
     highest).

     a. "Projected Annual Benefit" means the annual benefit a Participant would
     receive from employer contributions under a defined benefit plan, adjusted
     in the case of any benefit payable in a form other than a single life
     annuity or a qualified joint and survivor annuity, to the actuarial
     equivalent of a single life annuity, assuming (A) the Participant continued
     employment until reaching the plan's normal retirement age (or his current
     age, if later), (B) his compensation remained unchanged and (C) all other
     relevant factors used to determine benefits under the plan remained
     constant in the future.

     1. Notwithstanding anything herein to the contrary, this Section 4.12 shall
     not be applicable to Plan Years beginning after December 31, 1999.

                                       28
<PAGE>   34

A. Transfer of Fund Balances
B.
1. Commencing with the first month following the month in which a Participant
attains age 55, at the end of each month a portion of the balance of the
Participant's Account invested in Fund A shall be transferred to Fund B. The
portion to be transferred shall be determined in accord with the following
formula: P x A/B = Y, where P equals the Participant's balance in Fund A at the
end of the previous month; A equals 1; B equals the number of months remaining
until the Participant reaches age 65; and Y equals the amount to be transferred
from Fund A to Fund B.

1. Notwithstanding the foregoing Section 4.13(a), until the attainment of age
65, a Participant may elect to defer transfer of the portion of Fund A to Fund B
which would be transferred under Section 4.13(a). Nevertheless, commencing with
the first month following the month in which a Participant attains age 65, at
the end of each month a portion of the balance of the Participant's Account
invested in Fund A shall be transferred to Fund B. The portion to be transferred
shall be determined in accord with the following formula: P x A/B = Y, where P
equals the Participant's balance in Fund A at the end of the previous month; A
equals 1; B equals the number of months remaining until the Participant reaches
age 70; and Y equals the amount to be transferred from Fund A to Fund B. 2.
3. If a Participant terminates or retires after age 55 and does not elect lump
sum distribution, the Participant may make a one-time election to:
4.

     a. continue the periodic transfer schedule set forth in subsection (a) or
     (b) above, or

     a. transfer the balance remaining in Fund A to Fund B at the end of the
     month in which such termination or retirement occurs.

                                       29
<PAGE>   35

                  I.ARTICLE Amount of Payments to Participants

A. General Rule . Upon the retirement, disability, resignation or dismissal of a
Participant, he, or in the event of his death, his beneficiary, shall be
entitled to receive from his respective Accounts in the Trust Fund the following
amounts as of the latest Valuation Date for which values are available to the
Plan Administrator as of the date the distribution is processed by the Plan
Administrator:

1. an amount equal to the Participant's Before-Tax Account, After-Tax Account
and Rollover Account, plus any of the Participant's Contributions made to the
Trust Fund but not allocated to the Participant's Accounts as of such Valuation
Date; and 2.
3. the nonforfeitable portion of the Participant's Employer Account determined
as hereafter set forth.
4.
5. The time and manner of distribution of a Participant's Accounts shall be
determined in accordance with Article 6. 6. B. Retirement . Any Participant may
retire on or after his Early Retirement Date or his Normal Retirement Date, at
which date the forfeitable portion, if any, of his Employer Account shall become
nonforfeitable. If the retirement of a Participant is deferred beyond his Normal
Retirement Date, he shall continue in full participation in the Plan and Trust
Fund.
C.
D. Death . As of the date any Participant shall die while in the employ of the
Employer or an Affiliate, the forfeitable portion, if any, of his Employer
Account shall become nonforfeitable.
E.
F. Vesting . A Participant's interest in his Before-Tax Account, After-Tax
Account and Rollover Account shall be nonforfeitable at all times. Except as
otherwise provided in this Article 5, a Participant's nonforfeitable interest in
his Employer Account at any point in time shall be determined under Section 5.5.
A. Resignation or Dismissal .
B.
1. If any Participant shall resign or be dismissed from the service of the
Employer and all Affiliates, there shall become nonforfeitable a portion or all
of his Employer Account determined as of his Valuation Date in accordance with
the following schedule:

                                       30
<PAGE>   36

                         Years of Service     Nonforfeitable
                                                Percentage
                         Less than 2                  0
                         2 but less than 3           10
                         3 but less than 4           20
                         4 but less than 5           40
                         5 but less than 6           60
                         6 but less than 7           80
                         7 or more                  100

Any part of the Employer Account of such Participant which does not become
nonforfeitable shall be treated as a forfeiture pursuant to Section 5.7.

1. A Participant who has elected to take withdrawals pursuant to Section 6.7
shall upon resignation or dismissal have his nonforfeitable interest in his
Employer Account determined as of the Valuation Date coincident with or next
succeeding his resignation or dismissal as follows:
2.

     a. add to his Employer Account the amount of any such withdrawals charged
     to his Employer Account pursuant to Section 6.7;

     a. determine the nonforfeitable portion of his Employer Account as adjusted
     under (i) above; and

     a. subtract from the nonforfeitable amount, determined under (ii) above,
     the withdrawals charged to his Employer Account pursuant to Section 6.7.

A. Computation of Period of Service . For purposes of determining the
nonforfeitable percentage of the Participant's Employer Account, all Years of
Service shall be taken into account.
A. Treatment of Forfeitures .
B.
1. Upon termination of a Participant's employment with the Employer and all
Affiliates, that part of his Employer Account which becomes a forfeiture
pursuant to this Section 5.7 shall become allocable pursuant to Section 4.9 at
the end of the Plan Year in which the termination of employment occurred if the
Participant is not then reemployed by the Employer or an Affiliate.

1. If the Participant is reemployed by the Employer or an Affiliate without
incurring 5 consecutive One-Year Breaks in Service, the amount of the forfeiture
shall be credited to a

                                       31
<PAGE>   37

separate account for the Participant, called the Forfeiture Restoration Account,
as of the last day of the Plan Year in which he is reemployed and shall be
deducted from the forfeitures which otherwise would be allocable for such Plan
Year or, to the extent such forfeitures are insufficient, shall require a
supplemental contribution from the Employer.
2.
3. Upon a subsequent termination of a Participant's employment with the Employer
and all Affiliates (the "Relevant Time"), the Participant's vested interest in
the Company Contribution portion of his Forfeiture Restoration Account
(including earnings thereon) shall be the sum of the following:
4.
                           (1) the product of the amount of the account growth
         since rehire (the account balance at the Relevant Time less the amount
         of forfeiture restored at time of rehire) times the vested percentage
         at the Relevant Time,

                                    plus

                           (2) the sum of the product of the account balance at
         the time of the prior distribution times the vested percentage at the
         Relevant Time less the amount of the prior distribution.

                                       32
<PAGE>   38

                            I. ARTICLE Distributions

A. Commencement and Form of Distributions .
B.
a. Distribution of a Participant's Accounts in the Trust Fund following
termination of employment with the Employer and all Affiliates shall commence on
or as soon as practicable after the first to occur of:

          (1) the date set forth in the Participant's request for distribution;
          provided that (1) such date is not earlier than the date on which he
          is entitled to a distribution, (2) the Committee has notified the
          Participant of the availability of such distribution in a manner that
          would satisfy the notice requirements of Section 1.411(a)-11(c) of the
          income tax regulations, and (3) such notification is given no more
          than 90 days prior to the distribution date requested by the
          Participant; provided, further, that such distribution may commence
          less than 30 days after the date the notice required under Section
          1.411(a)-11(c) of the income tax regulations is given if:

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

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

          (1) the 60th day after the close of the later of the Plan Year in
          which the Participant attains his Normal Retirement Date or terminates
          employment with the Employer and all Affiliates, unless the
          Participant has requested to defer the distribution to a later date.

a. Subject to Section 6.1(f) below, effective January 1, 1997, if a Participant
is employed with the Employer or an Affiliate on the last day of the Plan Year
in which the Participant attains age 70 1/2, distribution of such Participant's
Accounts in the Trust Fund shall commence on the April 1 of the Plan Year
following the Plan Year during which such individual attains age 70 1/2, unless
such individual has elected to defer such distribution (in the form and manner
prescribed by the Committee for such purpose) on or before such date (December
31, 1997 with respect to distributions otherwise required by April 1, 1997). A
Participant who has filed a deferral election pursuant to this subsection (b)
may elect distribution of his Accounts to commence on any subsequent December
31, or such other dates as the Committee may provide. The Participant's right to
elect distribution pursuant to this subsection (b) shall be in addition to any
rights to elect distributions set forth in Section 6.7. A Participant's election
to begin distribution pursuant to the previous sentence shall be made in the
form and manner prescribed for such purpose by the Committee.
b.

                                       33
<PAGE>   39

c. Notwithstanding the foregoing, no required distribution shall be made,
deferral election required or subsequent distribution election permitted under
this subsection (b) with respect to any Participant who attains age 70 1/2 in or
after calendar year 1999.
d.
2. Distributions pursuant to subsection (a)(ii) above shall be made in the
manner described in subsection (a)(i) above.
3.
4. In all events, distribution shall commence no later than the Required
Beginning Date, and subsequent distributions required to be made each year for
compliance with Code Section 401(a)(9) and the regulations promulgated
thereunder shall be made no later than December 31 of such year.
5.
6. The Accounts distributable to a Participant shall be distributed in one or
more of the following ways, as the Participant may request by filing such notice
as shall be prescribed by the Committee, and in accordance with applicable laws
and regulations:
7.

          a. by payment in one lump sum;

          a. in substantially equal monthly, quarterly, semi-annual or annual
          installments which, except for the final payment, shall not be less
          than $100; or

          a. by a direct rollover to an employee's trust in which he is a
          participant, which is described in Code Section 401(a) and which is
          exempt from tax under Code Section 501(a), or to an individual
          retirement arrangement described in Code Section 408, in accordance
          with Section 6.11.

                                       34
<PAGE>   40

1. The value of the Participant's Accounts shall be paid to the Participant over
a period not to exceed his life expectancy or the joint life expectancy of the
Participant and his Individual Beneficiary. The minimum amount of any
installment distribution and determination of the life expectancy of a
Participant and the joint life expectancy of a Participant and his Individual
Beneficiary shall be determined in accordance with the regulations prescribed
under Code Section 401(a)(9); provided that the life expectancy of a Participant
or his spouse shall be redetermined annually. In no event shall the amount
distributable in any year under this Section 6.1 or under Section 6.2 be less
than the amount determined in accordance with the minimum distribution
incidental benefit requirements of Treasury Regulation Section 1.401(a)(9)-2.
2.
3. Notwithstanding anything in this Section 6.1 to the contrary, if the vested
balance of the Participant's Accounts does not exceed $5,000 at the time a
distribution is to be made from the Plan (or at the time of any prior
distributions did not exceed $5,000) and distribution pursuant to this Section
6.1 has not otherwise commenced, the Committee shall direct the Trustee to
distribute such amount in a lump sum payment to the individual so entitled and
the payment thereof shall be in full satisfaction of any liability of the Trust
to such individual. Any Participant whose vested balance of his Employer Account
is 0% shall be deemed to have received a lump sum payment upon termination of
employment.

1. Notwithstanding anything in this Section 6.1 to the contrary, if the amount
of any distribution required to commence on a certain date cannot be ascertained
by such date, a payment retroactive to such date may be made no later than 60
days after the earliest date on which such amount can be ascertained.

A. Distributions to Beneficiaries .
B.
1. If the beneficiary of a Participant is someone other than the Participant's
spouse at the time of the Participant's death, the balance of the deceased
Participant's Accounts which is distributable to a beneficiary shall be paid in
one lump sum within a reasonable time after the Participant's death, but in no
event later than the December 31 coinciding with or next following the 5th
anniversary of the Participant's death.

1. Except as otherwise provided in this Section 6.2(b), if the beneficiary of a
Participant is either the Participant's spouse at the time of the Participant's
death or the trustee of a trust (which complies with Code Section 401(a)(9) and
regulations promulgated thereunder) which has the Participant's spouse at the
time of the Participant's death as a beneficiary, the balance of a deceased
Participant's Accounts which is distributable to a beneficiary shall be
distributed in one of the forms described in Section 6.1(e)(i) or (ii), as the
beneficiary shall elect.
2.

     a. In the event that the distribution of the Participant's Accounts has
     begun in accordance with Section 6.1, any form of distribution to a
     beneficiary under this Section 6.2(b) shall be designed to distribute the
     balance of the deceased Participant's

                                       35
<PAGE>   41

     Accounts at least as rapidly as under the method of distribution in effect
     at the time of the Participant's death.

     a. If the distribution of a Participant's Accounts has not commenced at the
     time of his death, any form of distribution to a beneficiary under this
     Section 6.2(b) shall be designed to distribute the balance of the deceased
     Participant's Accounts as follows:

          (1) Any portion of the Accounts payable to or for the benefit of the
          beneficiary may be distributed over a period not to exceed the life
          expectancy of such beneficiary if such payments commence not later
          than (1) the December 31 coinciding with or next following the first
          anniversary of the Participant's death, or (2) the December 31 of the
          calendar year in which the Participant would have attained age 70-1/2.

          (1) If the Participant's surviving spouse dies prior to the
          commencement of benefit payments to such spouse, subsection (A) above
          shall be applied as if the Participant's death had occurred on the
          date of such spouse's death.

          (1) Unless distribution is made in accordance with subsections (A) or
          (B) above, the balance of the Participant's Accounts shall be
          distributed in full no later than the December 31 coinciding with or
          next following the 5th anniversary of the Participant's death.

     b. The life expectancy of a beneficiary who is the surviving spouse of the
     Participant shall be redetermined annually in accordance with regulations
     prescribed under Code Section 401(a)(9).

1. If a beneficiary to whom payments have commenced dies prior to receipt of all
such payments, the remaining balance of the Participant's Accounts shall be
distributed to any contingent or successor beneficiary in one lump sum in
accordance with Section 6.2(a), or if there is no such contingent or successor
beneficiary, in a lump sum to the deceased beneficiary's estate.

A. Beneficiaries .
B.
1. Unless a Participant has effectively elected otherwise in accordance with
this Section 6.3, the distributable balance of a deceased Participant's Accounts
shall be paid to his surviving spouse.

1. The balance of a deceased Participant's Accounts shall be distributed to the
persons effectively designated by the Participant as his beneficiaries. To be
effective, the designation shall be filed with the Committee in such written
form as the Committee requires and may include contingent or successive
beneficiaries; provided that any designation by a Participant who is married at
the time of his death or, if earlier, the date his benefit payments

                                       36
<PAGE>   42

commence, which fails to name his surviving spouse as the sole primary
beneficiary shall not be effective unless such surviving spouse has consented to
the designation in writing, witnessed by a Plan representative or notary public,
acknowledging the effect of the designation and the specific non-spouse
beneficiary, including any class of beneficiaries or any contingent beneficiary.
Such consent shall not be required if, at the time of filing such designation,
the Participant established to the satisfaction of the Committee that the
consent of the Participant's spouse could not be obtained because there is no
spouse, such spouse could not be located or by reason of such other
circumstances as may be prescribed by regulations. Any consent (or establishment
that the consent could not be obtained) shall be effective only with respect to
such spouse. Any Participant may change his beneficiary designation at any time
by filing with the Committee a new beneficiary designation (with such spousal
consent as may be required). Notwithstanding the foregoing, designation of a
beneficiary by a Participant who did not have any service after August 22, 1984,
shall not require the consent of his surviving spouse to be effective.
2.

     a. If a Participant dies, and to the knowledge of the Committee after
     reasonable inquiry leaves no surviving spouse, has not filed an effective
     beneficiary designation or has revoked all such designations, or has filed
     an effective designation but the beneficiary or beneficiaries predeceased
     him, the distributable portion of the Participant's Accounts shall be paid
     to the executor or administrator of the Participant's estate or if there is
     no executor or administrator, to the Participant's heirs as dictated by
     applicable state law.

     a. If the beneficiary, having survived the Participant, shall die prior to
     the final and complete distribution of the Participant's Accounts, then the
     distributable portion of said Accounts shall be paid:

          (1) to the contingent or successive beneficiary named in the most
          recent effective beneficiary designation filed by the Participant in
          accordance with such designation; or

          (1) if no such beneficiary has been named, to the executor or
          administrator of the beneficiary's estate.

A. Installment or Deferred Distributions . If a distribution made to a
Participant or to the beneficiary of a deceased Participant is deferred, the
undistributed vested balance shall share in the net earnings or losses as
provided in Section 4.5.
B.
C. Form of Elections and Applications for Benefits . Any election, revocation of
an election or application for benefits pursuant to the Plan shall not be
effective unless it is (a) made on such form, if any, as the Committee may
prescribe for such purpose; (b) signed by the Participant and, if required by
Section 6.3, by the Participant's spouse; and (c) filed with the Committee.
D.
E. Unclaimed Distributions . In the event any distribution cannot be made
because the person entitled thereto cannot be located and the distribution
remains unclaimed for 2 years after

                                       37
<PAGE>   43
the distribution date established by the Committee, then such amount shall be
treated as a forfeiture and allocated in accordance with Section 4.9. In the
event such person subsequently files a valid claim for such amount, such amount
shall be restored to the Participant's Accounts and removed from forfeitures for
that Plan Year.

A. Withdrawals.
B.
1. Upon the determination by the Committee that a Participant has incurred a
financial hardship, a Participant may make a hardship withdrawal, the amount of
which will be subject to the limits specified under Section 6.7(b), provided,
however, that such withdrawals shall not reduce the nonforfeitable portion of
the Participant's Accounts below an amount equal to the amount of any unpaid
loan made pursuant to Section 6.8. Any distribution hereunder shall be deemed to
be made first from the Participant's After-Tax Contributions made prior to
January 1, 1987, second, pro rata, from After-Tax Contributions made after
December 31, 1986 and from the earnings on such After-Tax Contributions, third,
from the earnings on After-Tax Contributions made prior to January 1, 1987,
fourth, from the Participant's Before-Tax Account, and fifth, from the vested
portion of the Participant's Employer Account.

1. An application for a withdrawal shall be made in writing to the Committee, in
accordance with procedures prescribed by the Committee, and shall include
justification and documentation for its purpose. The maximum amount of a
Participant's outstanding loans and accumulated withdrawals shall not exceed the
sum of the following percentages as of the last Valuation date, after restoring
previous withdrawals to such balances: 2. 3.

<TABLE>
<CAPTION>

                                             COMBINED BALANCE OF        BALANCE OF
                                                PARTICIPANT'S         ROLLOVER ACCOUNT
                                              EMPLOYER ACCOUNT,       ----------------
                                              BEFORE-TAX ACCOUNT
                                            AND AFTER-TAX ACCOUNT
                                            ---------------------
<S>                                                 <C>                  <C>
Participant with less than 5 Years of Service:        0%                   50%
----------------------------------------------       --                    --
Participant with at least 5 Years of Service:        30%                   50%
----------------------------------------------       --                    --
Participant with at least 10 Years of Service:       40%                   50%
----------------------------------------------       --                    --
Participant with at least 15 Years of Service:       50%                   50%
----------------------------------------------       --                    --
</TABLE>

1. A withdrawal may be granted only to satisfy an immediate and heavy financial
need. The following expenses shall be deemed to constitute an immediate and
heavy financial need:
2.

     a. expenses for medical care (as described in Code Section 213(d))
     previously incurred by the Participant, the Participant's spouse or any
     dependents of the Participant (as defined in Code Section 152) or necessary
     for these persons to obtain such medical care;

                                       38
<PAGE>   44

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

     a. tuition and related educational fees (including room and board) due for
     the next 12 months of post-secondary education for the Participant, the
     Participant's spouse, children or dependents;

     a. the need to prevent the eviction of the Participant from his principal
     residence or foreclosure on the mortgage of the Participant's principal
     residence; or

     a. any other event or expense deemed an immediate and heavy financial need
     by the Department of the Treasury.

1. Unless the Committee has actual knowledge to the contrary, the Committee
shall determine that a distribution is necessary to satisfy an immediate and
heavy financial need of the Participant if the Participant supplies a written
representation that the immediate and heavy financial need cannot be relieved:
2.

     a. through reimbursement or compensation by insurance or otherwise;

     a. by reasonable liquidation of the Participant's assets to the extent such
     liquidation would not itself cause an immediate and heavy financial need;

     a. by cessation of all contributions to any retirement plan (other than
     mandatory employee contributions to a defined benefit plan) maintained by
     the employer or any Affiliate;

     a. by other distributions or nontaxable loans currently available under all
     of the plans maintained by the Employer or any Affiliate; or

     a. by borrowing from commercial sources on reasonable commercial terms in
     an amount sufficient to satisfy the need.

A. Loans
B.
1. Upon the submission by the Participant of a written loan application form as
prescribed by the Committee, signed by the Participant, the Committee shall
grant a loan to such Participant from his Accounts; provided, however, that if
the Committee reasonably believes that the Participant either does not intend to
repay the loan or lacks proper financial ability to repay the loan, it shall not
grant such a loan. In the event a loan is not repaid, it will be charged to the
Participant's Account as of the beginning of the month in which the loan
repayment was due. The charge will be processed as a withdrawal from the
Participant's Account.
2.

                                       39
<PAGE>   45

3. The maximum amount of a Participant's outstanding loans and accumulated
withdrawals shall not exceed the sum of the following percentages as of the last
Valuation Date, after restoring previous withdrawals to such balances:
4.
<TABLE>
<CAPTION>
                                                   COMBINED BALANCE OF    BALANCE OF ROLLOVER
                                                      PARTICIPANT'S             ACCOUNT
                                                    EMPLOYER ACCOUNT,     -------------------
                                                 BEFORE-TAX ACCOUNT AND
                                                    AFTER-TAX ACCOUNT
                                                    -----------------
<S>                                                       <C>                 <C>
Participant with less than 5 Years of Service:              0%                  50%
Participant with at least 5 Years of Service:              30%                  50%
Participant with at least 10 Years of Service:             40%                  50%
Participant with at least 15 Years of Service:             50%                  50%
</TABLE>

1. The amount of any loan shall not exceed 50% of the amount which the
Participant would be entitled to receive from his Accounts if he had resigned
from the service of the Employer and all Affiliates on the Valuation Date
immediately preceding the date of such authorization; provided, however, that
the amount of such loan shall not exceed $50,000 reduced by the greater of (i)
the highest outstanding balance of loans to the Participant from the Trust Fund
during the one-year period ending on the day before the date on which such loan
is made or modified, or (ii) the outstanding balance of loans to the Participant
from the Trust Fund on the date on which such loan is made or modified.
2.
3. A loan may be granted only to satisfy an immediate and heavy financial need
caused by one of the following:
4.
     a. expenses for medical care (as described in Code Section 213(d))
     previously incurred by the Participant, the Participant's spouse or any
     dependents of the Participant (as defined in Code Section 152) or necessary
     for these persons to obtain such medical care;

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

     a. expansion of a Participant's home due to increased family size,
     including the addition of the parents of the Participant or the parents of
     the Participant's spouse;

     a. preservation of a Participant's home, other than normal repair expense;

     a. tuition and related educational fees (including room and board) for the
     Participant, the Participant's spouse, children or dependents;

                                       40
<PAGE>   46

     a. the need to prevent the eviction of the Participant from his principal
     residence or foreclosure on the mortgage of the Participant's principal
     residence;

     a. emergency financial need due to unforseen events that could not have
     been anticipated; or

     a. any other event or expense deemed an immediate and heavy financial need
     by the Department of the Treasury.

          The Committee must determine for each loan application that it
satisfies one of the above reasons. The Committee must also determine that the
requested amount for the loan does not exceed the amount needed to meet the
immediate and heavy financial need and that the requested funds are not
reasonably available from the Participant's other resources.

1. Such loans shall be made available on a reasonably equivalent basis to all
Participants and beneficiaries who have vested Account balances in the Plan and
who either (i) are active employees or (ii) are determined by the Committee to
be "parties in interest" as that term is defined in Section 3(14) of ERISA, so
long as the making of such loans does not discriminate in favor of Highly
Compensated Employees.
2.
3. Loans shall be made on such terms as the Committee may prescribe, provided
that any such loan shall be evidenced by a note, shall bear interest on the
unpaid balance thereof at a reasonable rate per annum to be set from time to
time by the Committee which is commensurate with the interest rates charged by
persons in the business of lending money for loans which would be made under
similar circumstances.
4. Loans shall be repaid by the Participant by payroll deduction or any other
method approved by the Committee which requires level amortization of principal
and repayments not less frequently than quarterly. Such loans shall be repaid
over a period not to exceed 5 years in accordance with procedures established by
the Committee from time to time.
5.
B. Facility of Payment . When, in the Committee's opinion, a Participant or
beneficiary is under a legal disability or is incapacitated in any way so as to
be unable to manage his affairs, the Committee may direct the Trustee to make
payments:
C.
1. directly to the Participant or beneficiary;
2.
3. to a duly appointed guardian or conservator of the Participant or
beneficiary;
4.
5. to a custodian for the Participant or beneficiary under the Uniform Gifts to
Minors Act;
6.
7. to an adult relative of the Participant or beneficiary; or
8.
9. directly for the benefit of the Participant or beneficiary.

                                       41
<PAGE>   47

10.
11. Any such payment shall constitute a complete discharge therefor with respect
to the Trustee and the Committee.

A. Claims Procedure .
B.
1. Any person who believes that he is then entitled to receive a benefit under
the Plan, including one greater than that initially determined by the Committee,
may file a claim in writing with the Committee.

1. The Committee shall within 90 days of the receipt of a claim either allow or
deny the claim in writing. A denial of a claim shall be written in a manner
calculated to be understood by the claimant and shall include:
2.

          a. the specific reason or reasons for the denial;

          a. specific references to pertinent Plan provisions on which the
          denial is based;

          a. a description of any additional material or information necessary
          for the claimant to perfect the claim and an explanation of why such
          material or information is necessary; and

          a. an explanation of the Plan's claim review procedure.

1. A claimant whose claim is denied (or his duly authorized representative) may,
within 60 days after receipt of denial of his claim:
2.

          a. submit a written request for review to the Committee;

          a. review pertinent documents; and

          a. submit issues and comments in writing.

1. The Committee shall notify the claimant of its decision on review within 60
days of receipt of a request for review. The decision on review shall be written
in a manner calculated to be understood by the claimant and shall include
specific reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
2.
3. The 90-day and 60-day periods described in subsections (b) and (d),
respectively, may be extended at the discretion of the Committee for a second
90- or 60-day period, as the case may be, provided that written notice of the
extension is furnished to the claimant prior to the termination of the initial
period, indicating the special circumstances requiring such extension of time
and the date by which a final decision is expected.

                                       42
<PAGE>   48

4.
5. Participants and beneficiaries shall not be entitled to challenge the
Committee's determinations in judicial or administrative proceedings without
first complying with the procedures in this Article. The Committee's decisions
made pursuant to this Section are intended to be final and binding on
Participants, beneficiaries and others.

A. Eligible Rollover Distributions .
B.
1. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Article 6, a distributee may
elect, at the time and in the manner prescribed by the 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.

1. 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 Code Section 401(a)(9); and the
portion of any distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect to
employer securities).
2.
3. Eligible retirement plan: An eligible retirement plan is an individual
retirement account described in Code Section 408(a), an individual retirement
annuity described in Code Section 408(b), an annuity plan described in Code
Section 403(a), or a qualified trust described in Code Section 401(a), 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.
4.
5. 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 Code Section 414(p), are distributees
with regard to the interest of the spouse or former spouse.
6.
7. A direct rollover is a payment by the Plan to the eligible retirement plan
specified by the distributee.

                                       43
<PAGE>   49

                     II. ARTICLE Top-Heavy Plan Requirements

A.   Definitions.  For purposes of this Article 7:
B.
1.       A "Key Employee" is any current or former employee (and the
beneficiaries of such employee) who at any time during the Determination Period
was an officer of the Employer or an Affiliate if such individual's annual
compensation exceeds 50% of the Defined Benefit Dollar Limitation, an owner (or
considered an owner under Code Section 318) of one of the 10 largest interests
in the Employer if such individual's compensation exceeds 100% of the Defined
Contribution Dollar Limitation, a Five-Percent Owner, or a One-Percent Owner of
the Employer who has an annual compensation of more than $150,000. Annual
compensation means Total Compensation plus amounts contributed by the Employer
pursuant to a salary reduction agreement which are excludable from the
employee's gross income under Code Section 125, 402(e)(3), 402(h) or 403(b). The
"Determination Period" is the Plan Year containing the Top-Heavy Determination
Date and the 4 preceding Plan Years.

         The determination of who is a Key Employee will be made in accordance
with Code Section 416(i)(1) and the regulations thereunder.

1.       For any Plan Year beginning after December 31, 1983, this Plan is
"Top-Heavy" if any of the following conditions exists:
2.   a.          The Top-Heavy Ratio for this Plan exceeds 60% and this Plan is
     not part of any Required Aggregation Group or Permissive Aggregation Group
     of plans;

     a.          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 60%;

     a.          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 60%.

                                       44
<PAGE>   50

1.       The "Top-Heavy Ratio" shall be determined as follows:
2.
     a.          If the Employer maintains one or more defined contribution
     plans and the Employer has not maintained any defined benefit plan which
     during the 5-year period ending on the Top-Heavy Determination Date(s) has
     or has had accrued benefits, the Top-Heavy Ratio for this Plan alone or for
     the Required or Permissive Aggregation Group as appropriate is a fraction,
     the numerator of which is the sum of the account balances of all Key
     Employees as of the Top-Heavy Determination Date(s) (including any part of
     any account balance distributed in the 5-year period ending on the
     Top-Heavy Determination Date(s)), and the denominator of which is the sum
     of all account balances (including any part of any account balance
     distributed in the 5-year period ending on the Top-Heavy Determination
     Date(s)), both computed in accordance with Code Section 416 and the
     regulations thereunder. Both the numerator and denominator of the Top-Heavy
     Ratio are increased to reflect any contribution not actually made as of the
     Top-Heavy Determination Date, but which is required to be taken into
     account on that date under Code Section 416 and the regulations thereunder.

     a.          If the Employer maintains one or more defined contribution
     plans and the Employer maintains or has maintained one or more defined
     benefit plans which during the 5-year period ending on the Top-Heavy
     Determination Date(s) has or has had any accrued benefits, the Top-Heavy
     Ratio for any Required or Permissive Aggregation Group as appropriate is a
     fraction, the numerator of which is the sum of account balances under the
     aggregated defined contribution plan or plans for all Key Employees,
     determined in accordance with (i) above, and the Present Value of accrued
     benefits under the aggregated defined benefit plan or plans for all Key
     Employees as of the Top-Heavy Determination Date(s), and the denominator of
     which is the sum of the account balances under the aggregated defined
     contribution plan or plans for all Participants, determined in accordance
     with (i) above, and the Present Value of accrued benefits under the
     aggregated defined benefit plan or plans for all Participants as of the
     Top-Heavy Determination Date(s), all determined in accordance with Code
     Section 416 and the regulations thereunder. The accrued benefits under a
     defined benefit plan in both the numerator and denominator of the Top-Heavy
     Ratio are increased for any distribution of an accrued benefit made in the
     5-year period ending on the Top-Heavy Determination Date.

     a.          For purposes of (i) and (ii) above the value of account
     balances and the Present Value of accrued benefits will be determined as of
     the most recent valuation date that falls within or ends with the 12-month
     period ending on the Top-Heavy Determination Date, except as provided in
     Code Section 416 and the regulations thereunder for the first and second
     plan years of a defined benefit plan. The account balances and accrued
     benefits of a Participant (A) who is not a Key Employee but who was a Key
     Employee in a prior year, or (B) who has not been credited with at least
     one hour of service with any employer maintaining the Plan at any time
     during the 5-year

                                       45
<PAGE>   51

     period ending on the Top-Heavy Determination Date will be disregarded. The
     calculation of the Top-Heavy Ratio, and the extent to which distributions,
     rollovers, and transfers are taken into account, will be made in accordance
     with Code Section 416 and the regulations thereunder. Deductible employee
     contributions will not be taken into account for purposes of computing the
     Top-Heavy Ratio. When aggregating plans the value of account balances and
     accrued benefits will be calculated with reference to the Top-Heavy
     Determination Date(s) that fall within the same calendar year. The accrued
     benefit of a Participant other than a Key Employee shall be determined
     under (1) the method, if any, that uniformly applies for accrual purposes
     under all defined benefit plans maintained by the Employer, or (2) 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 Code Section
     411(b)(1)(C).

1.       "Permissive Aggregation Group" means the Required Aggregation Group of
plans plus any other plan or plans of the Employer which, when considered as a
group with the Required Aggregation Group, would continue to satisfy the
requirements of Code Sections 401(a)(4) and 410.
2.
3.       "Required Aggregation Group" means (i) each qualified plan of the
Employer in which at least one Key Employee participates or participated at any
time during the Determination Period (regardless of whether the plan has
terminated), and (ii) any other qualified plan of the Employer which enables a
plan described in (i) to meet the requirements of Code Section 401(a)(4) or 410.
4.
5.       "Top-Heavy Determination Date" means, for any Plan Year subsequent to
the first Plan Year, the last day of the preceding Plan Year or, for the first
Plan Year of the Plan, the last day of that year.
6.
7.     "Present Value" shall be based on the interest assumption and
post-retirement mortality assumption specified in the defined benefit plan.
8.
9.      "Employer" means the Employer and all Affiliates except for purposes of
determining ownership under Code Section 416(i)(1).

                                       46
<PAGE>   52

A.   Top-Heavy Plan Requirements.
     ---------------------------
B.
     a.  Except as otherwise provided in (ii) and (iii) below, the Employer
     contributions and forfeitures allocated on behalf of any Participant who is
     not a Key Employee shall not be less than the lesser of three percent of
     such Participant's Considered Compensation, as limited by Code Section
     401(a)(17), or in the case where the Employer has no defined benefit plan
     which designates this Plan to satisfy Code Section 401, the largest
     percentage of Employer contributions and forfeitures, as a percentage of
     the Key Employee's Considered Compensation, as limited by Code Section
     401(a)(17), allocated on behalf of any Key Employee for that year. The
     minimum allocation is determined without regard to any Social Security
     contribution. This minimum allocation shall be made even though, under
     other Plan provisions, the Participant would not otherwise be entitled to
     receive an allocation, or would have received a lesser allocation for the
     year because of (A) the Participant's failure to complete 1,000 Hours of
     Service (or any equivalent provided in the Plan), (B) the Participant's
     failure to make mandatory employee contributions to the Plan, or (C)
     Considered Compensation less than a stated amount.

     a.          The provision in (i) above shall not apply to any Participant
     who was not employed by the Employer or an Affiliate on the last day of the
     Plan Year.

     a.          The provision in (i) above shall not apply to any Participant
     to the extent the Participant is covered under any other plan or plans of
     the Employer and the Employer's contribution and forfeitures allocated
     under such plan or plans are equal to or exceed the amount required to be
     allocated under (i) above.

1.       The minimum allocation required (to the extent required to be
nonforfeitable under Code Section 416(b)) may not be forfeited under Code
Section 411(a)(3)(B) or 411(a)(3)(D).
2.
3.       For any Plan Year in which this Plan is Top-Heavy, the following
schedule shall be substituted for the schedule set forth in Section 5.6,
provided that Section 5.6 shall apply to the extent that the nonforfeitable
percentage thereunder is greater than the following schedule:
4.
                     Years of Service             Nonforfeitable
                     ----------------               Percentage
                                                    ----------

                     Less than 2                                   0
                     2 but less than 3                            20
                     3 but less than 4                            40
                     4 but less than 5                            60
                     5 but less than 6                            80
                     6 or more                                   100

                                       47
<PAGE>   53

The minimum vesting schedule applies to all benefits within the meaning of Code
Section 411(a)(7) except those attributable to after-tax contributions,
including benefits accrued before the effective date of Code Section 416 and
benefits accrued before the Plan became Top-Heavy. Further, no reduction in
vested benefits may occur in the event the Plan's Top-Heavy status changes for
any Plan Year. However, this Section does not apply to the Account balances of
any employee who does not have any Service after the Plan has initially become
Top-Heavy and such employee Account balance attributable to Employer
Contributions and forfeitures will be determined without regard to this Section.

1.       If a Participant has 3 Years of Service as of the last day of the Plan
Year for which the vested percentage of his Employer Account was subject to
subparagraph(c), he may elect to have the vested percentage of his Employer
Account determined under subparagraph (c) in any subsequent Plan Year when
Section 7.2 is not applicable. II.

                                       48
<PAGE>   54

          II. ARTICLE Stockholder Rights with Respect to Company Stock

A.   Voting Shares of Company Stock. The Trustee shall vote, in person or by
proxy, shares of common stock of the Company ("Company Stock") held by the
Trustee in Fund A as instructed by Participants and Beneficiaries in accordance
with the terms of the Trust Agreement. Each Participant or Beneficiary shall be
entitled to give voting instructions, in the time and manner prescribed by the
Trustee with respect to the number of shares represented by the balance
allocated to his or her Accounts representing the proportional interest in Fund
A of such Participant or Beneficiary, determined as of the Valuation Date which
coincides with or immediately precedes the record date of any vote. Written
notice of any meeting of stockholders of the Company and a request for voting
instructions shall be given by the Trustee, at such time and in such manner as
the Trustee shall determine to each Participant or Beneficiary entitled to give
instructions for voting shares of Company stock at such meeting and the Company
shall establish and pay for a means by which such voting instructions can
expeditiously be delivered to the Trustee. All such instructions shall be
confidential and shall not be disclosed to any person, including the Company.
Subject to applicable law, the Trustee shall vote those shares of Company Stock
credited to the Accounts of Participants and Beneficiaries for which no voting
directions were received, plus shares not credited to such Accounts (if any).

A.   Tender Offers.
B.
1.       Rights of Participants. In the event a tender offer is made generally
to the stockholders of the Company to transfer all or a portion of their shares
of Common Stock in return for valuable consideration, including, but not limited
to, offers regulated by Section 14(d) of the Securities Exchange Act of 1934, as
amended, the Trustee shall respond to such tender offer in respect to the number
of shares of Company Stock held by the Trustee in Fund A pursuant to
instructions obtained from Participants and Beneficiaries, in accordance with
the terms of the Trust Agreement. Each Participant or Beneficiary shall be
entitled to instruct the Trustee regarding how to respond to any such tender
offer with respect to the number of shares of Company Stock represented by the
balance allocated to his or her Accounts representing the proportional interest
in the Fund A of such Participant or Beneficiary, determined as of the latest
Valuation Date for which information is available which coincides with or
precedes the record date of any tender offer. A Participant or Beneficiary shall
not be limited in the number of instructions to tender or withdraw from tender
which he can give, but a Participant or Beneficiary shall not have the right to
give instructions to tender or withdraw from tender after a reasonable time
established by the Trustee in accordance with the terms of the Trust Agreement.
2.
     3.  Duties of the Company.

     a.          Within a reasonable time after the commencement of a tender
     offer, the Company shall cause the Trustee to provide to each Participant
     or Beneficiary, as the case may be:

                                       49
<PAGE>   55

         (1)     the offer to purchase as distributed by the offeror to the
         stockholders of the Company;

         (1)     the statement of the shares of Company Stock attributable to
         the proportional interest in Fund A represented by the balance
         allocated to his or her Accounts; and

         (1)     directions as to the means by which instructions with respect
         to the tender offer can be given.

     a.          The Company shall establish and pay for a means by which
     instructions with respect to a tender offer can expeditiously be delivered
     to the Trustee. All such instructions shall be confidential and shall not
     be disclosed to any person, including the Company. The Company at its
     election may engage an agent to receive such instructions and transmit them
     to the Trustee.

     a.          For purposes of allocating the proceeds of any sale or exchange
     pursuant to a tender offer, the Trustee shall then treat as having been
     sold or exchanged from each of the individual Accounts of Participants and
     Beneficiaries who provided timely directions to the Trustee under this
     Section that number of shares of Company Stock represented by the
     Participant's or Beneficiary's proportional interest in Fund A (if any), or
     such fewer number of shares of Company Stock if the Participant's or
     Beneficiary's directions to the Trustee so indicate. If needed, the number
     of shares treated as sold or exchanged shall be further reduced if less
     than all shares tendered by Participants and Beneficiaries are accepted.
     The shares tendered by each Participant and Beneficiary shall be
     proportionately reduced by the ratio of (A) the shares accepted of those
     tendered hereunder, divided by (B) the total shares tendered hereunder. The
     proceeds of such sale or exchange shall be allocated accordingly, including
     allocation in installments if the proceeds are received in installments.
     The shares sold or exchanged for any individual shall not exceed the
     proportional shares accepted and the amounts credited to any Participant or
     Beneficiary shall not exceed the proportional installment amounts received
     with respect to that Participant's or Beneficiary's shares. Any proceeds
     shall be invested in Fund A.

1.       Duties of the Trustee. In accordance with the terms of the Trust
Agreement, the Trustee shall follow the instructions of the Participants
and Beneficiaries with respect to the tender offer as transmitted to the
Trustee, and shall establish a reasonable time, taking into account the time
restrictions of the tender offer, after which it shall not accept instructions
of Participants or Beneficiaries. Subject to applicable law, the Trustee shall
tender a number of shares of Company Stock for which it receives no
instructions, or which are not reflected in the balances allocated to the
Accounts of Participants and

                                       50
<PAGE>   56

Beneficiaries, if any, determined by multiplying the total number of such shares
by a fraction, the numerator of which is the number of shares of Common Stock in
Fund A reflected in the balances of Accounts of Participants and Beneficiaries
for which instructions to tender are given, and the denominator of which is the
total number of shares reflected in such Accounts.
2.
B.   Designation of Participants and Beneficiaries as Named Fiduciaries. Each
Participant and Beneficiary shall be a "named fiduciary" (as defined in Section
402(a) of ERISA) for purposes of directing the Trustee with respect to the
voting or tendering of shares of Company stock pursuant to this Article. II.

                                       51
<PAGE>   57

                          II. ARTICLE Change of Control

A.   Application. Notwithstanding any other provision of the Plan, the
provisions of this Article 9 shall apply on and after the date that a Change of
Control (as defined below) occurs.

A.   Investment of Trust Fund. All assets of the Plan and Trust attributable to
contributions made for any Plan Year beginning prior to the Change of Control
shall be held in the Wallace Computer Services, Inc. Profit Sharing and
Retirement Trust (the "Trust"). At all times after the Change of Control occurs,
the assets of the Plan and Trust attributable to contributions made for any Plan
Year beginning prior to the Change of Control shall not be invested in any
"employer security" or "employer real property" within the meaning of Section
407 of ERISA, except to the extent such employer securities or Company real
property were held in the Trust immediately prior to the Change of Control.
B.
C.   Administration of Plan and Trust. At all times after the Change of Control
occurs, the exercise of authority and responsibility in the administration of
the Plan with respect to each individual who was a Participant in the Plan
immediately prior to the date that the Change of Control occurs (a "Protected
Participant") or with respect to the beneficiary of a Protected Participant,
shall be subject to a de novo standard of review by a court in any action
brought under Title I of ERISA. At all times after the Change of Control occurs,
a bank that is organized under the laws of the United States of America or one
of its States, that has a combined capital and surplus in excess of
$250,000,000.00, and that is otherwise independent of and has no material
business relationships with the Company or a Related Company (as defined below)
shall be the Trustee of the Trust and the authority to manage, acquire, and
dispose of all assets of the Trust shall be vested in that Trustee to the extent
not vested in one or more investment managers (as defined in Section 3(38) of
ERISA) who are selected by that Trustee and otherwise independent of, and have
no material business relationships with, the Company or a Related Company. After
the Change of Control occurs, no cost or expense of administration of the Plan
shall be paid out of assets of the Plan or Trust. After the Change of Control
occurs, the Company shall pay directly to the Trustee the Trustee's fees and
expenses and if, at any time after the Change of Control, the Company fails to
pay the Trustee's fees and expenses when due and the Trustee deducts the amounts
owed from the Trust Fund, then the Company shall immediately reimburse the Trust
Fund in the amount of the deduction plus the additional amount that the Trust
Fund would have earned if the deduction had not been made, as determined by the
Trustee.
D.
E.   Maintenance of the Plan and Trust. The Plan and the Trust may be
terminated with respect to Protected Participants only if the termination does
not have an adverse effect on the qualified status of the Plan and Trust under
Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code").
Prior to the termination of the Plan and Trust, the Plan and Trust shall be
maintained, in operation and in form, in accordance with the requirements of
Section 401(a) of the Code and Title I of ERISA.
F.

                                       52
<PAGE>   58

G.   Change of Control Defined. For purposes of this Article 9, a "Change of
Control" shall be deemed to have occurred if any of the following occurs:

1.       The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of
either (i) the then outstanding shares of capital stock of the Corporation (the
"Outstanding Corporation Capital Stock") or (ii) the combined voting power of
the then outstanding voting securities of the Corporation entitled to vote
generally in the election of directors (the "Corporation Voting Securities");
provided, however, that (X) any acquisition by or from the Corporation or any of
its subsidiaries; (Y) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Corporation or any of its subsidiaries or
(Z) any acquisition by any corporation with respect to which, following such
acquisition, more than 65% of the then outstanding shares of capital stock of
such corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Corporation Capital Stock and
Corporation Voting Securities immediately prior to such acquisition, in
substantially the same proportion as their ownership, immediately prior to such
acquisition, of the Outstanding Corporation Capital Stock and Corporation Voting
Securities, as the case may be, shall not constitute a Change of Control; or
2.
3.       Individuals who, as of September 6, 1995, constituted the Board of
Directors of the Corporation (the "Incumbent Board") cease for any reason to
constitute at least a majority of such Board; provided, however, that any
individual who becomes a member of the Board of Directors of the Corporation
subsequent to such date whose election, or nomination for election by the
stockholders of the Corporation, was approved by a vote of at least a majority
of the directors then comprising the Incumbent Board shall be deemed to be a
member of the Incumbent Board; but provided further, that no individual whose
election or initial assumption of office as a director of the Corporation occurs
as a result of an actual or threatened election contest (as such terms are used
in Rule 14a-11 of the Regulation 14A promulgated under the Exchange Act) with
respect to the election or removal of directors, or any other actual or
threatened solicitation of proxies or consents by or on behalf of any person
other than the Board of Directors of the Corporation, shall be deemed to be a
member of the Incumbent Board; or
4.
5.       Approval by the stockholders of the Corporation of a reorganization,
merger or consolidation (a "Business Combination") with respect to which all or
substantially all of the individuals and entities who were the respective
beneficial owners of the Outstanding Corporation Capital Stock and Corporation
Voting Securities immediately prior to such Business Combination do not,
following such Business Combination, beneficially own, directly or indirectly,
more than 65% of, respectively, the then outstanding shares of capital stock and
the combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may be, of the
corporation resulting from the Business Combination, in substantially the same
proportion as their ownership immediately prior to such

                                       53
<PAGE>   59

Business Combination of the Outstanding Corporation Capital Stock and
Corporation Voting Securities, as the case may be; or
6.
7.       Approval by the stockholders of the Corporation of a sale or other
disposition of all or substantially all of the assets of the Corporation other
than to a corporation with respect to which, following such sale or disposition,
more than 65% of, respectively, the then outstanding shares of capital stock and
the combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors is then owned beneficially, directly
or indirectly, by all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Corporation Capital
Stock and Corporation Voting Securities immediately prior to such sale or
disposition, in substantially the same proportion as their ownership of the
Outstanding Corporation Capital Stock and Corporation Voting Securities, as the
case may be, immediately prior to such sale or disposition; or
8.
9.       A complete liquidation or dissolution of the Corporation.
10.
H.   Related Company Defined. For purposes of this Article 9, the term
"Related Company" means any corporation, trade, or business during any period
that is, along with the Company, a member of a controlled group of corporations,
a controlled group of trades or businesses, or an affiliated service group, as
described in Sections 414(b), 414(c), or 414(m), respectively, of the Code.
I.
J.   Attorneys' Fees and Other Costs and Expenses. Any Protected Participant
(or a Beneficiary of a Protected Participant) who brings any legal action after
a Change of Control to enforce the provisions of the Plan or the Trust shall be
entitled to recover from the Company any and all attorneys' fees and other costs
and expenses incurred in enforcing such provisions for his benefit or for the
benefit of any or all Protected Participants (or Beneficiaries of Protected
Participants).
K.
L.   Binding on Successors. The provision of the Plan and the Trust shall
be binding upon and shall inure to the benefit of the Company, any Related
Company that adopts the Plan, the Participants, and their respective successors
in interest and assigns, including, without limitation, the surviving
corporation in any merger or consolidation with the Company or such Related
Company and, to the extent provided in the Plan, the Beneficiaries of the
Participants. After a Change of Control, except as may otherwise be determined
by a resolution of the Board of Directors of the Company adopted prior to the
occurrence of the Change of Control, a successor in interest to the Company or a
Related Company that adopts the Plan shall be deemed to have adopted the Plan
and Trust and shall have all of the liabilities and obligations of the Company
or that Related Company under the Plan and Trust. Except as may otherwise be
determined by a resolution of the Board of Directors of the Company adopted
prior to the occurrence of a Change of Control, the Company shall require any
person or entity that becomes a successor in interest to the Company or a
Related Company that adopts the Plan to expressly assume the Plan and Trust and
agree to perform all of the obligations of the Company or that Related Company,
as the case may be, under the Plan and Trust. For purposes of this Section 9.8,
following a Change of

                                       54
<PAGE>   60

Control, a "successor in interest" to the Company or a Related Company that
adopts the Plan shall include, without limitation, any person or entity (or
group of related or affiliated persons or entities) that acquires (in a single
transaction or a series of related transactions) any businesses or assets of the
Company or such Related Company representing twenty-five percent (25%) or more
of the Company's or such Related Company's sales, operating profits, or
operating assets.
M.
N.   Amendment of Article 9. Notwithstanding any other provision of the Plan,
except as may otherwise be provided in a resolution of the Board of Directors
of the Company adopted prior to the occurrence of a Change of Control, the
provisions of this Article 9 may not be amended and shall continue to apply,
without amendment, in any successor plan.
O.
P.
Q.
R.

                                       55
<PAGE>   61

            I. ARTICLE Powers and Duties of Profit Sharing Committee

A.   Appointment of Profit Sharing Committee.
B.
1.       The Board of Directors of the Company (the "Board of Directors") may
name a Profit Sharing Committee (the "Committee") to consist of not less than 3
persons, one of whom shall be the President of the Company, to serve as plan
administrator and named fiduciary of the Plan. Any person, including directors,
shareholders, officers and employees of the Company, shall be eligible to serve
on the Committee. Every person appointed a member of the Committee shall signify
his acceptance in writing to the Board of Directors. In the event the Board of
Directors does not appoint a Committee pursuant to this Section 10.1, the
Company shall act as the administrator and named fiduciary of the Plan and all
references to the Committee shall mean references to the Company so acting as
administrator and named fiduciary of the Plan.

1.       Members of the Committee shall serve at the pleasure of the Board of
Directors and may be removed by the Board of Directors at any time with or
without cause. Any member of the Committee may resign by delivering his written
resignation to the Board of Directors, and such resignation shall become
effective at delivery or at any later date specified therein. Vacancies in the
Committee shall be filled by the Board of Directors.
2.
3.       Usual and reasonable expenses of the Committee may be paid in whole or
in part by the Employer and any such expenses not paid by the Employer shall be
paid by the Trustee out of the principal or income of the Trust Fund. The
members of the Committee shall not receive any compensation for their services
as such.
4.
B.   Powers and Duties of Committee. The Committee shall have final and
binding discretionary authority to control and manage the operation and
administration of the Plan, including all rights and powers necessary or
convenient to the carrying out of its functions hereunder, whether or not such
rights and powers are specifically enumerated herein. In exercising its
responsibilities hereunder, the Committee may manage and administer the Plan
through the use of agents who may include employees of the Employer.
C.
D.   Without limiting the generality of the foregoing, and in addition to
the other powers set forth in this Article 10, the Committee shall have the
following discretionary authorities:
E.
1.       To construe and interpret the Plan, decide all questions of eligibility
and determine the amount, manner and time of payment of any benefits hereunder.
2.
3.       To prescribe procedures to be followed by Participants or beneficiaries
filing applications for benefits.
4.
5.       To prepare and distribute, in such manner as the Committee determines
to be appropriate, information explaining the Plan.
6.

                                       56
<PAGE>   62

7.       To request and receive from the Employer, Participants and others such
information as shall be necessary for the proper administration of the Plan.
8.
9.       To furnish the Employer upon request such annual and other reports with
respect to the administration of the Plan as are reasonable and appropriate.
10.
11.      To receive, review and maintain on file reports of the financial
condition and of the receipts and disbursements of the Trust Fund from the
Trustee or Custodian.
12.
13.      To determine all questions relating to the eligibility, benefits and
other Plan rights of employees, Participants, Beneficiaries and distributees.
14.
15.      To administer the Plan, to allocate the assets of the Trust Fund, to
monitor the diversification of the investment of the Trust Fund, to assure that
the Plan does not violate any restrictions limiting the acquisition or holding
of securities or other property of the Company.

A.   Committee Procedures.
B.
1.       The Committee may adopt such bylaws and regulations as it deems
desirable for the conduct of its affairs.

1.       A majority of the members of the Committee at the time in office shall
constitute a quorum for the transaction of business. All resolutions or other
actions taken by the Committee at any meeting shall be by the vote of the
majority of the members of the Committee present at the meeting. The Committee
may act without a meeting by written consent of a majority of its members.
2.
3.       The Committee, by unanimous written consent, may authorize one of its
members to execute any document, instrument or direction on its behalf. A
written statement by a majority of the Committee members or by an authorized
Committee member shall be conclusive in favor of any person (including the
Trustee) acting in reliance thereon.
4.
5.       The Committee may elect one of its members as chairman and may appoint
a secretary, who may or may not be a Committee member, and shall advise the
Trustee and the Employer of such actions in writing. The secretary shall keep a
record of all actions of the Committee and shall forward all necessary
communications to the Employer or the Trustee.
6.
7.       Filing or delivery of any document with or to the secretary of the
Committee in person or by registered or certified mail, addressed in care of the
Employer, shall be deemed a filing with or delivery to the Committee.
8.
B.   Consultation with Advisors. The Committee (or any fiduciary designated by
the Committee) may employ or consult with counsel, actuaries, accountants,
physicians or other

                                       57
<PAGE>   63

advisors (who may be counsel, actuaries, accountants, physicians or other
advisors for the Employer).
C.
D.  Committee Members as Participants. Any Committee member may also be a
Participant, but no Committee member shall have power to take part in any
discretionary decision or action affecting his own interest as a Participant
under this Plan unless such decision or action is upon a matter which affects
all other Participants similarly situated and confers no special right, benefit
or privilege not simultaneously conferred upon all other such Participants.
E.
F.   Records and Reports. The Committee shall take all such action as it deems
necessary or appropriate to comply with governmental laws and regulations
relating to the maintenance of records, notifications to Participants,
registrations with the Internal Revenue Service, reports to the U.S. Department
of Labor and all other requirements applicable to the Plan.

A.   Investment Policy.
B.
1.       The Committee from time to time shall determine the Plan's short-term
and long-term financial needs, with which the investment policy of the Trust
shall be appropriately coordinated, and such needs shall be communicated from
time to time to the Trustee, Investment Managers or others having any
responsibility for management and control of the Trust assets.

1.       Subject to (c) below, the Trustee shall have exclusive authority and
discretion to manage and control the assets of the Trust pursuant to an
investment policy coordinated with the needs of the Plan as determined by the
Committee.
2.
3.       The Committee may in its discretion appoint one or more Investment
Managers to manage (including the power to direct the Trustee to acquire and
dispose of) any assets of the Plan pursuant to an investment policy coordinated
with the needs of the Plan as determined by the Committee, in which event the
Trustee shall not be liable for the acts or omissions of any such Investment
Manager or be under an obligation to invest or otherwise manage any asset of the
Plan which is subject to the management of any such Investment Manager except as
directed. Any such Investment Manager shall acknowledge in writing that he is a
fiduciary with respect to the Plan.
4.
5.       The term "Investment Manager" shall mean investment manager as defined
in ERISA ss. 3(38).
6.
B.   Designation of Other Fiduciaries. The Committee may designate in writing
other persons to carry out a specified part or parts of its responsibilities
hereunder (including the power to designate other persons to carry out a part of
such designated responsibility), but not including the power to appoint
Investment Managers. Any such designation shall be accepted by the designated
person, who shall acknowledge in writing that he is a fiduciary with respect to
the Plan.

                                       58
<PAGE>   64

A.   Obligations of Committee.
B.
1.       The Committee or its properly authorized delegate shall make such
determinations as are necessary to accomplish the purposes of the Plan with
respect to individual Participants or classes of such Participants. The Employer
shall notify the Committee of facts relevant to such determinations, including,
without limitation, length of service, compensation for services, dates of
death, permanent disability, granting or terminating of leaves of absence, ages,
retirement and termination of service for any reason (but indicating such
reason), and termination of participation. The Employer shall also be
responsible for notifying the Committee of any other facts which may be
necessary for the Committee to discharge its responsibilities hereunder.

1.       The Committee is hereby authorized to act solely upon the basis of such
notifications from the Employer and to rely upon any document or signature
believed by the Committee to be genuine and shall be fully protected in so
doing. For the purpose of this Section, a letter or other written instrument
signed in the name of the Employer by any officer thereof shall constitute a
notification therefrom; except that any action by the Company or its Board of
Directors with respect to the appointment or removal of a member of the
Committee or the amendment of the Plan and Trust or the designation of a group
of employees to which the Plan is applicable shall be evidenced by an instrument
in writing, signed by a duly authorized officer or officers, certifying that
said action has been authorized and directed by a resolution of the Board of
Directors of the Company.
2.
3.       The Committee shall notify the Trustee of its actions and
determinations affecting the responsibilities of the Trustee and shall give the
Trustee directions as to payments or other distributions from the Trust Fund to
the extent they may be necessary for the Trustee to fulfill the terms of the
Trust Agreement.
4.
5.       The Committee shall be under no obligation to enforce payment of
contributions hereunder or to determine whether contributions delivered to the
Trustee comply with the provisions hereof relating to contributions, and is
obligated only to administer this Plan pursuant to the terms hereof.
6.
B.   Indemnification of Committee. The Company shall indemnify members of the
Committee and its authorized delegates who are employees of the Employer for any
liability or expenses, including attorneys' fees, incurred in the defense of any
threatened or pending action, suit or proceeding by reason of their status as
members of the Committee or its authorized delegates, to the full extent
permitted by the law of the Company's state of incorporation or as set forth in
separate agreements between the Company and the members of the Committee.

                                       59
<PAGE>   65

                       II. ARTICLE Trustee and Trust Fund

A.   Trust Fund. A Trust Fund known as the Wallace Computer Services, Inc.
Profit Sharing and Retirement Trust (herein referred to as the "Trust" or the
"Trust Fund") has been established by the execution of a trust agreement with
one or more Trustees and is maintained for the purposes of this Plan. The assets
of the Trust will be held, invested and disposed of by the Trustee, in
accordance with the terms of the Trust, for the benefit of the Participants and
their beneficiaries.

A.   Payments to Trust Fund and Expenses. All contributions hereunder will be
paid into and credited to the Trust Fund and all benefits hereunder and expenses
chargeable thereto will be paid from the Trust Fund and charged thereto.
B.
C.   Trustee's Responsibilities. The powers, duties and responsibilities of the
Trustee shall be as setforth in the Wallace Computer Services, Inc. Profit
Sharing and Retirement Trust and nothing contained in this Plan, either
expressly or by implication, shall impose any additional powers, duties or
responsibilities upon the Trustee.
D.
E.   Reversion to the Employer. The Employer has no beneficial interest in the
Trust Fund and no part of the Trust Fund shall ever revert or be repaid to the
Employer, directly or indirectly, except that the Employer shall upon written
request have a right to recover:
F.
1.       within one year of the date of payment of a contribution by the
Employer, any amount (less any losses attributable thereto) contributed through
a mistake of fact;
2.
3.       within one year of the date on which any deduction for a contribution
by the Employer under Code Section 404 is disallowed, an amount equal to the
amount disallowed (less any losses attributable thereto); and
4.
5.       at the termination of the Plan, any amounts remaining in the Excess
Forfeiture Suspense Account.
6.

                                       60
<PAGE>   66

                      I. ARTICLE Amendment or Termination

A.   Amendment. The Company reserves the right to amend this Plan at any time
to take effect retroactively or otherwise, in any manner which it deems
desirable including, but not by way of limitation, the right to increase or
diminish contributions to be made by the Company hereunder, to change or modify
the method of allocation of its contributions, to change any provision relating
to the distribution or payment, or both, of any assets of the Trust.

A.   Termination.  The Company further reserves the right to terminate this Plan
at any time. The Plan will terminate on the earliest of the following dates:
B.
1.       The date the Company is judicially declared bankrupt or insolvent;
2.
3.       The date the Company permanently discontinues its contribution under
the Plan; or
4.
5.       The date the Company is dissolved, merged, consolidated or
reorganized, or sells all or substantially all of its assets, except that,
provision may be made by the successor or purchaser for continuing the Plan and
in that event the successor or purchaser shall be substituted for the Company
under the Plan. However, see Article 9 regarding a "Change of Control" in the
ownership or management of the Company.
6.
C.   Form of Amendment, Discontinuance of Employer Contributions, and
Termination. Any such amendment, discontinuance of Employer contributions or
termination shall be made only by resolution of the Board of Directors of the
Company or by any person so duly authorized by the Board of Directors.
D.
E.   Limitations on Amendments.  The provisions of this Article are subject to
the following restrictions:
F.
1.       Except as provided in Section 11.4, no amendment shall operate either
directly or indirectly to give the Employer any interest whatsoever in any funds
or property held by the Trustee under the terms hereof, or to permit corpus or
income of the Trust to be used for or diverted to purposes other than the
exclusive benefit of the Participants and their beneficiaries.
2.
3.       Except to the extent necessary to conform to the laws and regulations
or to the extent permitted by any applicable law or regulation, no amendment
shall operate either directly or indirectly to deprive any Participant of his
nonforfeitable beneficial interest in his Accounts as at the date of the
amendment.
4.
5.       No amendment shall change any vesting schedule unless each Participant
who has completed 3 or more Years of Service is permitted to elect to have the
nonforfeitable percentage of his Employer Account computed under the Plan
without regard to such amendment. The period for making such election shall
commence no later than the date of the adoption of such

                                       61
<PAGE>   67

amendment and shall expire no earlier than 60 days after the latest of the
following dates: (i) the date the Plan amendment is adopted, (ii) the date the
Plan amendment becomes effective, or (iii) the date the Participant is issued
written notice of the Plan amendment by the Committee. Notwithstanding the
foregoing, no election need be offered to a Participant whose nonforfeitable
percentage of his Employer Account cannot at any time be lower than such
percentage determined without regard to such amendment.
6.
7.       Except as permitted by applicable law, no amendment shall eliminate or
reduce an early retirement benefit or a retirement-type subsidy or eliminate an
optional form of benefit.
8.
G.   Level of Benefits Upon Merger. This Plan shall not merge or consolidate
with, or transfer assets or liabilities to, any other plan, unless each
Participant shall be entitled to receive a benefit immediately after said
merger, consolidation or transfer (if such other plan were then terminated)
which shall be not less than the benefit he would have been entitled to receive
immediately before said merger, consolidation or transfer (if this Plan were
then terminated).

A.   Vesting Upon Termination or Discontinuance of Employer Contributions;
Liquidation of Trust.
B.
1.       This Plan shall be deemed terminated if and only if
the Plan terminates by operation of law or pursuant to Section 12.2. In the
event of any termination or partial termination within the meaning of the Code,
or in the event the Employer permanently discontinues the making of
contributions to the Plan, the Employer Account of each affected Participant who
is employed by the Employer on the date of the occurrence of such event shall be
nonforfeitable; provided, however, that in no event shall any Participant or
beneficiary have recourse to other than the Trust Fund for the satisfaction of
benefits hereunder.

1.       In the event the Employer permanently discontinues the making of
contributions to the Plan, the Trustee shall make or commence distribution to
each Participant or his beneficiaries of the value of such Participant's
Accounts as provided herein within the time prescribed in Article 6. However,
if, after such discontinuance, the Company shall determine it to be
impracticable to continue the Trust any longer, the Company may, in its
discretion, declare a distribution date and Valuation Date for all Participants
and beneficiaries, including each Participant or beneficiary whose Accounts are
being distributed in installments.
2.
3.       The liquidation of the Trust, if any, in connection with any Plan
termination shall be accomplished by the Committee acting on behalf of the
Company. After directing that sufficient funds be set aside to provide for the
payment of all expenses incurred in the administration of the Plan and the
Trust, to the extent not paid or provided for by the Employer, the Committee
shall, as promptly as shall then be reasonable under the circumstances,
liquidate the Trust assets and distribute to each Participant or beneficiary his
Accounts in the Trust Fund. Notwithstanding the foregoing, if the Employer or an
Affiliate maintains another defined contribution plan, other than an employee
stock ownership plan (as defined in Code Section 4975(e) or 409) or a simplified
employee pension plan (as defined in Code

                                       62
<PAGE>   68

Section 408(k)), the Accounts of such Participant shall be transferred to such
other plan; provided, however, that if fewer than 2% of the Participants in this
Plan at the time this Plan is terminated are or were eligible to participate
under such other defined contribution plan at any time during the 24-month
period beginning 12 months before the time of termination, a Participant's
Accounts shall be transferred to such other plan only if the vested balance of
such Accounts exceeds $5,000 (or at the time of any prior distribution exceeded
$5,000) and the Participant does not consent to the distribution of such
Accounts. Upon completion of such liquidation and distribution, the Trust shall
finally and completely terminate. In the event the Committee is no longer in
existence, the actions to be taken by the Committee pursuant to this Section
shall be taken by the Trustee.

                                       63
<PAGE>   69

                           II. ARTICLE Miscellaneous

A.   No Guarantee of Employment, Etc. Neither the creation of the Plan nor
anything contained in the Plan, trust agreement or any other document or form
pertaining to the Plan shall be construed as a contract of employment between
the Employer and the Participant or as giving any Participant hereunder or other
employee of the Employer any right to remain in the employ of the Employer, any
equity or other interest in the assets, business or affairs of the Employer, or
any right to complain about any action taken or any policy adopted or pursued by
the Employer.

A.   Nonalienation.
B.
1.       Except as may be provided in the Plan with respect to loans to
Participants, no Participant shall have any right to sell, assign, pledge,
hypothecate, anticipate or in any way create a lien upon any part of the Trust
Fund. Except to the extent required by law or provided in the Plan, no interest
in the Trust Fund, or any part thereof, shall be assignable in or by operation
of law, or be subject to liability in any way for the debts or defaults of
Participants, their beneficiaries, spouses or heirs-at-law, whether to the
Employer or to others.
1.       Prior to the time that distributions are to be made hereunder, the
Participants, their spouses, beneficiaries, heirs-at-law or legal
representatives shall have no right to receive cash or other things of value
from the Employer or the Trustee from or as a result of the Plan and Trust.
2.
B.   Qualified Domestic Relations Order. Notwithstanding anything in this
Plan to the contrary, the Committee shall distribute a Participant's Accounts,
or any portion thereof, in accordance with the terms of any domestic relations
order entered on or after January 1, 1985, which the Committee determines to be
a qualified domestic relations order described in Code Section 414(p).
C.
D.   Controlling Law. To the extent not preempted by the laws of the United
States of America, the laws of the State of Illinois shall be controlling state
law in all matters relating to the Plan. Notwithstanding this Section 13.4,
where a Section of the Plan explicitly references a state law other than
Illinois, that state law shall be controlling for the matter arising under that
Plan section.
E.
F.   Severability. If any provision of this Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts of this Plan, but this Plan shall be construed and enforced as
if said illegal or invalid provision had never been included herein.
G.

                                       64
<PAGE>   70

H.   Notification of Addresses. Each Participant and each beneficiary of a
deceased Participant shall file with the Committee from time to time in writing
his post-office address and each change of post-office address. Any
communication, statement or notice addressed to the last post-office address
filed with the Committee, or if no such address was filed with the Committee,
then to the last post-office address of the Participant or beneficiary as shown
on the Employer's records, will be binding on the Participant and his
beneficiary for all purposes of this Plan and neither the Committee nor the
Employer shall be obliged to search for or ascertain the whereabouts of any
Participant or beneficiary.
I.
J.   Gender and Number.  Whenever the context requires or permits, the
masculine gender includes the feminine and neuter genders, words in the singular
include the plural and words in the plural include the singular.

                                       65
<PAGE>   71

                       II. ARTICLE  Adoption by Affiliates

A.   Adoption of Plan. Subject to any resolution or terms of any agreement
approved by the Board of Directors of the Company or a committee thereof to the
contrary, any Affiliate may adopt this Plan for the benefit of its eligible
employees if authorized to do so by the Board of Directors of the Company. Such
adoption shall be by resolution of such Affiliate's board of directors, a
certified copy of which shall be filed with the Company, the Committee and the
Trustee. Upon such adoption, such Affiliate shall become an "Employer." Adopting
Affiliates include, but are not limited to, Visible Computer Supply Corp. and
Wallace Commercial Printing, Inc.

A.   The Company as Agent for Employer. Each Employer which has adopted this
Plan pursuant to Section 14.1 hereby irrevocably gives and grants to the Company
full and exclusive power conferred upon it by the terms of the Plan and Trust to
take or refrain from taking any and all action which such Employer might
otherwise take or refrain from taking with respect to the Plan, including sole
and exclusive power to exercise, enforce or waive any rights whatsoever which
such Employer might otherwise have with respect to the Trust, and each such
Employer, by adopting this Plan, irrevocably appoints the Company its agent for
such purposes. Neither the Trustee nor the Committee nor any other person shall
have any obligation to account to any such Employer or to follow the
instructions of or otherwise deal with any such Employer, the intention being
that all persons shall deal solely with the Company as if it were the sole
company which had adopted this Plan. Each such Employer shall contribute such
amounts as determined under Article 3.

A.   Adoption of Amendments.
B.
1.       Any Employer which adopts this Plan pursuant to Section 14.1 may amend
this Plan with respect to its own employees by resolution of its board of
directors, if authorized to do so by the Board of Directors of the Company or
any person so duly authorized by the Board of Directors of the Company.

1.       Any Employer shall be deemed conclusively to have assented to any
amendment of this Plan by the Company without the necessity of any affirmative
action on the part of such Employer.
2.
B.   Termination. Any Employer which adopts this Plan pursuant to Section 14.1
may terminate this Plan with respect to its own employees by resolution of its
board of directors, if authorized to do so by the Board of Directors of
the Company, or any person so duly authorized by the Board of Directors of the
Company.
C.
D.   Data to Be Furnished by Employers. Each Employer which adopts this Plan
pursuant to Section 14.1 shall furnish information and maintain such records
with respect to its Participants as called for hereunder, and its determinations
and notifications with respect thereto shall have

                                       66
<PAGE>   72

the same force and effect as comparable determinations by the Company with
respect to its Participants.
E.
F.   Joint Employees. If a Participant receives Considered Compensation during a
Plan Year from more than one Employer, the total amount of such Considered
Compensation shall be considered for the purposes of the Plan, and the
respective Employers shall share in contributions to the Plan on account of said
Participant based on the Considered Compensation paid to such Participant by the
Employer.
G.
H.   Expenses. Each Employer shall pay such part of any expenses incurred in the
administration of the Plan as the Company shall determine.
I.
J.   Withdrawal.  An Employer may withdraw from the Plan by giving 60 days'
written notice of its intention to the Company and the Trustee, unless a
shorter notice shall be agreed to by the Company.
K.
L.   Prior Plans. If an Employer adopting the Plan already maintains a defined
contribution plan covering employees who will be covered by this Plan, it may,
with the consent of the Company, provide in its resolution adopting this Plan
for the termination of its own plan or for the merger, restatement and
continuation, of its own plan by this Plan. In either case, such Employer may,
subject to the approval of the Company, provide in its resolution of adoption of
this Plan for the transfer of the assets of such plan to the Trust for this Plan
for the payment of benefits accrued under such other plan.

                                       67
<PAGE>   73

                           WALLACE PROFIT SHARING PLAN

                                PLAN CHANGE INDEX
                             for Plan effective 1998
<TABLE>
<S>                                                                              <C>
                  ITEM                                                            Approved

1.  Good Decal Unit Participation                                                 9/14/98

2.  Fiscal Comp...effective 1999                                                  9/14/98

3.  Participant Directed Transfers                                                9/14/98

4.  5% transition rule for "Old Money"                                            9/14/98

5.  Eliminate Mandatory Age Transfer                                              9/14/98

6.  Create Company Stock Fund                                                     9/14/98

7.  Multiple Investment Funds                                                     9/14/98

8.  Loan & Withdrawal Simplification                                              9/14/98

9.  Daly Valuation                                                                9/14/98

10. Retiree/Beneficiary Fund  Transfers                                          12/14/98

11. Late Enrollment                                                              12/14/98

12. Fund A  Default Allocation: Company and Required                             12/14/98

13. Stock Fund Sell Repurchased Shares                                            2/24/99

14. Combine Required and Voluntary into Participant Contribution                  8/20/99

15. Raise 5% Quarterly Reclassification to 10%                                    8/20/99

16. Raise Participant Contribution Maximum to 15%                                10/12/99

17. Remove inter-fund transfer limitations                                       11/15/99

18. Add Participant Internet access option                                       11/15/99

19. Add provision to provide for inter-plan account transfers for participants   11/15/99
    transferring to units participating in different Wallace plan

20. Change Company Stock Fund to active, participant directed                    11/15/99

21. Provide for additional vesting credit for specific reorganization situations  3/23/00

</TABLE>

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