Document:

Exhibit 10.221

                                 THE SCHWABPLAN
                     RETIREMENT SAVINGS AND INVESTMENT PLAN

                    Restated and Amended as of April 1, 2001

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                                 THE SCHWABPLAN
                     RETIREMENT SAVINGS AND INVESTMENT PLAN

                                Table of Contents

Section                                                             Page Number

    1    Introduction and Purpose.............................                1

    2    Definitions..........................................                2

    3    Participation........................................               14

         3.1      Commencement of Participation.
         3.2      Cessation of Participation
         3.3      Readmission After Cessation of Participation
         3.4      Waiver of Participation

    4    Employer Contributions...............................               16

         4.1      Elective Contributions
         4.2      Employer Contributions
         4.3      Allocation of Matching Contributions, Profit
                  Sharing Contributions and ESOP Contributions
         4.4      Timing of Employer Contributions.
         4.5      Forfeitures
         4.6      Contribution Percentage Test.
         4.7      Distribution of Excess Aggregate Contributions
         4.8      Aggregate Limit for Contribution Percentage and
                  Actual Deferral Percentage.
         4.9      Profit Sharing Contributions.

    5    Salary Reduction Agreements and Rollover Contributions              23

         5.1      Salary Reduction Agreements.
         5.2      Change or Suspension of Salary Reduction Agreements
         5.3      Actual Deferral Percentage Test.
         5.4      Amendment or Revocation of Salary Reduction Agreement
                  by Committee.
         5.5      Distribution of Excess Contributions.
         5.6      Rollover Contributions.
         5.7      Trustee-to-Trustee Transfer of Assets

    6    Allocation of Contributions..........................               29

         6.1      Establishment of Cash Contribution Account.
         6.2      Establishment of Subaccounts

    7    Special ESOP Provisions..............................               30

         7.1      Investment of ESOP Accounts
         7.2      Allocation to ESOP Accounts.
         7.3      Suspense Subfund for ESOP Accounts
         7.4      Disposition of Shares Released from Suspense Subfund.
         7.5      Limitations on Allocations to ESOP Accounts
         7.6      Acquisition of Shares.
         7.7      Effect of Change in Plan Sponsor's Capitalization.
         7.8      Trustee and Committee Discretion to Engage in
                  Transactions in Shares.
         7.9      Valuation of ESOP Accounts.
         7.10     Role of Purchasing Agent

    8    Investment of Contributions, Valuations and Participants' Cash
         Contribution Accounts................................               38

         8.1      Delivery of Contributions to Trust Fund
         8.2      Participants' Right to Select Investments
         8.3      Participant Investment Election
         8.4      Change in Investment Election for Future Contributions
         8.5      Change in Investment Election for Prior Contributions
         8.6      Valuation of Cash Contribution Accounts.

    9    Retirement Dates.....................................               40

         9.1      Normal Retirement Date
         9.2      Deferred Retirement Date.

    10   Eligibility for Payment of  Accounts and Vested Interests           41

         10.1     Participants' Right to Account Upon Termination
                  Due to Retirement, Death or Disability.
         10.2     Participants' Right to Account Upon Other Termination
                  of Service
         10.3     Vesting Schedule for Determining Vested Interests.
         10.4     Breaks in Service.
         10.5     Participant's Right to Restoration of Account Upon
                  Return to Service.
         10.6     Participant's Right to Account Upon Death After
                  Termination of Service
         10.7     Amendment of Vesting Schedule.
         10.8     Distribution  Following  Attainment of Age 59-1/2
                  to Former Participants of The Hampton Pension
                  Services, Inc. 401(k) Retirement Savings Plan

    11   Method of Payment of Accounts and Withdrawals........               45

         11.1     Methods of Payment.
         11.2     Commencement of Payment
         11.3     Special Rules For Distribution of Shares.
         11.4     Payments to Surviving Spouse or Beneficiary
         11.5     Latest Date for Commencement of Benefits.
         11.6     Redirection of Investment of ESOP Account.
         11.7     Hardship Withdrawals.
         11.8     Direct Rollovers to Another Qualified Plan or IRA.
         11.9     Certain Securities Law Restrictions
         11.10    Participant Loans.

    12   Maximum Amount of Allocation.........................               58

         12.1     Section 415 Limitations
         12.2     Refund or Forfeiture of Amounts in Excess of
                  Section 415 Limits.

    13   Voting Rights........................................               61

         13.1     Voting and Tender or Exchange of Shares in General.
         13.2     Voting of Allocated Shares.
         13.3     Mechanics of Voting Allocated Shares
         13.4     Voting of Unallocated Shares
         13.5     Tender or Exchange of Allocated Shares
         13.6     Tender or Exchange of Unallocated Shares.
         13.7     Voting of Deceased Participant's Shares

    14   Designation of Beneficiaries.........................               65

         14.1     Designation of Beneficiary
         14.2     Failure to Designate Beneficiary

    15   Administration of the Plan...........................               66

         15.1     The Committee.
         15.2     The Trustee.
         15.3     Committee's Responsibility for Entering into
                  Exempt Loans and Valuation of Shares
         15.4     Committee's Power to Engage Outside Experts.
         15.5     Composition of Committee.
         15.6     Actions of Committee.
         15.7     Disbursement of Plan Funds.
         15.8     Application for Benefits.
         15.9     Denied Claims for Benefits
         15.10    Indemnification.
         15.11    Agent for Service of Process.

    16   Expenses.............................................               71

         16.1     Payment of Plan Expenses
         16.2     Expenses Attributable to Investment of Plan Assets and Taxes.

    17   Employer Participation...............................               72

         17.1     Adoption of Plan by Affiliated Employer
         17.2     Termination of Participation by Participating Employer
         17.3     Effect of Termination of Participation by Participating
                  Employer.
         17.4     Limitations on Transfer of Plan Assets to Successor Plan
         17.5     Shares Allocated to Suspense Fund Excluded from Transfer
                  of Plan Assets to Successor Plan.

    18   Amendment or Termination of the Plan.................               75

         18.1     Amendment, Suspension or Termination of Plan
         18.2     Power to Retroactively Amend, Suspend or Terminate
                  Plan Provisions
         18.3     Notice of Amendment, Suspension or Termination
         18.4     Effect of Termination of Plan.
         18.5     Partial Termination of Plan
         18.6     Trust for Exclusive Benefit of Participant

    19   Top-Heavy Plan Requirements..........................               78

         19.1     Top-Heavy Plan - In General
         19.2     Effect of Top-Heavy Status
         19.3     Top-Heavy Vesting Schedule.
         19.4     Definitions.
         19.5     Maintenance of Defined Benefit Plan in Addition to Plan.

    20   General Limitations and Provisions...................               84

         20.1     Exclusive Benefit of Participants and Beneficiaries
         20.2     No Rights to Continued Employment
         20.3     Trust Sole Source of Benefits.
         20.3     Trust Sole Source of Benefits.
         20.4     Risk of Decrease in Assets
         20.5     Incapacity of Participant or Beneficiary.
         20.6     Antialienation; Qualified Domestic Relations Orders
         20.7     Inability to Locate Participant or Beneficiary.
         20.8     Failure to Receive IRS Approval.
         20.9     Contributions Conditioned on Deductibility.
         20.10    Mistake of Fact
         20.11    Communications with Committee.
         20.12    Communications with Participants and Beneficiaries.
         20.13    Prior Service Credit
         20.14    Gender and Number
         20.15    Headings
         20.16    Governing Law.
         20.17    Severability of Provisions
         20.18    Heirs, Assigns and Personal Representatives
         20.19    Reliance on Data and Consents.
         20.20    Qualified Military Service.

    21   Application to Puerto Rico Employees.................               93

         21.1     Modifications Applicable to Puerto Rico.

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                                 THE SCHWABPLAN
                     RETIREMENT SAVINGS AND INVESTMENT PLAN

                        as Amended through June 24, 1999

                       SECTION 1. INTRODUCTION AND PURPOSE

     1.1  The Plan  Sponsor established  and  maintains  the Plan to enable each
Participant  to  benefit,  in  accordance  with  the  terms  of the  Plan,  from
contributions  made by the Employer  and from any  increases in the value of the
Plan assets  through  investment of such assets.  The Plan is comprised of three
parts:  (i) a  Section  401(k)  plan,  (ii) a profit  sharing  plan and (iii) an
employee stock  ownership plan. The purpose of the employee stock ownership plan
portion  of the Plan is to align  Employees'  interests  with the  interests  of
shareholders.  It is anticipated that any Employer contributions to the employee
stock  ownership  plan will be invested  primarily  or entirely in Shares of The
Charles Schwab  Corporation,  that the employee stock ownership plan may acquire
such  Shares  of The  Charles  Schwab  Corporation  from  time to time  with the
proceeds of one or more Exempt  Loans,  the repayment of which may be secured in
part by a pledge of the Shares of The Charles Schwab  Corporation  acquired with
those loan proceeds,  and that any Employer  contributions to the employee stock
ownership  plan may be used in full or in  substantial  part to the  payment  of
interest on, and retirement of principal of, such Exempt Loans.
     This  Plan  is a  restatement  of the  SchwabPlan  Retirement  Savings  and
Investment  Plan,  which was  initially  effective  as of October  1, 1983.  The
effective date of this  restatement is January 1, 2001. The rights of any person
who terminated employment or who retired on or before the effective date of this
restated Plan or any provision  hereof,  including  his or her  eligibility  for
benefits and the time and form in which benefits, if any, will be paid, shall be
determined  solely  under the terms of the Plan  provisions  as in effect on the
date of his or her  termination of employment or retirement,  unless such person
is  thereafter  reemployed  and again becomes a  Participant.  The rights of any
other person shall be determined  solely under the terms of this restated  Plan,
except as may otherwise be required by law.
     The Plan and Trust are  intended  to qualify as a plan and trust  which are
qualified and exempt from taxation under Sections 401(a) and 501(a) of the Code.
The Plan is intended to qualify in part as a profit  sharing plan (as defined in
Section  401(a)(27)  of the  Code)  and in  part as a stock  bonus  plan  and an
employee stock ownership plan (as defined by Section  4975(e)(7) of the Code and
Section 407(d)(6) of the Act) designed to invest primarily in shares of stock of
the Employer which meet the  requirements for "qualifying  employer  securities"
under  Section  4975(e)(8)  of the Code and Section  407(d)(5)  of the Act.  All
provisions of the Plan and Trust shall be construed accordingly.
     All Trust Fund assets  acquired under the Plan as a result of debt incurred
to purchase Shares,  Employer  contributions,  income and other additions to the
Trust Fund shall be administered,  distributed, forfeited and otherwise governed
by the provisions of the Plan. It is intended that the Trust associated with the
Plan be exempt  from  federal  income  taxation  pursuant to the  provisions  of
Section 501(a) of the Code. Subject to the provisions of Section 16 of the Plan,
the  assets  of the Plan  shall  be  applied  exclusively  for the  purposes  of
providing  benefits to  Participants  and  Beneficiaries  under the Plan and for
defraying   expenses  incurred  in  the  administration  of  the  Plan  and  its
corresponding Trust.

                             SECTION 2. DEFINITIONS

     When used herein the following terms shall have the following meanings:
     2.1  "Account"  means the account or accounts established and maintained on
behalf  of a  Participant  pursuant  to (i)  Section  6.1  with  respect  to the
Participant's Cash Contribution Account and (ii) Section 7.1 with respect to the
Participant's ESOP Account.
     2.2  "Act"  means  the  Employee Retirement Income Security Act of 1974, as
now in effect or as hereafter amended.
     2.3  "Actual  Deferral   Percentage"   means  the  average  of  the  ratios
(calculated  separately  for each Employee) for each Plan Year of (a) the amount
of Elective  Contributions and Matching  Contributions or Qualified  Nonelective
Contributions (if the Committee  determines to take such Matching  Contributions
or such Qualified Nonelective Contributions into account when calculating Actual
Deferral  Percentage)  on behalf of each  Employee for the relevant Plan Year to
(b)  the   Employee's   compensation   (as   defined  in   Treasury   Regulation
1.415-2(d)(10)  or in such other manner as is prescribed under Section 414(s) of
the Code) while a Participant for the relevant Plan Year.
     2.4  "Affiliated  Employer"  means any  corporation  which is included in a
controlled  group of  corporations  (within the meaning of Section 414(b) of the
Code) which  includes the Plan  Sponsor,  any trade or business  (whether or not
incorporated)  which is under common  control with the Plan Sponsor  (within the
meaning of Section 414(c) of the Code),  any  organization  included in the same
affiliated  service group (within the meaning of Section  414(m) of the Code) as
the Plan Sponsor and any other entity  required to be  aggregated  with the Plan
Sponsor  pursuant to the  Regulations  under Section 414(o) of the Code;  except
that for purposes of applying the  provisions of Sections 12 and 19 with respect
to the limitations on contributions, Section 415(h) of the Code shall apply.
     2.5  "Beneficiary"  means the beneficiary or beneficiaries  designated by a
Participant  pursuant to Section 14 to receive the amount, if any, payable under
the Plan upon the death of such Participant.
     2.6  "Board of Directors" means the board of directors of Charles  Schwab &
Co., Inc.
     2.7  "Break in Service" means a Plan Year (or for  purposes of  determining
membership in the Plan  pursuant to Section 3, the  Computation  Period)  during
which an  individual  has not  completed  more  than 500  Hours of  Service,  as
determined  by the  Committee in  accordance  with the  Regulations.  A Break in
Service  shall be deemed to have  commenced on the first day of the Plan Year in
which it occurs.  Solely for purposes of determining  whether a Break in Service
has occurred,  an  individual  shall be credited with the Hours of Service which
such individual  would have completed but for a maternity or paternity  absence,
as determined by the Committee in accordance  with this Section 2.7 and the Code
and Regulations;  provided, however, that the total Hours of Service so credited
shall not exceed  501 Hours of  Service  and that the  individual  shall  timely
provide  the  Committee  with such  information  as it shall  require.  Hours of
Service credited for a maternity or paternity absence shall be credited at eight
Hours of Service per day and shall be credited  entirely (i) in the Plan Year or
Computation  Period in which the  absence  began if such  Hours of  Service  are
necessary  to  prevent  a Break in  Service  in such Plan  Year,  or (ii) in the
following  Plan Year or  Computation  Period.  For purposes of this Section 2.7,
maternity or paternity  absence shall mean an absence from work by reason of the
individual's pregnancy,  the birth of the individual's child or the placement of
a child with the  individual  in  connection  with adoption of the child by such
individual,  or for  purposes  of caring for a child for the period  immediately
following such birth or adoption.
     2.8  "Cash Contribution Account" means the account or accounts  established
and  maintained on behalf of a Participant  pursuant to Section 6.1 with respect
to the Participant's  Elective  Contributions,  Matching  Contributions,  Profit
Sharing   Contributions,   Qualified   Nonelective   Contributions  or  Rollover
Contributions.
     2.9  "Code" means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended. All citations to sections of the Code are to such sections as
they may from time to time be amended or renumbered.
     2.10 "Committee"   means  the  Administrative  Committee  of  the  Employer
provided for in Section 15. For  purposes of the Act, the Employer  shall be the
"named  fiduciary"  (with  respect  to  the  matters  for  which  it  is  hereby
responsible  under the Plan) of the Plan,  and the  Employer  shall be the "plan
administrator" of the Plan within the meaning of Section 3(16)(A) of the Act.
     2.11 "Compensation"  means a  Participant's  W-2  compensation  related  to
services rendered to the Employer,  excluding (i) living allowances, (ii) travel
or commuting  allowances,  (iii)  reimbursements  for financial  planning,  (iv)
amounts that are paid as a result of participation  in the Employer's  Long-Term
Incentive Plan, (v) employee  referral  awards,  (vi) special  incentive  awards
(other  than  regular  bonus  programs),  (vii)  reimbursements  for  relocation
expenses,  (viii) commissions (other than "dual commissions",  commissions based
on  trading  results  that  are  paid to  traders  who  are  also  salaried  and
commissions where the  Participant's  only form of remuneration is commissions),
(ix) income items  attributable to the taxable portion of employee  benefits and
any cash  payments  made as a result of an  Employee's  election  not to receive
insured  benefits  pursuant to the  Company's  Pre-Tax  Contribution  Plan,  (x)
amounts paid as short term disability benefits, (xi) any income items reflecting
grants in aid,  (xii)  amounts  paid to a  Participant  pursuant  to the Charles
Schwab  Severance  Pay Plan  (other than any  amounts  paid with  respect to the
Notice Period, as defined in Section 2(K) of such plan), and (xiii) compensation
in excess of $150,000  (adjusted  for cost of living to the extent  permitted by
Section 401(a)(17) of the Code and Regulations). For purposes of determining the
whole  percentage  of  Compensation  for which a  Participant  may make a Salary
Reduction  Agreement,  and not for any other purposes,  subparagraph (ix) hereof
shall be disregarded.  Compensation  shall be determined  prior to reduction for
(i) any contributions pursuant to such Participant's election under Section 5.1,
(ii) any  contributions  made by an Employer on behalf of the Participant in the
Plan Year  pursuant to a  Participant  salary  reduction  election  that are not
includable in the Participant's  income under Section 125 of the Code, and (iii)
any  contributions  made by an Employer on behalf of the Participant in the Plan
Year pursuant to a Participant salary reduction election that are not includable
in the Participant's income under Section 132(a)(5) of the Code.
     2.12 "Computation  Period" means a 12 consecutive month period beginning on
the day an  individual  first  performs an Hour of Service or first  performs an
Hour of Service following a Break in Service. Thereafter, the Computation Period
shall be the Plan  Year,  commencing  with the Plan Year that  includes  the day
immediately following the last day of the Computation Period determined pursuant
to the first sentence hereof.
     2.13 "Contribution  Percentage" means the average of the ratios (calculated
separately  for  each  Participant  for  each  Plan  Year)  of  (a)(i)  Matching
Contributions,  if any, made by the Employer on behalf of a Participant and (ii)
Elective  Contributions,  (if the Committee elects to take into account Elective
Contributions   when  calculating  the  Contribution   Percentage)  to  (b)  the
Employee's compensation (as defined in Section 1.415-2(d)(10) of the Regulations
or in such other manner as is prescribed under Section 414(s) of the Code) while
a Participant for the relevant Plan Year.
     2.14 "Deferred Retirement Date" shall have the meaning set forth in Section
9.2.
     2.15 "Disability" means the inability to engage in any substantial  gainful
activity  considering the  Participant's  age,  education and work experience by
reason  of any  medically  determined  physical  or mental  impairment  that has
continued without  interruption for a period of at least six months and that can
be expected to be of long, continued and indefinite duration.  The determination
of the  Committee as to whether a Participant  has a Disability  shall be final,
binding and conclusive.
     2.16 "Effective Date" means October 1, 1983.
     2.17 "Elective  Contributions"  means  contributions made to the Trust Fund
pursuant to a Participant's  Salary Reduction Agreement entered into pursuant to
Section 5.1, and which are  considered  tax deferred under Section 401(k) of the
Code.
     2.18 "Elective  Contribution  Subaccount" means the account established and
maintained on behalf of a Participant pursuant to Section 6.2(a) with respect to
his or her Elective Contributions and Qualified Nonelective Contributions.
     2.19 "Employee"  means  any "regular  employee" of the Employer who is paid
through  United States payroll and for whom the Employer is required to withhold
United States Federal  employment  taxes excluding (i) any person covered by any
other  pension,  profit  sharing or  retirement  plan to which any  Employer  or
Affiliated  Employer is required to contribute  either  directly or  indirectly,
(ii) any nonresident  alien individual who received no earned income (within the
meaning of Section  911(d)(2)) from the Employer which  constitutes  income from
sources within the United  States,  (iii) any employee who is included in a unit
of employees covered by a negotiated  collective bargaining agreement which does
not provide  for his or her  membership  in the Plan,  (iv) any  individual  who
provides  services  to  the  Employer  pursuant  to  an  independent  contractor
agreement, irrespective of whether such individual is subsequently retroactively
reclassified  as a common law  employee  for periods  during  which the Employer
originally classified such individual as an independent contractor,  and (v) any
individual  who  provides  services to the  Employer  pursuant  to an  agreement
between the Employer and a temporary  agency or other  leasing  organization.  A
director of the Employer is not eligible for  membership in the Plan unless such
director is also an Employee.  A leased employee  (within the meaning of Section
414(n)  of the Code) is not  eligible  for  membership  in the Plan  unless  the
Employer designates such individual as eligible for membership in the Plan.
     2.20 "Employer"  means  Charles  Schwab & Co.,  Inc. and any  Participating
Employer  which  adopts  this  Plan  subject  to the  approval  of the  Board of
Directors.
     2.21 "ESOP Account" means the account  established and maintained on behalf
of a  Participant  pursuant  to  Section  7.1  with  respect  to his or her ESOP
Contributions.
     2.22 "ESOP Contributions" means the Employer contributions, if any, made to
the Plan on behalf of a Participant pursuant to Section 4.2(c).
     2.23 "Entry Date" means the first day of each calendar month.
     2.24 "Exempt  Loan" means any loan to the Plan or Trust not  prohibited  by
Section  4975(c) of the Code and  Section  406 of the Act because the loan meets
the requirements set forth in Section  4975(d)(3) of the Code, Section 408(b)(3)
of the Act and the  Regulations  promulgated  thereunder,  the proceeds of which
loan are used within a reasonable  time after receipt by the Trust Fund only for
any or all of the following  purposes:  (a) to acquire Shares;  (b) to repay the
same Exempt Loan; or (c) to repay any previous Exempt Loan.
     2.25 "Highly Compensated Participant" means any Participant who, during the
relevant  period,  is treated as a highly  compensated  employee  under  Section
414(q) of the Code.  For  purposes  of  determining  which  Employee is a Highly
Compensated Participant,  the look-back determination shall be made on the basis
of the  calendar  year.  The Plan shall comply with the  procedures  of Treasury
Regulation  1.401(k)-1(f) to the extent applicable.  For purposes of determining
which Employee is a Highly Compensated Participant:
          (a)  Highly  Compensated  Participant means a Participant who performs
Services  during the  determination  year and is described in one or more of the
following groups:
               (1)  An Employee who is a five percent  (5%) owner, as defined in
Section 416(i)(1) of the Code, at any time during the determination  year or the
look-back year.
               (2)  An Employee  who:  (a) had  compensation  from  the Employer
in excess of $80,000  (indexed as referenced  in Section  414(q)(1) of the Code)
during the look-back year and (b) if the Employer elects the application of this
Subsection  2.25(A)(2)  for  such  look-back  year,  such  Employee  was  in the
"top-paid group" for the look-back year.
          (b)  For purposes of this Section:
               (1)  The  determination  year  is  the  Plan  Year  for which the
determination of who is a Highly Compensated Participant is being made.
               (2)  The  look-back  year  is  the  calendar  year ending with or
within the  determination year.
               (3)  The  "top-paid  group"  consists of  the top twenty  percent
(20%) of  Employees  ranked on the basis of  compensation  received  during  the
look-back  year.  For  purposes of  determining  the number of  Employees in the
top-paid  group,  Employees  described in Section  414(q)(5) of the Code and the
Regulations promulgated thereunder are excluded.
               (4)  For  purposes of this Section 2.25, the term  "compensation"
means compensation as defined in Section 414(q)(4) of the Code.
               (5)  Employers  aggregated  under  Section  414(b),  (c), (m), or
(o) of the Code are treated as a single employer.
               (6)  Highly  Compensated  Participants  include a former Employee
who had a separation year prior to the  determination  year and who was a Highly
Compensated  Participant  for  either  (A) the  determination  year in which the
Employee separated from Service or (B) any determination year ending on or after
the  Employee's  55th  birthday.  With respect to an Employee who separated from
Service  before  January 1,  1987,  an  Employee  will be  included  as a Highly
Compensated  Participant  only if the  Employee was a five percent (5%) owner or
received  Compensation in excess of $50,000 during (1) the determination year in
which the Employee separated from Service (or the year preceding such separation
year) or (2) any year ending on or after such  Employee's  55th birthday (or the
last year ending before such Employee's 55th birthday).
     2.26 "Hours  of  Service"  means  hours  during  the applicable Computation
Period in which an  individual  performs  Service or is  treated  as  performing
Service and, except in the case of military  service or as otherwise  determined
by the Committee,  for which the Participant is directly or indirectly  entitled
to payment.  Hours of Service  shall be credited  for the  applicable  period in
which  such  Hours  of  Service  accrue  in  accordance  with  Labor  Department
Regulation 29 CFR ss. 2530.200b-2(c), which regulation is incorporated herein by
reference; provided that Hours of Service for reasons other than the performance
of duties shall be credited in accordance  with Labor  Department  Regulation 29
CFR ss. 2530.200b-2(b), which regulation is incorporated herein by reference.
          The  term "Service" includes  performance  of duties (or periods which
are treated as the performance of duties) for the Employer or for any Affiliated
Employer (under rules determined by the Committee,  uniformly  applicable to all
individuals similarly situated and in accordance with the Regulations) for which
an  individual  is  entitled  to receive  credit for  "Service",  including  (i)
vacation, (ii) holiday, (iii) absence authorized by the Employer for sickness or
incapacity  (including  disability or leave of absence),  (iv) layoff,  (v) jury
duty, (vi) if and to the extent required by the Military  Selective Service Act,
as amended or any other  federal law,  service in the Armed Forces of the United
States and (vii) an  approved  leave of absence  granted by the  Employer  to an
individual on or after August 5, 1993 pursuant to the Family  Medical Leave Act,
but only if such individual  returns to work for the Employer at the end of such
approved  leave.  Service  also  includes  periods  of time for which  back pay,
irrespective  of mitigation of damages,  is awarded or agreed to by the Employer
or any Affiliated Employer; provided that such award or agreement is not already
credited as Service under either of the preceding two  sentences.  Service shall
also  include (i)  Service  with any entity  formed  under the laws of a foreign
jurisdiction  if such entity would have  constituted an Affiliated  Employer had
such entity been formed under the laws of the United States, and (ii) any period
of a Participant's  prior employment with any other organization upon such terms
and  conditions  as the  Committee  may approve and subject to any  required IRS
approval.  Notwithstanding  the  foregoing,  (i) Hours of Service  credited with
respect to an  individual's  service with  BankAmerica  Corporation or a related
corporation  between  January 11,  1983 and March 31,  1987 shall be  considered
Service only if such  individual  was employed by the Employer prior to November
24, 1993, (ii) Hours of Service credited with respect to an individual's service
with BankAmerica  Corporation or a related corporation prior to January 11, 1983
shall be considered  Service,  but only if such  individual  was employed by the
Employer prior to April 1, 1987, (iii) Hours of Service credited with respect to
service with Mayer & Schweitzer,  Inc. prior to July 1, 1991 shall be considered
Service,  and (iv) Service shall include  service with The Rose Company prior to
April 1, 1989,  with  Performance  Technologies,  Inc. prior to August 31, 1994,
with TrustMark, Inc. prior to July 31, 1995, with Hampton Pension Services, Inc.
prior to November 6, 1995,  with  CyBerCorp.,  Inc. prior to March 1, 2000, with
U.S. Trust  Corporation  and its affiliates  prior to May 31, 2000, with Chicago
Investment  Analytics,  Inc. prior to November 14, 2000, and, in the case of any
other companies that become affiliated with the Company,  such service as may be
determined by the Committee from time to time.
     2.27 "IRS" means the United States Internal Revenue Service.
     2.28 "Labor Department" means the United States Department of Labor.
     2.29 "Matching Contribution"  means any Employer contribution, if any, made
to the Plan on behalf of a Participant pursuant to Section 4.2(a).
     2.30 "Matching Contribution Subaccount"  means  the account established and
maintained on behalf of a Participant pursuant to Section 6.2(b) with respect to
the Participant's Matching Contributions.
     2.31 "Non-Participating Affiliate" means an Affiliated Employer that is not
a Participating Employer.
     2.32 "Normal Retirement Date" shall have the meaning set forth  in  Section
9.1.
     2.33 "Participant"  means any Employee who has  satisfied  the  eligibility
requirements  of Section 3 below.
     2.34 "Participating Employer" means Charles Schwab & Co., Inc. or any other
Affiliated  Employer,  the board of directors or  equivalent  governing  body of
which shall adopt the Plan and Trust  Agreement by  appropriate  action with the
written  consent of the Board of  Directors.  By its  adoption  of this Plan,  a
Participating  Employer  shall be deemed to appoint  Charles Schwab & Co., Inc.,
the Committee and the Trustee its exclusive  agent to exercise on its behalf all
of the power  and  authority  conferred  by this  Plan  upon the  Employer.  The
authority of Charles Schwab & Co., Inc., the Committee and the Trustee to act as
such agent shall continue  until the Plan is terminated as to the  Participating
Employer and the relevant Trust Fund assets have been distributed by the Trustee
as  provided  in Section  17 of this Plan.
     2.35 "Plan"  means this  SchwabPlan  Retirement Savings and Investment Plan
as the same is stated herein and as it may be amended from time to time.
     2.36 "Plan Sponsor" means The Charles Schwab Corporation.
     2.37 "Plan Year" means the calendar year.
     2.38 "Profit Sharing Contribution" means the Employer contribution, if any,
made to the Plan on behalf of a Participant pursuant to Section 4.2(b)(ii).
     2.39 " Profit  Sharing  Subaccount "  means  the  account  established  and
maintained on behalf of a Participant pursuant to Section 6.2(c) with respect to
the Participant's Profit Sharing Contributions.
     2.40 "Purchasing Agent" means the agent designated by the Trustee to  enter
into certain transactions with respect to Shares hereunder.
     2.41 "Qualified Nonelective Contribution" means the  Employer contribution,
if any,  made  to the Plan on behalf of a Participant pursuant to Section 4.2(b)
(i).
     2.42 "Regulations"  means  the applicable regulations issued under the Code
or the Act by the IRS, the Labor Department or any other governmental  authority
and any temporary rules or releases  promulgated by such authorities pending the
issuance of such regulations.
     2.43 "Restated Effective Date" shall mean January 1, 2001.
     2.44 " Retirement  Date "   means  the  Participant's  Normal  or  Deferred
Retirement Date which has become effective pursuant to Section 9 below.
     2.45 "Rollover Subaccount" means the account established and maintained  on
behalf  of  a  Participant  pursuant  to  Section  6.2(d)  with  respect  to the
Participant's Rollover Contributions.
     2.46 "Rollover Contribution"  means  any  contribution  made by an Employee
pursuant to Section 5.6.
     2.47 "Salary Reduction Agreement" means an agreement  between a Participant
and the Employer entered into pursuant to Section 5.1.
     2.48 "Shares"  means  (i)  with  respect  to  Plan assets acquired with the
proceeds  of an Exempt  Loan,  the common  stock  issued by The  Charles  Schwab
Corporation or any successor  corporation  thereto  meeting the  requirements of
both  Section  4975(e)(8)  of the  Code  and  Section  407(d)(5)  of the Act for
"qualifying  employer  securities,"  and (ii) with  respect to Plan assets other
than those  acquired  with the proceeds of an Exempt  Loan,  stock issued by The
Charles Schwab Corporation or any successor  corporation  thereto,  of any type,
kind or class  meeting  the  requirements  of Section  407(d)(5)  of the Act for
"qualifying  employer  securities".  All valuations of Shares, where such Shares
are not readily  tradable  on an  established  securities  market and where such
valuations relate to activities  carried on by the Plan, shall be made by one or
more   independent   appraisers   retained  by  the  Committee,   who  meet  the
requirements,  if any,  of the Code and  Regulations.  To the  extent and in the
manner required by the Code and Regulations, all independent appraisers, if any,
making  appraisals  pursuant to the foregoing  sentence shall be registered with
the IRS.
     2.49 "Surviving Spouse"  means  the  survivor of a Participant to whom such
Participant was legally married on the date of the Participant's death.
     2.50 "Suspense Subfund" means the subfund established under Section 7.3.
     2.51 " Taxable  Compensation "  means  the  W-2  compensation  paid  to  an
individual for Service during any period under consideration.
     2.52 "Taxable Year" means the calendar year.
     2.53 "Total Break in Service"  means  a  period of five or more consecutive
Computation  Periods  in which a  Participant  incurs a Break in  Service,  with
respect to a Participant who did not have a nonforfeitable  right to any portion
of his or her Profit  Sharing  Subaccount or ESOP Account prior to the beginning
of the first such Computation Period.
     2.54 "Trustee" means the Trustee selected by the Employer to hold the funds
contributed  by the Employer to provide benefits under the Plan or any successor
or substitute.
     2.55 " Trust  Agreement "  means  the  SchwabPlan  Retirement  Savings  and
Investment  Plan Trust  Agreement,  as it may from time to time be amended,  and
such additional and successor trust agreements as may be executed.
     2.56 "Trust  Fund"  means the funds held by the Trustee from which payments
to the Trustee are made to provide benefits under the Plan.
     2.57 "Valuation Date"  means the last day of each Plan Year or such interim
periods as the Committee may designate from time to time.
     2.58 "Vested Interest"  means  the portion of a Participant's Account which
has become nonforfeitable pursuant to Section 10.3 below.
     2.59 "Year  of  Service "  means  a  Computation  Period  during  which  an
individual   completed  at  least  1,000  Hours  of  Service  or  satisfied  any
alternative  requirement,  as determined  by the Committee  from time to time in
accordance with the Regulations.

<PAGE>

                            SECTION 3. PARTICIPATION

     3.1  Commencement of Participation.
          (a)  An  Employee  who  is  a  Participant  as of the date immediately
preceding the Restated  Effective Date shall continue to be a Participant of the
Plan  as of the  Restated  Effective  Date.
          (b)  An  Employee  who  is not a Participant on the Restated Effective
Date and who (A) is in Service on the Restated  Effective  Date or (B) commences
Service on or after the  Restated  Effective  Date shall be eligible to become a
Participant of the Plan on the first day of the fourth  calendar month following
his or her commencement of Service (or, in the case of an Employee whose service
commences on the first day of a month, the first day of the third calendar month
following  his or her  commencement  of  Service),  provided  that the  Employee
completes at least one Hour of Service in each such month.
          (c)  An Employee who is eligible to become a Participant, but declines
to  participate  in the Plan,  may become a Participant  at any time, as soon as
administratively  feasible  following  a  request  to  participate.
          (d)  An Employee who satisfies the requirements of Section  3.1(b)(ii)
for participation but who terminates  Service prior to becoming a Participant in
the Plan and  subsequently  becomes an Employee again prior to incurring a Break
in Service  will  become a  Participant  in the Plan for all  purposes as of the
first day on which such individual again becomes an Employee.
     3.2  Cessation  of  Participation.  A  Participant  shall  cease  to  be  a
Participant  upon the earliest to occur of (i) the  Participant's  retirement on
his or her Retirement Date, (ii) the Participant's  death or Disability or (iii)
the  Participant's  termination of Service prior to his or her  Retirement  Date
followed by a Break in Service. A Participant who, without any Break in Service,
ceases to be an Employee  for any reason,  shall not cease to be a  Participant,
provided that,  notwithstanding  any other  provision of the Plan, and except as
provided in Section 4.3, no  contribution  shall be made for the benefit of such
Participant,  no  contributions  under  the Plan  shall be  allocated,  added or
otherwise  credited to the Account of such  Participant,  and no  contributions,
forfeitures or Shares released from a Suspense Subfund shall be allocated, added
or otherwise credited to the Account of such Participant on or after the date on
which such Participant  ceases to be an Employee and before the first day of the
Plan  Year  coincident  with or  preceding  the  date,  if any,  on  which  such
Participant again resumes Service as an Employee.
     3.3  Readmission After Cessation of Participation.  A  Participant  who has
incurred a Total Break in Service and  subsequently  returns to Service shall be
treated as a new Employee for all  purposes of the Plan.  In all other cases,  a
former  Participant  who returns to Service  following a Break in Service  shall
again become a Participant as soon as  administratively  feasible following such
former Participant's  return to Service,  except that if such former Participant
is  not  then  an  Employee,  such  former  Participant  shall  again  become  a
Participant  as soon as  administratively  feasible  following  the first day on
which such former Participant again becomes an Employee.
     3.4  Waiver  of  Participation.   An   individual  who  has  satisfied  the
requirements for  participation  set forth in Section 3.1 may permanently  waive
participation in the Plan, but only if such individual is on temporary  transfer
of employment to a Participating Employer from a Non-Participating Affiliate.

<PAGE>

                        SECTION 4. EMPLOYER CONTRIBUTIONS

     4.1  Elective Contributions. The Employer shall, subject to the limitations
of Sections 5 and 12,  contribute to the Trust Fund for each Plan Year on behalf
of all Participants the total amount of Elective Contributions  designated to be
contributed  pursuant to Salary  Reduction  Agreements  under  Section 5.1. Such
contributions  shall be paid in cash by the  Employer  to the Trustee as soon as
practicable,  but in no event  later  than 15 days  from the date on which  such
amounts otherwise would have been payable to the Participant in cash.
     4.2  Employer Contributions.
          (a)  Subject  to  the  limitations  of  Section 12, the Employer shall
contribute   Matching   Contributions  to  the  Trust  Fund  on  behalf  of  all
Participants  for  whom  Elective  Contributions  have  been  made  equal  to  a
percentage of such Elective  Contributions  made for each such Participant.  The
percentage (and, if desired, a maximum dollar amount) of Matching  Contributions
shall be determined from time to time by the Board of Directors and communicated
to the Participants.
          (b)  Subject  to the limitations of Section 12, for any Plan Year, the
Board of Directors may designate (i) a percentage of the aggregate  Compensation
of all  Participants  or a fixed dollar amount to be  contributed to the Plan as
Qualified  Nonelective  Contributions on behalf of certain  Participants who are
not Highly  Compensated  Participants and may designate (ii) a percentage of the
aggregate  Compensation  of all  Participants  or a fixed  dollar  amount  to be
contributed  to the  Plan as  Profit  Sharing  Contributions  on  behalf  of all
Employees who are or would be  Participants  but for their  election not to make
Elective Contributions.
          (c)  Subject to the limitations of Section 12,  and  the provisions of
any applicable loan or contribution agreement,  the Employer shall contribute to
the Trust Fund for each Plan Year as ESOP Contributions such sum as the Board of
Directors may, in its sole discretion,  determine, which sum may be zero. All or
any part of the  contributions  made under this Section 4.2(c) may be applied to
repay any outstanding  Exempt Loan. The Committee may,  subject to any pledge or
similar  agreement,  direct or determine the  proportions of such  contributions
which are  applied  to repay  each such  Exempt  Loan and,  with  respect to any
particular  Exempt Loan,  the proportion of such  contribution  to be applied to
repay principal and interest on such Exempt Loan.
     4.3  Allocation of Matching Contributions, Profit Sharing Contributions and
ESOP  Contributions.  Matching  Contributions  shall only be  allocated to those
Participants  employed by the Employer on the last day of the Plan Year.  Profit
Sharing  Contributions  and  ESOP  Contributions  shall  only  be  allocated  to
Participants  who are  members of the  Allocation  Group for the Plan Year.  For
purposes  of  Sections  4 and 7, the term  "Allocation  Group"  means  the group
consisting  of (i) each  Participant  who is employed by the  Employer as of the
last day of the Plan Year, and (ii) each  Participant  whose employment with the
Employer  terminated  during  the Plan Year by reason  of  Disability,  death or
retirement  on or  after  the  Participant's  Retirement  Date.  Profit  Sharing
Contributions  and ESOP  Contributions  shall be allocated among the Accounts of
Participants  who are members of the  Allocation  Group for the Plan Year in the
same proportion that a Participant's  Compensation during the Plan Year bears to
the total Compensation  during the Plan Year of all Participants who are members
of the  Allocation  Group for such Plan  Year.  For  purposes  of the  preceding
sentence,  Compensation earned by a Participant prior to the Participant's entry
into the Plan  pursuant to Section  3.1(b)(ii)  shall not be taken into account.
For purposes of this Section,  a Participant who transfers  employment  during a
Plan Year from a Participating Employer to a Non-Participating Affiliate will be
considered  employed by the  Employer  as of the last day of the Plan Year,  but
such   Participant's   Compensation  shall  not  include  amounts  paid  by  the
Non-Participating  Affiliate.  For  purposes  of  becoming  entitled to share in
Matching  Contributions,  Profit Sharing Contributions and/or ESOP Contributions
pursuant to this Section  4.3, a  Participant  who becomes  entitled to payments
pursuant  to the  Charles  Schwab  Severance  Pay Plan  shall not be  treated as
employed  by the  Employer on the last day of a Plan Year unless the last day of
the Participant's Notice Period (as defined in Section 2(K) of such plan) occurs
on or after the last day of the Plan Year.
     Notwithstanding  the  foregoing,  and subject to compliance with applicable
law, including the regulations issued pursuant to Code Section 401(a)(4), at the
election of the Board of Directors,  a contribution may be made solely on behalf
of the employees of one or more  Employers,  to be allocated in accordance  with
this  section but solely  among those  Participants  who are  employees  of such
Employer[s].
     4.4  Timing of Employer Contributions.
          (a)  Any   Profit   Sharing   Contributions,   Qualified   Nonelective
Contributions  and ESOP  Contributions  shall be  deemed  made on  account  of a
Taxable  Year if (i) the  Board  of  Directors  determines  the  amount  of such
contribution by appropriate  action, (ii) the Employer designates such amount in
writing as payment on account of such Taxable Year or (iii) the Employer  claims
such amount as a deduction on its federal tax return for such Taxable Year.
          (b)  Profit   Sharing   Contributions,  Matching  Contributions,  and,
subject  to the  provisions  of any  Exempt  Loan,  ESOP  Contributions  for any
particular  Taxable Year may be paid to the Trustee in installments,  but in any
event  such  contributions  shall  be paid no  later  than  the due date for the
Employer's  federal  income tax return for such Taxable Year.  The Employer may,
during any Taxable Year, make advance payments toward its contributions for such
Taxable  Year.  Any  income,  earnings  or  appreciation  earned  by any  amount
contributed  by the Employer  prior to the end of the Plan Year shall be treated
as part of the Profit Sharing  Contributions,  Matching  Contributions,  or ESOP
Contributions,  as the case may be, for such Plan Year.  On or about the date of
such payment the  Committee  shall be advised of the amount of such payment upon
which its allocation pursuant to Section 4.3 is to be calculated.
     4.5  Forfeitures.  Forfeitures  arising  during  the  Plan Year pursuant to
Section 10 shall be used to reduce the amount of Matching Contributions made for
such Plan Year  pursuant  to  Section  4.2(a).  To the extent the amount of such
forfeitures  exceeds  the amount of Matching  Contributions  to be made for such
Plan Year, such excess shall be reallocated as Profit Sharing  Contributions  on
the  last  day  of  the  Plan  Year  in  which  such  forfeiture  occurs  to all
Participants  entitled  to receive  Profit  Sharing  Contributions,  in the same
proportion as contributions are allocated pursuant to Section 4.3. Provided,  in
either  case,  that  forfeitures  shall  first  be used to fund  adjustments  to
Participants'  Accounts  required to correct  operational  errors, to the extent
directed  by the  Committee,  or to  fund  any  amounts  to be  recredited  to a
Participant's Account pursuant to Section 10.5.
     4.6  Contribution Percentage Test.
          (a)  Participant's  Contribution  Percentages  must  satisfy  at least
one of the  following tests:
               (1)  The  Contribution  Percentage  for  the  Highly  Compensated
Participants  shall  not  exceed  the  Contribution   Percentage  of  all  other
Participants for the preceding Plan Year multiplied by 1.25; or
               (2)  (A) The excess of the Contribution Percentage for the Highly
Compensated   Participants  over  the  Contribution   Percentage  of  all  other
Participants  for the preceding  Plan Year shall not be more than two percentage
points and (B) the Contribution  Percentage for Highly Compensated  Participants
shall not be more than the  Contribution  Percentage for all other  Participants
for the preceding Plan Year multiplied by 2.
          (b)  The  Employer  may  elect  to  apply the foregoing tests by using
current Plan Year data rather than utilize data from the preceding Plan Year. If
such an election is made, it may not be changed  except as provided by Secretary
of the Treasury.  Notwithstanding  the  foregoing,  for the 1997 Plan Year,  the
Employer  may rely on the  transitional  relief  set forth in  Internal  Revenue
Service Notice 97-2 to use current Plan Year data to apply the foregoing  tests.
          (c)  All  Matching  Contributions and Elective Contributions  that are
made  under two or more plans  that are  aggregated  for  purposes  of  Sections
401(a)(4)  and 410(b) of the Code are to be treated as made under a single plan;
and if two or more plans are  permissively  aggregated  such plans shall satisfy
Sections  401(a)(4)  and 410(b) as though they were a single plan in  accordance
with Section 410(m) of the Code and Section 1.401(m)-1 of the Regulations.
          (d)  For  purposes  of  this  Section 4.6,  Matching Contributions are
taken  into  account  for a  Plan  Year  only  if (i)  made  on  account  of the
Participant's  Elective  Contributions  for the Plan Year, (ii) allocated to the
Participant's  Account  during  the Plan Year and (iii)  paid to the Trust  Fund
prior to the end of the twelfth month following the close of the Plan Year.
          (e)  In  applying  the  tests  set  forth  in  this  Section 4.6,  the
following rules shall apply:
               (1)  In  the  case  of  an  Employee  who  receives  no  Matching
Contributions, the Matching Contributions that are to be included in determining
the Participant's Contribution Percentage are zero;
               (2)  The   availability   of  Matching  Contributions  shall  not
discriminate in favor of Highly Compensated Participants.
               (3)  The  distribution  of excess  aggregate  contributions  will
include  the  income  allocable  thereto  and  shall be made on the basis of the
amount of Matching Contributions (and Elective Contributions, if the Regulations
permit and the Committee elects to take into account Elective Contributions when
calculating  the  Contribution  Percentage)  made on behalf of each such  Highly
Compensated   Participant.   The  income   allocable  to  the  excess  aggregate
contributions  includes income for the Plan Year for which the excess  aggregate
contributions were made in accordance with Section  1.401(m)-1(e)(3)(ii)  of the
Regulations.
               (4)  A  Participant shall include any Employee who is directly or
indirectly  eligible  to receive an  allocation  of Matching  Contributions  and
includes (i) an Employee who would be a Participant  but for the failure to make
required  contributions  and (ii) a Participant  whose right to receive Matching
Contributions  has been  suspended  because of an election  (other than  certain
one-time elections) not to participate.
          (f)  For  Plan  Years commencing after December 31, 1998 for which the
Employer  uses  Section  410(b)(4)(B)  of the  Code  to  test  minimum  coverage
compliance,  the Employer may exclude from consideration all Participants (other
than  Highly  Compensated  Participants)  who have not met the  minimum  age and
service  requirements of Section 410(a)(1)(A) of the Code in determining whether
the tests set forth in Subsection 4.6(a) are met.
     4.7  Distribution of Excess Aggregate Contributions.
          (a)  The Committee shall determine as of the end of the Plan Year, and
at such other time or times in its discretion,  whether one of the  Contribution
Percentages  of Section 4.6 is satisfied  for such Plan Year.  If neither of the
tests set forth in Section 4.6 is satisfied,  the Committee shall distribute the
excess aggregate  contributions in the manner described in this Section 4.7. For
purposes of this Section  4.7,  "excess  aggregate  contributions"  means,  with
respect to any Plan Year and with respect to any Participant,  the excess of the
aggregate  amount of (i)  Matching  Contributions  (and any  earnings and losses
allocable thereto prior to distribution) and (ii) the Elective Contributions (if
the Regulations  permit and the Committee  elects to take into account  Elective
Contributions  when calculating the  Participant's  Contribution  Percentage) of
Highly  Compensated  Participants for such Plan Year, over the maximum amount of
such  contributions  that  could  be  made on  behalf  of  Participants  without
violating the requirements of Section 4.6. The amount of each Highly Compensated
Participant's excess aggregate contributions shall be determined by reducing the
Matching Contributions of all Highly Compensated Participants whose Contribution
Percentage  as adjusted by this Section 4.7 are at the highest  percentage  rate
for the Plan Year on a pro rata basis by one  hundredth of one percent  (0.01%).
The Committee shall continue to utilize this procedure until one of the tests of
Section 4.6 is satisfied.
          (b)  If  the  Committee  is  required  to  distribute excess aggregate
contributions for any Highly Compensated Participant for a Plan Year in order to
satisfy the  requirements  of Section 4.6, then the Committee  shall  distribute
such excess  aggregate  contributions  with  respect to such Highly  Compensated
Participants to the extent  practicable  before April 15th of the Plan Year next
following the Plan Year for which such excess aggregate contributions were made,
but in no event  later than the end of the Plan Year  following  such Plan Year.
For each of such  Participants,  the amounts so distributed shall be made in the
following order of priority:
               (i)  by distributing Matching Contributions and earnings thereon,
to the extent necessary; and
               (ii) by  distributing Elective  Contributions (to the extent such
amounts are included in the Contribution Percentage), and earnings thereon.
          All   such   distributions   shall   be  made  to  Highly  Compensated
Participants   on  the  basis  of  the  respective   portions  of  such  amounts
attributable  to each such Highly  Compensated  Participant.  No spousal consent
shall be  required of any married  Participant  who  receives a refund of excess
aggregate contributions.
     4.8  Aggregate  Limit  for  Contribution  Percentage  and  Actual  Deferral
Percentage.
          (a)  The  sum  of  the Contribution Percentage and the Actual Deferral
Percentage  for  Highly  Compensated  Participants  for the Plan Year  shall not
exceed the "aggregate limit" defined in this Section 4.8.
          (b)  The term "aggregate limit" means the greater of (1) or (2) below:
               (1)  The   sum   of  (a)  the  greater  of  the  Actual  Deferral
Percentage for all Participants other than the Highly  Compensated  Participants
or the  Contribution  Percentage  for all  Participants  other  than the  Highly
Compensated  Participants,  for the  Plan  Year  multiplied  by 1.25 and (b) the
lesser of such Actual Deferral Percentage or Contribution Percentage plus 2, but
not greater than 2 multiplied by the lesser of such Actual  Deferral  Percentage
or Contribution Percentage.
               (2)  The   sum   of   (a)  the  lesser  of  the  Actual  Deferral
Percentage for all Participants other than the Highly  Compensated  Participants
or the  Contribution  Percentage  for all  Participants  other  than the  Highly
Compensated  Participants,  for the  Plan  Year  multiplied  by 1.25 and (b) the
greater of such Actual Deferral  Percentage or  Contribution  percentage plus 2,
but not  greater  than 2  multiplied  by the  greater  of such  Actual  Deferral
Percentage or Contribution Percentage.
          (c)  If the aggregate limit is exceeded, the Committee shall determine
whether  to:  (i)  make  Qualified  Nonelective   Contributions  to  permit  the
satisfaction  of the test set forth in  subsection  (a) hereof;  (ii) reduce the
Contribution  Percentage of the Highly Compensated  Participants as set forth in
Section  4.7;  or (iii)  reduce the  Actual  Deferral  Percentage  of the Highly
Compensated Participants as set forth in Section 5.5.

<PAGE>

                     SECTION 5. SALARY REDUCTION AGREEMENTS
                           AND ROLLOVER CONTRIBUTIONS

     5.1  Salary Reduction Agreements.
          (a)  A  Participant  may  elect  to make Elective Contributions in any
Plan Year by entering into a Salary Reduction Agreement with the Employer.  Each
Salary  Reduction  Agreement  shall provide that a portion of the  Participant's
Compensation  shall be paid  through  payroll  deduction to the Trust Fund as an
Elective  Contribution pursuant to Section 4.1 rather than paid currently to the
Participant.   The  Salary  Reduction   Agreement  shall  provide  for  Elective
Contributions equal to any whole percentage between one percent (1%) and fifteen
percent (15%) of a  Participant's  Compensation  in any payroll  period,  not to
exceed  the  limitation  set  forth in  Section  402(g)  of the  Code  (adjusted
automatically for increases in accordance with the Regulations). Notwithstanding
the foregoing  provisions of this Section 5.1, the Committee  may, but need not,
adopt a procedure to enable Participants to make lump sum Elective Contributions
under the Plan through payroll  deductions.  No Salary Reduction Agreement shall
be effective unless the Participant has made an investment direction pursuant to
Section 8.3.
          (b)  A  Salary  Reduction Agreement will be taken into account for any
Plan Year only if it relates to  Compensation  that would have been  received by
the Participant in the Plan Year (but for the deferral election).
          (c)  In the event that the aggregate amount of Elective  Contributions
by a Participant  exceeds the  limitation  described in  subsection  (a) of this
Section 5.1, the amount of such excess, increased by any income and decreased by
any losses attributable  thereto,  shall be refunded to the Participant no later
than the April 15th of the calendar  year  following the calendar year for which
the Elective Contributions were made. If a Participant also participates, in any
calendar  year,  in any other  plans  subject  to the  limitations  set forth in
Section  402(g) of the Code and has made excess  deferrals  under this Plan when
combined  with the  other  plans  subject  to such  limits,  to the  extent  the
Participant designates,  in writing submitted to the Committee no later than the
March 1 of the calendar  year next  following  the  calendar  year for which the
Elective  Contributions were made, any Elective Contributions under this Plan as
excess deferrals,  the amount of such designated excess, increased by any income
and  decreased  by any losses  attributable  thereto,  shall be  refunded to the
Participant  no later than the April 15 of the calendar year next  following the
calendar year for which the Elective Contributions were made.
     5.2  Change  or  Suspension  of  Salary  Reduction  Agreements.  Subject to
Section 5.1, a Participant may enter into or change his or her Salary  Reduction
Agreement at any time,  effective as soon as  practicable,  in  accordance  with
rules  determined by the  Committee.  A Participant  may also suspend his or her
Salary  Reduction  Agreement at any time, in accordance with rules determined by
the Committee.  A Participant who suspends his or her Salary Reduction Agreement
in  accordance  with this  Section  5.2 may enter  into a new  Salary  Reduction
Agreement at any time, effective as soon as administratively feasible.
          A  Participant's most recent Salary Reduction Agreement shall continue
unchanged  from year to year unless the  Participant  notifies the  Committee in
writing of a change in such Salary  Reduction  Agreement in accordance  with the
rules determined by the Committee.
     5.3  Actual Deferral Percentage Test.
          (a)  Participants' Elective Contributions must satisfy at least one of
the following tests:
               (1)  The  Actual Deferral  Percentage for the Highly  Compensated
Participants  shall not  exceed  the  Actual  Deferral  Percentage  of all other
Participants for the preceding Plan Year multiplied by 1.25; or
               (2)  (A)    The  excess  of  the   Actual   Deferral   Percentage
for the Highly Compensated  Participants over the Actual Deferral  Percentage of
all other  Participants  for the preceding  Plan Year shall not be more than two
percentage  points,  and (B)  the  Actual  Deferral  Percentage  for the  Highly
Compensated  Participants shall not be more than the Actual Deferral  Percentage
for all other Participants for the preceding Plan Year multiplied by 2.
          (b)  The  Employer  may  elect  to  apply the foregoing tests by using
current Plan Year data rather than utilize data from the preceding Plan Year. If
such an election is made, it may not be changed  except as provided by Secretary
of the Treasury.  Notwithstanding  the  foregoing,  for the 1997 Plan Year,  the
Employer  may rely on the  transitional  relief  set forth in  Internal  Revenue
Service Notice 97-2 to use current Plan Year data to apply the foregoing tests.
          (c)  All  Elective Contributions that are made under two or more plans
that are  aggregated  for purposes of Sections  401(a)(4) and 410(b) of the Code
are to be  treated  as made  under a single  plan;  and if two or more plans are
permissively aggregated,  such plans shall satisfy Sections 401(a)(4) and 410(b)
as though they were a single plan in accordance  with Section 410(k) of the Code
and Section  1.401(k)-1  of the  Regulations.  For purposes of  calculating  the
Actual  Deferral  Percentage of any Highly  Compensated  Participant all cash or
deferred  arrangements of the Employer or any Affiliated  Employer in which such
Highly  Compensated  Participant  participates  shall be  treated as one cash or
deferred arrangement.
          (d)  In  applying  the  tests  set  forth  in  this  Section  5.3, the
following rules shall apply:
               (1)  In   the  case  of  a  Participant  who  makes  no  Elective
Contributions, the Elective Contributions that are to be included in determining
the Participant's Actual Deferral Percentage are zero;
               (2)  The  distribution  of  excess contributions will include the
income  allocable  thereto  and  shall  be made on the  basis of the  amount  of
Elective  Contributions on behalf of each such Highly  Compensated  Participant.
The income  allocable to the excess  contributions  includes income for the Plan
Year for which the excess  contributions  were made in  accordance  with Section
1.401(k)-1(f)(4)(ii) of the Regulations.
          (e)  For  Plan  Years commencing after December 31, 1998 for which the
Employer  uses  Section  410(b)(4)(B)  of the  Code  to  test  minimum  coverage
compliance,  the Employer may exclude from consideration all Participants (other
than  Highly  Compensated  Participants)  who have not met the  minimum  age and
service  requirements of Section 410(a)(1)(A) of the Code in determining whether
the tests set forth in Subsection 5.3(a) are met.
     5.4  Amendment  or  Revocation  of Salary Reduction Agreement by Committee.
The Committee  shall determine as of the end of the Plan Year, and at such other
time or times in its discretion,  whether one of the Actual Deferral  Percentage
tests of Section  5.3 will be  satisfied  for such Plan Year.  In the event that
neither of such Actual Deferral Percentage Tests is satisfied, the Committee may
amend or revoke the Salary Reduction Agreement of any Participant at any time if
it  determines  that such an amendment or revocation is necessary to ensure that
at least one of the Actual  Deferral  Percentage  tests of  Section  5.3 will be
satisfied  for any Plan Year.  The  determination  of whether it is necessary to
amend or revoke any Salary Reduction Agreement shall be made pursuant to Section
5.3 and the  procedure  for such  amendment or  revocation  shall be  determined
pursuant to Section 5.5(a).
     5.5  Distribution of Excess Contributions.
          (a)  If  neither  of the tests set forth in Section 5.3 are satisfied,
the Committee shall in its discretion,  to the extent permissible under the Code
and the Regulations,  refund the excess contributions in the manner described in
Section 5.5(b). For purposes of this Section 5.5, "excess  contributions" means,
with respect to any Plan Year,  the excess of the  aggregate  amount of Elective
Contributions   (and  any  earnings  and  losses  allocable   thereto  prior  to
distribution) made by Highly  Compensated  Participants for such Plan Year, over
the maximum  amount of such  Elective  Contributions  that could be made by such
Highly  Compensated  Participants  without violating the requirements of Section
5.3.
          (b)  If required in order to comply with the provisions of  Subsection
5.3 and the Code,  the Committee  shall refund excess  contributions  for a Plan
Year.  The  distribution  of such excess  contributions  shall be made to Highly
Compensated  Participants,  to the extent practicable,  before the March 15th of
the Plan Year next  following the Plan Year for which such excess  contributions
were made,  but in no event  later than the end of the Plan Year next  following
such Plan Year. Any such distribution  shall be made to each Highly  Compensated
Participant  whose  Elective  Contributions  are the  highest for the Plan Year,
until one of the  tests of  Section  5.3 is  satisfied.  Matching  Contributions
attributable  to  Elective   Contributions  returned  to  a  Highly  Compensated
Participant shall be distributed as provided in Section 4.6.
     5.6  Rollover Contributions.
          (a)  A  Participant  may  make  a Rollover Contribution to the Plan in
accordance with rules established by the Committee  uniformly applied consisting
of an eligible rollover distribution, as defined in Section 11.8(b), from a plan
qualified under Section 401(a) of the Code or an individual  retirement  account
qualified  under Section 408(a) of the Code (no part of which is attributable to
any source other than an eligible  rollover  distribution  from a qualified plan
under Section 401(a) of the Code);  provided such eligible rollover distribution
is in cash and  contributed  to the Plan on or before the 60th day after the day
in which such Participant  received such eligible  rollover  distribution.  If a
Participant  elects to make a Rollover  Contribution,  the Committee may require
such evidence,  assurances,  opinions and certifications,  including a statement
from the previous plan that such plan was a qualified  plan,  that the Committee
may deem  necessary  to  establish  to its  satisfaction  that the amounts to be
contributed qualify as an eligible rollover distribution and will not affect the
qualification  of the Plan or the tax-exempt  status of the Trust under Sections
401(a) and 501(a) of the Code,  respectively.  Except as otherwise  permitted by
Section 5.7, in no event shall any assets be  transferred  to this Plan from any
profit sharing,  pension or retirement plan that would cause this Plan to become
a "transferee"  plan (within the meaning set forth in Section  401(a)(11)(B)  of
the Code).
          (b)  Any  Rollover  Contribution shall be allocated to the appropriate
Participant's  Rollover  Contribution  Subaccount which shall be established and
separately accounted for. A Participant shall have at all times a nonforfeitable
right in the amount credited to his or her Rollover Contribution Subaccount.
          (c)  Each  request  by  a  Participant to make a Rollover Contribution
shall be  subject  to review by the  Committee  which  shall make a case by case
determination  that each Rollover  Contribution meets the requirements set forth
in Section  5.6(a),  and such other  requirements or conditions as the Committee
may, from time to time and in its sole discretion,  impose;  provided,  however,
that any determination  made by the Committee pursuant to this Section 5.6 shall
not have the effect of discriminating in favor of Participants who are officers,
shareholders or who are Highly Compensated Participants.
     5.7  Trustee-to-Trustee Transfer of  Assets.  Notwithstanding  anything  in
Section 5.6 to the contrary,  in the event of an  acquisition by the Employer or
the Plan  Sponsor  of a  company  which  maintains  a plan and  trust  which are
qualified under Sections 401(a) and 501(a) of the Code, respectively,  the Board
of Directors may (but shall not be required to) authorize a "trustee-to-trustee"
transfer of assets from such  qualified  plan into the Plan and Trust Fund.  The
Trustee may require such  evidence,  assurances,  opinions  and  certifications,
including a statement from the acquired  company's plan that such plan and trust
are qualified  under Sections  401(a) and 501(a) of the Code,  which the Trustee
may deem  necessary  to  establish  to its  satisfaction  that the amounts to be
transferred  will not affect  the  qualification  of the Plan or the  tax-exempt
status of the Trust under Sections 401(a) and 501(a) of the Code, respectively.

<PAGE>

                     SECTION 6. ALLOCATION OF CONTRIBUTIONS

     6.1  Establishment  of  Cash  Contribution  Account.  The  Committee  shall
establish and maintain or cause to be established and maintained with respect to
each Participant a Cash  Contribution  Account showing his or her interest under
the Plan and in the Trust Fund and all relevant data  pertaining  thereto.  Each
Participant  shall be  furnished  with a  written  statement  of his or her Cash
Contribution  Account at least once annually and upon any distribution to him or
her. In maintaining the Cash Contribution Accounts under the Plan, the Committee
can conclusively rely on the valuations of the Trust Fund in accordance with the
Plan. The  establishment  and maintenance of, or allocations and credits to, the
Cash  Contribution  Account of any Participant shall not vest in any Participant
any right,  title or interest in and to any Plan assets or  benefits,  except at
the time or times and upon the terms and conditions and to the extent  expressly
set forth in the Plan and in accordance with the terms of the Trust Fund.
     6.2  Establishment of Subaccounts.  Each  Participant's  Cash  Contribution
Account shall contain each of the following applicable subaccounts therein:
          (a)  All  Elective  Contributions  on  behalf  of  a Participant under
Section 4.1 and Qualified  Nonelective  Contributions on behalf of a Participant
under  Section  4.2(b)(i)  shall  be  credited  to  the  Participant's  Elective
Contribution Subaccount.
          (b)  All  Matching  Contributions  on  behalf  of  a Participant under
Section  4.2(a) shall be allocated  and credited to the  Participant's  Matching
Contribution Subaccount.
          (c)  All Profit Sharing Contributions on behalf of a Participant under
Section  4.2(b)(ii) shall be allocated and credited to the Participant's  Profit
Sharing Subaccount.
          (d)  All  Rollover  Contributions  on  behalf  of  a Participant under
Section  5.6 shall be  allocated  and  credited  to the  Participant's  Rollover
Contribution Subaccount.
          (e)  Any  amounts  that  are  transferred  from  a  Participant's ESOP
Account  pursuant to Section 7.11.

<PAGE>

                       SECTION 7. SPECIAL ESOP PROVISIONS

     7.1  Investment of ESOP Accounts.  The  ESOP  Accounts  of all Participants
shall be  invested  exclusively  in Shares,  except for cash or cash  equivalent
investments  held (a) for the limited  purpose of making Plan  distributions  to
Participants  and  Beneficiaries,  (b) pending the  investment by the Purchasing
Agent of  contributions  or other cash  receipts  in Shares,  (c) pending use to
repay an Exempt Loan, (d) for purposes of paying,  under the terms  described in
the Plan or Trust Agreement, fees and expenses incurred with respect to the Plan
or Trust and not paid for by the  Participating  Employers or (e) in the form of
de minimis cash balances.  Neither any Participating Employer nor the Purchasing
Agent,  the  Committee or the Trustee shall have any  responsibility  or duty to
time any transaction  involving Shares in order to anticipate  market conditions
or changes in stock value, nor shall any such person have any  responsibility or
duty  to  sell  Shares  held in the  ESOP  Accounts  (or  otherwise  to  provide
investment management for Shares held in the ESOP Accounts) in order to maximize
return or minimize loss.  Participating Employer contributions made in cash, and
other cash  received  by the  Trustee,  may be used by the  Purchasing  Agent to
acquire Shares from shareholders of the Employer or directly from the Employer.
     7.2  Allocation to ESOP Accounts.
          (a)  Subject  to  the  provisions  of   Section 4,  the  ESOP  Account
maintained for each Participant will be credited as of the last day of each Plan
Year with the Participant's allocable share of:

               (i)  Shares purchased  using cash  contributed by or on behalf of
the Participating  Employer  employing such Participant (and any earnings on any
cash contributions made prior to the last day of the Plan Year),
               (ii) Shares contributed directly to the Trust Fund;
               (iii)Dividends paid to the Trust Fund during the Plan Year on any
Shares that were  purchased by the Purchasing  Agent or contributed  directly to
the Trust Fund prior to the last day of the Plan Year; and
               (iv) Shares  released  from  the  Suspense  Subfund  pursuant  to
Section  7.3 and  allocable  to the  contribution  made by or on  behalf of such
Participating Employer pursuant to Section 7.4.
          (b)  Shares  attributable  to ESOP  Contributions  shall be  allocated
among the Accounts of Participants  who are members of the Allocation  Group for
the Plan Year in the same proportion that a  Participant's  Compensation  during
the Plan  Year  bears to the  total  Compensation  during  the Plan  Year of all
Participants  who are members of the  Allocation  Group for such Plan Year.  For
purposes of the preceding  sentence,  Compensation earned by a Participant prior
to the  Participant's  entry into the Plan pursuant to Section  3.1(b)(ii) shall
not be taken into account.
          (c)  Shares  contributed  directly  to  the Trust Fund for a Plan Year
shall be allocated  under  Section  7.2(a)(i) in the same  proportion  as Shares
purchased by the Trust Fund and allocated under Section 7.2(b).
     7.3  Suspense  Subfund  for  ESOP  Accounts.   Shares   acquired   by   the
Participants'  ESOP  Accounts  through  an  Exempt  Loan  shall  be added to and
maintained  in the Suspense  Subfund and shall  thereafter  be released from the
Suspense  Subfund and  allocated to  Participants'  ESOP Accounts as provided in
Sections 7.3 and 7.4. Shares acquired for the Trust Fund with the proceeds of an
Exempt Loan shall be released  from the  Suspense  Subfund as the Exempt Loan is
repaid, in accordance with the provisions of this Section 7.3.
          (a)  For  each  Plan  Year  until the Exempt Loan is fully repaid, the
number of Shares  released  from the Suspense  Subfund shall equal the number of
unreleased  Shares  immediately  before such  release for the current  Plan Year
multiplied  by the  "Release  Fraction."  As  used  herein,  the  term  "Release
Fraction"  shall  mean a  fraction,  the  numerator  of which is the  amount  of
principal  and  interest  paid on the Exempt Loan for such current Plan Year and
the  denominator  of which is the sum of the  numerator  plus the  principal and
interest to be paid on such Exempt Loan for all future  years during the term of
such Exempt Loan  (determined  without  reference to any possible  extensions or
renewals  thereof).  For purposes of computing  the  denominator  of the Release
Fraction,  if the interest rate on the Exempt Loan is variable,  the interest to
be paid in  subsequent  Plan Years  shall be  calculated  by  assuming  that the
interest  rate in effect as of the end of the  applicable  Plan Year will be the
interest rate in effect for the remainder of the term of the Exempt Loan.
          Notwithstanding the foregoing, in the event such Exempt Loan  shall be
repaid with the proceeds of a subsequent  Exempt Loan (the  "Substitute  Loan"),
such  repayment  shall not operate to release  all such  Shares in the  Suspense
Subfund,  but, rather,  such release shall be effected pursuant to the foregoing
provisions  of this  Section  7.3(a) on the basis of payments of  principal  and
interest on such Substitute Loan.
          (b)  If required by any pledge or similar agreement,  or  if permitted
by such  pledge  or  agreement  and  required  by the  Committee  pursuant  to a
one-time, irrevocable designation (which shall be made, if at all, in connection
with the making of an Exempt Loan) by the  Committee,  then, in lieu of applying
the provisions of Section  7.3(a) hereof with respect to an Exempt Loan,  Shares
shall be released  from the  Suspense  Subfund as the  principal  amount of such
Exempt  Loan is repaid  (without  regard to  interest  payments),  provided  the
following three conditions are satisfied:
               (i)  The  Exempt  Loan  shall  provide  for  annual  payments  of
principal  and interest at a cumulative  rate that is not less rapid at any time
than level annual payments of such amounts for ten years;
               (ii) The  interest  portion  of  any payment shall be disregarded
only to the  extent  it  would  be  treated  as  interest  under  standard  loan
amortization tables; and
               (iii)If the Exempt Loan is renewed,  extended or refinanced,  the
sum of the expired duration of the Exempt Loan and the renewal, extension or new
Exempt Loan period shall not exceed ten years.
          (c)  If  at  any  time there is more than one Exempt Loan outstanding,
then separate  accounts may be established  under the Suspense  Subfund for each
such Exempt Loan.  Each Exempt Loan for which a separate  account is  maintained
may be treated  separately for purposes of the provisions  governing the release
of Shares  from the  Suspense  Subfund  under this  Section 7.3  (including  for
purposes of  determining  whether  Section  7.3(a) or Section 7.3(b) governs the
release of Shares from any particular  Suspense Subfund) and for purposes of the
provisions governing the application of Participating  Employer contributions to
repay an Exempt Loan under Section 4.2.
          (d) All Shares released from the Suspense Subfund during any Plan Year
shall be allocated among Participants as prescribed by Section 7.4.
     7.4  Disposition of Shares Released from Suspense Subfund.
          (a)  Shares  released  from  the  Suspense  Subfund for a Plan Year in
accordance  with  Section 7.3 shall be held in the Trust Fund on an  unallocated
basis until  allocated by the Committee as of last day of the Plan Year.  Shares
released  from the  Suspense  Subfund on account of a payment for a Plan Year of
principal  or interest  on an Exempt  Loan,  to the extent  payment is made with
contributions for such Plan Year, shall be allocated under Section 7.2(a)(ii) in
the same proportion as Shares purchased with contributions under Section 7.2(b).
          (b)  (i)  Shares released from the Suspense Subfund on account  of the
payment for a Plan Year of principal or interest on an Exempt Loan to the extent
such payment is made with dividends  paid on Shares  allocated to ESOP Accounts,
shall be allocated in the same  proportion as dividends used to pay principal or
interest on such Exempt Loan would have been allocated  under Section 7.9(b) had
such dividends not been so used; and
               (ii) Subject to  Section  4.2,  Shares released from the Suspense
Subfund on account of the payment of principal or interest on an Exempt Loan, to
the extent  such  payment is made with  dividends  on Shares  not  allocated  to
Accounts,  shall be allocated to those ESOP Accounts and in the same  proportion
as Shares  released  pursuant  to Section  7.4(b)(i);  provided  that  Shares so
released shall be otherwise  allocated if necessary to satisfy the  requirements
of the Code (other than Section 404(k)) and any Regulations thereunder.
          (c)  All  Shares  in the Trust Fund, other than the Shares held in the
Suspense  Subfund as of the last day of any Plan Year, must be allocated to ESOP
Accounts as of the last day of any Plan Year.
     7.5  Limitations  on  Allocations  to ESOP  Accounts.  Notwithstanding  the
foregoing  provisions of this Section 7:
          (a)  If more than one-third of all ESOP Contributions for a Plan  Year
which  are  deductible  only  under  Section  404(a)(9)  of the  Code  would  be
allocated,  in the aggregate, to Participants described in Section 414(q) of the
Code,  then the  Committee  may reduce  such  allocations  pro rata in an amount
sufficient  to ensure  that  such ESOP  Contributions  will be  deductible  with
respect to such Plan Year; and
          (b)  Any contributions which are prevented from being allocated due to
the  restriction  contained in Section  7.5(a) shall be allocated as of the last
day of the  Plan  Year  pursuant  to  Sections  7.2  and  7.4  as  though  those
Participants  described in Section 414(q) of the Code did not participate in the
Plan.
     7.6  Acquisition of Shares.
          (a)  Notwithstanding  the  foregoing  provisions of this Section 7, in
the event that Shares are acquired in a transaction to which Section 1042 of the
Code applies, then, in accordance with the Regulations, such Shares shall not be
allocated,  directly or  indirectly,  to  prohibited  individuals  as defined in
Section 409(n)(1) of the Code for the duration of the  nonallocation  period (as
defined in Section 409(n)(3)(C) of the Code).
          (b)  If  Shares  are  prevented  from  being  allocated  due  to   the
prohibition  contained in Section 7.6(a), the allocation of Shares  attributable
to ESOP Contributions (or ESOP  Contributions)  otherwise provided under Section
7.2 shall be adjusted to reflect such result.
     7.7  Effect of Change in Plan Sponsor's Capitalization. Any Shares received
by the  Trustee  as a result of a stock  split,  dividend,  conversion,  or as a
result of a reorganization or other  recapitalization  of the Plan Sponsor shall
be  allocated  as of the day on which the Shares are  received by the Trustee in
the same manner as the Shares to which they are attributable are then allocated.
     7.8  Trustee  and Committee Discretion to Engage in Transactions in Shares.
Neither the Purchasing Agent, the Trustee nor the Committee shall be required to
engage in any transaction, including, without limitation, directing the purchase
or sale of  Shares,  which it  determines  in its sole  discretion  may  subject
itself,  its  Participants,   the  Plan,  any  Participating  Employer,  or  any
Participant to liability under federal or other state laws.
     7.9  Valuation of ESOP Accounts.
          (a)  Subject to the requirements of Section 7.9(b),  the  fair  market
value  of the  assets  of the  ESOP  Accounts  shall  be  determined  as of each
Valuation  Date, in accordance  with generally  accepted  valuation  methods and
practices  including,  but not limited to, in the case of Shares, the use of one
or more independent appraisers.
          (b)  The  value  of a  Participant's  ESOP Account as of any Valuation
Date shall equal the sum of:
               (i)  The aggregate  value (as  determined  under  Section 7.9(a))
of all Shares and dividends on Shares previously allocated to such Participant's
ESOP Account as of such Valuation Date; and
               (ii) Subject  to  Section  7.9(c),   the   aggregate  value  ( as
determined under Section 7.10(a)) of dividends, if any, received during the Plan
Year on Shares allocated to such Participant's ESOP Account.
               (iii)Such   Participant's   allocable   portion  ( determined  in
accordance with the rules set forth in Section 7.4 for determining Participant's
allocable portion of Shares released from the Suspense Subfund) of the earnings,
if any, on all amounts contributed to the Trust Fund for purposes other than the
repayment  of an Exempt Loan.
          (c)   Except as provided in Section 7.7,  dividends  payable, if  any,
with  respect to Shares held by the  Participant's  ESOP Account will be, in the
discretion of the  Committee  and in conformity  with the terms of the Shares on
which such  dividends are paid, (i) used for the purpose of repaying one or more
Exempt Loans,  (ii)  distributed  from the Trust Fund to  Participants  or their
Beneficiaries  not later  than 90 days after the close of the Plan Year in which
they are paid to the Trust Fund,  (iii) paid  directly to such  Participants  or
their  Beneficiaries,  (iv) retained in the Trust Fund and allocated pursuant to
Section  7.9(b),  or (v) paid or utilized in a combination  of any or all of the
foregoing four options.
          (d)  The  Committee  shall  establish  accounting  procedures  for the
purpose of making the  allocations,  valuations and adjustments to Participant's
ESOP Accounts in accordance  with the provisions of the Plan. From time to time,
the Committee may modify its accounting  procedures for the purpose of achieving
equitable  and   nondiscriminatory   allocations  among  the  ESOP  Accounts  of
Participants in accordance with the provisions of the Plan.
     7.10 Role of Purchasing Agent.
          (a)  All purchases of Shares made by the Trust Fund shall be  made  by
the  Purchasing  Agent.  The Trustee shall forward to the  Purchasing  Agent all
amounts  contributed to the employee stock ownership plan, and all amounts to be
invested in Shares pursuant to participant  investment directions given pursuant
to Sections 8.3, 8.4 and 8.5. Amounts to be invested in Shares shall be invested
in Shares in the  amount,  in the  manner  and at the  price  determined  by the
Purchasing Agent in its sole  discretion,  provided such price shall be the fair
market value of such Shares at the time of purchase.  The Purchasing Agent shall
in its sole discretion  select the  broker-dealer  through which the purchase of
such Shares shall be executed.  The Purchasing  Agent shall also invest any cash
dividends  received on any Shares which are allocated to Participants'  Accounts
and  held as part of the  Plan as  provided  in  Section  5.05(c)  of the  Trust
Agreement.
          (b)  The  Purchasing  Agent shall sell Shares only at the direction of
the Trustee,  which shall issue such  instructions  only at the direction of the
Committee;  provided that such Committee direction shall not be required for any
of the  following  purposes:  (i) any sales of Shares  required  pursuant to the
participant  investment  directions  given pursuant to Sections 8.3, 8.4 or 8.5;
(ii) any sales of Shares required  pursuant to the provisions of Section 13.5 or
13.6;  (iii)  any  sales of  Shares  required  to fund a  participant  loan or a
distribution to a Participant;  or (iv) any sales of Shares required to maintain
the levels of investment  of Shares and cash  specified by the Committee for the
Company Stock Fund.
     7.11 ESOP Contributions. Notwithstanding anything to the contrary contained
in the  Plan,  no ESOP  contributions  shall be made to the Plan for Plan  Years
beginning  after December 31, 2000.  Effective as of January 1, 2001, all Exempt
Loans shall be fully paid off, and all Shares  attributable to such Exempt Loans
shall be allocated among Plan  Participants in accordance with the provisions of
this  Section 7, and,  effective  as of April 1, 2001,  all  Participants'  ESOP
accounts shall be transferred to such Participants' Cash Contribution  Accounts.
The  provisions  of this  Section 7 shall  apply in the event any future  Exempt
Loans are approved by the Board of Directors.

<PAGE>

               SECTION 8. INVESTMENT OF CONTRIBUTIONS, VALUATIONS
                  AND PARTICIPANTS' CASH CONTRIBUTION ACCOUNTS

     8.1  Delivery of Contributions to Trust Fund.  All  monies,  securities  or
other property contributed to Participants' Cash Contribution  Accounts shall be
delivered  to the  Trustee  under  the  Trust  Fund,  to be  managed,  invested,
reinvested and distributed in accordance with the Plan and the Trust Fund.
     8.2  Participants' Right to Select Investments. Each Participant shall have
the  right to  invest  his or her Cash  Contribution  Account  among one or more
investment  funds selected by the Company,  which may include a fund established
for investment in Shares.
     8.3  Participant Investment Election.  As  of  any  date  permitted  by the
Committee,  a  Participant  may, in  accordance  with the rules of the Committee
uniformly  applied,  specify  the  percentage  (in minimum  multiples  as may be
determined from time to time by the Committee) of  contributions  which are made
to the  Participant's  Cash  Contribution  Account  that  shall be  invested  in
investment funds selected by the Committee.  An investment  election may be made
separately  with  respect to (i) the  aggregate  of the  Participant's  Elective
Contribution  Subaccount,   Matching  Contribution   Subaccount,   and  Rollover
Contribution Subaccount and (ii) the Participant's Profit Sharing Subaccount.
     8.4  Change in Investment Election for Future Contributions. Any investment
direction  specified  by a  Participant  shall  be  deemed  to  be a  continuing
direction until changed. A Participant may change an investment  direction as to
future  contributions  made by such  Participant  or on his or her behalf to the
subaccounts of his or her Cash  Contribution  Account as of any day permitted by
the Committee in accordance with the rules of the Committee uniformly applied.
     8.5  Change in Investment Election for Prior Contributions.  As of any date
permitted by the Committee, a Participant (or a former Participant whose Account
has not been  distributed  from the Plan) may change the percentages (in minimum
multiples as may be determined  from time to time by the Committee) in which the
investment of the portion of his or her Cash Contribution  Account  attributable
to prior  contributions  shall be allocated  among the funds  maintained  by the
Trustee.
     8.6  Valuation of Cash Contribution Accounts.
          (a)  As  of  each  Valuation  Date,  Participants'  Cash  Contribution
Accounts shall be valued pursuant to the terms of the Plan. Such valuation shall
be conclusive and binding upon all persons having an interest in the Trust Fund.
          (b)  The  Committee  shall  adjust  the   value   of   each   Elective
Contribution  Subaccount,   Matching  Contribution  Subaccount,  Profit  Sharing
Subaccount,  or Rollover Contribution Subaccount, as the case may be, maintained
under  Participants'  Cash  Contribution  Accounts as of each  Valuation Date to
reflect the effect of income  received  and  accrued,  realized  and  unrealized
profits and losses,  and all other  transactions of the preceding  period.  Such
adjustments  shall be made with respect to the period  since the next  preceding
Valuation  Date by (i)  deducting  from  each such  Subaccount  the total of all
payments  made  from such  Subaccount  during  such  period,  (ii)  adding to or
deducting from, as the case may be, each such Subaccount such proportion of each
item of income,  profit or loss as the amount in such  Subaccount as of the next
preceding  Valuation  Date  bears  to the  total of the  amounts  in all of such
Participants'   Elective   Contribution   Subaccount,    Matching   Contribution
Subaccount,  Profit Sharing Subaccount,  or Rollover Contribution Subaccount, as
the  case  may  be,  as  of  the  preceding  Valuation  Date  and  (iii)  adding
contributions   to  each  such  Elective   Contribution   Subaccount,   Matching
Contribution  Subaccount,  Profit Sharing Subaccount,  or Rollover  Contribution
Subaccount,  as the case may be,  pursuant to  Sections 4 and 5 of the Plan.  In
making such  allocations,  the Committee can conclusively rely on the valuations
of the Subaccounts by the Trustee in accordance with the Plan and the Trust.

<PAGE>

                           SECTION 9. RETIREMENT DATES

     9.1  Normal Retirement Date.  The  Normal  Retirement Date of a Participant
shall  be his or her 65th  birthday  or,  if  earlier,  the  date on  which  the
Participant  has  attained  age  fifty  (50) and  completed  seven  (7) Years of
Service.  Upon  attainment of his or her Normal  Retirement  Date, a Participant
shall have a nonforfeitable right to 100% of his or her Account.
     9.2  Deferred Retirement Date.  A  Participant who remains in Service after
his or her Normal Retirement Date may retire on a Deferred Retirement Date which
shall be the first day of the month coincident with or next following his or her
termination  of  Service  or  as  specified  in a  written  application  to  the
Committee.

<PAGE>

                 SECTION 10. ELIGIBILITY FOR PAYMENT OF ACCOUNTS
                              AND VESTED INTERESTS

     10.1 Participants'  Right  to  Account  Upon Termination Due to Retirement,
Death or Disability.
          (a)  A  Participant  shall  have  a  nonforfeitable  right  to  his or
her Account upon the occurrence of any of the following events while employed by
the Employer:
               (i)  attainment of his or her Retirement Date;
               (ii) his or her death; or
               (iii)his or her Disability.
          (b)  Upon  the  termination  of Service of any Participant on or after
his or her  Retirement  Date or by  reason  of his or her  death  or  Disability
("Terminated Participant"),  the Terminated Participant (or, in the event of the
Participant's  death,  his or her  Beneficiary)  shall be  entitled to an amount
equal  to  the  Terminated  Participant's  Account,   including  any  subsequent
contribution  allocated  to the  Terminated  Participant's  Account  pursuant to
Sections 6 or 7 with respect to the Plan Year in which the Participant's Service
is terminated.  The Participant's Account shall be distributable,  in accordance
with the methods and rules of  distribution  described in Section 11, as soon as
practicable following the Participant's termination of Service. The value of the
Participant's  Account shall be determined as of the Valuation  Date  coincident
with or  immediately  preceding the date of  distribution  of the  Participant's
Account.
     10.2 Participants' Right  to  Account  Upon  Other  Termination of Service.
Upon  the  termination  of  Service  of  any  Participant  prior  to  his or her
Retirement  Date for any reason other than death or  Disability,  the Terminated
Participant  shall be entitled to receive an amount equal to the sum of (i) 100%
of the Participant's  Elective  Contribution  Subaccount,  Matching Contribution
Subaccount,  and Rollover  Contribution  Subaccount  and (ii) the  Participant's
Vested  Interest  in his or her  Profit  Sharing  Subaccount  and ESOP  Account,
including  the  Participant's  Vested  Interest in any  subsequent  contribution
allocated to the Participant's  Account pursuant to Sections 6 or 7 with respect
to  the  Plan  Year  in  which  the  Participant's   Service   terminated.   The
Participant's Account shall be distributable, in accordance with the methods and
rules of distribution  described in Section 11, as soon as practicable following
the Valuation  Date  immediately  following  the  Participant's  termination  of
Service.  The value of the  Participant's  Account shall be determined as of the
Valuation Date coincident with or immediately preceding the date of distribution
of the Participant's  Account. If such Terminated  Participant's Vested Interest
is less than 100 percent,  the non-vested balance of such  Participant's  Profit
Sharing Subaccount and ESOP Account shall be forfeited and reallocated  pursuant
to Section  4.5 as of the last day of the  earlier of (i) the Plan Year in which
the  Participant's  Account is  distributed,  or (ii) the Plan Year in which the
Participant incurs a Total Break in Service.
     10.3 Vesting Schedule for Determining Vested Interests. For all purposes of
this  Plan,  a  Participant's  Vested  Interest  in his or  her  Profit  Sharing
Subaccount and ESOP Account shall consist of (i) the Participant's percentage of
his  or  her  Profit   Sharing   Subaccount  and  (ii)  the  percentage  of  the
Participant's  ESOP  Account,  both as  determined  from the  following  vesting
schedule  on the basis of the number of Years of Service  which the  Participant
has completed as of the date of the Participant's termination of Service.

                                VESTING SCHEDULE

                    Years of Service                                  Percentage

                    Less than two years                                   0%
                    Two years but less than three years                  25%
                    Three years but less than four years                 50%
                    Four years or more                                  100%

     10.4 Breaks in Service.  If  a  Participant's  Service  is terminated prior
to his or her Retirement Date for any reason other than the Participant's  death
or Disability prior to completing  three Years of Service,  and such Participant
incurs a Total Break in Service,  such Participant  shall not be entitled to any
benefit  attributable to amounts allocated to the  Participant's  Profit Sharing
Subaccount  or  ESOP  Account  prior  to  such  Total  Break  in  Service.  If a
Participant  returns to Service,  Years of Service  before such return  shall be
counted,  in addition to Years of Service  following such return, in determining
the  Participant's  Vested Interest in the amount credited to the  Participant's
Profit Sharing Subaccount or ESOP Account subsequent to the Participant's return
to Service.  If such Participant does not complete one Year of Service following
his or her  return,  then the  Participant  shall not be entitled to any further
benefit  under  the  Plan  and the  non-vested  balance  of any  Profit  Sharing
Contribution or ESOP Contributions  credited or recredited to such Participant's
Profit Sharing Subaccount or ESOP Account subsequent to the Participant's return
shall  be  forfeited   and   reallocated   pursuant  to  Section  4.5  upon  the
Participant's  termination of Service. All forfeitures shall occur in conformity
with the ordering rules of Section 54.4975-11(d) of the Regulations.
     10.5 Participant's Right to Restoration of Account Upon Return to  Service.
If a  Terminated  Participant  who had a vested  interest in such  Participant's
Profit Sharing  Subaccount or ESOP Account returns to Service prior to incurring
a Total Break in Service, the non-vested balance of the Terminated Participant's
Account,  if any, forfeited pursuant to Section 10.2 shall be recredited to such
Participant's  Account,  provided that, not later than the fifth  anniversary of
the  first  date  on  which  the  Participant  is  subsequently  employed,  such
Participant  repays the full amount of any distribution  made to the Participant
upon his or her prior  termination  of Service.  Any amount so repaid,  together
with any non-vested portion of such Participant's Account recredited pursuant to
this  Section  10.5,  shall be invested in the Trust Fund.  If such  Participant
fails to make a repayment of any  distributed  amounts  pursuant to this Section
10.5, the non-vested portion of such Participant's Account, if any, shall not be
recredited.
     10.6 Participant's  Right  to  Account  Upon  Death  After  Termination  of
Service.  Subject to the  provisions of Section 10, if a Terminated  Participant
dies before payment of the full value of his or her Account from the Trust Fund,
an amount equal to the current value of the unpaid portion of the  Participant's
Vested  Interest in his or her Account,  including any  subsequent  contribution
allocated to the Terminated  Participant's  Account  pursuant to Sections 6 or 7
with respect to the Plan Year in which the Participant's  Service is terminated,
shall be distributable, in accordance with the methods and rules of distribution
described  in Section 11, as soon as  practicable  following  the  Participant's
death.  The value of the  Participant's  Account  shall be  determined as of the
Valuation Date coincident with or immediately preceding the date of distribution
of the Participant's Account.
     10.7 Amendment of Vesting Schedule.  If  the  vesting schedule contained in
Section 10.3 is amended,  each  Participant who has completed at least three (3)
Years of  Service  may elect,  during  the  election  period  specified  in this
Section, to have his or her vested percentage  determined without regard to such
amendment.  For purposes of this Section,  the election period shall begin as of
the date on which the amendment  changing the vesting  schedule is adopted,  and
shall end on the latest of the following  dates:  (i) the date  occurring  sixty
(60) days after the Plan amendment is adopted; (ii) the date which is sixty (60)
days after the day on which the Plan amendment becomes effective; (iii) the date
which is sixty (60) days after the day the  Participant is issued written notice
of the Plan  amendment  by the  Committee;  or (iv)  such  later  date as may be
specified by the Committee.  The election  provided for in this Section shall be
made in writing and shall be irrevocable when made.
     10.8 Distribution Following Attainment of Age 59-1/2 to Former Participants
of  The  Hampton Pension Services,  Inc. 401(k)  Retirement  Savings  Plan.    A
Participant  who was employed by Hampton Pension  Services,  Inc. on November 6,
1995  shall be  entitled  to  receive,  at any  time  following  the  date  such
Participant  attains age  59-1/2,  a  distribution  of all or any portion of the
Participant's  Account,  to the extent  attributable  to any  amounts  that were
transferred  to the Plan from such  Participant's  former account in The Hampton
Pension Services, Inc. 401(k) Retirement Savings Plan.
     10.9 Transfer to Non-Participating Affiliate.  For purposes of applying the
provisions of this Section 10, a Participant  whose  employment has  transferred
from the Employer to a Non-Participating Affiliate will not be treated as having
terminated employment.

<PAGE>

                    SECTION 11. METHOD OF PAYMENT OF ACCOUNTS
                                 AND WITHDRAWALS

     11.1 Methods of Payment.  Any  benefit  payable  under  the Plan, except as
otherwise  provided  in Section  11.2  shall be  payable as soon as  practicable
following  the last day of the  calendar  month in which  falls a  Participant's
termination of Service (or other event requiring a distribution under the Plan),
in one lump sum payment from the Trust Fund,  provided that the  Participant may
elect to direct the Committee to directly  transfer all or any portion of his or
her  "eligible  rollover  distribution"  (as  defined in Section  11.8 below) to
another  tax-qualified  plan  pursuant  to  Section  401(a)(31)  of the Code.  A
Participant  who has no Vested  Interest in his or her  Account  upon his or her
termination  of Service will be deemed to have received a full  distribution  of
his or her Account as of such date.  A  Participant  who elects not to receive a
distribution  at the  time  set  forth  in the  first  sentence  may  receive  a
distribution at any time thereafter upon reasonable notice to the Plan.
     Subject to the provisions of Section 11.3 with respect to the  distribution
of Shares, any distribution hereunder shall be made in cash; provided,  however,
that  pursuant  to  procedures  adopted  from time to time by the  Committee,  a
Participant  may elect to  receive a  distribution  in the form of shares of the
assets in which such Participant's Account was invested immediately prior to the
distribution,  but only if such  distribution is made directly to a rollover IRA
established with the Employer as custodian.
     11.2 Commencement of Payment.  Notwithstanding  any  other provision of the
Plan to the contrary,  (i) if a Participant  has a Vested Interest in his or her
Account with a value of $5,000 or less, it shall be  distributed in one lump sum
as soon as is  administratively  feasible following the last day of the calendar
month in which such Participant's  termination of employment occurs, and (ii) if
a Participant  has a Vested  Interest in his or her Account with a value of more
than $5,000, it shall not commence to be distributed  without the consent of the
Participant before the Participant's Normal Retirement Date.
          In the absence of receipt of such consent by the Committee, payment of
the benefit to such Participant  shall commence as soon as practicable after the
Participant's  attainment of his or her Normal  Retirement  Date,  which benefit
shall be in an  amount  equal to the  value of the  Participant's  distributable
Account as of the Valuation Date  coincident  with or immediately  following the
Participant's attainment of his or her Normal Retirement Date. In any case where
distribution  of any benefit  amount from the  Participant's  Cash  Contribution
Account is to be deferred,  the Committee shall either (i) establish or cause to
be established a special account for the benefit of the former  Participant,  to
be invested  by the Trustee in a fixed  investment  account  established  by the
Trustee or (ii) cause all amounts in the Participant's Cash Contribution Account
deferred by the Participant to be invested at the Participant's  election in the
same manner as the normal Cash Contribution Accounts maintained for Participants
under to the Plan.
     11.3 Special Rules For Distribution of Shares.
          (a)  A  Participant  may  elect  to  receive  a  distribution  of  the
Participant's  Vested Interest from his or her account entirely in whole Shares,
with the value of any  fractional  interest in Shares paid in cash.  Any cash or
other property in a Participant's  Account for which a distribution in Shares is
elected will be used by the Purchasing Agent to acquire Shares, valued as of the
last day of the calendar month in which occurs (i) the Participant's election to
receive a distribution of his or her Account  pursuant to Section 11.1, (ii) the
Participant's  termination of Service, in the case of a distribution pursuant to
Section  11.2(i),  or (iii) the  Participant's  Normal  Retirement  Date (or the
Participant's  death,  if earlier),  in the case of a  distribution  pursuant to
Section 11.2(ii) to a Participant who failed to consent to a distribution  prior
to  his  or  her  Normal   Retirement  Date  (the  "Share   Conversion   Date").
Notwithstanding  the  foregoing,   if  applicable  corporate  charter  or  bylaw
provisions  restrict  ownership  of  substantially  all  outstanding  Shares  to
Employees or to a plan or trust  described in Section  401(a) of the Code,  then
any distribution of a Participant's  Vested Interest in the  Participant's  ESOP
Account shall be in cash.  When a  distribution  consists in whole or in part of
Shares,  and if such Shares  consists of more than one class of securities,  the
distribution of such Shares shall consist of  substantially  the same proportion
of each such class of Shares as such classes of Shares represent  proportions of
the Participant's Account. If the record date for dividends payable with respect
to Shares  distributable to a Participant  occurs following the Share Conversion
Date,  such dividends shall not be considered  attributable to such Shares,  but
shall be considered as earnings of the Fund and  allocated  among  Participants'
Accounts pursuant to Section 8.6(b).
          (b)  Notwithstanding anything in Section 11 to the  contrary,  in  the
discretion  of the  Committee,  Section  11.1 may not apply to Shares  held in a
Participant's  ESOP Account until the close of the Plan Year in which any Exempt
Loan used to acquire such Shares is repaid in full.
          (c)  If at the  time of  distribution,  Shares  distributed  from  the
Trust  Fund that  were  acquired  with the  proceeds  of an Exempt  Loan are not
treated as "readily  tradable on an  established  market"  within the meaning of
Section  409(h) of the Code and  Regulations,  such Shares shall be subject to a
put option in the hands of a Qualified Holder by which such Qualified Holder may
sell all or any part of such  Shares to the Trust.  Should the Trust  decline to
purchase  all or any part of such  Shares,  the Employer  shall  purchase  those
Shares that the Trust  declines to purchase.  The put option shall be subject to
the following conditions:
               (i)  The  term  "Qualified Holder"  shall mean the Participant or
Beneficiary  receiving the distribution of such Shares,  any other party to whom
the  Shares are  transferred  by gift or reason of death,  or any  trustee of an
individual  retirement  account (as defined under Code Section 408) to which all
or any portion of the distributed  Shares is transferred  pursuant to a tax-free
"rollover"  transaction  satisfying the  requirements of Sections 402 and 408 of
the Code.
               (ii) During the 60-day period following any distribution of  such
Shares,  a  Qualified  Holder  shall have the right to require  the Trust or the
Employer  to  purchase  all or a portion of the  distributed  Shares held by the
Qualified  Holder.  The  purchase  price to be paid for any such Shares shall be
their fair market value  determined as of the Valuation Date  coinciding with or
immediately  preceding  the  exercise  of the  put  option  under  this  Section
11.3(c)(ii),  provided that in the case of a transaction  between the Plan and a
"disqualified person" within the meaning of Section 4975(e)(2) of the Code, such
fair market value shall be determined as of the date of the transaction.
               (iii) If  a Qualified  Holder  shall  fail  to  exercise such put
option, the put option shall temporarily lapse upon the expiration of the 60-day
period. As soon as practicable  following the last day of the Plan Year in which
the 60-day option period  expires,  the Employer  shall notify the  non-electing
Qualified Holder (if he or she is then a shareholder of record) of the valuation
of the Shares as of that date.  During the 60-day period  immediately  following
receipt of such  valuation  notice,  the  Qualified  Holder shall again have the
right to require the Employer to purchase all or any portion of the  distributed
Shares.  The purchase  price to be paid therefor shall be based on the valuation
of the Shares as of the Valuation Date coinciding with or immediately  preceding
the exercise of the option under this Section 11.3(c)(iii), provided that in the
case of a transaction  between the Plan and a  "disqualified  person" within the
meaning of Section  4975(e)(2)  of the Code,  such fair  market  value  shall be
determined as of the date of the transaction.
               (iv) The foregoing  put options  under  Section  11.3(c)(ii)  and
(iii)  hereof  shall be  effective  solely  against the  Employer  and shall not
obligate the Plan or Trust in any manner.
               (v)  Except as otherwise required or permitted  by the Code,  the
put options under this Section 11.3(c) shall satisfy the requirements of Section
54.4975-7(b)  of the  Treasury  Regulations  to the  extent,  if any,  that such
requirements apply to such put options.
               If  a  Qualified Holder exercises a put option under this Section
11.3(c),  payment for the Shares  shall be made in  substantially  equal  annual
payments  over a period  beginning  not later than 30 days after the exercise of
the put option and not exceeding five years (provided that adequate security and
reasonable interest are provided with respect to unpaid amounts).
               Except  as  provided in this Section  11.3(c) or in Section 11.2,
no shares  acquired with the proceeds of an Exempt Loan may be subject to a put,
call or other  option,  or  buy-sell  or  similar  arrangement  while held by or
distributed  from the Plan. The rights and protections set forth in this Section
11.3(c) shall be non-terminable.
     11.4 Payments  to  Surviving  Spouse  or  Beneficiary.  If a Participant or
former Participant dies before the commencement of his or her benefits under the
Plan, such Participant's or former  Participant's  Vested Interest in his or her
Account is payable in full to his or her Surviving  Spouse.  If such Participant
has no  Surviving  Spouse,  he or she may  designate a  Beneficiary  pursuant to
Section  14. A  Participant  may with the  written  consent of his or her spouse
elect to designate a Beneficiary other than or in addition to his or her spouse.
The written  consent of the spouse must  acknowledge the effect of such election
and must be witnessed by a  representative  of the Plan or a notary public.  Any
such election may not be changed  without spousal  consent.  Such an election or
revocation  must be made in  accordance  with the  procedures  developed  by the
Committee in accordance with the Code and Regulations.
     11.5 Latest Date for Commencement of Benefits.
          (a)  Payments will commence no later than 60 days following the latest
of the close of the Plan Year in which:
               (i)  the Participant attains his or her Normal Retirement Date,
               (ii) occurs  the  10th  anniversary  of  the  year  in  which the
Participant commenced participation in the Plan, or
               (iii)the  Participant  terminates  his  or  her  Service with the
Employer.
          (b)  Notwithstanding  the provisions of the foregoing sentence, if the
amount payable cannot be  ascertained,  or, subject to the provisions of Section
20.6, the  Participant  cannot be located after  reasonable  efforts,  a payment
retroactive to the date determined under the foregoing  sentence may be made not
later than 60 days after the  earliest  date on which the amount of such payment
can be  ascertained  under  the  Plan or the date on which  the  Participant  is
located (whichever is applicable).
          (c)  Notwithstanding any other provision of the Plan, benefits payable
to a Participant  who is a five percent (5%) owner, as defined in Section 416 of
the Code with respect to the Plan Year ending in the calendar  year in which the
Participant  attains age 70 1/2,  shall  commence no later than April 1st of the
calendar year following the calendar year in which such Participant  attains age
70 1/2.  Commencing  July 1,  1997,  to the  extent  permitted  by the  Code and
Regulations,  Participants  who are not five  percent  (5%)  owners may elect to
commence  distribution  of their  benefits  on April  1st of the  calendar  year
following the later of the calendar year in which such  Participant  attains age
70  1/2  or the  calendar  year  following  the  calendar  year  in  which  such
Participant retires.
          (d)  If  a  Participant   dies   before   benefits   have   commenced,
distributions  to any Surviving  Spouse or Beneficiary  shall be made as soon as
administratively   feasible,   but  not  later  than  five   years   after  such
Participant's  death.  In the event that  payment  is made to the  Participant's
Surviving Spouse,  such  distribution  shall not commence later than the date on
which such Participant  would have had to commence  distributions  under Section
401(a)(9)  of the Code (or,  in either  case,  on any later date  prescribed  by
Regulations).   If  the   Participant's   Surviving   Spouse   dies  after  such
Participant's  death but  before  distribution  has been made to such  Surviving
Spouse,  the Section 11.5(d) shall be applied to require payment of any benefits
as if such Surviving Spouse were the Participant.
          (e)  Pursuant  to  Regulations,  any  benefit paid to a child shall be
treated as if paid to a  Participant's  Surviving  Spouse if such  amount  would
become payable to such Surviving Spouse on the child's  attaining  majority,  or
other designated event permitted by Regulations.
     11.6 Redirection of Investment of ESOP Account.
          (a)  Upon both attaining age 50 and completing five Years of  Service,
a  Participant  shall be  permitted  to direct the Plan to  transfer  all or any
portion  of  the  Vested  Interest  in the  Participant's  ESOP  Account  to the
Participant's Cash Contribution Account.
          (b)  In  addition,  effective  as  of May 1, 1999, upon completing the
number of Years of Service  indicated in the table below, a Participant shall be
permitted to direct the Plan to transfer the percentage  indicated  below of the
Vested  Interest in the  Participant's  ESOP Account to the  Participant's  Cash
Contribution Account.

                     Years of Service                     Percentage

                      5                                    50
                     10                                    75
                     15                                   100

          (c)  Any  directions  pursuant  to  this  Section  11.6  shall be made
pursuant to rules prescribed by the Committee, and shall be effective as soon as
administratively  feasible,  but not  later  than 30 days from the date on which
such direction is given.  Any directions given pursuant to subsection (b) hereof
may be given not more than once per Plan  Year.  For  purposes  of this  Section
11.6,  the  number of the  Participant's  Years of Service  shall be  determined
without regard to Hours of Service,  and shall be based on periods of continuous
service from the date the Participant commenced employment with the Company.
          (d)  In  the  event that the Participant's Account does not provide at
least three  investment  options to the  Participant  other than  investment  in
Shares, the Committee shall provide  diversification  options to any Participant
required to be given such diversification options under Section 401(a)(28)(B) of
the Code in a manner  consistent with the Code.  Notwithstanding  the foregoing,
the ability to make  transfers  may be restricted by the Committee to the extent
necessary to comply with any applicable  federal securities laws (including Rule
144); provided,  however, that in no event shall a Participant be prevented from
transferring  any  amount  necessary  in  order  to  meet  the   diversification
requirements set forth in Section 401(a)(28)(B) of the Code.
          (e)  In addition, effective as of April 1, 2001, the ESOP Accounts  of
all Participants  shall be transferred to the  Participant's  Cash  Contribution
Account.  Thereafter,  Participants  may direct the investment of the prior ESOP
Account balances in the same manner as the remainder of the  Participant's  Cash
Contribution Account.
     11.7 Hardship Withdrawals.
          (a)  A Participant (other than a Terminated Participant) may  elect to
withdraw  all or  any  portion  of  the  Vested  Interest  in  his  or her  Cash
Contribution Account  attributable to Elective  Contributions (but excluding any
earnings on Elective  Contributions  accruing after December 31, 1988), Rollover
Contributions, Matching Contributions, and Profit Sharing Contributions (if, and
only if, the withdrawal of Profit Sharing  Contributions is occasioned by a life
threatening  illness to the Participant) by giving written notice thereof to the
Committee  specifying such date,  which shall not be less than 30 days following
the date such notice is given to the Committee. Such notice shall designate that
the hardship  withdrawal  shall be withdrawn from the investment  funds in which
the Participant has directed  investment of the Participant's  Cash Contribution
Account.
          (b)  The Committee may authorize a hardship withdrawal only for:
               (i)  medical  expenses  described in Section  213(d) of the  Code
incurred  or  immediately  anticipated  by the  Participant,  the  Participant's
spouse,  or any dependents of the  Participant (as defined in Section 152 of the
Code);
               (ii) the  purchase (excluding  mortgage  payments) of a principal
residence  of the Participant;
               (iii)the  payment  of tuition  and  related  educational fees for
the next 12  months  of  post-secondary  education  for the  Participant  or the
Participant's spouse,  children, or dependents;  or
               (iv) the need to prevent the eviction  of  the  Participant  from
the  Participant's  principal  residence  or  foreclosure on the mortgage of the
Participant's principal residence.
          (c)  A  hardship  withdrawal  may  be  authorized  only  to the extent
necessary to satisfy the hardship. A distribution will be deemed to be necessary
to satisfy the hardship only if the  distribution is not in excess of the amount
of  the  immediate  and  heavy  financial  need  of  the  Participant  and  such
Participant's  tax obligations as a result of such distribution and the Employee
certifies  in writing  that such a hardship  exists  (and the  Committee  has no
knowledge  to the  contrary);  provided  that  the  Committee  may set  stricter
standards  for making  such  determination  on a  nondiscriminatory  basis;  and
provided  further that the Participant must obtain the written consent of his or
her spouse to the extent  required by law.  The  Committee's  decision  shall be
final and binding on the Participant.
          (d)  In  the  event  that a Participant's Vested Interest is less than
100% at the time of  making a  withdrawal  from his  Profit  Sharing  Subaccount
pursuant to Section  11.7(a),  the  Participant's  Vested Interest in his or her
Profit Sharing  Subaccount at any relevant time thereafter  shall be equal to an
amount ("X")  determined by the following  formula:  X = P [AB + (R x D)] - (R x
D). For purposes of applying the formula: P is the Participant's Vested Interest
at the relevant  time,  AB is the balance of the  Participant's  Profit  Sharing
Subaccount at the relevant time; D is the amount  distributed to the Participant
pursuant  to Section  11.7(a);  and R is the ratio of the  Participant's  Profit
Sharing  Subaccount  balance at the relevant  time to the  Participant's  Profit
Sharing  Subaccount  balance  immediately  after the  distribution  pursuant  to
Section 11.7(a).
     11.8 Direct Rollovers to Another Qualified Plan or IRA.
          (a)  This  Section  11.8  applies  to  distributions  made on or after
January 1, 1993.  Notwithstanding any provision of the Plan to the contrary that
would  otherwise  limit a  distributee's  election  under this  Section  11.8, 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.
          (b)  An eligible rollover distribution is any distribution of  all  or
any  portion of the  balance to the credit of the  distributee,  except  that an
eligible rollover distribution does not include: any distribution that is one of
a series of  substantially  equal periodic  payments (not less  frequently  than
annually) made for the life (or life expectancy) of the distributee or the joint
lives (or joint life  expectancies)  of the  distributee  and the  distributee's
designated  Beneficiary,  or for a  specified  period of ten years or more;  any
distribution to the extent such distribution is required under Section 401(a)(9)
of the Code; and the portion of any distribution that is not includable in gross
income   (determined   without  regard  to  the  exclusion  for  net  unrealized
appreciation with respect to employer securities).
          (c)  An eligible retirement plan is an individual  retirement  account
described  in  section  408(a) of the Code,  an  individual  retirement  annuity
described in section  408(b) of the Code,  an annuity plan  described in section
403(a) of the Code or a qualified trust described in section 401(a) of the Code,
that accepts the distributee's eligible rollover  distribution.  However, in the
case of an eligible  rollover  distribution to the surviving spouse, an eligible
retirement  plan is an individual  retirement  account or individual  retirement
annuity.
          (d)  A  distributee  includes  a Participant or former Participant. In
addition,  the  Participant's or former  Participant's  Surviving Spouse and the
Participant's  or  former  Participant's  spouse  or  former  spouse  who is the
alternate  payee  under a  qualified  domestic  relations  order,  as defined in
Section 414(p) of the Code, are distributees  with regard to the interest of the
Surviving Spouse, spouse or former spouse.
          (e)  A  direct  rollover  is  a  payment  by  the Plan to the eligible
retirement plan specified by the distributee.
          (f)  If a distribution is one to which Sections 401(a)(11) and 417  of
the Code do not apply,  such  distribution  may commence less than 30 days after
the notice  required under Section  1.411(a)-11(c)  of the Regulations is given,
provided that:
               (1)  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,
if applicable, a particular distribution option), and
               (2)  the   Participant, after receiving the notice, affirmatively
elects  a distribution.
     11.9 Certain  Securities  Law  Restrictions.  Any  distribution  of  Shares
pursuant to this Section 11 shall be subject to all applicable  laws,  rules and
regulations and to such approvals by stock exchanges or governmental agencies as
may  be  deemed  necessary  or  appropriate  by the  Board  of  Directors.  Each
distributee may be required to give the Employer a written  representation  that
such  distributee  will not be  involved  in a  violation  of  state or  federal
securities laws,  including the Securities Act of 1933, as amended;  the form of
such written representation will be prescribed by the Board of Directors.
     11.10 Participant Loans.
          (a)  Upon the written request of a Participant who is an Employee  (or
who is employed by a Non-Participating  Affiliate), the Committee may direct the
Trustee  to make a loan to such  Participant  from such  Participant's  Account.
Loans to  Participants  pursuant to this Section 11.10 shall be  administered by
the Committee  and shall be subject to a Participant  Loan Policy and such other
procedures  as may be adopted  from time to time by the  Committee.  The Company
shall not have the discretion to refuse a loan request,  so long as the terms of
the loan comply with the  requirements of this Section 11.10 and the Participant
Loan Policy. The terms of the loan shall be determined by the Committee, subject
to the  limits  set  forth  in this  Section,  and  shall  be  evidenced  by the
Participant's  promissory note.  Loans shall be held in a segregated  Account of
the Trust. An Employee who has made a Rollover  Contribution shall be considered
a Participant  for purposes of this  Section,  even if such Employee has not yet
become a Participant pursuant to Section 3.
          (b)  The aggregate outstanding balance of all loans to  a  Participant
from this Plan and all other  qualified plans  maintained by the Employer,  when
added to any  principal  repayments  on any  participant  loans made  within the
twelve-month period preceding the date on which the loan is made, may not exceed
the  lesser  of  (i)  $50,000  or  (ii)  50%  of  the  vested  interest  in  the
Participant's Account as of the day of making the loan.
          (c)  Principal  and  interest  shall  be  repaid  in  level,  periodic
installments  by payroll  deductions  not less  frequent than  quarterly  over a
definite period of time not to exceed five (5) years, provided, however, that in
the case of a loan the proceeds of which are used by the  Participant to acquire
a principal  residence  of the  Participant,  the loan may be  repayable  over a
reasonable  period  of time in excess  of five (5)  years as  determined  by the
Committee.
          (d)  All  loans  shall  be  secured  by  a  lien  on the Participant's
interest in the trust. The amount of the loan may not exceed fifty percent (50%)
of the value of the Participant's vested Account balance at the time the loan is
made.  The Committee may determine  that any  distribution  made pursuant to the
Plan shall be reduced by an amount up to the outstanding  principal and interest
balance of the loan.
          (e)  Any loan made pursuant to this Section 11.10 must not  constitute
a prohibited transaction as defined in Section 4975 of the Code.
          (f)  Loan  repayments  will  be suspended  under the Plan as permitted
under  Section  414(u)(4) of the Code.
     11.11 Other In-Service  Withdrawals. A Participant (other than a Terminated
Participant)  who has completed five (5) Years of Service may elect at any time,
but not more than once in each Plan Year,  to withdraw all or any portion of the
Vested Interest in such  Participant's  ESOP Account or such  Participant's Cash
Contribution  Account  attributable  to  Profit  Sharing   Contributions,   ESOP
Contributions or Rollover  Contributions by giving written notice thereof to the
Committee  specifying such date,  which shall not be less than 30 days following
the date such notice is given to the Committee. Such notice shall designate that
the  withdrawal  shall be  withdrawn  from  the  investment  funds in which  the
Participant  has directed  investment  of the  Participant's  Cash  Contribution
Account.

<PAGE>

                    SECTION 12. MAXIMUM AMOUNT OF ALLOCATION

     12.1 Section 415 Limitations.  Annual  additions to a Participant's Account
with  respect  to any Plan  Year may not  exceed  the  limitations  set forth in
Section 415 of the Code, which are incorporated  herein by reference.  For these
purposes,  (i)  "annual  additions"  shall have the meaning set forth in Section
415(c)(2) of the Code,  as modified  elsewhere in the Code and the  Regulations,
(ii) the  limitation  year  shall  mean the Plan Year  unless  any other  twelve
consecutive month period is designated  pursuant to a written resolution adopted
by the  Employer,  (iii)  "compensation"  shall have the meaning  elected by the
Employer pursuant to Section 415(c)(3) of the Code, and (iv) "annual  additions"
shall  include  annual  additions  under all other  defined  contribution  plans
maintained by the Employer or any Affiliated Employer.  Effective for Plan Years
beginning on or after January 1, 1998,  "compensation" shall be computed without
reduction for a Participant's  elective deferrals under Section 402(g)(3) of the
Code or for contributions  made by the Employer or the Participant under Section
125 of the Code. If the  requirements of Section 7.5(a) are satisfied,  the term
"annual  additions" shall not include any amounts credited to the  Participant's
Account (i) due to  Participating  Employer  contributions  relating to interest
payments on an Exempt Loan deductible under Section 404(a)(9)(B) of the Code, or
(ii)  attributable  to a forfeiture  of Shares  acquired with the proceeds of an
Exempt Loan.
     Effective for limitation years commencing prior to January  1,  1999,  if a
Participant  in the Plan  also  participates  in any  defined  benefit  plan (as
defined in Sections 414(j) and 415(k) of the Code) maintained by the Employer or
any  Affiliated  Employer,  in the  event  that in any Plan  Year the sum of the
Participant's  Defined Benefit Fraction (as defined in Section  415(e)(2) of the
Code) and the Participant's Defined Contribution Fraction (as defined in Section
415(e)(3) of the Code) exceed 1.0, the benefit  under such defined  benefit plan
or plans  shall be reduced in  accordance  with the  provisions  of that plan or
those plans,  so that the sum of such fractions with respect to the  Participant
will not exceed 1.0. If this  reduction  does not ensure that the limitation set
forth in Section 12.1 is not exceeded,  then the annual  addition to any defined
contribution  plan, other than the Plan, shall be reduced in accordance with the
provisions  of that plan but only to the extent  necessary  to ensure  that such
limitation is not exceeded.
     12.2 Refund or Forfeiture of Amounts in Excess of Section 415 Limits.
          (a) In  the event that amounts which would otherwise be allocated to a
Participant's  Account  under  the  Plan  must  be  reduced  by  reason  of  the
limitations of Section 12.1,  then such reduction shall be made in the following
order or priority, but only to the extent necessary:
               (i)  first the  Participant's  Profit Sharing Contributions shall
be forfeited and reallocated pursuant to this Section 12.2; and then
               (ii) the Participant's  Matching Contributions shall be forfeited
and reallocated pursuant to this Section 12.2; and then
               (iii)the Participant's  Elective  Contributions shall be refunded
to the Participant; and then
               (iv) Shares  allocated  to the Participant's Account attributable
to ESOP  Contributions  shall be  forfeited  and  reallocated  pursuant  to this
Section 12.2.
          (b)  Forfeitures  arising  under  the  Plan  and  allocable  to   such
Participant in respect of such Plan Year shall be reallocated to the Accounts of
other  Participants  as of the end of the Plan Year for which such  reduction is
made in the manner provided under Section 4.5 above.
          (c)  If,  with  respect  to  any  Plan  Year,   there   is  an  excess
contribution on account of the  limitations  contained in this Section 12.2, and
such excess cannot be fully allocated in accordance with Section 12.2(b) because
of the  limitations  prescribed  in this  Section  12, the amount of such excess
which  cannot be so  allocated  shall be held in suspense  and  allocated in the
succeeding Plan Year prior to any other  contributions  by the Employer for such
Plan Year.

<PAGE>

                SECTION 13. VOTING AND TENDER OR EXCHANGE RIGHTS

     13.1 Voting  and  Tender  or  Exchange  of  Shares  in  General.  Except as
otherwise  required  by the Act,  the Code and the  Regulations,  all voting and
tender or exchange  rights of Shares  held in  Participants'  Accounts  shall be
exercised by the Purchasing  Agent only as directed by the Participants or their
Beneficiaries or as otherwise provided in accordance with the provisions of this
Section 13.
     13.2 Voting of Allocated Shares.
          (a)  If any Participating Employer has a  registration-type  class  of
securities (as defined in Section 409(e)(4) of the Code or any successor statute
thereto), then, with respect to all corporate matters submitted to shareholders,
all Shares (including  fractional interests in Shares) allocated and credited to
the Accounts of Participants shall be voted in accordance with the directions of
such  Participants  as given to the  Purchasing  Agent;  provided  that (i) with
regard to Shares  allocated  to ESOP  Accounts,  allocated  Shares  for which no
directions  are  received  by the  Purchasing  Agent  shall be voted in the same
proportion  as  allocated  Shares for which  directions  are  received are voted
pursuant to this Section 13.2, and (ii) Shares  allocated to Accounts other than
ESOP Accounts for which no directions are received by the Purchasing Agent shall
not be voted.
          (b)  If  no  Participating  Employer  has a registration-type class of
securities (as defined in Section 409(e)(4) of the Code or any successor statute
thereto),  then, only with respect to corporate  matters relating to a corporate
merger  or  consolidation,  recapitalization,   reclassification,   liquidation,
dissolution,  sale of substantially  all assets of a trade or business,  or such
other similar  transaction  that Regulations  require,  all Shares allocated and
credited to the Accounts of  Participants  shall be voted in accordance with the
directions of such Participants as given to the Purchasing Agent;  provided that
(i) with respect to Shares  allocated  to ESOP  Accounts,  allocated  Shares for
which no directions are received by the  Purchasing  Agent shall be voted in the
same proportion as allocated  Shares for which directions are received are voted
pursuant to this Section 13.2, and (ii) Shares  allocated to Accounts other than
ESOP Accounts for which no directions are received by the Purchasing Agent shall
not be voted.
     13.3 Mechanics of Voting Allocated Shares.  If  Participants  are  entitled
under Section 13.2 to direct the vote with respect to allocated Shares, then, at
least 30 days  before  each  annual  or  special  shareholders'  meeting  of the
Employer (or, if such  schedule  cannot be met, as early as  practicable  before
such meeting), the Committee shall cause each Participant to be furnished with a
copy of the proxy solicitation material sent generally to shareholders, together
with a form requesting confidential  instructions concerning the manner in which
the Shares allocated to such Participant's  Account are to be voted. Upon timely
receipt of such  instructions,  the Purchasing  Agent (after  combining votes of
fractional   Shares  to  give  effect  to  the  greatest   extent   possible  to
Participants'   instructions)   shall  vote  the  Shares  as   instructed.   The
instructions  received by the Purchasing  Agent from each  Participant  shall be
held by the Purchasing  Agent in strict  confidence and shall not be divulged or
released to any person, including, without limitation, any officers or Employees
of any  Participating  Employer,  or of any other  Employer.  The  Trustee,  the
Employer,  the Purchasing Agent and the Committee shall not make recommendations
to Participants concerning whether to vote or how to vote.
     13.4 Voting of Unallocated Shares.  With respect to unallocated Shares held
in the Trust  Fund,  absent  specific  instructions  from the  Trustee  or other
fiduciary pursuant to the Trust Agreement,  the Purchasing Agent shall vote such
Shares in the same  proportion  as Shares are voted  pursuant  to Section  13.2;
provided that the Purchasing Agent shall follow any directions of the Trustee or
any other  fiduciary  authorized  to instruct  the Trustee  with  respect to the
voting of such unallocated Shares under the Trust Agreement.
     13.5 Tender or Exchange of Allocated Shares.  The  Committee  shall  notify
each Participant of each tender or exchange offer for the Shares and utilize its
best efforts to distribute or cause to be distributed  to each  Participant in a
timely manner all  information  distributed to  shareholders  of the Employer in
connection with any such tender or exchange offer.  Each Participant  shall have
the  right  from  time to time  with  respect  to the  Shares  allocated  to the
Participant's  Account to  instruct  the  Purchasing  Agent in writing as to the
manner in which to  respond  to any  tender or  exchange  offer  which  shall be
pending  or  which  may be made in the  future  for all  Shares  or any  portion
thereof. A Participant's  instructions shall remain in force until superseded by
the Participant. The Purchasing Agent shall tender or exchange whole Shares only
as and to the extent so  instructed.  If the  Purchasing  Agent does not receive
instructions  from a  Participant  regarding  any tender or  exchange  offer for
Shares,  the Purchasing  Agent shall have no discretion in such matter and shall
not tender or  exchange  any such Shares in response  thereto.  For  purposes of
responding  to such tender or exchange  offers,  each  Participant  shall be the
"named  fiduciary" with respect to such Shares  allocated to his or her Account.
Unless and until Shares are tendered or exchanged,  the individual  instructions
received  by the  Purchasing  Agent  from  Participants  shall  be  held  by the
Purchasing  Agent in strict  confidence and shall not be divulged or released to
any person,  including,  without  limitation,  any  officers or Employees of any
Participating  Employer, or of any other Employer;  provided,  however, that the
Purchasing  Agent shall advise the Employer,  at any time upon  request,  of the
total number of Shares not subject to instructions to tender or exchange.
     13.6 Tender or Exchange of Unallocated Shares. Absent specific instructions
from the  Trustee  or other  fiduciary  pursuant  to the  Trust  Agreement,  the
Purchasing  Agent  shall  tender  unallocated  Shares  held in the Trust Fund in
proportion  to the ratio  that (A) the  number of Shares  with  respect to which
Participant  instructions  favor of the tender or  exchange  have been  received
bears to (b) the number of Shares with respect to which Participant instructions
for or against  the tender or exchange  have been  received;  provided  that the
Purchasing  Agent  shall  follow  any  directions  of the  Trustee  or any other
fiduciary  authorized  to  instruct  the Trustee  with  respect to the tender or
exchange of unallocated Shares under the Trust Agreement.
     13.7 Voting of Deceased Participant's Shares. If this Section 13 applies to
Shares allocated to the Account of a deceased  Participant,  such  Participant's
Beneficiary  shall be  entitled  to direct the manner in which to respond to any
tender or exchange offer as if such Beneficiary were the Participant.

<PAGE>

                    SECTION 14. DESIGNATION OF BENEFICIARIES

     14.1 Designation of Beneficiary.  Each  Participant  shall  file  with  the
Committee a written  designation of one or more persons as the  Beneficiary  who
shall be entitled to receive the amount, if any, payable under the Plan upon his
or her death.  A  Participant  may from time to time revoke or change his or her
Beneficiary designation without the consent of any prior Beneficiary by filing a
new designation with the Committee.  The last such  designation  received by the
Committee  shall be controlling;  provided,  however,  that no  designation,  or
change  or  revocation  thereof,  shall  be  effective  unless  received  by the
Committee  prior  to the  Participant's  death,  and  in no  event  shall  it be
effective  as of a date  prior  to such  receipt.  A  Participant's  Beneficiary
designation  shall not be effective to the extent that payments to the Surviving
Spouse  are  required  pursuant  to  Section  11,  and in no  event  shall it be
effective as of a date prior to such receipt.
     14.2 Failure to Designate Beneficiary.  If  no such Beneficiary designation
is in  effect  at  the  time  of a  Participant's  death,  or  if no  designated
Beneficiary survives the Participant, the payment of the amount, if any, payable
under  the  Plan  upon  his or her  death  shall  be made  to the  Participant's
Surviving Spouse, if any; or if the Participant has no Surviving Spouse, then to
the Participant's  children,  if any, in equal shares; or if the Participant has
no children,  to the Participant's  parents,  if any, in equal shares; or if the
Participant has no parents,  to the Participant's  brothers and sisters, if any,
in equal shares. If the Participant has no brothers or sisters, payment shall be
made to the  Participant's  estate. If the Committee is in doubt as to the right
of any person to receive such amount,  the  Committee  may direct the Trustee to
retain such amount, without liability for any interest thereon, until the rights
thereto  are  determined,  or the  Committee  may direct the Trustee to pay such
amount into any court of  appropriate  jurisdiction  and such payment shall be a
complete discharge of the liability of the Plan and the Trust Fund therefor.

<PAGE>

                     SECTION 15. ADMINISTRATION OF THE PLAN

     15.1 The Committee. The Committee shall have general responsibility for the
administration, interpretation and construction of the Plan. The Committee shall
be  responsible  for  establishing  and  maintaining  Plan  records,   including
responsibility  for compliance  with the Actual  Deferral  Percentage and Actual
Contribution  Percentage  tests  described  in  Sections  4.6 and  5.3,  and the
Committee  shall be responsible  for complying with the reporting and disclosure
requirements  of the Act. The Committee  shall report to the Board of Directors,
or to a  committee  of the  Board of  Directors  designated  for  that  purpose,
periodically  as shall be specified by the Board of Directors or such designated
committee,  with  regard to the matters  for which it is  responsible  under the
Plan.
     15.2 The Trustee.  Except  as  otherwise provided in the Trust Agreement or
the Plan, the Trustee may act only as directed by the Committee, the Employer or
any other party, as applicable.  The Trustee shall have responsibility under the
Plan for the  management  and control of the assets of the Plan.  The  Committee
shall  periodically  review the  performance  and  methods of the  Trustee.  The
Employer or the Committee shall have the power to appoint,  remove or change the
Trustee  and, to the extent that the Trust Fund is invested in assets other than
Shares,  shall  have the  power to  appoint  or  remove  one or more  investment
advisers  and to delegate to such adviser  authority  and  discretion  to manage
(including the power to acquire and dispose of) the assets of the Plan, provided
that (i) such adviser with such authority and discretion  shall be either a bank
or a registered  investment  adviser under the Investment  Advisers Act of 1940,
and shall acknowledge in writing that it is a fiduciary with respect to the Plan
and (ii) the Committee shall periodically review the investment  performance and
methods of each  adviser(s)  with such authority and  discretion.  The Committee
shall  establish  investment  standards and policies and communicate the same to
the Trustee.  If annuities  are to be purchased  under the Plan,  the  Committee
shall   determine  what  contracts   should  be  made  available  to  terminated
Participants or purchased by the Trust Fund.
     15.3 Committee's  Responsibility  for  Entering  into  Exempt   Loans   and
Valuation of Shares.  The Committee shall have  responsibility for directing the
Trustee as to whether  and under what terms it shall  enter into an Exempt  Loan
and for  directing  the  Purchasing  Agent whether and under what terms it shall
purchase or otherwise dispose of Shares. In the event that there is no generally
recognized  market for Shares,  the Committee  shall be the named fiduciary with
responsibility  for determining  the fair market value of the Shares,  provided,
that any such determination shall be in accordance with applicable  Regulations,
if any,  and the  Committee  shall,  in  making  such  determination,  retain an
independent  appraiser  to make such  valuation  on behalf of the  Committee  in
accordance with Section 7.9.
     15.4 Committee's Power to Engage Outside Experts. The Committee may arrange
for the engagement of such legal  counsel,  who may be counsel for the Employer,
and make use of such agents and  clerical or other  personnel as they each shall
require or may deem  advisable for purposes of the Plan.  The Committee may rely
upon the  written  opinion of such  counsel and the  accountants  engaged by the
Committee and may delegate to any such agent of said  Committee its authority to
perform any act hereunder, including without limitation, those matters involving
the exercise of discretion,  provided that such  delegation  shall be subject to
revocation at any time at the discretion of said Committee.  The Committee shall
engage  such  certified  public  accountants,  who  may be  accountants  for the
Employer, as it shall require or may deem advisable for purposes of the Plan.
     15.5 Composition of Committee.  The  Committee  shall  consist  of at least
three members, each of whom shall be appointed by, shall remain in office at the
will of, and may be removed,  with or without cause,  by the Board of Directors.
Any member of said Committee may resign at any time. No member of said Committee
shall be entitled to act on or decide any matter  relating  solely to himself or
any of his or her  rights  or  benefits  under  the  Plan.  The  members  of the
Committee  shall not  receive  any  special  compensation  for  serving in their
capacities  as  members  of such  Committee  but  shall  be  reimbursed  for any
reasonable  expenses  incurred  in  connection  therewith.  Except as  otherwise
required by the Act, no bond or other security need be required of the Committee
or any member thereof in any jurisdiction.  Any member of the Committee,  or any
agent to whom said Committee  delegates any  authority,  and any other person or
group of  persons,  may serve in more  than one  fiduciary  capacity  (including
service both as a Trustee and administrator) with respect to the Plan.
     15.6 Actions of Committee.  The  Committee shall elect or designate its own
chairman,  establish its own  procedures and the time and place for its meetings
and  provide  for the  keeping  of minutes of all  meetings.  A majority  of the
members  of the  Committee  shall  constitute  a quorum for the  transaction  of
business at a meeting of the Committee. Any action of the Committee may be taken
upon the  affirmative  vote of a majority of the members of the  Committee  at a
meeting  or, at the  direction  of its  Chairman,  without a  meeting,  by mail,
telephone or  facsimile,  provided  that all of the members of the Committee are
informed by mail or  telephone of their right to vote on the proposal and of the
outcome of the vote thereon.
     15.7 Disbursement of Plan Funds.  The Committee shall cause to be kept full
and accurate  accounts of receipts and disbursements of the Plan, shall cause to
be  deposited  all funds of the Plan to the name and  credit of the Plan in such
depositories as may be designated by the Committee,  shall cause to be disbursed
the monies and funds of the Plan when so  authorized  by the Committee and shall
generally perform such other duties as may be assigned to them from time to time
by the Committee.
     15.8 Application for Benefits.  Each  Participant  or Beneficiary believing
himself  eligible for benefits  under the Plan shall apply for such  benefits by
completing and filing with the Committee an  application  for benefits on a form
supplied by the Committee.  Before the date on which benefit payments  commence,
each such  application  must be  supported by such  information  and data as the
Committee deems relevant and appropriate.  Evidence of age, marital status (and,
in the  appropriate  instances,  health,  death or  disability)  and location of
residence  shall be  required of all  applicants  for  benefits.  All claims for
benefits under the Plan shall, within a reasonable period of time, be decided by
one or more persons designated in writing by the chairman of the Committee.
     15.9 Denied Claims for Benefits.  In  the event that any claim for benefits
is denied in whole or in part, the  Participant  or Beneficiary  whose claim has
been so denied shall be notified of such denial in writing by the Committee. The
notice  advising of the denial  shall  specify the reason or reasons for denial,
make specific  reference to pertinent Plan  provisions,  describe any additional
material  or  information  necessary  for the  claimant  to  perfect  the  claim
(explaining  why such  material or  information  is needed) and shall advise the
Participant or Beneficiary,  as the case may be, of the procedure for the appeal
of such denial. All appeals shall be made by the following procedure:
          (a)  The Participant or Beneficiary whose claim has been denied  shall
file with the  Committee  a notice of desire to appeal the  denial.  Such notice
shall be filed within sixty (60) days of  notification by the Committee of claim
denial, shall be made in writing and shall set forth all of the facts upon which
the appeal is based. Appeals not timely filed shall be barred.
          (b)  The  Committee  shall,  within thirty (30) days of receipt of the
Participant's  or  Beneficiary's  notice of appeal,  establish a hearing date on
which  the  Participant  or  Beneficiary  may make an oral  presentation  to the
Committee in support of his or her appeal.  The Participant or Beneficiary shall
be given not less than ten (10) days' notice of the date set for the hearing.
          (c)  The Committee shall consider the merits of the claimant's written
and oral  presentations,  the merits of any facts or  evidence in support of the
denial of benefits and such other facts and circumstances as the Committee shall
deem relevant.  If the claimant  elects not to make an oral  presentation,  such
election  shall  not be  deemed  adverse  to the  claimant's  interest,  and the
Committee shall proceed as set forth below as though an oral presentation of the
contents of the claimant's written presentation had been made.
          (d)  The  Committee  shall  render  a  determination upon the appealed
claim which  determination shall be accompanied by a written statement as to the
reasons therefor. The determination so rendered shall be binding on all parties.
          (e)  For all purposes under the Plan,  such decisions on claims (where
no review is  requested)  and  decisions on review  (where  review is requested)
shall  be  final,  binding  and  conclusive  on  all  interested  persons  as to
participation and benefit eligibility, the Employee's amount of Compensation and
any other matter of fact or interpretation relating to the Plan.
     15.10 Indemnification. To the maximum extent permitted by law, no member of
the  Committee  shall be  personally  liable by reason of any  contract or other
instrument  executed by such member of the  Committee or on his or her behalf in
the  Committee  member's  capacity  as a member  of such  Committee  nor for any
mistake of judgment  made in good faith,  and the Employer  shall  indemnify and
hold  harmless,  directly  from its own assets  (including  the  proceeds of any
insurance policy the premiums of which are paid from the Employer's own assets),
each member of the Committee and each other officer, employee or director of the
Employer  to  whom  any  duty  or  power  relating  to  the   administration  or
interpretation of the Plan or to the management and control of the assets of the
Plan may be  delegated  or  allocated,  against  any cost or expense  (including
counsel fees) or liability (including any sum paid in settlement of a claim with
the  approval  of the  Employer)  arising  out of any act or  omission to act in
connection  with the Plan  unless  arising  out of such  person's  own  fraud or
willful  misconduct.  The Employer shall advance funds for legal expenses to the
extent permitted by the Act.
     15.11 Agent for Service of Process.  The  Committee or such other person as
may from  time to time be  designated  by the  Committee  shall be the agent for
service of process under the Plan.

<PAGE>

                              SECTION 16. EXPENSES

     16.1 Payment of Plan Expenses.  The expenses incurred in the management and
administration  of the Plan  shall be paid  from the Trust  Fund,  except to the
extent the  Employer,  in its sole  discretion,  may choose to pay such expenses
from time to time; provided that any Trustee expenses paid to The Charles Schwab
Trust Company  shall be payable  solely by the  Employer.  Such  expenses  shall
include  (i) the fees and  expenses of any  employee  and of the Trustee for the
performance  of their  duties under the Plan and Trust Fund  (including  but not
limited to  obtaining  investment  advice,  record  keeping  services  and legal
services),  (ii) the  expenses  incurred by the members of the  Committee in the
performance of their duties under the Plan  (including  reasonable  compensation
for any legal counsel, certified public accountants, consultants and agents, and
cost of services  rendered  with respect to the Plan) and (iii) all other proper
charges  and  disbursements  of the  Trustee  or the  members  of the  Committee
(including  settlements  of claims or legal  actions  approved by counsel to the
Plan).
     16.2 Expenses  Attributable  to  Investment  of  Plan  Assets   and  Taxes.
Brokerage fees,  transfer taxes and any other expenses  incident to the purchase
or sale of  securities  by the Trustee shall be deemed to be part of the cost of
such securities,  or deducted in computing the proceeds  therefrom,  as the case
may be. Expenses attributable to investments of the Trust Fund shall be paid out
of the Trust Fund,  except to the extent the Employer,  in its sole  discretion,
may  choose  to pay such  expenses  from  time to time;  provided  that  expense
entirely  attributable to any one investment or to any one investment fund shall
be  allocated  pro rata in  accordance  with  Account  balances  among  Accounts
invested in such  investment or investment  fund.  Taxes, if any, of any and all
kinds  whatsoever  which are levied or  assessed  on any  assets  held or income
received by the Trustee shall be paid out of the Trust Fund.

<PAGE>

                       SECTION 17. EMPLOYER PARTICIPATION

     17.1 Adoption of Plan by Affiliated Employer.  Any  Affiliated Employer may
adopt the Plan and the Trust Fund by  resolution  of its board of  directors  or
equivalent  governing  body  provided  that (i) the Board of  Directors  has not
expressly disallowed participation by such Affiliated Employer in the Plan; (ii)
the Affiliated Employer has not previously  expressly declined to participate in
the Plan; or (iii) the Affiliated  Employer is not precluded from  participating
in  the  Plan  by  a  legally  binding  written  document  that  precludes  such
participation; and provided further that the Board of Directors consents to such
adoption.  Any  Affiliated  Employer which so adopts the Plan shall be deemed to
appoint  Charles Schwab & Co., Inc., the Committee and the Trustee its exclusive
agents to exercise on its behalf all of the power and authority  conferred under
the Plan or the Trust Agreement. This authority shall continue until the Plan is
terminated and the relevant Trust Fund assets have been distributed.
     17.2 Termination   of   Participation   by   Participating   Employer.    A
Participating Employer may terminate its participation in the Plan by giving the
Committee prior written notice  specifying a termination date which shall be the
last day of a month  at least 60 days  subsequent  to the date  such  notice  is
received  by  the   Committee.   The  Board  of  Directors   may  terminate  any
Participating  Employer's  participation in the Plan, as of any termination date
specified by the  Committee,  for the failure of the  Participating  Employer to
make proper contributions or to comply with any other provision of the Plan.
     17.3 Effect  of  Termination  of  Participation  by Participating Employer.
Upon  termination  of  the  Plan  as  to  any   Participating   Employer,   such
Participating  Employer shall not make any further  contributions under the Plan
and no amount shall  thereafter  be payable under the Plan to or with respect to
any  Participants  then  employed  by such  Participating  Employer,  except  as
provided in this  Section 17. To the maximum  extent  permitted  by the Act, any
rights of Participants no longer employed by such Participating  Employer and of
former  Participants  and their  Beneficiaries  and Surviving  Spouses and other
eligible  survivors  under the Plan shall be unaffected by such  termination and
any transfer,  distribution  or other  disposition  of the assets of the Plan as
provided  in this  Section  17 shall  constitute  a  complete  discharge  of all
liabilities  under  the  Plan  with  respect  to such  Participating  Employer's
participation   in  the  Plan  and  any   Participant   then  employed  by  such
Participating Employer.
          The  interest  of  each  such  Participant who is in Service with such
Participating  Employer  as of the  termination  date  is the  amount,  if  any,
credited to his or her Account  after  payment of or provision  for expenses and
charges and appropriate  adjustment of the Accounts of all such Participants for
expenses and charges as described  in Section 16, and all  forfeitures  shall be
nonforfeitable  as of the termination date, and upon receipt by the Committee of
IRS approval of such termination, the full current value of such amount shall be
paid from the Trust Fund in the manner  described in Section 17.4 or transferred
to a successor  employee benefit plan which is qualified under Section 401(a) of
the Code;  provided,  however,  that in the event of any transfer of assets to a
successor  employee  benefit plan the provisions of Section 17.4 will apply.  No
advances  against such payments shall be made prior to such receipt of approval,
but after such receipt the  Committee,  in its sole  discretion,  may direct the
Trustee to make one or more advances in accordance with Section 11.1.
          All  determinations,  approvals  and  notifications  referred to above
shall be in form and substance and from a source  satisfactory to the Committee.
To the maximum  extent  permitted by the Act, the  termination of the Plan as to
any Participating  Employer shall not in any way affect any other  Participating
Employer's participation in the Plan.
     17.4 Limitations on Transfer of Plan Assets to Successor Plan.  No transfer
of the Plan's  assets and  liabilities  to a  successor  employee  benefit  plan
(whether by merger or consolidation with such successor plan or otherwise) shall
be made unless each Participant would, if either the Plan or such successor plan
then terminated,  receive a benefit immediately after such transfer which (after
taking account of any  distributions or payments to such Participants as part of
the same  transaction) is equal to or greater than the benefit such  Participant
would have been entitled to receive immediately before such transfer if the Plan
had  then  been   terminated.   The  Committee  may  also  request   appropriate
indemnification  from the employer or employers  maintaining such successor plan
before making such a transfer.
     17.5 Shares  Allocated  to  Suspense  Fund  Excluded  from Transfer of Plan
Assets to Successor  Plan.  Notwithstanding  any provision of this Section 17 to
the  contrary,  any  Shares  allocated  to  a  Suspense  Subfund  shall  not  be
transferred  to a  successor  employee  benefit  plan  except as is  required or
permitted by the  Committee in  accordance  with the terms of an Exempt Loan and
the Regulations.

<PAGE>

                SECTION 18. AMENDMENT OR TERMINATION OF THE PLAN

     18.1 Amendment, Suspension or Termination of Plan.
          (a)  Subject to the provisions of Section 18.1(b) and (c) hereof,  the
board of directors of the Plan Sponsor reserves the right at any time to suspend
or terminate the Plan, any contributions  thereunder,  or any other agreement or
arrangement  forming a part of the Plan, in whole or in part and for any reason,
and to adopt any amendment or modification  thereto,  all without the consent of
any Participating Employer, Participant,  Beneficiary, Surviving Spouse or other
eligible survivor.  Subject to the provisions of Section 18.1(b) and (c) hereof,
the Board of  Directors  reserves  the right at any time to amend or modify  the
Plan. Each Participating Employer by its adoption of the Plan shall be deemed to
have delegated this authority to the Board of Directors.
          (b)  The  Board  of  Directors  shall  not  make  any   amendment   or
modification  which  would (i)  retroactively  impair any rights to any  benefit
under the Plan which any  Participant,  Beneficiary,  Surviving  Spouse or other
eligible  survivor  would  otherwise  have had at the date of such  amendment by
reason of the  contributions  theretofore  made or (ii) make it possible for any
part of the funds of the Plan (other than such part as is required to pay taxes,
if any, and administration expenses as provided in Section 16) to be used for or
diverted to any purposes  other than for the exclusive  benefit of  Participants
and their Beneficiaries and Surviving Spouses and other eligible survivors under
the Plan prior to the satisfaction of all liabilities with respect thereto.
     18.2 Power  to  Retroactively  Amend, Suspend or Terminate Plan Provisions.
Subject  to  the  provisions  of  Section  18.1,  any  amendment,  modification,
suspension or termination of any provision of the Plan may be made retroactively
if  necessary or  appropriate  to qualify or maintain the Plan as a plan meeting
the  requirements  of  Sections  401(a)  of the  Code  or any  other  applicable
provision of law  (including  the Act) as now in effect or hereafter  amended or
adopted and the Regulations issued thereunder.
     18.3 Notice  of  Amendment,  Suspension  or  Termination.   Notice  of  any
amendment, modification, suspension or termination of the Plan shall be given by
the Board of Directors or the board of  directors  of the Plan  Sponsor,  as the
case may be, to the Trustee and all Participating Employers.
     18.4 Effect  of  Termination  of  Plan.  Upon  termination  of the Plan, no
Participating  Employer shall make any further  contributions under the Plan and
no amount shall  thereafter  be payable under the Plan to or with respect to any
Participant  except as  provided in this  Section 18, and to the maximum  extent
permitted by the Act,  transfers or  distributions  of the assets of the Plan as
provided  in this  Section  18 shall  constitute  a  complete  discharge  of all
liabilities  under the Plan.  The provisions of the Plan which are necessary for
the operation of the Plan and the  distribution or transfer of the assets of the
Plan shall remain in force.
          Upon receipt by the Committee of IRS approval of such termination, the
full current value of such adjusted  amount,  and the full value of each account
described  in Sections  6.2 and 7.1 above,  shall be paid from the Trust Fund to
each  Participant  and former  Participant  (or,  in the event of the death of a
Participant  or former  Participant,  to the  Surviving  Spouse  or  Beneficiary
thereof) in any manner of distribution  specified in Section 11 above, including
payments which are deferred until the Participant's  termination of Service,  as
the  Committee  shall  determine.  Without  limiting  the  foregoing,  any  such
distribution  may be made in cash or in property,  or both,  as the Committee in
its sole discretion may direct.
          All  determinations,  approvals  and  notifications  referred to above
shall be in form and substance and from a source satisfactory to the Committee.
     18.5 Partial  Termination  of  Plan.  In  the  event  that any governmental
authority,  including  without  limitation  the IRS,  determines  that a partial
termination (within the meaning of the Act) of the Plan has occurred or if there
is a complete  discontinuance of Employer contributions then (i) the interest of
each   Participant   affected  thereby  in  his  or  her  Account  shall  become
nonforfeitable  as  of  the  date  of  such  partial   termination  or  complete
discontinuance  of contributions  and (ii) the provisions of Sections 18.2, 18.3
and 18.4 above,  which in the opinion of the  Committee  are  necessary  for the
execution of the Plan and the allocation and  distribution  of the assets of the
Plan, shall apply.
     18.6 Trust for Exclusive Benefit of Participant. In no event shall any part
of the Trust Fund (other than such part as is required to pay taxes, if any, and
administration expenses as provided in Section 16 above) be used for or diverted
to any purposes other than for the exclusive  benefit of Participants  and their
Beneficiaries and Surviving Spouses under the Plan.

<PAGE>

                     SECTION 19. TOP-HEAVY PLAN REQUIREMENTS

     19.1 Top-Heavy Plan - In General.  For any Plan Year for which this Plan is
a Top-Heavy Plan, the provisions of this Section 19 shall apply  notwithstanding
any other provisions of the Plan.
     19.2 Effect of Top-Heavy Status.  Each  Participant  who (i) is  a  Non-Key
Employee  and  (ii) is  employed  on the last  day of the  Plan  Year,  shall be
entitled to have contributions  allocated to his or her Account of not less than
three percent (3%) of the Participant's  Compensation (the "Minimum Contribution
Percentage")  regardless  of (i) whether such Non-Key  Employee has  completed a
Year of Service,  and (ii) the amount of such Non-Key  Employee's  Compensation;
provided,  however,  that the minimum contribution  percentage for any Plan Year
shall not exceed the percentage at which  contributions  are made under the Plan
for the Plan Year for the Key Employee for whom such  percentage  is the highest
for such Plan Year.  For this purpose,  such  percentage  shall be determined by
dividing the  contributions  made for such Key Employee by so much of his or her
Compensation (which solely for this purpose includes Elective Contributions made
by the  Employer  for the Key  Employee)  for the Plan  Year as does not  exceed
$150,000   (adjusted   automatically   for  increases  in  accordance  with  the
Regulations).
          Contributions taken into account under this Section 19.2 shall include
contributions under this Plan and under all other defined contribution plans (as
defined in Section 414(i) of the Code) required to be included in an Aggregation
Group;  provided,  however,  that  such  contributions  shall  not  include  (i)
contributions to any defined contribution plan in the required aggregation group
if such  contributions  enable  such a  defined  contribution  plan to meet  the
requirements  of  Sections  401(a)(4)  or 410 of the Code or (ii)  contributions
under the Social Security Act or any other federal or state law.

     19.3 Top-Heavy Vesting Schedule.
     In  the event that the Plan is a Top-Heavy Plan, all contributions shall be
vested at a rate not slower than the following vesting schedule:

               Years of Service                                       Percentage

               Less than two years                                        0%
               At least two years but less than three years              20%
               At least three years but less than four years             50%
               At least four years but less than five years              75%
               Five years or more                                       100%

     19.4 Definitions.
          (a)  "Top-Heavy Plan"  means this Plan for any Plan Year if, as of the
Determination  Date,  (i) the present value of the Accounts of all  Participants
who are Key Employees (excluding former Key Employees) exceeds 60 percent of the
present value of all Participants'  Accounts (excluding former Key Employees) or
(ii) the Plan is required to be in an Aggregation Group which for such Plan Year
is a Top-Heavy  Group. In determining  whether the Plan  constitutes a Top-Heavy
Plan, the Committee shall make the following adjustments:
               (i)  When  more than one plan is aggregated,  the Committee shall
determine  separately  for each plan as of any  Determination  Date, the present
value of accrued  benefits of all  Participants and the value of Accounts of all
Participants.
               (ii) Any  such  determination  shall include the present value of
distributions made to former Participants under the applicable plan (including a
terminated plan) during the five-year period ending on the  Determination  Date,
unless  reflected  in the value of the accrued  benefits or the Accounts of such
former Participants as of the Determination Date.
               (iii)Any  such   determination   shall   include   any   Rollover
Contribution from any other plan as follows:
                    (A)      If the  Rollover  Contribution  is initiated by the
Employee and made to or from a plan maintained by a corporation  which is not an
Affiliated  Employer,  the plan  providing the  distribution  shall include such
distribution in the value of such accrued benefit or Account.
                    (B)      If the Rollover  Contribution  is not  initiated by
the Employee or made from a plan maintained by an Affiliated Employer,  the plan
accepting the distribution  shall include such distribution in the value of such
accrued benefit or Account.
          (b)  "Determination  Date" means for any Plan Year the last day of the
next  preceding  Plan Year.
          (c)  "Aggregation  Group"  means  all plans maintained by the Employer
or any  Affiliated  Employer which are required to be aggregated or permitted to
be aggregated. For purposes of this Section 19.4(c),
               (i)  The  group  of  plans  that  are  required  to be aggregated
(the  "required  aggregation  group")  includes each plan of the Employer or any
Affiliated  Employer in which a Key  Employee is a  Participant,  and each other
plan of the Employer or any Affiliated  Employer which enables a plan in which a
Key Employee is a Participant to meet the requirements of Sections  401(a)(4) or
410 of the Code; and
               (ii) The group of plans that are permitted to be aggregated  (the
"permissive aggregation group") includes the required aggregation group plus one
or more plans of the Employer or any Affiliated Employer that is not part of the
required  aggregation  group and that the Committee  certifies as constituting a
plan within the permissive aggregation group. Such plan or plans may be added to
the permissive  aggregation group only if the permissive aggregation group would
continue to meet the requirements of Sections 401(a)(4) and 410 of the Code.
          (d)  "Top Heavy Group"  means  the  Aggregation  Group,  if  as of any
Determination  Date, the sum of (i) the present value of the accrued benefits of
all  Participants  who are Key Employees under all defined benefit plans (within
the meaning of Section  414(j) of the Code)  included in the  Aggregation  Group
plus (ii) the aggregate  value of the Accounts of all  Participants  who are Key
Employees  under all defined  contribution  plans (within the meaning of Section
414(i) of the Code) included in the Aggregation  Group exceeds 60 percent of the
sum of (i) the  present  value  of the  accrued  benefits  for all  Participants
(excluding former Key Employees), under all such defined benefit plans plus (ii)
the aggregate value of the Accounts of all  Participants  (excluding  former Key
Employees) under all such defined  contribution  plans. If the Aggregation Group
that is a  Top-Heavy  Group is a required  aggregation  group,  each plan in the
Aggregation  Group will be a Top-Heavy Plan. If the Aggregation  Group that is a
Top-Heavy  Group is a permissive  aggregation  group,  only those plans that are
part of the required  aggregation  group will be treated as a Top-Heavy Plan. If
the Aggregation  Group is not a Top-Heavy Group, no plan within such Aggregation
Group will be a Top-Heavy Plan.
          For purposes of Section 19.4(a), the present value of accrued benefits
under any  defined  benefit  plan and the value of  Accounts  under any  defined
contribution  plan  shall  be  determined  as of  the  Valuation  Date  that  is
coincident with the Determination Date in accordance with the Regulations.
          (e)  "Key Employee" means any Employee or former Employee who, at  any
time during the Plan Year preceding the Determination  Date or during any of the
four preceding Plan Years, is or was one of the following:
               (i)  An  officer  of  the  Employer  or  any Affiliated  Employer
having annual  compensation  (within the meaning of Section  414(q)(4))  greater
than 50 percent of the amount in effect under Section  415(b)(1)(A)  of the Code
for any Plan Year (as adjusted for increases in the cost of living in accordance
with the  Regulations).  For purposes of the preceding  sentence  there shall be
treated as officers for any such Plan Year no more than the lesser of:
                    (A)     50 Employees, or
                    (B)     the greater of three  Employees or 10 percent of the
Employees of the Employer or any Affiliated Employer;
               (ii) One  of  the ten Employees  owning (or  considered as owning
within the  meaning of Section  318 of the Code) more than a five  percent  (5%)
interest  and one of the largest  interests  in the  Employer or any  Affiliated
Employer.  An Employee will not be considered such an owner for any Plan Year if
the Employee's  compensation  (within the meaning of Section  414(q)(4)) is less
than $30,000 (as adjusted for increases in the cost of living in accordance with
the  Regulations);  for purposes of  determining  ownership  pursuant to Section
19.4(e)(ii)  the aggregation  rules of Section  414(b),  (c) and (m) of the Code
apply.
               (iii)Any  person  who  owns (or  considered  as owning within the
meaning of Section  318 of the Code) more than a five  percent  interest  in the
Employer;
               (iv) Any  person  having  compensation  (within  the  meaning  of
Section  414(q)(4)) of more than  $150,000,  and owning (or considered as owning
within the meaning of Section 318 of the Code) more than a one percent  interest
in the Employer.  For purposes of this Section  19.4(e),  a Beneficiary of a Key
Employee shall be treated as a Key Employee and the interests  inherited by such
Beneficiary shall be treated the same as if owned by the Key Employee.
          (f)  "Non-Key  Employee"  means  any "Non-Key  Employee" as defined in
Section 416(i)(2) of the Code and the Regulations promulgated thereunder.
     19.5 Maintenance of Defined Benefit Plan in Addition to Plan.
     Effective  for limitation years commencing prior to January 1, 2000, in the
event that the Plan is a Top-Heavy  Plan for any Plan Year and the Employer also
maintains a defined benefit plan (within the meaning of Section 414 of the Code)
which provides benefits on behalf of Participants, then one of the two following
provisions shall apply:
          (1)  If  the  Plan is a Top-Heavy Plan for any Plan Year but would not
be a "Top-Heavy Plan" for the Plan Year if "90 percent" were substituted for "60
percent" in Section  19.4(a),  then  Section 19.2 shall be applied for such Plan
Year by substituting "four percent" for "three percent."
          (2)  If  a  Top-Heavy Plan would continue to be a "Top-Heavy Plan" for
the Plan  Year if "90  percent"  were  substituted  for "60  percent",  then the
denominator  of the defined  contribution  plan fraction shall be calculated for
such Plan Year by  substituting  "1.0" for "1.25",  except  with  respect to any
Participant who is not entitled to an allocation of Employer  contributions  and
does not receive any accruals under any defined benefit plan (within the meaning
of Section 414(j) of the Code) maintained by the Employer.
     In  the  event  that another defined contribution plan or a defined benefit
plan maintained by the Employer provides  contributions or benefits on behalf of
Participants, the Committee shall take such other plan into account as a part of
this  Plan to the  extent  required  by the  Code  and in  accordance  with  the
Regulations.

<PAGE>

                 SECTION 20. GENERAL LIMITATIONS AND PROVISIONS

     20.1 Exclusive Benefit of Participants and Beneficiaries. In no event shall
any part of the funds of the Plan be used for or diverted to any purposes  other
than for the exclusive benefit of Participants and their Beneficiaries under the
Plan except as permitted under Section 403(c) of the Act. Upon the transfer by a
Participating  Employer  of  any  money  to the  Trustee,  all  interest  of the
Participating Employer therein shall cease and terminate.
     20.2 No Rights to Continued Employment. Nothing contained in the Plan shall
give any employee the right to be retained in the  employment of the Employer or
any  Affiliated  Employer or affect the right of the Employer or any  Affiliated
Employer to dismiss any employee. The adoption and maintenance of the Plan shall
not  constitute  a  contract  between  the  Employer  and  any  employee  or  be
consideration  for, or an inducement  to or condition of, the  employment of any
employee.
     20.3 Trust Sole Source of Benefits. The Trust Fund shall be the sole source
of benefits  under the Plan and,  except as  otherwise  required by the Act, the
Employer and the Committee assume no liability or responsibility for payment for
such benefits,  and each  Participant,  Surviving  Spouse,  Beneficiary or other
person who shall claim the right to any payment under the Plan shall be entitled
to look only to the Trust  Fund for such  payment  and shall not have any right,
claim or demand therefor against the Employer, the Committee, or any Participant
thereof, or any employee or director of the Employer.
     20.4 Risk  of  Decrease  in  Assets.   Each  Participant,  Beneficiary  and
Surviving  Spouse shall assume all risk in  connection  with any decrease in the
value of the assets of the Trust Fund and the Participants'  Accounts or special
accounts  and  neither  the  Employer  nor the  Committee  shall  be  liable  or
responsible therefor.
     20.5 Incapacity of Participant or Beneficiary.  If the Committee shall find
that any person to whom any  amount is payable  under the Plan is unable to care
for his or her affairs  because of illness or  accident,  or is a minor,  or has
died, then any payment due such person or his or her estate shall be made to his
or her duly appointed legal representative. Any such payment shall be a complete
discharge of the liability of the Plan and the Trust Fund therefor.
     20.6 Antialienation; Qualified Domestic Relations Orders.
          (a)  Except insofar as may otherwise be required by law or pursuant to
the terms of a Qualified  Domestic Relations Order, as set forth in this Section
20.5,  no amount  payable at any time under the Plan and the Trust Fund shall be
subject in any manner to alienation by anticipation, sale, transfer, assignment,
bankruptcy,  pledge,  attachment,  charge or  encumbrance of any kind nor in any
manner be subject to the debts or liabilities of any person,  and any attempt to
so alienate or subject any such amount, whether presently or thereafter payable,
shall be void.  If any  person  shall  attempt  to,  or shall,  alienate,  sell,
transfer,  assign,  pledge,  attach,  charge or  otherwise  encumber  any amount
payable under the Plan and Trust Fund,  or any part thereof,  or if by reason of
his or her  bankruptcy  or other  event  happening  at any such time such amount
would be made subject to his or her debts or liabilities or would  otherwise not
be enjoyed by such person, then the Committee,  if it so elects, may direct that
such amount be withheld and that the same or any part thereof be paid or applied
to or for the benefit of such person.
          (b)  Upon  receipt  of  notification  of any judgment, decree or order
(including  approval of a property  settlement  agreement)  which relates to the
provision of child support,  alimony  payments,  or marital property rights of a
spouse,  former spouse,  child, or other dependent of a Participant and which is
made pursuant to a state domestic  relations law (including a community property
law) (herein referred to as a "domestic  relations order"),  the Committee shall
(i) notify the  Participant  and any  prospective  Alternate  Payee named in the
order of the receipt and date of receipt of such domestic relations order and of
the Plan's procedures for determining the status of the domestic relations order
as a Qualified  Domestic  Relations Order,  and (ii) within a reasonable  period
after  receipt of such  order,  determine  whether it  constitutes  a  Qualified
Domestic Relations Order. The Plan's procedures for the determination of whether
a domestic  relations  order  constitutes a Qualified  Domestic  Relations Order
shall  be set  forth  by  the  Committee  in  writing,  shall  provide  for  the
notification  of each person  specified  in that order as entitled to payment of
benefits  under the Plan (at the  address  included  in the  domestic  relations
order)  of such  procedures  promptly  upon  receipt  by the  Committee  of such
domestic  relations order,  and shall permit the prospective  Alternate Payee to
designate a representative for receipt of copies of notices that are sent to the
prospective Alternate Payee with respect to a domestic relations order.
          (c)  During  any  period  in  which  the  issue  of whether a domestic
relations order is a Qualified  Domestic Relations Order is being determined (by
the Committee,  by a court of competent jurisdiction,  or otherwise),  including
the period  beginning on the date of the Committee's  receipt of the order,  the
Committee  shall  segregate  in a  separate  account in the Plan or in an escrow
account held by a Trustee the amounts,  if any, which would have been payable to
the  Alternate  Payee  during  such period if the order had been  determined  to
constitute a Qualified  Domestic  Relations Order,  provided that if no payments
would  otherwise  be made  under  the  Plan  to the  Alternate  Payee  or to the
Participant or a Beneficiary of the Participant while the status of the order as
a Qualified Domestic Relations Order is being determined,  no segregation into a
separate or escrow account shall be required.  If a domestic  relations order is
determined  to be a Qualified  Domestic  Relations  Order within  eighteen  (18)
months of the date of its receipt by the Committee (or from the beginning of any
other period during which the issue of its being a Qualified  Domestic Relations
Order is being determined by the Committee) the Committee shall cause to be paid
to the persons  entitled  thereto the amounts,  if any,  held in the separate or
escrow account referred to above in one lump sum. If a domestic  relations order
is determined not be a Qualified  Domestic  Relations Order, or if the status of
the domestic  relations  order as a Qualified  Domestic  Relations  Order is not
finally  resolved  within such eighteen month period,  the Committee shall cause
the separate  account or escrow  account  balance to be returned,  with interest
thereon, to the Participant's  Account or to be paid to the person or persons to
whom  such  amount  would  have  been  paid if there  had been no such  domestic
relations order,  whichever shall apply. Any subsequent  determination that such
domestic  relations  order is a  Qualified  Domestic  Relations  Order  shall be
prospective in effect only.
          (d)  (i)  Benefits payable to an Alternate Payee shall be  payable  in
one lump sum and in no event shall such benefits continue beyond the lifetime of
the  Alternate  Payee.  Such  payment may be made at the time  specified  in the
Qualified  Domestic  Relations Order irrespective of whether the Participant has
attained  the  "earliest   retirement   age"  (within  the  meaning  of  Section
414(p)(4)(B)  of the Code).  In  particular,  no Alternate  Payee shall have the
right with  respect to any  benefit  payable by reason of a  Qualified  Domestic
Relations Order to (A) designate a beneficiary  with respect to amounts becoming
payable under the Plan, (B) elect a method of benefit distribution providing for
benefits   continuing  beyond  the  Alternate  Payee's  lifetime,   (C)  provide
survivorship benefits to a spouse or dependent of such Alternate Payee or to any
other person,  spouse,  dependent or other person,  or (D) transfer rights under
the Qualified Domestic Relations Order by will or by state law of intestacy.
               (ii) None of the  payments,  benefits  or rights of any Alternate
Payee shall be subject to any claim of any creditor, and, in particular,  to the
fullest extent permitted by law, all such payments, benefits and rights shall be
free from  attachment,  garnishment,  trustee's  process,  or any other legal or
equitable  process  available  to any  creditor  of  such  Alternate  Payee.  No
Alternate Payee shall have the right to alienate,  anticipate,  commute, pledge,
encumber or assign any of the benefits or payments which he or she may expect to
receive, contingently or otherwise, under the Plan.
               (iii) Alternate  Payees  shall  not  have any right to (A) borrow
money under any  Participant  loan  provisions  under the Plan, (B) exercise any
Participant  investment  direction  rights or  privileges  under  the Plan,  (C)
exercise  any  other  election,  privilege,  option or  direction  rights of the
Participant  under the Plan except as  specifically  provided  in the  Qualified
Domestic Relations Order, or (D) receive communications with respect to the Plan
except as  specifically  provided by law,  regulation or the Qualified  Domestic
Relations Order.
               (iv) Each  Alternate  Payee shall advise the Committee in writing
of each change of his or her name, address or marital status, and of each change
in the provisions of the Qualified  Domestic Relations Order or any circumstance
set forth therein which may be material to the Alternate Payee's  entitlement to
benefits  thereunder or the amount  thereof.  Until such written notice has been
provided to the  Committee,  the Committee  shall be (A) fully  protected in not
complying  with,  and  in  conducting  the  affairs  of  the  Plan  in a  manner
inconsistent  with, the information set forth in the notice, and (B) required to
act with respect to such notice  prospectively only, and then only to the extent
provided for in the Qualified  Domestic Relations Order. The Committee shall not
be required to modify or reverse any  payment,  transaction  or  application  of
funds  occurring  before the receipt of any notice that would have affected such
payment,  transaction or  application  of funds,  nor shall the Committee or any
other party be liable for any such payment, transaction or application of funds.
               (v)  Except  as  specifically  provided  for  in  the   Qualified
Domestic  Relations  Order,  an Alternate Payee shall have no right to interfere
with the exercise by the Participant or by any  Beneficiary of their  respective
rights, privileges and obligations under the Plan.
          (e)  For purposes of this Plan,  a  Qualified Domestic Relations Order
means  any  judgment,  decree,  or  order  (including  approval  of  a  property
settlement  agreement)  which has been determined by the Committee in accordance
with procedures  established under the Plan, to constitute a qualified  domestic
relations  order  within  the  meaning  of  Section  414(p)(1)  of the  Code and
Alternate  Payee  means any person  entitled  to  current  or future  payment of
benefits under the Plan pursuant to a Qualified Domestic Relations Order.
     20.7 Inability to Locate  Participant  or  Beneficiary.  If  the  Committee
cannot  ascertain the  whereabouts  of any person to whom a payment is due under
the Plan,  and if,  after five years from the date such payment is due, a notice
of such payment due is mailed to the last known address of such person, as shown
on the records of the Committee or the  Employer,  and within three months after
such mailing such person has not made written claim therefor, the Committee,  if
it so elects,  may direct that such payment and all remaining payments otherwise
due to such person be canceled on the records of the Plan and the amount thereof
applied to reduce the contributions of the Employer, and upon such cancellation,
the Plan and the Trust Fund shall,  to the maximum extent  permitted by the Act,
have no further  liability  therefor except that, in the event such person later
notifies  the  Committee of his or her  whereabouts  and requests the payment or
payments due to such person under the Plan,  the amount so applied shall be paid
to him or her as provided in Section 11. All elections, designations,  requests,
notices,   instructions,   and  other   communications  from  the  Employer,   a
Participant,  Beneficiary,  Surviving  Spouse or other  person to the  Committee
required or permitted under the Plan shall be in such form as is prescribed from
time to time by the Committee,  shall be mailed or delivered to such location as
shall be specified by the Committee,  and shall be deemed to have been given and
delivered only upon actual receipt thereof by the Committee at such location.
     20.8 Failure to Receive IRS Approval.  Notwithstanding  any other provision
herein,  if this Plan shall not be approved by the IRS under the  provisions  of
the Code and the  Regulations for any reason  (including  failure to comply with
any condition for such approval imposed by the IRS) contributions made after the
restatement of this Plan and prior to such denial shall be returned, without any
liability  to any  person,  within  one year  after  the date of  denial of such
approval.
     20.9 Contributions Conditioned on Deductibility.  Notwithstanding any other
provision herein, all contributions to the Trust Fund are expressly  conditioned
upon their deductibility under Section 404 of the Code and the Regulations,  and
in the event of the final disallowance of the deduction for any contribution, in
whole or in part,  then  such  contribution  (to the  extent  the  deduction  is
disallowed)  shall upon  direction  of the  Committee,  which  shall be given in
conformity with the provisions of the Act, be returned, without liability to any
person, within one year after such final disallowance.
     20.10 Mistake of Fact.  Notwithstanding any other provisions herein, if any
contribution  is made by a mistake  of fact,  such  contribution  shall upon the
direction  of the  Committee,  which  shall  be  given  in  conformity  with the
provisions of the Act, be returned,  without liability to any person, within one
year after the payment of such contribution.
     20.11 Communications with Committee. All elections, designations, requests,
notices,   instructions,   and  other   communications  from  the  Employer,   a
Participant,  Beneficiary,  Surviving  Spouse or other  person to the  Committee
required or permitted under the Plan shall be in such form as is prescribed from
time to time by such Committee, shall be mailed by first-class mail or delivered
to such location as shall be specified by such Committee, and shall be deemed to
have been given and delivered only upon actual receipt thereof by such Committee
at such location.
     20.12 Communications  with Participants  and  Beneficiaries.  All  notices,
statements,  reports and other communications from the Employer or the Committee
to any Employee,  Participant,  Surviving  Spouse,  Beneficiary  or other person
required  or  permitted  under the Plan  shall be deemed to have been duly given
when  delivered  to, or when mailed by  first-class  mail,  postage  prepaid and
addressed to, such Employee, Participant, Surviving Spouse, Beneficiary or other
person at his or her address last appearing on the records of the Committee.
     20.13 Prior  Service  Credit.   Upon  such  terms  and  conditions  as  the
Committee may approve, and subject to any required IRS approval, benefits may be
provided  under the Plan to a  Participant  with  respect  to any  period of the
Participant's  prior employment by any organization,  and such benefits (and any
Service  credited with respect to such period of employment  under Section 2.25)
may be provided  for,  in whole or in part,  by funds  transferred,  directly or
indirectly  (including a rollover from an individual retirement account), to the
Trust Fund from an employee  benefit plan of such  organization  which qualified
under Section 401(a) of the Code.
     20.14 Gender and Number.  Except  where otherwise  required by the context,
whenever  used in the Plan the  masculine  gender  includes the feminine and the
singular shall include the plural.
     20.15 Headings.  The captions  preceding the Sections of the Plan have been
inserted  solely as a matter of  convenience  and in no way  define or limit the
scope or intent of any provisions of the Plan.
     20.16 Governing  Law.  The Plan and all rights thereunder shall be governed
by and construed in accordance with the Act and, to the extent not  inconsistent
therewith, the laws of the State of California.
     20.17 Severability of Provisions.  If  any  provision  of the Plan shall be
held invalid or  unenforceable,  such invalidity or  unenforceability  shall not
affect any other provisions hereof, and the Plan shall be construed and enforced
as if such provisions had not been included.
     20.18 Heirs, Assigns  and  Personal  Representatives.  The  Plan  shall  be
binding upon the heirs, executors, administrators, successors and assigns of the
parties, including each Participant and Beneficiary,  present and future and all
persons for whose benefit there exists any QDRO with respect to any  Participant
(except that no successor to the Plan Sponsor shall be considered a Plan Sponsor
unless that successor adopts the Plan).
     20.19 Reliance on Data  and  Consents. The Plan Sponsor, the Employer, each
participating Employer, the Board of Directors,  the Committee, the Trustee, all
fiduciaries  with  respect  to the  Plan,  and all  other  persons  or  entities
associated with the operation of the Plan, the management of its assets, and the
provision of benefits thereunder, may reasonably rely on the truth, accuracy and
completeness  of  all  data  provided  by  any  Participant,  Surviving  Spouse,
Beneficiary,  and Alternate  Payee,  including,  without  limitation,  data with
respect to age, health and marital status.  Furthermore,  the Plan Sponsor,  the
Employer,  each participating  Employer, the Board of Directors,  the Committee,
the Trustee, and all fiduciaries with respect to the Plan may reasonably rely on
all consents, elections and designations filed with the Plan or those associated
with the operation of the Plan and its  corresponding  Trust by any Participant,
Surviving  Spouse,  Beneficiary,  Alternate Payee, or any  representative of any
such person,  without duty to inquire into the  genuineness of any such consent,
election  or  designation.  None  of  the  aforementioned  persons  or  entities
associated with the operation of the Plan, its assets and the benefits  provided
under the Plan shall have any duty to  inquire  into any such data,  and all may
rely on such data being current to the date of  reference,  it being the duty of
the  Participants,  Surviving  Spouses,  Beneficiaries  and Alternate  Payees to
advise the appropriate parties of any change in such data.
     20.20 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 Section 414(u) of
the Code.

<PAGE>

                SECTION 21. APPLICATION TO PUERTO RICO EMPLOYEES

     21.1 Modifications  Applicable  to  Puerto  Rico.  The  provisions  of this
Section  shall  govern  the  application  of  the  provisions  of  the  Plan  to
Participants  who  are  employed  by the  Company  in and are  residents  of the
Commonwealth of Puerto Rico ("Puerto Rico Participants"):
          (a)  Notwithstanding   Section   2.25,   the   definition  of  "Highly
Compensated  Participant"  shall be a Puerto  Rico  Participant  employed by the
Company who  receives  Compensation  that exceeds the  Compensation  paid to two
thirds of the Puerto Rico  Participants,  as  provided in Section  165(e) of the
Puerto Rico Income Tax Act;
          (b)  The  following  shall  apply  in  lieu  of the second sentence of
Section 5.1(a) hereof: The Salary Reduction Agreement shall provide for Elective
Contributions  equal to any whole  percentage  between one percent  (1%) and ten
Percent (10%) of a  Participant's  Compensation  in any payroll  period,  not to
exceed $7,500 (reduced by any  contributions  made by the Participant to an IRA)
in any calendar year;
          (c)  The  Actual  Deferral  Percentage  Test  set forth in Section 5.3
shall be applied  separately  with  respect  to Puerto  Rico  Participants.  For
purposes  of  applying  the  Actual  Deferral  Percentage  Test to  Puerto  Rico
Participants,  the  definition  of  Highly  Compensated  Employee  contained  in
subparagraph (a) hereof shall be used; and
          (d)  For  purposes  of  applying  subparagraphs  (b)  and  (c) of this
Section 21.1, the definition of Compensation  contained in Section 2.11 shall be
applied without regard to clause (xii) thereof.
          In  all  other respects,  the terms of this Plan shall apply to Puerto
Rico Participants.sandler

EXHIBIT 4.6

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (this "Agreement") is made and entered into as of the 29th day of June, 2001 by and among APOLLO INVESTMENT FUND IV, L.P., a Delaware limited partnership ("AIF IV"), APOLLO OVERSEAS PARTNERS IV, L.P., a Cayman Islands exempted limited partnership ("AOP IV"), APOLLO INVESTMENT FUND V, L.P., a Delaware limited partnership ("AIF V"), APOLLO OVERSEAS PARTNERS V, L.P., a Cayman Islands exempted limited partnership ("AOP V") (each of AIF IV, AOP IV, AIF V and AOP V being sometimes referred to herein individually as a "Seller" and collectively as the "Sellers"), APOLLO MANAGEMENT IV, L.P., a Delaware limited partnership, in its capacity as investment manager to AIF IV and AOP IV ("Apollo IV Management"), APOLLO MANAGEMENT V, L.P., a Delaware limited partnership, in its capacity as investment manager to AIF V and AOP V ("Apollo V Management" and collectively with Apollo IV Management and their affiliates, "Apollo"), AMC ENTERTAINMENT INC., a Delaware corporation (the "Company"), SANDLER CAPITAL PARTNERS V, L.P., a Delaware limited partnership ("SCP V Domestic"), SANDLER CAPITAL PARTNERS V FTE, L.P., a Delaware limited partnership ("SCP V FTE"), and SANDLER CAPITAL PARTNERS V GERMANY, L.P., a Delaware limited partnership ("SCP V Germany") (each of SCP V Domestic, SCP V FTE and SCP V Germany being sometimes referred to herein individually as a "Purchaser" and collectively as the "Purchasers"). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Purchase Agreement (as defined below) in the form previously filed by the Company with the SEC.
W I T N E S S E T H

WHEREAS, the Sellers previously acquired shares of Series A Convertible Preferred Stock of the Company, par value $0.662/3 per share (the "Series A Preferred Stock"), and shares of Series B Exchangeable Preferred Stock, par value $0.662/3 per share (the "Series B Preferred Stock," and together with the Series A Preferred Stock, the "Preferred Stock"), pursuant to that certain Investment Agreement dated as of April 19, 2001 by and among the Company, the Sellers, Apollo Management IV and Apollo Management V (the "Purchase Agreement");

WHEREAS, concurrently with the closing of the Purchase Agreement, the Sellers also entered into that certain Registration Rights Agreement dated as of April 19, 2001 by and among the Company and the Sellers (the "Registration Rights Agreement"); 

WHEREAS, the Sellers desire to sell to the Purchasers certain of their respective shares of Preferred Stock acquired pursuant to the Purchase Agreement and the Purchasers desire to purchase such shares of Preferred Stock on the terms and conditions set forth in this Agreement; and

WHEREAS, the Company desires to consent to the purchase and sale of the shares of Preferred Stock between the Sellers and the Purchasers provided for hereunder and to the other transactions contemplated under this Agreement;

NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties and covenants herein contained, the parties hereto hereby agree as follows:

	Sale and Purchase of the Preferred Stock. Subject to the terms and conditions of this Agreement, each of the Sellers severally agrees to sell and deliver to each of the Purchasers, and each of the Purchasers severally agrees to purchase from each of the Sellers, the number of shares of Preferred Stock described on Schedule 1 attached hereto with respect to such respective Seller and Purchaser, consisting in the aggregate of (i) 5,520 shares of Series A Preferred Stock at a purchase price of $1,000 per share, for an aggregate purchase price of $5,520,000, and (ii) 9,480 shares of Series B Preferred Stock at a purchase price of $1,000 per share, for an aggregate purchase price of $9,480,000, representing an aggregate purchase price of $15,000,000 (the "Purchase Price") for all of the shares of Preferred Stock to be sold hereunder by the Sellers to the Purchasers.

	Payment and Delivery. 

(a)The closing of the sale to, and purchase by, the Purchasers of the shares of Preferred Stock referred to in Section 1 hereof (the "Closing") shall occur at the offices of Akin, Gump, Strauss, Hauer & Feld, L.L.P., 1333 New Hampshire Ave. NW, Washington, DC 20036, at 10:00 a.m., on July 3, 2001 or such other location, date and time as agreed upon by the Purchasers and the Sellers (the "Closing Date"). 

(b)At the Closing, each Purchaser is paying to each Seller the portion of the Purchase Price set forth on Schedule 1 with respect to such respective Seller and Purchaser in U.S. dollars in immediately available funds by wire or other transfer to an account designated by the Sellers and each Seller is delivering to each Purchaser a certificate or certificates evidencing the number of shares of Preferred Stock to be sold by such Seller to such Purchaser in the amount set forth on Schedule 1, duly endorsed in blank, or accompanied by a stock power or stock powers duly executed in blank, in proper form for transfer. The Company shall, and shall cause its transfer agent to, take all such actions and execute, issue and deliver to the Purchasers such new stock certificates as may be necessary to give effect to the purchase and sale of the shares of Preferred Stock by the Sellers to the Purchasers as contemplated hereunder.

	Conditions of Parties' Obligations.

(a)Conditions of the Purchasers' Obligations. The obligations of each Purchaser under Section 1 hereof are subject to the fulfillment prior to or on the Closing Date of all of the following conditions, any of which may be waived in whole or in part by the Purchasers.

(i)Representations and Warranties Correct. The representations and warranties of the Sellers under this Agreement shall be true, complete and correct in all material respects on and as of the date hereof and on the Closing Date with the same force and effect as if they had been made on the Closing Date.

(ii)Compliance with Agreement. The Sellers shall have performed and complied with all agreements and conditions required by this Agreement to be performed or complied with by them on or before the Closing Date.

(b)Conditions of Sellers' Obligations. The Sellers' obligations under Section 1 hereof are subject to the fulfillment prior to or on the Closing Date of the following conditions, any of which may be waived in whole or in part by the Sellers.

(i)Representations and Warranties Correct. The representations and warranties of the Purchasers under this Agreement shall be true, correct and complete, in all material respects, on and as of the date hereof and on the Closing Date with the same force and effect as if they had been made on the Closing Date.

(ii)Compliance with Agreement. The Purchasers shall have performed and complied with all agreements and conditions required by this Agreement to be performed or complied with by them on or before the Closing Date.

(iii)Payment of Purchase Price. The Sellers shall have received from the Purchasers the Purchase Price as set forth on Schedule 1 hereto.

	Certain Restrictions on Conversion and Transfer; Assignment of Certain Rights. 

(a)Restrictions on Conversion of Series A Preferred Stock. During the period commencing on the date hereof and ending on April 19, 2006 (or such earlier date as of which the Sellers are permanently released from the conversion restrictions set forth in Section 9.5 of the Purchase Agreement) (the "Conversion Restriction Period"), the Purchasers shall not, without the prior written consent of the Company, convert any shares of Series A Preferred Stock into shares of the Company's Common Stock, except in connection with a Disposition effected pursuant to this Section 4(a). If at any time during the Conversion Restriction Period, any Purchaser desires to effect a Disposition of any shares of Series A Preferred Stock to any Person other than an Affiliate of such Purchaser, such Purchaser may, as part of such Disposition, elect to convert such shares of Series A Preferred Stock into Common Stock, prior to the transfer to such purchasing Person. In order to convert shares of Preferred Stock to effect any such Disposition, the selling Purchaser shall deliver to the Company, on or before the proposed settlement date of such Disposition, written notice of its intention to convert Series A Preferred Stock as part of a Disposition (a "Disposition Notice"). The Disposition Notice shall set forth the number of shares of Series A Preferred Stock that shall be converted into Common Stock, the sale price for such shares and the purchasing Person in whose name the Common Stock shall be registered. Upon surrender by the selling Purchaser of certificates representing the shares of Series A Preferred Stock that are being converted as part of such Disposition, the Company shall issue to the purchasing Person certificates representing the appropriate number of shares of Common Stock.

(b)Restrictions on Transfer of Series B Preferred Stock. The Purchasers shall not transfer to any Person (other than their respective Affiliates) any shares of Series B Preferred Stock until October 19, 2002 (or such earlier date as of which the Sellers are permanently released from the transfer restrictions set forth in Section 9.6 of the Purchase Agreement), without the prior written consent of the Company.

(c)Assignment of Certain Rights Under the Purchase Agreement. Each Seller hereby assigns to the respective Purchasers that are purchasing shares of Preferred Stock from such Seller all of such Seller's rights that are applicable to such shares of Preferred Stock with respect to indemnification by the Company under Section 12.4 of the Purchase Agreement and any other remedies of such Seller under the Purchase Agreement or otherwise that are applicable to such shares of Preferred Stock with respect to a breach of any of the representations, warranties or covenants made by the Company pursuant to the Purchase Agreement (subject to the provisions of Section 12.5 of the Purchase Agreement).

(d)Registration Rights Agreement. Each Seller hereby assigns, subject to the conditions set forth herein, to each Purchaser its respective rights and obligations under the Registration Rights Agreement with respect to the shares of Preferred Stock it is selling pursuant to this Agreement, and the parties hereto agree that each Purchaser shall be deemed to have been added as a party to the Registration Rights Agreement as if it had been an original signatory thereto. As such, each Purchaser shall be deemed to be an "Investor" under the Registration Rights Agreement with respect to the shares of Preferred Stock it is acquiring from the Sellers hereunder (the "Transfer Shares"), and each Purchaser hereby agrees, effective as of the Closing, to assume all the rights, liabilities and obligations of Sellers under the Registration Rights Agreement with respect to the Transfer Shares and agrees to be subject to the terms thereof with respect to the Transfer Shares. Notwithstanding the foregoing, no Purchaser shall be deemed to be an "Investor" with respect to Section 13(i) of the Registration Rights Agreement. The parties hereto acknowledge and agree that the Transfer Shares (and the underlying shares of Common Stock issuable upon conversion of the Transfer Shares) shall be deemed to be "Registrable Shares" within the meaning of the Registration Rights Agreement.

(i)In the event that the Sellers and/or their Affiliates exercise their demand registration rights pursuant to the Registration Rights Agreement, the Purchasers shall be entitled to participate in such demand registration on a Pro Rata Basis (as defined below). The Purchasers shall also be permitted to participate in any piggyback registration on a Pro Rata Basis.

	The Sellers will provide the Purchasers with prior written notice of any demand or piggyback registration that the Sellers and/or their Affiliates are participating in pursuant to the terms of the Registration Rights Agreement.

	"Pro Rata Basis" means that right of the Purchasers to participate pro rata with the Sellers and their Affiliates based on a percentage that is determined by dividing the aggregate number of shares of Preferred Stock (on an as converted basis) and Conversion Shares (as defined below) owned by the Purchasers as of the date of determination and the aggregate number of shares of Preferred Stock (on an as converted basis) and Conversion Shares owned by the Sellers and their Affiliates as of the date of determination.

(e)Legend. Each Purchaser understands and agrees that the certificates evidencing the shares of Preferred Stock to be purchased hereunder will bear the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES OR THE SECURITIES ARE SOLD AND TRANSFERRED IN A TRANSACTION THAT IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN LIMITATIONS ON TRANSFER SET FORTH IN A SECURITIES PURCHASE AGREEMENT DATED AS OF JUNE 29, 2001 AMONG AMC ENTERTAINMENT INC. AND CERTAIN OTHER PARTIES NAMED THEREIN, COPIES OF WHICH ARE ON FILE WITH THE SECRETARY OF AMC ENTERTAINMENT INC.

(f)Removal of Legend. The Securities Act legend endorsed on the certificates pursuant to Section 4(e) hereof shall be removed and the Company shall issue a certificate without such legend to the holder thereof at such time as the securities evidenced thereby cease to be restricted securities upon the earliest to occur of (i) a registration statement with respect to the sale of such securities shall have become effective under the Securities Act of 1933, as amended (the "Securities Act") and such securities shall have been disposed of in accordance with such registration statement, (ii) the securities shall have been sold to the public pursuant to Rule 144 (or any successor provision) under the Securities Act, or (iii) such securities may be sold by the holder without restriction or registration under Rule 144(k) under the Securities Act (or any successor provision).

	Representations and Agreements of the Sellers. Each Seller severally, and not jointly, represents and warrants to each Purchaser as follows:

(a)Organization and Power. The Seller is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. The Seller has all requisite legal and partnership power to execute and deliver this Agreement and to carry out and perform its obligations under the terms of this Agreement.

(b)Authorization. All partnership action on the part of the Seller necessary for the authorization, execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby (including, without limitation, the sale and delivery of the shares of Preferred Stock) has been taken. This Agreement has been duly and validly executed and delivered by the Seller, and constitutes a valid and binding agreement of the Seller, enforceable against the Seller in accordance with its terms, except to the extent that such enforceability (i) may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether enforcement is sought in a proceeding at law or in equity.

(c)Consents. Except for filings, permits, authorizations, consents and approvals as may be required under, and other applicable requirements of, state blue sky laws and except for such reports with respect to the transactions contemplated under this Agreement as may be required to be filed by the Seller with the SEC under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations of the SEC thereunder, neither the execution, delivery or performance of this Agreement nor the consummation by the Seller of the obligations and transactions contemplated hereby requires any consent of, authorization by, exemption from, filing with, or notice to any Governmental Entity or any other Person. 

(d)Ownership of Shares of Preferred Stock; Title and Related Matters. The Seller owns and has valid, marketable and unencumbered title to the Transfer Shares that such Seller is selling to the Purchasers under this Agreement, free and clear of any security interest, mortgage, pledge, lien, charge, restriction or encumbrance of any nature whatsoever (collectively, "Liens"), other than the restrictions set forth in the Transaction Documents. Except for this Agreement, the Seller is not a party to any option, warrant, right, contract, call, put or other agreement or commitment providing for the disposition or acquisition of any of such Transfer Shares. Upon delivery by the Seller of such Transfer Shares to the Purchasers at the Closing, valid, marketable and unencumbered title to such Transfer Shares, free and clear of any Lien (other than the restrictions set forth in Sections 4(a) and 4(b) of this Agreement), will pass to the respective Purchasers of such Transfer Shares. 

(e)No Conflict With Other Agreements, Etc. The execution, delivery and performance of this Agreement and any other related documents and instruments contemplated herein by the Seller will not (i) conflict with or result in a breach of any provision of such Seller's agreement of limited partnership or other organizational documents, (ii) conflict with or result in the breach of the terms, conditions or provisions of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give rise to any right of termination, acceleration or cancellation under, any material agreement, lease, mortgage, license, indenture or other contract to which such Seller is a party or by which any of its properties or assets are bound or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including, without limitation, U.S. federal and state laws and regulations) applicable to such Seller or by which any of its properties or assets are bound or affected, except in the case of clauses (ii) or (iii), where such conflicts or violations would not prevent or materially delay its ability to consummate the transactions contemplated herein.

	Representations and Agreements of the Purchasers. Each Purchaser severally, and not jointly, represents and warrants to each Seller as follows:

(a)Organization and Power. The Purchaser is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. The Purchaser has all requisite legal and partnership power to execute and deliver this Agreement and to carry out and perform its obligations under the terms of this Agreement.

(b)Authorization. All partnership action on the part of the Purchaser necessary for the authorization, execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby (including, without limitation, the purchase of the shares of Preferred Stock) has been taken. This Agreement has been duly and validly executed and delivered by the Purchaser, and constitutes a valid and binding agreement of the Purchaser, enforceable against the Purchaser in accordance with its terms, except to the extent that such enforceability (i) may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether enforcement is sought in a proceeding at law or in equity.

(c)Consents. Except for filings, permits, authorizations, consents and approvals as may be required under, and other applicable requirements of, state blue sky laws and except for such reports with respect to the transactions contemplated under this Agreement as may be required to be filed by the Purchaser with the SEC under the Exchange Act and the rules and regulations of the SEC thereunder, neither the execution, delivery or performance of this Agreement nor the consummation by the Purchaser of the obligations and transactions contemplated hereby requires any consent of, authorization by, exemption from, filing with, or notice to any Governmental Entity or any other Person.

(d)Investment Representations of the Purchasers. 

	The shares of Preferred Stock being purchased by the Purchaser hereunder are being acquired for its own account as principal and not directly or indirectly for or on behalf of any other party and for the purpose of investment and not with a view to or for sale in connection with any distribution thereof.

	The Purchaser is an "accredited investor" within the meaning of Rule 501(a) promulgated under the Securities Act. 

	The Purchaser (A) has been furnished with or has had full access to all of the information that it considers necessary or appropriate to make an informed investment decision with respect to the shares of Preferred Stock and (B) can bear the economic risk of such investment in the Preferred Stock, has such knowledge and experience in business and financial matters so as to enable it to understand and evaluate the risks of and form an investment decision with respect to its investment in the Preferred Stock and to protect its own interests in connection with such investment.

	The Purchaser has no need for liquidity in its investment in the shares of Preferred Stock and is able to bear the economic risk of its investment in the shares of Preferred Stock and the complete loss of all of such investment.

	The Purchaser understands that the transferability of the shares of Preferred Stock is restricted, and that such restrictions will be reflected in an appropriate legend on the instruments representing the shares of Preferred Stock.

	The Purchaser recognizes that an investment in the Company involves certain risks and has taken full cognizance of, and understands all of, the risks related to the purchase of the shares of Preferred Stock. The Purchaser further acknowledges and understands that no federal or state agency has made any recommendation or endorsement of the Preferred Stock or any finding or determination as to the fairness of the investment therein.

(e)No Conflict With Other Agreements, Etc. The execution, delivery and performance of this Agreement and any other related documents and instruments contemplated herein by the Purchaser will not (i) conflict with or result in a breach of any provision of such Purchaser's agreement of limited partnership or other organizational documents, (ii) conflict with or result in the breach of the terms, conditions or provisions of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give rise to any right of termination, acceleration or cancellation under, any material agreement, lease, mortgage, license, indenture or other contract to which such Purchaser is a party or by which any of its properties or assets are bound or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including, without limitation, U.S. federal and state laws and regulations) applicable to such Purchaser or by which any of its properties or assets are bound or affected, except in the case of clauses (ii) or (iii), where such conflicts or violations would not prevent or materially delay its ability to consummate the transactions contemplated herein.

	Participation Rights.

(a)Each time the Sellers or their Affiliates propose to purchase any additional shares of equity securities (the "Additional Equity Securities") (which shall include securities convertible into or exercisable for any shares of, any class of the Company's capital stock), such Sellers shall, and the Sellers shall use their reasonable efforts to cause their respective Affiliates (as applicable) and the Company to, prior to selling or issuing any such Additional Equity Securities to the Sellers, make an offering of such Additional Equity Securities to each of the Purchasers in accordance with the following provisions:

	The Sellers shall deliver a written notice (the "Notice") by certified mail to each of the Purchasers stating (i) the bona fide intention of the Sellers and/or their Affiliates to purchase such Additional Equity Securities, (ii) the number of such Additional Equity Securities to be purchased, and (iii) the price and terms, if any, upon which the Sellers and/or their Affiliates propose to purchase such Additional Equity Securities.

	Within five business days after giving of the Notice, each Purchaser may elect to purchase or obtain, at the price and on the terms specified in the Notice (which price shall be no greater than the price to be paid by, and the terms no less favorable than those offered to, any other party to purchase Additional Equity Securities of such issuance), up to that portion of such Additional Equity Securities which equals the proportion that the number of shares of Preferred Stock (on an as converted basis) and Conversion Shares held by such Purchaser bears to the total number of shares of Preferred Stock (on an as converted basis) and Conversion Shares then held by of all of the Sellers and/or their Affiliates participating in such issuance of Additional Equity Securities by giving written notice thereof to the Sellers (the "Subscription Notice").

	In the event that no Subscription Notices are received by the Sellers within the foregoing time period, the Sellers and/or their Affiliates, as the case may be, shall be entitled to freely purchase any such Additional Equity Securities, provided, however, that the price for such transaction shall not be lower than the price contained in the Notice and that the terms and conditions of the transaction are not, in the reasonable opinion of the Sellers, more favorable than those described in the Notice.

	In the event that none of the Sellers and/or their Affiliates, as the case may be, purchase the Additional Equity Securities as described in the Notice, the Purchasers shall have no right to purchase Additional Equity Securities pursuant to the participation rights granted in this Section 7.

(b)The participation rights set forth in this Section 7 shall not be applicable to the issuance of: (i) equity securities pursuant to the conversion or exercise of convertible or exercisable securities, (ii) any stock, stock options, stock appreciation rights or similar rights issued or granted pursuant to a compensatory option plan, agreement or arrangement, and any shares of capital stock issued upon the exercise thereof; (iii) equity securities pursuant to any stock split or stock dividend, (iv) equity securities upon the subdivision, split-up, combination or reclassification of the outstanding equity securities of the Company or (ii) equity securities in connection with a bona fide business acquisition of or by the Company, whether by merger, consolidation, sale of assets, sale or exchange of stock or otherwise.

(c)The participation rights set forth in this Section 7 shall not be transferable to any Person who is not an Affiliate of the Purchasers. Notwithstanding the foregoing, if the Purchasers sell Preferred Stock or Conversion Shares to any Person, other than to Affiliates of the Purchasers, in an amount in excess of 33% of the shares of Preferred Stock and Conversion Shares owned by the Purchasers in the aggregate as of the date hereof after giving effect to the transactions contemplated hereby, the Purchasers may transfer or assign the participation rights set forth herein to such Person with the prior written consent of the Sellers, which consent will not be unreasonably withheld, and upon the agreement of such Person to be bound by all of the rights and obligations of such Purchaser under this Agreement upon the consummation of the proposed transfer. For purposes of this Section 7(c) only, the definition of "Affiliate" shall include any entity in which the Purchasers or their affiliates have exclusive management or investment control over.

	Restrictions on Transfer.

(a)During the period commencing on the date hereof and ending on the second anniversary hereof, the Purchasers shall not, directly or indirectly (including, without limitation, through the disposition or transfer of any equity interest in another person), alone or in concert with others, sell, assign, transfer, pledge, hypothecate, grant any option with respect to or otherwise dispose of any interest in (or enter into an agreement or understanding with respect to the foregoing) (a "Restricted Disposition") the common stock of the Company to be issued upon conversion of any shares of Series A Preferred Stock (including shares of Series A Preferred Stock issued upon the exchange of any shares of Series B Preferred Stock) (the "Conversion Shares") in any public sale or offering to a Person who is not an Affiliate of the Purchasers in an amount that would exceed the volume limitations applicable to the Purchasers under the provisions of Rule 144, as promulgated under the Securities Act.

(b)During the period commencing on the second anniversary of the date hereof and ending on the third anniversary hereof, the Purchasers shall not effect a Restricted Disposition of Conversion Shares in any public sale or offering to a Person who is not an Affiliate of the Purchasers in an amount that would exceed two times the average daily trading volume of the shares of the Common Stock, on the American Stock Exchange or other national securities exchange where the Common Stock is listed or to which the Common Stock is admitted for trading for the 30 trading days immediately proceeding the date of sale. 

(c)The limitations set forth in Sections 8(a) and 8(b) above shall terminate on the earlier to occur of:

	The third anniversary of the date hereof;

	The date that the Sellers no longer own at least 90% of the shares of Preferred Stock owned by the Sellers on the date hereof, after giving effect to the transactions contemplated hereby.

(d)During the period commencing on the date hereof and ending on the third anniversary hereof, the Purchasers shall give the Sellers five business days prior written notice of its intention to sell any shares of Preferred Stock to any Person who is not an Affiliate of the Purchasers.

	Tag-Along Rights.If the Sellers and/or any of their Affiliates (each a "Selling Shareholder") propose to sell, in one transaction or a series of related transactions (a "Tag-Along Sale"), any shares of Preferred Stock or Conversion Shares to any Person, other than to Affiliates of the Sellers, (the "Transferee"), in an amount in excess of 50% of the shares of Preferred Stock and other equity securities of the Company owned by the Sellers and their Affiliates in the aggregate immediately prior to such sale (the "Tag-Along Shares"), the Purchasers (the "Non-Selling Shareholders") shall have the right (the "Tag-Along Right"), but not the obligation, to participate in any such Tag-Along Sale, on the same terms and conditions as the Selling Shareholder(s) propose to sell their Tag-Along Shares, as set forth in the offer from the Transferee (the "Offer"), pursuant to the procedure set forth herein.

(a)In the event any Selling Shareholder wishes to sell the Tag-Along Shares, the Selling Shareholder shall first deliver written notice to the Non-Selling Shareholders of its intention to transfer the Tag-Along Shares to a non-Affiliate (the "Transfer Notice"). The Transfer Notice shall include (i) a description of the Tag-Along Shares to be transferred, (ii) the identity of the prospective transferee and (iii) the consideration and the material terms and conditions upon which the proposed transfer is to be made. The Transfer Notice shall also include a copy of any written proposal, term sheet, letter of intent or other agreement relating to the proposed transfer. Each Non-Selling Shareholder may exercise its Tag-Along Right by delivering to the nominated Selling Shareholder in the Transfer Notice (the "Nominated Selling Shareholder") within five business days after receipt of the Notice (the "Offer Period") a notice stating that such Non-Selling Shareholder intends to exercise its Tag-Along Rights and that it is willing to sell its own shares of Preferred Stock or Conversion Shares in accordance with the terms of the Offer (the "Tag Along Notice", and the Non-Selling Shareholder rendering such Tag-Along Notice, the "Tagging Shareholder"). If no Tag-Along Notice is received by the Nominated Selling Shareholder within the Offer Period, or if the notice received does not fulfill all of the foregoing requirements, it shall be understood that the Non-Selling Shareholders have waived their respective Tag-Along Rights hereunder and the Selling Shareholders shall be free to transfer the Tag-Along Shares.

(b)Each Tagging Shareholder may sell all or any part of that number of shares of Preferred Stock or Conversion Shares equal to the product obtained by multiplying (i) the aggregate number of shares of Preferred Stock or Conversion Shares covered by the Transfer Notice by (ii) a fraction, the numerator of which is the number of shares of Preferred Stock or Conversion Shares owned by the Tagging Shareholder, determined on an "as converted" basis, on the date of the Transfer Notice and the denominator of which is the total number of shares of Preferred Stock or Conversion Shares owned by all of the Non-Selling Shareholders and the Selling Shareholders, determined on an "as converted" basis, on the date of the Transfer Notice.

(c)Each Tagging Shareholder shall effect its participation in the sale by promptly delivering to the Nominated Selling Shareholder, at or prior to the closing of such sale, for transfer to the prospective purchaser one or more certificates, properly endorsed for transfer, which represent the Tag-Along Shares. To the extent that any prospective Transferee refuses to purchase any shares of Preferred Stock or Conversion Shares from a Tagging Shareholder, the Selling Shareholders shall not sell to such prospective Transferee any Tag-Along Shares unless and until, simultaneously with such sale, the Selling Shareholders shall purchase from such Tagging Shareholder the shares of Preferred Stock and Conversion Shares such Tagging Shareholder would otherwise have been able to sell hereunder for the same consideration and on the same terms and conditions as the proposed sale described in the Transfer Notice.

(d)In connection with any transfer by a Seller of shares of Preferred Stock or Conversion Shares to an Affiliate, such Seller shall cause such Affiliate to agree to be bound by the provisions of this Section 9 with respect to such transferred shares.

	Protective Provisions. The Sellers shall not, without the prior written consent of the Purchasers, effect any amendment to the Registration Rights Agreement that would affect the Purchasers' rights pursuant to the Registration Rights Agreement in a manner which is different from the effect on the Sellers' rights pursuant to the Registration Rights Agreement.

	Notices. All notices, requests, consents and other communications required or permitted hereunder shall be in writing and shall be hand delivered or mailed postage prepaid by registered or certified mail,

(a)If to the Purchaser:

Sandler Capital Partners V, L.P.

Sandler Capital Partners V, FTE, L.P.

Sandler Capital Partners V Germany, L.P.

c/o Sandler Capital Management

767 Fifth Avenue, 45th Floor

New York, NY 10153

Attention: Douglas E. Schimmel

Fax: (212) 826-0281
(b) If to the Sellers or Apollo:

Apollo Investment Fund IV, L.P.
Apollo Overseas Partners IV, L.P.

c/o Apollo Management IV, L.P. and

Apollo Investment Fund V, L.P.

Apollo Overseas Partners V, L.P.

c/o Apollo Management V, L.P.

1301 Avenue of the Americas

38th Floor

New York, NY 10019

Attention: Marc Rowan

Fax: (212) 515-3263

with copies to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
1333 New Hampshire Ave., N.W.

Washington, D.C. 20036
Attention: Bruce S. Mendelsohn

Fax: (202) 887-4288

or (c) If to the Company:
AMC Entertainment Inc.

106 West 14th Street

P.O. Box 419615

Kansas City, MO 64105

Attention: Peter Brown

Fax: (816) 480-2517
with a copy to:

Lathrop & Gage L.C.

2345 Grand Boulevard

Suite 2800

Kansas City, MO 64108

Attention: Raymond F. Beagle, Jr.

Fax: (816) 292-2001

or at such other address as the respective parties each may specify by written notice to the other parties, and each such notice, request, consent and other communication shall for all purposes of the Agreement be treated as being effective or having been given when delivered if delivered personally, or, if sent by mail, at the earlier of its receipt or 72 hours after the same has been deposited in a regularly maintained receptacle for the deposit of United States mail, addressed and postage prepaid as aforesaid.

	AMC Consent. 

(a)The Company hereby consents to the sale of the Preferred Stock, including the Series B Preferred Stock, by the Sellers to the Purchasers and to the assignment of all of the rights and obligations set forth in Section 4 hereof. The Company hereby acknowledges and agrees that the shares of the Preferred Stock which are owned by the Purchasers shall be freely transferable by the Purchasers, subject to compliance with applicable securities laws and the restrictions contained in Sections 4(a) and 4(b) of this Agreement.

(b)The Company hereby consents to the assignment by the Sellers of the rights and obligations pursuant to the Registration Rights Agreement to the Purchasers as set forth in Section 4(d) hereof.

(c)The Company and the Sellers hereby acknowledge and agree that Section 8.1 (Preferred Stock Approval Rights) and 9.7(i) (Preferred Stock Approval Rights) of the Purchase Agreement shall be amended to provide that the Sellers shall have the Preferred Stock Approval Rights so long as the Sellers continue to beneficially own shares of Preferred Stock representing more than 50% of the Preferred Stock owned by the Sellers immediately after the consummation of the transactions contemplated hereby.

(d)The Company is executing this Agreement solely for purposes of this Section 12, and, except as set forth in Section 2(b), shall have no other obligations under this Agreement.

	Fees and Expenses. Each party will bear its own fees and expenses incurred in connection with the proposed purchase and sale of the Preferred Stock and the negotiation, execution and delivery of the Purchase Agreement.

	Receipt of Dividends. Notwithstanding anything herein to the contrary, the dividend on the Preferred Stock to be paid to the holders of record on July 2, 2001 shall be paid, in its entirety, to the Sellers.

	Termination of Agreement. This Agreement may be terminated prior to the Closing Date as follows:

(a)by mutual consent of the Purchasers and the Sellers;

(b)at the election of the Sellers, if any one or more of the conditions to their obligations have not been fulfilled as of the Closing Date;

(c)at the election of the Purchasers, if any one or more of the conditions to their obligations have not been fulfilled as of the Closing Date;

In the event that the Sellers or the Purchasers, as the case may be, elect to terminate this Agreement, it shall deliver an irrevocable notice to the other party to this Agreement declaring its election to so terminate this Agreement in accordance with the provisions of this Section 15, and setting forth therein the basis for such termination.

	Severability. Should any one or more of the provisions of this Agreement or of any agreement entered into pursuant to this Agreement be determined to be illegal or unenforceable, all other provisions of this Agreement and of each other agreement entered into pursuant to this Agreement shall be given effect separately from the provision or provisions determined to be illegal or unenforceable and shall not be affected thereby.

	Parties in Interest. All the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective parties hereto, the successors and assigns of the Purchasers and the Sellers, whether so expressed or not. This Agreement shall not run to the benefit of or be enforceable by any other Person.

	Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto and shall inure to the benefit of and be enforceable by each person who shall be a holder of shares of the Preferred Stock and/or the Conversion Shares. Notwithstanding the foregoing and in addition to the restrictions set forth in Section 7(c), the rights and obligations granted to the Purchasers pursuant to Sections 4(c), 4(d), 9 and 10 of this Agreement are not transferable; provided, however, that such rights may be transferred to an Affiliate of any Purchaser who agrees to be bound by all the rights and obligations of such Purchaser under this Agreement upon the consummation of the proposed transfer.

	Headings. The headings of the sections and paragraphs of this Agreement have been inserted for convenience of reference only and do not constitute a part of this Agreement.

	Choice of Law. It is the intention of the parties that the internal laws, and not the laws of conflicts, of the State of New York should govern the enforceability and validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties.

	Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, with the same effect as if all parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument.

	Further Assurances. Each of the undersigned, upon request of another party hereto, agrees to execute and deliver such further documents and instruments, and to perform such further acts, as may be necessary to accomplish and give full effect to this Agreement and sale of the Preferred Stock contemplated hereby.

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

Sellers:

APOLLO INVESTMENT FUND IV, L.P.

By:APOLLO ADVISORS IV, L.P.,

General Partner

By:Apollo Capital Management IV, Inc.,

General Partner

By:/s/ Michael D. Weiner

Name: Michael D. Weiner

Title: Vice President

 

APOLLO OVERSEAS PARTNERS IV, L.P.

By:APOLLO ADVISORS IV, L.P.,

Managing General Partner

By:Apollo Capital Management IV, Inc.,

General Partner

By:/s/ Michael D. Weiner

Name: Michael D. Weiner

Title: Vice President

 

APOLLO INVESTMENT FUND V, L.P.

By:APOLLO ADVISORS V, L.P.,

General Partner

By:Apollo Capital Management V, Inc.,

General Partner

By:/s/ Michael D. Weiner

Name: Michael D. Weiner

Title: Vice President

APOLLO OVERSEAS PARTNERS V, L.P.

By:APOLLO ADVISORS V, L.P.

Managing General Partner

By:Apollo Capital Management V, Inc.

General Partner

By:/s/ Michael D. Weiner

Name: Michael D. Weiner

Title: Vice President

APOLLO MANAGEMENT IV, L.P.

in its capacity as investment manager to

Apollo Investment Fund IV, L.P.
By:AIF IV Management, Inc.
By: /s/ Michael D. Weiner
Name: Michael D. Weiner

Title: Vice President

 

APOLLO MANAGEMENT V, L.P.

in its capacity as investment manager to 

Apollo Investment Fund V, L.P.
By:AIF V Management, Inc.
By: /s/ Michael D. Weiner
Name: Michael D. Weiner

Title: Vice President

 

 The Company:

AMC ENTERTAINMENT INC.

By:/s/ Peter C. Brown

Name: Peter C. Brown
Title: Chairman of the Board, President and
Chief Executive Officer

Purchasers:

SANDLER CAPITAL PARTNERS V, L.P.
By:Sandler Investment Partners, L.P., General Partner

By:Sandler Capital Management, General Partner

By:MJDM Corp., a General Partner

By:/s/ Moira Mitchell
Name: Moira Mitchell
Title: President

 

SANDLER CAPITAL PARTNERS V FTE, L.P.
By:Sandler Investment Partners, L.P., General Partner

By:Sandler Capital Management, General Partner

By:MJDM Corp., a General Partner

By:/s/ Moira Mitchell
Name: Moira Mitchell

Title: President

 

SANDLER CAPITAL PARTNERS V GERMANY, L.P.
By:Sandler Investment Partners, L.P., General Partner

By:Sandler Capital Management, General Partner

By:MJDM Corp., a General Partner

By:/s/ Moira Mitchell
Name: Moira Mitchell

Title: President

Schedule 1

<Table>

<Caption> 

	
Seller
	
Purchaser
	
Number of Shares of Preferred Stock Purchased
	
Purchase Price of the Preferred Stock

	
<S>
	
<C>
	
<C>
	
<C>

	
Apollo Investment Fund IV, L.P.
	
Sandler Capital Partners V, L.P.
	
Series A: 1,859

Series B: 3,192
	
Series A: $1,859,000.00

Series B: $3,192,000.00

	
 
	
Sandler Capital Partners V FTE, L.P.
	
Series A: 687

Series B: 1,180
	
Series A: $687,000.00

Series B: $1,180,000.00

	
 
	
Sandler Capital Partners V Germany, L.P.
	
Series A: 69

Series B: 118
	
Series A: $69,000.00

Series B: $118,000.00

	
Apollo Overseas Partners IV, L.P.
	
Sandler Capital Partners V, L.P.
	
Series A: 103

Series B: 177
	
Series A: $103,000.00

Series B: $177,000.00

	
 
	
Sandler Capital Partners V FTE, L.P.
	
Series A: 38

Series B: 66
	
Series A: $38,000.00

Series B: $66,000.00

	
 
	
Sandler Capital Partners V Germany, L.P.
	
Series A: 4

Series B: 7
	
Series A: $4,000.00

Series B: $7,000.00

	
Apollo Investment Fund V, L.P.
	
Sandler Capital Partners V, L.P.
	
Series A: 1,863

Series B: 3,199
	
Series A: $1,863,000.00

Series B: $3,199,000.00

	
 
	
Sandler Capital Partners V FTE, L.P.
	
Series A: 689

Series B: 1,183
	
Series A: $689,000.00

Series B: $1,183,000.00

	
 
	
Sandler Capital Partners V Germany, L.P.
	
Series A: 69

Series B: 119
	
Series A: $69,000.00

Series B: $119,000.00

	
Apollo Overseas Partners V, L.P.
	
Sandler Capital Partners V, L.P.
	
Series A: 98

Series B: 170
	
Series A: $98,000.00

Series B: $170,000.00

	
 
	
Sandler Capital Partners V FTE, L.P.
	
Series A: 37

Series B: 63
	
Series A: $37,000.00

Series B: $63,000.00

	
 
	
Sandler Capital Partners V Germany, L.P.
	
Series A: 4

Series B: 6
	
Series A: $4,000.00

Series B: $6,000.00

	
 
	
 
	
Total: 15,000
	
Total: $15,000,000.00

</table>

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