Document:

<PAGE>
                                                                    Exhibit 10.7
                                      LEASE

         LEASE made the 30th day of August, 2001, between KOBRUN INVESTMENTS,
III, L.L.C. whose address is 12 Gloria Lane, Suite II, Fairfield, New Jersey
07004 (hereinafter called "Landlord"), and WOMEN'S GOLF UNLIMITED with an office
at 18 Gloria Lane, Fairfield, NJ 07004 (hereinafter called "Tenant").

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

         For and in consideration of the covenants herein contained, and upon
the terms and conditions herein set forth, Landlord and Tenant agree as follows:

         1. DESCRIPTION. Landlord hereby leases to Tenant, and Tenant hereby
hires from Landlord the following space: 18 Gloria Lane, Fairfield, NJ 07004,
consisting of approximately 20,612 sq. ft. plus an additional 7,830 sq. ft.
located in same building, as shown on attached site plan. Total space occupied
to be 28,442 sq. ft. (The Premises).

         2. TERM. The Premises are leased for a term of three (3) years
commencing on December 1, 2001 and to end at 12:00 Midnight on November 30,
2004. Tenant may take occupancy commencing December 1, 2001 therefrom and
thereafter for the term of the Lease and shall pay all charges attributable
thereto including but not limited to, basic rent, taxes, and insurance. Tenant
shall have one (1) option for an additional two (2) year term. Increase for the
new term to be based on 100% CPI increase over base year. Base rent figure for
the calculation shall be $6.40 per square foot net.

         3. BASIC RENT. The Tenant shall pay to the Landlord during the term of
the Lease total basic annual net rent of one hundred eighty two thousand
twenty-eight dollars and eighty cents ($182,028.80) in equal monthly
installments of fifteen thousand one hundred sixty-nine dollars and seven cents
($15,169.07) per month payable in advance on the first day of each and

<PAGE>

every month during the term of the Lease with additional rent to be paid as
hereinafter set forth. Tenant shall also pay any additional charges, on a pro
rated basis, whose sum encompasses the cost of the following: taxes, insurance
on the building, water, sewage, landscaping, snow removal, common maintenance
and repairs, and common area electricity for the term of the lease. The
approximate charge for the cam charges shall be approximately $1.75 per square
foot. Tenant shall pay the basic rent and any additional rent as hereafter
provided, to Landlord at Landlord's above stated address, or at such other place
as Landlord may designate in writing, without demand and without counterclaim,
deduction or set off.

         4. USE AND OCCUPANCY. To be used for assembly, warehouse, and
distribution of golf clubs and apparel, and associated components and products.

         5. HAZARDOUS SUBSTANCES. Tenant shall not generate, manufacture, store,
handle or dispose at the premises any types and quantities of hazardous
substances including red and yellow label products. Tenant shall be allowed to
store the equivalent of two (2) fifty-five (55) gallon drums of acetone as part
of its occupancy.

         6. CARE AND REPAIR OF PREMISES. Tenant shall commit no act of waste and
shall take good care of the Premises and the fixtures and appurtenances therein,
and shall, in the use and occupancy of the Premises, conform to all laws, orders
and regulations of the federal, state and municipal governments or any of the
departments, and the Tenant, which has examined the Premises thoroughly, takes
the Premises AS IS, with the exception of Landlord's work detailed in Addendum
1, and Tenant will be responsible for reasonable repairs, replacements and
upkeep caused by normal wear and tear of building. Structural repairs, including
but not limited to the roof, exterior walls and foundation will be made by
Landlord, unless caused by Tenant's negligence. All improvements made by the
Tenant to the Premises, which are so attached to the

                                     - 2 -
<PAGE>

Premises that they cannot be removed without material injury to the Premises,
shall become the property of Landlord. Not later than the last day of the term,
Tenant shall surrender the Premises in as good condition as they were in the
beginning of the term, reasonable wear excepted.

         7. ABANDONMENT. Tenant shall not, without first obtaining the written
consent of Landlord, abandon the Premises or allow the Premises to become vacant
or deserted. Tenant acknowledges and agrees that the foregoing covenant on its
part is a material inducement to Landlord to execute the Lease, recognizing that
the continuous occupancy of the lease Premises is material to the economic value
of the Premises.

         8. ASSIGNMENT AND SUBLETTING. The Tenant shall have the right to assign
or sublet this Lease in part or in full subject only to the Landlord's consent
as to suitability of a prospective assignee or sub-tenant, which shall not be
unreasonably withheld.

         9. TAXES, ASSESSMENTS, UTILITIES AND HAZARDS INSURANCE. This Lease
shall be a triple-net lease. Accordingly, the Tenant agrees to be ultimately
responsible for payment of its pro rata portion of insurance coverage as
provided in this Lease, real estate taxes and any other impositions by
governmental authority assessed and allocated to the building and lands
described within this Lease, including assessment for capital improvements made
by such governmental authority. Tenant's pro rata portion for capital
improvements shall also be based on the total cost of said capital improvements
divided by the anticipated useful life in accordance with generally accepted
accounting principles, and allocated based on remaining time left on lease. In
addition, the Tenant shall pay for all utilities services whatsoever in
connection with the Demised Premises. Landlord, upon payment of all real estate
taxes, shall give Tenant proof of such payment, and Tenant shall reimburse
Landlord for payment of such real estate taxes not later than ten (10) days
after receipt of proof of payment by Landlord. In the event the tax structure of

                                     - 3 -
<PAGE>

this State shall change concerning the assessment and payment of taxes on real
estate, it is the intent of the parties hereto that all realty taxes whatsoever
chargeable or taxes in substitution for real estate taxes, as applicable to the
Demised Premises, shall be paid by the Landlord and reimbursed to Landlord by
Tenant.

          It is expressly understood and agreed that the Landlord shall carry
fire insurance with full extended coverage in broad form wherein Landlord is
named as the primary insured in an amount equivalent to the appraised value of
the Premises (as determined by a MAI approval commissioned at Landlord's sole
cost), exclusive of foundation (without depreciation), inclusive of broad form
boiler and machinery coverage, including air-conditioning system, together with
coverage for sprinkler damage to the building or its improvements. Landlord
shall use best efforts to try to obtain reasonable rates. Tenant shall be billed
for its pro-rata share on a monthly basis as part of the rent. In addition,
Landlord, at Tenant's sole cost, shall obtain rent insurance to cover payment of
rent after a casualty has partially or wholly destroyed the Premises, as well as
adequate public liability insurance wherein the Landlord is named as a party
insured in the minimum amount of One Million Dollars ($1,000,000.00) per claim
together with excess coverage limits of not less than One Million Dollars
($1,000,000.00) per incident and property damage of One Million Dollars
(1,000,000.00).

         Landlord reserves the right, every year, to review and to upgrade the
coverage hereinabove referred to in order to establish the then actual full
appraised value of insurable improvements (as determined by MAI appraisal
provided by Landlord) and to require Tenant to increase any other insurance
coverage as may be required to provide reasonable insurance coverage. Landlord
may, at its sole discretion, require the Tenant to obtain such other insurance
(including flood insurance pursuant to any federally-recognized program) as it
may deem

                                     - 4 -
<PAGE>

reasonably necessary to provide adequate coverage for all reasonably insurable
risks attributable to the use, ownership and operation of the Tenant's leased
Premises.

         Notwithstanding the foregoing, Landlord shall not be responsible for
obtaining insurance coverage of any contents in the Premises.

         Landlord and Tenant hereby release the other from any and all liability
or responsibility (to the other or anyone claiming through or under them by way
of subrogation or otherwise) under fire and extended coverage and supplementary
contract casualties if such fire, casualty or damage shall have been caused by
the fault or negligence of the other party, or anyone for whom such party may be
responsible; provided, however that this release shall be applicable and in
force and effect only with respect to loss or damage occurring during such time
as the releasor's policies shall contain a clause or endorsement to the effect
that any such release shall not adversely affect or impair said policies or
prejudice the right of the releasor to recover thereunder. Each of Landlord and
Tenant agrees that its policies will include such a clause or endorsement at the
sole cost of Tenant.

         Tenant covenants and agrees that it will indemnify, defend and save
harmless the Landlord against and from all liabilities, obligations, damages,
penalties, claims, costs, charges and expenses, including, without limitation,
reasonable attorney's fees, which may be imposed upon or incurred by Tenant by
reason of any of the following occurring during the term of this Lease:

         (i)      Any matter, cause or thing arising out of the use and
                  occupancy of the leased Premises or any part thereof caused by
                  the negligence or willful acts of the Tenant, or any of its
                  agents, contractors, servants, employees, licensees or
                  invitees;

         (ii)     Any failure on the part of Tenant to perform or comply with
                  any of the covenants, agreements, terms or conditions
                  contained in this Lease on its part to be performed or
                  complied with.

                                     - 5 -
<PAGE>

         Landlord shall promptly notify Tenant in a timely manner in writing of
any such claim asserted against it and shall promptly send to Tenant copies of
all papers or legal process served upon it in connection with any action or
proceeding brought against Landlord by reason of any such claim, in order that
Tenant shall interpose a timely defense to such action.

         10. EXTERIOR MAINTENANCE. Not Applicable.

         11. EMINENT DOMAIN. If Tenant's use of the Premises is materially
affected due to the taking by eminent domain of the Premises or any part thereof
or any estate therein, then this Lease shall terminate on the date when title
vests pursuant to such taking. The rent, and any additional rent, shall be
apportioned as of said termination date, and any prepaid rent paid for any
period beyond said date shall be repaid to Tenant. Tenant shall not be entitled
to any part of the award for such taking or any payment in lieu thereof, but
Tenant may file a separate claim for any taking of fixtures and improvements
owned by Tenant which have not become the Landlord's property, and for moving
expenses, provided same shall in no way affect or diminish Landlord's award. In
the event of a partial taking which does not effect a termination of this Lease
but does deprive Tenant of the use of a portion of the Demised Premises, there
shall either be an abatement or an equitable reduction of the basis rent and
additional rent, depending upon the period for which and the extent to which the
Premises so taken are not reasonably usable for the purpose for which they are
leased hereunder.

         12. LANDLORD'S REMEDIES ON DEFAULT. If Tenant defaults in the payment
of basic rent, or any additional rent, or defaults in the performance of any of
the other covenants and conditions hereof, Landlord may give Tenant notice of
such default, and if Tenant does not cure the default in payment of any basic
rent within five (5) days or cure any other non-monetary default within thirty
(30) days after giving of such notice (or if such

                                     - 6 -
<PAGE>

other default is of such nature that it cannot be completely cured within such
period, if Tenant does not commence such curing within such thirty (30) days and
thereafter proceeds with reasonable diligence and in good faith to cure such
default), then Landlord may terminate this Lease on not less than ten (10) days
notice to Tenant, on the date specified in said notice, Tenant's right to
possession of the Demised Premises shall cease, and Tenant shall then quit and
surrender the Premises to the Landlord, but Tenant shall remain liable as
hereafter provided. If this Lease shall have been so terminated by Landlord
pursuant to this Paragraph, Landlord may at any time thereafter resume
possession of the Premises by any lawful means and remove Tenant or other
occupants and their effects.

         13. DEFICIENCY. In any case where Landlord has recovered possession of
the Premises by reason of Tenant's default, Landlord may, at Landlord's option,
occupy the Premises or cause the Premises to be altered, divided, consolidated
with other adjoining premises or otherwise changed or prepared for reletting,
any may relet the Premises or any part thereof as agent of Tenant or otherwise
for a term or terms to expire prior to, at the same time as, or subsequent to
the original expiration date of this Lease, at Landlord's option, and receive
the rent therefor. Rent so received shall be applied first to the payment of
such expenses as Landlord may have incurred in connection with the recovery of
possession, altering, dividing, consolidating with other adjourning premises or
otherwise changing or preparing for reletting, and the reletting, including
brokerage and reasonable attorney's fees, and then to the payment of damages in
amounts equal to the rent hereunder and to the costs and expense of performance
of the other covenants for Tenant as herein provided. Landlord agrees, in any
such case, whether or not Landlord has relet, to pay to Landlord damages equal
to the basic and additional rent and other sums herein agreed to be paid by
Tenant, less the net proceeds of the reletting, if any, as ascertained from time
to time, and the same shall be payable by Tenant on the date rent is

                                     - 7 -
<PAGE>

payable as above specified. Tenant shall not be entitled to any surplus accruing
as a result of any such reletting. In reletting the Premises as aforesaid,
Landlord may grant rent concessions, and Tenant shall not be credited therewith.
No such reletting shall constitute a surrender and acceptance or be deemed
evidence thereof. If Landlord elects, pursuant hereto, actually to occupy and
use the Premises or any part thereof during any part of the balance of the term
as originally fixed or such extended, there shall be allowed against Tenant's
obligation for rent or damages as herein defined, during the period of
Landlord's occupancy, the reasonable value of such occupancy, not to exceed, in
any event, the basic and additional rent herein reserved, and such occupancy
shall not be construed as a release of Tenant's liability hereunder.

         Landlord's remedies hereunder are in addition to any remedy allowed by
law.

         14. RIGHT TO CURE TENANT'S BREACH. If Tenant breaches any covenant or
condition of this Lease, Landlord may, on reasonable notice to Tenant (except
that no notice need be given in case of emergency), cure such breach at the
expense of Tenant, and the reasonable amount of all expenses, including
attorney's fees, incurred by Landlord in so doing (whether paid by Landlord or
not) shall be deemed "additional rent" payable on demand.

         15. MECHANIC'S LIENS. Tenant shall, within ten (10) days after notice
from Landlord, discharge or satisfy by bond or otherwise any mechanic's liens
for materials or labor claimed to have been furnished to the Premises on
Tenant's behalf.

         16. RIGHT TO INSPECT AND REPAIR. Landlord may enter the Premises but
shall not be obligated to so do (except as required by any specific provision of
this Lease) at any reasonable time on reasonable notice to Tenant (except that
no notice need be given in case of emergency) for the purpose of inspection or
the making of such repairs, replacements or additions in, to, on or about the
Premises as Landlord deems necessary or desirable. Tenant shall have no claims
or

                                     - 8 -
<PAGE>

causes of action against Landlord by reason thereof. In no event shall Tenant
have any claim against Landlord for interruption to Tenant's business, however
occurring.

         17. HOLDOVER TENANCY. If Tenant holds possession of the premises after
the term of this Lease, Tenant shall become a tenant from month to month under
the provisions herein provided, but at a monthly rental of One Hundred Fifty
Percent (150%) of the rent for the last month of the term of any renewal term,
payable in advance on the first day of each month, and such tenancy shall
continue until terminated by Landlord, or until Tenant shall have given to
Landlord a written notice at least thirty (30) days prior to the intended date
of termination, of intent to terminate such tenancy.

         18. RIGHT TO SHOW PREMISES. Landlord may show the Premises to
prospective purchasers and mortgagees; and during the six (6) months prior to
termination of this Lease, to prospective tenants, during business hours on
reasonable notice to Tenant.

         19. LATE CHARGE. Tenant shall pay a "Late Charge" of Two Percent (2%)
of any installment of rent or additional rent paid more than five (5) days after
the due date thereof, to cover the extra expense involved in handling delinquent
payments.

         20. NO OTHER REPRESENTATIONS. No representations or promises shall be
binding on the parties hereto except those representations and promises
contained herein or in some future writing signed by the party making such
representation(s) or promise(s).

         21. QUIET ENJOYMENT. Landlord covenants that if, and so long as Tenant
pays the rent and any additional rent as herein provided and performs the
covenants hereof, Landlord shall do nothing to affect Tenant's right to
peaceably and quietly have, hold and enjoy the Premises for the term herein
mentioned, subject to the provisions of this Lease.

                                     - 9 -
<PAGE>

         22. PARAGRAPH HEADINGS. The paragraph headings in this Land position of
its provisions are intended for convenience only and shall not be taken into
consideration in any construction or interpretation of this Lease or any of its
provisions.

         23. APPLICABILITY TO HEIRS AND ASSIGNS. The provisions of this Lease
shall apply to, bind and inure to the benefit of Landlord and Tenant, and their
respective heirs, successors, legal representatives and assigns.

         24. LANDLORD'S LIABILITY FOR LOSS OF PROPERTY. Landlord shall not be
liable for any loss of property from any cause whatsoever, including, but not
limited to, water damage, theft or burglary from the Demised Premises, and
Tenant covenants and agrees to make no claim for any such loss at any time
unless such loss shall be the result of the negligence or willful conduct of
Landlord.

         25. NOTICES. Any notice by either party to the other shall be in
writing and shall be deemed to have been duly given only if delivered personally
or sent by registered mail or certified mail in a postpaid envelope addressed:
if to Tenant, at the above described Building; if to Landlord, at Landlord's
address as set forth above; to either at such other addresses as Landlord or
Tenant, respectively, may designate in writing. Notice shall be deemed to have
been duly given, if delivered personally, on delivery thereof, and if mailed,
upon the tenth day after the mailing thereof, except if notice shall be given
for a lesser period as otherwise in this Lease provided.

         26. SECURITY. Existing security deposit of nineteen thousand five
hundred dollars ($19,500.00), shall remain as security for the full and faithful
performance by the Tenant of all of the terms and conditions upon the performed,
which said sum shall be returned to the Tenant after the time fixed as the
expiration of the term herein, provided the Tenant has fully and

                                     - 10 -
<PAGE>

faithfully
carried out all of the terms, covenants and conditions on the Tenant's part to
be performed. In the event of a BONA FIDE sale, subject to this Lease, the
Landlord shall have the right to transfer the security to the vendee for the
benefit of the Tenant and the Landlord shall be considered released by the
Tenant from all liability for the return of such security; and the Tenant agrees
to look to the new Landlord solely for the return of the said security, and it
is agreed that this shall apply to every transfer or assignment made of the
security to a new Landlord.

         27. SECURITY NOT TO BE ENCUMBERED. That the security deposited under
this Lease shall not be mortgaged, assigned or encumbered by the Tenant without
the written consent of the Landlord.

         28. SUBORDINATION. In the event Landlord shall desire to finance or
refinance the Premises through an institutional lender, Tenant agrees that its
interest in the Premises shall be subordinated to such lender. In connection
therewith, Tenant agrees to execute any documents reasonably necessary to
subordinate its interest in the Premises.

         29. CERTIFICATE OF OCCUPANCY. In the event the Township of Fairfield
shall require a new Certificate of Occupancy to be issued due to a change of
Tenant, Tenant agrees that it will, at its sole cost and expense, obtain such
new Certificate of Occupancy, including, but not limited to, any modifications
to the Premises required by the Township of Fairfield to obtain such new
Certificate of Occupancy. Landlord will be responsible for correcting any
existing faults that are not a direct result of Tenant's occupancy. The Lease is
subject to Tenant obtaining such Certificate of Occupancy.

         30. COMPLIANCE WITH THE LAW.

         A. Landlord warrants to Tenant that the Premises, in its state existing
on the Lease commencement date, will not violate any provisions of any
applicable building code, regulation

                                     - 11 -
<PAGE>

or ordinance so as to materially adversely affect use of the Premises by Tenant.
In the event this warranty has been violated, then Landlord shall, after written
notice from Tenant, promptly at Landlord's sole cost and expense, rectify any
such violation. In the event Tenant does not give to Landlord written notice of
the violation of this warranty within six (6) months from the Lease commencement
date (unless the violation was not known and could not reasonably have been
ascertained by Tenant), the correction of same shall be the obligation of the
Tenant at Tenant's sole cost. The warranty contained in this Paragraph 30A shall
be of no force or effect if Tenant caused such violation.

         B. Except as provided in Paragraph 30A, Tenant shall, at Tenant's
expense, comply promptly with all statutes, ordinances, rules, regulations,
orders and requirements in effect during the term or any part of the term
hereof, applicable to the Premises.

         C. Without limiting the generality of the provisions of Paragraph 30A
or any other provisions of this Lease, Tenant, at its sole cost and expense,
shall comply with, and observe and perform all of the obligations of Landlord
and/or Tenant under the New Jersey Environmental Cleanup Responsibility Act,
N.J.S.A. 13:lK-6 ET. SEQ. and the rules, regulations, requirements, orders and
directives issued thereunder (collectively "ISRA"), insofar as the same may
pertain to the use, or the manner of use, of the Premises or any appurtenance
thereto by Tenant or any other person during the term or during any other period
when Tenant or any person claiming under Tenant may be permitted to enter upon
the Facility, the Premises or any appurtenance thereto, and, among other things,
Tenant shall:

         (i)      Not permit or allow the Premises or the parking lot to be used
                  in a manner so as to be considered an "industrial
                  establishment" as such term is in ISRA without the prior
                  written consent of Landlord;

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<PAGE>

         (ii)     At all times during the term keep Landlord advised of the
                  "Standard Industrial Classification" (as such term is used in
                  ISRA) of Tenant and each other person using the Premises;

         (iii)    File as and when required by ISRA all forms, notices,
                  affidavits, certifications, plans, declarations, reports and
                  other information as may be necessary or desirable to comply
                  with ISRA.

         (iv)     Make or cause to be made all such soil, water and other tests
                  as may be necessary or desirable to comply with ISRA;

         (v)      Furnish Landlord with a copy of each of the items referred
                  to in the preceding clauses, and with copies of all
                  correspondence pertaining to the ISRA, as and when available;
                  and

         (vi)     Give Landlord prompt notice if, as and when Tenant becomes
                  aware of any use, spill, discharge or other event at the
                  Facility or the Premises concerning a hazardous substance or
                  waste to which ISRA may pertain and in the event of any spill,
                  discharge or contamination take the necessary action to
                  provide the required environmental cleanup.

         The provisions of this paragraph shall survive the expiration or
         termination of this Lease.

         Nothing herein shall hold tenant responsible for discharge of hazardous
substances or waste prior to tenant's occupancy of the premises.

                                     - 13 -
<PAGE>

         IN WITNESS WHEREOF, Landlord and Tenant have hereunto set their hands
and seals the date and year first above written.

WITNESSES:                                  LANDLORD:

                                            KOBRUN INVESTMENTS III, L.L.C.

/s/ [Illegible] Kobola GT (ASCP)
----------------------------------
                                            By:/s/ Frank Kobola           (L.S.)
                                               ---------------------------------
                                               FRANK KOBOLA, MANAGING MEMBER

                                            TENANT:

                                            WOMEN'S GOLF UNLIMITED

/s/ [Illegible]
----------------------------------

                                            By:/s/ Douglas A. Buffington  (L.S.)
----------------------------------             ---------------------------------
                                               DOUGLAS A. BUFFINGTON, PRESIDENT

                                     - 14 -
<PAGE>

                                   ADDENDUM 1

LANDLORD'S WORK

         1.       Replace carpet in new 1,500 sq. ft office area.
         2.       Paint walls in new 1,500 sq. ft. office area.
         3.       Replace carpet in existing accounting area (three rooms).
         4.       Removal of two walls in new 1,500 sq. ft. office area, to
                  be mutually agreed to by both Tenant and Landlord.

         Note:    New carpet to be of a quality and grade that is mutually
                  agreed to by both Tenant and Landlord.

WITNESSES:                                  LANDLORD:

                                            KOBRUN INVESTMENTS III, L.L.C.

/s/ [Illegible] Kobola G.T. (ASCP)
----------------------------------

                                            By:/s/ Frank Kobola           (L.S.)
----------------------------------             ---------------------------------
                                               FRANK KOBOLA, MANAGING MEMBER

                                            TENANT:

                                            WOMEN'S GOLF LIMITED

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

                                            By:/s/ Douglas A. Buffington  (L.S.)
----------------------------------             ---------------------------------
                                               DOUGLAS A BUFFINGTON,
                                               PRESIDENT<PAGE>

                                  EXHIBIT 10.1

                          EMPLOYEE STOCK OWNERSHIP PLAN

                                TABLE OF CONTENTS
<TABLE>
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                                                                                                     PAGE
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<S>                                                                                                   <C>
SECTION 1 - PARTICIPATION..............................................................................2
         1.01     Eligibility Requirements.............................................................2
         1.02     Service for Eligibility..............................................................2
         1.03     Effect of Rehire on Prior Eligibility Service........................................2

SECTION 2 - CONTRIBUTIONS..............................................................................3
         2.01     Regular Employer Contributions.......................................................3
         2.02     Employer Contribution to Reduce Loan Obligation......................................3
         2.03     Rollover Contributions/Participant Contributions.....................................3
         2.04     Limitations on Annual Additions......................................................3
         2.05     Corrective Adjustments...............................................................4
         2.06     Limitation on Reversion of Contributions.............................................5

SECTION 3 - ALLOCATION OF EMPLOYER CONTRIBUTIONS.......................................................6
         3.01     Allocation of Regular Contributions and Forfeitures..................................6
         3.02     Allocation of Employer Shares Purchased with Proceeds of Plan Loan...................6
         3.03     Special Restriction on Allocation....................................................6

SECTION 4 - PARTICIPANTS' ACCOUNTS.....................................................................7
         4.01     Establishment of Employer Contributions Accounts.....................................7
         4.02     Establishment of Suspense Account (Effective on and after January 1, 1998 and
                  prior to October 15, 1999)...........................................................7
         4.02     Establishment of Suspense Account (Effective on and after October 15, 1999)..........7

SECTION 5 - PLAN INVESTMENTS...........................................................................9
         5.01     Primary Investment...................................................................9
         5.02     Diversification Requirements.........................................................9

SECTION 6 - VALUATION OF PARTICIPANTS' ACCOUNTS.......................................................11
         6.01     Valuations..........................................................................11
         6.02     Method of Adjustment................................................................11

SECTION 7 - RETIREMENT BENEFITS.......................................................................12
         7.01     Eligibility for Retirement..........................................................12
</TABLE>

                                       i

<PAGE>

<TABLE>
<CAPTION>

<S>                                                                                               <C>
SECTION 8 - DEATH BENEFITS............................................................................13
          8.01    Eligibility for Death Benefit.......................................................13
          8.02    Designation of Beneficiary..........................................................13
          8.03    Distribution of Deathz Benefit......................................................14

SECTION 9 - DISABILITY BENEFITS.......................................................................15
          9.01    Amount of Disability Benefit........................................................15
          9.02    Determination of Total and Permanent Disability.....................................15

SECTION 10 - TERMINATION OF EMPLOYMENT BENEFITS.......................................................16
         10.01    Amount of Benefits Upon Termination of Employment...................................16

SECTION 11 - VESTING..................................................................................17
         11.01    Determination of Vested Benefits....................................................17
         11.02    Full Vesting at Normal Retirement Age...............................................17
         11.03    Service for Vesting.................................................................17
         11.04    Effect of Break in Service on Vesting...............................................17
         11.05    Forfeitures.........................................................................18

SECTION 12 - PAYMENT OF BENEFITS......................................................................19
         12.01    Method of Payment...................................................................19
         12.02    Timing of Payments..................................................................19
         12.03    Distributions After Death...........................................................20
         12.04    Consent and Cash-Out Requirements...................................................21
         12.05    Eligible Rollover Distributions.....................................................22
         12.06    Put Option..........................................................................23
         12.07    Right of First Refusal..............................................................24
         12.08    Installment Distributions...........................................................24

SECTION 13 - TRUST AGREEMENT..........................................................................26
         13.01    Description of Trust Agreement......................................................26

SECTION 14 - PLAN ADMINISTRATION......................................................................27
         14.01    Plan Administrator..................................................................27
         14.02    Duties of Plan Administrator........................................................27
         14.03    Interpretation of Document..........................................................27

SECTION 15 - AMENDMENT AND TERMINATION................................................................28
         15.01    Sponsor's Right to Amend or Terminate the Plan......................................28

SECTION 16 - DISTRIBUTIONS ON PLAN TERMINATION........................................................29
         16.01    Full Vesting on Plan Termination....................................................29
         16.02    Payment on Plan Termination.........................................................29
</TABLE>

                                       ii

<PAGE>

<TABLE>
<CAPTION>

<S>                                                                                               <C>
         16.03    Discontinuance of Contributions; Partial Termination of Plan........................29

SECTION 17 - CREDITORS OF PARTICIPANTS................................................................30
         17.01    Non-Assignability...................................................................30
         17.02    Qualified Domestic Relations Orders.................................................30

SECTION 18 - CLAIMS PROCEDURES........................................................................31
         18.01    Filing a Claim for Benefits.........................................................31
         18.02    Denial of Claim.....................................................................31
         18.03    Remedies Available to Claimants.....................................................31

SECTION 19 - TOP HEAVY RULES..........................................................................33
         19.01    Definitions.........................................................................33
         19.02    Top Heavy Status....................................................................34
         19.03    Minimum Contributions...............................................................35
         19.04    Top Heavy Vesting...................................................................35

SECTION 20 - VOTING RIGHTS............................................................................37
         20.01    Participant Voting Rights with Respect to Allocated Shares..........................37
         20.02    Participant Voting Rights with Respect to Unallocated Shares........................37

SECTION 21 - EXEMPT LOANS.............................................................................38
         21.01    Authority to Borrow.................................................................38
         21.02    Requirements for Plan Loans.........................................................38

SECTION 22 - MISCELLANEOUS............................................................................40
         22.01    Employer's Right to Terminate Employees.............................................40
         22.02    Gender and Number...................................................................40
         22.03    Merger or Consolidation.............................................................40
         22.04    Named Fiduciaries...................................................................40
         22.05    Limitations on Payment; Missing Participant.........................................40
         22.06    Additional Service Credits..........................................................41
         22.07    Uniformed Services Employment and Reemployment Rights Act...........................41
         22.08    Nonterminable Protections and Rights................................................41
         22.09    Dividends...........................................................................41
         22.10    Use of Return of Capital with Respect to Employer Shares............................42
         22.11    Minimum Distributions...............................................................42
         22.12    Qualified Transportation Fringe Compensation........................................42
         22.13    Mistakes or Misstatements...........................................................42

SECTION 23 - DEFINITIONS..............................................................................44
</Table>
                                      iii

<PAGE>

                     UNITED COMMUNITY FINANCIAL CORPORATION
                          EMPLOYEE STOCK OWNERSHIP PLAN

                  United Community Financial Corp. (the "Sponsor") hereby
adopts, as of the Effective Date, the following amended and restated employee
stock ownership plan (hereinafter referred to as the "Plan"). The Plan will be
maintained for the exclusive benefit of the Employer's eligible Employees and,
where applicable, the Beneficiaries of such Employees. It is intended that the
Plan, together with the Trust Agreement, will comply with the applicable
provisions of the Internal Revenue Code of 1986, as amended, and the Employee
Retirement Income Security Act of 1974, as amended. The Plan was originally
effective as of January 1, 1998.

                  Unless otherwise provided in the terms of this amended and
restated Plan, the vested interest of a Participant who terminated employment is
determined by the provisions of the Plan in effect on the date the Participant
terminated employment.

<PAGE>

                            SECTION 1 - PARTICIPATION

1.01          ELIGIBILITY REQUIREMENTS

              Each Employee of the Employer who is classified by the Employer as
a "part-time employee" shall be eligible to participate in the Plan on the Entry
Date coinciding with or first following the date on which he has completed a
Year of Eligibility Service and has attained age 20. A part-time Employee shall
also be given credit for all Years of Eligibility Service with an Affiliate
which is not a participating employer.

              Each Employee of the Employer who is classified by the Employer as
a full-time Employee shall be eligible to participate in the Plan on the Entry
Date coinciding with or first following the date on which he has completed 6
months of service and has attained age 20. A full-time employee will be given
credit for a month of service if such full-time employee is employed by the
Employer or an Affiliate at any time during such month.

              An individual who ceases to be classified by the Employer as an
Employee but who remains actively employed by the Employer or an Affiliate will
not be treated as being eligible to receive a distribution from the Plan
pursuant to Section 10.01 until his termination of employment from the Employer
and all Affiliates.

1.02          SERVICE FOR ELIGIBILITY

              An Employee will be credited with a "Year of Eligibility Service"
on the last day of an Eligibility Computation Period in which he is credited
with at least 1,000 Hours of Service. An Employee's "Eligibility Computation
Period" is a 12-month period beginning on his Employment Commencement Date or,
to the extent necessary, any anniversaries of such Employment Commencement Date.

1.03          EFFECT OF REHIRE ON PRIOR ELIGIBILITY SERVICE

              A former Participant who is reemployed by the Employer following
the termination of his employment with the Employer and all Affiliates will
participate in the Plan on the date of his reemployment with the Employer,
provided that he is classified as an Employee on such date.

                                       2
<PAGE>

                            SECTION 2 - CONTRIBUTIONS

2.01          REGULAR EMPLOYER CONTRIBUTIONS

              Subject to its right to terminate or amend the Plan, for each Plan
Year, the Employer may contribute and pay to the Trustee of the Trust Fund
created for the purpose of carrying out this Plan a contribution in cash or in
Employer Shares as the Board of Directors of the Sponsor may in its discretion
determine.

              The amount of such contribution by the Employer to be paid to the
Plan in any year will be such amount as the Board of Directors of the Sponsor
may in its discretion determine, provided, however, that in any year, the amount
contributed pursuant to this section will not exceed the maximum amount
deductible from the Employer's income for such year under Section 404(a)(3) of
the Code.

2.02          EMPLOYER CONTRIBUTION TO REDUCE LOAN OBLIGATION

              Subject to its right to terminate or amend the Plan, in addition
to the contributions authorized by Section 2.01, the Employer may in its
discretion contribute amounts sufficient to enable the Trustee to pay, on or
before the due date thereof, each installment of principal and interest on a
Plan loan used to acquire Employer Shares, as further described in Section 21,
provided that the amounts contributed in any year by the Employer pursuant to
this Section 2.02 will not exceed the maximum amount deductible from the
Employer's income for such year under Section 404(a)(9) of the Code.

2.03          ROLLOVER CONTRIBUTIONS/PARTICIPANT CONTRIBUTIONS

              Neither rollover contributions nor Participant contributions to
the Plan are permitted.

2.04          LIMITATIONS ON ANNUAL ADDITIONS

              Annual Additions to each Participant's Account will not exceed the
lesser of (a) $30,000, or such increased amount as permitted by the Secretary of
the Treasury; or (b) 25% of the Participant's Section 415 Limit Compensation
paid or made available for a Limitation Year. If the Annual Additions allocated
to a Participant's Account for a Limitation Year is in excess of the limitations
set forth in this paragraph, such excess will be considered an "excess Annual
Addition."

              For the purpose of this section, Section 2.04, "Section 415 Limit
Compensation" means compensation as defined in Treasury Regulation Section
1.415-2(d)(1)-(3), or one of the alternative definitions of compensation set
forth in Treasury Regulation Section 1.415-2(d)(11)(i) or (ii), as selected by
the Plan Administrator.

                                       3
<PAGE>

              For the purpose of this section, Section 415 Compensation will
include "elective deferrals," as such term is defined by Section 402(g)(3) of
the Code, and amounts contributed or deferred at the election of the Participant
by the Employer that are not includable in the gross income of the Participant
by reason of Section 125, Section 457, or for Limitation Years commencing on and
after January 1, 2001, Section 132(f)(4) of the Code.

              The following paragraphs of this section are effective for all
Limitation Years prior to the first Limitation Year commencing on or next
following January 1, 2000. If the Participant is, or was, covered under a
defined benefit plan and a defined contribution plan maintained by the Employer
or an Affiliate, the sum of the Participant's defined benefit plan fraction and
defined contribution plan fraction may not exceed 1.0 in any Limitation Year.

              The defined benefit plan fraction is a fraction, the numerator of
which is the sum of the Participant's Projected Annual Benefits under all
defined benefit plans (whether or not terminated) maintained by the Employer or
an Affiliate, and the denominator of which is the lesser of (i) 1.25 times the
dollar limitation of Code Section 415(b)(1)(A) in effect for the Limitation
Year; or (ii) 1.4 times the Participant's average compensation for the three
consecutive years that produced the highest average.

              The defined contribution plan fraction is a fraction, the
numerator of which is the sum of the Annual Additions to the Participant's
Account under all defined contribution plans maintained by the Employer (whether
or not terminated) or an Affiliate for the current and all prior Limitation
Years, and the denominator of which is the sum of the lesser of the following
amounts determined for such year and for each prior Year of Service with the
Employer or an Affiliate: (i) 1.25 times the dollar limitation in effect under
Code Section 415(c)(1)(A); or (ii) 1.4 times the amount that may be taken into
account under Code Section 415(c)(1)(B).

              For any years in which the Plan is "top heavy," "1.0" will be
substituted for "1.25" in the preceding two paragraphs.

              If, in any Limitation Year, the sum of the defined benefit plan
fraction and the defined contribution plan fraction exceeds 1.0, the rate of
benefit accruals under the defined benefit plan will be reduced so that the sum
of the fractions equals 1.0.

2.05          CORRECTIVE ADJUSTMENTS

              If, as a result of the allocation of Forfeitures, a reasonable
error in estimating a Participant's annual compensation, or under other limited
facts and circumstances that the Commissioner will specify, an excess Annual
Addition exists, such excess will be disposed of by reducing contributions made
by the Employer and allocated to the Participant's Account for the applicable
Limitation Year in the next and succeeding Limitation Years until such excess is
reduced. If an excess Annual Addition exists at the end of the Limitation Year
and the Participant was not covered by the Plan as of the last day of such
Limitation Year, such excess will be treated

                                       4
<PAGE>

as a forfeiture to be held unallocated in a suspense account and applied to
reduce contributions made by the Employer for all remaining Participants in the
next and succeeding Limitation Years prior to any contributions being made by
the Employer to the Plan for such year.

              If an excess Annual Addition exists as a result of a Participant
being a participant in another defined contribution plan maintained by the
Employer or Affiliate, the excess Annual Addition will be treated in accordance
with this Section 2.05 unless treated as an excess annual addition in the other
plan.

2.06          LIMITATION ON REVERSION OF CONTRIBUTIONS

              Prior to the satisfaction of all liabilities to Participants and
Beneficiaries, except as provided in paragraphs (a) through (d) below, all
assets of the Trust Fund will be held for the exclusive benefit of Participants
and their Beneficiaries and may not revert to the Employer.

              (a) In the event any contribution made by the Employer to the Plan
is made based upon a mistake of fact, such contribution may be returned to the
Employer within one year after the date it was contributed to the Plan.

              (b) In the event that the Office of District Director of the
Internal Revenue Service, upon initial application of the Sponsor for approval
of the Plan, and after an opportunity has been given the Sponsor to make any
changes to the Plan and Trust Agreement which may be suggested by such office
for approval of the Plan and Trust Agreement, rules that the Plan and Trust
Agreement fail to qualify as tax exempt under Sections 401 and 501 of the Code,
then the Plan and Trust Agreement will become null and void and the then market
value of the contributions made by the Employer to the Trust prior to the date
of such initial determination as to qualification will be returned by the
Trustee within one year of the date of denial of qualification. This paragraph
(b) will not be applicable unless the application by the Employer is made by the
time prescribed by law for filing the Employer's tax return for the taxable year
in which the Plan is adopted, or such later date as the Secretary of the
Treasury may prescribe.

              (c) In the event that a contribution made by the Employer to the
Plan is disallowed as a tax-deductible expense under Section 404 of the Code,
then such contribution, to the extent that the deduction is disallowed, less the
net losses, if any, attributed thereto, will be returned to the Employer within
one year after the disallowance of the deduction.

              (d) In the event that the Plan is terminated, all amounts held in
a suspense account will be allocated to the Accounts of active Participants in a
nondiscriminatory manner, as determined by the Plan Administrator. To the extent
that any amounts held in the suspense account cannot be allocated due to the
application of Section 415 of the Code, the excess amounts will be treated as a
reversion and distributed to the Sponsor or Employer after the payment to
Participants and Beneficiaries of their Account.

                                       5
<PAGE>

                SECTION 3 - ALLOCATION OF EMPLOYER CONTRIBUTIONS

3.01          ALLOCATION OF REGULAR CONTRIBUTIONS AND FORFEITURES

              As of the last day of each Plan Year, the Employer's regular
contribution made pursuant to this Section 3.01, and any Forfeitures available
for such year, will be allocated to the Accounts of Participants who are both
(a) credited with at least 1,000 Hours of Service during the Plan Year while an
Employee; and (b) are actively employed by the Employer on the last day of the
Plan Year. The amount allocated to the Account of a Participant entitled to
share in the allocation pursuant to this Section 3.01 for the Plan Year will be
in the same proportion to the total amounts available for allocation as the
Compensation of such eligible Participant for the Plan Year bears to the
Compensation of all eligible Participants for such Plan Year.

3.02          ALLOCATION OF EMPLOYER SHARES PURCHASED WITH PROCEEDS OF PLAN
              LOAN

              Employer Shares purchased with the proceeds of a Plan loan will be
held in a suspense account and allocated to eligible Participants' Employer
Contributions Accounts as such loans are reduced and such Shares are released.
Each year the number of Employer Shares released under all Plan loans will be
allocated to each eligible Participant's Employer Contributions Account in the
same manner as the Employer's regular contribution is allocated pursuant to
Section 3.01. Employer Shares described in this Section 3.02 will be released
pursuant to one of the methods referenced in Section 21.02(f).

3.03          SPECIAL RESTRICTION ON ALLOCATION

              Notwithstanding any provision contained herein, no portion of the
assets of the Plan attributable to Employer Shares acquired by the Plan in a
sale to which Section 1042 of the Code applies may be allocated, either directly
or indirectly, (a) to the Employer Contributions Account of a Participant who
owns, after application of Section 318(a) of the Code, more than 25% of either
(i) any class of outstanding stock of the Employer; or (ii) the total value of
any outstanding stock of the Employer; or (b) during the "non-allocation period"
[as defined in Code Section 409(n)], to the Employer Contributions Account of a
Participant who makes an election under Code Section 1042(a) with respect to
Employer Shares or to any person "related" to such Participant, within the
meaning of Code Section 267(b).

                                       6
<PAGE>

                       SECTION 4 - PARTICIPANTS' ACCOUNTS

4.01          ESTABLISHMENT OF EMPLOYER CONTRIBUTIONS ACCOUNTS

              The Plan Administrator will establish and maintain an Employer
Contributions Account for each Participant to record:

              (a)    his share of the Employer contributions and Forfeitures
                     allocated under Section 3; and

              (b)    his share of the net income, or net losses, resulting from
                     the investment thereof.

              The Plan Administrator may establish other accounts for the
benefit of a Participant to the extent it deems necessary for the proper
administration of the Plan.

4.02          ESTABLISHMENT OF SUSPENSE ACCOUNT (EFFECTIVE ON AND AFTER
              JANUARY 1, 1998 AND PRIOR TO OCTOBER 15, 1999)

              The Plan Administrator will establish and maintain a suspense
account to record the number of Employer Shares encumbered under all outstanding
Plan loans. As described in Section 3.02, Employer Shares will be transferred
from the suspense account and allocated to the Participants' Employer
Contributions Accounts as such Shares are released from encumbrance.

4.02          ESTABLISHMENT OF SUSPENSE ACCOUNT (EFFECTIVE ON AND AFTER
              OCTOBER 15, 1999)

              The Plan Administrator shall establish and maintain a suspense
account to record the number of Employer Shares, or the proceeds of such shares,
encumbered under all outstanding Plan loans. To the extent amounts held in the
suspense account represent monies received as a result of a transaction
classified by the Sponsor as a "return of capital," the Plan Administrator
shall, as soon as administratively practicable after the receipt of such monies,
direct the trustee to purchase additional Employer Shares (referred to as
"Additional Employer Shares").

              Solely for the purpose of Section 21.02(f), to the extent that all
monies representing the return of capital have not been used to purchase
Employer Shares by the last day of the Plan Year immediately following the date
such monies are credited to the suspense account, the "number of encumbered
securities held immediately before release" will be deemed to be increased by
the number of Employer Shares actually purchased by the monies representing the
return of capital (plus earnings and dividends on such amounts) during the
period beginning on the first day of the following Plan Year and ending on the
last day of second month of such following Plan Year.

                                       7
<PAGE>

              As described in Section 3.02, Employer Shares shall be transferred
from the suspense account and allocated to the Participants' Employer
Contributions Account as such Shares are released from encumbrance under the
terms of the applicable Plan loans. Additional Employer Shares shall be
transferred from the suspense account and allocated to the Participants'
Employer Contributions Accounts at the same time and in the same proportion as
Employer Shares.

                                       8
<PAGE>

                          SECTION 5 - PLAN INVESTMENTS

5.01          PRIMARY INVESTMENT

              The Plan is intended to be a stock bonus plan under Section 401(a)
of the Code and is hereby designated to be an employee stock ownership plan
within the meaning of Section 4975(e)(7) of the Code. As an employee stock
ownership plan, the Plan will invest primarily in Employer Shares. Any Plan
assets not invested in Employer Shares will be invested in accordance with the
provisions of the Trust Agreement. To this end, the Plan Administrator shall
appoint an investment committee to direct the investment of Plan assets not
invested in Employer Shares.

5.02          DIVERSIFICATION REQUIREMENTS

              (a) A Participant who has completed at least ten years of
participation in the Plan and who has attained age 55 may elect, within the
first 90 days of each of the six Plan Years immediately following the Plan Year
in which he first satisfies such requirements (the "election period"), to direct
the Plan as to the investment of up to 25% of the total balance of his Account
attributable to Employer Shares (to the extent such 25% portion exceeds the
amount to which a prior election under this paragraph applies). In the case of
the Plan Year in which the Participant can make his last such election, the
preceding sentence will be applied by substituting "50%" for "25%." The
Participant's direction will be provided to the Plan Administrator in writing.
The Plan Administrator may elect to exclude from the requirements of this
Section 5.02: (i) all Employer Shares acquired by the Plan on or before December
31, 1986; or (ii) to the extent the market value of the Employer Shares held on
behalf of a Participant in his Account as of a Valuation Date applicable to the
election period does not exceed $500, such Employer Shares.

              (b) To the extent the diversification requirements of this Section
5.02 are applicable to a Participant, the Plan may, notwithstanding Section
409(d) of the Code:

                     (i) distribute the portion of the Participant's Account
              directed by the Participant within the first 180 days of the Plan
              Year in which the election is made. Such distribution will be
              subject to the requirements of Code Section 411(a)(11)(A);

                     (ii) offer at least three investment options (other than
              Employer Shares) to each Participant and, if the Participant so
              elects, by investing, within the first 180 days of the Plan Year
              in which the election is made, the amount of the Participant's
              diversification election in the option(s) selected by the
              Participant; or

                     (iii) provide a Participant with the opportunity to
              transfer a portion of his Account to another qualified defined
              contribution plan of the Employer

                                       9
<PAGE>

              that offers at least three (3) investment options (other than
              Employer Shares) and, if the Participant so elects, by
              transferring, within the first 180 days of the Plan Year in which
              the election is made, the amount of the Participant's
              diversification election in the option(s) selected by the
              Participant. Such transfer will comply with Code Sections 414(l),
              411(d)(6) and 401(a)(11).

                                       10
<PAGE>

                 SECTION 6 - VALUATION OF PARTICIPANTS' ACCOUNTS

6.01          VALUATIONS

              As of each Valuation Date, the Plan Administrator will obtain the
value of the assets of the Trust Fund from the Trustee on the basis of the
market value of the assets of the Trust Fund. On the basis of such valuation,
the Participants' Accounts will be adjusted as of such Valuation Date to reflect
the effect of income received or accrued, realized and unrealized profits and
losses, expenses, Forfeitures, payments to Participants and all other
transactions in the period since the last preceding Valuation Date.

              For purposes of obtaining the valuation of Employer Shares under
this section and with respect to all other activities carried on by the Plan
which require the valuation of Employer Shares, at all times during which the
Employer Shares are not readily tradable on an established securities market,
such valuations will be made by an "independent appraiser," within the meaning
of Section 401(a)(28)(C) of the Code.

6.02          METHOD OF ADJUSTMENT

              The amount to the credit of each Participant's Account as of each
Valuation Date will be adjusted as of each succeeding Valuation Date by the
following credits and charges in the order specified below:

              (a) There will be debited the total amount of all disbursements
made from a Participant's Account during the period since the last Valuation
Date.

              (b) There will be credited or debited to a Participant's Account
that portion of the net increase or net decrease of the value of the assets of
the Trust Fund since the last Valuation Date (including the value of
non-distributed dividends on allocated Employer Shares). Such amounts will be
allocated to a Participant's Account (after the amounts allocated in Section
6.02(a)) based on the ratio that the balance of his Account bears to the total
balance of all Accounts.

              (c) There will be credited to his Account the Employer's
contributions, Forfeitures and Employer Shares that are allocable to a
Participant pursuant to Section 3 of this Plan. In allocating Forfeitures,
Employer Shares attributable to the loan made pursuant to Section 21 will be
allocated only after all other amounts required to be forfeited and allocated to
Participants' Accounts for the applicable Plan Year have been allocated.

                                       11
<PAGE>

                         SECTION 7 - RETIREMENT BENEFITS

7.01          ELIGIBILITY FOR RETIREMENT

              A Participant who terminates his employment with the Employer on
or after attaining his Early Retirement Age will become eligible for a
retirement benefit equal to the entire value of his Account. Subject to Section
12.04, a Participant who is eligible for a distribution pursuant to this section
may elect among the forms of benefits set forth in Section 12.01.

                                       12
<PAGE>

                           SECTION 8 - DEATH BENEFITS

8.01          ELIGIBILITY FOR DEATH BENEFIT

              The Beneficiary of a Participant who died prior to his termination
of employment from the Employer and all Affiliates will be entitled to the
entire value of the deceased Participant's Account. The Beneficiary of a
Participant who died on or after his termination of employment from the Employer
and all Affiliates will be entitled to the vested value of the Participant's
Account.

8.02          DESIGNATION OF BENEFICIARY

              (a) Subject to the provisions of Section 8.03, each Participant
will designate, by a written instrument filed with the Plan Administrator, one
or more Beneficiaries who, upon the death of the Participant, will be entitled
to receive the death benefit described in Section 8.01. If more than one
Beneficiary is named, the Participant may specify the sequence and/or proportion
in which payments must be made to each Beneficiary. To the extent that the
Participant does not specify either the sequence or proportion in which payments
are to be made to each Beneficiary, payments will be made in equal shares to all
named Beneficiaries then living at the time of the Participant's death. To the
extent otherwise consistent with the Plan, a Participant may change his
Beneficiary from time to time by written notice delivered to the Plan
Administrator in the manner prescribed by the Plan Administrator. If, with
regard to all or a portion of a Participant's Account, no Beneficiary has been
designated or if no designated Beneficiary is living at the time of the
Participant's death, payment of such death benefit, if any, to the extent
permitted by law, will be made to the surviving person or persons in the first
of the following classes of successive preference of Beneficiaries: (i)
Surviving Spouse; (ii) executors or administrators of the estate of such
deceased Participant. Any minor's share will be paid to such adult or adults as
have, in the opinion of the Plan Administrator, assumed custody and support of
such minor. Proof of death satisfactory to the Plan Administrator must be
furnished prior to the payment of any death benefit under the Plan.

              (b) If benefits under the Plan are paid to a Beneficiary pursuant
to this Section 8 in a form other than a lump sum, such Beneficiary may name in
a writing filed with the Plan Administrator an individual or individuals to
receive the remainder of such benefit upon the death of the Beneficiary. In the
absence of such a designation by the Beneficiary, such remaining benefit, if
any, will be paid to the estate of the Beneficiary. If a Beneficiary is alive at
the time of the Participant's death but dies prior to the commencement of
benefits to him or her, the death benefit payable to the Beneficiary pursuant to
this Section 8 will be paid to the estate of such Beneficiary.

                                       13
<PAGE>

8.03          DISTRIBUTION OF DEATH BENEFIT

              If a Participant dies without a Surviving Spouse and prior to the
commencement of his retirement benefits, the death benefit described in Section
8.01 will be distributed to his Beneficiary. Subject to Section 12.04, the
Beneficiary may elect among any of the forms of benefits available to
Participants as set forth in Section 12.01.

              If a Participant dies with a Surviving Spouse and prior to the
commencement of his retirement benefits, the death benefit described in Section
8.01 will be paid to his Surviving Spouse. Subject to Section 12.04, the
Surviving Spouse may elect among any of the forms of benefits available to
Participants as set forth in 12.01. However, if the Spouse consents to an
alternate Beneficiary to receive the death benefit described in Section 8.01,
such death benefit will be distributed to the alternate Beneficiary in
accordance with the preceding paragraph. For purposes of the preceding sentence,
the consent of the Spouse must (a) be in writing; (b) designate a specific
Beneficiary, including any class of beneficiaries or contingent beneficiaries,
which may not be changed without the consent of the Spouse (or the Spouse
expressly permits designations by the Participant without further consent of the
Spouse); (c) acknowledge the effect of such consent; and (d) be witnessed by a
Plan representative or notary public.

              If a Participant dies after the commencement of his retirement
benefit and prior to the complete distribution of his Account, his Beneficiary
will be entitled to the remaining amount in his Account. In such case, if the
Participant either fails to designate a Beneficiary or a Beneficiary is not
alive at the time of the Participant's death, such death benefit will be payable
to the surviving person or persons in accordance with Section 8.02(a).

              All distributions made pursuant to this section will also comply
with the provisions of Section 12.03.

                                       14
<PAGE>

                         SECTION 9 - DISABILITY BENEFITS

9.01          AMOUNT OF DISABILITY BENEFIT

              A Participant who becomes "totally and permanently disabled," as
defined in Section 9.02 below, will be entitled to the entire value of his
Account. A Participant who is eligible for a distribution pursuant to this
section may elect among the forms of benefits set forth in Section 12.01.

9.02          DETERMINATION OF TOTAL AND PERMANENT DISABILITY

              A Participant will be considered to be "totally and permanently
disabled" if it is established by a licensed physician selected by the Plan
Administrator that, while the Participant is employed by the Employer or an
Affiliate, the Participant is not able to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than 12 months. The determination by
the Plan Administrator with respect to whether a Participant is totally and
permanently disabled will be made in a nondiscriminatory manner.

                                       15
<PAGE>

                 SECTION 10 - TERMINATION OF EMPLOYMENT BENEFITS

10.01         AMOUNT OF BENEFITS UPON TERMINATION OF EMPLOYMENT

              A Participant who terminates his employment with the Employer and
all Affiliates for any reason other than retirement (pursuant to Section 7),
death (pursuant to Section 8) or disability (pursuant to Section 9) will be
entitled to receive the vested portion of his Account. Such nonforfeitable
percentage will be determined in accordance with Section 11.01 of the Plan. A
Participant who is eligible for a distribution pursuant to this section may
elect among the forms of benefits set forth in Section 12.01.

                                       16
<PAGE>

                              SECTION 11 - VESTING

11.01         DETERMINATION OF VESTED BENEFITS

              A Participant's vested interest in his Employer Contributions
Account will become vested and nonforfeitable based upon his Years of Service in
accordance with the following schedule:

                                                             NONFORFEITABLE
                        YEARS OF SERVICE                       PERCENTAGE
                        ----------------                     --------------
                          Less than 5                              0
                           5 or more                              100%

11.02         FULL VESTING AT NORMAL RETIREMENT AGE

              Notwithstanding any provision in the Plan to the contrary, all
amounts credited to a Participant's Account will become fully vested upon
attainment of his Normal Retirement Age if he attains such age prior to the date
he terminates his employment with the Employer and all Affiliates.

11.03         SERVICE FOR VESTING

              Years of Service for vesting purposes will include all Years of
Service with the Employer, a predecessor employer (to the extent the Employer
maintains the Plan of a predecessor employer) or an Affiliate (excluding service
prior to the date an organization became an Affiliate unless otherwise specified
below), including service prior to the date the Plan was first effective.

11.04         EFFECT OF BREAK IN SERVICE ON VESTING

              If a Participant has five or more consecutive One-Year Breaks in
Service, (a) all Years of Service after such One-Year Breaks in Service will be
disregarded for the purpose of determining whether his Account that accrued
before such One-Year Breaks in Service is nonforfeitable; and (b) all Years of
Service before such One-Year Breaks in Service will count in determining whether
the post-break Account is nonforfeitable only if either (i) he had any
nonforfeitable interest in his Account at the time of his termination of
employment; or (ii) upon returning to employment, the number of his consecutive
One-Year Breaks in Service is less than the number of his Years of Service.

              Separate Accounts will be maintained for the Participant for
pre-break and post-break periods. Both such Accounts will share in the earnings
and losses of the Trust Fund.

                                       17
<PAGE>

              If a Participant does not have five consecutive One-Year Breaks in
Service, both pre-break and post-break service will count in determining whether
his rights to his pre-break and post-break Accounts are nonforfeitable, subject
to the first paragraph of this section.

              For the purpose of this Section 11.04, the 12-month periods used
to determine a separated Participant's consecutive One-Year Breaks in Service
will be the 12-month period used to determine a Year of Service.

11.05         FORFEITURES

              The non-vested portion of a terminated Participant's Account will
be treated as a Forfeiture upon the earlier of (a) the date such terminated
Participant's Account is distributed from the Plan; or (b) the date on which the
terminated Participant incurs five consecutive One-Year Breaks in Service.
Forfeitures of Employer Shares allocated pursuant to Section 3.01 will occur
only after all other assets in a Participant's Account have been forfeited. For
purposes of this section, if a terminated Participant is not vested in any
portion of his Account as of the date of his termination of employment, the
Participant will be deemed to have received a distribution of his vested Account
on the date of his termination of employment.

              In the event that a terminated Participant who was not 100% vested
in his Account (a) received a distribution of the vested portion of his Account;
(b) returns to the employment of the Employer before he incurs five consecutive
One-Year Breaks in Service; and (c) repays to the Plan the full amount of his
distribution within five years after the date he resumes employment, the amount
of the non-vested portion of his Account, including all forms of benefits
relating to such non-vested portion, that has been treated as a Forfeiture will
be restored to his Account first from Forfeitures available in that year, if
any, and then from contributions made by the Employer. A Participant who is
deemed to have received a distribution of his vested Account upon his
termination of employment will be deemed to have repaid the forfeited portion of
his Account upon the date he resumes employment with the Employer provided he
resumes employment prior to incurring five consecutive One-Year Breaks in
Service.

              For the purpose of this Section 11.05, the 12-month periods used
to determine a former Participant's consecutive One-Year Breaks in Service will
be the 12-month period used to determine a Participant's Year of Service.

              Forfeitures from a Participant's Employer Contributions Account,
unless required to be restored to a Participant's Account pursuant to this
section, will be added to the Employer contribution made pursuant to Section 2
for the year in which such Forfeiture has occurred and allocated to
Participants' Accounts in accordance with such section.

                                       18
<PAGE>

                        SECTION 12 - PAYMENT OF BENEFITS

12.01         METHOD OF PAYMENT

              At the time a Participant or Beneficiary becomes entitled to
receive his Account because of the Participant's retirement (pursuant to Section
7), death (pursuant to Section 8), disability (pursuant to Section 9) or
termination of employment (pursuant to Section 10), the Trustee, acting in
accordance with the written instructions of the Plan Administrator, will make
payment from the Trust Fund to the Participant (or his Beneficiary in the case
of the Participant's death) in the form of either (a) a lump sum; or (b) in
periodic installments payable monthly, quarterly, semi-annually or annually in
accordance with Section 12.08. All such payments will be made by the Trustee, at
the option of the Participant (or his Beneficiary) in Employer Shares, in cash,
or both in cash and in shares. The Employer reserves the right to pay fractional
shares in cash.

12.02         TIMING OF PAYMENTS

              (a) Subject to paragraph (b) below, unless the Participant elects
otherwise, the payment of the Participant's benefit pursuant to Section 12.01
will begin not later than 60 days after the end of the Plan Year in which the
latest of the following occurs: (i) the Participant attains his Normal
Retirement Age; (ii) the 10th anniversary of the year in which the Participant
commenced participation in the Plan; or (iii) the Participant terminates service
with the Employer and all Affiliates. To the extent a Participant who is
required to consent to a distribution pursuant to Section 12.04 fails to provide
the Plan Administrator with his consent, the Participant will be deemed to have
made an election to defer a distribution pursuant to this paragraph (a).

              (b) In no event will the amount payable to a Participant pursuant
to the terms of the Plan be distributed, or commence to be distributed, later
than a Participant's Required Beginning Date. "Required Beginning Date" means,
for a Participant who is not a 5% Owner, the April 1 of the calendar year
following the later of (i) the calendar year in which the Participant attains
age 70 1/2; or (ii) the calendar year in which the Participant retires. The
Required Beginning Date of a Participant who is a 5% Owner means the April 1 of
the calendar year following the calendar year in which the Participant attains
age 70 1/2. Notwithstanding the provisions of this paragraph, distribution may
also be made to a Participant in accordance with a valid election made by the
Participant pursuant to Section 242(b)(2) of the Tax Equity and Fiscal
Responsibility Act of 1982.

              Distributions that commence pursuant to this paragraph (b) will
commence in any form of benefit offered under the Plan, provided that the amount
of such distributions and the date such distributions commence comply with Code
Section 401(a)(9) and applicable regulations thereunder. After an active
Participant who is receiving minimum distributions pursuant to this section
terminates employment, such Participant shall be eligible to receive a
distribution from the Plan in any form of benefit offered under the Plan.

                                       19
<PAGE>

              (c) For the purpose of this Section 12.02, a Participant is
treated as a 5% Owner if such Participant is a "5% Owner" (as defined in Code
Section 416) with respect to the Plan Year ending with or within the calendar
year in which such owner attains age 70 1/2.

              (d) Unless a distribution is required to be made to a Participant
or Beneficiary pursuant to Section 12.04, a distribution to a Participant or
Beneficiary who is eligible to receive a distribution pursuant to this Section
12 will be made as soon as is administratively practicable after the Participant
or Beneficiary completes a benefit election form and returns it to the Plan
Administrator, but not earlier than the Valuation Date immediately following the
date the Plan Administrator receives the election form.

12.03         DISTRIBUTIONS AFTER DEATH

              If the distribution of the Participant's benefit under the Plan
has commenced pursuant to Section 12 and he dies before his entire Account has
been distributed to him, the remaining portion of such Account, if any, will
comply with the provisions of Code Section 401(a)(9)(B)(i)(II), which provides
that such remaining portion be distributed as rapidly as under the method of
distribution in effect prior to the Participant's death.

              Unless otherwise provided in this Section 12.03, if a Participant
dies before the distribution of his Account has commenced in accordance with
either the terms of the Plan or Section 12.02(b), the amount payable as a death
benefit pursuant to the terms of the Plan (hereinafter referred to as "death
benefit") will be distributed:

              (a) unless otherwise provided in (b) below, not later than by the
       fifth anniversary of the December 31 coinciding with or next following
       the date of his death; or

              (b) provided that the Plan provides for installment or annuity
       distributions to a Beneficiary and the Participant's death benefit is
       payable to or on behalf of a designated Beneficiary:

                     (i) over a period not extending beyond the life expectancy
              of such designated Beneficiary, provided that the distribution of
              the death benefit commences not later than the first anniversary
              of the December 31 coinciding with or next following the date of
              the Participant's death; or

                     (ii) if the designated Beneficiary is the Participant's
              Surviving Spouse, the date by which the death benefit must
              commence in (i) above will not be earlier than the later of the
              December 31 of the calendar year immediately following the
              calendar year in which the Participant died or the December 31 of
              the calendar year in which the Participant would have attained age
              70 1/2. If the Surviving Spouse dies before distribution to said
              Spouse begins, this paragraph (ii) will apply as if the Surviving
              Spouse were the Participant. In addition, any amount paid to a
              child of the Participant will be treated as if it had been paid to

                                       20
<PAGE>

              the Surviving Spouse if the amount becomes payable to the
              Surviving Spouse when the child reaches the age of majority.

              The designated Beneficiary must elect the method of distribution
payable pursuant to this Section 12.03 not later than the earlier of (a) the
December 31 of the calendar year in which distributions would be required to
begin under this Section 12.03; or (b) the December 31 of the calendar year
which contains the fifth anniversary of the date of death of the Participant. If
the Participant has no designated Beneficiary, or if the designated Beneficiary
does not elect a method of distribution, distribution of the Participant's death
benefit must be completed by the December 31 of the calendar year containing the
fifth anniversary of the Participant's death.

12.04         CONSENT AND CASH-OUT REQUIREMENTS

              If a Participant is eligible to receive a distribution pursuant to
Section 7, 8, 9 or 10 and the value of his vested Account does not exceed
$5,000, the Participant (or Beneficiary in the case of the Participant's death)
will receive a distribution of his vested Account in the form of a lump sum as
soon as administratively feasible following the date he is first eligible to
receive a distribution from the Plan.

              If a Participant is eligible to receive a distribution pursuant to
Section 7, 8, 9 or 10 or is otherwise eligible to receive a distribution from
his Account and the value of his vested Account exceeds $5,000, the Participant
must consent to the receipt of a distribution made from the Plan if distributed
prior to the later of the date the Participant attains his Normal Retirement Age
or age 62, except that the consent of the Participant is not required prior to
the commencement of a distribution pursuant to Code Section 401(a)(9) or Code
Section 415. A Participant's election to receive a distribution from the Plan
prior to his attainment of the later of age 62 or his Normal Retirement Age will
not be valid unless (a) the Participant has received a general description of
the material features and the relative values of the forms of benefits
(hereinafter referred to as "description") under the Plan; and (b) the
Participant has been informed that he has the right to postpone a distribution
from the Plan. The Participant will be provided with such description not less
than 30 days and not more than 90 days prior to the date his benefits are
scheduled to commence, provided that a distribution may be made to the
Participant prior to such 30-day period, provided the Participant has been
informed that he has a right to a period of at least 30 days after receiving the
description to consider the decision of whether to elect a distribution from the
Plan and the Participant, after receiving such information, affirmatively elects
a distribution prior to such 30-day period.

                                       21
<PAGE>

              If a Participant does not consent to a distribution pursuant to
the preceding paragraph, his Account will be maintained by the Plan and will
continue to shall share in the earnings of the Trust. Notwithstanding the
foregoing, after the later of the date the Participant attains his Normal
Retirement Age or age 62, the Plan may require such Participant, in accordance
with a uniform policy for all Participants similarly situated, to receive a
distribution of his Account from the Plan.

12.05         ELIGIBLE ROLLOVER DISTRIBUTIONS

              (a) A distributee may elect 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) The following definitions will apply for purposes of this
section:

                               (i) Eligible rollover distribution: An eligible
                      rollover distribution is any distribution of all or any
                      portion of the balance to the credit of the distributee,
                      except that an eligible rollover distribution does not
                      include: (A) 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; (B) any distribution that is for a
                      specified period of ten years or more; (C) any
                      distribution to the extent such distribution is required
                      under Code Section 401(a)(9); (D) 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); (E) effective for distributions occurring
                      after December 31, 1998 (or such later date as elected by
                      the Plan Administrator in accordance with Notice 99-5),
                      hardship distributions described in Code Section
                      401(k)(2)(B)(i)(IV) in the amount described in Treasury
                      Regulation 1.401(k)-1(d)(2)(ii); and (F) at the election
                      of the Plan Administrator, any other distribution provided
                      that all distributions in the year are reasonably expected
                      to total less than $200.

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

                               (iii) Distributee: A distributee includes an
                      Employee or former Employee. In addition, the Spouse or
                      Surviving Spouse of an Employee or

                                       22
<PAGE>

                      former Employee is a distributee with regard to the
                      interest of the Spouse or Surviving Spouse.

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

12.06         PUT OPTION

              (a) Except as otherwise provided in this Section 12.06, all
Employer Shares that are not readily tradable on an established market at the
time they are distributed, or are subject to a trading limitation when
distributed, will be subject to a put option. The put option will permit the
Participant or Beneficiary to put such Employer Shares to the Employer. Put
options will be exercisable during a period of not less than 16-months beginning
on the date the Employer Shares subject to the put option are distributed. The
put option may be exercised by the holder of the Shares by notifying the
Employer in writing that the put option is being exercised. The price at which
the put option must be exercisable is the fair market value of the Employer
Shares.

              (b) If, pursuant to this section, the Employer is required to
repurchase Employer Shares that are distributed within one taxable year in a
distribution that represents the balance to the credit of the Participant's
Account, the amount to be paid for such Employer Shares will be paid in
substantially equal periodic payments (not less frequently than annually) over a
period beginning not later than 30 days after the exercise of the put option
described in this section and not exceeding five years. If, pursuant to this
section, the Employer is required to repurchase Employer Shares that are
distributed to a Participant as part of an installment distribution, the amount
to be paid for such Employer Shares will be paid not later than 30 days after
the exercise of the put option described in this section.

              (c) Under no circumstances may the put option bind the Plan.
However, the Plan may assume the rights and obligations of the Employer at the
time the put option is exercised. Adequate security will be provided and
reasonable interest will be paid on the amounts payable to the individual or
entity that exercised the put option.

              (d) Notwithstanding any provision of this Plan to the contrary,
(i) to the extent that the Employer's charter or by-laws restrict the ownership
of substantially all outstanding employer securities to employees or to a trust
described in Code Section 401(a); or (ii) to the extent the Employer is an S
corporation, the Plan may require that the individual entitled to receive a
distribution from the Plan has a right to receive the distribution in the form
of cash, except that the Plan may distribute Employer Shares to such individual
subject to a requirement that such securities may be resold to the Employer
under the circumstances described in the preceding paragraphs of this Section
12.06.

              (e) In the case of a Plan established by a bank that is prohibited
by law from redeeming or purchasing its own securities, the requirements of this
section will not apply,

                                       23
<PAGE>

provided that Participants entitled to receive a distribution from the Plan have
the right to receive a distribution in the form of cash.

12.07         RIGHT OF FIRST REFUSAL

              (a) During any period when Employer Shares are not publicly
traded, all distributions of Employer Shares to a Participant or his Beneficiary
by the Plan will be subject to a "right of first refusal" upon the terms and
conditions hereinafter set forth. The "right of first refusal" will provide that
prior to any transfer of the Employer Shares, the Participant or Beneficiary
must first offer to sell such shares to the Plan; and if the Plan refuses to
exercise its right to purchase the Employer Shares, then the Employer will have
a "right of first refusal" to purchase such Shares. Neither the Plan nor the
Employer will be required to exercise the "right of first refusal." This Section
12.07 will not be operative unless and until the Board of Directors of the
Sponsor so directs.

              (b) The terms and conditions of the "right of first refusal" will
be determined as follows:

                               (i) If the Participant or Beneficiary receives a
                      bona fide offer for the purchase of all or any part of his
                      Employer Shares from a third party, the Participant or
                      Beneficiary will deliver (by registered mail, return
                      receipt requested) a copy of any such offer to the Plan
                      Administrator. The Trustee (as directed by the Plan
                      Administrator) or the Employer, as the case may be, will
                      then have 14 days after receipt by the Plan Administrator
                      of the written offer to exercise the right to purchase all
                      or any portion of the Employer Shares.

                               (ii) The selling price and other terms under the
                      "right of first refusal" must not be less favorable to the
                      Participant or Beneficiary than the purchase price and
                      other terms offered by a buyer, other than the Employer or
                      the Plan making a good faith offer to purchase the
                      security.

              The Employer may require a Participant or Beneficiary who is
entitled to a distribution of Employer Shares to execute an appropriate stock
transfer agreement evidencing the right of first refusal prior to receiving a
certificate for Employer Shares.

12.08         INSTALLMENT DISTRIBUTIONS

              Notwithstanding any provisions in this Plan to the contrary, if a
Participant's entire interest is to be distributed in other than an immediate
lump sum, such distribution will be made, unless the Participant elects
otherwise, in substantially equal periodic installments (not less frequently
than annually) over a period not longer than the greater of:

              (a)     five years; or

                                       24
<PAGE>

              (b) in the case of a Participant with an Account in excess of
$500,000, five years plus one year for each $100,000, or any fraction thereof,
by which such balance exceeds $500,000; provided, however, that in no event may
installment payments under the Plan exceed 10 years unless the Participant
elects otherwise. The dollar limits set forth in this paragraph (b) are adjusted
by the Secretary of the Treasury, and the current dollar amount for the
applicable Plan Year shall apply; provided, however, that in no event may
installment payments under the Plan be made which exceed either:

                            (i) a period certain not extending beyond the life
                     expectancy of the Participant; or

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

              If a Participant's Account is to be distributed in other than the
form of a lump sum, then the amount to be distributed each year must be at least
an amount equal to the quotient obtained by dividing the Participant's Account
by the life expectancy of the Participant and designated Beneficiary. If the
Participant's Spouse is not the designated Beneficiary, the method of
distribution selected must at all times comply with proposed Treasury Regulation
1.401(a)(9)-2.

                                       25
<PAGE>

                          SECTION 13 - TRUST AGREEMENT

13.01         DESCRIPTION OF TRUST AGREEMENT

              The Sponsor will continue the Trust Agreement with the Trustee to
provide for the administration of the Trust Fund. With its continuation, the
Trust Agreement will be deemed to form a part of the Plan; and any and all
rights or benefits which may accrue to any person under the Plan will be subject
to all the terms and provisions of the Trust Agreement.

              All expenses of the Plan will be paid from the Trust Fund, unless
paid by the Employer. In its discretion, the Employer may require the Trustee to
reimburse the Employer for expenses of the Plan that the Employer paid on behalf
of the Trust, so long as the request for reimbursement is presented by the
Employer to the Trustee before the last day of the Plan Year in which the
expense was paid by the Employer. Alternatively, the Employer may reimburse the
Trust for expenses of the Plan paid by the Trustee. An administration expense
paid to the Trust as a reimbursement will not be considered as a contribution
made by the Employer.

                                       26
<PAGE>

                        SECTION 14 - PLAN ADMINISTRATION

14.01         PLAN ADMINISTRATOR

              The Plan will be administered by a Plan Administrator. The Plan
Administrator will be appointed by and serve at the pleasure of the Sponsor.

14.02         DUTIES OF PLAN ADMINISTRATOR

              The Plan Administrator will supervise the maintenance of accounts
and records as will be necessary or desirable to show the contributions of the
Employer, allocations to Participants' Accounts, payments from Participants'
Accounts, valuations of the Trust Fund and all other transactions pertinent to
the Plan.

              The Plan Administrator is authorized to perform, in its
discretion, all functions necessary to administer the Plan and will have the
power and discretion to construe the terms of the Plan and to determine all
questions arising from its operation, including, without limitation, to
determine the eligibility and qualification of Employees or Beneficiaries for
benefits under the Plan (including the validity of a beneficiary designation);
to determine the allocation and vesting of contributions, earnings and profits
of the Plan; to determine the amount of benefits payable to Participants and
Beneficiaries; unless otherwise provided pursuant to Section 18, to decide all
questions or disputes with respect to the rights or obligations of Participants
and Beneficiaries; and to adopt regulations and procedures. To the extent
provided in the Plan and the Trust, the Plan Administrator or other fiduciary
may direct the Trustee as to the investment of the Trust or may select an
investment advisor to so direct.

              The Plan Administrator may employ one or more persons to render
advice with regard to any responsibility it has under the Plan, and it may
designate others to carry out any of its responsibilities.

14.03         INTERPRETATION OF DOCUMENT

              The construction and interpretation of the Plan provisions, or any
document relating to the administration or operation of the Plan, are vested
with the Plan Administrator, in its absolute discretion. The Plan Administrator
will endeavor to act, whether by general rules or by particular decisions, so as
to treat all persons in similar circumstances without discrimination. All such
decisions, determinations and interpretations will be final, conclusive and
binding upon all parties having an interest in the Plan.

                                       27
<PAGE>

                     SECTION 15 - AMENDMENT AND TERMINATION

15.01         SPONSOR'S RIGHT TO AMEND OR TERMINATE THE PLAN

              The Sponsor has the right, at any time, by an instrument in
writing, to modify, alter, amend or terminate the Plan in whole or in part.
Except as permitted by Code Section 411(d)(6) and applicable regulations
thereunder, no amendment to the Plan will reduce the Participant's accrued
benefit, decrease the balance of a Participant's Account or eliminate an
optional form of distribution with respect to the amount of the Participant's
Account accrued as of the date of the amendment. To this end, provisions that
affect directly or indirectly the computation of accrued benefits and are
amended at the same time and with the same effective date will be treated as one
Plan amendment.

              If an amendment changes the vesting schedule set forth in Section
11.01, and such amendment reduces the nonforfeitable interest of a Participant
for any Year of Service to be earned by the Participant, each Participant having
not less than three Years of Service may elect, during the period beginning when
the amendment is adopted and ending no earlier than the latest of (a) 60 days
after the amendment's adoption; (b) 60 days after the amendment's effective
date; or (c) 60 days after the Participant is issued a written notice of the
amendment, to have the vested amount of his Account computed without regard to
such amendment. No amendment may reduce a Participant's nonforfeitable
percentage in his Account determined as of the date the amendment is effective
or executed, whichever is later.

              Any Amendment to the Plan shall be executed by any individual
authorized by the Board of Directors of the Sponsor.

                                       28
<PAGE>

                 SECTION 16 - DISTRIBUTIONS ON PLAN TERMINATION

16.01         FULL VESTING ON PLAN TERMINATION

              Upon termination of the Plan, after adjustment of all Accounts
maintained under the Plan in accordance with Section 6, including the adjustment
of such Accounts for the payment of Plan expenses relating to the termination of
the Plan, each affected Participant will be fully vested and will be entitled to
receive the entire amount then credited to his Account. The date the Plan is
terminated shall be an allocation date for the purpose of making final
allocations to the Plan.

16.02         PAYMENT ON PLAN TERMINATION

              Within a reasonable time after the termination of the Plan, the
Plan Administrator will distribute to each Participant or Beneficiary the value
of his Account. Such payment will be made in the form of a single lump sum
payment.

16.03         DISCONTINUANCE OF CONTRIBUTIONS; PARTIAL TERMINATION OF PLAN

              Upon the "partial termination" of the Plan, or the "complete
discontinuance of contributions" by the Employer to the Plan (with such terms
having the meaning by reference to Section 411(d)(3) of the Code and applicable
regulations thereunder), the Accounts of all affected Participants will be fully
vested as of the date of such partial termination or complete discontinuance of
contributions.

                                       29
<PAGE>

                     SECTION 17 - CREDITORS OF PARTICIPANTS

17.01         NON-ASSIGNABILITY

              Except as otherwise provided in Code Section 401(a)(13), no
assignment, pledge or encumbrance of any character of the benefits under the
Plan is permitted or recognized under any circumstances; and such benefits will
not be subject to claims of creditors, execution, attachment, garnishment or any
other legal process.

17.02         QUALIFIED DOMESTIC RELATIONS ORDERS

              Section 17.01 will also apply to the creation, assignment or
recognition of a right to any benefit payable with respect to a Participant
pursuant to a domestic relations order unless such order is determined to be a
"qualified domestic relations order," as defined in Code Section 414(p). A
qualified domestic relations order may provide for an immediate distribution to
the "alternate payee" [as defined in Code Section 414(p)(8)] named therein as
soon as is administratively practicable after the determination by the Plan
Administrator that the order constitutes a qualified domestic relations order,
notwithstanding the fact the distribution is made to such alternate payee prior
to the Participant attaining his "earliest retirement age," as such term is
defined in Code Section 414(p).

                                       30
<PAGE>

                         SECTION 18 - CLAIMS PROCEDURES

18.01         FILING A CLAIM FOR BENEFITS

              A Participant, Beneficiary or alternate payee, or the Employer
acting on behalf of such individual, will notify the Plan Administrator of a
claim for benefits under the Plan. Such request will be in writing to the Plan
Administrator and will set forth the basis of such claim and will authorize the
Plan Administrator to conduct such examinations as may be necessary for the Plan
Administrator to determine, in its discretion, the validity of the claim and to
take such steps as may be necessary to facilitate the payment of benefits to
which the claimant may be entitled under the terms of the Plan.

              A decision by the Plan Administrator on a claim for benefits under
the Plan will be made promptly and not later than 90 days after the Plan
Administrator's receipt of such claim, unless special circumstances require an
extension of the time for processing; in which case, a decision will be rendered
as soon as possible, but not later than 180 days after the initial receipt of
the claim for benefits. The claimant will be notified of the extension prior to
the expiration of the 90-day period described in this paragraph. If notice of
the denial of a claim is not furnished within the time period specified in this
paragraph, the claim will be deemed denied.

18.02         DENIAL OF CLAIM

              Whenever a claim for benefits by a claimant has been denied by the
Plan Administrator, in whole or in part, a written notice, prepared in a manner
calculated to be understood by such individual, must be provided and must set
forth:

              (a) the specific reason or reasons for the denial;

              (b) the specific reference to the pertinent Plan provisions on
which the denial is based;

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

              (d) an explanation of the Plan's claim review procedures.

18.03         REMEDIES AVAILABLE TO CLAIMANTS

              Upon denial of his claim by the Plan Administrator, the claimant
may:

              (a) request a review upon written application to the Plan;

                                       31
<PAGE>

              (b) review pertinent Plan documents; and

              (c) submit issues and comments in writing to a named fiduciary.

              The claimant will have 60 days after receipt of the written
notification of a denial of his or her claim to request a review of such denied
claim.

              A decision by a named fiduciary will be made promptly and not
later than 60 days after the named fiduciary's receipt of a request for review,
unless special circumstances require an extension of the time for processing; in
which case, a decision will be rendered as soon as possible, but not later than
120 days after receipt of a request for review. The claimant will be notified of
the extension prior to the expiration of the 60-day period described in this
paragraph. If the decision on review is not furnished within the applicable time
period, the claim will be deemed denied upon review.

              The decision on review by a named fiduciary will be in writing and
will include specific reasons for the decision, written in a manner calculated
to be understood by the claimant, and specific references to the pertinent Plan
provisions on which the decision is based.

                                       32
<PAGE>

                          SECTION 19 - TOP HEAVY RULES

19.01         DEFINITIONS

              If, for any Plan Year, the Plan is a Top Heavy Plan, the
provisions of Section 19.03 and Section 19.04 will be applicable. For the
purpose of this section, to the extent necessary, the term "Employer" includes
an Affiliate other than an Employer, and the term "Employee" includes an
employee of an Affiliate other than an Employee of the Employer. The following
definitions are applicable to this Section 19.01.

              (a) Key Employee: An Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the determination period
was (i) an officer of the Employer, provided that such individual's annual
compensation exceeds 50% of the dollar limitation under Code Section
415(b)(1)(A); (ii) an owner (or considered an owner under Code Section 318) of
one of the ten largest interests in the Employer, provided that such
individual's annual compensation exceeds the dollar limitation under Code
Section 415(c)(1)(A); (iii) a 5% owner of the Employer; or (iv) a 1% owner of
the Employer who has annual compensation of more than $150,000. For purposes of
this section, "annual compensation" means compensation as defined in Code
Section 415(c)(3). The determination period is the Plan Year containing the
Determination Date and the four preceding Plan Years. The determination of who
is a Key Employee will be made in accordance with Code Section 416(i)(1) and the
regulations thereunder.

              (b) Non-Key Employee: An Employee or former Employee of the
Employer who is not a Key Employee. The Beneficiary of a Non-Key Employee will
be treated as a Non-Key Employee, and the Beneficiary of a former Non-Key
Employee will be treated as a former Non-Key Employee.

              (c) Determination Date: For all Plan Years subsequent to the first
Plan Year, the last day of the preceding Plan Year. For the first Plan Year, the
last day of such Plan Year.

              (d) Permissive Aggregation Group: The Required Aggregation Group
of plans plus any other plan or plans of the Employer that, when considered as a
group with the Required Aggregation Group, would continue to satisfy the
requirements of Code Sections 401(a)(4) and 410.

              (e) Required Aggregation Group: (i) Each qualified plan of the
Employer in which at least one Key Employee participates or participated at any
time during the Plan Year containing the Determination Date and the four
preceding Plan Years (regardless of whether the Plan has terminated); and (ii)
any other qualified plan of the Employer that enables a plan described in (i) of
this paragraph (e) to meet the requirements of Code Sections 401(a)(4) or 410.

              (f) Top Heavy Plan: The Plan, if in any Plan Year it is top heavy
as set forth in Section 19.02.

                                       33
<PAGE>

              (g) Top Heavy Compensation: Top Heavy Compensation means
"compensation" as defined in Section 415(c)(3) and Treasury Regulation
1.415(2)(d)(11)(i) of the Code, and for Limitation Years beginning prior to
January 1, 1998, taking into consideration Code Section 414(q)(4)(B).

19.02         TOP HEAVY STATUS

              The Plan and any other plans aggregated with it will become top
heavy pursuant to this Section 19.02 as of the Determination Date if the present
value of accrued benefits of Key Employees is more than 60% of the sum of the
present value of accrued benefits of all Employees. In the case of more than one
plan which is to be aggregated with the Plan, the present value of the accrued
benefits of employees in such plan is first determined separately for each plan
as of each plan's determination date. The plans will then be aggregated by
adding the results of each plan as of the determination dates for such plans
that fall within the same calendar year. The combined results will indicate
whether the plans are top heavy. For the purpose of determining the present
value of the accrued benefits of an Employee (a) the present value of accrued
benefits of the Employee will be increased by the aggregate distributions made
with respect to such Employee during the five-year period ending on the
Determination Date; (b) the accrued benefits of former Key Employees who have
not performed services at any time during the five-year period ending on the
Determination Date will not be taken into account; and (c) the accrued benefits
of Employees who have not performed services at any time during the five-year
period ending on the Determination Date for the Employer maintaining the Plan
will not be taken into account.

              Notwithstanding the foregoing, if the Plan is aggregated for top
heavy purposes with a defined benefit plan, the present value of accrued
benefits will be determined, for the Plan and for such other plan, by using the
interest rate and mortality assumptions contained in such other plan. If a
Required or Permissive Aggregation Group includes two or more defined benefit
plans (a) the same actuarial assumptions will be used with respect to all such
plans and must be specified in such plans; and (b) the accrued benefits of
Non-Key Employees will be determined under a uniform accrual method or, where
there is no such method, as if such benefit accrued not more rapidly than the
slowest rate of accrual permitted under the fractional rule of Code Section
411(b)(1)(C).

              The present value of accrued benefits as of the Determination Date
for any applicable Employee or former Employee is the sum of (a) the applicable
Employee's Account as of the most recent valuation date occurring within a
12-month period ending on the Determination Date; (b) an adjustment for
contributions due as of the Determination Date; and (c) the aggregate
distributions made with respect to such individual under the Plan during the
five-year period ending on the Determination Date. For a profit sharing plan,
the adjustment in (b) is generally the amount of contributions actually made
after the valuation date but on or before the Determination Date.

              In determining whether the Plan is top heavy, it must be
aggregated with each plan included in the Required Aggregation Group. In
addition, the Employer may aggregate plans included in the Permissive
Aggregation Group.

                                       34
<PAGE>

19.03         MINIMUM CONTRIBUTIONS

              For each Plan Year in which the Plan is top heavy, each
Participant who is a Non-Key Employee and who is employed on the last day of the
Plan Year (including Participants who did not complete 1,000 Hours of Service in
the Plan Year) is required to receive an annual allocation of contributions
(disregarding Social Security benefits) equal to at least 3% of his Top Heavy
Compensation; provided that if the largest percentage of Top Heavy Compensation
allocated to a Key Employee for a Plan Year is less than 3%, that largest
percentage will be substituted for 3%. Such amount will be referred to in this
Section 19.03 as the "top heavy minimum contribution." For each year in which
the Employer maintains a defined benefit plan in addition to the Plan, the
requirements of this paragraph will be satisfied for all Non-Key Employees who
participate in both plans by providing each Non-Key Employee with the 2% minimum
annual benefit provided under the top heavy provisions of the defined benefit
plan. For each year in which the Employer maintains another defined contribution
plan in addition to the Plan, the minimum benefit described in this paragraph
may be provided for Non-Key Employees who participate in both plans by such
other defined contribution plan or the Plan, as elected by the Plan
Administrator.

              For each Plan Year in which the Plan is required to provide the
top heavy minimum contribution, the Employer will contribute to the Account of
each Non-Key Employee required to receive an allocation pursuant to the previous
paragraph an amount equal to the difference between the amount necessary to
provide such Non-Key Employee with the top heavy minimum contribution for such
year and the amount previously allocated to such Non-Key Employee's Account for
such year.

19.04         TOP HEAVY VESTING

              For each Plan Year in which the Plan is top heavy, the following
vesting schedule will apply to amounts credited to his Account:

                                                               NONFORFEITABLE
                        YEARS OF SERVICE                         PERCENTAGE
                        ----------------                       --------------
                          Less than 3                                0
                           3 or more                                100%

Notwithstanding the foregoing, a Participant's vested interest in his Account
will not be decreased as a result of the Plan becoming top heavy and the
application of the above vesting schedule.

              If, at any time after becoming top heavy the Plan should cease to
be top heavy, the vesting schedule contained in Section 11 will again be
applicable. However, any portion of a Participant's Account that was
nonforfeitable before the Plan ceased to be top heavy will remain
nonforfeitable. In addition, any Participant with three or more Years of Service
at the time that the

                                       35
<PAGE>

Plan ceased to be top heavy, may elect, in accordance with Section 15.01, to
have the vesting schedule contained in this section remain applicable.

                                       36
<PAGE>

                           SECTION 20 - VOTING RIGHTS

20.01         PARTICIPANT VOTING RIGHTS WITH RESPECT TO ALLOCATED SHARES

              If the Employer Shares are of a "registration-type class of
securities," all Employer Shares held in the Trust Fund and allocated to a
Participant's or Beneficiary's Account will be voted by the Trustee pursuant to
written instructions received from the Participant or Beneficiary. If the
Employer Shares are not of a "registration-type class of securities," all
Employer Shares held in the Trust Fund and allocated to a Participant's or
Beneficiary's Account will be voted by the Trustee pursuant to written
instructions received from the Participant and Beneficiary with respect to all
corporate matters relating to the approval of a corporate merger or
consolidation, recapitalization, reclassification, liquidation, dissolution,
sale of substantially all assets of a trade or business or such similar
transaction as the Secretary may provide in regulations. For the purpose of this
Section 20.01, "registration-type class of securities" has the meaning as set
forth in Code Section 409(e)(4). With respect to allocated Employer Shares for
which the Trustee does not receive written instructions from a Participant or
Beneficiary, such Shares will be voted by the Trustee in the same proportion as
the shares voted by the Participants and Beneficiaries.

20.02         PARTICIPANT VOTING RIGHTS WITH RESPECT TO UNALLOCATED SHARES

              All Employer Shares held in the Trust Fund and not allocated to
the Participant's Account of a Participant will be voted by the Trustee in the
same proportion as the Shares voted by Participants. Notwithstanding the
foregoing, if at the time Employer Shares are required to be voted no shares
have been allocated, the Plan Administrator will vote such shares.

                                       37
<PAGE>

                            SECTION 21 - EXEMPT LOANS

21.01         AUTHORITY TO BORROW

              The Plan Administrator may direct the Trustee to borrow funds on
behalf of the Plan to purchase Employer Shares, provided that any Plan loan is
an exempt loan within the meaning of Treasury Regulation Section
54.4975-7(b)(1)(iii).

21.02         REQUIREMENTS FOR PLAN LOANS

              A loan made to the Plan pursuant to this Section 21 must meet the
following requirements:

              (a) The proceeds of the loan must be used within a reasonable time
after their receipt by the Plan to (i) acquire Employer Shares; (ii) repay such
loan; or (iii) repay a prior exempt loan.

              (b) The interest rate on the loan must not be in excess of a
reasonable rate of interest. All relevant factors will be considered in
determining a reasonable rate of interest, including the amount and duration of
the loan, the security and guarantee (if any) involved, the credit standing of
the Plan and the guarantor (if any) and the interest rate prevailing for
comparable loans.

              (c) The loan must be for a specific term. Such loan may not be
payable at the demand of any person, except in the case of default.

              (d) The loan must be without recourse against the Plan.
Furthermore, the only assets of the Plan that may be given as collateral for the
loan are Employer Shares of two classes--those acquired with the proceeds of the
loan and those that were used as collateral on a prior exempt loan repaid with
the proceeds of the current loan. No person entitled to payment under the exempt
loan will have any rights to assets of the Plan other than: (i) collateral given
for the loan (or the proceeds of such collateral held in the unallocated
suspense account); (ii) contributions (other than contributions of Employer
Shares) that are made under the Plan to meet its obligations under the loan; and
(iii) earnings attributable to either such collateral or the investment of such
contributions.

              (e) Payments of principal and interest on the loan will be made
only from (i) Employer contributions paid in cash; (ii) earnings from such
Employer contributions; or (iii) from dividends on Employer Shares financed by
the loan, to the extent the Plan Administrator directs that such dividends be
used for such purpose.

              (f) The loan and/or related documents must provide for the release
from encumbrance of Plan assets used as collateral for the loan. For each Plan
Year during the

                                       38
<PAGE>

duration of the loan, the number of securities released shall be determined in
accordance with Treasury Regulation 54.4975-8(i) or (ii). If collateral includes
more than one class of securities, the number of securities of each class to be
released for a Plan Year must be determined by applying the same fraction to
each class.

              (g) In the event of default, the value of Plan assets transferred
in satisfaction of the loan must not exceed the amount of default. If the lender
is a "disqualified person," within the meaning of Code Section 4975(e)(2), a
loan must provide for a transfer of Plan assets upon default only upon and to
the extent of the failure of the Plan to meet the payment schedule of the loan.

              (h) All other requirements of Treasury Regulation Section
54.4975-7(b).

                                       39
<PAGE>

                           SECTION 22 - MISCELLANEOUS

22.01         EMPLOYER'S RIGHT TO TERMINATE EMPLOYEES

              The right of an Employer to terminate the employment of any of its
Employees will not be affected by an Employee's participation in the Plan.

22.02         GENDER AND NUMBER

              Wherever used in the Plan, a masculine pronoun will refer to both
the masculine and feminine; and a singular pronoun will refer to both singular
and plural, unless the context clearly requires otherwise.

22.03         MERGER OR CONSOLIDATION

              The Plan Administrator may authorize the merger, transfer or
consolidation of a Participant's Accounts to another qualified plan. In case of
any merger or consolidation with, or transfer of assets or liabilities to, any
other plan, each participant in such other plan would (if the other plan then
terminated) receive a benefit immediately after the merger, consolidation or
transfer that is equal to, or greater than, the benefit he would have been
entitled to receive immediately before the merger, consolidation or transfer (if
the Plan had then terminated). To the extent required by Code Section 411(d)(6),
the Plan will preserve the forms of benefits relating to that portion of a
Participant's Account acquired as a result of a merger, consolidation or
transfer of assets or liabilities with any other plan.

22.04         NAMED FIDUCIARIES

              The named fiduciaries of the Plan will be the Plan Administrator,
the Sponsor, and the investment committee.

22.05         LIMITATIONS ON PAYMENT; MISSING PARTICIPANT

              If, in the judgment of the Plan Administrator, a Participant or
Beneficiary is legally, physically or mentally incapable of personally receiving
and executing a receipt for any distribution or payment due him under the Plan,
the distribution or payment may be made to the person's guardian or other legal
representative (or, if none is known, to any other person or institution who has
custody of the person), and that distribution or payment will constitute a full
discharge of any obligation with respect to the amount paid or distributed.

                                       40
<PAGE>

              If the Plan Administrator cannot locate a Participant or
Beneficiary at the time payments are due, the Account of such Participant or
Beneficiary may be cancelled and such amounts paid to the Employer. In such
case, the Account of the Participant or Beneficiary will be reinstated if such
individual subsequently files a claim for his or her benefit under the Plan.

22.06         ADDITIONAL SERVICE CREDITS

              If a Leased Employee becomes eligible to participate in the Plan,
such Employee's service while a Leased Employee, and such service during a
period in which the Employee would have been a Leased Employee but for the fact
that the Employee did not work for a one-year period as a substantially
full-time employee, will be considered in determining any eligibility or vesting
service required to be completed by a Participant under the Plan.

              The Plan Administrator may, on a nondiscriminatory basis, provide
that the period of time in which an authorized leave of absence has occurred
will be included in any eligibility or vesting service required to be completed
by a Participant under the Plan.

22.07         UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT

              This section is effective as of December 12, 1994 or the Plan's
initial effective date, if later. Notwithstanding any provisions of the Plan to
the contrary, contributions, benefits and years of service with respect to
Qualified Military Service will be provided in accordance with Code Section
414(u).

22.08         NONTERMINABLE PROTECTIONS AND RIGHTS

              Notwithstanding anything contained herein to the contrary, except
as provided in Sections 12.06 (put requirements) or 12.07 (right of first
refusal) of the Plan, or as otherwise permitted by applicable law, no security
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 and/or
distributed from this Plan.

              The rights and protections specified in the preceding sentence,
together with the put option rights provided for in Section 12.06 hereof, will
be non-terminable regardless of whether this Plan ceases to be an employee stock
ownership plan or an exempt loan is paid in full.

22.09         DIVIDENDS

              Dividends on Employer Shares held in a Participant's Account shall
be allocated as investment earnings of such Participant's Account, and dividends
on Shares held in the

                                       41
<PAGE>

unallocated suspense account described in Section 4.02 shall be allocated in
accordance with procedures established by the Plan Administrator.

22.10         USE OF RETURN OF CAPITAL WITH RESPECT TO EMPLOYER SHARES

              Amounts received by the Plan as a return of capital on the
Employer Shares held in the suspense account described in Section 3.02 may be
used to repay the Plan loan which has been used to acquire such shares, or may
be held in the suspense account and allocated on a pro rata basis in accordance
with the remaining Employer Shares held in suspense, as determined by the Plan
Administrator.

22.11         MINIMUM DISTRIBUTIONS

              With respect to distributions under the Plan made in calendar
years beginning on or after January 1, 2001, the Plan will apply the minimum
distribution requirements of Section 401(a)(9) of the Internal Revenue Code in
accordance with the regulations under Section 401(a)(9) that were proposed in
January 2001, notwithstanding any provision of the Plan to the contrary. This
paragraph shall continue in effect until the end of the last calendar year
beginning before the effective date of final regulations under Section 401(a)(9)
or such other date specified in guidance published by the Internal Revenue
Service.

22.12         QUALIFIED TRANSPORTATION FRINGE COMPENSATION

              To the extent that any provision of the Plan directly or
indirectly references the definition of "compensation" set forth in either
Section 415(c)(3) or Section 414(s)(2) of the Code, and such provision provides
that certain deferred compensation pursuant to Section 415(c)(3)(D) of the Code
or Section 414(s)(2) of the Code will be included in the definition of
"compensation," then effective for Plan Years or Limitation Years beginning on
and after January 1, 2001, the amount of compensation determined pursuant to
such provision will include elective amounts that are not includable in the
gross income of the Participant by reason of Section 132(f)(4) of the Code. To
the extent that the definition of "compensation" which is used for the purpose
of determining a Participant's allocation under the Plan includes in such
definition certain deferred compensation referenced in either Section 414(s)(2)
or 415(c)(3)(D) of the Code, effective for Plan Years beginning on and after
January 1, 2001, the amount of compensation determined pursuant to such
provision will include elective amounts that are not includable in the gross
income of the Participant by reason of Section 132(f)(4) of the Code.

22.13         MISTAKES OR MISSTATEMENTS

              In the event of a mistake or a misstatement by a Participant or
Beneficiary as to any item of information that is furnished pursuant to the
terms of the Plan that has an effect on the

                                       42
<PAGE>

amount of paid or to be paid to such Participant or Beneficiary, or a mistake by
the Plan as to the amount paid or to be paid to a Participant or Beneficiary,
the Plan Administrator shall take such action as in its judgment will accord to
such person the payment to which he is properly entitled under the Plan. The
actions to be taken by the Plan Administrator may include the reduction of
future payments to the Participant or Beneficiary, the restatement of such
person's accrued benefit on the books and records or the Plan Administrator, a
request of the Participant or Beneficiary that the amounts paid in error to such
person be repaid, or any other such action as the Plan Administrator deems
desirable.

                                       43
<PAGE>

                            SECTION 23 - DEFINITIONS

              Whenever used herein, the following words and phrases will have
the meanings specified below. Additional words and phrases may be defined in the
text of the Plan.

              "ACCOUNT" means a Participant's Employer Contributions Account and
any other accounts established for the benefit of a Plan Participant. "Account,"
when used in the Plan, will also mean, to the extent the context so requires,
the aggregate of such accounts.

              "AFFILIATE" means, except for the purpose of determining the
limitations set forth in Section 2.04, any other employer that, together with
the Employer, is a member of: (a) a controlled group of corporations or of a
commonly controlled trade or business, as defined in Code Sections 414(b) and
(c); (b) an affiliated service group as defined in Code Section 414(m); or (c)
any other organization described in Code Section 414(o) (to the extent required
to be aggregated by the Secretary of Treasury). For the purpose of determining
the limitations set forth in Section 2.04, the term "Affiliate" has the meaning
as set forth in this definition, as modified by Section 415(h).

              "ANNUAL ADDITIONS" means the sum of the following amounts for a
Limitation Year:

              (a) Employer contributions and Forfeitures allocated to a
Participant's Account pursuant to Section 2. The amount of Annual Additions
attributable to Employer contributions that are used to repay an exempt loan (as
described in Section 21) may be determined by reference to either the amount of
Employer contributions used to repay such loan or the value of the Employer
Shares allocated to Participants' Accounts.

              For any Plan Year in which not more than one-third of the Employer
contributions made pursuant to Section 2.02 are allocated to "highly-compensated
employees" (within the meaning of Code Section 414(q)), the amount treated as an
Annual Addition will be adjusted to exclude Forfeitures on Employer Shares that
are acquired with the proceeds of a loan described in Section 21, or Employer
contributions that are allocable to interest payments on such loan. For any Plan
Year, the Plan Administrator may reallocate the allocation required to be made
to Participants' Accounts in accordance with Section 3 by reducing the amounts
allocated to the Plan's highly compensated employees in order to satisfy the
"one-third" rule.

              (b) amounts allocated after March 31, 1984 to an individual
medical account, as defined in Code Section 415(l)(2), which is part of a
pension or annuity plan maintained by the Employer;

              (c) amounts derived from contributions paid or accrued after
December 31, 1985 in taxable years ending after such date which are attributable
to postretirement medical benefits allocated to the separate account of a "key
employee" (as defined in Section 416(i) of the Code) under a welfare benefit
fund (as defined in Section 419(e) of the Code) maintained by the Employer. The
amounts described under this paragraph (c) will not be subject to the 25% of
compensation limit provided in Section 2.04;

                                       44
<PAGE>

              (d) amounts consisting of Employer contributions (including
elective deferral contributions), employee after-tax contributions or
forfeitures allocated to any other defined contribution plan or simplified
employee pension (other than a salary reduction simplified employee pension) of
the Employer or an Affiliate to which the Participant is or was a participant.

              In determining the amount set forth in paragraph (a) above, an
excess annual addition determined in accordance with Section 3.01 that is
applied to reduce Employer contributions in a Limitation Year will be considered
an Annual Addition for the year in which such contribution is applied.

              The amounts described in paragraphs (a) and (d) above will include
amounts treated as "excess deferrals" within the meaning of Treasury Regulation
1.402(g)-1(e)(1)(iii) (unless distributed in accordance with Treasury Regulation
1.402(g)-1(e)(2) or (3)), "excess contributions" within the meaning of Treasury
Regulation 1.401(k)-1(g)(7) or "excess aggregate contributions" within the
meaning of Treasury Regulation 1.401(m)-1(f)(8) for a Limitation Year.

              "BENEFICIARY" means the individual, individuals or trust
designated by the Participant or determined in accordance with Section 8 to
receive any death benefit payable under the Plan.

              "CODE" means the Internal Revenue Code of 1986, as may be amended
from time to time and corresponding provisions of future federal internal
revenue codes.

              "COMPENSATION" means all amounts paid to the Participant by the
Employer for a Plan Year which is treated as wages pursuant to Code Section
3401(a), plus all other payments of compensation which the Employer is required
to report on form W-2, plus all amounts excluded from income under Sections 125,
402(e)(3), 402(h)(1)(B), 403(b), or for Limitation Years commencing on and after
January 1, 2001, Section 132(f)(4) of the Code; provided compensation paid by
the Employer during any Plan Year in excess of the limit set forth in Code
Section 401(a)(17)(A), as adjusted by Code Section 401(a)(17)(B), will be
excluded. Effective August 19, 1999, amounts realized from the exercise of a
nonqualified stock option, or amounts includable in income when restricted stock
(or property) held by the Employee either becomes freely transferable or is no
longer subject to a substantial risk of forfeiture, shall also be excluded from
the definition of compensation.

              For purposes of a Participant's first Plan Year of eligibility,
only Compensation paid to such Participant after the Entry Date on which he
begins to participate in the Plan shall be considered for purposes of
determining allocations under Section 3 hereof.

              "EFFECTIVE DATE" for this amended and restated Plan means, except
where separately stated, January 1, 1998.

              "EMPLOYEE" means any person who is an employee in the regular
employment of the Employer, excluding: (a) Employees who are members of a
collective bargaining unit providing retirement benefits were subject to
good-faith negotiation between the Union and the Employer;

                                       45
<PAGE>

and (b) Employees who are classified by the Employer as "leased employees." If
an individual who is not classified as a common law employee is determined by a
court of law or governmental agency to be a common law employee of the Employer,
such employee will remain excluded from participation in the Plan unless the
Plan is amended to specifically provide for such employee's inclusion. The
definition of "Employee" shall also exclude any person acquired in a corporate
transaction with Industrial Bancorp, Inc. or one of its affiliated companies who
was a participant in the Industrial Bancorp, Inc. Employee Stock Ownership Plan
immediately prior to the acquisition date. Notwithstanding the foregoing, the
persons who are excluded from participation in this Plan as described in the
preceding sentence will become Participants in the Plan on January 1, 2003,
provided such persons are Employees on such date.

              "EMPLOYER" means the Sponsor or Affiliate that adopts the Plan and
joins in the Trust Agreement. As of the Effective Date, The Home Savings and
Loan Company of Youngstown, Ohio is an Affiliate that participates in the Plan.

              "EMPLOYER CONTRIBUTIONS ACCOUNT" means the account established for
the benefit of a Participant pursuant to Section 4.01.

              "EMPLOYER SHARES" OR "SHARES" means securities which constitute
"employer securities" under Section 409(1) of the Code and "qualifying employer
securities" under Section 4975(e)(8) of the Code and Section 407(d)(5) of ERISA.

              "EMPLOYMENT COMMENCEMENT DATE" means the date on which an Employee
first performs an Hour of Service for the Employer or an Affiliate or the date
on which an Employee first performs an Hour of Service for the Employer or an
Affiliate after a One-Year Break in Service.

              "ENTRY DATE" means the first day of January, April, July or
October following the period described in Section 1.02 in which an Employee
satisfied the requirements of Section 1.01, but not earlier than the date the
Plan first became effective.

              "FORFEITURE" means the non-vested amount of a Participant's
Account determined in accordance with Section 11 that the Participant is not
entitled to receive upon the termination of his employment.

              "HOUR OF SERVICE" means:

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

              (b) each hour for which an Employee is paid, or entitled to
payment, by the Employer or an Affiliate on account of a period of time during
which no duties are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, illness, incapacity
(including disability), layoff, absence for maternity or paternity reasons, jury

                                       46
<PAGE>

duty, military duty or leave of absence. No more than 501 Hours of Service will
be credited under this paragraph for any single continuous period (whether or
not such period occurs in a single computation period) unless such period is a
period of Qualified Military Service. An Employee will be credited with Hours of
Service for all periods of Qualified Military Service in accordance with the
Uniformed Services Employment and Reemployment Rights Act. Hours under this
paragraph will be calculated and credited pursuant to Section 2530.200b-2 of the
Department of Labor Regulations which are incorporated herein by this reference;
and

              (c) each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer or an Affiliate. The
same Hours of Service will not be credited both under paragraph (a) or paragraph
(b), as the case may be, and under this paragraph (c). The hours credited
pursuant to this paragraph (c) will be credited to the computation period or
periods to which the award or agreement pertains rather than the computation
period in which the award, agreement or payment is made; and

              (d) if records of actual hours are not maintained for an Employee,
an Employee will be given credit for 190 Hours of Service if he is employed at
any time during the month.

              "LATE RETIREMENT DATE" means the first day of the month following
the Participant's actual retirement after his Normal Retirement Date.

              "LIMITATION YEAR" means the Plan Year.

              "NORMAL RETIREMENT AGE" means the day on which the Participant
attains age 65.

              "NORMAL RETIREMENT DATE" means the first day of the month
coincident with or next following the date on which a Participant attains his
Normal Retirement Age; provided, however, that the Plan will not be interpreted
to require that a Participant retire prior to attaining any specific age.

              "ONE-YEAR BREAK IN SERVICE" means a 12-month period during which a
Participant has not completed more than 500 Hours of Service.

              In the case of an Employee who is absent from work for maternity
or paternity reasons, such Employee will have credited, solely for purposes of
determining whether a One-Year Break in Service has occurred for eligibility and
vesting, if required, in the year in which the absence begins if necessary to
prevent a One-Year Break in Service for such year; or in the following year, the
number of hours that would normally have been credited but for such absence; or
in any case in which such hours cannot be determined, 8 Hours of Service per day
of such absence. The total number of hours treated as Hours of Service under
this paragraph will not exceed 501 hours. For purposes of this paragraph, an
absence from work for maternity or paternity reasons means an absence (a) by
reason of pregnancy of the Participant; (b) by reason of the birth of a child of
the Participant; (c) by reason of the placement of a child with the Participant
in connection with the adoption of such child by such Participant; or (d) for
purposes of caring for such child for a period beginning immediately following
such birth or placement.

                                       47
<PAGE>

              An Employee will not be treated as having a One-Year Break in
Service as a result of any periods of Qualified Military Service.

              "PARTICIPANT" means either (a) an Employee who is participating in
the Plan in accordance with Section 1.01 for whom an Account is being
maintained; or (b) a former Employee of the Employer for whom an Account is
being maintained.

              "PLAN" means the United Community Financial Corp. Employee Stock
Ownership Plan, as amended, as embodied in the Plan document and amendments made
hereto from time to time.

              "PLAN ADMINISTRATOR" means an administrative committee appointed
by the Sponsor to perform the functions described in Section 14. In the absence
of such appointment, the Sponsor will be the Plan Administrator. Notwithstanding
the foregoing, the Sponsor will be the Plan Administrator for purposes of the
reporting and disclosure requirements of Employee Retirement Income Security Act
of 1974, as it shall be amended from time to time, and of the Code.

              "PLAN YEAR" means the fiscal year of the Plan beginning on January
1 and ending on December 31.

              "PROJECTED ANNUAL BENEFIT" means the annual benefit to which the
Participant would be entitled under all Employer or Affiliate sponsored defined
benefit plans, assuming that the Participant continues employment until his
Normal Retirement Date, that the Participant's compensation continues until his
Normal Retirement Date at the rate in effect during the current calendar year
and that all other factors relevant for determining benefits under the plans
remain constant at the level in effect during the current calendar year.

              "QUALIFIED MILITARY SERVICE" means any service in the "uniformed
services" (as defined in Chapter 43 of Title 38 of the United States Code) by an
Employee relating to reemployment initiated on or after December 12, 1994, if
such Employee is entitled to reemployment rights under such chapter with respect
to such service.

              "SHARES."  See "EMPLOYER SHARES."

              "SPONSOR" means United Community Financial Corp., or any successor
employer that assumes the responsibilities and liabilities of the Plan.

              "SPOUSE" or "SURVIVING SPOUSE" means an individual who is legally
married to the Participant, provided that an individual who was formerly married
to the Participant will be treated as the Spouse or Surviving Spouse to the
extent provided under a qualified domestic relations order, as described in Code
Section 414(p).

              "TRUST" or "TRUST FUND" means the fund established pursuant to the
terms of the Trust Agreement, which fund may be comprised of one or more
investment funds.

                                       48
<PAGE>

              "TRUST AGREEMENT" means the agreement by and between the Sponsor
and the Trustee for the management, investment and disbursement of assets held
in the Trust Fund.

              "TRUSTEE" means the bank, trust company and/or individual
designated by the Sponsor to hold and invest the Trust Fund and to pay benefits
and expenses in accordance with the terms and provisions of the agreement by and
between the Sponsor and such bank, trust company and/or individual. As of the
Effective Date, the Trustee is Riggs Bank, N.A.

              "VALUATION DATE" means the last day of the Plan Year and any other
date or dates fixed by the Plan Administrator for the valuation of assets and
adjustments of Accounts.

              "YEAR(S) OF SERVICE" An Employee will be credited with a Year of
Service for each Plan Year (excluding service described in Section 11.03, if
any) in which he is credited with at least 1,000 Hours of Service. An Employee
who terminates employment before the end of a Plan Year but after being credited
with at least 1,000 Hours of Service will be credited with a Year of Service. In
determining an Employee's Year(s) of Service, all periods of Qualified Military
Service will be included.

                                       49
<PAGE>

         IN WITNESS WHEREOF, the undersigned has caused this Plan to be executed
by a duly authorized individual this 14 day of November, 2001.
<Table>
<S>                                                           <C>

                                                                UNITED COMMUNITY FINANCIAL CORP.

                                                                By: /S/ DOUGLAS M. MCKAY
                                                                   ----------------------------------------------
                                                                Name (Print): DOUGLAS M. MCKAY
                                                                   ----------------------------------------------
Date executed: NOVEMBER 14, 2001
               ------------------
                                                                Title: PRESIDENT AND CHAIRMAN OF THE BOARD

                                                                THE HOME SAVINGS AND LOAN COMPANY OF YOUNGSTOWN,
                                                                OHIO

                                                                By: /S/ DOUGLAS M. MCKAY
                                                                   ----------------------------------------------

                                                                Name (Print): DOUGLAS M. MCKAY
                                                                   ----------------------------------------------
Date executed: NOVEMBER 15, 2001
               ------------------
                                                                Title: CHIEF EXECUTIVE OFFICER AND CHAIRMAN OF THE
                                                                BOARD

</Table>

                                       50

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