Document:

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                            REDLANDS CENTENNIAL BANK
                         EMPLOYEE STOCK OWNERSHIP PLAN

                  THIS PLAN, hereby adopted this 1st day of February, 2000,
by Redlands Centennial Bank (herein referred to as the "Employer").

                              W I T N E S S E T H:

                  WHEREAS, the Employer desires an Employee Stock Ownership
Plan so as to enable its eligible employees to acquire a proprietary interest
in capital stock of the Employer; and

                  WHEREAS, the Employer desires to recognize the contribution
made to its successful operation by its employees and to reward such
contribution by means of an Employee Stock Ownership Plan for those employees
who shall qualify as Participants hereunder; and

                  WHEREAS, contributions to the Plan will be made by the
Employer and such contributions made to the trust will be invested primarily
in the capital stock of the Employer;

                  NOW, THEREFORE, effective February 1, 2000, (hereinafter
called the "Effective Date"), the Employer hereby establishes an Employee
Stock Ownership Plan (ESOP) (which plan is hereinafter called the "Plan") for
the exclusive benefit of the Participants and their Beneficiaries, which is
intended to qualify as an "ESOP", according to the following terms:
                                    ARTICLE I
                                   DEFINITIONS

         1.1      "Act" means the Employee Retirement Income Security Act of
1974, as it may be amended from time to time.

         1.2      "Administrator" means the Employer unless another person or
entity has been designated by the Employer pursuant to Section 2.2 to
administer the Plan on behalf of the Employer.

         1.3      "Affiliated Employer" means any corporation which is a
member of a controlled group of corporations (as defined in Code Section
414(b)) which includes the Employer; any trade or business (whether or not
incorporated) which is under common control (as defined in Code Section
414(c)) with the Employer; any organization (whether or not incorporated)
which is a member of an affiliated service group (as defined in Code Section
414(m)) which includes the Employer; and any other entity required to be
aggregated with the Employer pursuant to Regulations under Code Section
414(o).

         1.4      "Aggregate Account" means, with respect to each
Participant, the value of all accounts maintained on behalf of a

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Participant, whether attributable to Employer or Employee contributions,
subject to the provisions of Section 9.2.

         1.5      "Anniversary Date" means December 31st.

         1.6      "Beneficiary" means the person to whom the share of a
deceased Participant's total account is payable, subject to the restrictions
of Sections 7.2 and 7.5.

         1.7      "Code" means the Internal Revenue Code of 1986, as amended
or replaced from time to time.

         1.8      "Company Stock" means common stock issued by the Employer
(or by a corporation which is a member of the controlled group of
corporations of which the Employer is a member) which is readily tradeable on
an established securities market. If there is no common stock which meets the
foregoing requirement, the term "Company Stock" means common stock issued by
the Employer (or by a corporation which is a member of the same controlled
group) having a combination of voting power and dividend rights equal to or
in excess of: (A) that class of common stock of the Employer (or of any other
such corporation) having the greatest voting power, and (B) that class of
common stock of the Employer (or of any other such corporation) having the
greatest dividend rights. Noncallable preferred stock shall be deemed to be
"Company Stock" if such stock is convertible at any time into stock which
constitutes "Company Stock" hereunder and if such conversion is at a
conversion price which (as of the date of the acquisition by the Trust) is
reasonable. For purposes of the preceding sentence, pursuant to Regulations,
preferred stock shall be treated as noncallable if after the call there will
be a reasonable opportunity for a conversion which meets the requirements of
the preceding sentence.

         1.9      "Company Stock Account" means the account of a Participant
which is credited with the shares of Company Stock purchased and paid for by
the Trust Fund or contributed to the Trust Fund.

         1.10     "Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401(a) and all other payments
of compensation by the Employer (in the course of the Employer's trade or
business) for a Plan Year for which the Employer is required to furnish the
Participant a written statement under Code Sections 6041(d), 6051(a)(3) and
6052. Compensation must be determined without regard to any rules under Code
Section 3401(a) that limit the remuneration included in wages based on the
nature or location of the employment or the services performed (such as the
exception for agricultural labor in Code Section 3401(a)(2)).

                  For purposes of this Section, the determination of
Compensation shall be made by:

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                  (a)      excluding commissions.

                  (b)      including amounts which are contributed by the
         Employer pursuant to a salary reduction agreement and which are not
         includible in the gross income of the Participant under Code Sections
         125, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee
         contributions described in Code Section 414(h)(2) that are treated as
         Employer contributions.

                  For a Participant's initial year of participation,
Compensation shall be recognized for the entire Plan Year.

                  Compensation in excess of $160,000 shall be disregarded.
Such amount shall be adjusted for increases in the cost of living in
accordance with Code Section 407(a)(17), except that the dollar increase in
effect on January 1 of any calendar year shall be effective for the Plan Year
beginning with or within such calendar year. For any short Plan Year the
Compensation limit shall be an amount equal to the Compensation limit for the
calendar year in which the Plan Year begins multiplied by the ratio obtained
by dividing the number of full months in the short Plan Year by twelve (12).

         1.11     "Contract" or "Policy" means any life insurance policy,
retirement income or annuity policy or annuity contract (group or individual)
issued pursuant to the terms of the Plan.

         1.12     "Early Retirement Date." This Plan does not provide for a
retirement date prior to Normal Retirement Date.

         1.13     "Eligible Employee" means any Employee.

                  Employees of Affiliated Employers shall not be eligible to
participate in this Plan unless such Affiliated Employers have specifically
adopted this Plan in writing.

         1.14     "Employee" means any person who is employed by the Employer
or Affiliated Employer. Employee shall include Leased Employees within the
meaning of Code Sections 414(n)(2) and 414(o)(2) unless such Leased Employees
are covered by a plan described in Code Section 414(n)(5) and such Leased
Employees do not constitute more than 20% of the recipient's non-highly
compensated work force.

         1.15     "Employer" means Redlands Centennial Bank and any successor
which shall maintain this Plan; and any predecessor which has maintained this
Plan. The Employer is a corporation with principal offices in the State of
California.

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         1.16     "ESOP" means an employee stock ownership plan that meets
the requirements of Code Section 4975(e)(7) and Regulation 54.4975-11.

         1.17     "Fiduciary" means any person who (a) exercises any
discretionary authority or discretionary control respecting management of the
Plan or exercises any authority or control respecting management or
disposition of its assets, (b) renders investment advice for a fee or other
compensation, direct or indirect, with respect to any monies or other
property of the Plan or has any authority or responsibility to do so, or (c)
has any discretionary authority or discretionary responsibility in the
administration of the Plan, including, but not limited to, the Trustee, the
Employer and its representative body, and the Administrator.

         1.18     "Fiscal Year" means the Employer's accounting year of 12
months commencing on January 1st of each year and ending the following
December 31st.

         1.19     "Forfeiture" means that portion of a Participant's Account
that is not Vested, and occurs on the earlier of:

                  (a)      the distribution of the entire Vested portion of a
         Terminated Participant's Account, or

                  (b)      the last day of the Plan Year in which the
         Participant incurs five (5) consecutive 1-Year Breaks in Service.

                  Furthermore, for purposes of paragraph (a) above, in the
case of a Terminated Participant whose Vested benefit is zero, such
Terminated Participant shall be deemed to have received a distribution of his
Vested benefit upon his termination of employment. Restoration of such
amounts shall occur pursuant to Section 7.4(f)(2). In addition, the term
Forfeiture shall also include amounts deemed to be Forfeitures pursuant to
any other provision of this Plan.

         1.20     "Former Participant" means a person who has been a
Participant, but who has ceased to be a Participant for any reason.

         1.21     "415" Compensation" with respect to any Participant means
such Participant's wages as defined in Code Section 3401(a) and all other
payments of compensation by the Employer (in the course of the Employer's
trade or business) for a Plan Year for which the Employer is required to
furnish the Participant a written statement under Code Sections 6041(d),
6051(a)(3) and 6052.  "415 Compensation" must be determined without regard to
any rules under Code Section 3401(a) that limit the remuneration included in
wages based on the nature or location of the

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employment or the services performed (such as the exception for agricultural
labor in Code Section 3401(a)(2)).

                  For purposes of this Section, the determination of "415
Compensation" shall include any elective deferral (as defined in Code Section
401(g)(3)), and any amount which is contributed or deferred by the Employer
at the election of the Participant and which is not includible in the gross
income of the Participant by reason of Code Sections 125 and 457.

         1.22     "Highly Compensated Employee" means an Employee described
in Code Section 414(q) and the Regulations thereunder, and generally means an
Employee who performed services for the Employer during the "determination
year" and is in one or more of the following groups:

                  (a)      Employees who at any time during the "determination
         year" or "look-back year" were "five percent owners" as defined in
         Section 1.27(c).

                  (b)      Employees who received "415 Compensation" during
         the "look-back year" from the Employer in excess of $80,000.

                  The "determination year" shall be the Plan Year for which
testing is being performed, and the "look back year" shall be the immediately
preceding twelve-month period.

                  For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not
includible in the gross income of the Participant under Code Sections 125,
402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee contributions
described in Code Section 414(h)(2) that are treated as Employer
contributions. Additionally, the dollar threshold amount specified in (b)
above shall be adjusted at such time and in the same manner as under Code
Section 415(d), except that the base period shall be the calendar quarter
ending September 30, 1996. In the case of such an adjustment, the dollar
limit which shall be applied is the limit for the calendar year in which the
"look back year" begins.

                  In determining who is a Highly Compensated Employee,
Employees who are non-resident aliens and who received no earned income
(within the meaning of Code Section 911(d)(2)) from the Employer constituting
United States source income within the meaning of Code Section 861(a)(3)
shall not be treated as Employees. Additionally, all Affiliated Employers
shall be taken into account as a single employer and Leased Employees within
the meaning of Code Sections 414(n)(2) and 414(o)(2) shall be considered
Employees unless such Leased Employees are covered by a plan described in
Code Section 414(n)(5) and are not covered in any qualified plan maintained
by the Employer. The exclusion of

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Leased Employees for this purpose shall be applied on a uniform and
consistent basis for all of the Employer's retirement plans. Highly
Compensated Former Employees shall be treated as Highly Compensated Employees
without regard to whether they performed services during the "determination
year."

         1.23 "Highly Compensated Former Employee" means a former Employee
who had a separation year prior to the "determination year" and was a Highly
Compensated Employee in the year of separation from service or in any
"determination year" after attaining age 55. Notwithstanding the foregoing,
an Employee who separated from service prior to 1987 will be treated as a
Highly Compensated Former Employee only if during the separation year (or
year preceding the separation year) or any year after the Employee attains
age 55 (or the last year ending before the Employee's 55th birthday), the
Employee either received "415 Compensation" in excess of $50,000 or was a
"five percent owner." For purposes of this Section, "determination year,"
"415 Compensation" and "five percent owner" shall be determined in
accordance with Section 1.22. Highly Compensated Former Employees shall be
treated as Highly Compensated Employees. The method set forth in this Section
for determining who is a "Highly Compensated Former Employee" shall be
applied on a uniform and consistent basis for all purposes for which the Code
Section 414(q) definition is applicable.

         1.24 "Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to participate in the Plan.

         1.25 "Hour of Service" means each hour for which an Employee is paid
or entitled to payment for the performance of duties for the Employer.

         1.26 "Investment Manager" means an entity that (a) has the power to
manage, acquire, or dispose of Plan assets and (b) acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person, firm, or
corporation registered as an investment adviser under the Investment Advisers
Act of 1940, a bank, or an insurance company.

         1.27 "Key Employee" means an Employee as defined in Code Section
416(i) and the Regulations thereunder. Generally, any Employee or former
Employee (as well as each of his Beneficiaries) is considered a Key Employee
if he, at any time during the Plan Year that contains the "Determination
Date" or any of the preceding four (4) Plan Years, has been included in one
of the following categories:

                  (a) an officer of the Employer (as that term is defined within
         the meaning of the Regulations under Code Section 416) having annual
         "415 Compensation" greater than 50 percent of the amount in effect
         under Code Section 415(b)(1)(A) for any such Plan Year.

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                  (b) one of the ten employees having annual "415 Compensation"
         from the Employer for a Plan Year greater than the dollar limitation in
         effect under Code Section 415(c)(1)(A) for the calendar year in which
         such Plan Year ends and owning (or considered as owning within the
         meaning of Code Section 318) both more than one-half percent interest
         and the largest interests in the Employer.

                  (c) a "five percent owner" of the Employer. "Five percent
         owner" means any person who owns (or is considered as owning within the
         meaning of Code Section 318) more than five percent (5%) of the
         outstanding stock of the Employer or stock possessing more than five
         percent (5%) of the total combined voting power of all stock of the
         Employer or, in the case of an unincorporated business, any person who
         owns more than five percent (5%) of the capital or profits interest in
         the Employer. In determining percentage ownership hereunder, employers
         that would otherwise be aggregated under Code Sections 414(b), (c), (m)
         and (o) shall be treated as separate employers.

                  (d) a "one percent owner" of the Employer having an annual
         "415 Compensation" from the Employer of more than $150,000. "One
         percent owner" means any person who owns (or is considered as owning
         within the meaning of Code Section 318) more than one percent (1%) of
         the outstanding stock of the Employer or stock possessing more than one
         percent (1%) of the total combined voting power of all stock of the
         Employer or, in the case of an unincorporated business, any person who
         owns more than one percent (1%) of the capital or profits interest in
         the Employer. In determining percentage ownership hereunder, employers
         that would otherwise be aggregated under Code Sections 414(b), (c), (m)
         and (o) shall be treated as separate employers. However, in determining
         whether an individual has "415 Compensation" of more than $150,000,
         "415 Compensation" from each employer required to be aggregated under
         Code Sections 414(b), (c), (m) and (o) shall be taken into account.

         For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not
includible in the gross income of the Participant under Code Sections 125,
402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee contributions
described in Code Section 414(h)(2) that are treated as Employer
contributions.

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         1.28 "Late Retirement Date" means the first day of the month
coinciding with or next following a Participant's actual Retirement Date
after having reached his Normal Retirement Date.

         1.29 "Leased Employee" means any person (other than an Employee of
the recipient) who pursuant to an agreement between the recipient and any
other person ("leasing organization") has performed services for the
recipient (or for the recipient and related persons determined in accordance
with Code Section 414(n)(6)) on a substantially full time basis for a period
of at least one year, and such services are performed under primary direction
or control by the recipient employer. Contributions or benefits provided a
Leased Employee by the leasing organization which are attributable to
services performed for the recipient employer shall be treated as provided by
the recipient employer. A Leased Employee shall not be considered an Employee
of the recipient:

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

                  (1) a non-integrated employer contribution rate of at least
                  10% of compensation, as defined in Code Section 415(c)(3),
                  but including amounts which are contributed by the Employer
                  pursuant to a salary reduction agreement and which are not
                  includible in the gross income of the Participant under Code
                  Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and
                  Employee contributions described in Code Section 414(h)(2)
                  that are treated as Employer contributions.

                  (2) immediate participation; and

                  (3) full and immediate vesting; and

                  (b) if Leased Employees do not constitute more than 20% of the
         recipient's non-highly compensated work force.

         1.30 "Non-Highly Compensated Participant" means any Participant who
is not a Highly Compensated Employee.

         1.31 "Non-Key Employee" means any Employee or former Employee (and
his Beneficiaries) who is not a Key Employee.

         1.32 "Normal Retirement Age" means the Participant's 65th birthday.
A Participant shall become fully Vested in his Participant's Account upon
attaining his Normal Retirement Age.

         1.33 "Normal Retirement Date" means the first day of the month
coinciding with or next following the Participant's Normal Retirement Age.

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         1.34 "1-Year Break in Service" means a Period of Severance of at
least 12 consecutive months.

         1.35 "Other Investments Account" means the account of a Participant
which is credited with his share of the net gain (or loss) of the Plan.
Forfeitures and Employer contributions in other than Company Stock and which
is debited with payments made to pay for Company Stock.

         1.36 "Participant" means any Eligible Employee who participates in
the Plan and has not for any reason become ineligible to participate further
in the Plan.

         1.37 "Participant's Account" means the account established and
maintained by the Administrator for each Participant with respect to his
total interest in the Plan and Trust resulting from the Employer
contributions.

         1.38 "Period of Service" means the aggregate of all periods
commencing with the Employee's first day of employment or reemployment with
the Employer or Affiliated Employer and ending on the date a 1-Year Break in
Service begins. The first day of employment or reemployment is the first day
the Employee performs an Hour of Service. An Employee will also receive
partial credit for any Period of Severance of less than 12 consecutive
months. Fractional periods of a year will be expressed in terms of days.

         1.39 "Period of Severance" means a continuous period of time during
which the Employee is not employed by the Employer. Such period begins on the
date the Employee retires, quits or is discharged, or if earlier, the 12
month anniversary of the date on which the Employee was otherwise first
absent from service.

         In the case of an individual who is absent from work for maternity
or paternity reasons, the 12-consecutive month period beginning on the first
anniversary of the first day of such absence shall not constitute a 1-Year
Break in Service. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (a) by reason of the
pregnancy of the individual, (b) by reason of the birth of a child of the
individual, (c) by reason of the placement of a child with the individual in
connection with the adoption of such child by such individual, or (d) for
purposes of caring for such child for a period beginning immediately
following such birth or placement.

         1.40 "Plan" means this instrument, including all amendments thereto.

         1.41 "Plan Year" means the Plan's accounting year of twelve (12)
months commencing on January 1st of each year and ending the following
December 31st, except for the first Plan Year which commenced February 1st.

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         1.42 "Regulation" means the Income Tax Regulations as promulgated by
the Secretary of the Treasury or his delegate, and as amended from time to
time.

         1.43 "Retired Participant" means a person who has been a
Participant, but who has become entitled to retirement benefits under the
Plan.

         1.44 "Retirement Date" means the date as of which a Participant
retires for reasons other than Total and Permanent Disability, whether such
retirement occurs on a Participant's Normal Retirement Date or Late
Retirement Date (see Section 7.1).

         1.45 "Super Top Heavy Plan" means a plan described in Section 9.2(b).

         1.46 "Terminated Participant" means a person who has been a
Participant, but whose employment has been terminated other than by death,
Total and Permanent Disability or retirement.

         1.47 "Top Heavy Plan" means a plan described in Section 9.2(a).

         1.48 "Top Heavy Plan Year" means a Plan Year during which the Plan
is a Top Heavy Plan.

         1.49 "Total and Permanent Disability" means a physical or mental
condition of a Participant resulting from bodily injury, disease, or mental
disorder which renders him incapable of continuing any gainful occupation and
which condition constitutes total disability under the federal Social
Security Acts.

         1.50 "Trustee" means the person or entity named as trustee herein or
in any separate trust forming a part of this Plan, and any successors.

         1.51 "Trust Fund" means the assets of the Plan and Trust as the same
shall exist from time to time.

         1.52 "Valuation Date" means the Anniversary Date and such other date
or dates deemed necessary by the Administrator. The Valuation Date may
include any day during the Plan Year that the Trustee, any transfer agent
appointed by the Trustee or the Employer and any stock exchange used by such
agent are open for business.

         1.53 "Vested" means the nonforfeitable portion of any account
maintained on behalf of a Participant.

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                                   ARTICLE II
                                 ADMINISTRATION

2.1   POWERS AND RESPONSIBILITIES OF THE EMPLOYER

                  (a)      In addition to the general powers and
         responsibilities otherwise provided for in this Plan, the Employer
         shall be empowered to appoint and remove the Trustee and the
         Administrator from time to time as it deems necessary for the proper
         administration of the Plan to ensure that the Plan is being operated
         for the exclusive benefit of the Participants and their Beneficiaries
         in accordance with the terms of the Plan, the Code, and the Act. The
         Employer may appoint counsel, specialists, advisers, agents (including
         any nonfiduciary agent) and other persons as the Employer deems
         necessary or desirable in connection with the exercise of its fiduciary
         duties under this Plan. The Employer may compensate such agents or
         advisers from the assets of the Plan as fiduciary expenses (but not
         including any business (settlor) expenses of the Employer), to the
         extent not paid by the Employer.

                  (b)      The Employer may, by written agreement or
         designation, appoint at its option an Investment Manager (qualified
         under the Investment Company Act of 1940 as amended), investment
         adviser, or other agent to provide direction to the Trustee with
         respect to any or all of the Plan assets. Such appointment shall be
         given by the Employer in writing in a form acceptable to the Trustee
         and shall specifically identify the Plan assets with respect to which
         the Investment Manager or other agent shall have authority to direct
         the investment.

                  (c)      The Employer shall establish a "funding policy and
         method," i.e., it shall determine whether the Plan has a short run need
         for liquidity (e.g., to pay benefits) or whether liquidity is a long
         run goal and investment growth (and stability of same) is a more
         current need, or shall appoint a qualified person to do so. The
         Employer or its delegate shall communicate such needs and goals to the
         Trustee, who shall coordinate such Plan needs with its investment
         policy. The communication of such a "funding policy and method" shall
         not, however, constitute a directive to the Trustee as to investment of
         the Trust Funds. Such "funding policy and method" shall be consistent
         with the objectives of this Plan and with the requirements of Title I
         of the Act.

                  (d)      The Employer shall periodically review the
         performance of any Fiduciary or other person to whom duties have been
         delegated or allocated by it under the

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         provisions of this Plan or pursuant to procedures established
         hereunder. This requirement may be satisfied by formal periodic review
         by the Employer or by a qualified person specifically designated by the
         Employer, through day-to-day conduct and evaluation, or through other
         appropriate ways.

2.2   DESIGNATION OF ADMINISTRATIVE AUTHORITY

         The Employer shall be the Administrator. The Employer may appoint
any person, including, but not limited to, the Employees of the Employer, to
perform the duties of the Administrator. Any person so appointed shall
signify his acceptance by filing written acceptance with the Employer. Upon
the resignation or removal of any individual performing the duties of the
Administrator, the Employer may designate a successor.

2.3   ALLOCATION AND DELEGATION OF RESPONSIBILITIES

         If more than one person is appointed as Administrator, the
responsibilities of each Administrator may be specified by the Employer and
accepted in writing by each Administrator. In the event that no such
delegation is made by the Employer, the Administrators may allocate the
responsibilities among themselves, in which event the Administrators shall
notify the Employer and the Trustee in writing of such action and specify the
responsibilities of each Administrator. The Trustee thereafter shall accept
and rely upon any documents executed by the appropriate Administrator until
such time as the Employer or the Administrators file with the Trustee a
written revocation of such designation.

2.4   POWERS AND DUTIES OF THE ADMINISTRATOR

         The primary responsibility of the Administrator is to administer the
Plan for the exclusive benefit of the Participants and their Beneficiaries,
subject to the specific terms of the Plan. The Administrator shall administer
the Plan in accordance with its terms and shall have the power and discretion
to construe the terms of the Plan and to determine all questions arising in
connection with the administration, interpretation, and application of the
Plan. Any such determination by the Administrator shall be conclusive and
binding upon all persons. The Administrator may establish procedures, correct
any defect, supply any information, or reconcile any inconsistency in such
manner and to such extent as shall be deemed necessary or advisable to carry
out the purpose of the Plan; provided, however, that any procedure,
discretionary act, interpretation or construction shall be done in a
nondiscriminatory manner based upon uniform principles consistently applied
and shall be consistent with the intent that the Plan shall continue to be
deemed a qualified plan under the terms of Code Section 401(a),

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and shall comply with the terms of the Act and all regulations issued
pursuant thereto. The Administrator shall have all powers necessary or
appropriate to accomplish his duties under this Plan.

         The Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the following:

                  (a)      the discretion to determine all questions relating to
         the eligibility of Employees to participate or remain a Participant
         hereunder and to receive benefits under the Plan;

                  (b)      to compute, certify, and direct the Trustee with
         respect to the amount and the kind of benefits to which any Participant
         shall be entitled hereunder;

                  (c)      to authorize and direct the Trustee with respect to
         all nondiscretionary or otherwise directed disbursements from the
         Trust;

                  (d)      to maintain all necessary records for the
         administration of the Plan;

                  (e)      to interpret the provisions of the Plan and to make
         and publish such rules for regulation of the Plan as are consistent
         with the terms hereof;

                  (f)      to determine the size and type of any Contract to be
         purchased from any insurer, and to designate the insurer from which
         such Contract shall be purchased;

                  (g)      to compute and certify to the Employer and to the
         Trustee from time to time the sums of money necessary or desirable to
         be contributed to the Plan;

                  (h)      to consult with the Employer and the Trustee
         regarding the short and long-term liquidity needs of the Plan in order
         that the Trustee can exercise any investment discretion in a manner
         designed to accomplish specific objectives;

                  (i)      to establish and communicate to Participants a
         procedure for allowing each Participant to direct the Trustee as to the
         distribution of his Company Stock Account pursuant to Section 4.6;

                  (j)      to assist any Participant regarding his rights,
         benefits, or elections available under the Plan.

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2.5   RECORDS AND REPORTS

         The Administrator shall keep a record of all actions taken and shall
keep all other books of account, records, policies, and other data that may
be necessary for proper administration of the Plan and shall be responsible
for supplying all information and reports to the Internal Revenue Service,
Department of Labor, Participants, Beneficiaries and others as required by
law.

2.6   APPOINTMENT OF ADVISERS

         The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, agents (including
nonfiduciary agents) and other persons as the Administrator or the Trustee
deems necessary or desirable in connection with the administration of this
Plan, including but not limited to agents and advisers to assist with the
administration and management of the Plan, and thereby to provide, among such
other duties as the Administrator may appoint, assistance with maintaining
Plan records and the providing of investment information to the Plan's
investment fiduciaries.

2.7   PAYMENT OF EXPENSES

         All expenses of administration may be paid out of the Trust Fund
unless paid by the Employer. Such expenses shall include any expenses
incident to the functioning of the Administrator, or any person or persons
retained or appointed by any Named Fiduciary incident to the exercise of
their duties under the Plan, including, but not limited to, fees of
accountants, counsel, Investment Managers, and other specialists and their
agents, and other costs of administering the Plan. Until paid, the expenses
shall constitute a liability of the Trust Fund.

2.8   CLAIMS PROCEDURE

         Claims for benefits under the Plan may be filed in writing with the
Administrator. Written notice of the disposition of a claim shall be
furnished to the claimant within 90 days after the application is filed. In
the event the claim is denied, the reasons for the denial shall be
specifically set forth in the notice in language calculated to be understood
by the claimant, pertinent provisions of the Plan shall be cited, and, where
appropriate, an explanation as to how the claimant can perfect the claim will
be provided. In addition, the claimant shall be furnished with an explanation
of the Plan's claims review procedure.

                                       14

<PAGE>

2.9   CLAIMS REVIEW PROCEDURE

         Any Employee, former Employee, or Beneficiary of either, who has
been denied a benefit by a decision of the Administrator pursuant to Section
2.8 shall be entitled to request the Administrator to give further
consideration to his claim by filing with the Administrator (on a form which
may be obtained from the Administrator) a request for a hearing. Such
request, together with a written statement of the reasons why the claimant
believes his claim should be allowed, shall be filed with the Administrator
no later than 60 days after receipt of the written notification provided for
in Section 2.8. The Administrator shall then conduct a hearing within the
next 60 days, at which the claimant may be represented by an attorney or any
other representative of his choosing and at which the claimant shall have an
opportunity to submit written and oral evidence and arguments in support of
his claim. At the hearing (or prior thereto upon 5 business days written
notice to the Administrator) the claimant or his representative shall have an
opportunity to review all documents in the possession of the Administrator
which are pertinent to the claim at issue and its disallowance. Either the
claimant or the Administrator may cause a court reporter to attend the
hearing and record the proceedings. In such event, a complete written
transcript of the proceedings shall be furnished to both parties by the court
reporter. The full expense of any such court reporter and such transcripts
shall be borne by the party causing the court reporter to attend the hearing.
A final decision as to the allowance of the claim shall be made by the
Administrator within 60 days of receipt of the appeal (unless there has been
an extension of 60 days due to special circumstances, provided the delay and
the special circumstances occasioning it are communicated to the claimant
within the 60 day period). Such communication shall be written in a manner
calculated to be understood by the claimant and shall include specific
reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.

                                   ARTICLE III
                                   ELIGIBILITY

3.1   CONDITIONS OF ELIGIBILITY

         Any Eligible Employee shall be eligible to participate hereunder on the
date of his employment with the Employer.

3.2  EFFECTIVE DATE OF PARTICIPATION

         An Eligible Employee shall become a Participant effective as of the
date on which he satisfies the eligibility requirements of Section 3.1.

                                       15

<PAGE>

3.3   DETERMINATION OF ELIGIBILITY

         The Administrator shall determine the eligibility of each Employee
for participation in the Plan based upon information furnished by the
Employer. Such determination shall be conclusive and binding upon all
persons, as long as the same is made pursuant to the Plan and the Act. Such
determination shall be subject to review per Section 2.9.

3.4   TERMINATION OF ELIGIBILITY

                  (a)      In the event a Participant shall go from a
         classification of an Eligible Employee to an ineligible Employee, such
         Former Participant shall continue to vest in his interest in the Plan
         for each Period of Service completed while a noneligible Employee,
         until such time as his Participant's Account shall be forfeited or
         distributed pursuant to the terms of the Plan. Additionally, his
         interest in the Plan shall continue to share in the earnings of the
         Trust Fund.

                  (b)      In the event a Participant is no longer a member of
         an eligible class of Employees and becomes ineligible to participate,
         such Employee will participate immediately upon returning to an
         eligible class of Employees.

3.5   OMISSION OF ELIGIBLE EMPLOYEE

         If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission
is not made until after a contribution by his Employer for the year has been
made, the Employer shall make a subsequent contribution with respect to the
omitted Employee in the amount which the said Employer would have contributed
with respect to him had he not been omitted. Such contribution shall be made
regardless of whether or not it is deductible in whole or in part in any
taxable year under applicable provisions of the Code.

3.6   INCLUSION OF INELIGIBLE EMPLOYEE

         If, in any Plan Year, any person who should not have been included
as a Participant in the Plan is erroneously included and discovery of such
incorrect inclusion is not made until after a contribution for the year has
been made, the Employer shall not be entitled to recover the contribution
made with respect to the ineligible person regardless of whether or not a
deduction is allowable with respect to such contribution. In such event, the
amount contributed with respect to the ineligible person shall constitute a
Forfeiture for the Plan Year in which the discovery is made.

                                       16
<PAGE>

3.7   ELECTION NOT TO PARTICIPATE

         An Employee may, subject to the approval of the Employer, elect
voluntarily not to participate in the Plan. The election not to participate
must be communicated to the Employer, in writing, at least thirty (30) days
before the beginning of a Plan Year.

                                   ARTICLE IV
                           CONTRIBUTION AND ALLOCATION

4.1   FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION

                  (a)      For each Plan Year, the Employer shall contribute to
         the Plan such amount as shall be determined by the Employer.

                  (b)      The Employer contribution shall not be limited to
         years in which the Employer has current or accumulated net profit.
         Additionally, to the extent necessary, the Employer shall contribute to
         the Plan the amount necessary to provide the top heavy minimum
         contribution. All contributions by the Employer shall be made in cash
         or in such property as is acceptable to the Trustee.

4.2   TIME OF PAYMENT OF EMPLOYER CONTRIBUTION

         Employer contributions will be paid in cash, Company Stock or other
property as the Employer may from time to time determine. Company Stock and
other property will be valued at their then fair market value. The Employer
shall pay to the Trustee its contribution to the Plan for each Plan Year
within the time prescribed by law, including extensions of time, for the
filing of the Employer federal income tax return for the Fiscal Year.

4.3   ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS

            (a) The Administrator shall establish and maintain an account in
         the name of each Participant to which the Administrator shall credit
         as of each Anniversary Date all amounts allocated to each such
         Participant as

            (b) The Employer shall provide the Administrator with all
         information required by the Administrator to make a proper
         allocation of the Employer contributions for each Plan Year. Within
         a reasonable period of time after the date of receipt by the
         Administrator of such information, the Administrator shall allocate
         such contribution to each Participant's Account in the same

                                      17
<PAGE>

         proportion that each such Participant's Compensation for the year
         bears to the total Compensation of all Participants for such year.

               Only Participants who have completed a Period of Service
         during the Plan Year shall be eligible to share in the discretionary
         contribution for the year.

            (c) The Company Stock Account of each Participant shall be
         credited as of each Anniversary Date with Forfeitures of Company
         Stock and his allocable share of Company Stock (including fractional
         shares) purchased and paid for by the Plan or contributed in kind by
         the Employer. Stock dividends on Company Stock held in his Company
         Stock Account shall be credited to his Company Stock Account when
         paid. Cash dividends on Company Stock held in his Company Stock
         Account shall be credited to his Other Investments Account when paid.

            (d) As of each Valuation Date, before the current valuation
         period allocation of Employer contributions and Forfeitures, any
         earnings or losses (net appreciation or net depreciation) of the
         Trust Fund shall be allocated in the same proportion that each
         Participant's and Former Participant's nonsegregated accounts (other
         than each Participant's Company Stock Account) bear to the total of
         all Participants' and Former Participants' nonsegregated accounts
         (other than each Participant's Company Stock Account) as of such
         date.

            (e) As of each Anniversary Date any amounts which became
         Forfeitures since the last Anniversary Date shall first be made
         available to reinstate previously forfeited account balances of
         Former Participants, if any, in accordance with Section 7.4(f)(2).
         The remaining Forfeitures, if any, shall be allocated among the
         Participants' Accounts of Participants otherwise eligible to share
         in the allocation of discretionary contributions in the same
         proportion that each such Participant's Compensation for the year
         bears to the total Compensation of all such Participants for the
         year.

            Provided, however, that in the event the allocation of
         Forfeitures provided herein shall cause the "annual addition" (as
         defined in Section 4.4) to any Participant's Account to exceed the
         amount allowable by the Code, the excess shall be reallocated in
         accordance with Section 4.5.

            (f) For any Top Heavy Plan Year, Employees not otherwise eligible
         to share in the allocation of

                                       18
<PAGE>

         contributions and Forfeitures as provided above, shall receive the
         minimum allocation provided for in Section 4.3(h) if eligible pursuant
         to the provisions of Section 4.3(j).

            (g) Notwithstanding the foregoing, Participants who are not
         actively employed on the last day of the Plan Year due to Retirement
         (Normal or Late), Total and Permanent Disability or death shall not
         share in the allocation of contributions and Forfeitures for that
         Plan Year.

            (h) Minimum Allocations Required for Top Heavy Plan Years:
         Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum
         of the Employer contributions and Forfeitures allocated to the
         Participant's Account of each Employee shall be equal to at least
         three percent (3%) of such Employee's "415 Compensation" (reduced by
         contributions and forfeitures, if any, allocated to each Employee in
         any defined contribution plan included with this plan in a Required
         Aggregation Group). However, if (1) the sum of the Employer
         contributions and Forfeitures allocated to the Participant's Account
         of each Key Employee for such Top Heavy Plan Year is less than three
         percent (3%) of each Key Employee's "415 Compensation" and (2) this
         Plan is not required to be included in an Aggregation Group to
         enable a defined benefit plan to meet the requirements of Code
         Section 401(a)(4) or 410, the sum of the Employer contributions and
         Forfeitures allocated to the Participant's Account of each Employee
         shall be equal to the largest percentage allocated to the
         Participant's Account of any Key Employee.

               However, no such minimum allocation shall be required in this
         Plan for any Employee who participates in another defined
         contribution plan subject to Code Section 412 included with this
         Plan in a Required Aggregation Group.

            (i) For purposes of the minimum allocations set forth above, the
         percentage allocated to the Participant's Account of any Key
         Employee shall be equal to the ratio of the sum of the Employer
         contributions and Forfeitures allocated on behalf of such Key
         Employee divided by the "415 Compensation" for such Key Employee.

            (j) For any Top Heavy Plan Year, the minimum allocations set
         forth above shall be allocated to the Participant's Account of all
         Employees who are Participants and who are employed by the Employer
         on the last day of the Plan Year, including Employees who

                                      19
<PAGE>

         have (1) failed to complete a Period of Service; and (2) declined to
         make mandatory contributions (if required) to the Plan.

            (k) For the purposes of this Section, "415 Compensation" shall be
         limited to $150,000. Such amount shall be adjusted for increases in
         the cost of living in accordance with Code Section 401(a)(17),
         except that the dollar increase in effect on January 1 of any
         calendar year shall be effective for the Plan Year beginning with or
         within such calendar year. For any short Plan Year the "415
         Compensation" limit shall be an amount equal to the "415
         Compensation" limit for the calendar year in which the Plan Year
         begins multiplied by the ratio obtained by dividing the number of
         full months in the short Plan Year by twelve (12).

            (l) If a Former Participant is reemployed after five (5)
         consecutive 1-Year Breaks in Service, then separate accounts shall
         be maintained as follows:

            (1) one account for nonforfeitable benefits attributable to
            pre-break service; and

            (2) one account representing his status in the Plan attributable to
            post-break service.

4.4   MAXIMUM ANNUAL ADDITIONS

                  (a)      Notwithstanding the foregoing, the maximum "annual
         additions" credited to a Participant's accounts for any "limitation
         year" shall equal the lesser of: (1) $30,000 adjusted annually as
         provided in Code Section 415(d) pursuant to the Regulations, or (2)
         twenty-five percent (25%) of the Participant's "415 Compensation" for
         such "limitation year." For any short "limitation year," the dollar
         limitation in (1) above shall be reduced by a fraction, the numerator
         of which is the number of full months in the short "limitation year"
         and the denominator of which is twelve (12).

                  (b)      For purposes of applying the limitations of Code
         Section 415, "annual additions" means the sum credited to a
         Participant's accounts for any "limitation year" of (1) Employer
         contributions, (2) Employee contributions, (3) forfeitures, (4) 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 and (5) amounts derived from
         contributions paid or accrued after December 31, 1985, in taxable years
         ending after such date, which are attributable to post-retirement
         medical

                                       20

<PAGE>

         benefits allocated to the separate account of a key employee (as
         defined in Code Section 419A(d)(3)) under a welfare benefit plan (as
         defined in Code Section 419(e)) maintained by the Employer. Except,
         however, the "415 Compensation" percentage limitation referred to in
         paragraph (a)(2) above shall not apply to: (1) any contribution for
         medical benefits (within the meaning of Code Section 419A(f)(2)) after
         separation from service which is otherwise treated as an "annual
         addition," or (2) any amount otherwise treated as an "annual addition"
         under Code Section 415(l)(1) .

                  (c)      For purposes of applying the limitations of Code
         Section 415, the transfer of funds from one qualified plan to another
         is not an "annual addition."  In addition, the following are not
         Employee contributions for the purposes of Section 4.4(b): (1) rollover
         contributions (as defined in Code Sections 402(a)(5), 403(a)(4),
         403(b)(8) and 408(d)(3)); (2) repayments of loans made to a Participant
         from the Plan; (3) repayments of distributions received by an Employee
         pursuant to Code Section 411(a)(7)(B) (cash-outs); (4) repayments of
         distributions received by an Employee pursuant to Code Section
         411(a)(3)(D) (mandatory contributions); and (5) Employee contributions
         to a simplified employee pension excludable from gross income under
         Code Section 408(k)(6).

                  (d)      For purposes of applying the limitations of Code
         Section 415, the "limitation year" shall be the Plan Year.

                  (e)      For the purpose of this Section, all qualified
         defined contribution plans (whether terminated or not) ever maintained
         by the Employer shall be treated as one defined contribution plan.

                  (f)      For the purpose of this Section, if the Employer is a
         member of a controlled group of corporations, trades or businesses
         under common control (as defined by Code Section 1563(a) or Code
         section 414(b) and (c) as modified by Code Section 415(h)), is a member
         of an affiliated service group (as defined by Code Section 414(m)), or
         is a member of a group of entities required to be aggregated pursuant
         to Regulations under Code Section 414(o), all Employees of such
         Employers shall be considered to be employed by a single Employer.

                  (g)      For the purpose of this Section, if this Plan is a
         Code Section 413(c) plan, each Employer who

                                      21
<PAGE>

         maintains this Plan will be considered to be a separate Employer.

                  (h)(1)   If a Participant participates in more than one
         defined contribution plan maintained by the Employer which have
         different Anniversary Dates, the maximum "annual additions" under this
         Plan shall equal the maximum "annual additions" for the "limitation
         year" minus any "annual additions" previously credited to such
         Participant's accounts during the "limitation year."

                  (2) If a Participant participates in both a defined
                  contribution plan subject to Code Section 412 and a defined
                  contribution plan not subject to Code Section 412 maintained
                  by the Employer which have the same Anniversary Date, "annual
                  additions" will be credited to the Participant's accounts
                  under the defined contribution plan subject to Code Section
                  412 prior to crediting "annual additions" to the Participant's
                  accounts under the defined contribution plan not subject to
                  Code Section 412.

                  (3) If a Participant participates in more than one defined
                  contribution plan not subject to Code Section 412 maintained
                  by the Employer which have the same Anniversary Date, the
                  maximum "annual additions" under this Plan shall equal the
                  product of (A) the maximum "annual additions" for the
                  "limitation year" minus any "annual additions" previously
                  credited under subparagraphs (1) or (2) above, multiplied by
                  (B) a fraction (i) the numerator of which is the "annual
                  additions" which would be credited to such Participant's
                  accounts under this Plan without regard to the limitations of
                  Code Section 415 and (ii) the denominator of which is such
                  "annual additions" for all plans described in this
                  subparagraph.

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

4.5   ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS

                  (a)      If, as a result of the allocation of Forfeitures, a
         reasonable error in estimating a Participant's Compensation, a
         reasonable error in

                                      22
<PAGE>

         determining the amount of elective deferrals (within the meaning of
         Code Section 402(g)(3)) that may be made with respect to any
         Participant under the limits of Section 4.4 or other facts and
         circumstances to which Regulation 1.415-6(b)(6) shall be applicable,
         the "annual additions" under this Plan would cause the maximum "annual
         additions" to be exceeded for any Participant, the Administrator shall
         (1) distribute any elective deferrals (within the meaning of Code
         section 402(g)(3)) or return any Employee contributions (whether
         voluntary or mandatory), and for the distribution of gains attributable
         to those elective deferrals and Employee contributions, to the extent
         that the distribution or return would reduce the "excess amount" in the
         Participant's accounts (2) hold any "excess amount" remaining after the
         return of any elective deferrals or voluntary Employee contributions in
         a "Section 415 suspense account" (3) allocate and reallocate the
         "Section 415 suspense account" in the next "limitation year" (and
         succeeding "limitation years" if necessary) to all Participants in the
         Plan before any Employer or Employee contributions which would
         constitute "annual additions" are made to the Plan for such "limitation
         year" (4) reduce Employer contributions to the Plan for such
         "limitation year" by the amount of the "Section 415 suspense account"
         allocated and reallocated during such "limitation year."

                  (b)      For purposes of this Article, "excess amount" for any
         Participant for a "limitation year', shall mean the excess, if any, of
         (1) the "annual additions" which would be credited to his account under
         the terms of the Plan without regard to the limitations of Code Section
         415 over (2) the maximum "annual additions" determined pursuant to
         Section 4.4.

                  (c)      For purposes of this Section, "Section 415 suspense
         account" shall mean an unallocated account equal to the sum of "excess
         amounts" for all Participants in the Plan during the "limitation year."
         The "Section 415 suspense account" shall not share in any earnings or
         losses of the Trust Fund.

                  (d)      The Plan may not distribute or return "excess
         amounts," other than elective deferrals (within the meaning of Code
         Section 402(g)(3)) or Employee contributions (whether voluntary or
         mandatory) and gains attributable to such elective deferrals and
         Employee contributions, to Participants or Former Participants.

                                      23
<PAGE>

4.6   DIRECTED INVESTMENT ACCOUNT

                  (a)      Each "Qualified Participant" may elect within ninety
         (90) days after the close of each Plan Year during the "Qualified
         Election Period" to direct the Trustee in writing as to the
         distribution in cash and/or Company Stock of 25 percent of the total
         number of shares of Company Stock acquired by or contributed to the
         Plan that have ever been allocated to such "Qualified Participant's"
         Company Stock Account (reduced by the number of shares of Company Stock
         previously distributed in cash and/or Company Stock pursuant to a prior
         election). In the case of the election year in which the Participant
         can make his last election, the preceding sentence shall be applied by
         substituting "50 percent" for "25 percent." If the "Qualified
         Participant" elects to direct the Trustee as to the distribution of his
         Company Stock Account, such direction shall be effective no later than
         180 days after the close of the Plan Year to which such direction
         applies.

                  Notwithstanding the above, if the fair market value
         (determined pursuant to Section 6.1 at the Plan Valuation Date
         immediately preceding the first day on which a "Qualified Participant"
         is eligible to make an election) of Company Stock acquired by or
         contributed to the Plan and allocated to a "Qualified Participant's"
         Company Stock Account is $500 or less, then such Company Stock shall
         not be subject to this paragraph. For purposes of determining whether
         the fair market value exceeds $500, Company Stock held in accounts of
         all employee stock ownership plans (as defined in Code Section
         4975(e)(7)) and tax credit employee stock ownership plans (as defined
         in Code Section 409(a)) maintained by the Employer or any Affiliated
         Employer shall be considered as held by the Plan.

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

                  (1) "Qualified Participant" means any Participant or Former
                  Participant who has completed ten (10) Periods of Service as a
                  Participant and has attained age 55.

                  (2) "Qualified Election Period" means the six (6) Plan Year
                  period beginning with the first Plan Year in which the
                  Participant first became a "Qualified Participant."

                                       24
<PAGE>

4.7   TREATMENT OF QUALIFIED MILITARY SERVICE

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

                                    ARTICLE V
                         FUNDING AND INVESTMENT POLICY

5.1   INVESTMENT POLICY

                  (a)      The Plan is designed to invest primarily in Company
         Stock.

                  (b)      With due regard to subparagraph (a) above, the
         Administrator may also direct the Trustee to invest funds under the
         Plan in other property described in the Trust or in life insurance
         policies to the extent permitted by subparagraph (c) below, or the
         Trustee may hold such funds in cash or cash equivalents.

                  (c)      With due regard to subparagraph (a) above, the
         Administrator may also direct the Trustee to invest funds under the
         Plan in insurance policies on the life of any "keyman" Employee. The
         proceeds of a "keyman" insurance policy may not be used for the
         repayment of any indebtedness owed by the Plan which is secured by
         Company Stock. In the event any "keyman" insurance is purchased by the
         Trustee, the premiums paid thereon during any Plan Year, net of any
         policy dividends and increases in cash surrender values, shall be
         treated as the cost of Plan investment and any death benefit or cash
         surrender value received shall be treated as proceeds from an
         investment of the Plan.

                  (d)      The Plan may not obligate itself to acquire Company
         Stock from a particular holder thereof at an indefinite time determined
         upon the happening of an event such as the death of the holder.

                  (e)      The Plan may not obligate itself to acquire Company
         Stock under a put option binding upon the Plan. However, at the time a
         put option is exercised, the Plan may be given an option to assume the
         rights and obligations of the Employer under a put option binding upon
         the Employer.

                  (f)      All purchases of Company Stock shall be made at a
         price which, in the judgment of the Administrator, does not exceed the
         fair market value thereof. All sales of Company Stock shall be made at
         a price which, in the judgment of the Administrator, is not less than

                                       25

<PAGE>

         the fair market value thereof. The valuation rules set forth in Article
         VI shall be applicable.

5.2   TRANSACTIONS INVOLVING COMPANY STOCK

                  (a)      No portion of the Trust Fund attributable to (or
         allocable in lieu of) Company Stock acquired by the Plan in a sale to
         which Code Section 1042 applies may accrue or be allocated directly or
         indirectly under any plan maintained by the Employer meeting the
         requirements of Code Section 401(a):

                  (1)      during the "Nonallocation Period," for the benefit of

                           (i) any taxpayer who makes an election under Code
                           Section 1042(a) with respect to Company Stock,

                           (ii) any individual who is related to the taxpayer
                           (within the meaning of Code Section 267(b)), or

                  (2) for the benefit of any other person who owns (after
                  application of Code Section 318(a) applied without regard to
                  the employee trust exception in Code Section 318(a)(2)(B)(i))
                  more than 25 percent of

                           (i) any class of outstanding stock of the Employer or
                           Affiliated Employer which issued such Company Stock,
                           or

                           (ii) the total value of any class of outstanding
                           stock of the Employer or Affiliated Employer.

                  (b)      Except, however, subparagraph (a)(1)(ii) above shall
         not apply to lineal descendants of the taxpayer, provided that the
         aggregate amount allocated to the benefit of all such lineal
         descendants during the "Nonallocation Period" does not exceed more than
         five (5) percent of the Company Stock (or amounts allocated in lieu
         thereof) held by the Plan which are attributable to a sale to the Plan
         by any person related to such descendants (within the meaning of Code
         Section 267(c)(4)) in a transaction to which Code Section 1042 is
         applied.

                  (c)      A person shall be treated as failing to meet the
         stock ownership limitation under paragraph (a)(2) above if such person
         fails such limitation:

                                       26
<PAGE>

                  (1) at any time during the one (1) year period ending on the
                  date of sale of Company Stock to the Plan, or

                  (2) on the date as of which Company Stock is allocated to
                  Participants in the Plan.

                  (d)      For purposes of this Section, "Nonallocation Period"
         means the period beginning on the date of the sale of the Company Stock
         and ending on the date which is ten (10) years after the date of sale.

                                   ARTICLE VI
                                   VALUATIONS

6.1   VALUATION OF THE TRUST FUND

         The Administrator shall direct the Trustee, as of each Valuation Date,
to determine the net worth of the assets comprising the Trust Fund as it exists
on the Valuation Date. In determining such net worth, the Trustee shall value
the assets comprising the Trust Fund at their fair market value as of the
Valuation Date and shall deduct all expenses for which the Trustee has not yet
obtained reimbursement from the Employer or the Trust Fund.

6.2   METHOD OF VALUATION

         Valuations must be made in good faith and based on all relevant factors
for determining the fair market value of securities. In the case of a
transaction between a Plan and a disqualified person, value must be determined
as of the date of the transaction. For all other Plan purposes, value must be
determined as of the most recent Valuation Date under the Plan. An independent
appraisal will not in itself be a good faith determination of value in the case
of a transaction between the Plan and a disqualified person. However, in other
cases, a determination of fair market value based on at least an annual
appraisal independently arrived at by a person who customarily makes such
appraisals and who is independent of any party to the transaction will be deemed
to be a good faith determination of value. Company Stock not readily tradeable
on an established securities market shall be valued by an independent appraiser
meeting requirements similar to the requirements of the Regulations prescribed
under Code Section 170(a)(1).

                                   ARTICLE VII
                   DETERMINATION AND DISTRIBUTION OF BENEFITS

7.1   DETERMINATION OF BENEFITS UPON RETIREMENT

         Every Participant may terminate his employment with the Employer and
retire for the purposes hereof on his Normal

                                       27
<PAGE>

Retirement Date. However, a Participant may postpone the termination of his
employment with the Employer to a later date, in which event the participation
of such Participant in the Plan, including the right to receive allocations
pursuant to Section 4.3, shall continue until his Late Retirement Date. Upon a
Participant's Retirement Date, or as soon thereafter as is practicable, the
Trustee shall distribute, at the election of the Participant, all amounts
credited to such Participant's Account in accordance with Sections 7.5 and 7.6.

7.2   DETERMINATION OF BENEFITS UPON DEATH

                  (a)      Upon the death of a Participant before his Retirement
         Date or other termination of his employment, all amounts credited to
         such Participant's Account shall become fully Vested. If elected,
         distribution of the Participant's Account shall commence not later than
         one (1) year after the close of the Plan Year in which such
         Participant's death occurs. The Administrator shall direct the Trustee,
         in accordance with the provisions of Sections 7.5 and 7.6, to
         distribute the value of the deceased Participant's accounts to the
         Participant's Beneficiary.

                  (b)      Upon the death of a Former Participant, the
         Administrator shall direct the Trustee, in accordance with the
         provisions of Sections 7.5 and 7.6, to distribute any remaining Vested
         amounts credited to the accounts of a deceased Former Participant to
         such Former Participant's Beneficiary.

                  (c)      The Administrator may require such proper proof of
         death and such evidence of the right of any person to receive payment
         of the value of the account of a deceased Participant or Former
         Participant as the Administrator may deem desirable. The
         Administrator's determination of death and of the right of any person
         to receive payment shall be conclusive.

                  (d)      The Beneficiary of the death benefit payable pursuant
         to this Section shall be the Participant's spouse. Except, however, the
         Participant may designate a Beneficiary other than his spouse if:

                  (1)      the spouse has waived the right to be the
                  Participant's Beneficiary, or

                  (2)      the Participant is legally separated or has been
                  abandoned (within the meaning of local law) and the
                  Participant has a court order to such effect (and there is no
                  "qualified domestic relations order" as defined in Code
                  Section 414(p) which provides otherwise), or

                                       28
<PAGE>

                  (3)      the Participant has no spouse, or

                  (4)      the spouse cannot be located.

                           In such event, the designation of a Beneficiary shall
         be made on a form satisfactory to the Administrator. A Participant may
         at any time revoke his designation of a Beneficiary or change his
         Beneficiary by filing written notice of such revocation or change with
         the Administrator. However, the Participant's spouse must again consent
         in writing to any change in Beneficiary unless the original consent
         acknowledged that the spouse had the right to limit consent only to a
         specific Beneficiary and that the spouse voluntarily elected to
         relinquish such right. In the event no valid designation of Beneficiary
         exists at the time of the Participant's death, the death benefit shall
         be payable to his estate.

                  (e)      Any consent by the Participant's spouse to waive any
         rights to the death benefit must be in writing, must acknowledge the
         effect of such waiver, and be witnessed by a Plan representative or a
         notary public. Further, the spouse's consent must be irrevocable and
         must acknowledge the specific nonspouse Beneficiary.

7.3   DETERMINATION OF BENEFITS IN EVENT OF DISABILITY

         In the event of a Participant's Total and Permanent Disability prior to
his Retirement Date or other termination of his employment, all amounts credited
to such Participant's Account shall become fully Vested. In the event of a
Participant's Total and Permanent Disability, the Trustee, in accordance with
the provisions of Sections 7.5 and 7.6, shall distribute to such Participant all
amounts credited to such Participant's Account as though he had retired. If such
Participant elects, distribution shall commence not later than one (1) year
after the close of the Plan Year in which Total and Permanent Disability occurs.

7.4   DETERMINATION OF BENEFITS UPON TERMINATION

                  (a)      If a Participant's employment with the Employer is
         terminated for any reason other than death, Total and Permanent
         Disability or retirement, such Participant shall be entitled to such
         benefits as are provided hereinafter pursuant to this Section 7.4.

                           If a portion of a Participant's Account is forfeited,
         Company Stock allocated to the Participant's Company Stock Account must
         be forfeited only after the

                                       29
<PAGE>

         Participant's Other Investments Account has been depleted. If interest
         in more than one class of Company Stock has been allocated to a
         Participant's Account, the Participant must be treated as forfeiting
         the same proportion of each such class.

                           Distribution of the funds due to a Terminated
         Participant shall be made on the occurrence of an event which would
         result in the distribution had the Terminated Participant remained in
         the employ of the Employer (upon the Participant's death, Total and
         Permanent Disability or Normal Retirement). However, at the election of
         the Participant, the Administrator shall direct the Trustee to cause
         the entire Vested portion of the Terminated Participant's Account
         attributable to Company Stock to be payable to such Terminated
         Participant one (1) year after the close of the Plan Year which is the
         fifth Plan Year following the Plan Year in which the Participant
         otherwise separates from service. However, if such Terminated
         Participant is reemployed by the Employer before distribution is
         required to commence under this paragraph, such distribution shall be
         postponed. Any distribution under this paragraph shall be made in a
         manner which is consistent with and satisfies the provisions of
         Sections 7.5 and 7.6, including, but not limited to, all notice and
         consent requirements of Code Section 411(a)(11) and the Regulations
         thereunder.

                           If the value of a Terminated Participant's Vested
         benefit derived from Employer and Employee contributions does not
         exceed $5,000, the Administrator shall direct the Trustee to cause the
         entire Vested benefit to be paid to such Participant in a single lump
         sum.

                           For purposes of this Section 7.4, if the value of a
         Terminated Participant's Vested benefit is zero, the Terminated
         Participant shall be deemed to have received a distribution of such
         Vested benefit.

                  (b)      The Vested portion of any Participant's Account shall
         be a percentage of the total amount credited to his Participant's
         Account determined on the basis of the Participant's number of whole
         years of his Period of Service according to the following schedule:

<TABLE>
<CAPTION>
                           Vesting Schedule

        Periods of                                   Percentage
         Service
<S>                                                  <C>
             1                                           0 %
             2                                          40 %
</TABLE>

                                       30
<PAGE>
<TABLE>
            <S>                                      <C>

             3                                          60  %
             4                                          80  %
             5                                         100  %
</TABLE>
                  (c)      Notwithstanding the vesting schedule provided for in
         paragraph (b) above, for any Top Heavy Plan Year, the Vested portion of
         the Participant's Account of any Participant who has an Hour of
         Service after the Plan becomes top heavy shall be a percentage of the
         total amount credited to his Participant's Account determined on the
         basis of the Participant's number of whole years of his Period of
         Service according to the following schedule:

                           If in any subsequent Plan Year, the Plan ceases to be
         a Top Heavy Plan, the Administrator shall revert to the vesting
         schedule in effect before this Plan became a Top Heavy Plan. Any such
         reversion shall be treated as a Plan amendment pursuant to the terms of
         the Plan.

                  (d)      Notwithstanding the vesting schedule above, upon the
         complete discontinuance of the Employer contributions to the Plan or
         upon any full or partial termination of the Plan, all amounts credited
         to the account of any affected Participant shall become 100% Vested and
         shall not thereafter be subject to Forfeiture.

                  (e)      The computation of a Participant's nonforfeitable
         percentage of his interest in the Plan shall not be reduced as the
         result of any direct or indirect amendment to this Plan. For this
         purpose, the Plan shall be treated as having been amended if the Plan
         provides for an automatic change in vesting due to a change in top
         heavy status. In the event that the Plan is amended to change or modify
         any vesting schedule, a Participant with at least three (3) whole
         years of his Period of Service as of the expiration date of the
         election period may elect to have his nonforfeitable percentage
         computed under the Plan without regard to such amendment.  If a
         Participant fails to make such election, then such Participant shall be
         subject to the new vesting schedule. The Participant's election period
         shall commence on the adoption date of the amendment and shall end 60
         days after the latest of:

                  (1)      the adoption date of the amendment,

                  (2)      the effective date of the amendment, or

                                       31
<PAGE>

                  (3)      the date the Participant receives written notice of
                  the amendment from the Employer or Administrator.

                  (f)(1)   If any Former Participant shall be reemployed by the
         Employer before a 1-Year Break in Service occurs, he shall continue to
         participate in the Plan in the same manner as if such termination had
         not occurred.

                  (2)      If any Former Participant shall be reemployed by the
                  Employer before five (5) consecutive 1-Year Breaks in Service,
                  and such Former Participant had received, or was deemed to
                  have received, a distribution of his entire Vested interest
                  prior to his reemployment, his forfeited account shall be
                  reinstated only if he repays the full amount distributed to
                  him before the earlier of five (5) years after the first date
                  on which the Participant is subsequently reemployed by the
                  Employer or the close of the first period of five (5)
                  consecutive 1-Year Breaks in Service commencing after the
                  distribution, or in the event of a deemed distribution, upon
                  the reemployment of such Former Participant. In the event the
                  Former Participant does repay the full amount distributed to
                  him, or in the event of a deemed distribution, the
                  undistributed portion of the Participant's Account must be
                  restored in full, unadjusted by any gains or losses occurring
                  subsequent to the Valuation Date coinciding with or preceding
                  his termination. The source for such reinstatement shall first
                  be any Forfeitures occurring the year.  If such source is
                  insufficient, then the Employer shall contribute an amount
                  which is sufficient to restore any such forfeited Accounts
                  provided, however, that if a discretionary contribution is
                  made for such year, such contribution shall first be applied
                  to restore any such Accounts and the remainder shall be
                  allocated in accordance with Section 4.3.

                  (3)      If any Former Participant is reemployed after a
                  1-Year Break in Service has occurred, Periods of Service shall
                  include Periods of Service prior to his 1-Year Break in
                  Service subject to the following rules:

                           (i) If a Former Participant has a 1-Year Break in
                           Service, his pre-break and post-break service shall
                           be used for computing Periods of Service for vesting
                           purposes only after he has been employed for

                                       32
<PAGE>

                           one (1) Period of Service following the date of his
                           reemployment with the Employer;

                           (ii) Any Former Participant who under the Plan does
                           not have a nonforfeitable right to any interest in
                           the Plan resulting from Employer contributions shall
                           lose credits otherwise allowable under (i) above if
                           his consecutive 1-Year Breaks in Service equal or
                           exceed the greater of (A) five (5) or (B) the
                           aggregate number of his pre-break Periods of
                           Service;

                           (iii) After five (5) consecutive 1-Year Breaks in
                           Service, a Former Participant's Vested Account
                           balance attributable to pre-break service shall not
                           be increased as a result of post-break service;

                           (iv) If a Former Participant is reemployed by the
                           Employer, he shall participate in the Plan
                           immediately on his date of reemployment;

                           (v) If a Former Participant (a 1-Year Break in
                           service previously occurred, but employment had not
                           terminated) is credited with an Hour of Service
                           after the first eligibility computation period in
                           which he incurs a 1-Year Break in Service, he shall
                           participate in the Plan immediately.

                  (g)      In determining Periods of Service for purposes of
         vesting under the Plan, Periods of Service prior to the Employee's
         eighteenth birthday shall be excluded.

7.5   DISTRIBUTION OF BENEFITS

                  (a)      The Administrator, pursuant to the election of the
         Participant, shall direct the Trustee to distribute to a Participant or
         his Beneficiary any amount to which he is entitled under the Plan in
         one or more of the following methods:

                  (1)      One lump-sum payment.

                  (2)      Payments over a period certain in monthly, quarterly,
                  semiannual, or annual installments. The period over which such
                  payment is to be made shall not extend beyond the earlier of
                  the Participant's life expectancy (or the life expectancy of
                  the Participant and his designated Beneficiary) or the

                                       33
<PAGE>

                  limited distribution period provided for in Section 7.5(b).

                  (b)      Unless the Participant elects in writing a longer
         distribution period, distributions to a Participant or his Beneficiary
         attributable to Company Stock shall be in substantially equal monthly,
         quarterly, semiannual, or annual installments over a period not longer
         than five (5) years.  In the case of a Participant with an account
         balance attributable to Company Stock in excess of $500,000, the five
         (5) year period shall be extended one (1) additional year (but not more
         than five (5) additional years) for each $100,000 or fraction thereof
         by which such balance exceeds $500,000. The dollar limits shall be
         adjusted at the same time and in the same manner as provided in Code
         Section 415(d).

                  (c)      Any distribution to a Participant who has a benefit
         which exceeds $5,000, shall require such Participant's consent if such
         distribution commences prior to the later of his Normal Retirement Age
         or age 62. However, if a Participant has begun to receive distributions
         pursuant to an optional form of benefit under which at least one
         scheduled periodic distribution has not yet been made, and if the value
         of the Participant's benefit, determined at the time of the first
         distribution under that optional form of benefit exceeded $5,000, then
         the value of the Participant's benefit is deemed to continue to exceed
         such amount.  With regard to this required consent:

                  (1)      The Participant must be informed of his right to
                  defer receipt of the distribution. If a Participant fails to
                  consent, it shall be deemed an election to defer the
                  commencement of payment of any benefit. However, any election
                  to defer the receipt of benefits shall not apply with respect
                  to distributions which are required under Section 7.5(f).

                  (2)      Notice of the rights specified under this paragraph
                  shall be provided no less than 30 days and no more than 90
                  days before the date the distribution commences.

                  (3)      Consent of the Participant to the distribution must
                  not be made before the Participant receives the notice and
                  must not be made more than 90 days before the date the
                  distribution commences.

                                       34

<PAGE>

                  (4)      No consent shall be valid if a significant detriment
                  is imposed under the Plan on any Participant who does not
                  consent to the distribution.

                           Any such distribution may commence less than 30 days
         after the notice required under Regulation 1.411(a)-11(c) is given,
         provided that: (1) the Administrator clearly informs the Participant
         that the Participant has a right to a period of at least 30 days after
         receiving the notice to consider the decision of whether or not to
         elect a distribution (and, if applicable, a particular distribution
         option), and (2) the Participant, after receiving the notice,
         affirmatively elects a distribution.

                  (d)      Notwithstanding anything herein to the contrary, the
         Administrator, in his sole discretion, may direct that cash dividends
         on shares of Company Stock allocable to Participants' or Former
         Participants Company Stock Accounts be distributed to such
         Participants or Former Participants within 90 days after the close of
         the Plan Year in which the dividends are paid.

                  (e)      Any part of a Participant's benefit which is retained
         in the Plan after the Anniversary Date on which his participation ends
         will continue to be treated as a Company Stock Account or as an Other
         Investments Account (subject to Section 7.4(a)) as provided in Article
         IV. However, neither account will be credited with any further Employer
         contributions or Forfeitures.

                  (f)      Notwithstanding any provision in the Plan to the
         contrary, the distribution of a Participant's benefits shall be made in
         accordance with the following requirements and shall otherwise comply
         with Code Section 401(a)(9) and the Regulations thereunder including
         Regulation 401(a)(9)-2), the provisions of which are incorporated
         herein by reference:

                  (1)      A Participant's benefits shall be distributed or must
                  begin to be distributed to him not later than April 1st of the
                  calendar year following the later of the calendar year in
                  which the Participant attains age 70 1/2 or (ii) the calendar
                  year in which the Participant retires, provided, however, that
                  this clause (ii) shall not apply in the case of a Participant
                  who is a "five (5) percent owner" at any time during the Plan
                  Year ending with or within the calendar year in which such
                  owner attains age 70 1/2.  Such distributions

                                       35

<PAGE>

                  shall be equal to or greater than any required distribution.

                  Alternatively, distributions to a Participant must begin no
                  later than the applicable April 1st as determined under the
                  preceding paragraph and must be made over a period certain
                  measured by the life expectancy of the Participant (or the
                  life expectancies of the Participant and his designated
                  Beneficiary) in accordance with Regulations,

                  (2)      Distributions to a Participant and his Beneficiaries
                  shall only be made in accordance with the incidental death
                  benefit requirements of Code Section 401(a) (9) (G) and the
                  Regulations thereunder.

                  (g)      Notwithstanding any provision in the Plan to the
         contrary, distributions upon the death of a Participant shall be made
         in accordance with the following requirements and shall otherwise
         comply with Code Section 401(a) (9) and the Regulations thereunder. If
         it is determined pursuant to Regulations that the distribution of a
         Participant's interest has begun and the Participant dies before his
         entire interest has been distributed to him, the remaining portion of
         such interest shall be distributed at least as rapidly as under the
         method of distribution selected pursuant to Section 7.5 as of his date
         of death. If a Participant dies before he has begun to receive any
         distributions of his interest under the Plan or before distributions
         are deemed to have begun pursuant to Regulations, then his death
         benefit shall be distributed to his Beneficiaries by December 31st of
         the calendar year in which the fifth anniversary of his date of death
         occurs.

                           However, the 5-year distribution requirement of the
         preceding paragraph shall not apply to any portion of the deceased
         Participant's interest which is payable to or for the benefit of a
         designated Beneficiary. In such event, such portion shall be
         distributed over a period not extending beyond the life expectancy of
         such designated Beneficiary provided such distribution begins not later
         than December 31st of the calendar year immediately following the
         calendar year in which the Participant died. However, in the event the
         Participant's spouse (determined as of the date of the Participant's
         death) is his Beneficiary, the requirement that distributions commence
         within one year of a Participant's death shall not apply. In lieu
         thereof, distributions must commence on or before the later of: (1)
         December 31st of the calendar year

                                       36
<PAGE>

         immediately following the calendar year in which the Participant died;
         or (2) December 31st of the calendar year in which the Participant
         would have attained age 70 1/2. If the surviving spouse dies before
         distributions to such spouse begin, then the 5-year distribution
         requirement of this Sections shall apply as if the spouse was the
         Participant.

                  (h)      For purposes of this Section, the life expectancy of
         a Participant and a Participant's spouse shall not be redetermined in
         accordance with Code Section 401(a)(9)(D). Life expectancy and joint
         and last survivor expectancy shall be computed using the return
         multiples in Tables V and VI of Regulation 1.72-9.

                  (i)      Except as limited by Sections 7.5 and 7.6, whenever
         the Trustee is to make a distribution or to commence a series of
         payments, the distribution or series of payments may be made or begun
         as soon as is practicable. However, unless a Former Participant elects
         in writing to defer the receipt of benefits (such election may not
         result in a death benefit that is more than incidental), the payment of
         benefits shall begin not later than the 60th day after the close of the
         Plan Year in which the latest of the following events occurs:

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

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

                  (3)      the date the Participant terminates his service with
                  the Employer.

                  (j)      If a distribution is made at a time when a
         Participant is not fully Vested in his Participant's Account and the
         Participant may increase the Vested percentage in such account;

                  (1)      a separate account shall be established for the
                  Participant's interest in the Plan as of the time of the
                  distribution; and

                                       37
<PAGE>

                  (2)      at any relevant time, the Participant's Vested
                  portion of the separate account shall be equal to an
                  amount ("X") determined by the formula:

                  X equals P(AB plus (R x D)) - (R x D)

                  For purposes of applying the formula: P is the Vested
                  percentage at the relevant time, AB is the account balance at
                  the relevant time, D is the amount of distribution, and R is
                  the ratio of the account balance at the relevant time to the
                  account balance after distribution.

7.6   HOW PLAN BENEFIT WILL BE DISTRIBUTED

                  (a)      Distribution of a Participant's benefit may be made
         in cash or Company Stock or both, provided, however, that if a
         Participant or Beneficiary so demands, such benefit shall be
         distributed only in the form of Company Stock. Prior to making a
         distribution of benefits, the Administrator shall advise the
         Participant or his Beneficiary, in writing, of the right to demand that
         benefits be distributed solely in Company Stock.

                  (b)      If a Participant or Beneficiary demands that benefits
         be distributed solely in Company Stock, distribution of a Participant's
         benefit will be made entirely in whole shares or other units of
         Company Stock. Any balance in a Participant's Other Investments Account
         will be applied to acquire for distribution the maximum number of whole
         shares or other units of Company Stock at the then fair market value.
         Any fractional unit value unexpended will be distributed in cash. If
         Company Stock is not available for purchase by the Trustee, then the
         Trustee shall hold such balance until Company Stock is acquired and
         then make such distribution, subject to Sections 7.5(i) and 7.5(f).

                  (c)      The Trustee will make distribution from the Trust
         only on instructions from the Administrator.

                  (d)      Notwithstanding anything contained herein to the
         contrary, if the Employer charter or by-laws restrict ownership of
         substantially all shares of Company Stock to Employees and the Trust
         Fund, as described in Code Section 409 (h) (2) (B) (ii) (I) , the
         Administrator shall distribute a Participant's Account entirely in cash
         without granting the Participant the right to demand distribution in
         shares, of Company Stock.

                                       38
<PAGE>

                  (e)      Except as otherwise provided herein, Company Stock
         distributed by the Trustee may be restricted as to sale or transfer by
         the by-laws or articles of incorporation of the Employer, provided
         restrictions are applicable to all Company Stock of the same class. If
         a Participant is required to offer the sale of his Company Stock to the
         Employer before offering to sell his Company Stock to a third party, in
         no event may the Employer pay a price less than that offered to the
         distributee by another potential buyer making a bona fide offer and in
         no event shall the Trustee pay a price less than the fair market value
         of the Company Stock.

7.7   DISTRIBUTION FOR MINOR BENEFICIARY

         In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal guardian,
or if none, to a parent of such Beneficiary or a responsible adult with whom the
Beneficiary maintains his residence, or to the custodian for such Beneficiary
under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted
by the laws of the state in which said Beneficiary resides. Such a payment to
the legal guardian, custodian or parent of a minor Beneficiary shall fully
discharge the Trustee, Employer, and Plan from further liability on account
thereof.

7.8   LOCATION OF PARTICIPANT OR BENEFICIARY  UNKNOWN

         In the event that all, or any portion, of the distribution payable to a
Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain
unpaid solely by reason of the inability of the Administrator, after sending
a registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such
Participant or his Beneficiary, the amount so distributable shall he treated
as a Forfeiture pursuant to the Plan. In the event a Participant or
Beneficiary is located subsequent to his benefit being reallocated, such
benefit shall be restored unadjusted for earnings or losses.

7.9   QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION

         All rights and benefits, including elections, provided to a Participant
in this Plan shall be subject to the rights afforded to any alternate payee"
under a "qualified domestic relations order." Furthermore, a distribution to an
"alternate payee" shall be permitted if such distribution is authorized by a
"qualified domestic relations order," even if the affected Participant has not
separated from service and as not reached the "earliest retirement age" under
the Plan. For the purposes of this Section, "alternate payee," "qualified
domestic relations

                                       39

<PAGE>

order" and "earliest retirement age" shall have the meaning set forth under
Code Section 414 (p).

7.10  DIRECT ROLLOVER

                  (a)      Notwithstanding any provision of the Plan to the
         contrary that would otherwise limit a distributee's election under
         this Section, a distributee may elect, at the time and in the manner
         prescribed by the Administrator, to have any portion of an eligible
         rollover distribution that is equal to at least $500 paid directly to
         an eligible retirement plan specified by the distributee in a direct
         rollover.

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

                  (1)      An eligible rollover distribution is any distribution
                  of all or any portion of the balance to the credit of the
                  distributee, except that an eligible rollover distribution
                  does not include: any distribution that is one of a series of
                  substantially equal periodic payments (not less frequently
                  than annually) made for the life (or life expectancy) of the
                  distributee or the joint lives (or joint life expectancies) of
                  the distributee and the distributee's designated beneficiary,
                  or for a specified period of ten years or more; any
                  distribution to the extent such distribution is required
                  under Code Section 401(a)(9); the portion of any other
                  distribution that is not includible in gross income
                  (determined without regard to the exclusion for net unrealized
                  appreciation with respect to employer securities) ; and any
                  other distribution that is reasonably expected to total less
                  than $200 during a year.

                  (2)      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.

                  (3)      A distributee includes an Employee or former
                  Employee. In addition, the Employee's or former

                                       40

<PAGE>

                  Employee's surviving spouse and the Employee's or former
                  Employee's, spouse or former spouse who is the alternate payee
                  under a qualified domestic relations order, as defined in Code
                  Section 414(p), are distributees with regard to the interest
                  of the spouse or former spouse.

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

                                  ARTICLE VIII
                       AMENDMENT, TERMINATION AND MERGERS

8.1   AMENDMENT

                  (a)      The Employer shall have the right at any time to
         amend the Plan, subject to the limitations of this Section. However,
         any amendment which affects the rights, duties or responsibilities of
         the Trustee and Administrator, other than an amendment to remove the
         Trustee or Administrator, may only be made with the Trustee's and
         Administrator's written consent. Any such amendment shall become
         effective as provided therein upon its execution. The Trustee shall not
         be required to execute any such amendment unless the Trust provisions
         contained herein are a part of the Plan and the amendment affects the
         duties of the Trustee hereunder.

                  (b)      No amendment to the Plan shall be effective if it
         authorizes or permits any part of the Trust Fund (other than such part
         as is required to pay taxes and administration expenses) to be used for
         or diverted to any purpose other than for the exclusive benefit of the
         Participants or their Beneficiaries or estates; or causes any reduction
         in the amount credited to the account of any Participant; or causes or
         permits any portion of the Trust Fund to revert to, or become property
         of the Employer.

                  (c)      Except as permitted by Regulations, no Plan amendment
         or transaction having the effect of a Plan amendment (such as a merger,
         plan transfer or similar transaction) shall be effective to the extent
         it eliminates or reduces any "Section 411(d)(6) protected benefit" or
         adds or modifies conditions relating to "Section 411(d)(6) protected
         benefits," the result of which is a further restriction on such benefit
         unless such protected benefits are preserved with respect to benefits
         accrued as of the later of the adoption date or effective date of the
         amendment. "Section 411(d)(6) protected benefits" are benefits
         described in Code

                                       41

<PAGE>

         Section 411(d)(6)(A), early retirement benefits and retirement-type
         subsidies, and optional forms of benefit.

8.2   TERMINATION

                  (a)      The Employer shall have the right at any time to
         terminate the Plan by delivering to the Trustee and Administrator
         written notice of such termination. Upon any full or partial
         termination, all amounts credited to the affected Participants'
         Accounts shall become 100% Vested as provided in Section 7.4 and
         shall not thereafter be subject to forfeiture, and all unallocated
         amounts shall be allocated to the accounts of all Participant in
         accordance with the provisions hereof.

                  (b)      Upon the full termination of the Plan, the Employer
         shall direct the distribution of the assets of the Trust Fund to
         Participants in a manner which is consistent with and satisfies the
         provisions of Sections 7.5 and 7.6. Except as permitted by Regulations,
         the termination of the Plan shall not result in the reduction of
         "Section 411(d)(6) protected benefits" in accordance with
         Section 8.1(c).

8.3   MERGER OR CONSOLIDATION

         This Plan and Trust may be merged or consolidated with, or its assets
and/or liabilities may be transferred to any other plan and trust only if the
benefits which would be received by a Participant of this Plan, in the event of
a termination of the plan immediately after such transfer, merger or
consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation, and such transfer, merger or consolidation does not otherwise
result in the elimination or reduction of any "Section 411(d)(6) protected
benefits" in accordance with Section 8.1(c).

                                   ARTICLE IX
                                    TOP HEAVY

9.1   TOP HEAVY PLAN  REQUIREMENTS

         For any Top Heavy Plan Year, the Plan shall provide the special vesting
requirements of Code Section 416(b) pursuant to Section 7.4 of the Plan and
the special minimum allocation requirements of Code Section 416(c) pursuant to
Section 4.3 of the Plan.

                                       42

<PAGE>

9.2   DETERMINATION OF TOP HEAVY STATUS

                  (a)      This Plan shall be a Top Heavy Plan for any Plan Year
         in which, as of the Determination Date, (1) the Present Value of
         Accrued Benefits of Key Employees and (2) the sum of the Aggregate
         Accounts of Key Employees under this Plan and all plans of an
         Aggregation Group, exceeds sixty percent (60%) of the Present Value of
         Accrued Benefits and the Aggregate Accounts of all Key and Non-Key
         Employees under this Plan and all plans of an Aggregation Group.

                           If any Participant is a Non-Key Employee for any Plan
         Year, but such Participant was a Key Employee for any prior Plan Year,
         such Participant's Present Value of Accrued Benefit and/or Aggregate
         Account balance shall not be taken into account for purposes of
         determining whether this Plan is a Top Heavy or Super Top Heavy Plan
         (or whether any Aggregation Group which includes this Plan is a Top
         Heavy Group). In addition, if a Participant or Former Participant has
         not performed any services for any Employer maintaining the Plan at
         any time during the five year period ending on the Determination Date,
         any accrued benefit for such Participant or Former Participant shall
         not be taken into account for the purposes of determining whether
         this Plan is a Top Heavy or Super Top Heavy Plan.

                  (b)      This Plan shall be a Super Top Heavy Plan for any
         Plan Year in which, as of the Determination Date, (1) the Present Value
         of Accrued Benefits of Key Employees and (2) the sum of the Aggregate
         Accounts of Key Employees under this Plan and all plans of an
         Aggregation Group, exceeds ninety percent (90%) of the Present Value of
         Accrued Benefits and Aggregate Accounts of all Key and Non-key
         Employees under this Plan and all plans of an Aggregation Group.

                  (c)      Aggregate Account: A Participant's Aggregate Account
         as of the Determination Date is the sum of:

                  (1)      his Participant's Account balance as of the most
                  recent valuation occurring within a twelve (12) month period
                  ending on the Determination Date;

                  (2)      an adjustment for any contributions due as of the
                  Determination Date. Such adjustment shall be the amount of any
                  contributions actually made after the Valuation Date but due
                  on or before the Determination Date, except for the first Plan
                  Year when such adjustment shall also reflect the amount of any
                  contributions made after the Determination

                                       43
<PAGE>

                  Date that are allocated as of a date in that first Plan Year.

                  (3)      any Plan distributions made within the Plan Year that
                  includes the Determination Date or within the four (4)
                  preceding Plan Years. However, in the case of distributions
                  made after the Valuation Date and prior to the Determination
                  Date, such distributions are not included as distributions for
                  top heavy purposes to the extent that such distributions are
                  already included in the Participant's Aggregate Account
                  balance as of the Valuation Date. Notwithstanding anything
                  herein to the contrary, all distributions, including
                  distributions under a terminated plan which if it had not been
                  terminated would have been required to be included in an
                  Aggregation Group, will be counted. Further, distributions
                  from the Plan (including the cash value of life insurance
                  policies) of a Participant's account balance because of death
                  shall be treated as a distribution for the purposes of this
                  paragraph.

                  (4)      any Employee contributions, whether voluntary or
                  mandatory. However, amounts attributable to tax deductible
                  qualified voluntary employee contributions shall not be
                  considered to be a part of the Participant's Aggregate Account
                  balance.

                  (5)      with respect to unrelated rollovers and plan-to-plan
                  transfers (ones which are both initiated by the Employee and
                  made from a plan maintained by one employer to a plan
                  maintained by another employer), if this Plan provides the
                  rollovers or plan-to-plan transfers, it shall always consider
                  such rollovers or plan-to-plan transfers as a distribution for
                  the purposes of this Section. If this Plan is the plan
                  accepting such rollovers or plan-to-plan transfers, it shall
                  not consider such rollovers or plan-to-plan transfers as part
                  of the Participant's Aggregate Account balance.

                  (6)      with respect to related rollovers and plan-to-plan
                  transfers (ones either not initiated by the Employee or made
                  to a plan maintained by the same employer), if this Plan
                  provides the rollover or plan-to-plan transfer, it shall not
                  be counted as a distribution for purposes of this Section. If
                  this Plan is the plan accepting such rollover or plan-to-plan
                  transfer it shall consider such rollover or plan-to-plan
                  transfer as part of the Participant's Aggregate Account

                                       44
<PAGE>

                  balance, irrespective of the date on which such rollover or
                  plan-to-plan transfer is accepted.

                  (7)      For the purposes of determining whether two employers
                  are to be treated as the same employer in (5) and (6) above,
                  all employers aggregated under Code Section 414(b), (c), (m)
                  and (o) are treated as the same employer.

                  (d)      "Aggregation Group" means either a Required
         Aggregation Group or a Permissive Aggregation Group as hereinafter
         determined.

                  (1)      Required Aggregation Group: In determining a Required
                  Aggregation Group hereunder, each plan of the Employer in
                  which a Key Employee is a participant in the Plan Year
                  containing the Determination Date or any of the four preceding
                  Plan Years, and each other plan of the Employer which enables
                  any plan in which a Key Employee participates to meet the
                  requirements of Code Sections 401(a)(4) or 410, will be
                  required to be aggregated. Such group shall be known as a
                  Required Aggregation Group.

                  In the case of a Required Aggregation Group, each plan in the
                  group will be considered a Top Heavy Plan if the Required
                  Aggregation Group is a Top Heavy Group. No plan in the
                  Required Aggregation Group will be considered a Top Heavy Plan
                  if the Required Aggregation Group is not a Top Heavy Group.

                  (2)      Permissive Aggregation Group. The Employer may also
                  include any other plan not required to be included in the
                  Required Aggregation Group, provided the resulting group,
                  taken as a whole, would continue to satisfy the provisions of
                  Code Sections 401(a)(4) and 410. Such group shall be known as
                  a Permissive Aggregation Group.

                  In the case of a Permissive Aggregation Group, only a plan
                  that is part of the Required Aggregation Group will be
                  considered a Top Heavy Plan if the Permissive Aggregation
                  Group is a Top Heavy Group. No plan in the Permissive
                  Aggregation Group will be considered a Top Heavy Plan if the
                  Permissive Aggregation Group is not a Top Heavy Group.

                  (3)      Only those plans of the Employer in which the
                  Determination Dates fall within the same calendar

                                       45

<PAGE>

                  year shall be aggregated in order to determine whether such
                  plans are Top Heavy Plans.

                  (4)      An Aggregation Group shall include any terminated
                  plan of the Employer if it was maintained within the last five
                  (5) years ending on the Determination Date.

                  (e)      "Determination Date" means (a) the last day of the
         preceding Plan Year, or (b) in the case of the first Plan Year, the
         last day of such Plan Year.

                  (f)      Present Value of Accrued Benefit: In the case of a
         defined benefit plan, the Present Value of Accrued Benefit for a
         Participant other than a Key Employee, shall be as determined using the
         single accrual method used for all plans of the Employer and Affiliated
         Employers, or if no such single method exists, using a method which
         results in benefits accruing not more rapidly than the slowest accrual
         rate permitted under Code Section 411(b)(1)(C). The determination of
         the Present Value of Accrued Benefit shall be determined as of the most
         recent valuation date that falls within or ends with the 12-month
         period ending on the Determination Date except as provided in Code
         Section 416 and the Regulations thereunder for the first and second
         plan years of a defined benefit plan.

                  (g)      "Top Heavy Group" means an Aggregation Group in
         which, as of the Determination Date, the sum of:

                  (1)      the Present Value of Accrued Benefits of Key
                  Employees under all defined benefit plans included in the
                  group, and

                  (2)      the Aggregate Accounts of Key Employees under all
                  defined contribution plans included in the group,

                           exceeds sixty percent (60%) of a similar sum
                  determined for all Participants.

                                   ARTICLE X
                                 MISCELLANEOUS

10.1  PARTICIPANT'S RIGHTS

         This Plan shall not be deemed to constitute a contract between the
Employer and any Participant or to be a consideration or an inducement for the
employment of any Participant or Employee. Nothing contained in this Plan shall
be deemed to give any Participant or Employee the right to be retained in the
service of the Employer or to interfere with the right of the

                                       46
<PAGE>

Employer to discharge any Participant or Employee at any time regardless of the
effect which such discharge shall have upon him as a Participant of this Plan.

10.2  ALIENATION

                  (a)      Subject to the exceptions provided below, no benefit
         which shall be payable out of the Trust Fund to any person (including
         a Participant or his Beneficiary) shall be subject in any manner to
         anticipation, alienation, sale, transfer, assignment, pledge,
         encumbrance, or charge, and any attempt to anticipate, alienate, sell,
         transfer, assign, pledge, encumber, or charge the same shall be void;
         and no such benefit shall in any manner be liable for, or subject to,
         the debts, contracts, liabilities, engagements, or torts of any such
         person, nor shall it be subject to attachment or legal process for or
         against such person, and the same shall not be recognized by the
         Trustee, except to such extent as may be required by law.

                  (b)      This provision shall not apply to a "qualified
         domestic relations order" defined in Code Section 414(p), and those
         other domestic relations orders permitted to be so treated by the
         Administrator under the provisions of the Retirement Equity Act of
         1984. The Administrator shall establish a written procedure to
         determine the qualified status of domestic relations orders and to
         administer distributions under such qualified orders. Further, to the
         extent provided under a "qualified domestic relations order," a former
         spouse of a Participant shall be treated as the spouse or surviving
         spouse for all purposes under the Plan.

10.3  CONSTRUCTION OF PLAN

         This Plan and Trust shall be construed and enforced according to the
Act and the laws of the State of California, other than its laws respecting
choice of law, to the extent not preempted by the Act.

10.4  GENDER AND NUMBER

         Wherever any words are used herein in the masculine, feminine or neuter
gender, they shall be construed as though they were also used in another gender
in all cases where they would so apply, and whenever any words are used herein
in the singular or plural form, they shall be construed as though they were also
used in the other form in all cases where they would so apply.

                                       47
<PAGE>

10.5  LEGAL ACTION

         In the event any claim, suit, or proceeding is brought regarding the
Trust and/or Plan established hereunder to which the Trustee, the Employer or
the Administrator may be a party, and such claim, suit, or proceeding is
resolved in favor of the Trustee, the Employer or the Administrator, they
shall be entitled to be reimbursed from the Trust Fund for any and all costs,
attorney's fees, and other expenses pertaining thereto incurred by them for
which they shall have become liable.

10.6  PROHIBITION AGAINST DIVERSION OF FUNDS

                  (a)      Except as provided below and otherwise specifically
         permitted by law, it shall be impossible by operation of the Plan or of
         the Trust, by termination of either, by power of revocation or
         amendment, by the happening of any contingency, by collateral
         arrangement or by any other means, for any part of the corpus or
         income of any trust fund maintained pursuant to the Plan or any funds
         contributed thereto to be used for, or diverted to, purposes other
         than the exclusive benefit of Participants, Retired Participants, or
         their Beneficiaries.

                  (b)      In the event the Employer shall make an excessive
         contribution under a mistake of fact pursuant to Act Section
         403(c)(2)(A), the Employer may demand repayment of such excessive
         contribution at any time within one (1) year following the time of
         payment and the Trustees shall return such amount to the Employer
         within the one (1) year period.  Earnings of the Plan attributable to
         the excess contributions may not be returned to the Employer but any
         losses attributable thereto must reduce the amount so returned.

10.7  BONDING

         Every Fiduciary, except a bank or an insurance company, unless
exempted by the Act and regulations thereunder, shall be bonded in an amount
not less than 10% of the amount of the funds such Fiduciary handles;
provided, however, that the minimum bond shall be $1,000 and the maximum
bond, $500,000. The amount of funds handled shall be determined at the
beginning of each Plan Year by the amount of funds handled by such person,
group, or class to be covered and their predecessors, if any, during the
preceding Plan Year, or if there is no preceding Plan Year, then by the
amount of the funds to be handled during the then current year. The bond
shall provide protection to the Plan against any loss by reason of acts of
fraud or dishonesty by the Fiduciary alone or in connivance with others. The
surety shall be a corporate surety company (as such term is used in Act
Section

                                       48

<PAGE>

412(a)(2)), and the bond shall be in a form approved by the Secretary of
Labor. Notwithstanding anything in the Plan to the contrary, the cost of such
bonds shall be an expense of and may, at the election of the Administrator,
be paid from the Trust Fund or by the Employer.

10.8  EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE

         Neither the Employer, the Administrator, nor the Trustee, nor their
successors shall be responsible for the validity of any Contract issued
hereunder or for the failure on the part of the insurer to make payments
provided by any such Contract, or for the action of any person which may delay
payment or render a Contract null and void or unenforceable in whole or in part.

10.9  INSURER'S PROTECTIVE CLAUSE

         Any insurer who shall issue Contracts hereunder shall not have any
responsibility for the validity of this Plan or for the tax or legal aspects of
this Plan. The insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee, and shall have no duty to
see to the application of any funds paid to the Trustee, nor be required to
question any actions directed by the Trustee. Regardless of any provision of
this Plan, the insurer shall not be required to take or permit any action or
allow any benefit or privilege contrary to the terms of any Contract which it
issues hereunder, or the rules of the insurer.

10.10 RECEIPT AND RELEASE FOR PAYMENTS

         Any payment to any Participant, his legal representative, Beneficiary,
or to any guardian or committee appointed for such Participant or Beneficiary in
accordance with the provisions of the Plan, shall, to the extent thereof, be in
full satisfaction of all claims hereunder against the Trustee and the
Employer, either of whom may require such Participant, legal representative,
Beneficiary, guardian or committee, as a condition precedent to such payment, to
execute a receipt and release thereof in such form as shall be determined by
the Trustee or Employer.

10.11 ACTION BY THE EMPLOYER

         Whenever the Employer under the terms of the Plan is permitted or
required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.

                                       49

<PAGE>

10.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY

         The "named Fiduciaries" of this Plan are (1) the Employer, (2) the
Administrator and (3) the Trustee. The named Fiduciaries shall have only those
specific powers, duties, responsibilities, and obligations as are specifically
given them under the Plan or as accepted by or assigned to them pursuant to any
procedure provided under the Plan, including but not limited to any agreement
allocating or delegating their responsibilities, the terms of which are
incorporated herein by reference. In general, unless otherwise indicated herein
or pursuant to such agreements, the Employer shall have the duties specified in
Article II hereof, as the same may be allocated or delegated thereunder,
including but not limited to the responsibility for making the contributions
provided for under Section 4.1; and shall have the authority to appoint and
remove the Trustee and the Administrator; to formulate the Plan's "funding
policy and method"; and to amend or terminate, in whole or in part, the Plan.
The Administrator shall have the responsibility for the administration of the
Plan, including but not limited to the items specified in Article II of the
Plan, as the same may be allocated or delegated thereunder. The Trustee shall
have the responsibility of management and control of the assets held under the
Trust, except to the extent directed pursuant to Article II or with respect to
those assets, the management of which has been assigned to an Investment
Manager, who shall be solely responsible for the management of the assets
assigned to it, all as specifically provided in the Plan and any agreement with
the Trustee. Each named Fiduciary warrants that any directions given,
information furnished, or action taken by it shall be in accordance with the
provisions of the Plan, authorizing or providing for such direction, information
or action. Furthermore, each named Fiduciary may rely upon any such direction,
information or action of another named Fiduciary as being proper under the
Plan, and is not required under the Plan to inquire into the propriety of any
such direction, information or action. It is intended under the Plan that each
named Fiduciary shall be responsible for the proper exercise of its own powers,
duties, responsibilities and obligations under the Plan as specified or
allocated herein. No named Fiduciary shall guarantee the Trust Fund in any
manner against investment loss or depreciation in asset value. Any person or
group may serve in more than one Fiduciary capacity. In the furtherance of their
responsibilities hereunder, the "named Fiduciaries" shall be empowered to
interpret the Plan and Trust and to resolve ambiguities, inconsistencies and
omissions, which findings shall be binding, final and conclusive.

10.13 HEADINGS

         The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.

                                       50

<PAGE>

10.14 APPROVAL BY INTERNAL REVENUE SERVICE

                  (a)      Notwithstanding anything herein to the contrary,
         contributions to this Plan are conditioned upon the initial
         qualification of the Plan under Code Section 401. If the Plan receives
         an adverse determination with respect to its initial qualification,
         then the Plan may return such contributions to the Employer within one
         year after such determination, provided the application for the
         determination is made by the time prescribed by law for filing the
         Employer's return for the taxable year in which the Plan was adopted,
         or such later date as the Secretary of the Treasury may prescribe.

                  (b)      Notwithstanding any provisions to the contrary,
         except Sections 3.5, 3.6, and 4.1(b), any contribution by the Employer
         to the Trust Fund is conditioned upon the deductibility of the
         contribution by the Employer under the Code and, to the extent any such
         deduction is disallowed, the Employer may, within one (1) year
         following the disallowance of the deduction, demand repayment of such
         disallowed contribution and the Trustee shall return such contribution
         within one (1) year following the disallowance. Earnings of the Plan
         attributable to the excess contribution may not be returned to the
         Employer, but any losses attributable thereto must reduce the amount so
         returned.

10.15 UNIFORMITY

         All provisions of this Plan shall be interpreted and applied in a
uniform, nondiscriminatory manner. In the event of any conflict between the
terms of this Plan and any Contract purchased hereunder, the Plan provisions
shall control.

10.16 SECURITIES AND EXCHANGE COMMISSION APPROVAL

         The Employer may request an interpretative letter from the
Securities and Exchange Commission stating that the transfers of Company
Stock contemplated hereunder do not involve transactions requiring a
registration of such Company Stock under the Securities Act of 1933. In the
event that a favorable interpretative letter is not obtained, the Employer
reserves the right to amend the Plan and Trust retroactively to their
Effective Dates in order to obtain a favorable interpretative letter or to
terminate the Plan.

                                       51
<PAGE>

10.17 VOTING COMPANY STOCK

         The Trustee shall vote all Company Stock held by it as part of the
Plan assets at such time and in such manner as the Administrator shall
direct. Provided, however, that if any agreement entered into by the Trust
provides for voting of any shares of Company Stock pledged as security for
any obligation of the Plan, then such shares of Company Stock shall be voted
in accordance with such agreement. If the Administrator fails or refuses to
give the Trustee timely instructions as to how to vote any Company Stock as
to which the Trustee otherwise has the right to vote, the Trustee shall not
exercise its power to vote such Company Stock and shall consider the
Administrator's failure or refusal to give timely instructions as an exercise
of the Administrator's rights and a directive to the Trustee not to vote said
Company Stock.

         Notwithstanding the foregoing, if the Employer has a
registration-type class of securities each Participant or Beneficiary shall
be entitled to direct the Trustee as to the manner in which the Company Stock
which is entitled to vote and which is allocated to the Company Stock Account
of such Participant or Beneficiary is to be voted. If the Employer does not
have a registration-type class of securities, each Participant or Beneficiary
in the Plan shall be entitled to direct the Trustee as to the manner in which
voting rights on shares of Company Stock which are allocated to the Company
Stock Account of such Participant or Beneficiary are to be exercised with
respect to any corporate matter which involves the voting of such shares with
respect to the approval or disapproval of any corporate merger or
consolidation, recapitalization, reclassification, liquidation, dissolution,
sale of substantially all assets of a trade or business, or such similar
transaction as prescribed in Regulations. For purposes of this Section the
term "registration-type class of securities" means: (A) a class of securities
required to be registered under Section 12 of the Securities Exchange Act of
1934; and (B) a class of securities which would be required to be so
registered except for the exemption from registration provided in subsection
(g) (2) (H) of such Section 12.

         If the Employer does not have a registration-type class of
securities and the by-laws of the Employer require the Plan to vote an issue
in a manner that reflects a one-man, one-vote philosophy, each Participant or
Beneficiary shall be entitled to cast one vote on an issue and the Trustee
shall vote the shares held by the Plan in proportion to the results of the
votes cast on the issue by the Participants and Beneficiaries.

                                       52
<PAGE>

         IN WITNESS WHEREOF, this Plan has been executed the day and year first
above written.

                                    Redlands Centennial Bank

                                    By /s/ Beth Sanders
                                      --------------------------------
                                         EMPLOYER

                                       53
<PAGE>

                             REDLANDS CENTENNIAL BANK
                         EMPLOYEE STOCK OWNERSHIP PLAN

                            SUMMARY PLAN DESCRIPTION

<PAGE>

                                TABLE OF CONTENTS

                                        I
                            INTRODUCTION TO YOUR PLAN

                                        II
                      GENERAL INFORMATION ABOUT YOUR PLAN

1.  General Plan Information .......................................2

2.  Employer Information ...........................................2

3.  Plan Administrator Information .................................2

4.  Plan Trustee Information .......................................3

5.  Service of Legal Process .......................................3

                                       III
                           PARTICIPATION IN YOUR PLAN

1.  Eligibility Requirements .......................................3

2.  Participation Requirements .....................................3

                                       IV
                           CONTRIBUTIONS TO YOUR PLAN

1.  Employer Contributions to the Plan .............................4

2.  Your Share of Employer Contributions ...........................4

3.  Compensation ...................................................5

4.  Forfeitures ....................................................6

5.  Directed Investments............................................6

                                        V
                            BENEFITS UNDER YOUR PLAN

1.  Distribution of Benefits Upon Normal Retirement ................6

2.  Distribution of Benefits Upon Late Retirement...................6

3.  Distribution of Benefits Upon Death ............................6

4.  Distribution of Benefits Upon Disability .......................7

5.  Distribution of Benefits Upon Termination of Employment ........8

6.  Vesting in Your Plan............................................8

7.  Benefit Payment Options.........................................9

8.  Treatment of Distributions From Your Plan......................10

9.  Domestic Relations Order.......................................11

<PAGE>

10. Pension Benefit Guaranty Corporation............................11

                                       VI
                       INFORMATION REGARDING COMPANY STOCK

1.  Voting of Company Stock ........................................12

                                       VII
                                  SERVICE RULES

1.  Period of Service...............................................12

2.  Hour of Service.................................................12

3.  1-Year Break in Service.........................................13

4.  Uniformed Service Employment and Reemployment Rights Act........13

                                      VIII
                         YOUR PLAN'S "TOP HEAVY RULES"

1.  Explanation of Top Heavy Rules..................................14

                                       IX
                    CLAIMS BY PARTICIPANTS AND BENEFICIARIES

1.  The Claim, Review Procedure.....................................15

                                       X
                           STATEMENT OF ERISA RIGHTS

1.  Explanation of Your ERISA Rights................................15

                                       XI
                     AMENDMENT AND TERMINATION OF YOUR PLAN

1.  Amendment.......................................................17

2.  Termination.....................................................17

<PAGE>

                            REDLANDS CENTENNIAL BANK
                          EMPLOYEE STOCK OWNERSHIP PLAN

                            SUMMARY PLAN DESCRIPTION

                                        I
                            INTRODUCTION TO YOUR PLAN

         Redlands Centennial Bank wishes to recognize the efforts its employees
have made to its success and to reward them by adopting an Employee Stock
Ownership Plan. This Plan will be for the exclusive benefit of eligible
employees and their beneficiaries.

         The purpose of this Plan is to reward eligible employees for long and
loyal service by providing them with retirement benefits.

         Between now and your retirement, your Employer intends to make
contributions for you and other eligible employees. Contributions to the Plan
will be invested primarily in Company Stock. Your efforts added to the
efforts of all other employees contribute to the profitability and growth of
the employer and thereby increase the value of Company Stock and your
benefits in the Plan. When you retire, you will be entitled to, receive the
value of the amounts which have accumulated in your account in the form of
Company Stock.

         Your Employer has the right to submit this Plan to the Internal
Revenue Service for approval. The Internal Revenue Service will issue a
"determination letter" to your Employer approving this Plan as a "qualified"
retirement plan, if this Plan meets specific legal requirements.

         This Summary Plan Description is a brief description of your Plan
and your rights, obligations, and benefits under that Plan. Some of the
statements made in this Summary Plan Description are dependent upon this Plan
being "qualified" under the provisions of the Internal Revenue Code. This
Summary Plan Description is not meant to interpret, extend, or change the
provisions of your Plan in any way. The provisions of your Plan may only be
determined accurately by reading the actual Plan document.

         A copy of your Plan is on file at your Employer's office and may be
read by you, your beneficiaries, or your legal representatives at any
reasonable time. If you have any questions regarding either your Plan or this
Summary Plan Description, you should ask your Plan's Administrator. In the
event of any discrepancy between this Summary Plan Description and the actual
provisions of the Plan, the Plan will govern.

                                       1
<PAGE>

                                        II
                       GENERAL INFORMATION ABOUT YOUR PLAN

         There is certain general information which you may need to know
about your Plan. This information has been summarized for you in this section.

1.       General Plan Information

         Redlands Centennial Bank Employee Stock Ownership Plan is the name of
your Plan.

         Your Employer has assigned Plan Number 002 to your Plan.

         The provisions of your plan become effective on February 1, 2000, which
is called the Effective Date of the Plan.

         Your Plan's, records are maintained on a twelve-month period of
time. This is known as the Plan Year. The Plan Year begins on January 1st and
ends on December 31st, except for the first Plan Year which begins on
February 1st and ends on December 31st.

         Certain valuations and distributions are made on the Anniversary Date
of your Plan. This date is December 31st.

         The contributions made to your Plan will be held and invested by the
Trustee of your Plan.

         Your Plan and Trust will be governed by the laws of the State of
California.

2.       Employer Information

         Your Employer's name, address and identification number are:

         Redlands Centennial Bank
         218 East State Street
         Redlands, California 92373

3.       Plan Administrator Information

         The name, address and business telephone number of your Plan's
Administrator are:

         Redlands Centennial Bank
         218 East State Street
         Redlands, California 92373
         (909) 798-3611

         Your Plan's Administrator keeps the records for the Plan and is
responsible for the administration of the Plan. The

                                       2
<PAGE>

Administrator has discretionary authority to construe the terms of the Plan
and make determinations on questions which may affect your eligibility for
benefits. Your Plan's Administrator will also answer any questions you may
have about your Plan,

4.       Plan Trustee Information

         The name of your Plan's Trustee is:

         Douglas C. Spencer

         The principal place of business of your Plan's Trustee is:

         218 East State Street
         Redlands, California 92373

         Your Plan's Trustee has been designated to hold and invest Plan
assets for the benefit of you and other Plan participants. The trust fund
established by the Plan's Trustee will be the funding medium used for the
accumulation of assets from which benefits will be distributed.

 S.      Service of Legal Process

         The name and address of your Plan's agent for service of legal
process are:

         Plan Administrator of Redlands Centennial Bank Employee
         Stock Ownership Plan
         218 East State Street
         Redlands, California 92373

         Service of legal process may also be made upon the Trustee.

                                      III
                           PARTICIPATION IN YOUR PLAN

         Before you become a member or a "participant" in the Plan, there are
certain eligibility and participation rules which you must meet. These rules are
explained in this section.

1.       Eligibility Requirements

         You will be eligible to participate in the Plan on the date of your
employment.

2.       Participation Requirements

         Once you have satisfied your Plan's eligibility requirements, your
next step will be to actually become a member or a "participant" in the Plan.
You will become a participant on a specified day of the Plan Year. This day
is called the Effective Date of Participation.

                                       3
<PAGE>

         You will become a participant on the day you meet the eligibility
requirements.

                                       IV
                           CONTRIBUTIONS TO YOUR PLAN

1.       Employer Contributions to the Plan

         As a participant, you may be eligible to share in and benefit from
the contributions made by your employer. Each year, your Employer's
contribution, if any, will be placed into a trust fund for the benefit of
Plan participants. The Administrator of your Plan will then establish and
maintain a separate account for you and all other participants, into which
the contributions will be placed.

         Each year, your Employer will determine the amount to contribute to
your Plan. This contribution is discretionary.

         You must complete a Period of Service during the Plan Year to share in
this contribution.

         In determining your eligibility to share in contributions for the
year, there are special rules which apply if your employment terminates due
to your Retirement (Normal or Late) , Total and Permanent Disability or death.

         In such cases, you will be eligible to share in the contributions made
by your Employer in accordance with the following:

         If the reason your employment terminated is due to your Retirement
         (Normal or Late) , Total and Permanent Disability or death, then you
         will not be eligible to share in the contribution for the year even if
         you satisfied the requirements explained above.

2.       Your Share of Employer Contributions

         Your Employer's contribution will be "allocated" or divided among
participants eligible to share in the contribution for the Plan Year. Your share
of the contribution will depend upon how much compensation you received during
the year and the compensation received by other eligible participants.

                                        4

<PAGE>

         Your share of your Employer's discretionary contribution is determined
         by the following fraction:

                                                         Your Compensation
               Employer's                   X        -------------------------
         Discretionary contribution                  Total Compensation of All
                                                     Participants Eligible to
                                                               Share
         For example:

         Suppose the Employer's contribution for the Plan Year is $20,000.
         Employee A's compensation for the Plan Year is $25,000. The total
         compensation of all participants eligible to share, including Employee
         A, is $250,000. Employee A's share will be:

                              $20,000 X $25,000 or $2,000
                                       --------
                                       $250,000

         In addition to the Employer's contributions made to your account, your
account will be credited annually with a share of the investment earnings or
losses of the trust fund.

         You should also be aware that the law imposes certain limits on how
much money may be allocated to your account for a year. These limits are
extremely complex but generally no more than the lesser of $30,000 or 25% of
your compensation may be allocated to you (excluding earnings or losses) in any
year. The Administrator will inform you if these limits have affected you.

3.       Compensation

         For the purposes of your Plan, compensation has a special meaning.
Compensation is defined as your total compensation during a Plan Year that is
subject to income tax and is reflected on your W-2 Form, but

                   --   excluding commissions.

                   --   including your salary reduction contributions to any
                        plan or arrangement maintained by your Employer.

         Your compensation will be recognized for benefit purposes for the
entire Plan Year.

         For the Plan Year beginning in 2000 and for Plan Years thereafter, the
Plan, by law, cannot recognize compensation in excess of $170,000. This amount
will be adjusted in future years for cost of living increases. For any short
Plan Year, the adjusted limit will be prorated based upon the number of full
months in the short Plan Year.

                                       5
<PAGE>

4.       Forfeitures

         Forfeitures are created when participants terminate employment
before becoming entitled to their full benefits under the Plan. Your
account may grow from the forfeitures of other participants. -Forfeitures
will be "allocated" or divided among participants eligible to share for a
Plan Year.

5.       Directed Investments

         When you have completed ten (10) Periods of Service as a participant
and have attained age fifty-five (55), you will have the right to direct the
investment of a portion of your account attributable to Company Stock. The
Administrator will advise you of any such rights.

                                        V
                            BENEFITS UNDER YOUR PLAN

1.       Distribution of Benefits Upon Normal Retirement

         Your Normal Requirement Date is the first day of the month coinciding
with or next following your normal Retirement Age.

         You will attain your Normal Retirement Age when you reach your 65th
birthday.

         At your Normal Retirement Age, you will be entitled to 100% of your
account balance. Payment of your benefits will, at your election, begin as soon
as practicable following your actual retirement but not prior to your Normal
Retirement Date. If you continue working after your Normal Retirement Age, your
benefits will be deferred to your Late Retirement Date. However, if you are a 5%
owner, payment cannot be deferred past the April 1st following the end of the
year in which you attain age 70 1/2.

2.       Distribution of Benefits Upon Late Retirement

         You may remain employed past your Plan's Normal Retirement Date and
retire instead on your Late Retirement Date. Your Late Retirement Date is the
first day of the month coinciding with or next following the date you choose
to retire after first having reached your Normal Retirement Date. On your Late
Retirement Date, you will be entitled to 100% of your Account. Actual benefit
payments will begin as soon as practicable following your Late Retirement
Date.

3.       Distribution of Benefits upon Death

         Your beneficiary will he entitled to 100% of your account balance upon
your death.

                                       6
<PAGE>

         If you are married at the time of your death, your spouse will be the
beneficiary of the death benefit, unless you otherwise elect in writing on a
form to be furnished to you by the Administrator. IF YOU WISH TO DESIGNATE A
BENEFICIARY OTHER THAN YOUR SPOUSE, HOWEVER, YOUR SPOUSE MUST IRREVOCABLY
CONSENT TO WAIVE ANY RIGHT TO THE DEATH BENEFIT. YOUR SPOUSE'S CONSENT MUST BE
IN WRITING, BE WITNESSED BY A NOTARY OR A PLAN REPRESENTATIVE AND ACKNOWLEDGE
THE SPECIFIC NONSPOUSE BENEFICIARY.

         If, however,

                  (a)      your spouse has validly waived any right to the death
         benefit in the manner outlined above,

                  (b)      your spouse cannot be located; or

                  (c)      you are not married at the time of your death,

then your death benefit be paid to the beneficiary of your own choosing in
installments or as a single lump sum, as you or your beneficiary may elect. You
may designate the beneficiary on a form to be supplied to you by the
Administrator. If you change your designation, your spouse must again consent
to the change.

         If your designated beneficiary is a person (rather than your estate or
most trusts) then minimum distributions of your death benefit must generally
begin within one year of your death and must be paid over a period not extending
beyond your beneficiary's life expectancy. If your spouse is the beneficiary,
the start of payments may be delayed until the year in which you would have
attained age 70 1/2. Generally, if your beneficiary is not a person, then your
entire death benefit must he paid within five years after your death.

         Since your spouse had certain rights in the death benefit, you should
immediately report any change in your marital status to the Administrator.

4.       Distribution of Benefits Upon Disability

         Under your Plan, disability is defined as a physical or mental
condition resulting from bodily injury, disease, or mental disorder which
renders you incapable of continuing any gainful occupation with your Employer.
This condition must constitute total disability under the federal Social
Security Acts.

         If you become disabled while a participant, you will be entitled to
100% of your account balance. Payment of your disability benefits will be made
to you as if you had retired. However, if the value of your vested benefit is
less than a certain dollar threshold, a distribution will be made to you

                                       7
<PAGE>

within a reasonable time after you terminate employment. (See the Section in
this Article entitled "Benefit Payment Options.")

5.   Distribution of Benefit Upon Termination of Employment

     Your Plan is designed to encourage you to stay with your Employer until
retirement. Payment of your account balance under your Plan is only available
upon your death, disability or retirement.

     If your employment terminates for reasons other than those listed above,
you will be entitled to receive only your "vested percentage" of your account
balance and the remainder of your account will be forfeited. Only contributions
made by your Employer are subject to forfeiture. (See the Section in this
Article entitled "Vesting in Your Plan.")

     If you so elect, the Administrator will direct the Trustee to distribute
your vested benefit attributable to Company Stock to you before the date it
would normally be distributed (upon your death, disability or retirement), but
not until one year after the close of the Plan Year which is the fifth Plan Year
following the Plan Year in which you terminate employment. If you are reemployed
within such period, the commencement of your distribution will be postponed.
However, if the value of your vested benefit is less than a certain dollar
threshold, a distribution will be made to you within a reasonable time after you
terminate employment. (See the Section in this Article entitled "Benefit
Payment Options.")

6. Vesting in Your Plan

     Your "vested percentage" in your account is determined under the following
schedule and is based on vesting Periods of Service. You will always, however,
be 100% vested upon your Normal Retirement Age. (See the Section in this
Article entitled "Distribution of Benefits Upon Normal Retirement.")

                                Vesting Schedule
                     Periods of                    Percentage
                      Service

                         1                             0%
                         2                            40%
                         3                            60%
                         4                            80%
                         5                           100%

     Periods of Service prior to the time you attained age 18 will not be
counted for vesting purposes.

     Your vested benefit will be distributed to you or your beneficiary upon
your death, disability or retirement.

                                        8
<PAGE>

7.       Benefit Payment Options

         The Administrator, in accordance with your election, will direct the
Trustee to pay your benefits to you under one or more of the following options:

                  (a)      a single lump-sum payment,

                  (b)      installments over a period not extending beyond the
         earlier of your assumed life expectancy (or your and your beneficiary's
         assumed life expectancies) determined at the time of distribution.

                           Notwithstanding the above, unless you elect in
         writing a longer period, Company Stock will he distributed to you in
         substantially equal installments over a period not longer than five
         years. A special rule may spread the distribution of the Company Stock
         in the account of participants with large account balances over an
         even longer period of time.

         Distribution of your account at retirement will be in the form of cash
or Company Stock or both. However, you or your beneficiary may demand
distribution of your entire account in the form of Company Stock. Cash may be
paid (1) in lieu of partial shares of Company Stock, or (2) in certain
circumstances where it may not be possible for the Plan to purchase Company
Stock for distribution.

         If your vested benefit under the Plan does not exceed $5,000, the
Administrator will direct the Trustee to distribute your vested benefit to you
if the distribution occurs prior to the later of your age 62 or Normal
Retirement Age.

         If your vested benefit under the Plan exceeds $5,000, you must give
written consent before the distribution may be made.

         If you have started receiving installments, and the value of your
vested benefit at the time of the first installment exceeded the limit in the
preceding paragraph, then the Administrator cannot pay out your benefits to you
without your consent if the value of your vested benefit is now less than the
limit at the time of your first installment.

         In addition to the benefit payment mentioned above, there are rules
which require that certain minimum distributions be made from the Plan. If you
are a 5% owner, distributions are required to begin not later than the April
1st following the end of the year in which you reach age 70 1/2. If you are not
a 5% owner, distributions are required to begin not later than the later of the
April 1st following the end of the year in which you

                                        9

<PAGE>

reach age 70 1/2 or retire. You should see the Administrator if you feel you
may be affected by these rules.

8.       Treatment of Distributions From Your Plan

         Whenever you receive a distribution from your Plan, it will normally be
subject to income taxes. You may, however, reduce, or defer entirely, the tax
due on your distribution through use of one of the following methods:

                  (a)      The rollover of all or a portion of the distribution
         to an Individual Retirement Account (IRA) or another qualified employer
         plan. This will result in no tax being due until you begin withdrawing
         funds from the IRA or other qualified employer plan. The rollover of
         the distribution, however, MUST be made within strict time frames
         (normally, within 60 days after you receive your distribution). Under
         certain circumstances all or a portion of a distribution may not
         qualify for this rollover treatment. In addition, most distributions
         will be subject to mandatory federal income tax withholding at a rate
         of 20%. This will reduce the amount you actually receive. For this
         reason, if you wish to rollover all or a portion of your distribution
         amount, the direct transfer option described in paragraph (b) below
         would be the better choice.

                  (b)      You may request for most distributions that a direct
         transfer of all or a portion of your distribution amount be made to
         either an Individual Retirement Account (IRA) or another qualified
         employer plan willing to accept the transfer. A direct transfer will
         result in no tax being due until you withdraw funds from the IRA or
         other qualified employer plan. Like the rollover, under certain
         circumstances all or a portion of the amount to be distributed may not
         qualify for this direct transfer, e.g., a distribution of less than
         $500 will not be eligible for a direct transfer. If you elect to
         actually receive the distribution rather than request a direct
         transfer, then in most cases 20% of the distribution amount will be
         withheld for federal income tax purposes.

                  (c)      The election of favorable income tax treatment under
         "10-year forward averaging," "5-year forward averaging" or, if you
         qualify, "capital gains" method of taxation.

         WHENEVER YOU RECEIVE A DISTRIBUTION, THE ADMINISTRATOR WILL DELIVER TO
YOU A MORE DETAILED EXPLANATION OF THESE OPTIONS. HOWEVER, THE RULES WHICH
DETERMINE WHETHER YOU QUALIFY FOR FAVORABLE TAX TREATMENT ARE VERY COMPLEX.
YOU SHOULD CONSULT WITH QUALIFIED TAX COUNSEL BEFORE MAKING A CHOICE.

                                       10
<PAGE>

9.       Domestic Relations Order

         As a general rule, your interest in your account, including your
"vested interest," may not be alienated. This means that your interest may not
be sold, used as collateral for a loan, given away or otherwise transferred. In
addition, your creditors may not attach, garnish or otherwise interfere with
your account.

         There is an exception, however, to this general rule. The
Administrator may be required by law to recognize obligations you incur as a
result of court ordered child support or alimony payments. The Administrator
must honor a "qualified domestic relations order." A "qualified domestic
relations order" is defined as a decree or order issued by a court that
obligates you to pay child support or alimony, or otherwise allocates a
portion of your assets in the Plan to your spouse, former spouse, child or
other dependent. If a qualified domestic relations order is received by the
Administrator, all or a portion of your benefits may be used to satisfy the
obligation. The Administrator will determine the validity of any domestic
relations order received.

10.      Pension Benefit Guaranty Corporation

         Benefits provided by your Plan are NOT insured by the Pension Benefit
Guaranty Corporation (PBGC) under Title IV of the Employee Retirement Income
Security Act of 1974 because the insurance provisions under ERISA are not
applicable to your Plan.

                                       11
<PAGE>

                                       VI
                      INFORMATION REGARDING COMPANY STOCK

1.       Voting of Company Stock

         The Trustee of the Plan will vote all company Stock held by it as a
part of the Plan assets at the direction of the Administrator, provided that
you or your beneficiary will be entitled to direct the Trustee as to the
manner in which voting rights on shares of Company Stock which are allocated
to your account are to be exercised (i) with respect to any corporate matter
which involves the voting of such shares with respect to the approval or
disapproval of any corporate merger or consolidation, recapitalization,
reclassification, liquidation, dissolution, sale of substantially all assets
of a trade or business, or such similar transaction, and (ii) with respect to
all corporate matters if, at the time of the vote thereon, the Company Stock
is a "registration-type" class of securities. If you do not timely exercise
your right to vote Company Stock, the Trustee, at the direction of the
Administrator, will vote such Company Stock.

                                       VII
                                  SERVICE RULES

1.       Period of Service

         The term "Period of Service" is used in this Summary Plan Description
and in your Plan.

         Your Period of Service is the aggregate of all your periods commencing
with the first day of your employment or reemployment with your Employer and
ending on the date a 1-Year Break in Service begins. Your first day of
employment or reemployment is the first day you perform an Hour of Service. You
will also receive credit for any Period of Severance of less than twelve
consecutive months. Fractional periods of a year will be expressed in terms of
days.

         You will incur a Period of Severance for any continuous period of time
during which you are not employed by your Employer. Such period will begin on
the date you retire, quit or are discharged, or if earlier, the twelve
consecutive month anniversary of the date on which you were otherwise first
absent from service.

2.       Hour of Service

         You will be credited with an Hour of Service for each hour for which
you are paid or entitled to payment for the performance of duties for your
Employer.

                                       12
<PAGE>

3.       1-Year Break in Service

         A 1-Year Break in Service is a Period of Severance of at least
twelve consecutive months. However, if you are absent from work for maternity
or paternity reasons, the twelve consecutive month period beginning on the
first anniversary of your first day of such absence will not constitute a
1-Year Break in Service.

4.       Uniformed Services Employment and Reemployment Rights Act

         If you are a veteran and are reemployed under the Uniformed Services
Employment and Reemployment Rights Act of 1994, your qualified military
service may be considered service with the Employer. If you may be affected
by this law, ask your Administrator for further details.

                                      VIII
                          YOUR PLAN'S "TOP HEAVY RULES"

1.       Explanation of "Top Heavy Rules"

         A Plan that primarily benefits "key employees" is called a "top
heavy plan." Key employees are certain owners or officers of your Employer. A
Plan is a "top heavy plan" when more than 60% of the contributions or
benefits have been allocated to key employees.

         Each year, the Administrator is responsible for determining whether
your Plan is a "top heavy plan."

         If your Plan becomes top heavy in any Plan Year, then non-key and
key employees will be entitled to certain "top heavy minimum benefits," and
other special rules will apply. Among these top heavy rules are the following:

                  (a)      Your Employer may be required to make a contribution
         to your account in order to provide you with at least "top heavy
         minimum benefits."

                  (b)      If you are a participant in more than one Plan, you
         may not be entitled to "top heavy minimum benefits" under both Plans.

                                       IX
                    CLAIMS BY PARTICIPANTS AND BENEFICIARIES

         Benefits will be paid to participants and their beneficiaries without
the necessity of formal claims. You or your beneficiaries, however, may make a
request for any Plan benefits to which you may be entitled. Any such request
must be made in writing, and it should be made to the Administrator. (See the
Article in this Summary entitled "GENERAL INFORMATION ABOUT YOUR PLAN.")

                                       13

<PAGE>

         Your request for Plan benefits shall be considered a claim for Plan
benefits, and it will be subject to a full and fair review. If your claim is
wholly or partially denied, the Administrator will furnish you with a written
notice of this denial. This written notice must be provided to you within a
reasonable period of time (generally 90 days) after the receipt of your claim by
the Administrator. The written notice must contain the following information:

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

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

                  (c)      a description of any additional information or
         material necessary to correct your claim and an explanation of why such
         material or information is necessary; and

                  (d)      appropriate information as to the steps to be taken
         if you or your beneficiary wishes to submit your claim for review.

         If notice of the denial of a claim is not furnished to you in
accordance with the above within a reasonable period of time, your claim will be
deemed denied. You will then be permitted to proceed to the review stage
described in the following paragraphs.

         If your claim has been denied, and you wish to submit your claim for
review, you must follow the Claims Review Procedure.

1.   The Claims Review Procedure

                  (a)      Upon the denial of your claim for benefits, you may
         file your claim for review, in writing, with the Administrator.

                  (b)      YOU MUST FILE THE CLAIM FOR REVIEW NO LATER THAN 60
         DAYS AFTER YOU HAVE RECEIVED WRITTEN NOTIFICATION OF THE DENIAL OF YOUR
         CLAIM FOR BENEFITS, OR IF NO WRITTEN DENIAL OF YOUR CLAIM WAS PROVIDED,
         NO LATER THAN 60 DAYS AFTER THE DEEMED DENIAL OF YOUR CLAIM.

                  (c)      You may review all pertinent documents relating to
         the denial of your claim and submit any issues and comments, in
         writing, to the Administrator.

                  (d)      Your claim for review must be given a full and fair
         review. If your claim is denied, the Administrator must provide you
         with written notice of this denial within 60 days after the
         Administrator's receipt of your written claim for review. There may
         be times when this 60 day period may

                                       14

<PAGE>

         be extended. This extension may only be made, however, where there are
         special circumstances which are communicated to you in writing within
         the 60 day period.  If there is an extension, a decision shall be made
         as soon as possible, but not later than 120 days after receipt by the
         Administrator of your claim for review.

                  (e)      The Administrator's decision on your claim for
         review will be communicated to you in writing and will include specific
         references to the pertinent Plan provisions on which the decision was
         based.

                  (f)      If the Administrator's decision on review is not
         furnished to you within the time limitations described above, your
         claim will be deemed denied on review.

                  (g)      If benefits are provided or administered by an
         insurance company, insurance service, or other similar organization
         which is subject to regulation under the insurance laws, the claims
         procedure relating to these benefits may provide for review. If so,
         that company, service, or organization will be the entity to which
         claims are addressed.  If you have any questions regarding the proper
         person or entity to address claims, you should ask the Administrator.

                                        X
                            STATEMENT OF ERISA RIGHTS

1.       Explanation of Your ERISA Rights

         As a participant in this Plan you are entitled to certain rights and
protections under the Employee Retirement income Security Act of 1974, also
called ERISA. ERISA provides that all Plan participants are entitled to:

                  (a)      examine, without charge, all Plan documents,
         including:

                  (1)      insurance contracts;

                  (2)      collective bargaining agreements; and

                  (3)      copies of all documents filed by the Plan with the
                  U.S. Department of Labor, such as detailed annual reports and
                  Plan descriptions.

                  This examination may take place at the Administrator's office
                  and at other specified employment locations of the Employer.
                  (See the Article in this Summary entitled "GENERAL INFORMATION
                  ABOUT YOUR PLAN"):

                                       15
<PAGE>

                  (b)      obtain copies of all Plan documents and other Plan
         information upon written request to the Plan Administrator. The
         Administrator may make a reasonable charge for the copies;

                  (c)      receive a summary of the Plan's annual financial
         report. The Administrator is required by law to furnish each
         participant with a copy of this summary annual report;

                  (d)      obtain a statement telling you whether you have a
         right to receive a retirement benefit at Normal Retirement Age and, if
         so, what your benefits would be at Normal Retirement Age if you stop
         working under the Plan now.  If you do not have a right to a retirement
         benefit, the statement will tell you how many years you have to
         work to get a right to a retirement benefit. THIS STATEMENT MUST BE
         REQUESTED IN WRITING AND IS NOT REQUIRED TO BE GIVEN MORE THAN ONCE A
         YEAR. The Plan must provide the statement free of charge.

         In addition to creating rights for Plan participants, ERISA imposes
duties upon the people who are responsible for the operation of the Plan. The
people who operate your Plan, called "fiduciaries" of the Plan, have a duty to
do so prudently and in the interest of you and other Plan participants and
beneficiaries. No one, including your employer or any other person, may fire you
or otherwise discriminate against you in any way to prevent you from obtaining a
pension benefit or exercising your rights under ERISA.

         If your claim for a retirement benefit is denied in whole or in part,
you must receive a written explanation of the reason for the denial. You have
the right to have the Administrator review and reconsider your claim. (See the
Article in this Summary entitled "CLAIMS BY PARTICIPANTS AND BENEFICIARIES.")

         Under ERISA, there are steps you can take to enforce the above
rights. For instance, if you request materials from the Plan and do not
receive them within 30 days, you may file suit in a federal court. In such a
case, the court may require the Administrator to provide the materials and
pay you up to $110.00 a day until you receive the materials, unless the
materials were not sent because of reasons beyond the control of the
Administrator.

         If you have a claim for benefits which is denied or ignored, in whole
or in part, you may file suit in a state or federal court.

         If the Plan's fiduciaries misuse the Plan's money, or if you are
discriminated against for asserting your rights, you may seek assistance from
the U.S. Department of Labor, or you may file suit in a federal court. The court
will decide who should pay

                                       16
<PAGE>

court costs and legal fees. If you are successful, the court may order the
person you have sued to pay these costs and fees. If you lose, the court may
order you to pay these costs and fees if, for example, it finds your claim is
frivolous.

         If you have any questions about this statement, or about your rights
under ERISA, you should contact the nearest office of the Pension and Welfare
Benefits Administration, U.S. Department of Labor, listed in your telephone
directory or the Division of Technical Assistance and Inquiries, Pension and
Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution
Avenue, N.W., Washington, D.C. 20210.

                                       XI
                     AMENDMENT AND TERMINATION OF YOUR PLAN

1.       Amendment

         Your Employer has the right to amend your plan at any time. In no
event, however, will any amendment:

                  (a)      authorize or permit any part of the Plan assets to
         be used for purposes other than the exclusive benefit of participants
         or their beneficiaries; or

                  (b)      cause any reduction in the amount credited to your
         account.

2.       Termination

         Your Employer has the right to terminate the plan at any time. Upon
termination, all amounts credited to your accounts will become 100% vested. A
complete discontinuance of contributions by your Employer will constitute a
termination.

                                       17<PAGE>

                                  Exhibit 10.1

                          ANCHOR DISTRIBUTION AGREEMENT

This agreement (the "Agreement") is made and entered into as of _______________,
2000, between Microsoft Corporation ("Microsoft"), with offices at One Microsoft
Way, Redmond, WA 98052-6399 and Netivation.com (the "Company"), with offices at
806 West Clearwater Loop, Suite N, Post Falls, ID 83854. Microsoft and Company
agree as follows:

SECTION 1.        DEFINITIONS

         "COMPANY LOGO" means the Company logo(s) and trademark(s) provided to
Microsoft for use in connection with the Service.

         "CONTENT" means material provided by Company to Microsoft, including,
but not limited to, advertisements, promotional banners and the Newsletter.

         "COPY" means a single email delivered to a specific Subscriber
consisting of a reproduction (in whole or in part) of a specific version of the
Newsletter and/or hypertext link to the Newsletter.

         "IPRS" means trade secrets, patents, copyrights, trademarks, service
marks, trade names, know-how, moral rights, rights of publicity and privacy, and
similar rights of any type under the laws of any governmental authority,
domestic or foreign, including all applications and registrations relating to
any of the foregoing.

         "NEWSLETTER" means the publications to be provided by Company to
Microsoft, Copies of which will be distributed to Subscribers via the Service.

         "REGISTRATION PAGES" means those web pages that are displayed to users
of the U.S. English language Hotmail service in a manner to permit such users to
register to receive the Copies and other third party content via the Service.

         "SERVICE" means the WebCourier Service whereby a person registering or
registered for a U.S. English language Hotmail email account may also register
to receive third party content via the Hotmail service.

         "SUBSCRIBER" means a Hotmail account that has consented to receiving
the Newsletter.

SECTION 2.        MICROSOFT OBLIGATIONS

         2.1 SERVICE. Microsoft will provide Company with placement on the
Registration Page consisting of Newsletter name, for which the Newsletter name
will link to a hide-and-seek functionality which displays the Company Logo and a
text description of the Newsletter. Company will be listed as an "Anchor
Provider" in the Politics category ("Category"). Microsoft may modify the
Registration Pages (including, without limitation, Category names) from time to
time, provided that Company receives reasonably comparable placement on such
revised pages as specified herein.

         2.2 PROVIDERS. The Newsletters of not more than one (1) "Premier
Provider" and [confidential information filed separately with the SEC] "Anchor
Providers" may be referenced in the Category. The "Premier Provider" will
receive the most prominent placement in the Category, and each "Anchor Provider"
will receive placement in descending order [confidential information filed
separately with the SEC] by such "Anchor Provider" to Microsoft to appear in
such category.

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         2.3 DISTRIBUTION. Subject to paragraph 3.1, Microsoft will deliver
Copies to Subscribers according to such schedules as mutually agreed upon by
Company and Microsoft. Company may change the schedule pursuant to which the
Copies are distributed to Subscribers by giving Microsoft written notice of the
requested change at least fifteen (15) business days prior to the scheduled
change. Company may not schedule Copies of more than one Newsletter to be
distributed in any twenty-four (24) hour period.

         2.4 POLITICS ADVERTISEMENT. Microsoft will provide Company with a
permanent advertisement approximately one-third (1/3) of the page beginning
below the header in the right column on the MSN Politics home page and
appropriate story level pages designated by Microsoft (collectively, "Politics
Ad"). Company may alternate the elements and text within the Politics Ad,
however, such Content shall be subject to prior approval by Microsoft. The
Politics Ad (including the site to which the ad links) must identify Company as
the purchaser of the advertisement. Specifications for the material elements
that Company must include in the Politics Ad and any link are attached hereto as
Exhibit A, and Company agrees that all submissions will comply with all such
applicable elements.

         2.5 ADVERTISING IMPRESSIONS. Microsoft will provide Company with the
following advertising impressions ("Impressions"):

                  (a) [Confidential information filed separately with the SEC]
Impressions which shall be distributed between various Microsoft properties, at
Microsoft's sole discretion; and

                  (b) [Confidential information filed separately with the SEC]
Impressions which shall appear on MSNBC.

Impressions consist of a combination of banners (in rotation with other
companies), e-mail advertisements (within the text of the e-mail), advertorials
and any other advertising inventory elements greed upon by the parties. Such
Impressions may not be redeemed for cash and will expire at the end of the Term.
Microsoft guarantees a minimum of [confidential information filed separately
with the SEC] Impressions of the Political Ad. If Microsoft fails to deliver the
agreed upon number of Impressions during the Term, Company's sole remedy for
such failure will be the extension of the Term until the agreed upon number of
Impressions (or other Impressions as the parties may agree) are provided.
Company may purchase additional advertising impressions during the Term at
Microsoft's then-current rate card. Company will create and deliver to Microsoft
all promotional banners for review at least ten (10) days prior to the first run
date for such banner as designated by Company. All promotional banners shall
meet all specifications and submissions requirements provided by Microsoft.

SECTION 3.        COMPANY OBLIGATIONS

         3.1 DELIVERY AND SPECIFICATIONS. Company will deliver the Newsletter to
Microsoft at a specified URL, and on a delivery schedule agreed upon by the
parties in writing. The Company Logo, Newsletter text description and the
Newsletters are all subject to specifications and submissions guidelines (as
applicable) established by Microsoft and set forth in Exhibit B, as the same may
be modified from time to time by Microsoft upon notice. Company will deliver the
Company Logo and Newsletter text description to Microsoft in the manner directed
by Microsoft. Company acknowledges that time is of the essence in providing the
foregoing to Microsoft, and the Company's failure to meet the foregoing timing
requirements or any applicable specifications may delay or prevent delivery of
Copies hereunder.

         3.2 LICENSE. Company hereby grants Microsoft a world-wide,
non-exclusive, royalty-free license to:

                  (a) reproduce, promote, market, distribute, display, transmit,
download, upload, edit, modify and otherwise use the Newsletter to fulfill
Microsoft's obligations under this Agreement; and

                  (b) reproduce, display, transmit and otherwise use the Company
Logo and Newsletter text description in connection with (i) providing the
Service and Newsletter to Subscribers, and (ii) marketing and promoting the
Service and Newsletter.

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         3.3 LIMITATIONS. The Content may not contain, promote, market,
advertise, distribute, offer to distribute, link (either directly or, if with
the knowledge of Company, indirectly) to or otherwise related to content that:

                  (a) is inappropriate, obscene, defamatory, profane, indecent
or unlawful;

                  (b) infringes or misappropriates third party IPRs;

                  (c) constitutes "hate speech," whether directed at an
individual or a group, and whether based upon the race, sex, creed, national
origin, religious affiliation, sexual orientation or language of such individual
or group;

                  (d) promotes or contains viruses, worms, corrupted files,
cracks or other materials that are intended to or may damage or render
inoperable software, hardware or security measures of Microsoft, Subscribers or
any third party;

                  (e) facilitates gambling, or the sale or use of liquor,
tobacco products or illicit drugs;

                  (f) facilitates, promotes or forwards pyramid schemes, chain
letters or illegal contests; or

                  (g) otherwise restricts or inhibits any person's use or
enjoyment of Hotmail or the Service.

The Newsletter may not contain, promote, market, advertise, distribute, or offer
to distribute competing e-mail or newsletter products whether offered by Company
or a third party (E.G., Lycos, Excite and other services designated by
Microsoft). Microsoft may, but is under no obligation to, review the Content,
and may refuse to host or make the Content available to MSN users in whole or in
part if Microsoft determines that the Content violates the foregoing
limitations, is not deemed appropriate for MSN users, or violates such other
reasonable limitations as Microsoft may adopt from time to time. Failure by
Microsoft to publish any Content does not constitute a breach of contract or
otherwise entitle Company to any legal remedy. Microsoft reserves the right to
refuse advertisements from third parties that require ads to be served from that
third party's servers.

         3.4 SUBSCRIBER INFORMATION. All information regarding Subscribers
collected through the Service constitutes Confidential Information (as that term
is used in Section 9) of Microsoft, and is subject to the confidentiality
requirements of Section 9. Notwithstanding the foregoing, information obtained
by Company directly from Subscribers will not constitute Confidential
Information of Microsoft and may be used by Company from time to time; provided,
Company does not collect, use or disclose such information in any manner that
identifies the subject as a Subscriber or Hotmail customer.

         3.5 CHANGES TO NEWSLETTER. Company will provide Microsoft with
[confidential information filed separately with the SEC] prior written notice of
any material change to the nature or intended audience of any Newsletter.
[Confidential information filed separately with the SEC.]

SECTION 4.        CONSIDERATION

         4.1 ADVANCE. Company will prepay Microsoft an advance of the fees set
forth in paragraph 4.2 in an amount equal to one million five hundred thousand
dollars (U.S.$1,500,000) (the "Advance"). The Advance is a non-refundable,
guaranteed payment to Microsoft. The Advance will be rendered to Microsoft in
four (4) equal installments on a quarterly basis (i.e., every three (3) months
during the Term). The first payment hereunder is due when this Agreement is
signed and returned to Microsoft. Microsoft will invoice Company for the three
(3) remaining payments approximately thirty (30) days prior to the beginning of
each subsequent quarter, and Company will pay such invoiced amounts on or before
the

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first day of each such subsequent quarter. Notwithstanding the foregoing,
upon termination or expiration of this Agreement, other than by Company
pursuant to paragraph 5.2(b) or Microsoft pursuant to paragraph 5.3, Company
will immediately pay Microsoft any amounts of the Advance not yet paid.

         4.2 FEE. Company will pay Microsoft the following fees as consideration
for Microsoft distributing the Newsletter to Subscribers:

                  (a) for Newsletters scheduled to be distributed [confidential
information filed separately with the SEC], one cent (U.S.$0.01) per Copy
distributed to a Subscriber; and

                  (b) for Newsletters scheduled to be distributed [confidential
information filed separately with the SEC], one and one-half cent (U.S.$0.015)
per Copy distributed to a Subscriber.

         4.3 DISTRIBUTION AGREEMENT. On a quarterly basis (including, at the end
of the Term), Microsoft will compare the fees accumulated for the Copies
actually distributed hereunder against the Advance paid for such quarter (or the
Term). If the fees incurred pursuant to paragraph 4.2 for the number of Copies
actually distributed during such quarter (or the Term) are greater than the
portion of the Advance paid for such quarter (or the Term), Microsoft will
invoice Company for the difference at the applicable rates noted in paragraph
4.2. If at the end of the Term the fees (including the Advance) received by
Microsoft hereunder exceed the amount of the fees incurred by Company for
distribution of Copies hereunder, Microsoft will refund the difference to
Company; except that in no event will Microsoft be required to refund or
otherwise return to Company any portion of the Advance.

         4.4 INVOICE AND PAYMENT. Within thirty (30) days after the date of an
invoice, Company will pay Microsoft all amounts owing pursuant to such invoice
in readily available funds. Amounts not paid when due under this Agreement will
accrue interest at a rate of one and one-half percent (1.5%), compounded on a
monthly basis. Microsoft reserves the right to immediately suspend distribution
of the Newsletter if Company fails to make timely payment of any amounts owing
hereunder. All payments of amounts owing to Microsoft will be made at the
following location or such other location designated by Microsoft in writing:

                  Microsoft Corporation
                  PO Box 7247 - 7123
                  Philadelphia PA  19170-7123

         4.5 REPORTS. Microsoft will provide Company with monthly reports
setting forth the number of Subscribers receiving Copies and the total number of
Copies delivered per month.

         4.6 TAXES. The fees, advances and other amounts owing to Microsoft
pursuant to this Agreement do not include taxes or other governmental fees.
Company will pay all taxes and other governmental fees arising out of or related
to all transactions undertaken pursuant to this Agreement, other than taxes on
Microsoft income and revenue, and will provide Microsoft with appropriate
evidence of such payment upon request.

         4.7 AUDITS. Microsoft will maintain during the Term and for at least
six (6) months thereafter all of its regular books of account relating to Copies
distributed via the Service and amounts owing to Microsoft hereunder. If Company
believes in good faith that Microsoft invoiced Company in excess of amounts
actually owing pursuant to paragraph 4.2, Company will have the right at
Company's sole expense to audit such books of account, subject to the following:
(a) Company will provide Microsoft with at least thirty (30) days' prior written
notice of such audits; (b) audits may occur only during Microsoft's regular
business hours, and at the location where such books of account are maintained
by Microsoft or such other location reasonably specified by Microsoft; (c)
Company will cooperate with Microsoft in good faith to avoid and limit any
disruption of such audits to Microsoft's business and operations; (d) such audit
will be conducted by an independent accounting firm, acceptable to Microsoft and
compensated by Company in a manner that is not affected by the outcome of the
audit (e.g., no contingency fees); (e) the auditors provide Microsoft with all
results and other communications to Company related to the audit at the same
time such

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auditors provide such communications to Company; (f) audits may not occur
more than once, may not exceed three (3) consecutive days and must be
completed within six (6) months after the end of the Term; (g) the auditors
provide their final conclusions of the audit to Company and Microsoft
simultaneously and within thirty (3) days after the last day of the audit.
Any information disclosed to or otherwise learned by Company or its auditors
in connection with an audit conducted pursuant to this paragraph constitutes
Confidential Information (as the term is used in Section 9) of Microsoft and
subject to the limitations on use set forth in paragraph 9.1.

SECTION 5.        TERM AND TERMINATION

         5.1 TERM. This Agreement is binding upon signature and the "Term" will
be in effect for a period of twelve (12) months commencing upon January 14,
2000.

         5.2 TERMINATION. Either party may immediately terminate this Agreement:
(a) [confidential information filed separately with the SEC]; or (b) upon
written notice if the other party breaches the Agreement in any material
respect, and the breach remains uncured for a period of ten (10) days following
the breaching party's receipt of written notice of the breach from the
nonbreaching party.

         5.3 MICROSOFT TERMINATION. Notwithstanding paragraph 5.1, Microsoft may
terminate this Agreement upon thirty (30) days' prior written notice if
Microsoft ceases to offer the Service. In such a case, Microsoft will return to
Company a pro rata portion of the Advance actually paid to Microsoft (less any
additional fees incurred by Company hereunder). If fees incurred by Company
hereunder exceed the amount of the pro rated Advance actually paid to Microsoft
as of the date of termination, Microsoft will invoice, and Company will promptly
pay, any additional amounts owing hereunder.

         5.4 SURVIVAL. This paragraph and Sections 3.4 (Subscriber Information),
4 (Consideration), 6 (Representations and Warranties), 7 (Indemnification), 8
(Limitation of Liability), 9 (Confidentiality), and 10 (General) shall survive
any termination of this Agreement, together with all obligations, rights and
causes of action that may have accrued prior to termination, along with any
other provisions that might reasonably be deemed to survive such termination.

SECTION 6.        REPRESENTATIONS AND WARRANTIES

         6.1 COMPANY. Company represents and warrants that:

                  (a) Company has the full corporate rights, power and authority
to enter into this Agreement and to perform the acts required of it hereunder;

                  (b) Company's execution and performance of this Agreement do
not and will not violate any agreement to which Company is a party or by which
Company is otherwise bound, or any applicable law, rule or regulation;

                  (c) the Content and Company Logo do not and will not violate
any third party IPRs or give rise to any obligation for the payment of any sums
to any third party by Microsoft or Microsoft's successors in interest;

                  (d) the Content (in whole or in part) and Company Logo do not
and will not violate the limitations set forth in paragraph 3.3;

                  (e) it will not harvest or otherwise collect through the
Service information about Subscribers, including e-mail addresses, without
Subscribers' express consent.

                  (f) it will not link the Service or Hotmail to any unsolicited
communication sent to any third party, or otherwise use or mention the Service
or Hotmail in connection with any such unsolicited communication; and

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<PAGE>

                  (g) it has in effect a privacy policy that is available online
to Subscribers and that meets or exceeds the applicable standards of an industry
recognized online privacy organization (e.g., the TRUST E Program, BBB ONLINE),
and it will adhere to the information gathering, dissemination, privacy
protection and other practices specified in such privacy policy.

         6.2 MICROSOFT: Microsoft represents and warrants to Company that it has
the full corporate rights, power and authority to enter into this Agreement and
to perform the acts required of it hereunder.

         6.3 WARRANTY DISCLAIMER. EXCEPT AS EXPRESSLY PROVIDED HEREIN, THE
SERVICE, NEWSLETTER, HOTMAIL, AND ANY MATERIALS OR OTHER SERVICES PROVIDED BY OR
ON BEHALF OF MICROSOFT PURSUANT TO THIS AGREEMENT ARE PROVIDED "AS IS" AND WITH
ALL DEFECTS. MICROSOFT HEREBY DISCLAIMS ALL REPRESENTATIONS, WARRANTIES AND
CONDITIONS, EXPRESS OR IMPLIED, OF FITNESS FOR A PARTICULAR PURPOSE, WORKMANLIKE
EFFORT, MERCHANTABILITY, TITLE, NONINFRINGEMENT, COMPATIBILITY, SECURITY, AND
CONDITION OR OPERATION OF THE FOREGOING, MICROSOFT DOES NOT WARRANT THE
CONTINUED OR UNINTERRUPTED OPERATION OF THE INTERNET, SERVICE, OR HOTMAIL.

SECTION 7.        INDEMNIFICATION

         7.1 COMPANY. The Company will indemnify and hold harmless Microsoft
against, and will defend or settle at the Company's expense, any and all
actions, claims, liabilities, losses, damages, costs, expenses, judgments and
penalties, including but not limited to reasonable attorneys' fees, or other
proceeding brought by third parties against Microsoft to the extent based on a
claim that, if true would (a) result from any misrepresentation or breach of
representation or warranty of the Company contained herein, or (b) result from
any breach of any covenant or agreement to be performed by Company hereunder.

         7.2 MICROSOFT. Microsoft will indemnify and hold harmless the Company
against, and will defend or settle at Microsoft's expense, any action actions,
claims, liabilities, losses, damages, costs, expenses, judgments and penalties,
including but not limited to reasonable attorneys' fees, or other proceeding
brought by third parties against Company to the extent based on a claim that, if
true would (a) result from any misrepresentation, or breach of representation or
warranty of Microsoft contained herein, or (b) result from any breach of any
covenant or agreement to be performed by Microsoft hereunder.

         7.3 PROCEDURE. The party to be indemnified, defended and held harmless
pursuant to paragraph 7.1 or 7.2 will: (a) provide the indemnifying party with
prompt written notice of any such claim, (b) permit the indemnifying party to
assume and control the defense of such action, and (c) not enter into any
settlement or compromise of any such claim without the indemnifying party's
prior written consent (not to be unreasonably withheld). The indemnifying party
will pay any and all costs, damages, and expenses (including but not limited to
reasonable attorneys' fees and costs) awarded or incurred by the indemnified
party in any such action or proceeding attributable to any such claim. The
indemnified party may also retain counsel at its own expense in connection with
the defense or settlement of any such claim.

SECTION 8.        LIMITATION OF LIABILITY

         8.1 LIMITATION OF REMEDIES. EXCEPT TO THE EXTENT ARISING PURSUANT TO
SECTION 7 OR A BREACH OF SECTION 9, UNDER NO CIRCUMSTANCE SHALL EITHER PARTY BE
LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR
EXEMPLARY DAMAGES (EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES), ARISING FROM OR OTHERWISE RELATED TO THIS AGREEMENT, SUCH AS, BUT
NOT LIMITED TO, LOSS OF REVENUE, PROFITS, ACCOUNTS OR LOST BUSINESS, AND WHETHER
ARISING IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE.

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         8.2 LIMITATION OF DAMAGES. EXCEPT TO THE EXTENT ARISING PURSUANT TO
SECTION 7 OR A BREACH OF SECTION 9, UNDER NO CIRCUMSTANCE SHALL EITHER PARTY BE
LIABLE TO THE OTHER PARTY FOR DAMAGES IN EXCESS OF AMOUNTS ACTUALLY PAID AND
OWING TO MICROSOFT HEREUNDER.

SECTION 9.        CONFIDENTIALITY

The parties acknowledge and agree that the Microsoft Non-Disclosure Agreement
dated as of November 4, 1999 ("NDA") entered into by and between the parties
applies to this Agreement as if fully set forth herein and that all of the terms
of this Agreement (including but not limited to its existence) and all
discussions and negotiations related thereto are considered Confidential
Information (as that term is defined in the NDA) of Microsoft under the NDA.

SECTION 10.       GENERAL

         10.1 NOTICES. All notices and requests in connection with this
Agreement will be deemed given (a) when personally delivered, (b) when delivered
by facsimile (followed by delivery of the original in the United States mail,
postage prepaid, certified or registered, return receipt request) or telex, (c)
the next business day following delivery to a nationally recognized courier
service guarantying next-day delivery, or (d) five (5) business days after being
placed in the United States mail, postage prepaid, certified or registered,
return receipt requested, as follows:

Notice to Company:                            Notices to Microsoft:
------------------                            ---------------------

Netivation.com, Inc.                          Microsoft Corporation
806 West Clearwater Loop, Suite N             One Microsoft Way
Post Falls, ID  83854                         Redmond, WA  98052-6399
Attn:  Tony Paquin                            Attn:  Cyrus Krohn

Telephone:___________________                 Telephone:  (425) 705-2179
Fax:________________________                  Fax:  (425) 936-7329

Copy to:                                      Copy to:

Netivation.com, Inc.                          Microsoft Law & Corporate Affairs
806 West Clearwater Loop, Suite N             One Microsoft Way
Post Falls, ID  83854                         Redmond, WA  98052
Fax:_________________________                 Fax:  (425) 936-7329
Attn:  Legal Department                       Attn:  Gregory Ritts

or to such other address as the party to receive the notice or request so
designates by at least ten (10) days' prior written notice to the other party.

         10.2 INDEPENDENT CONTRACTOR. Company is an independent contractor, and
nothing in this Agreement will be construed as creating an employer-employee
relationship, partnership, or joint venture between the parties.

         10.3 GOVERNING LAW. This Agreement will be governed by the laws of the
State of Washington. Company hereby irrevocably consents to the personal
jurisdiction of, and exclusive venue for any legal proceeding commenced by or on
behalf of Company in, the state and federal courts sitting in King County,
Washington, USA. In any suit or action to enforce any right or remedy under this
Agreement or to interpret any provision of this Agreement, the prevailing party
will be entitled to recover its costs, including reasonable attorneys' fees.

         10.4 ASSIGNMENT. Company may not assign, sub-license, transfer,
encumber or otherwise dispose of this Agreement without Microsoft's prior
written approval. Any attempted assignment, sub-

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<PAGE>

license, transfer, encumbrance or other disposal of this Agreement by Company
without Microsoft's prior written approval will be void and will constitute a
material default and breach of this Agreement. Except as otherwise provided,
this Agreement will be binding upon and inure to the benefit of the parties'
successors and lawful assigns.

         10.5 PUBLICITY. No press releases, public statements, promotions or
advertising concerning the existence of this Agreement, shall be made or
released in any medium except with the prior written approval of both parties
except as follows:

                  (a) Either party may, at any time, make announcements which
are required by applicable law, regulatory bodies, stock exchange or stock
association rules, so long as the announcing party notifies the non-announcing
party of such requirement and discusses in good faith the exact wording of any
such announcement;

                  (b) Microsoft will have the right to distribute a general
press release regarding the Service and Company's participation therein without
Company's approval;

         10.6 EXCLUSIVITY. This Agreement is non-exclusive and the parties shall
be free to enter into agreements with other parties comprising technologies and
products within the scope of this Agreement.

         10.7 HEADINGS. The section headings used in this Agreement are intended
for convenience only and will not be deemed to affect in any manner the meaning
or intent of this Agreement or any provision hereof.

         10.8 MODIFICATION. This Agreement may not be modified except by a
written agreement dated subsequent to the date of this Agreement and signed on
behalf of Company and Microsoft by their respective duly authorized
representatives.

         10.9 WAIVER. No waiver of any breach of this Agreement will constitute
a waiver of any prior, concurrent or subsequent breach of the same or any other
provisions hereof, and no waiver will be effective unless made in writing and
signed by the waiving party.

         10.10 SEVERABILITY. To the extent that any provision of this Agreement
conflicts with governing law or any provision is held to be null, void or
otherwise ineffective or invalid by a court of competent jurisdiction, (a) such
provision will be deemed to be restated to reflect as nearly as possible the
original intentions of the parties in accordance with applicable law, and (b)
the remaining terms, provisions, covenants and restrictions of this Agreement
will remain in full force and effect.

         10.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which taken together will constitute one agreement.

         10.12 ENTIRE AGREEMENT. Subject to Section 9, this Agreement
constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior and contemporaneous agreements or
communications between the parties.

The parties have caused this Agreement to be executed by their duly authorized
representatives as of the date written above.

Microsoft                                Company
MICROSOFT CORPORATION                    NETIVATION.COM, INC.
One Microsoft Way                        806 West Clearwater Loop, Suite N
Redmond, WA  98052-6399                  Post Falls, ID  83854

By                                       By
  -----------------------------------      -------------------------------------
(Sign)                                   (Sign)

                                       66

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

-------------------------------------    ---------------------------------------
Title                                    Title

-------------------------------------    ---------------------------------------
Date                                     Date

                                         ---------------------------------------
                                         Company's Federal Employer ID Number

                                       67

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